/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/190506.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 6, 2019, Vol. 23, No. 125 Headlines 1400 NORTHSIDE: Case Summary & 10 Unsecured Creditors 219 SAGG MAIN: Case Summary & 9 Unsecured Creditors 34 HOLDING: June 26 Plan Confirmation Hearing 47 HOPS LLC: Trustee Hires Columbia Research as Special Counsel 7632 WISCASSET: Case Summary & Unsecured Creditor 90 WEST STREET: Court Confirms Chapter 11 Plan ACHAOGEN INC: Hires Cassel Salpeter as Investment Banker AIR FORCE VILLAGE: Hires Cushman & Wakefield as Broker AIR LEASE: Fitch Rates $250MM 6.15% Preferred Shares 'BB+' ALL AMERICAN OIL: June 5 Plan Confirmation Hearing ALLIANT HOLDINGS: Moody's Affirms B3 CFR Amid Incremental Loan ALLIANT HOLDINGS: S&P Rates $505MM Sr. Secured Debt 'B' ALTA MESA: Receives Default Notice for Failure to File Form 10-K AMERICAN PRINTING: Case Summary & 20 Largest Unsecured Creditors ARIZONA AIRCRAFT: Voluntary Chapter 11 Case Summary ASSUREDPARTNERS INC: Moody's Affirms B3 CFR Amid Incremental Notes AYTU BIOSCIENCE: Averaden Agrees to Perform Consulting Services BAUSCH HEALTH: Fitch Hikes Long-Term IDR to 'B', Outlook Stable BCP RENAISSANCE: Fitch Gives BB-(EXP) Rating to $65MM Term Loan B BCP RENAISSANCE: Moody's Gives B1 Rating to $65MM Term Loan B BIOSCRIP INC: Incurs $10.3 Million Net Loss in First Quarter BLACKWOOD REDEVELOPMENT: Hires Nehmad Perrillo as Counsel BLUE CAT CARRIERS: Seeks to Hire Seiller Waterman as Counsel BOEAU BELLE: Seeks to Hire Jeff Wright as Accountant BRAVEHEART REAL: U.S. Trustee Unable to Appoint Committee BROOALEXA LLC: U.S. Trustee Unable to Appoint Committee CALIFORNIA RESOURCES: Widens Net Loss to $67-Mil. in 1st Quarter CANBRIAM ENERGY: Moody's Cuts CFR to Ca & $350MM Unsec. Notes to C CAPSTONE PEDIATRICS: U.S. Trustee Unable to Appoint Committee CBCS WASHINGTON: U.S. Trustee Forms 3-Member Committee CDK GLOBAL: Moody's Rates New Sr. Unsecured Notes Due 2029 'Ba1' CENGAGE LEARNING: S&P Puts B- ICR on Watch Pos. on McGraw-Hill Deal CHARLES RIVER: S&P Lowers ICR to 'BB+' on Citoxlab Acquisition CHRISTIAN RADABAUGH, SR: Proposed Sale of GP Cattle Approved COMMUNITY HEALTH: Reports First Quarter 2019 Financial Results CONSOLIDATED INFRASTRUCTURE: Sets Bidding Procedures for All Assets CORP.REALTY USA: Voluntary Chapter 11 Case Summary COVIA HOLDINGS: Moody's Cuts CFR to B1 & Alters Outlook to Negative CREDIAUTOUSA FINANCIAL: Taps Brandon Smith Law as Special Counsel CUMBERLAND FARMS: Moody's Hikes CFR to Ba3 & Unsec. Rating to B1 CYXTERA DC: Moody's Rates $100MM Incremental 1st Lien Loan 'B1' DELUXE ENTERTAINMENT: Moody's Alters Outlook on B3 CFR to Stable ECOSPHERE TECHNOLOGIES: Hires Allan Kalish as Broker EP ENERGY: Appoints New Director to Fill Vacancy EXCO RESOURCES: Committee Taps Quinn Emanuel as Co-Counsel F.M. BUTT HOTELS: Hires James M. Joyce, Esq. as Counsel FANNIE MAE: Posts $2.4 Billion Net Income in First Quarter FCH MCKINNEY: $290K Sale of McKinney Property to Treadways Approved FERNLEY & FERNLEY: Hires Mitchell & Mitchell CPA's as Accountant FFORDABLE BUILDING: $1.25M Sale of All Remaining Assets Approved GARDNER DENVER: Moody's Affirms Ba3 CFR Amid Ingersoll Rand Deal GNC HOLDINGS: Files Form 10-Q for the Quarter Ended March 31 GOGO INC: Launches $20 Million Senior Secured Notes Offering GOODYEAR TIRE: Moody's Cuts CFR to Ba3 & Alters Outlook to Stable GOODYEAR TIRE: S&P Alters Outlook to Neg., Affirms 'BB' Debt Rating GRCDALLASHOMES LLC: Case Summary & 12 Unsecured Creditors GTT COMMUNICATIONS: Fitch Affirms 'B' LT Issuer Default Rating GUITAR CENTER: Moody's Alters Outlook on Caa1 CFR to Stable H K FINE PROPERTIES: Cuevas Buying Baytown Property for $53K HELIOS AND MATHESON: Swaps Warrants for 12% Debentures Due 2020 HELIOS AND MATHESON: Will be Delisted from Nasdaq HELIOS SOFTWARE: Moody's Alters Outlook on B3 CFR to Stable HI-CRUSH PARTNERS: Moody's Alters Outlook on B2 CFR to Negative IDEANOMICS INC: Swings to $19.9 Million Net Income in Q1 INTERCONTINENTAL AFFORDABLE HOUSING: S&P Cuts Bond Rating to 'BB-' K&D INDUSTRIAL: Selling Operations and Business Assets for $1.2M KBC ENTERPRISE: Unsecureds to Get $1,500 Per Quarter for 5 Years KENDALL FROZEN: Asks Court to Approve Employment of CMR KNOLL'S INC: Case Summary & 4 Unsecured Creditors KODIAK GAS: Moody's Withdraws B3 CFR on Cancelled Bond Offering KODRENYC LLC: Plan Outline Evidentiary Hearing Set for June 21 KRONOS WORLDWIDE: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable LAKE BRANCH: Farm Credit Objects to Plan, Disclosures LAKE BRANCH: MetLife Objects to Disclosure Statement LAREDO HOUSING: S&P Puts CCC+ Rev. Bond Rating on Watch Negative LASALLE GROUP: Case Summary & 20 Largest Unsecured Creditors LIBERTY UNION: A.M. Best Affirms B(Fair) FSR, Alters Outlook to Pos LOWER CADENCE: Fitch Assigns 'B+' First-Time LT IDR, Outlook Stable MACAULEY CONTRACTING: May 23 Plan Confirmation Hearing MARINE ENVIRONMENTAL: Case Summary & 20 Top Unsecured Creditors MCGRAW-HILL EDUCATION: S&P Affirms 'B' ICR on Cengage Merger Plan MCGRAW-HILL GLOBAL: Moody's Assigns B2 CFR Amid Cengage Deal MGM RESORTS: Fitch Affirms 'BB' IDR Amid Macau Unit's Notes Issue MGM RESORTS: Moody's Affirms Ba3 CFR Amid Macau Unit's Notes Issue MGM RESORTS: S&P Affirms BB- ICR Amid Macau Unit's Notes Issuance MID-CITIES HOME: Seeks to Hire CR3 Partners, Appoint CRO MISTER CAR: Moody's Cuts CFR to B3 & Alters Outlook to Stable MUSCLEPHARM CORP: Hires Former General Electric Executive as COO NANOMECH INC: May 6 Meeting Set to Form Creditors' Panel NBM US: Fitch Rates Proposed 7-Year Senior Unsecured Notes 'BB-' NEW START INCORPORATED: Hires Quintairos as Special Counsel NORTHERN POWER: Disposes of US Service Business ORCHIDS PAPER: Orchids Investments Offers $176M for All Assets ORIGINCLEAR INC: Liggett & Webb, P.A. Raises Going Concern Doubt PARTNERSHIPS TO UPLIFT: S&P Raises 2014A Rev. Bonds Rating to 'BB' PASCO COUNTY FIREFIGHTERS: Trustee Unable to Appoint Committee PAUL F. SMITH: Taps Gary Cook as Bankruptcy Attorney PCI GAMING: Moody's Assigns First-Time Ba3 CFR, Outlook Stable PETSMART INC: Moody's Alters Outlook on Caa1 CFR to Stable PHARMACYTE BIOTECH: Accumulated Deficit Raises Going Concern Doubt PHOEBEN INC: $1.9M Sale of Substantially All Assets to Dothan OK'd PIONEER ENERGY: Incurs $15.1 Million Net Loss in First Quarter PLAINVILLE LIVESTOCK: James Overcash Named Chapter 11 Trustee PLAYPOWER INC: Moody's Cuts Ratings on 1st Lien Facilities to B3 POST PRODUCTION: Asks Court to Approve 1st Amended Plan Outline PREFERRED CARE: Taps Daniel Sherman as Consultant PTC INC: S&P Affirms 'BB' ICR; Outlook Stable PUC SCHOOLS, CA: S&P Affirms BB Bond Rating; Rating Off Watch Dev. QUORUM HEALTH: Receives Noncompliance Notice from NYSE RUBIO & ASSOCIATES: U.S. Trustee Forms 4-Member Committee S&S FOREST CITY: Seeks to Hire Jones & Walden as Legal Counsel SCHELL & KAMPETER: Filing of 3rd Amended Classick Suit Due May 7 SIMKAR LLC: Sandeep Gupta Appointed Chapter 11 Trustee SIZMEK INC: Taps FTI Capital Advisors as Financial Advisor SIZMEK INC: Taps Muchin Rosenman as Legal Counsel SOUTH MOON BBQ: Seeks to Hire Barrick Switzer as Legal Counsel STRAIGHT UP: Taps Winegarden Haley as Legal Counsel SUNGARD AVAILABILITY: Case Summary & 30 Top Unsecured Creditors SUNGARD AVAILABILITY: Moody's Cuts PDR to D-PD Amid Bankr. Filing SYNIVERSE HOLDINGS: S&P Lowers ICR to 'B-' on Elevated Leverage TELESCOPE MANAGEMENT: SBFC Objects to Plan, Disclosures THE9 LIMITED: Grant Thornton Raises Going Concern Doubt THOMSON-SHORE INC: Taps Eby Conner as Special Counsel THOMSON-SHORE INC: Taps Goldstein Bershad as Legal Counsel TOPAZ SOLAR: Fitch Affirms C Rating on $1.1BB Senior Secured Notes TRIBUNE CO: Court Bars Fraudulent Transfer Claims v. Shareholders TROIANO TRUCKING: Seeks to Hire Nickless Phillips as Legal Counsel TWISTLEAF HOLDINGS: Seeks to Hire RPD Analytics as Appraiser U.S. STEM CELL: Incurs $2.16-Mil. Net Loss for Year Ended Dec. 31 UNITED EMERGENCY: Case Summary & 20 Largest Unsecured Creditors USG CORP: S&P Withdraws 'BB+' ICR After Gebr Knauf Acquisition VCLS HOLDINGS: Seeks to Hire Portfolio Real Estate as Broker VERISIGN INC: Moody's Hikes CFR & Sr. Unsecured Debt Rating to Ba1 VISION INVESTMENT: June 19 Plan Confirmation Hearing WEYERBACHER BREWING: Seeks to Hire Ciardi Ciardi as Counsel WHEEL PROS: Moody's Affirms B3 CFR Amid Mobile Hi-Tech Deal WMC MORTGAGE: May 7 Meeting Set to Form Creditors' Panel WOODLAWN COMMUNITY: Trustee Taps Millennium Properties as Broker WYNN RESORTS: Moody's Alters Outlook on Ba3 CFR to Positive XPLOSION INC: Continued Losses Cast Going Concern Doubt ********* 1400 NORTHSIDE: Case Summary & 10 Unsecured Creditors ----------------------------------------------------- Debtor: 1400 Northside Drive, Inc. dba Swinging Richards 1400 Northside Drive, NW Atlanta, GA 30318 Business Description: 1400 Northside Drive, Inc. owns and operates a male strip club known as Swinging Richards. Chapter 11 Petition Date: May 2, 2019 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Case No.: 19-56846 Debtor's Counsel: Paul Reece Marr, Esq. PAUL REECE MARR, P.C. 300 Galleria Parkway, N.W., Suite 960 Atlanta, GA 30339 Tel: 770-984-2255 Fax: 678-623-5109 E-mail: paul.marr@marrlegal.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Cummins Beveridge Jones, II, CEO and CFO. A full-text copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at: http://bankrupt.com/misc/ganb19-56846.pdf 219 SAGG MAIN: Case Summary & 9 Unsecured Creditors --------------------------------------------------- Debtor: 219 Sagg Main LLC 307 West 38th Street, Suite 2010 New York, NY 10018 Business Description: 219 Sagg Main LLC owns a real property located at 219 Sagaponack Main Street Sagaponack, NY 11962. Chapter 11 Petition Date: May 3, 2019 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Case No.: 19-11444 Judge: Hon. Shelley C. Chapman Debtor's Counsel: Joel Shafferman, Esq. SHAFFERMAN & FELDMAN, LLP 137 Fifth Avenue, 9th Floor New York, NY 10010 Tel: (212) 509-1802 Fax: 212 509-1831 E-mail: joel@shafeldlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Benjamin Ringel, manager. 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/nysb19-11444.pdf 34 HOLDING: June 26 Plan Confirmation Hearing --------------------------------------------- The Bankruptcy Court has signed an order approving the Second Amended Disclosure Statement explaining the Second Amended Chapter 11 Plan filed by 34 W 128 Funding Inc., a secured creditor of 34 Holding Corp., and scheduled the confirmation hearing to be held on June 26, 2019 at 10:00 AM. Class 4 General Unsecured Claims are Impaired. The Debtor Scheduled only one General Unsecured Claims: Andrian George, which was Scheduled in the amount of $317,829 and was listed as disputed, contingent and unliquidated. As of the Bar Date, only two unsecured proofs of claim were filed including Con Edison in the amount of $645.60 and Adrian George in the amount of $317,829.00. If 34 Funding is the Successful Bidder and the Property is transferred to 34 Funding pursuant only to its Credit Bid, then 34 Funding will fund the Creditor Fund in the amount of $25,000 will be used to pay Class 1 Claims, if any, up to in full and then Pro Rata to holders of Allowed Class 3 unsecured Claims and Allowed Class 4 Claims. In the event that the Successful Bidder is a Cash bidder or the Property is otherwise sold for cash in accordance with the Amended Plan, then from the Sales Proceeds, after payment in full, on the Distribution Date, of the unclassified Allowed Claims in Articles II and III above, and payment of the Allowed 34 Funding Secured Claim, plus post-petition amounts due to 34 Funding pursuant to section 506(b) of the Bankruptcy Code, plus the full amount set forth in its 34 Funding Substantial Contribution Claim, then to the extent the Webster Claim is an Allowed Secured Claim, Webster shall be paid in full up to its Allowed Secured Claim from the Sales Proceeds. To the extent that any portion of 34 Funding's claim is disallowed, 34 Funding will make up in cash that disallowed portion of its Opening Credit Bid. The Amended Plan proposes to let the market establish the actual value of the Property through the marketing and, if necessary, the Auction sale. However, as set forth in the Liquidation Analysis, the Plan Proponent believes that recoveries for creditors under this Amended Plan would exceed the distributions, if any, in a conversion and liquidation under Chapter 7 or a dismissal of this Case. As of February 28, 2019, 34 Funding estimates that approximately $100,000 in interest and legal fees became due and owing (subject the proper filing of a substantial contribution motion pursuant to section 503(b) of the Bankruptcy Code on notice to case parties, and subject to allowance by the Bankruptcy Court). Thus, as of such date, 34 Funding asserts a Claim in the amount of approximately $1,820,000. 34 Funding has agreed to bid such amount as an opening bid in the auction of the Property. To the extent any portion of this opening bid amount is disallowed, 34 Funding will make up that disallowed portion in cash as part of its opening bid at an auction, if any. A blacklined version of the Second Amended Disclosure Statement dated April 24, 2019, is available at https://tinyurl.com/y46uzz23 from PacerMonitor.com at no charge. Attorneys for 34 W 128 Funding Inc: Gary O. Ravert, Esq. RAVERT PLLC 116 West 23rd Street, Suite 500 New York, NY 10011 Tel: (646) 966-4770 Fax: (917) 677-5419 About 34 Holding Corp. Based in White Plains, New York, 34 Holding Corp., a privately held company engaged in activities related to real estate, filed a voluntary Chapter 11 Petition (Bankr. S.D.N.Y. Case No. 18-23408) on Sept. 11, 2018, and is represented by Amanda Medina, Esq., at Norfolk, Connecticut. The case is assigned to Judge Robert D. Drain. At the time of filing, the Debtor had $1 million to $10 million in estimated assets and liabilities. The petition was signed by Jeffrey I. Klein, president. The Debtor listed Adrian George as its sole unsecured creditor holding a claim of $317,829. 47 HOPS LLC: Trustee Hires Columbia Research as Special Counsel --------------------------------------------------------------- Mel R. Codd, the Chapter 11 Trustee of 47 Hops, LLC, seeks authority from the U.S. Bankruptcy Court for the Eastern District of Washington to employ Columbia Research Corporation, as counsel to the Trustee. The Trustee requires Columbia Research to: -- conduct a 2004 examination of Anastasia MacKinnon, wife of Douglas MacKinnon, and a 50% owner of the Company. -- conduct a 2004 examination of Marina Guryanova, mother of Anastasia, and a recipient of loan repayments from the Debtor or affiliate companies for which the Debtor apparently has no records; -- conduct further investigations into payments in excess of $100,000 from the Debtor to a variety of contractors and entities related to the office building owned by Guryanova; -- complete additional analysis of bank records obtained during the course of the investigation. Columbia Research will be paid at the hourly rate of $225. Columbia Research will also be reimbursed for reasonable out-of-pocket expenses incurred. Daniel Seligman, partner of Columbia Research Corporation, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Columbia Research can be reached at: Daniel Seligman, Esq. COLUMBIA RESEARCH CORPORATION P.O. Box 99249 Seattle, WA 98139-0249 Tel: (206) 349-4769 About 47 Hops Based in Yakima, Washington, 47 Hops LLC -- https://47hops.com/ -- sells aroma and alpha hops to breweries in 38 countries around the world. 47 Hops LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Case No. 17-02440) on Aug. 11, 2017. In the petition signed by Douglas MacKinnon, its president, the Debtor disclosed $4.3 million in assets and $7.45 million in liabilities. Judge Frank L. Kurtz oversees the case. Catherine J Reny, Esq., and Nathan T. Riordan, Esq., at Wenokur Riordan PLLC, serve as the Debtor's bankruptcy counsel. The official committee of unsecured creditors tapped Cairncross & Hempelmann, P.S., as counsel. Marcia A. Frey, the examiner appointed in the Debtor's case, hired Hillis Clark Martin & Peterson P.S., as counsel. Mel R. Codd was appointed Chapter 11 trustee for the Debtor. The Trustee tapped Southwell & O'Rourke, P.S., as his legal counsel. Columbia Research Corporation, is the special counsel. 7632 WISCASSET: Case Summary & Unsecured Creditor ------------------------------------------------- Debtor: 7632 Wiscasset Drive LLC 7632 Wiscasset Drive Canoga Park, CA 91304 Business Description: 7632 Wiscasset Drive LLC is a privately held company in Canoga Park, California. Chapter 11 Petition Date: May 2, 2019 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Case No.: 19-11090 Judge: Hon. Victoria S. Kaufman Debtor's Counsel: Thomas B. Ure, Esq. URE LAW FIRM 800 West 6th Street, Ste. 940 Los Angeles, CA 90017 Tel: 213-202-6070 Fax: 213-202-6075 E-mail: tbuesq@aol.com tom@urelawfirm.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Justin Byrd, president. The Debtor lists NPI Debt Fund 1, LP as its sole unsecured creditor holding a claim of $500,000. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/cacb19-11090.pdf 90 WEST STREET: Court Confirms Chapter 11 Plan ---------------------------------------------- The Bankruptcy Court issued an order granting final approval of the disclosure statement and confirmation of the further amended Chapter 11 plan of 90 West Street, LLC. Any and all objections to the Plan of not previously withdrawn be and are overruled. The provisions of the Plan shall bind the Debtor, and all creditors of the Debtor, whether or not such creditors have filed proofs of claim or are deemed to have filed proofs of claim. Pursuant to section 1146 of the Bankruptcy Code, the sale of the Property to Purchaser shall not be subject to tax under any law imposing a stamp tax, real estate transfer tax, mortgage recording tax or similar tax, as such conveyance is a transfer made pursuant to a Chapter11 plan that has been confirmed. A full-text copy of the Amended Disclosure Statement dated March 13, 2019, is available at https://tinyurl.com/y6cguw89 from PacerMonitor.com at no charge. About 90 West Street 90 West Street LLC is a privately-held company in Brooklyn, New York, engaged in activities related to real estate. It owns the real property occupied by its affiliate Woodbriar Health Center LLC, which operates a nursing home facility located at 90 West Street, Wilmington, Massachusetts. The company, together with WHC, was organized in March 2015 to acquire the facility for $22 million. The acquisition included both the real property on which the facility is located and the nursing home itself. 90 West Street is related to Keen Equities, which sought bankruptcy protection on Nov. 12, 2013 (Bankr. E.D.N.Y. Case No. 13-46782). 90 West Street sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-40515) on Jan. 30, 2018. In the petition signed by Y.C. Rubin, chief restructuring officer, the Debtor estimated assets and liabilities of $1 million to $10 million. Judge Carla E. Craig presides over the case. 90 West Street tapped Goldberg Weprin Finkel Goldstein LLP as its legal counsel. ACHAOGEN INC: Hires Cassel Salpeter as Investment Banker -------------------------------------------------------- Achaogen, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Cassel Salpeter & Co., LLC, as investment banker to the Debtor. Achaogen, Inc., requires Cassel Salpeter to: a. review and analyze the Debtor's business, operations and financial projections; b. attend meetings of the Board of Directors of the Company with respect to matters on which Cassel Salpeter has been engaged to advise; c. provide testimony, as necessary, with respect to matters on which Cassel Salpeter has been engaged to advise in any proceeding before the Court; d. assist in the preparation of materials, describing the Debtor's industry, business strategy, business and management, and incorporating current financial and other appropriate information furnished by the Debtor; e. assist the Debtor with market testing the debtor-in- possession financing currently anticipated from Silicon Valley Bank, or, if such financing is not obtained from Silicon Valley Bank, identifying and evaluating alternative candidates for potential debtor-in-possession financing; f. assist in creating a teaser and confidential information memorandum to be distributed to potential bidders; g. assist the Debtor in identifying and evaluating candidates for any potential Sale Transaction; h. advise the Debtor in connection with negotiations, and aiding in the consummation of any such Sale Transaction; i. advise with regards to possible affiliations with strategic partners; j. advise with regards to divestitures of non-strategic assets; k. assist or cooperate in the drafting and/or review of any materials for submission to the Bankruptcy Court, creditors, or other parties in interest related to any Sale Transaction or the process therefor; and l. provide testimony, as necessary, with respect to matters on which we have been engaged to advise hereunder in any proceeding before the Bankruptcy Court. Cassel Salpeter will be paid as follows: a. Advisory Fee: A non-refundable, $200,000 fee which shall be due and earned in full on the date of execution of this Agreement, provided, however, that such Advisory Fee shall be payable by check or wire transfer in immediately available U.S. funds, as follows: $100,000 on the date hereof; $50,000 on the first monthly anniversary hereafter; and $50,000 on the second monthly anniversary hereafter; and provided further, however, that in the event of expiration or termination of this Agreement prior to the payment in full of this $200,000 Advisory Fee, then any remaining unpaid portion of such Advisory Fee owing hereunder shall be payable upon such expiration or termination of this Agreement. b. Sale Transaction Fee: If the Debtor consummates a Sale Transaction, the Debtor shall pay to Cassel Salpeter a sale transaction fee (the "Sale Transaction Fee"), payable by check or wire transfer in immediately available U.S. funds at the closing of the Sale Transaction, equal to the greater of (x) $500,000 or (y) the sum of (i) 3% of the Sale Consideration (as defined in Exhibit A) up to $30 million; and (ii) 4.5% of the Sale Consideration in excess of $30 million. Notwithstanding the foregoing, in the event any Sale Transaction(s) includes deferred and/or contingent payment(s), the Debtor shall pay to Cassel Salpeter the portion of any Sale Transaction Fee relating thereto, payable in cash by check or wire transfer in immediately available U.S. funds, if and when such deferred and/or contingent payment(s) is actually paid. c. Multiple Closings: If more than one Sale Transaction is consummated, Cassel Salpeter shall be compensated based on the aggregate Consideration of all Sale Transactions, calculated in the manner set forth in the Engagement Letter. d. Fee Obligation: Cassel Salpeter shall be entitled to the foregoing fees with respect to any Sale Transaction consummated during the Term, or within six (6) months after the date of any termination or expiration of the Engagement Letter, provided, however, that in the event of any proper termination of the Engagement Letter by the Debtor for cause prior to the expiration of the Engagement Letter, Cassel Salpeter shall not be entitled to any Sale Transaction Fee for any Sale Transaction that is consummated within six (6) months after the date of any such proper termination of the Engagement Letter for cause. e. Lenders: In consideration for Cassel Salpeter's agreement to render services to the Debtor under the terms of the Engagement Letter, the Debtor's prepetition and debtor-in- possession lenders (the "DIP Lender") has agreed that (a) Cassel Salpeter's fees and expenses may be paid to Cassel Salpeter free and clear of any lien, claim or interest that such DIP Lender may have in the Debtor's assets or the proceeds thereof; and (b) in the event that Cassel Salpeter becomes entitled to any fees in connection with a Sale Transaction, such DIP Lenders agree to fully subordinate their right to payment of their debt (whether principal, interest or other costs or charges) or any other recovery on its claims to the payment of all fees and expenses due to Cassel Salpeter under the Engagement Letter. f. Expenses: The Debtor agrees to promptly reimburse Cassel Salpeter, upon request, which shall be made no less than monthly, for all reasonable and documented out-of-pocket expenses incurred by Cassel Salpeter in connection with the Engagement Letter or the performance therefor, whether or not any Sale Transaction, or other type of transaction is consummated, including, but not limited, to, travel and lodging, databases, fees and disbursements of Cassel Salpeter's counsel and any other consultants and advisors retained by Cassel Salpeter after consultation with and agreement by the Debtor. All fees and reimbursable expenses due to Cassel Salpeter shall have no offsets, are non- refundable and non-cancelable. Cassel Salpeter shall not incur unpaid expenses pursuant to the Engagement Letter in excess of $20,000 without having obtained the Debtor's prior written consent to incur such expenses. James S. Cassel, chairman and co-founder of Cassel Salpeter & Co., 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 Debtor and its estates. Cassel Salpeter can be reached at: James S. Cassel CASSEL SALPETER & CO., LLC 801 Brickell Avenue Miami, FL 33131 Tel: (305) 438-7700 Fax: (305) 438-7710 About Achaogen South San Francisco, California-based Achaogen, Inc. -- http://www.achaogen.com/-- is a biopharmaceutical company focused on the discovery, development, and commercialization of innovative antibacterial treatments against multi-drug resistant gram-negative infections. Achaogen, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del., Lead Case No. 19-10844) on April 25, 2019. The petition was signed by Blake Wise, chief executive officer. As of Jan. 31, 2019, the Debtor disclosed assets of $91,607,000 and liabilities of $119,956,000. The case is assigned to Judge Brendan Linehan Shannon. The Debtor tapped Hogan Lovells US LLP as its bankruptcy counsel; Morris, Nichols, Arsht & Tunnell LLP as co-counsel; Meru LLC as financial advisor; Cassel Salpeter & Co., LLC as investment banker; and Kurtzman Carson Consultants LLC as claims, noticing and solicitation agent. AIR FORCE VILLAGE: Hires Cushman & Wakefield as Broker ------------------------------------------------------ Air Force Village West, Inc., d/b/a Altavita Village, seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Cushman & Wakefield US, Inc., as broker to the Debtor. Air Force Village requires Cushman & Wakefield to market and sell the Debtor's real property located at 17050 Arnold Drive, Riverside CA 92518. Cushman & Wakefield will be paid a commission of 1.5% of the total sales price. Cushman & Wakefield will also be reimbursed for reasonable out-of-pocket expenses incurred. Allen McMurtry, a partner at Cushman & Wakefield US, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Cushman & Wakefield can be reached at: Allen McMurtry CUSHMAN & WAKEFIELD US, INC. 201 North Franklin Street, Suite 3300 Tampa, FL 33602-5163 Tel: (813) 349-8349 About Air Force Village West d/b/a Altavita Village Air Force Village West -- https://livealtavita.org/ -- owns and operates a continuing care retirement community with assisted living, independent living, skilled nursing and memory care services. Air Force Village is a not-for-profit entity opened in 1989. Air Force Village West, Inc., based in Riverside, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-11920) on March 10, 2019. The petition was signed by Mary Carruthers, chairman of the Board. In its petition, the Debtor estimated $50 million to $100 million in both assets and liabilities. The Hon. Scott C Clarkson oversees the case. Samuel R. Maizel, Esq., at Dentons US LLP, serves as bankruptcy counsel. AIR LEASE: Fitch Rates $250MM 6.15% Preferred Shares 'BB+' ---------------------------------------------------------- Fitch Ratings has assigned a final rating of 'BB+' to Air Lease Corporation's issuance of $250 million 6.150% fixed-to-floating rate perpetual non-cumulative preferred shares. The preferred shares represent unsecured obligations, ranking junior to and subordinated in right of payment to Air Lease's current and future senior and subordinated indebtedness. Distributions on the preferred shares are non-cumulative. Unless distributions have been declared on the preferred shares, Air Lease may not declare or pay distributions on its common shares except under certain circumstances. The preferred shares are perpetual in nature but may be redeemed, at Air Lease's option, five-years after the issuance. Proceeds from the issuance will be used for general corporate purposes. The assignment of the final rating follows the receipt of documents conforming to information already received. The final rating is the same as the expected rating assigned to the preferred shares on February 26, 2019. KEY RATING DRIVERS IDR AND PREFERRED SHARES The final rating assigned to the preferred shares is two notches below Air Lease's Long-Term Issuer Default Rating of 'BBB', in accordance with Fitch's 'Corporate Hybrids Treatment and Notching Criteria' dated Nov. 9, 2018. The preferred share rating includes two notches for loss severity, reflecting the preferred shares' deep subordination and heightened risk of non-performance relative to other obligations, namely unsecured debt. Fitch has afforded the issuance 100% equity credit given the non-cumulative nature of the distributions, the fact that the preferred shares are perpetual, and the lack of change of control provisions and events of default. As a result of the issuance, Air Lease's debt to tangible equity leverage improved modestly to 2.3x from 2.4x, as of Dec. 31, 2018, which is below management's long-term articulated target of 2.5x. The issuer has the option to redeem the proposed preferred shares in full prior to February 2024, in case of adverse rating agency treatment of the shares. Air Lease may redeem the preferred shares in whole or in part on or after February 2024; however, shareholders will not have the right to require the redemption or repurchase of the preferred stock. Air Lease's current ratings take into account the company's high quality commercial aircraft portfolio, strong funding profile with a meaningful portion of unsecured debt and peer-superior leverage, which is expected to persist over the long term. Air Lease's credit strengths also include its above-average scale, strong and stable profitability supported by long-term contractual lease streams, demonstrated management track record at Air Lease and predecessor organizations, and enhanced risk management framework. The ratings are constrained by elevated key person risk; funding and placement risks associated with the company's outsized order book; above-average lessee exposure to China; and above-average widebody exposure. Rating constraints applicable to the aircraft leasing industry more broadly include the monoline nature of the business; vulnerability to exogenous shocks; potential exposure to residual value risk; sensitivity to oil prices; reliance on wholesale funding sources; and increased competition. The Stable Outlook reflects Fitch's expectations that Air Lease will maintain a young, high quality aircraft portfolio, which limits residual value risk, as well as above-average scale, a strong funding profile with a meaningful portion of unsecured debt and peer-superior leverage. These positive attributes are offset by Air Lease's large order book, which will require consistent access to the capital markets. Fitch expects that Air Lease will maintain sufficient liquidity to fund the order book. RATING SENSITIVITIES IDR AND PREFERRED SHARES The rating on the preferred shares is primarily sensitive to changes in Air Lease's Long-Term IDR and is expected to move in tandem. However, the preferred shares rating could be downgraded by an additional notch to reflect further structural subordination should the firm consider hybrid issuances. Positive rating momentum for the IDR, although likely limited to the 'BBB' rating category, could be driven by a perceived reduction in key person risk, while maintaining leverage around 2.5x, unsecured debt to total debt at or around current levels and contractual cash flow to debt of between 100% and 115%. In addition, positive rating momentum could arise from a material reduction in the size of the order book relative to the owned fleet and maintenance of robust liquidity, particularly with respect to near-term funding obligations. Negative rating pressure could arise from a material increase in secured debt levels; leverage approaching or above 3.0x, resulting from capital returns, aircraft impairments or a higher risk appetite; a sustained deterioration in financial performance and/or operating cash flows; higher-than-expected repossession activity; difficulty re-leasing aircraft or the order book at economical rates; a reduction in available liquidity or unencumbered assets; and/or an inability to maintain the fleet profile in terms of average age and narrowbody/widebody composition. A key person event with respect to Mr. Hazy or Mr. Plueger would not necessarily result in an immediate downgrade, but would be evaluated in the context of the potential impacts on Air Lease's strategic direction, industry relationships and risk appetite. The key person risk is somewhat mitigated because it resides with two individuals rather than one. Fitch has assigned the following rating: Air Lease Corporation -- Preferred Shares 'BB+'. Fitch currently rates Air Lease as follows: Air Lease Corporation -- Long-Term IDR 'BBB'; -- Senior secured debt 'BBB+'; -- Senior unsecured debt 'BBB'. The Rating Outlook is Stable. ALL AMERICAN OIL: June 5 Plan Confirmation Hearing -------------------------------------------------- The Disclosure Statement of All American Oil & Gas Incorporated, et al., is approved. The Confirmation Hearing at which the Court will consider confirmation of the Plan will be held before the Honorable Ronald B. King, United States Bankruptcy Judge, in the United States Bankruptcy Court for the Western District of Texas, San Antonio Division, 615 E. Houston St., Courtroom 1, San Antonio, Texas 78205 on June 5, 2019, at 9:30 a.m. (prevailing Central time). The deadline for filing objections to confirmation of the Plan will be May 29, 2019, at 5:00 p.m. (prevailing Central time). Class 5 - General Unsecured Claims. Each Holder of an Allowed General Unsecured Claim shall receive, in full and final satisfaction of its Allowed General Unsecured Claim, its Pro Rata share of net proceeds of the ORRI, if any, as and when such net proceeds are received by the Liquidating Trustee, following payment in full of all Allowed Administrative Tax Claims, Allowed Priority Tax Claims, Allowed Other Priority Claims, and Allowed Other Secured Claims, until such Holder’s General Unsecured Claim is paid in full. A full-text copy of the Disclosure Statement dated April 24, 2019, is available at https://tinyurl.com/yxmxmfrr from PacerMonitor.com at no charge. Counsel for the Debtors are Deborah D. Williamson, Esq., Patrick L. Huffstickler, Esq., Danielle N. Rushing, Esq., at Dykema Gossett PLLC, San Antonio, Texas; and Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., Erin N. Brady, Esq., at Hogan Lovells US LLP, in Los Angeles, California. About All American Oil & Gas All American Oil & Gas Inc. -- https://www.aaoginc.com -- is an independent oil company headquartered in San Antonio, Texas. It holds and provides shared administrative and accounting services to its two wholly-owned subsidiaries Kern River Holdings Inc. and Western Power & Steam, Inc. KRH is an exploration and production company that utilizes a state-of-the-art steam flood to extract oil within a 215-acre leasehold, with 110 acres currently under steam flood, in the Kern River Oil Field. WPS is a power company that operates a 20-megawatt cogeneration facility, which -- in addition to selling power to Pacific Gas & Electric -- provides KRH with both electricity and steam (generated from waste heat) to aid its extraction of oil. All American Oil & Gas sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Lead Case No. 18-52693) on Nov. 12, 2018. At the time of the filing, the Debtors had estimated assets of $100 million to $500 million and liabilities of the same range. The cases are assigned to Judge Ronald B. King. The Debtors tapped Dykema Gossett PLLC and Hogan Lovells US, LLP as legal counsel; Houlihan Lokey as financial advisor; and BMC Group, Inc., as notice, claims and balloting agent. ALLIANT HOLDINGS: Moody's Affirms B3 CFR Amid Incremental Loan -------------------------------------------------------------- Moody's Investors Service has affirmed the B3 corporate family rating and B3-PD probability of default rating of Alliant Holdings Intermediate, LLC, a subsidiary of Alliant Holdings, L.P. following the company's announcement that it plans to issue an incremental $505 million first-lien senior secured term loan (rated B2). Alliant will use proceeds from the incremental borrowing to repay revolver borrowings and repurchase equity. In the same action, Moody's affirmed the B2 ratings on the senior secured revolving credit facility and the first-lien term loan and the Caa2 rating on its senior unsecured notes. The outlook for Alliant is stable. RATINGS RATIONALE Alliant's ratings reflect its leading position in several niche markets, steady organic revenue growth and strong operating margins, said the rating agency. The company's emphasis on specialty programs, where the broker offers distinct value to both insurance buyers and insurance carriers, has been a successful strategy. Alliant continues to build its specialty and middle market insurance business by expanding through a mix of organic growth, lateral hires and acquisitions. The company has reported strong revenue growth, healthy EBITDA margins, and good free-cash-flow-to-debt metrics. These strengths are offset by aggressive financial leverage and moderate interest coverage, along with its contingent/legal risk related to lateral hires (seasoned producers, mostly with specialty books of business) and acquisition integration risk. The company also faces potential liabilities from errors and omissions, a risk inherent in professional services. Giving effect to the incremental borrowing, Alliant will have pro forma debt-to EBITDA of just above 8.0x, (EBITDA - capex) interest coverage of about 2.0x, and free-cash-flow-to-debt in the mid-single digits, according to Moody's estimates. The rating agency expects that Alliant will reduce its leverage through EBITDA growth over the next few quarters. These pro forma metrics reflect Moody's accounting adjustments for operating leases, contingent earnout obligations, certain other non-recurring and unusual items, and run-rate EBITDA from acquisitions. The rating agency views Alliant's leverage as aggressive for its rating category, leaving little room for error in integrating acquired operations. Factors that could lead to an upgrade of Alliant's ratings include: (i) debt-to-EBITDA ratio below 6.5x, (ii) (EBITDA - capex) coverage of interest exceeding 2x, and (iii) free-cash-flow-to-debt ratio exceeding 5%. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio above 8x, (ii) (EBITDA - capex) coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below 2%. Moody's has affirmed the following ratings of Alliant Holdings Intermediate, LLC: Corporate family rating at B3; Probability of default rating at B3-PD; $685 million senior unsecured notes maturing in August 2023 at Caa2 (LGD6 from LGD5) (Co-issuer: Alliant Holdings Co-Issuer, Inc.); $200 million senior secured revolving credit facility maturing in May 2023 at B2 (LGD3); $2,071 million senior secured term loan maturing in May 2025 at B2 (LGD3). Moody's has assigned the following ratings to Alliant Holdings Intermediate, LLC: $505 million six-year senior secured term loan at B2 (LGD3). The outlook is stable. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Alliant, based in Newport Beach, California, is a specialty oriented insurance broker providing property & casualty and employee benefits products and services to middle-market clients across the US. The company generated revenue of $1.35 billion for 2018. ALLIANT HOLDINGS: S&P Rates $505MM Sr. Secured Debt 'B' ------------------------------------------------------- S&P Global Ratings said that it has assigned its 'B' senior secured debt rating to Alliant Holdings Intermediate LLC's proposed $505 million incremental term loan B due 2025. It also assigned a '3' recovery rating, indicating an expectation of meaningful (50%-70%; rounded estimate: 50%) recovery in case of default. The incremental term loan is nonfungible with the company's existing term loan B and is subject to the same terms and conditions. Alliant is issuing the proposed $505 million incremental debt, along with $57.5 million of new common equity, to repurchase equity from Stone Point Capital LLC and co-investors, repay outstanding revolver balance, and for general corporate purposes. Alliant's leverage as of year-end 2018 pro forma for the incremental debt deteriorates to 7.9x from 7x, but remains consistent with S&P's current ratings tolerances. Coverage also deteriorated modestly to about 2.0x pro forma for the new debt (and including interest from the new payment-in-kind toggle preferred instrument issued in January 2019) from about 2.6x at year-end 2018. S&P expects modest deleveraging over the next year, with leverage of 7.0x-7.3x by year-end 2019 through organic growth and earnings momentum. Consistent with its favorable track record, Alliant performed well in 2018. Total revenue was up about 20% for the year, 10% of which was organic. Robust organic growth was fostered by strong retention and new business trends in its specialty niches and continued lateral hire success. S&P adjusted margins remained favorable and steady at about 33.5% for the year. Acquisition activity was also robust and included two platform acquisitions (national specialty insurance broker Crystal & Co., and insurance consultant and due diligence advisor Harbor Group Consulting) and five tuck-in transactions throughout 2018. Alliant Holdings, L.P. Alliant Holdings Intermediate, LLC. Issuer Credit Rating B/Stable/-- New Rating Alliant Holdings Intermediate, LLC. Senior Secured US$505 mil term loan B bank in due 2025 B Recovery Rating 3(50%) ALTA MESA: Receives Default Notice for Failure to File Form 10-K ---------------------------------------------------------------- Alta Mesa Holdings, LP and Alta Mesa Finance Services Corp., both indirect subsidiaries of AMR, acknowledged receipt of a notice from the trustee under that certain indenture, dated as of Dec. 8, 2016, governing the Issuers' 7.875% Senior Notes due 2024, among the Issuers, U.S. Bank National Association, as trustee, and each of the subsidiary guarantors party thereto that the failure to file the AMH Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2018 by the date set forth in the rules and regulations promulgated by the Securities and Exchange Commission constitutes a default under Section 3.10 of the Indenture. The Indenture provides that the 10-K Default will give rise to an event of default under Section 6.1(4) of the Indenture if it continues for 30 days following the date of receipt of the Notice. Accordingly, if AMH is unable to file the AMH Form 10-K by May 19, 2019, the trustee may at any time after that date, and is required if directed by the holders of at least 25% in principal amount of the Notes, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes to be due and payable. If the 10-K Default ripens into an event of default under the Indenture, it would constitute an event of default under Section 7.01(d) of the Eighth Amended and Restated Credit Agreement, among AMH, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent and issuing lender, dated as of Feb. 9, 2018 (the "AMH RBL"). Furthermore, AMH did not furnish to the administrative agent and each lender the financial items and related deliveries required under Section 5.06(a) of the AMH RBL by April 30, 2019. This failure constitutes a default under the AMH RBL. If such Delivery Default remains unremedied on May 31, 2019, it would constitute an event of default under Section 7.01(c)(ii) of the AMH RBL. After the occurrence and during the continuance of any of the above-described events of default under the AMH RBL, if one arises, the administrative agent shall at the request, or may with the consent of a majority of the lenders, by notice to AMH (i) declare all lender obligations to make extensions of credit to be terminated and (ii) declare all principal, interest, fees, reimbursements, indemnifications and all other amounts payable under the AMH RBL due and payable. AMH said it is working diligently to furnish the items required under the Indenture and the AMH RBL. About Alta Mesa Headquartered in Houston, Texas, Alta Mesa Holdings, LP -- http://www.altamesa.net/-- is an independent energy company focused on the development and acquisition of unconventional oil and natural gas reserves in the Anadarko Basin in Oklahoma and provides midstream energy services, including crude oil and gas gathering, processing and marketing to producers in the STACK play region through Kingfisher Midstream, LLC. Alta Mesa reported a net loss of $77.66 million for the year ended Dec. 31, 2017, compared to a net loss of $167.9 million for the year ended Dec. 31, 2016. As of Sept. 30, 2018, Alta Mesa had $2.95 billion in total assets, $916.07 million in total liabilities, and $2.04 billion in total partners' capital. * * * As reported by the TCR on Feb. 26, 2019, Moody's Investors Service downgraded Alta Mesa Holdings, LP's (Alta Mesa) Corporate Family Rating (CFR) to Caa1 from B2. "The downgrade reflects Alta Mesa's heavy deficit funded development strategy in 2018 that resulted in very large projected negative free cash flow and raised concerns about capital efficiency and declining liquidity, as well as the sudden departure of Alta Mesa's long-standing senior management team," said Sajjad Alam, Moody's Senior Analyst. AMERICAN PRINTING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: American Printing Company, Inc. 428 Industrial Lane Birmingham, AL 35211 Business Description: American Printing Company, Inc. -- http://americanprintingco.net-- is a printing company headquartered in Birmingham, Alabama. The Company offers pre-press services, such as scanning, CTP technology, color retouching, stochastic and sublima printing, hi-fi mixed process, delano, and apogeex. It also provides finishing, specialty coatings, specialty process, direct mail and fulfillment services. American Printing is a family-run business founded in 1912. Chapter 11 Petition Date: May 3, 2019 Court: United States Bankruptcy Court Northern District of Alabama (Birmingham) Case No.: 19-01844 Judge: Hon. Tamara O. Mitchell Debtor's Counsel: Bill D. Bensinger, Esq. CHRISTIAN & SMALL, LLP 1800 Financial Center 505 North 20th Street Birmingham, AL 35203 Tel: 205-250-6626 205-795-6588 Fax: 205-328-7234 E-mail: bdbensinger@csattorneys.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert Stanford, president and CEO. 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/alnb19-01844.pdf ARIZONA AIRCRAFT: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Arizona Aircraft Painting, LLC 4911 E Falcon Dr Mesa, AZ 85215 Business Description: Arizona Aircraft Painting specializes in all aerospace performance coatings, combined with the latest in spray technology. The Company has a fully integrated, pressurized, and automatically climate controlled paint booth, which keeps the temperature and humidity constant for optimal painting conditions. The Company also offers design services, interior refurbishment, vortex generators, aircraft cleaning & detailing services, and window replacement services. Arizona Aircraft Painting operates out of a 10,000 square foot facility in Mesa, Arizona. Chapter 11 Petition Date: May 3, 2019 Court: United States Bankruptcy Court District of Arizona (Phoenix) Case No.: 19-05477 Judge: Hon. Daniel P. Collins Debtor's Counsel: Ronald J. Ellett, Esq. ELLETT LAW OFFICES, P.C. 2999 North 44th Street, Suite 330 Phoenix, AZ 85018 Tel: 602-235-9510 Fax: 602-235-9098 E-mail: rjellett@ellettlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Steven Head, member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/azb19-05477.pdf ASSUREDPARTNERS INC: Moody's Affirms B3 CFR Amid Incremental Notes ------------------------------------------------------------------ Moody's Investors Service has affirmed the B3 corporate family rating and B3-PD probability of default rating of AssuredPartners, Inc. following the company's announcement that it plans to issue an incremental $475 million in new senior notes (rated Caa2). The company will use proceeds from the incremental borrowing to help fund a partial recapitalization led by GTCR, repay revolving credit facilities, pay related fees and expenses and fund acquisitions. In the same action, Moody's affirmed the B2 rating on the senior secured revolving credit facility and the first-lien term loan and the Caa2 ratings on its existing senior notes. AssuredPartners also plans to increase its first-lien delayed draw facilities by $250 million for working capital and general corporate purposes, including to fund acquisitions. The outlook for AssuredPartners is stable. RATINGS RATIONALE According to Moody's, AssuredPartners' ratings reflect its growing presence in middle market insurance brokerage, its good mix of business across property & casualty and employee benefits, and healthy EBITDA margins. The company has made organizational changes to improve its organic growth, which Moody's expects will be in the low single digits through 2019. AssuredPartners is an active acquirer, having completed over 40 acquisitions in 2018 with total revenues rising 25% to $1.1 billion in 2018. The company allows acquired brokers to operate fairly autonomously, maintain their local and regional brands, while centralizing the accounting and controls function, as well as certain carrier relationships. Tempering these strengths are the company's large volume of acquisitions coupled with aggressive financial leverage and significant cash outflows related to contingent earnout liabilities. Given the company's high volume of acquisitions, its existing and acquired operations face potential liabilities from errors and omissions in the delivery of professional services. The company's EBITDA margin has declined in recent periods as the company absorbs its largest acquisition, Keenan. Given the persistently high financial leverage, the company has little room for error in managing its existing and acquired operations. Giving effect to the proposed incremental borrowing and associated acquired EBITDA, Moody's estimates that AssuredPartners' has a pro forma debt-to-EBITDA ratio higher than 7.5x, with (EBITDA - capex) interest coverage of around 2x and a free-cash-flow-to-debt ratio in the low single digits. These pro forma metrics include Moody's accounting adjustments for operating leases, deferred earnout obligations, run-rate earnings from completed acquisitions and certain non-recurring costs. Moody's expects the company to reduce its debt-to-EBITDA ratio below 7.5x over the next few quarters through continued EBITDA growth and slight amortization of the term loan. While the performance-based deferred earnout arrangements promote growth among the company's acquired brokers, they also add to its financial leverage and near-term cash outflows. Factors that could lead to an upgrade of AssuredPartners' ratings include: (i) debt-to-EBITDA ratio below 6x, (ii) (EBITDA - capex) coverage of interest consistently exceeding 2x, and (iii) free-cash-flow-to-debt ratio exceeding 5%. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio remaining above 7.5x, (ii) (EBITDA - capex) coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below 2%. Moody's affirmed the following ratings: Corporate family rating at B3; Probability of default rating at B3-PD; $267.5 million ($193 million outstanding as of 4/26/19) senior secured revolving credit facility maturing in October 2022 at B2 (LGD3); $1.7 billion senior secured term loan maturing in October 2024 at B2 (LGD3); $500 million senior unsecured notes maturing in August 2025 at Caa2 (LGD5). Moody's has assigned the following ratings (and loss given default (LGD) assessments): $267.5 million senior secured five-year revolving credit facility at B2 (LGD3); $250 million delayed draw senior secured five-year term loan at B2 (LGD3); $475 million senior unsecured eight-year notes at Caa2 (LGD5). As part of the financing, the company will repay and terminate the existing revolving credit facility. The outlook for the issuer is stable. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Based in Lake Mary, Florida, AssuredPartners ranks among the 15 largest US insurance brokers. The company generated revenue of $1.1 billion for 2018. AYTU BIOSCIENCE: Averaden Agrees to Perform Consulting Services --------------------------------------------------------------- Aytu BioScience, Inc. has entered into an Independent Contractor Services Agreement with Averaden, LLC, pursuant to which Averaden Contractor agrees to perform certain consulting services with respect to corporate business development activities for the Company. In return, the Company has agreed to pay the Contractor $8,400 per month, which amount shall not exceed $110,000 in aggregate. The Agreement will terminate on May 15, 2020. Gary Cantrell, a member of the board of directors of the Company, is a principal of the Contractor. Mr. Cantrell will continue to serve as a member of the Board and the Compensation Committee of the Company, but has resigned from the Company's Audit Committee in order to comply with the audit committee independence rules of Nasdaq and the Securities and Exchange Commission. About Aytu BioScience Englewood, Colorado-based Aytu BioScience, Inc. (OTCMKTS:AYTU) -- http://www.aytubio.com/-- is a commercial-stage specialty pharmaceutical company focused on global commercialization of novel products addressing significant medical needs. The company currently markets Natesto, the only FDA-approved nasal formulation of testosterone for men with hypogonadism, ZolpiMist, an FDA-approved, commercial-stage prescription sleep aid indicated for the short-term treatment of insomnia characterized by difficulties with sleep initiation, and recently acquired Tuzistra XR, the only FDA-approved 12-hour codeine-based antitussive oral suspension. Additionally, Aytu is developing MiOXSYS, a novel, rapid semen analysis system with the potential to become a standard of care for the diagnosis and management of male infertility caused by oxidative stress. MiOXSYS is commercialized outside of the U.S. where it is a CE Marked, Health Canada cleared, Australian TGA approved, Mexican COFEPRAS approved product, and Aytu is planning U.S.-based clinical trials in pursuit of 510k de novo medical device clearance by the FDA. Aytu's strategy is to continue building its portfolio of revenue-generating products, leveraging its focused commercial team and expertise to build leading brands within large, growing markets. Aytu Bioscience reported a net loss of $10.18 million for the year ended June 30, 2018, compared to a net loss of $22.50 million for the year ended June 30, 2017. As of Dec. 31, 2018, Aytu Bioscience had $42.39 million in total assets, $22.50 million in total liabilities, and $19.89 million in total stockholders' equity. EKS&H LLLP, in Denver, Colorado, the Company's auditor since 2015, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended June 30, 2018, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. BAUSCH HEALTH: Fitch Hikes Long-Term IDR to 'B', Outlook Stable --------------------------------------------------------------- Fitch Ratings has upgraded Bausch Health Companies Inc.'s and Bausch Health Americas, Inc.'s Long-Term Issuer Default Ratings to 'B' from 'B-'. Fitch has also upgraded BHC's secured debt to 'BB'/'RR1' from 'BB-'/'RR1' and unsecured debt to 'B'/'RR4' from 'B-'/'RR4'. The ratings apply to approximately $24.6 billion of debt outstanding at Dec. 31, 2018. The Rating Outlook is Stable. KEY RATING DRIVERS Good Progress in Business Turn-around: The upgrade reflects Bausch's progress in stabilizing operations and reducing debt since mid-2016. The company is poised to return the dermatology business to profitable growth in 2019-2020. Throughout the business turn-around, BHC consistently generated strong FCF relative to the 'B' category rating, pushed its nearest large debt maturity out until 2022, and loosened restrictive secured debt covenants through refinancing transactions. The company's stronger operating profile and consistent cash generation should enable it to further reduce leverage in the near term. Lingering High Leverage: The balance sheet is highly leveraged due to the funding of past acquisitions and EBITDA growth hampered by operational issues under prior management. The company has made good progress in reducing the absolute level of debt outstanding, having reduced debt by approximately $7.8 billion since March 31, 2016 with a combination of internally generated cash flow and proceeds from asset divestitures. Leverage remains modestly high for the 'B' rating, with current gross debt to EBITDA of approximately 7.2x; however, Fitch expects the company will continue to pay down term loan balances with cash on hand in 2019-2020. Return to Growth in 2019-2020: Bausch operates with a reasonably diverse business model relative to its products, customers and geographies served. Many of the company's businesses are comprised of defensible product portfolios, which Fitch believes are capable of generating durable margins and cash flows. While the loss of patent protection on some of BHC's branded drugs will be a drag on growth in 2019, Fitch believes that the expected long-term growth for Bausch's eye health (Bausch + Lomb/International) and gastrointestinal (GI/Salix) businesses support the company's operating prospects. Further supporting the operating outlook, Fitch expects that 2019 will be an inflection point for the dermatology business, which generated 7.5% of total sales in 2018. Growth of the dermatology business will be tied to the successful commercialization of recently launched products. Reliance on New Products: The stabilization of Bausch's operating profile has involved an increased focus on developing an internal research and development pipeline, which Fitch believes is constructive for the company's credit profile over the long term. This strategy is not without risk since Bausch needs to ramp up the utilization of recently-approved products through successful commercialization efforts. These products include Siliq (for the treatment of moderate-to-severe plaque psoriasis, although with safety restrictions), Bryhali (plaque psoriasis), Lumify (red eye) and Vyzulta (glaucoma). The recent approval of Duobrii or IDP-118 (plaque psoriasis) should also help to strengthen the company's dermatology business. Near-Term Maturities Manageable: Bausch consistently generates significant positive FCF (LTM FCF margin of 15.1%) and has satisfied debt maturities until 2022 aside from annual amortization recruitments on the term loans of about $300 million annually. The company's ability to access the credit markets for unsecured notes issues in late 2017 and early 2018 was an important step forward for the prospects of refinancing shorter dated maturities. DERIVATION SUMMARY Bausch, rated 'B'/Stable, is significantly larger and more diversified than speciality pharmaceutical industry peers Mallinckrodt plc ('bb-*'/Outlook Negative) and Endo International plc Endo ('b-*'/Outlook Stable). While all three manufacture and market specialty pharmaceuticals and have maturing pharmaceutical products, Bausch Health's Bausch + Lomb (B+L) business meaningfully decreases business concentration risk relative to Mallinckrodt and Endo. B+L offers operational diversification in terms of geographies and payers. Many of its products are purchased directly by customers without the requirement of a prescription. However, Bausch's rating also reflects gross debt leverage that is higher than peers. The company accumulated a significant amount of debt through numerous acquisitions. In addition, Bausch had a number of missteps in the integration process and other operational issues. New management has been focusing on reducing leverage by applying operating cash flow and divestiture proceeds to debt reduction and returning the business to organic growth through internal product development efforts. Fitch links the ratings of Bausch Health Companies Inc. (parent) and Bausch Health Americas, Inc. (subsidiary), and assigns the same 'B' Long-Term IDR to both entities. The linkage reflects the strong legal and operational ties between the parent and the subsidiary. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Forecasted revenue returning to growth in 2019-2020. Fitch expects the loss of exclusivity (LOE) on products will be a roughly $400 million headwind to revenues in 2019 and forecasts total revenue growth of less than 1%. The growth of Siliq, Bryhali and potentially Duobrii should help return the dermatology business to growth in 2019-2020; -- EBITDA of $3.4 billion in 2019 and increasing during the intermediate term, driven by revenue growth, improved sales mix and cost control; -- Normalized annual FCF of $1.2 billion to $1.3 billion; -- Continued debt reduction utilizing FCF; -- Leverage declining to below 7.0x by the end of 2019. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- An expectation of gross debt leverage (total debt/EBITDA) durably below 6.0x and lease adjusted leverage (total adjusted debt/EBITDAR) durably below 6.5x; -- Bausch continues to maintain a stable operating profile and refrains from pursuing large, leveraging transactions including acquisitions; -- Forecasted FCF remains significantly positive; -- Debt maturities are successfully addressed well in advance through a combination of debt reduction and refinancing. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Gross debt leverage (total debt/EBITDA) durably above 7.0x and lease adjusted leverage (total adjusted debt/EBITDAR) persisting above 7.5x; -- Material operational stress returns without a clear path to stabilize in the near term; -- FCF significantly and durably deteriorates; -- Refinancing risk increases and the prospect for meaningful leverage reduction weakens. LIQUIDITY Bausch had adequate near-term liquidity at Dec. 31, 2018, including cash on hand of $723 million and roughly $980 million availability under its $1.225 billion revolving credit facility that matures on June 1, 2023. Availability was reduced by $75 million of revolver borrowings and approximately $170 million in letters of credit. The company's refinancing activities have largely satisfied debt maturities until 2022. Fitch estimates that Bausch currently has debt maturities and loan amortizations of roughly $127 million in 2019, $303 million in 2020, $303 million in 2021 and $1.55 billion in 2022. Fitch forecasts 2019 FCF of $1.0 billion to $1.1 billion, and the rating incorporates an expectation that the company will continue to prioritize use of cash for debt reduction ahead of acquisitions or share repurchases. Bausch has consistently generated significantly positive FCF during 2015-2018, despite facing serious operating challenges. Fitch expects the company to maintain adequate headroom under the debt agreement financial maintenance covenants during the 2019-2022 forecast period. FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: Bausch Health Companies Inc. -- Long-term Issuer Default Rating (IDR) to 'B' from 'B-'; -- Senior secured notes to 'BB'/'RR1' from 'BB-'/'RR1'; -- Senior unsecured notes to 'B'/'RR4' from 'B-'/'RR4'. The Rating Outlook is Stable. Bausch Health Americas, Inc. -- Long-term IDR to 'B' from 'B-'; -- Senior secured bank facility to 'BB'/'RR1' from 'BB-'/'RR1'; -- Senior unsecured notes to 'B'/'RR4' from 'B-'/'RR4'. The Rating Outlook is Stable. Recovery Assumptions The recovery analysis assumes that Bausch would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch estimates a going concern enterprise value of $19.1 billion for Bausch and assumes that administrative claims consume 10% of this value in the recovery analysis. The going concern EV is based upon estimates of post-reorganization EBITDA and the assignment of an EBITDA multiple. Fitch's estimate of Bausch's going concern EBITDA of $2.55 billion is 32% lower than the estimated 2019 EBITDA, reflecting a scenario where the recent stabilization in the base business is reversed and the company is not successful in commercializing the R&D pipeline. Fitch assumes Bausch will receive a going-concern recovery multiple of 7.5x EBITDA. This is slightly higher than the 6.0x-7.0x Fitch typically assigns to specialty pharmaceutical manufacturers, representing Bausch + Lomb's relatively more durable consumer products focus and the company's larger scale and broader product portfolio than peers. The current average 2018 forward trading multiple of Bausch and the company's closet peers is 9.9x. Fitch applies a waterfall analysis to the going concern EV based on the relative claims of the debt in the capital structure, and assumes that the company would fully draw the revolvers in a bankruptcy scenario. The senior secured credit facility, including the term loans and revolver, and senior secured notes, have outstanding recovery prospects of 100% in a reorganization scenario and are rated 'BB'/'RR1', three notches above the IDR. The senior unsecured notes recover 38% and are rated 'B'/'RR4'. BCP RENAISSANCE: Fitch Gives BB-(EXP) Rating to $65MM Term Loan B ----------------------------------------------------------------- Fitch Ratings has affirmed the debt rating and Recovery Rating on the senior secured debt issued by BCP Renaissance Parent, LLC and assigned an expected 'BB-(EXP)' debt issue rating and 'RR3' Recovery Rating to BCP's new $65 million senior secured term loan B due 2024. The Rating Outlooks are Stable. RATING RATIONALE The ratings reflect the completion of pipeline construction, start-up operations to provide natural gas transportation to several natural gas shippers under long-term contracts, reliance on about one-half of cash flow from weak credit quality shipping counterparties and significant refinance risk in 2024 that has increased due to new additional debt at BCP. Fitch has revised its base and rating cases to take into account the additional debt, reduced cash flow due to higher-than-forecast ad valorem taxes and a more favorable view of near-term volumes based on Rover Pipeline's (Rover) market position as an exporting gas pipeline from the rapidly growing Marcellus region. Under revised rating case assumptions, leverage at maturity is 7.5x, consistent with the assigned rating. KEY RATING DRIVERS Fixed-Price Contracts - Revenue Risk: Midrange: Revenue risk primarily reflects the sub-investment-grade credit quality of the shipper counterparties, with revenues split almost evenly between shippers rated at or above the 'BB' rating level and those that are rated either below the 'BB' rating level or not rated by Fitch. The pricing structure of the take-or-pay agreements provides revenue stability so long as the shippers remain solvent. In the event that a shipper is unable to meet its commitments, Rover would be forced to remarket capacity at prevailing market rates, which may demonstrate high volatility. The potential for a longer-term reduction in demand and the prospect of competing pipeline development could put downward pressure on the pricing of any remarketed capacity. Abundant Natural Gas - Supply Risk: Midrange: Fitch believes Rover should be able to remarket capacity based on the fundamental economics of the Marcellus and Utica shale production regions, particularly in the near to medium term when Rover represents one of the only available transportation options for the contracted shippers. Rover provides shippers with access to multiple regions of steady industrial demand and gas storage locations such that shipper netbacks would improve considerably versus local markets that are oversupplied due to a lack of takeaway capacity. The competitive position of Rover should support full utilization of the pipeline system going forward, even if pricing is lower than originally contracted following any potential shipper bankruptcy. Established Operating Profile - Operation Risk: Midrange: Operation risk is generally low based on the evaluation of the independent technical expert, the asset's low complexity, the use of conventional technology and the operator's extensive experience. Tempering the otherwise low-risk operating profile is the green-field nature of the pipeline system and the lack of risk transfer from the Rover operating company to third parties. High Leverage and Refinance risk - Debt Structure: Weaker: BCP's debt structure includes initially high leverage, variable interest rate risk, and significant refinancing risk. The term loans employ a partially amortizing structure that triggers a balloon payment at maturity, and BCP's ability to refinance will be dependent upon the efficacy of a cash sweep. Financial metrics are generally robust during the seven-year tenor of the term loans, but BCP's project life coverage ratio around the time of debt maturity falls near 1x under rating case assumptions. The risk of structural subordination of BCP's indebtedness to Rover is low due to lack of distribution covenants at Rover in conjunction with restrictions on additional indebtedness and capiex activity. Financial Profile DSCRs average 1.4x under rating case conditions during the tenor of the term loans and average 2.2x in the post-refinancing period, reflecting the benefit of the flexible repayment profile and the long-term value of Rover's contracts. Leverage at term loan debt maturity in these conditions is from 7.5x. Leverage does not decline below 4.0x until 2032 based on Fitch's assumption that debt at maturity is refinanced in a similar structure. PEER GROUP Fitch has assigned investment-grade ratings to comparable pipeline systems, such as Midcontinent Express Pipeline, LLC (BBB-/Negative), Ruby Pipeline LLC (BBB-/Negative) and Rockies Express Pipeline, LLC (BBB-/Stable). BCP's initial leverage exceeds 10x, which is considerably weaker than the leverage under 4.0x exhibited by these higher rated peers that also generally have a stronger mix of shipper counterparties and also higher exposure to take-or-pay contracts rolling-off in the next two years. Additionally, debt at the peer pipelines is directly at the operating level. Fitch recognizes the potential for BCP to rapidly de-lever under the term loans, suggesting that BCP has some capacity to improve the capital structure over time if economic conditions are favorable and the shipper contracts remain in force. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- Increased exposure to material merchant risk following a hypothetical shipper bankruptcy, such that Rover is forced to remarket capacity at lower-than-contracted pricing; -- Adverse market conditions that interfere with BCP's ability to meet target amortization levels and/or refinance the balloon maturity in 2024, particularly if leverage exceeds 8x absent mitigating factors; -- Additional indebtedness at Rover that is not offset by an increase in revenue, such that cash distributions to BCP fall materially below base case levels. Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- Financial performance that allows BCP to consistently meet targeted amortization and reduce leverage below 5.0x; -- Improvement in the credit quality of the shipper counterparties to the 'BB' rating category, such that the proportion of contracted revenue exceeds 75% of total projected revenue. TRANSACTION SUMMARY BCP Renaissance Parent LLC is a special purpose company created to finance and acquire a minority equity interest in the Rover pipeline project, which consists of a greenfield 713-mile interstate pipeline designed to transport 3.25 bcfd of natural gas. The pipeline is primarily situated in northern Ohio, extending from the Vector Pipeline interconnection in southeastern Michigan to Ohio's eastern border, with laterals reaching into West Virginia and Pennsylvania. The project has contracted 98% of the pipeline's capacity with nine natural gas producers/shippers under long-term take-or-pay agreements with 15-20-year terms. An affiliate of ETP Legacy, LP (ETP) is operating the project. The $1.25 billion senior secured term loan financed the sponsor's acquisition of a 32.435% ownership interest in the Rover pipeline from ETP, the previous majority owner. The proceeds of the financing funded the acquisition payment, the sponsor's share of construction costs, interest during construction and the debt service reserve. CREDIT UPDATE BCP is raising $65 million in senior secured debt that ranks pari passu with the existing senior secured debt. Loan provisions for the new debt are expected to mirror the existing debt. BCP will use the proceeds to make a distribution to affiliates of the ultimate parent, Blackstone Group, L.P. Ad valorem taxes at Rover are higher than expected, which will reduce distributions to BCP by about $9 million annually through 2033. BCP reports that revenues from one shipper are up about 6% from earlier projections due to additional contracts but that spot sales are about $4 million lower than forecast due to lower than planned spot prices. The additional debt, which raises overall debt and interest expense, leads to a higher debt balance at term loan maturity in 2024 than previously forecast. Lower distributions from Rover along with a cash flow sweep holiday until the third quarter of 2019 exacerbate the additional debt to increase leverage in all years in Fitch's revised base and rating cases. Marcellus and Utica production remains solid. The U.S. Energy Information Agency reports that natural gas production in the Marcellus increased 13% from March 2018 to March 2019. Growth in the Utica basin over the same period was 21%. Part of the reason for the increase is the growth in exports out of the region by way of new pipeline capacity including Rover and other new pipes. Given the glut of natural gas production in the Marcellus, shippers on Rover and other new export pipes are able to sell their volumes to higher price markets and improve their netback position, which supports increased production. Rover's market impact is as expected. Market data indicate that Rover has led to a narrowing of the natural gas price differential between the Dominion South hub of the Marcellus - Rover's entry area -- and Henry Hub. The differential between other Marcellus hubs and Henry Hub have not changed since export capacity from those areas has not built out yet. Additionally, market data indicate that natural gas volumes from the Marcellus into the Lebanon Hub from established pipelines have declined significantly since Rover began operations. These developments confirm Rover's first mover advantage and currently help to mitigate the risk of Rover losing a weak shipping counterparty. Considerable pipeline expansion is occurring in the region and more is expected as long as Marcellus and Utica producers can realize higher netbacks from remote markets. The more competition, the more challenge for Rover to extend contracts, which could influence its ability to refinance debt at maturity on favorable terms. Recent start-ups include Nexus and Atlantic Sunrise. However, Fitch believes that it is increasingly difficult to establish large long-haul pipelines in the region. FINANCIAL ANALYSIS In its revised base case, Fitch assumes current levels of contract, spot and backhaul volumes through term loan maturity in 2024, reflecting actual performance along with expectations of favorable market conditions over the near term. After the maturity date, Fitch applies a 10% reduction to spot revenues and all revenues associated with low speculative-grade shippers and spot and backhaul revenue projections through the forecast period to late 2037. The reduction recognizes the potential for a shipper bankruptcy and is approximately equivalent to the loss of all merchant revenues, or the revenues associated with one of the speculative-grade shippers other than Ascent Utica. In 2024, Fitch assumes an effective extension of the term facility and the cash sweep at an all-in average interest rate of 8%. DSCRs average 1.5x during the tenor of the term loan facility and 2.9x post-refinancing. At term loan refinance, leverage is 6.6x and the PLCR based on revenue through late 2037 is about 1.2x at an 8% discount rate. The PLCR would be about 1.3x at 6% or the approximate current cost of debt. These PLCR calculations include cash flow only to late 2037 based on model limitations, producing conservative results. Fitch's rating case further sensitizes the base case assumptions through a 10% increase in O&M costs, a further 5% decline in the low speculative-grade revenue haircut, and adds the new debt. DSCRs average 1.4x during the tenor of the term loan and average 2.1x in the post-refinancing period, reflecting the benefit of the flexible repayment profile and the long-term value of Rover's contracts. At term loan refinance, leverage is 7.5x and the PLCR based on revenue through late 2037 is about 1.0x at the 8% discount rate and 1.1x at a 6% discount rate Recovery Fitch's revised recovery analysis assumes a default scenario in which a combination of lower capacity prices and marketed volumes push Rover's revenues 30% below sponsor case levels. The debt service reserve would be depleted such that default occurs at the term loans' maturity in 2024. The 30% reduction in revenues corresponds to approximately $95 million per year of distributable cash flow to BCP. This reduced level of cash flow is assumed to persist indefinitely and represents BCP's EBITDA as a going concern in a distressed market environment. Fitch applied a multiple of 8x against the 'going concern' EBITDA to calculate an enterprise value of $760 million for BCP. The multiple reflects Fitch's internal views and a comparison to transaction multiples for similar companies. The Corporates group has applied bespoke recovery analyses for midstream gas companies only in isolated instances, as ratings within the sector only rarely fall below the 'BB' category. An EBITDA multiple approach for a going concern was applied in each case, and an EBITDA multiple of 8x appears reasonable for Rover compared with the limited pool of peers. The enterprise value less 10% for administrative fees in bankruptcy is divided by the $1.23 billion of term loans outstanding at default to calculate a recovery rate of 56%, which falls within the 51%-70% band of recovery rates that correspond to the 'RR3' Recovery Rating. This level of recovery is described as 'Good' on the recovery ratings scale. Criteria Variation The analysis includes a variation from the "Rating Criteria for Infrastructure and Project Finance", as this criteria excludes recovery prospects given a default in instrument ratings provided under this framework, which focus on the probability of default. Nevertheless, in the context of the rating, a recovery rating has been provided in line with the "Corporates Notching and Recovery Ratings Criteria" published in March 2018. BCP RENAISSANCE: Moody's Gives B1 Rating to $65MM Term Loan B ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to BCP Renaissance Parent L.L.C.'s proposed $65 million senior secured Term Loan B due November 2024. BCP Renaissance's existing ratings including its B1 Corporate Family Rating, the B1 rating on its existing Term Loan B and its B1-PD Probability of Default Rating are not affected by this rating assignment. The outlook is stable. The proposed $65 million Term Loan B is rated B1, equivalent to the B1 Corporate Family Rating, as the Term Loan B is the only debt in BCP Renaissance's capital structure. Assignments: Issuer: BCP Renaissance Parent L.L.C. Senior Secured Term Loan B, Assigned B1 (LGD4) RATINGS RATIONALE BCP Renaissance's B1 CFR reflects its non-operated 32.4% indirect ownership interest in the Rover natural gas pipeline, a strategic link which provides natural gas producers in the Utica and Marcellus Basins with much needed expanded geographic access beyond constrained local markets. Firm Transportation Service Agreements aggregating 3.1 billion cubic feet per day of Rover's 3.25 Bcf per day nameplate capacity is contracted on a "take-or-pay" basis with eight natural gas producers. Effective September 1, 2018, FERC in-service authorizations enabled Rover to begin earning on 100% of its long haul contractual commitments, with final completion achieved November 1. Moody's estimates that the weighted average rating of the shipper portfolio has improved one notch to Ba2 since BCP Renaissance's initial rating in September 2017, with the remaining weighted average life of the contract portfolio approximating 16-years. Notwithstanding the strong asset quality and strategic value of a fully completed and in-service Rover pipeline, BCP Renaissance carries a heavy debt load, with debt/EBITDA initially exceeding 8x, and Funds From Operations (FFO)/debt falling well below 10%.The rating reflects the elevated leverage of BCP Renaissance's investment in Rover, essentially a highly leveraged holding company loan. Leverage is expected to decline from its initial high levels, the function of a cash flow sweep of 100% of available cash to the extent leverage exceeds 6x. Under the joint venture agreement governing Rover, it is required to distribute all free cash flow to the partners. Moreover, whereas Rover incurred completion delays and substantial cost increases, the joint venture agreement governing BCP Renaissance's investment in Rover insulates it from these risks, insulation which continues to the extent of any further construction-related costs on Rover. BCP Renaissance has no obligation to fund beyond the $1.57 billion fixed dollar amount of its October 2017 investment in Rover, and the funding of any incremental costs incurred to complete the project will not dilute its interest. The outlook is stable reflecting the stable, fully contracted cash flows generated on a take-or-pay basis by the fully in-service Rover pipeline, and the continuing insulation of BCP Renaissance from any further completion delays or cost increases. If debt/EBITDA declines towards 5x with FFO/debt comfortably exceeding 10%, a rating upgrade could be considered. A downgrade could occur should the credit quality of Rover's contracted shippers deteriorates, or if debt/EBITDA and FFO/debt do not show steady improvement. Blackstone Energy Partners II L.P. and Blackstone Capital Partners VII L.P. (collectively "Blackstone") established BCP Renaissance Parent L.L.C. to acquire and hold a 49.9% interest in ET Rover Pipeline LLC (ET Rover), the intermediate holding company that owns a 65% interest in Rover Pipeline LLC, from Energy Transfer Partners, L.P. (now Energy Transfer Operating, L.P. "ETO," Baa3 stable) in October 2017. ETO holds the remaining 50.1% interest in ET Rover (32.6% net), and is the operator and construction manager of the project. Traverse Midstream Partners LLC (B2 stable) holds the remaining 35% non-operating interest in the Rover pipeline. BIOSCRIP INC: Incurs $10.3 Million Net Loss in First Quarter ------------------------------------------------------------ BioScrip, Inc., issued a press release reporting its first quarter 2019 financial results. First Quarter 2019 Highlights * Net revenue of $179.0 million, up 6.2% compared to $168.6 million in the first quarter of 2018. * Net revenue up 7.8% on a billing day rate basis; there was one less billing day in the first quarter of 2019 as compared to the first quarter of 2018. * Net loss from continuing operations of $10.3 million, compared to $13.0 million in the prior year quarter. * Adjusted EBITDA of $7.1 million, up 25.6% compared to $5.6 million in the prior year quarter, despite $4.5 million of increased bad debt expense in the current year quarter. * Net cash used in operating activities of $6.6 million, reflecting $7.0 million of operational cash flow and $13.6 million of interest payments, including a bi-annual bond interest payment of $8.9 million. * Liquidity of $5.7 million at March 31, 2019, consisting of cash and cash equivalents. Daniel E. Greenleaf, president and chief executive officer, commented, "BioScrip delivered net revenue growth of 7.8% on a billing day rate basis in the first quarter of 2019. This is the third consecutive quarter of comparable net revenue growth for BioScrip, and we are confident this trend will continue. Adjusted EBITDA increased 25.6% year over year, to $7.1 million, despite $4.5 million of higher bad debt expense in the quarter, and was in line with our internal expectations. We continue to make progress in improving our cash collections and expect that bad debt expense as a percent of sales will improve." Mr. Greenleaf continued, "The merger transaction with Option Care continues to proceed on plan, and we filed the preliminary merger proxy statement earlier this week, highlighting the earnings power of the pro forma combined company. We remain incredibly enthusiastic about the strategic and financial virtues of this combination, which will create the nation's leading independent national provider of home infusion services." Financial Guidance and Conference Call Given the pending combination with Option Care, the Company will not be providing BioScrip financial guidance and will not be hosting a quarterly conference call. The Company and Option Care intend to conduct investor and analyst meetings in the coming days. About BioScrip, Inc. Headquartered in Denver, Colo., BioScrip, Inc. -- http://www.bioscrip.com/-- is an independent national provider of infusion and home care management solutions, with approximately 2,100 teammates and nearly 70 service locations across the U.S. BioScrip partners with physicians, hospital systems, payors, pharmaceutical manufacturers and skilled nursing facilities to provide patients access to post-acute care services. BioScrip operates with a commitment to bring customer-focused pharmacy and related healthcare infusion therapy services into the home or alternate-site setting. BioScrip reported a net loss attributable to common stockholders of $62.90 million in 2018, following a net loss attributable to common stockholders of $74.27 million in 2017. As of March 31, 2019, Bioscrip had $597.19 million in total assets, $657.28 million in total liabilities, $3.33 million in series A convertible preferred stock, $92.9 million in series C convertible preferred stock, and a total stockholders' deficit of $156.34 million. * * * As reported by the TCR on Aug. 1, 2018, Moody's Investors Service upgraded BioScrip Inc's Corporate Family Rating to 'Caa1' from 'Caa2'. BioScrip's Caa1 Corporate Family Rating reflects the company's very high leverage and weak liquidity. S&P Global Ratings placed its ratings on BioScrip Inc., including the 'CCC+' issuer credit rating, on CreditWatch with positive implications. The CreditWatch positive placements for the ratings on Bioscrip reflect the announcement that Bannockburn, Ill.-based HC Group Holdings III Inc. plans to acquire Bioscrip in an all-stock transaction., as reported by the TCR on March 22, 2019. BLACKWOOD REDEVELOPMENT: Hires Nehmad Perrillo as Counsel --------------------------------------------------------- Blackwood Redevelopment Co. Inc., seeks authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Nehmad Perrillo Davis & Goldstein, PC, as counsel to the Debtor. Blackwood Redevelopment requires Nehmad Perrillo to: -- assist in the preparation of the petition and ancillary reporting documents; -- consult with creditors concerning the administration of the bankruptcy case; -- form a Plan; and -- advise on the Debtor's rights, duties and obligations. Nehmad Perrillo will be paid based upon its normal and usual hourly billing rates. Nehmad Perrillo will be paid a retainer of $25,000. The Debtor has an outstanding fee due of $1,717, of which the firm agrees to waive. Nehmad Perrillo will also be reimbursed for reasonable out-of-pocket expenses incurred. Scott H. Marcus, a partner at Nehmad Perrillo, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Nehmad Perrillo can be reached at: Scott H. Marcus, Esq. NEHMAD PERRILLO DAVIS & GOLDSTEIN 4030 Ocean Heights Avenue Egg Harbor Township, NJ 08234 Tel: (609) 927-1177 About Blackwood Redevelopment Blackwood Redevelopment Co. Inc., based in Blackwood, NJ, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 19-15937) on March 25, 2019. In the petition signed by Daniel Riiff, president, the Debtor disclosed $1,400,000 in assets and $4,342,768 in liabilities. Scott H. Marcus, Esq., at Nehmad Perrillo Davis & Goldstein, PC, serves as bankruptcy counsel to the Debtor. BLUE CAT CARRIERS: Seeks to Hire Seiller Waterman as Counsel ------------------------------------------------------------ Blue Cat Carriers LLC, seeks authority from the U.S. Bankruptcy Court for the Western District of Kentucky to employ Seiller Waterman LLC, as counsel to the Debtor. Blue Cat Carriers requires Seiller Waterman to: a. give legal advice with respect to the Debtor's powers and duties as debtor in possession in the continued operations of its business and management of its assets; b. take all necessary action to protect and preserve Debtor's estate, including the prosecution of actions on behalf of the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, if any, and objecting to claims filed against the Debtor's estate; c. prepare on behalf of Debtor all necessary motions, answers, orders, reports and other legal papers in connection with the administration of the Debtor's estate herein; and d. perform any and all other legal services for Debtor in connection with this chapter 11 case and the formulation and implementation of the Debtor's chapter 11 plan. Seiller Waterman will be paid based upon its normal and usual hourly billing rates. Seiller Waterman received from the Debtor a retainer in the sum of $25,000. Of this retainer, $5,355 has been utilized for prepetition services and the chapter 11 filing fee, leaving a balance of $19,645 in the Firm's trust account. Seiller Waterman will also be reimbursed for reasonable out-of-pocket expenses incurred. Neil C. Bordy, a partner at Seiller Waterman, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Seiller Waterman can be reached at: Neil C. Bordy, Esq. SEILLER WATERMAN LLC Meidinger Tower – 22nd Floor 462 S. Fourth Street Louisville, KY 40202 Tel: (502) 584-7400 Fax: (502) 583-2100 E-mail: cantor@derbycitylaw.com About Blue Cat Carriers Blue Cat Carriers LLC, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Ky. Case No. 19-31199) on April 15, 2019, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Neil C. Bordy, Esq. at Seiller Waterman LLC. BOEAU BELLE: Seeks to Hire Jeff Wright as Accountant ---------------------------------------------------- Boeau Belle, Ltd., Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Jeff Wright Consulting Services, LLC, as accountant to the Debtor. Boeau Belle requires Jeff Wright to: (a) prepare Monthly Operating Reports; (b) provide general bookkeeping services; (c) prepare state and federal tax returns; (d) prepare plan projections; (e) perform other accounting tasks to assist in the Debtor's daily operations; and (f) provide testimony before the Court, if necessary. Jeff Wright will be paid at the hourly rate of $225. Jeff Wright will also be reimbursed for reasonable out-of-pocket expenses incurred. Jeffrey A. Wright, partner of Jeff Wright Consulting Services, 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 Debtor and its estates. Jeff Wright can be reached at: Jeffrey A. Wright JEFF WRIGHT CONSULTING SERVICES, LLC 10935 Estate Lane, Suite 432 Dallas, TX 75238 Tel: (610) 213-8168 About Boeau Belle, Ltd., Inc. Founded in 2012, Boeau Belle Ltd. Boeau Belle Salon & Spa offers a wide range of professional beauty services including hair cuts & style, hair color, nails, waxing, threading, lash & brow tinting/extensions, and make up application, as well as facials and body polish services. http://www.boeaubelle.com/ Boeau Belle Ltd., Inc., based in Southlake, TX, filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 19-40708) on March 18, 2019. The Hon. Brenda T. Rhoades presides over the case. Christopher J. Moser, Esq., at Quilling Selander Lownds Winslett & Moser, PC, serves as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and liabilities. The petition was signed by Sid Biranth, president. BRAVEHEART REAL: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Braveheart Real Estate, Inc. as of May 1, according to a court docket. About Braveheart Real Estate Inc. Braveheart Real Estate, Inc., a real estate lessor headquartered in Stanaford, W.Va., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-50044) on March 22, 2019. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The case has been assigned to Judge Frank W. Volk. Caldwell & Riffee is the Debtor's legal counsel. BROOALEXA LLC: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of BrooAlexa, LLC as of May 1, according to a court docket. About BrooAlexa LLC BrooAlexa, LLC, a multi-faceted construction company in Charleston, W.Va., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-20128) on March 27, 2019. At the time of the filing, the Debtor disclosed $25,352 in assets and $1,557,712 in liabilities. The case has been assigned to Judge Frank W. Volk. Pepper & Nason is the Debtor's legal counsel. CALIFORNIA RESOURCES: Widens Net Loss to $67-Mil. in 1st Quarter ---------------------------------------------------------------- California Resources Corporation has filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss attributable to common stock of $67 million on $690 million of total revenues and other for the three months ended March 31, 2019, compared to a net loss attributable to common stock of $2 million on $609 million of total revenues and other for the same period in 2018. Todd Stevens, CRC's president and chief executive officer, said, "CRC began 2019 with a solid first quarter that highlighted our value-driven, dynamic capital allocation. We generated strong cash flow, benefiting from the high quality, low risk and long life of CRC's resource base, as well as our ability to quickly adapt operating and capital plans to capture value across various price environments. To further accelerate value, we recently sold an interest in our shallow production in the Lost Hills field, which garnered more than $200 million consisting of $168 million in cash, in addition to a 100% carry on a 200-well development program worth at least $35 million. The sale represents a 'win-win' that provides cash to fund our ongoing balance sheet strengthening efforts, while retaining a significant upside in the future development by the new operator. We will continue to seek strategic opportunities through the drill bit and through accretive transactions using our diverse portfolio that unlock shareholder value and strengthen our balance sheet." As of March 31, 2019, California Resources had $7.23 billion in total assets, $689 million in total current liabilities, $5.16 billion in long-term debt, $203 million in deferred gain and issuance costs, $692 million in other long-term liabilities, $766 million in redeemable noncontrolling interests, and a total deficit of $289 million. As of March 31, 2019, the Company had approximately $256 million of available borrowing under its $1 billion revolving credit facility (2014 Revolving Credit Facility), before a $150 million month-end minimum liquidity requirement. Effective May 1, 2019, the borrowing base under this facility was reaffirmed at $2.3 billion. The Company's 2014 Revolving Credit Facility also includes a sub-limit of $400 million for the issuance of letters of credit. As of March 31, 2019 and Dec. 31, 2018, the Company had letters of credit outstanding of approximately $168 million and $162 million, respectively . These letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters. First quarter of 2019 adjusted net income excluded $97 million of non-cash derivative losses on commodity contracts, a $3 million non-cash derivative loss from interest-rate contracts as well as a net gain of $6 million on debt repurchases and $4 million of unusual and infrequent items. EBITDAX for the first quarter of 2019 was $301 million and cash provided by operating activities was $158 million, which included interest payments of $72 million. Total daily production volumes increased 8% year-over-year, from 123,000 BOE per day for the first quarter of 2018 to 133,000 BOE per day for the first quarter of 2019. Total daily production for 2019 included volumes from the Elk Hills transaction, which was completed in the second quarter of 2018. Oil volumes averaged 84,000 barrels per day, NGL volumes averaged 15,000 barrels per day and gas volumes averaged 202,000 thousand cubic feet (MCF) per day. Realized crude oil prices, including the effect of settled hedges, increased by $2.51 per barrel from the first quarter of 2018 to $65.28 per barrel in the first quarter of 2019 primarily due to settled hedges that increased the Company's realized crude oil prices by $1.98 per barrel. Realized NGL prices were $42.52 per barrel. Realized natural gas prices were $3.43 per MCF for the first quarter of 2019, $0.62 higher than the same prior-year period primarily due to higher winter demand. Production costs for the first quarter of 2019 were $233 million compared to $212 million for the first quarter of 2018. The increase is attributable to the Elk Hills transaction, cash-settled stock-based compensation, energy costs and other items. General and administrative expenses were $83 million for the first quarter of 2019 compared to $63 million for the same prior-year period. CRC's cash-settled stock-based compensation expense increased approximately $7 million due to the increase in the Company's stock price in the first quarter of 2019. Additionally, 2019 G&A expenses increased by approximately $3 million as certain costs are no longer collected from CRC's former working interest partner following the Elk Hills transaction. CRC reported taxes other than on income of $41 million for the first quarter of 2019 compared to $38 million for the same prior year period. Exploration expense was $10 million for the first quarter of 2019, $2 million higher in the first quarter of 2019 than the same prior-year period due to an increased exploration budget. CRC's internally funded capital investment for the first quarter of 2019 totaled $104 million, of which $93 million was directed to drilling and capital workovers. CRC's JV partner Benefit Street Partners (BSP) also invested $27 million, which is included in CRC's consolidated results. CRC's JV partner Macquarie Infrastructure and Real Assets Inc. (MIRA) invested an additional $7 million, which is excluded from CRC's consolidated results. Operational Update In the first quarter of 2019, CRC operated an average of 7 drilling rigs with 2 rigs focused on conventional primary production, 2 on waterfloods, 1 on steamfloods and 2 on unconventional production. With total invested capital, the Company drilled 52 development wells and 8 exploration wells (40 steamflood, 9 waterflood, 5 primary and 6 unconventional). Steamfloods and waterfloods have different production profiles and longer response times than typical conventional wells and, as a result, the full production contribution may not be experienced in the same period that the well is drilled. The San Joaquin basin produced approximately 97,000 BOE per day and operated six rigs. The Los Angeles basin contributed 25,000 BOE per day of production and operated one rig directed toward waterflood projects. The Ventura and Sacramento basins, where the Company had no active drilling program, produced 6,000 BOE per day and 5,000 BOE per day, respectively. 2019 Capital Budget CRC's internally funded investments will be largely directed to short payout projects, such as primary drilling and capital workovers, and low-risk projects including waterflood and steamflood investments that maintain base production. CRC estimates its 2019 internally funded capital program will range from $300 million to $385 million, which may be adjusted during the course of the year depending on commodity prices. CRC obtained an additional $50 million investment from BSP during the first quarter of 2019 and continues discussions to obtain additional investments from new and existing JVs to achieve a total capital budget of approximately $500 million. Strategic Asset Divestiture On May 1, 2019 CRC sold 50% of its working interest and transferred operatorship in certain zones in the Company's Lost Hills field in the San Joaquin Basin for total consideration in excess of $200 million, consisting of approximately $168 million in cash and a carried 200 well development program to be drilled through 2023 with an estimated minimum value of $35 million. The cash proceeds were used to pay down the revolver and CRC benefits from accelerated development from the drilling carry. Balance Sheet and Credit Facility Update Effective May 1, 2019, CRC's borrowing base under its 2014 Credit Agreement was reaffirmed at $2.3 billion. Following the closing of the Lost Hills transaction, pro forma total debt outstanding was $5.1 billion, down $168 million from March 31, 2019, bringing total availability on the Company's revolver to over $420 million before the minimum liquidity requirement. During the first quarter of 2019, CRC repurchased $18 million in aggregate principal amount of CRC's Second Lien Notes for $14 million. Hedging Update CRC continues to implement an opportunistic hedging program to protect its cash flow, operating margins and capital program, while maintaining adequate liquidity. For the second quarter of 2019, CRC has protected its downside price risk on approximately 40,000 barrels per day at approximately $70 Brent. For the third and fourth quarters of 2019, CRC has protected the downside price risk on approximately 40,000 and 35,000 barrels per day at approximately $73 Brent and $76 Brent, respectively. The underlying instruments in the Company's 2019 hedge program are puts and put spreads that provide full upside to oil price movements. For the first and second quarters of 2020, CRC has protected the downside risk of approximately 25,000 and 15,000 barrels per day at approximately $72 Brent and $70 Brent, respectively. CRC's 2019 and 2020 put spreads provide downside price protection until Brent prices drop to between $55 and $60 per barrel, at which point the Company receives Brent plus approximately $15 per barrel. A full-text copy of the Form 10-Q is available for free at: https://is.gd/0uxkf1 About California Resources California Resources Corporation -- http://www.crc.com/-- is an oil and natural gas exploration and production company headquartered in Los Angeles, California. The Company operates its resource base exclusively within the State of California, applying complementary and integrated infrastructure to gather, process and market its production. Using advanced technology, California Resources Corporation focuses on safely and responsibly supplying affordable energy for California by Californians. California Resources reported net income attributable to common stock of $328 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stock of $266 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, the Company had $7.15 billion in total assets, $607 million in total current liabilities, $5.25 billion in long-term debt, $216 million in deferred gain and issuance costs, $575 million in other long-term liabilities, $756 million in redeemable non-controlling interests, and a total deficit of $247 million. * * * In March 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit rating on California Resources Corp. The affirmation reflects S&P's expectation that CRC will continue to support its liquidity by balancing its spending with its cash flow, selling non-core assets, and potential for joint ventures in 2019 as mentioned in the company's fourth quarter conference call. In November 2017, Moody's Investors Service upgraded California Resources' Corporate Family Rating (CFR) to 'Caa1' from 'Caa2' and Probability of Default Rating (PDR) to 'Caa1-PD' from 'Caa2-PD'. Moody's said the upgrade of CRC's CFR to 'Caa1' reflects CRC's improved liquidity and the likelihood that it will have sufficient liquidity to support its operations for at least the next two years at current commodity prices. CANBRIAM ENERGY: Moody's Cuts CFR to Ca & $350MM Unsec. Notes to C ------------------------------------------------------------------ Moody's Investors Service downgraded Canbriam Energy Inc.'s Corporate Family Rating to Ca from Caa3, Probability of Default Rating to C-PD/LD from Caa3-PD and US$350 million senior unsecured notes rating to C from Ca. The outlook remains negative. The downgrade of the CFR and the downgrade of the PDR with the /LD designation indicating a limited default reflects the maturity of the revolver due April 30, 2019 without a long-term resolution for extension or refinancing in place. Canbriam has entered into a forbearance agreement and Moody's expects a subsequent debt restructuring. Downgrades: Issuer: Canbriam Energy Inc. Probability of Default Rating, Downgraded to C-PD /LD from Caa3-PD Corporate Family Rating, Downgraded to Ca from Caa3 Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD5) from Ca (LGD5) Outlook Actions: Issuer: Canbriam Energy Inc. Outlook, Remains Negative RATINGS RATIONALE Canbriam (Ca CFR) is challenged by: 1) the failure to pay the revolver due April 2019 and inability to pay the senior notes due November 2019; 2) high exposure to weak western Canadian natural gas prices and minimal hedges in 2019 keeping margins weak; 3) a weak leveraged full-cycle ratio (LFCR) well under 1x in 2019; and 4) geographic concentration in the Montney formation in northeast British Columbia. The company is supported by: 1) a sizeable reserves and expected production of 38,000 boe/d (barrel of oil equivalent per day) in 2019; and 2) low sustaining capital spending which will support near breakeven free cash flow in 2019. In accordance with Moody's Loss Given Default (LGD) Methodology, the US$350 million senior unsecured notes are rated C, one notch below the Ca CFR, due to the priority ranking of the debt outstanding under the secured borrowing base revolving credit facility. The negative outlook reflects the high probability of a debt restructuring or bankruptcy filing in the near term. The ratings could be upgraded if the senior notes are refinanced and the revolver is extended such that liquidity would be at least adequate. The CFR could be downgraded if the company pursues a formal restructuring. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Canbriam Energy Inc. is a private Calgary, Alberta-based independent exploration and production company focused in the Montney formation in northeastern British Columbia with (net of royalties) production at about 34,500 boe/d in 2018 (83% natural gas). CAPSTONE PEDIATRICS: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Capstone Pediatrics, PLLC as of May 1, according to a court docket. About Capstone Pediatrics PLLC Capstone Pediatrics, PLLC -- http://www.capstonepediatrics.com-- operates a pediatric and adolescent center focused on delivering personalized care designed to improve and maintain its patients' health and well being. It is owned by Dr. Gary Griffieth, who operates the company as chief executive officer. Capstone Pediatrics sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 19-01971) on March 28, 2019. It previously sought bankruptcy protection on Dec. 18, 2015 (Bankr. M.D. Tenn. Case No. 15-09031). At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. The case has been assigned to Judge Randal S. Mashburn. Burr & Forman LLP is the Debtor's legal counsel. CBCS WASHINGTON: U.S. Trustee Forms 3-Member Committee ------------------------------------------------------ The U.S. Trustee for Region 2 on May 1 appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of CBCS Washington Street LP. The committee members are: (1) Stephen B. Jacobs Group P.C. 381 Park Avenue South New York, New York 10016 Attention: Stephen B. Jacobs, President Telephone: (212) 421-3712 (2) Cumming Construction Management Inc. d/b/a Lehrer Cumming 888 7th Avenue, 2nd Floor New York, New York 10019 Attention: Peter M. Lehrer, CEO Telephone: (212) 459-1818 (3) 445 Washington, LLC 60 Vestry Street New York, New York 10013 Attention: Vincent J. Ponte, President Telephone: (212) 274-1555 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 CBCS Washington Street CBCS Washington Street LP is a partnership and a lessee under an Agreement of Lease dated June 19, 2013 with 445 Washington LLC for the parcels of real property located in New York. The Debtor is currently developing the premises into a 96-room luxury hotel under the "Hotel Barriere Le Fouquet" brand. Based in White Plains, N.Y., CBCS Washington Street filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 19-22607) on March 12, 2019. In its petition, the Debtor disclosed $40,500,496 in assets and $17,201,731 in liabilities. The petition was signed by Ivaylo V. Ninov, authorized representative of Washington Street Hotel GP LLC, GP. The Hon. Robert D. Drain oversees the case. Fred B. Ringel, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck P.C., is the Debtor's bankruptcy counsel. CDK GLOBAL: Moody's Rates New Sr. Unsecured Notes Due 2029 'Ba1' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to CDK Global, Inc.'s new senior unsecured notes due 2029. CDK intends to use the proceeds to repay debt outstanding under its $750 million senior unsecured revolving credit facility due 2023 and for general corporate purposes. Assignments: Issuer: CDK Global, Inc. Senior Unsecured Notes, Assigned Ba1 (LGD4) RATINGS RATIONALE The announced offering will improve liquidity and is credit positive, Moody's expects most of the proceeds to be used for debt reduction. CDK will increase availability under its $750 million revolver, which had approximately $490 million drawn as of March 31, 2018. The transaction is expected to be leverage neutral and Moody's expects debt to EBITDA (Moody's adjusted) to decline towards 3.0x over the next 12-18 months through EBITDA growth. Leverage is currently at the top of management's 2.5-3.0x stated range (per management's definition) as a result of elevated debt-funded share repurchases in recent quarters and the ELEAD1ONE acquisition in 2018. Moody's expects lower buybacks as management seeks to return to historical leverage levels. The transaction does not impact the company's Ba1 Corporate Family Rating, Ba1 (LGD4) senior unsecured rating or SGL-1 Speculative Grade Liquidity rating. The outlook for CDK remains stable. The principal methodology used in this rating was Business and Consumer Service Industry published in October 2016. CDK Global Inc., headquartered in Hoffman Estates, IL, is a global provider of technology and digital marketing solutions to the automotive retail and adjacent industries. The company also provided automotive commerce solutions to dealers in over 100 countries, serving roughly 28,000 retail locations and most automotive manufacturers. CDK generated revenues of $2.3 billion for the 12 months ended March 31, 2019. CENGAGE LEARNING: S&P Puts B- ICR on Watch Pos. on McGraw-Hill Deal ------------------------------------------------------------------- S&P Global Ratings placed all of its ratings on U.S.-based educational material and learning solutions provider Cengage Learning Holdings II Inc. (Cengage), including its 'B-' issuer credit rating, on CreditWatch with positive implications. The CreditWatch positive placement follows Cengage's announcement that it will merge with McGraw-Hill Education Inc. (MHE) in an all-stock transaction. The new company is expected to be called McGraw Hill and will benefit from increased scale and potentially significantly improved cash flow generation and should be able to deleverage through cost savings, though the execution risks are high given the size of the two companies and the potential for operational disruptions. The companies expect to realize around $300 million of operating synergies through rationalization of sales force and other corporate functions. S&P doesn't expect to see any significant improvement in McGraw Hill's credit metrics in the first year after the transaction close, because the synergies will be offset by cash severance and restructuring charges. As part of the proposed merger, the companies will seek to extend the maturities of their combined $3.4 billion of existing senior secured term loans to May 2024. MHE and Cengage's existing senior secured term loans mature in 2022 and 2023, respectively. Cengage's senior unsecured notes will remain outstanding after the merger and S&P anticipates that the combined entity will guarantee the debt. McGraw Hill will be highly leveraged with roughly $4.5 billion of debt. On a combined basis, adjusted debt to EBITDA was 9x and adjusted free operating cash flow (FOCF) to debt was 4% as of March 31, 2019. This compares with Cengage's stand-alone leverage of over 11x. S&P expects McGraw Hill's adjusted leverage and FOCF to debt to improve to 7x and 5%, respectively, in fiscal year 2020. "We expect to resolve the CreditWatch following the completion of the merger in early 2020. We will monitor all developments related to the merger, including when the companies receive the necessary regulatory clearances and lender support to refinance or extend their existing senior secured term loans, their operating performance, and industry conditions," S&P said. The rating agency said it expects the transaction will be positive for Cengage given its higher rating on MHE and the combined company's larger scale, adding that it also anticipates the combination will provide potential cost-saving synergies. "If the transaction is completed as expected, we would likely raise our issuer credit rating on Cengage to 'B' to equalize it with our rating on MHE," S&P said. CHARLES RIVER: S&P Lowers ICR to 'BB+' on Citoxlab Acquisition -------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Wilmington, Mass.-based contract research organization (CRO) Charles River Laboratories International Inc. (CRL) to 'BB+' from 'BBB-' and lowered all issue-level ratings by one notch. S&P removed the ratings from CreditWatch, where it had placed them with negative implications on Feb. 14, 2019. CRL acquired privately held Europe-focused discovery and safety assessment company CRO Citoxlab for roughly $500 million. The acquisition is consistent with CRL's strategy of enhancing its leading position in the fragmented but growing market for outsourced pharmaceutical nonclinical and manufacturing support services, while maintaining its position as the leader in the related research models and services business. "The stable outlook reflects our belief that leverage will generally remain in upper end of the 2.5-3.0x range, occasionally spiking above 3x following an acquisition. We think CRL has the capacity to quickly deleverage following an acquisition, given its strong expected free cash flow and the company's financial policy to keep leverage generally below 3x," S&P said. CHRISTIAN RADABAUGH, SR: Proposed Sale of GP Cattle Approved ------------------------------------------------------------ Judge Peter C. McKittrick of the U.S. Bankruptcy Court for the District of Oregon authorized Christian S. Radabaugh, Sr.'s sale of the cattle that is subject to a lien in favor of GP, LLC outside the ordinary course of business, on the terms and conditions set forth in the Motion. In the Motion, the Debtor intends to sell his GP Cattle at private, arms'-length, market price sales beginning on April 26, 2019. If he's unable to sell all of his GP Cattle by May 30, 2019, the Debtor intends to sell his remaining GP Cattle at auction on May 30, 2019, through Shasta Livestock Auction Yard / Western Video Market. The proceeds from the sales will be applied only to GP's interest and principal. GP's attorney fees and costs will not be paid from the sales proceeds without further order of the Court. Christian S. Radabaugh, Sr. sought Chapter 11 protection (Bankr. D. Ore. Case No. 18-34244) on Dec. 7, 2018. The Debtor tapped Nicholas J. Henderson, Esq., at Motschenbacher & Blattner LLP, as counsel. COMMUNITY HEALTH: Reports First Quarter 2019 Financial Results -------------------------------------------------------------- Community Health Systems. Inc. has filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss attributable to the Company's stockholders of $118 million on $3.37 billion of net operating revenues for the three months ended March 31, 2019, compared to a net loss attributable to the Company's stockholders of $25 million on $3.68 billion of net operating revenues for the three months ended March 31, 2018. As of March 31, 2019, Community Health had $16.30 billion in total assets, $17.39 billion in total liabilities, $505 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $1.59 billion. Liquidity and Capital Resources Net cash provided by operating activities increased $27 million, from approximately $106 million for the three months ended March 31, 2018, to approximately $133 million for the three months ended March 31, 2019. The increase in cash provided by operating activities was primarily the result of lower interest payments due to the timing of payments resulting from the refinancing activity during the three months ended March 31, 2019, as well as from an increase in cash flow from patient accounts receivable collections. Such increases were offset by higher malpractice claim payments compared to the same period in 2018. Total cash paid for interest during the three months ended March 31, 2019 decreased to approximately $189 million compared to $212 million for the three months ended March 31, 2018. Cash paid for income taxes, net of refunds received, resulted in a net refund of less than $1 million during both of the three-month periods ended March 31, 2019 and 2018. The Company's net cash provided by investing activities was approximately $19 million for the three months ended March 31, 2019, compared to net cash used in investing activities of approximately $177 million for the three months ended March 31, 2018, an increase of approximately $196 million. The cash provided by investing activities during the three months ended March 31, 2019, was primarily impacted by an increase in proceeds from the divestitures of hospitals and other ancillary operations of $150 million in the first three months of 2019 compared to the same period in 2018, an increase in cash provided by the net impact of the purchases and sales of available-for-sale securities and equity securities of $2 million, a decrease of $4 million in the cash used in the acquisition of facilities and other related equipment (for physician practices, clinics and other ancillary businesses, as there were no hospital acquisitions during either the three months ended March 31, 2019 or 2018) and a decrease in the cash used in the purchase of property and equipment of $49 million for the three months ended March 31, 2019 compared to the same period in 2018. These increases in cash inflow were partially offset by an increase in cash used for other investments (primarily from internal-use software expenditures and physician recruiting costs) of $6 million and a decrease in cash provided by the sale of property and equipment of $3 million. The Company's net cash used in financing activities was $71 million for the three months ended March 31, 2019, compared to approximately $68 million for the three months ended March 31, 2018, an increase of approximately $3 million. The increase in cash used in financing activities, in comparison to the prior year period, was primarily due to the net effect of our debt repayment, refinancing activity, and cash paid for deferred financing costs and other debt-related costs. A full-text copy of the Form 10-Q is available for free at: https://is.gd/Do7EVu About Community Health Community Health -- http://www.chs.net/-- is a publicly traded hospital company and an operator of general acute care hospitals in communities across the country. The Company, through its subsidiaries, owns, leases or operates 106 affiliated hospitals in 18 states with an aggregate of approximately 17,000 licensed beds. The Company's headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol "CYH." Community Health reported a net loss attributable to the Company's stockholders of $788 million for the year ended Dec. 31, 2018, compared to a net loss attributable to the Company's stockholders of $2.45 billion for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Community Health had $15.85 billion in total assets, $16.81 billion in total liabilities, $504 million in redeemable non-controlling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $1.46 billion. * * * As reported by the TCR on July 2, 2018, S&P Global Ratings raised its corporate credit rating on Franklin, Tenn.-based hospital operator Community Health Systems Inc. to 'CCC+' from 'SD' (selective default). The outlook is negative. "The upgrade of Community to 'CCC+' reflects the company's longer-dated debt maturity schedule, and our view that its efforts to rationalize its hospital portfolio as well as improve financial performance and cash flow should strengthen credit measures over the next 12 to 18 months." In May 2018, Fitch Ratings downgraded Community Health Systems' (CHS) Issuer Default Rating (IDR) to 'C' from 'CCC' following the company's announcement of an offer to exchange three series of senior unsecured notes due 2019, 2020 and 2022. CONSOLIDATED INFRASTRUCTURE: Sets Bidding Procedures for All Assets ------------------------------------------------------------------- Consolidated Infrastructure Group, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to authorize the bidding procedures in connection with the sale of substantially all assets at auction. By order of the Court, the Debtor has retained the firm Gavin/Solmonese, LLC to conduct a robust marketing process in order to reach as many potential purchasers as possible and to elicit the best and highest offer possible for its Assets. Since its engagement, Gavin/Solmonese has begun and continues to diligently and aggressively market the Debtor's Assets through a comprehensive sale and marketing process. To date, Gavin/Solmonese has identified approximately 75 potential purchasers, of which three have executed non-disclosure agreements. The Debtor expects these marketing efforts to culminate in a sale process that will maximize the value of its Assets for the benefit of all stakeholders. The salient terms of the Bidding Procedures are: a. Bid Deadline: May 9, 2019 at 5:00 p.m. (ET) b. Initial Bid: The purchase price offered for the Assets is expressed in U.S. Dollars. c. Deposit: 10% of the Purchase Price d. Auction: If it receives two or more Qualified Bids, the Debtor will conduct the Auction of the Assets, which will take place May 13, 2019 at 10:00 a.m. (ET) at the offices of Debtor’s counsel, Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware 19801. e. Bid Increments: $100,000 f. Sale Hearing: May 23, 2019 at 10:00 a.m. (ET) g. Closing: May 30, 2019 The Debtor proposes these other key dates and deadlines for the Sale and Auction process, which may be subject to extension in accordance with the Bid Procedures. a. May 2, 2019 - Deadline for the Debtor to designate Stalking Horse b. May 8, 2019 at 4:00 p.m. (ET) - Cure Objection Deadline c. May 10, 2019 - Deadline for the Debtor to notify Potential Bidders of their status as Qualified Bidders d. May 14, 2019 - Target date for the Debtor to file with the Court the Notice of Auction Results e. May 17, 2019 at 4:00 p.m. (ET) - Sale Objection Deadline f. May 17, 2019 at 4:00 p.m. (ET) - Adequate Assurance Objection Deadline Within one day after entry of the Bid Procedures Order, or as reasonably practicable thereafter, the Debtor will file with the Court the Sale Notice upon all Sale Notice Parties. In connection with the Sale, the Debtor may seek to assume and assign to the Successful Bidder any of the Debtor’s Contracts. Within one day after entry of the Bid Procedures Order, or as reasonably practicable thereafter, the Debtor will file with the Court and serve the Assumption and Assignment Notice, on each applicable Counterparty listed thereon. By the Motion, the Debtor asks (a) entry of the Bid Procedures Order (i) approving the Bid Procedures, (ii) authorizing, but not directing, the Debtor to enter into a Stalking Horse APA with a Stalking Horse, subject to Court approval of any Bid Protections; (iii) approving the Assumption and Assignment Procedures, (iv) approving the form and manner of the Sale Notice, and (v) scheduling an Auction and Sale Hearing, and (b) entry of an order (i) authorizing the sale of the Assets free and clear of all liens, claims, interests and encumbrances, (ii) authorizing the assumption and assignment of Contracts as set forth in any Purchase Agreement, and (iii) granting related relief. The Debtor believes it is in the best interests of the Estate, its creditors, and other parties in interest to commence a process for soliciting potential bidders and to complete the Sale of the Debtor’s Assets. The Bid Procedures were developed to further the Debtor’s dual needs to expedite the sale process and to foster competitive bidding among financially capable bidders who demonstrate the ability to close a transaction. A copy of the Bidding Procedures attached to the Motion is available for free at: http://bankrupt.com/misc/Consolidated_Infrastructure_135_Sales.pdf A hearing on the Motion is set for April 29, 2019 at 11:00 a.m. (ET). The objection deadline is April 19, 2019 at 4:00 p.m. (ET). About Consolidated Infrastructure Created in 2016 and headquartered in Omaha, Nebraska, Consolidated Infrastructure Group, Inc., provides underground utility and damage prevention services to support others that do underground construction and maintenance. By providing detailed information on what lies beneath the surface, CIG's damage prevention services help protect communities from damage that could otherwise occur when utilities, other companies, or individuals dig underground. CIG sought Chapter 11 protection (Bankr. D. Del. Case No. 19-10165) on Jan. 30, 2019. The Hon. Brendan Linehan Shannon is the case judge. The Debtor disclosed $11.6 million in assets and $9 million in liabilities as of Jan. 30, 2019. Richards, Layton & Finger, P.A., is the Debtor's counsel. Gavin/Solmonese LLC is the financial advisor and investment banker. Omni Management Group is the claims and noticing agent. CORP.REALTY USA: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Corp.Realty USA, LLC aka Crp.Realty USA, LLC 10936 Pacific View Dr. Malibu, CA 90265 Business Description: Corp.Realty USA, LLC is a privately held company engaged in activities related to real estate. The Company owns a property in Malibu, California with a current value of $7.80 million (based on expert valuation). The Company previously sought bankruptcy protection on May 10, 2018 (Bankr. C.D. Cal. Case No. 18-10741). Chapter 11 Petition Date: May 1, 2019 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Case No.: 19-10822 Judge: Hon. Deborah J. Saltzman Debtor's Counsel: Mark J. Markus, Esq. LAW OFFICE OF MARK J. MARKUS 11684 Ventura Blvd Ste 403 Studio City, CA 91604-2652 Tel: 818-509-1173 E-mail: bklawr@bklaw.com Total Assets: $7,814,000 Total Liabilities: $6,000,356 The petition was signed by Edgard Augusto Meinhardt Iturbe, managing member. The Debtor lists Gensi, LLC as its sole unsecured creditor holding a claim of $717,907. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/cacb19-10822.pdf COVIA HOLDINGS: Moody's Cuts CFR to B1 & Alters Outlook to Negative ------------------------------------------------------------------- Moody's Investors Service downgraded Covia Holdings Corporation's Corporate Family Rating to B1 from Ba3, the Probability of Default Rating to B1-PD from Ba3-PD, and senior secured credit facility to B1 from Ba3. The Speculative Grade Liquidity Rating is affirmed at SGL-3. The rating outlook was revised to negative from rating under review. This concludes the review initiated on February 28, 2019. Downgrades: Issuer: Covia Holdings Corporation Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Corporate Family Rating, Downgraded to B1 from Ba3 Senior Secured Bank Credit Facility, Downgraded to B1 (LGD3) from Ba3 (LGD3) Outlook Actions: Issuer: Covia Holdings Corporation Outlook, Changed To Negative From Rating Under Review Affirmations: Issuer: Covia Holdings Corporation Speculative Grade Liquidity Rating, Affirmed SGL-3 RATINGS RATIONALE Covia's B1 CFR and negative outlook reflect Moody's expectation that EBITDA, operating profits and key credit metrics will significantly deteriorate during 2019, stemming from on-going volatility in the oil and natural gas industry and persistent weakness in the frac sand industry. It also takes into consideration the company's reliance on cash on hand to supplement its cash flows. Since mid-2018, prices for frac sand have declined by more than 20% due to overcapacity and the displacement of Northern White Sand by cheaper in-basin sand. Despite, recent improvement in the price of oil, mine closures, and production cuts, Moody's does not expect any significant price recovery as many miners have committed to higher volumes at lower prices. For 2019, Moody's expects the company's revenues and operating profits to decline by 3% and 76%, respectively, total debt-to-EBITDA to increase to 6.7x from 5.1x, adjusted debt-to-book capitalization to increase to 57% from 55%, and EBIT-to-Interest expense to decline to 0.2x from 1.6x (inclusive of Moody's adjustments). The company's B1 CFR reflects the company's exposure and reliance on the hydraulic fracturing industry for the majority of its revenue, the earnings volatility associated with the energy end markets and Moody's expectation that in 2019, key credit metrics will weaken materially due to overcapacity and lower demand impacting the pricing dynamics for frac-sand. The B1 rating is supported by its (i) strong leading market position as a supplier of sand-based proppants for the oil and natural gas industry in North America and as a supplier of multimineral product offerings to industrial customers primarily in the United States and Mexico; (ii) its extensive proven and probable reserves, with over 50 processing and coating facilities, a broad, developed logistical network, and long-standing customer relationships; and (iii) the stability of earnings generated from the company's industrial segment, which represents 40% to 50% of sales volume, diversifying its earnings stream away from the cyclical energy markets. The Speculative Grade Liquidity Rating (SGL-3) reflects the company's adaquate liquidity profile resulting from its cash on hand and ability to fund its operations from internal sources, service its debt and deploy growth capital. This is supported by $134.1 million of cash on hand (as of December 31, 2018) and lack of near-term debt maturities, as its $200 million revolver expires in 2023 and its $1.65 billion term loan matures in 2025. The principal financial covenant under the existing revolving credit facility and the $1.65 billion term loan facility is a maximum leverage ratio covenant test of 6.6x until December 31, 2019. This leverage test steps down to 5.5x for the full year 2020, and gradually declines to 4.0x by March 31, 2022. The rating assumes that the company will not utilize the revolver to meet internal uses of cash but rather use cash on hand. Moody's indicated that the ratings could be stabilized if adjusted debt-to-book capitalization is maintained under 60%, adjusted EBIT-to-Interest is sustained above 2.0x, and adjusted operating margin is above 20%. A stable outlook would also require robust liquidity, free cash flow generation, and healthy oil and natural gas end markets. The ratings could be downgraded if liquidity deteriorates in part by lack of free cash generation, revolver availability and/or weakened financial flexibility, possibly due to aggressive growth, large debt-funded acquisitions or shareholder friendly activities such as share repurchases. In addition, ratings could be pressured if adjusted debt-to-book capitalization stays above 60%, if adjusted EBIT-to-Interest remains below 1.0x, and adjusted operating margin is sustained below 10% for an extended period of time. The principal methodology used in these ratings was Building Materials Industry published in January 2017. Based in Independence, Ohio, Covia [NYSE: CVIA] is a leading provider of specialty sands and minerals serving the energy and industrial end markets. The company has approximately 50 million tons of annual processing capacity. In June 2018, Unimin Corporation and Fairmount Santrol, Inc. combined in a cash and stock transaction to create Covia, with Sibelco as the largest shareholder with approximately 65% of the shares. Sibelco is SCR-Sibelco NV, a private, globally-diversified, industrial minerals company based in Belgium. For the 12 months ending December 31, 2019, Moody's projects Covia will generate approximately $1.8 billion in revenues and $35 million in operating profits (inclusive of Moody's standard adjustments). CREDIAUTOUSA FINANCIAL: Taps Brandon Smith Law as Special Counsel ----------------------------------------------------------------- CrediautoUSA Financial Company LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of California to retain the Law Offices of Brandon Smith as its special litigation counsel. The firm will continue to represent the Debtor in the following cases, which are still pending in the San Diego Superior Court: (a) CrediautoUSA Financial Company LLC v. Meena's Corporation et al., Case No. 37-2019-00009253-CU-BC-CTL. (b) CrediautoUSA Financial Company LLC v. Grow Auto Financial et al., Case No. 37-2019-00011532-CU-BC-CTL. (c) Alcocer v. CrediautoUSA Financial Company LLC, Case No. 37-2019-00004549-CU-BC-CTL. The firm will charge $350 per hour for its services. Brandon Smith, principal of the Law Offices of Brandon Smith, attests that he and other employees of the firm neither hold nor represent any interest adverse to the Debtor's estate. The firm can be reached at: Brandon M. Smith, Esq. Law Offices of Brandon M. Smith, APC 105 W. "F" Street 3rd Floor, San Diego, CA 92101 Phone: (619) 236-8344 Email: brandonsmith@brandonsmithlaw.com About CrediautoUSA Financial Company and AI CAUSA LLC Founded in 2012 and headquartered in San Diego, CrediautoUSA Financial Company LLC -- http://www.crediautofinancial.com-- has established programs to finance vehicles sold by licensed automobile dealerships to individuals with no credit history or with less than perfect credit. CrediautoUSA Financial Company LLC and its affiliate AI CAUSA LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Calif. Case Nos. 19-01870 and 19-01864) on March 30, 2019. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The cases have been assigned to Judge Louise Decarl Adler. CrediautoUSA is represented by the Law Offices of Kit J. Gardner while AI CAUSA LLC is represented by Higgs Fletcher & Mack LLP. CUMBERLAND FARMS: Moody's Hikes CFR to Ba3 & Unsec. Rating to B1 ---------------------------------------------------------------- Moody's Investors Service upgraded Cumberland Farms, Inc.'s Corporate Family Rating to Ba3 from B1, its Probability of Default Rating to Ba3-PD from B1-PD and its senior unsecured rating to B1 from B3. The outlook is stable. "The upgrade reflects Moody's expectation that Cumberland Farms will maintain leverage below 4.5x (including Moody's standard adjustments) as the company benefits from new store growth and improved earnings at its "AIM" format stores," stated Pete Trombetta, Moody's convenience store/fuel retailer analyst. " These new stores represent about 70% of the company's store base and feature fresh food offerings, improved store formats and increased private label sales", added Trombetta. Upgrades: Issuer: Cumberland Farms, Inc. Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Corporate Family Rating, Upgraded to Ba3 from B1 Senior Unsecured Notes, Upgraded to B1 (LGD5) from B3 (LGD5) Outlook Actions: Issuer: Cumberland Farms, Inc. Outlook, Remains Stable RATINGS RATIONALE Cumberland Farms' credit profile benefits from its modest leverage with Moody's adjusted debt/EBITDA of 2.4x for the LTM period ended December 31, 2018. Cumberland Farms' credit profile is also supported by its favorable comparison to higher rated industry peers in terms of (1) a lower reliance on volatile fuel prices as a percentage of total revenue and gross profit, (2) merchandise gross profit margins and (3) fuel margins on a cents per gallon basis. The ratings also consider the company's success with the transition to its new store design ("AIM format"), which accounts for about 70% of the company's stores, that has driven improved merchandise margins, a better merchandise mix with strong performance from its prepared and fresh foods, and increased customer loyalty. Cumberland Farms is constrained by its small scale in terms of absolute level of earnings and number of stores relative to industry peers and its geographic concentration -- about 90% of its stores are in the northeast US. While this market has proven to be successful for Cumberland Farms, this level of geographic concentration exposes the company to local, regional, and nationwide economic swings as well as promotional activities from larger, more diversified peers. Cumberland Farms' credit profile is also constrained by the possibility of increased leverage should the company make a debt financed acquisition or pay a sizeable dividend. The stable rating outlook reflects Moody's view that Cumberland Farms will maintain leverage below 4.5x on a sustained basis and maintain very good liquidity over the next 12 to 18 months. Given the company's scale, another ratings upgrade is unlikely in the near term. Over the longer term ratings could be upgraded if debt/EBITDA is sustained below 3.5x with EBIT/interest expense maintained above 4.0x. Ratings could be downgraded if debt/EBITDA is sustained above 4.5x or EBIT/interest falls below 2.0x. Headquartered in Westborough, MA, Cumberland Farms, Inc. is a fuel retailer and convenience store operator in the United States with 563 locations across New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, Maine and Florida. Revenue for the last twelve month period ended December 31, 2018 was about $4.1 billion. The company does not file public financials. CYXTERA DC: Moody's Rates $100MM Incremental 1st Lien Loan 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Cyxtera DC Holdings, Inc.'s $100 million incremental first lien term loan. This offering and a similarly-sized equity investment is credit positive, with net proceeds being used to pay down the outstanding revolver balance and for general corporate purposes, including the funding of data center facility expansions to monetize growth opportunities in capacity constrained markets. Moody's expects that the combined net proceeds will sufficiently fund additional and strategically important discretionary capital spending over the next two years. This focused expansion better positions Cyxtera to drive revenue and profitability over the intermediate term but will meaningfully delay deleveraging over the next two years. Assignments: Issuer: Cyxtera DC Holdings, Inc. Senior Secured 1st lien Term Loan, Assigned B1 (LGD3) RATINGS RATIONALE Cyxtera is weakly positioned for its B2 corporate family rating despite its standing as the second largest global independent data center operator offering retail colocation and interconnection services. The rating also incorporates the company's stable base of contracted recurring revenue, strong network footprint and the favorable near-term growth trends for data center services globally. These positive factors are offset by currently high leverage, weaker than expected revenue and EBITDA growth, execution difficulties as a standalone entity which may now be abating, significant industry risks, intensifying competition and the likely intermediate term need for higher capital intensity to drive stronger top line growth. Despite relatively low capacity utilization across most of its facilities, increasing capital investments to alleviate market-specific capacity constraints are necessary to better monetize growth opportunities. Moody's expects Cyxtera will generate negative free cash flow after discretionary growth capital spending over the next two years before achieving moderately positive free cash flow in second half 2021. The stable outlook reflects Moody's view that Cyxtera will slowly realize increasing benefits from operating as a standalone entity with a newly rebuilt and unified sales force, and that bookings and revenue growth will steadily improve over the next two years and be sufficient in magnitude to place the company back on track to debt/EBITDA (Moody's adjusted) of less than 6x by year-end 2021. Moody's could upgrade Cyxtera's ratings if debt/EBITDA approaches 5.0x and free cash flow/debt was positive, both on a sustained basis. Moody's could downgrade Cyxtera's ratings if liquidity deteriorates, or sales force efforts fail to sustainably improve bookings and revenue growth, or if debt/EBITDA does not decline to below 6x by year-end 2021. DELUXE ENTERTAINMENT: Moody's Alters Outlook on B3 CFR to Stable ---------------------------------------------------------------- Moody's Investors Service has affirmed Deluxe Entertainment Services Group, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating. Concurrent with this rating action, Moody's assigned a B3 rating to the proposed $429 million senior secured term loan maturing February 2022. The rating outlook was changed to stable from negative. Deluxe recently announced plans to spin-off its Deluxe Creative Services division ("DCS", comprising the Post-Production and Visual Effects units) for a valuation of roughly $900 million enterprise value. DCS will become a standalone entity and capitalized initially with debt and new cash equity sufficient to fund a shareholder distribution to Deluxe of $500 million, which, in turn, will use the funds, plus equitization of certain debts owed to the sponsor, to reduce existing debt by $572 million (net, including $360 million of $789 million outstanding senior secured term loans and $59 million of $69 million outstanding ABL facility borrowings), pay fees and expenses, and add to cash balances. The company will also seek to amend the existing credit agreements to downsize the ABL facility, tighten certain provisions and extend debt maturities by two years. Following the DCS carve-out, Deluxe's remaining businesses will include Localization, Delivery Operations, Digital Cinema and Deluxe One. Deluxe will retain 50% ownership in DCS following the planned equity raise. Assignments: Issuer: Deluxe Entertainment Services Group, Inc. Senior Secured Term Loan due February 2022, Assigned B3 (LGD3) Affirmations: Issuer: Deluxe Entertainment Services Group, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Outlook Actions: Issuer: Deluxe Entertainment Services Group, Inc. Outlook, Changed To Stable From Negative Ratings and outlook actions are subject to review of final documentation and no material change in the size, terms and conditions of the proposed transaction as advised to Moody's. Upon transaction close, Moody's will withdraw the ratings and LGD assessments on the existing $789 million term loans due February 2020 (includes the 2016 incremental term loan). RATINGS RATIONALE The rating outlook change to stable from negative reflects the elimination of near-term refinancing risk via the extension of debt maturities, Moody's expectation that Deluxe will repay debt with proceeds from the planned equity/debt raise for its Creative Services unit and sustain adequate liquidity over the next twelve months. It also reflects its expectation that by 2020 Deluxe's rationalization plan will be mostly complete, leading to improved GAAP EBITDA, GAAP financial leverage below 5x (Moody's adjusted) and positive free cash flow generation as severance and restructuring costs subside, substantial cost savings are realized and capital expenditures normalize. Deluxe's B3 CFR reflects the elevated pro forma GAAP financial leverage after the DCS disposal and limited prospects for meaningful deleveraging over the coming year given the lack of positive free cash flow generation and ongoing need to fund restructuring actions and higher-than-usual capital expenditures, mainly for the Deluxe One platform buildout. The rating also recognizes the proposed recapitalization of the balance sheet designed to reduce leverage by repaying a sizable amount of outstanding debt via the DCS spin-off/capital raise, as well as the proposed two-year extension of debt maturities and amendments to tighten provisions in the credit agreements. While pro forma gross debt is reduced by nearly 55% from capital raise proceeds, the company's pro forma GAAP EBITDA decreases disproportionately due to the loss of sizable EBITDA from DCS following its spin-off. Consequently, the rating is constrained by a smaller scale as well as a reduced business focus, concentrated customer base and revenue linked to the cyclical North American movie slate. Deluxe is restructuring its business through efficiency enhancements and increased automation by developing a cloud-based B2B self-service technology platform called Deluxe One. Notwithstanding the improved capital structure, Moody's expects the restructuring and Deluxe One investments will pressure debt protection measures this year. Moody's estimates adjusted GAAP financial leverage will remain high, increasing to around 8.2x total debt to EBITDA at year end 2019 from 7.1x at LTM 3/31/19 before declining to under 5x in 2020. This leverage metric is Moody's adjusted, incorporating standard operating lease adjustments and the expected cumulative realized cost savings through 2019, however excluding one-time severance and restructuring costs that will flow through the P&L to achieve future savings. The rating acknowledges the equity sponsor's financial support for Deluxe through a $110 million total commitment to reduce the term loan within 12-18 months after transaction close. Consequently, by 2020, as the rationalization program nears completion and nearly 20% of the term loan is repaid, Moody's expects earnings quality to meaningfully improve leading to higher GAAP EBITDA, lower GAAP financial leverage in the 4x-5x area and positive free cash flow generation. The B3 rating is supported by Deluxe's position as a leading global provider offering a broad range of outsourced media supply chain services including Localization (e.g., subtitling, dubbing and audio services), Delivery Operations (e.g., physical/digital fulfillment, media cloud and delivery for other LOBs) and Digital Cinema (e.g., distribution, mastering, keys and content protection services) to feature film studios and direct-to-consumer OTT content creators. Its long-term customer relationships are buttressed by 3-5 year contracts, principally with major accounts. Deluxe benefits from somewhat high switching costs given its technical expertise, preferred vendor status and global asset base. The company also benefits from geographic diversity with 66% of pro forma revenue from North America, 26% from EMEA and 8% from Australia. With implementation of the Deluxe One SaaS platform, Moody's believes there will be opportunities to expand and extend its services to existing and new clients as the media industry undergoes transformation. Moody's expects Deluxe to maintain adequate liquidity supported by at least $24 million pro forma cash balances at transaction close offset by negative free cash flow generation over the next 12-15 months. Liquidity is buttressed by the proposed $60 million extended ABL facility (downsized from $115 million) and new $70 million subordinated line of credit provided by the equity sponsor. Moody's expects Deluxe will draw under both facilities on a $1 for $1 basis simultaneously over the coming year to help fund restructuring costs and higher-then-normal investments and capital expenditures. Factors That Could Lead to an Upgrade Upward ratings pressure is contingent upon Moody's expectation that Deluxe will sustain total debt to GAAP EBITDA below 5x (Moody's adjusted), positive free cash flow to debt at or greater than 3% (Moody's adjusted) and cash balances at or better than forecasted levels. An upgrade would also require evidence of: (i) profitable revenue growth in core segments; (ii) growth in film release volumes; (iii) meeting or exceeding management's financial projections; (iv) limited pricing pressure; and (v) margin expansion. Management would also need to demonstrate a commitment to balance debtholder returns with those of its shareholders and exhibit operating performance and financial policies consistent with a higher rating. Factors That Could Lead to a Downgrade Ratings could be downgraded if Deluxe's market share in its core markets were to erode and operating performance were to weaken. Moody's expectation that management intends to sustain leverage above 7.5x total debt to GAAP EBITDA (Moody's adjusted), negative free cash flow generation and diminished liquidity 18 months after closing the DCS spin-off transaction could result in a downgrade. Ratings pressure could also occur as a result of cash distributions to private equity shareholders that weaken liquidity or increase leverage. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Burbank, CA, Deluxe Entertainment Services Group, Inc. is a leading global provider offering a broad range of outsourced media supply chain services including Localization, Delivery Operations, Digital Cinema and Deluxe One to feature film studios and direct-to-consumer OTT content creators. Deluxe will retain 50% ownership in its Creative Services business following the unit's carve-out. The company is privately-owned and an indirect wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc. Revenue totaled approximately $937 million in fiscal 2018. Pro forma for the Creative Services disposal, revenue totaled $483 million last year. ECOSPHERE TECHNOLOGIES: Hires Allan Kalish as Broker ---------------------------------------------------- Ecosphere Technologies, Inc., and Sea of Green Systems, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Allan Kalish as broker to sell their assets. The broker receive a 10% commission of the total sale price. Mr. Kalish, a minority shareholder of Ecosphere Technologies, has agreed to waive all his equity and creditor interests in the bankruptcy estates pursuant to Section 327(a) of the Bankruptcy Code. Mr. Kalish maintains an office at: Allan Kalish 2240 Palm Beach Lakes Blvd., Suite 400A West Palm Beach, FL 33409 About Ecosphere Technologies Ecosphere Technologies, Inc., is a technology development and intellectual property licensing company that develops environmental solutions for global water, energy, industrial and agricultural markets. The company helps industries increase production, reduce costs and protect the environment through a portfolio of unique, patented technologies: technologies like Ozonix, the Ecos PowerCube and the Ecos GrowCube, which are available for sale, as well as exclusive and nonexclusive licensing opportunities across a wide range of industries and applications throughout the world. The Ecosphere technologies and products are available through multiple brands and subsidiaries that include Sea of Green Systems, Inc., Ecosphere Development Company, LLC and Fidelity National Environmental Solutions, LLC. Based in Stuart, Fla., Ecosphere Technologies and Sea of Green Systems sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 18-25900) on Dec. 21, 2018. The Hon. Mindy A. Mora oversees the cases. Aaron A. Wernick, Esq., at Furr & Cohen, P.A., is the Debtors' bankruptcy counsel. In the petitions signed by Dennis McGuire Sr., chairman and chief executive officer, Ecosphere Technologies disclosed assets of $453,403 and liabilities of $14,476,097. Sea of Green's disclosed that it had estimated assets and liabilities of between $10 million and $50 million. EP ENERGY: Appoints New Director to Fill Vacancy ------------------------------------------------ John J. Hannan had advised the Board of Directors of EP Energy Corporation of his intent to resign from the Company's Board, effective May 1, 2019. Mr. Hannan's resignation did not result from a disagreement with the Company on any matter relating to the Company's operations, policies or practices including its internal controls or financial related matters, according to a Form 8-K filed with the U.S. Securities and Exchange Commission. Mr. Hannan had served on the Board since 2013 at the direction of certain affiliates of Apollo Global Management, LLC pursuant to the Apollo Sponsor's director appointment rights under the Company's Stockholders Agreement, dated as of Aug. 30, 2013, by and among the Company and the holders party thereto. Appointment of New Director On April 29, 2019, the Board appointed Carol Flaton to serve on the Company's Board, effective May 1, 2019, filling the newly created vacancy. Ms. Flaton will also serve on the Board's Audit, Compensation, and Governance and Nominating Committees. Ms. Flaton was appointed as a Class I director, with an initial term expiring at the Company's 2021 annual meeting of stockholders. Ms. Flaton has been determined to be an independent director for purposes of the listing standards of the New York Stock Exchange. There are no material relationships between Ms. Flaton and any of the Company's directors, executive officers, or the immediate family members of any such person and there are no family relationships between Ms. Flaton and any of the Company's directors or executive officers. There are no arrangements or understandings between Ms. Flaton and any other person pursuant to which Ms. Flaton was selected as a director, and there are no relationships that would be reportable as a related party transaction under the rules of the U.S. Securities and Exchange Commission. Ms. Flaton will be compensated in accordance with the Company's independent director compensation program. About EP Energy LLC EP Energy LLC, a wholly-owned subsidiary of EP Energy Corporation -- http://www.epenergy.com-- is an independent exploration and production company engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a diverse base of producing assets and are focused on providing returns through the development of its drilling inventory located in three areas: the Permian basin in West Texas, the Eagle Ford Shale in South Texas, and the Altamont Field in the Uinta basin in Northeastern Utah. The Company is headquartered in Houston, Texas. EP Energy LLC incurred a net loss of $1 billion for the year ended Dec. 31, 2018, compared to a net loss of $203 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, EP Energy had $4.18 billion in total assets, $440 million in total current liabilities, $4.34 billion in total non-current liabilities, and a total members' deficit of $599 million. * * * In April 2019, S&P Global Ratings lowered its issuer credit rating on exploration and production company EP Energy LLC to 'CCC-' from 'CCC+'. The downgrade follows heightened concerns surrounding EP Energy's liquidity as the Company's 10-K included language questioning its ability to address $182 million in senior unsecured notes maturing May 2020 while maintaining ongoing operations and maintenance capital expenditures. In April 2019, Moody's Investors Service downgraded EP Energy LLC's Corporate Family Rating to Caa3 from Caa1. 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. EXCO RESOURCES: Committee Taps Quinn Emanuel as Co-Counsel ---------------------------------------------------------- The official committee of unsecured creditors of EXCO Resources, Inc., received approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Quinn Emanuel Urquhart & Sullivan, LLP. The firm will serve as co-counsel with Brown Rudnick LLP and Jackson Walker L.L.P., the two other firms representing EXCO and its affiliates in their Chapter 11 cases. Quinn Emanuel's hourly rates are: Attorneys $595 - $1,550 Paralegals $295 - $330 The firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code, according to court filings. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Patricia Tomasco, Esq., a partner at Quinn Emanuel, disclosed that her firm has not agreed to a variation of its standard billing arrangements for its employment with the Debtors, and that no Quinn Emanuel professional has varied his rate based on the geographic location of the Debtors' bankruptcy cases. The attorney further disclosed that Quinn Emanuel did not represent the committee in the 12 months prior to the Debtors' bankruptcy filing. Ms. Tomasco also disclosed that the committee has not yet approved a budget and staffing plan for the firm. Quinn Emanuel can be reached through: Patricia B. Tomasco, Esq. Quinn Emanuel Urquhart & Sullivan, LLP Pennzoil Place 711 Louisiana St., Suite 500 Houston, TX 77002 Phone: +1 713-221-7227 / +1 713 221 7000 Fax: +1 713 221 7100 Email: pattytomasco@quinnemanuel.com About EXCO Resources EXCO Resources, Inc. (otc pink:XCOO) -- http://www.excoresources.com/-- is an oil and natural gas exploration, exploitation, acquisition, development and production company headquartered in Dallas, Texas, with principal operations in Texas, North Louisiana and the Appalachia region. EXCO's headquarters are located at 12377 Merit Drive, Suite 1700, Dallas, Texas. EXCO Resources, Inc., and 14 of its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 18-30155) on Jan. 15, 2018. EXCO disclosed total assets of $829.1 million and total debt of $1.355 billion as of Sept. 30, 2017. The Debtors' cases are assigned to the Honorable Marvin Isgur. The Debtors tapped Gardere Wynee Sewell LLP, and Kirkland & Ellis LLP, as bankruptcy counsel; PJT Partners LP as financial advisor; Alvarez & Marsal North America, LLC, as restructuring advisor; and Epiq Bankruptcy Solutions, LLC, as claims agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee is represented by lawyers at Jackson Walker LLP and Brown Rudnick LLP. Intrepid Partners LLC and Jefferies LLC serve as the committee's investment bankers. F.M. BUTT HOTELS: Hires James M. Joyce, Esq. as Counsel ------------------------------------------------------- F.M. Butt Hotels Corp., seeks authority from the U.S. Bankruptcy Court for the Western District of New York to employ James M. Joyce, Esq., as counsel to the Debtor. F.M. Butt Hotels requires James M. Joyce, Esq.to: a. advise the Debtor as to its right, duties and powers as a debtor in possession; b. prepare and file any statements, schedules, plans or other documents or pleadings to be filed by the Debtor in the bankruptcy case; c. represent the Debtor in all hearings, meetings of creditors, conferences, trials and other proceedings in the bankruptcy case; and d. perform such other legal services as may be necessary in connection with the bankruptcy case. James M. Joyce, Esq.will be paid at the hourly rate of $250. James M. Joyce, Esq. will also be reimbursed for reasonable out-of-pocket expenses incurred. James M. Joyce, Esq., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. James M. Joyce, Esq. can be reached at: James M. Joyce, Esq. 4733 Transit Road Lancaster, NY 14043 Tel: (716) 656-0600 Fax: (716) 656-0607 E-mail: jmjoyce@lawyer.com About F.M. Butt Hotels Corp. F.M. Butt Hotels Corp. owns in fee simple a real estate property located at 911 Brooks Ave. Rochester with an appraised value of $9 million. The Company previously sought bankruptcy protection on March 18, 2019 (Bankr. W.D.N.Y. Case No. 19-20234). F.M. Butt Hotels Corp., based in Rochester, NY, filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 19-20310) on April 5, 2019. In the petition signed by Naeem W. Butt, president, the Debtor disclosed $9,386,530 in assets and $6,392,001 in liabilities. James M. Joyce, Esq., serves as bankruptcy counsel to the Debtor. FANNIE MAE: Posts $2.4 Billion Net Income in First Quarter ---------------------------------------------------------- Federal National Mortgage Association, commonly known as Fannie Mae, has filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $2.40 billion on $30.54 billion of total interest income for the three months ended March 31, 2019, compared to net income of $4.26 billion on $28.51 billion of total interest income for the three months ended March 31, 2018. Net interest income was $4.7 billion for the first quarter of 2019, compared with $5.0 billion for the fourth quarter of 2018. The decrease in net interest income for the first quarter of 2019 was due primarily to lower amortization income from the Company's guaranty book of business driven by lower mortgage prepayment activity in the first quarter of 2019 due to a higher prevailing interest rate environment at the end of 2018. Additionally, the company saw a decrease in interest income from its portfolios due to lower average balances. As of March 31, 2019, Fannie Mae had $3.42 trillion in total assets, $3.41 trillion in total liabilities, and $5.36 billion in total stockholders' equity. Fannie Mae expects to pay a $2.4 billion dividend to Treasury by June 30, 2019. Through the first quarter of 2019, the Company has paid $179 billion in dividends to Treasury. Hugh R. Frater, chief executive officer, commented, "Fannie Mae's solid first quarter financial results demonstrate the strength of our business model, our risk management capabilities, and our customer focus. "We are enhancing our credit risk transfer programs and attracting more private capital into the U.S. mortgage market. "We continue to drive technology innovations to help make the mortgage market more certain, efficient, and simple for our customers. "And we're working with customers and partners to address critical challenges such as the shortage of affordable homes and apartments across the country." Business Highlights * Fannie Mae provided $85.1 billion in liquidity to the single-family mortgage market in the first quarter of 2019 and was the largest issuer of single-family mortgage-related securities in the secondary market. More than 55% of the single-family mortgage loans the company acquired were affordable to families earning at or below 120% of the area median income, providing support for both affordable and workforce housing. The company's estimated market share of new single-family mortgage-related securities issuances was 36% for the first quarter of 2019. * Fannie Mae has transferred a portion of the credit risk on single-family mortgages with an unpaid principal balance of more than $1.6 trillion since 2013, measured at the time of the transactions, including $91 billion in the first quarter of 2019. As of March 31, 2019, $1.2 trillion in single- family mortgages or approximately 42% of the loans in the company's single-family conventional guaranty book of business, measured by unpaid principal balance, were covered by a credit risk transfer transaction. * Fannie Mae provided $16.9 billion in multifamily financing in the first quarter of 2019, which supported 171,000 units of multifamily housing. More than 85% of the multifamily units the company financed were affordable to families earning at or below 120% of the area median income, providing support for both affordable and workforce housing. Through the first quarter of 2019, Fannie Mae continued to be one of the largest issuers of Green bonds in the world, issuing more than $54 billion in Green bonds since inception of the program. * Fannie Mae continued to share credit risk with lenders on nearly 100% of the company's new multifamily business volume, primarily through its Delegated Underwriting and Servicing (DUS) program. To complement the company's lender loss sharing program through DUS, the company completed its fifth multifamily Credit Insurance Risk Transfer (CIRT) transaction in the first quarter of 2019, which covered multifamily loans with an unpaid principal balance of $11.7 billion. As of March 31, 2019, $49 billion in multifamily mortgages or 15% of the loans in the company's multifamily guaranty book of business, measured by unpaid principal balance, were covered by a CIRT transaction. Financial Performance Outlook Fannie Mae's long-term financial performance will depend in large part upon both the size of and its share of the U.S. mortgage market, which in turn will depend upon such factors as population growth, household formation, and home price appreciation. While Fannie Mae expects to remain profitable on an annual basis for the foreseeable future, certain factors could result in significant volatility in the company's financial results from quarter to quarter or year to year. Fannie Mae expects quarterly volatility in its financial results due to a number of factors, particularly changes in market conditions that result in fluctuations in the estimated fair value of derivatives and other financial instruments that it marks to market through its earnings. Other factors that may result in volatility in the company's quarterly financial results include factors that affect its loss reserves, such as redesignations of loans from held for investment to held for sale, changes in interest rates, home prices or accounting standards, or events such as natural disasters, and other factors. Further, Fannie Mae's implementation on Jan. 1, 2020 of the CECL standard will likely introduce additional volatility in the company's results thereafter as credit-related income or expense will include expected lifetime losses on the company's loans and other financial instruments subject to the standard and thus become more sensitive to fluctuations in these factors. The potential for significant volatility in the company's financial results could result in a net loss in a future quarter. Fannie Mae is permitted to retain up to $3.0 billion in capital reserves as a buffer in the event of a net loss in a future quarter. However, any net loss the company experiences in the future could be greater than the amount of its capital reserves, which would result in a net worth deficit for that quarter. For example, Fannie Mae's implementation of the CECL standard will likely decrease, perhaps substantially, the company's retained earnings and increase its allowance for credit losses, which could result in a net worth deficit when the company adopts the guidance in the first quarter of 2020. If the company experiences a net worth deficit in a future quarter, it will be required to draw funds from Treasury to avoid being placed into receivership. Providing Liquidity and Support to the Market Fannie Mae provided $102 billion in liquidity to the mortgage market in the first quarter of 2019. Through its purchases and guarantees of mortgage loans in the first quarter of 2019, Fannie Mae acquired approximately 356,000 single-family mortgage loans. Fannie Mae also financed approximately 171,000 units of multifamily housing in the first quarter of 2019. A full-text copy of the Form 10-Q is available for free at: https://is.gd/0jwP1q About Fannie Mae and Freddie Mac Federal National Mortgage Association (OTCQB: FNMA), commonly known as Fannie Mae -- http://www.FannieMae.com/-- is a government-sponsored enterprise (GSE) that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. A brother organization of Fannie Mae is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac. Freddie Mac (OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. ABOUT FANNIE MAE'S CONSERVATORSHIP AND AGREEMENTS WITH TREASURY Fannie Mae has operated under the conservatorship of FHFA since Sept. 6, 2008. Treasury has made a commitment under a senior preferred stock purchase agreement to provide funding to Fannie Mae under certain circumstances if the company has a net worth deficit. Pursuant to this agreement and the senior preferred stock the company issued to Treasury in 2008, the conservator has declared and directed Fannie Mae to pay dividends to Treasury on a quarterly basis for every dividend period for which dividends were payable since the company entered conservatorship in 2008. FCH MCKINNEY: $290K Sale of McKinney Property to Treadways Approved ------------------------------------------------------------------- Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas authorized FCH McKinney Senior Homes, LLC's sale of the real property located at 3716 Creek View Lane, McKinney, Texas, to Lawrence Treadway and Belinda Treadway for $290,000. All ad valorem taxes due and owing to the Tax Assessor for tax years 2017, 2018 and 2019 in connection with the property, will be paid in full at closing from the sales proceeds of the requested sale. The Collin County Tax Assessor's statutory tax lien will continue to attach to the subject real property to secure 2019 ad valorem property taxes assessed against said property. About FCH McKinney Senior Homes FCH McKinney Senior Homes, LLC, operates an assisted living facility in Dallas, Texas. FCH McKinney filed as a Domestic Limited Liability Company in the State of Texas on April 10, 2013, according to public records filed with Texas Secretary of State. FCH McKinney filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 18-42734) on Dec. 3, 2018. In the petition signed by Kent C. Conine, manager, the Debtor disclosed less than $50,000 in assets and less than $10 million in estimated liabilities. The Debtor is represented by Larry Kent Hercules, Esq., at Larry K Hercules, Attorney At Law. FERNLEY & FERNLEY: Hires Mitchell & Mitchell CPA's as Accountant ---------------------------------------------------------------- Fernley & Fernley, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Mitchell & Mitchell CPA's, LLC, as accountant to the Debtor. Fernley & Fernley requires Mitchell & Mitchell CPA's to prepare the Debtor's income tax returns required to be filed under the bankruptcy laws. Mitchell & Mitchell CPA's will be paid at the hourly rate of $195. Mitchell & Mitchell CPA's will also be reimbursed for reasonable out-of-pocket expenses incurred. Jeffrey S. Mitchell, partner of Mitchell & Mitchell CPA's, 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 Debtor and its estates. Mitchell & Mitchell CPA's can be reached at: Jeffrey S. Mitchell MITCHELL & MITCHELL CPA'S, LLC 1215 West Baltimore Pike, Suite 15 Media, PA 19063 Tel: (610) 566-0101 Fax: (610) 566-8827 About Fernley & Fernley Founded in 1886, Fernley & Fernley, Inc., is one of the most distinguished association management companies in the nation. Bases in Philadelphia, Pennsylvania, Fernley & Fernley filed a voluntary petition for relief under Chapter 11 of title 11, United States Code (Bankr. E.D. Pa. Case No. 18-16122) on Sept. 14, 2018, estimating under $1 million in assets and liabilities. Ellen M. McDowell, Esq., at McDowell Law, PC, is the Debtor's counsel. FFORDABLE BUILDING: $1.25M Sale of All Remaining Assets Approved ---------------------------------------------------------------- Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for Eastern District of Texas authorized Affordable Building Systems, LLC, doing business as Durra Building Systems, to sell substantially all remaining assets consisting of real estate of 21.343 acres, more or less, situated at 2747 State Hwy 160, Whitewright, Grayson County, Texas, and the improvements situated thereon, and the personal property remaining on the premises, to Nicholas A. Smith or Assigns for a total consideration of $1.25 million. The sale is free and clear of all liens, claims and encumbrances. All liens, claims and encumbrances in and to the Property will attach to the net sales proceeds. The s that secure all amounts ultimately owed for year 2019 ad valorem property taxes will remain attached to the Property and become the responsibility of the Buyer. Security Title, Inc. of Sherman, Texas, is approved to serve as the closing agent for the sale, and is authorized to pay from the $1.25 million sales proceeds the following: (i) ABS's share of usual and customary closing costs (i.e. title insurance, land survey, UCC title search, document preparation fees and recording costs, etc.); (ii) for release of Jack Norman's deed of trust lien in the principal amount of $5,092; (iii) for release of the Texas Work Force Commission's statutory lien in the principal amount of $44,968; and (iv) the net sales proceeds to Movants' Disbursing Agent: Donald Johnston, for distribution in accordance with Movant's Chapter 11 Plan. The 14-day period otherwise imposed by Fed. R. Bankr. P. 6004 (h) will not be applicable to the Order. About Affordable Building Affordable Building Systems, LLC, doing business as Durra Building Systems, sought Chapter 11 protection (bankr. E.D. Tex. Case No. 11-43655) on Dec. 5, 2011. In the petition signed by John Parker Burg, president, the Debtor estimated assets and liabilities at $1 million to $10 million. The Debtor tapped Donald L. Johnston, Esq., at Law Office of Donald Johnston as counsel. GARDNER DENVER: Moody's Affirms Ba3 CFR Amid Ingersoll Rand Deal ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Gardner Denver, Inc. including its Ba3 and Ba3-PD Corporate Family Rating and Probability of Default Rating, respectively, Ba3 senior secured rating and SGL-1 Speculative Grade Liquidity rating, following the announcement that it has entered into a definitive agreement to be combined with the Industrial business of Ingersoll-Rand Plc. The outlook is positive. The proposed combination is being structured as a Reverse Morris Trust transaction with Gardner Denver combining with Ingersoll-Rand's Industrial business for an implied approximate 11.0x EBITDA multiple (excluding synergies). The purchase consideration is expected to include $1.9 billion of debt and $5.8bn equity consideration. RATINGS RATIONALE Moody's views Gardner Denver's planned combination with IR's Industrial business as credit positive given the more than two fold increase in the company's revenues, increased end-market diversification and complementary product portfolio that would result from the transaction. Pro forma for the planned transaction, Gardner Denver's debt/EBITDA remains essentially neutral (including Moody's standard adjustments) at approximating 2.6x. Going forward, Moody's anticipates that the company will be able to realize cost synergies from the combined businesses through manufacturing and supply chain efficiencies as well as streamlining costs. The adoption of both Gardner Denver and Ingersoll-Rand's business operating systems and operating excellence measures should also contribute to improvement of the combined company's margins. However, the company's announced $250 million of anticipated annualized synergies from the planned combination in three-years is sizable and Moody's expects that it would take several years for those synergies to become evident. Positively, Gardner Denver and Ingersoll-Rand's product portfolio complement each other and include well-established and recognized brands. End-market diversification will increase with Gardner Denver's highly cyclical energy end-market exposure pro forma for the proposed transaction decreasing to roughly 10% of revenues versus approximately 25% at 2018 year-end. Given both entities' low capital intensity with 2-3% of capex/revenue and track record of strong cash flow generation, Moody's expects that the combination will result in a solid free cash flow profile. In addition, KKR's ownership of the company is expected to be reduced to approximately 17% through the proposed combination due to the equity portion of the consideration, thereby decreasing event risk. Pro forma for the planned combination, the company's margin profile is expected to weaken over the short-term given Ingersoll-Rand Industrial's lower margins versus Gardner Denver with the expectation that margins will revert to Gardner Denver's current approximate 25% reported EBITDA margins during the course of three to four years. In addition, the proposed transaction is a very sizable combination for Gardner Denver and integration risk from the combination as well as costs to effectuate the transaction and achieve expected synergies are credit considerations. Furthermore, the absolute amount of funded debt would essentially double pro forma for the transaction. Gardner Denver's Ba3 CFR continues to reflect its well-established position in engineered products, diversity by end-market and geography, healthy margins and good free cash flow generation. The company's EBITDA margins are supported by its brand strength in mission critical applications in its core energy, industrial and medical segments as well as the benefits from restructuring efforts. The company possesses a relatively large scale within its market, a sizable aftermarket business (grown to approximately 40% of sales) and diversity by end-market and geography with roughly half of sales generated abroad. These factors temper the high degree of cyclicality in certain of its end-markets such as oil and gas drilling and economically-sensitive industrial businesses. The company's speculative grade liquidity rating was affirmed at SGL-1, reflecting Moody's expectation that the company will maintain very good liquidity supported by strong free cash flow generation, a sizable cash balance, and lack of meaningful debt maturities over the next 12-15 months. The positive outlook is based both on the expectation that the company will continue to organically grow revenue at the mid-single digit level or above due to positive order trends and realize synergies such that debt/EBITDA remains at the mid-2.0x range over the next twelve to eighteen months together with the potential benefits in terms of scale, market position and diversification from its pending combination with Ingersoll-Rand's Industrial business. The continued reduction in KKR's ownership interest is also reflected in the outlook change. Moody's took the following rating actions on Gardner Denver, Inc.: Ratings Affirmed: Corporate Family Rating, Ba3 Probability of Default Rating, Ba3-PD $270 million senior secured revolving credit facility due 2020, Ba3 (LGD3) $1.3 billion senior secured term loan due 2024, Ba3 (LGD3) EUR615 million senior secured term loan due 2024, Ba3 (LGD3) Speculative Grade Liquidity Rating, at SGL-1 Outlook Action: Outlook, changed to Positive, from Stable An upward rating action would be driven by a continued increase in revenue scale through organic growth and acquisitions that increase the company's revenue base and diversification without adding to the company's leverage profile. Expectations of debt-to-EBITDA improving to and sustained in the high 2x level, EBITA-to-interest exceeding 5.0x on a sustained basis and free cash flow-to-debt in excess of 15% while maintaining strong liquidity would support an upgrade. A normalized governance structure with a diverse group of shareholders that balances debt and equity holders would also be considered. The ratings could be downgraded if revenue and earnings deteriorate, debt-to-EBITDA exceeds 3.5x, EBITA-to-interest coverage weakens to below 3.0x and is sustained at those levels, or liquidity meaningfully erodes. An aggressive financial policy such as debt-financed share repurchases from KKR or the open market, introduction of a meaningful recurring dividend, or sizable acquisitions could also lead to a downgrade. GNC HOLDINGS: Files Form 10-Q for the Quarter Ended March 31 ------------------------------------------------------------ GNC Holdings, Inc., has filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $15.26 million on $564.8 million of revenue for the three months ended March 31, 2019, compared to net income of $6.19 million on $607.5 million of revenue for the three months ended March 31, 2018. As of March 31, 2019, GNC Holdings had $1.77 billion in total assets, $1.74 billion in total liabilities, $211.4 million in convertible preferred stock, and a $189.08 million in total stockholders' deficit. As of March 31, 2019, the Company had $74.2 million available under a Revolving Credit Facility, after giving effect to $6.2 million utilized to secure letters of credit and $0.6 million reduction to borrowing ability as a result of decrease in net collateral. The Company said its ability to make scheduled payments of principal on, to pay interest on or to refinance its debt and to satisfy its other debt obligations will depend on its future operating performance, which will be affected by general economic, financial and other factors beyond its control. The Company expects to make an excess cash flow payment between $25 million and $35 million at 50% with respect to the year ending Dec. 31, 2019, which is expected to be paid in the second quarter of 2020. "We currently anticipate that cash generated from operations, together with amounts available under the Revolving Credit Facility, will be sufficient to service our debt (including the expected excess cash flow payment), meet our operating expenses and fund capital expenditures over the next 12 months," the Company stated in the Report. "If all outstanding amounts under the convertible senior notes ("Notes") in excess of $50.0 million have not been repaid, refinanced, converted or effectively discharged prior to May 2020 ("Springing Maturity Date"), the maturity date of the Tranche B-2 becomes the Springing Maturity Date, subject to certain adjustments. In the event that a refinancing does not occur before the Springing Maturity Date, management believes that the Company will have the ability to repay $138.6 million of the Notes with projected cash on hand and the Revolving Credit Facility. We are currently in compliance with our debt covenant reporting and compliance obligations under our Credit Facilities and expect to remain in compliance during 2019." Cash provided by operating activities increased by $43.6 million from $25.1 million for the three months ended March 31, 2018 to $68.7 million for the three months ended March 31, 2019 due to favorable working capital changes primarily due to an increase in accounts payable as a result of the Company's cash management efforts and the increase in accounts payable related to the establishment of the Manufacturing JV. Cash provided by investing activities was $85.6 million for the three months ended March 31, 2019 compared with cash used in investing activities of $3.4 million for the same period in 2018 primarily due to the $101 million cash proceeds received from IVC in exchange for 57% ownership in the Manufacturing JV. In addition, the Company made a capital contribution of $10.7 million to the Manufacturing JV for its share of short-term working capital needs and contributed $2.4 million cash from its China business to the China joint ventures. Capital expenditures for the three months ended March 31, 2019 was $3.0 million compared with $3.7 million for the same period in 2018. The Company expects capital expenditures to be approximately $20 to $30 million in 2019, which includes investments for store development, IT infrastructure and maintenance. The Company anticipates funding its 2019 capital requirements with cash flows from operations and, if necessary, borrowings under the Revolving Credit Facility. For the three months ended March 31, 2019, cash used in financing activities was $84.4 million, primarily consisting of $147 million in payments on the Tranche B-1 Term Loan, $114 million in payments on the Tranche B-2 Term Loan, a $10.4 million original issuance discount paid to the Tranche B-2 Term Loan lender at 2% of the outstanding balance, and $12.6 million in fees paid for the issuance of convertible preferred stock, partially offset by approximately $200 million of proceeds from the issuance of convertible preferred stock. A full-text copy of the Form 10-Q is available for free at: https://is.gd/sVVpGC About GNC Holdings GNC Holdings, Inc., headquartered in Pittsburgh, PA, is a global health and wellness brand with a diversified, multi-channel business. The Company's assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink and other general merchandise features innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC. As of March 31, 2019, GNC had approximately 8,200 locations, of which approximately 6,000 retail locations are in the United States (including approximately 2,100 Rite Aid licensed store-within-a-store locations) and the remainder are franchise locations in approximately 50 countries. GNC Holdings reported net income of $69.78 million for the year ended Dec. 31, 2018, compared to a net loss of $150.26 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, GNC Holdings had $1.52 billion in total assets, $1.54 billion in total liabilities, $98.80 million in Series A convertible preferred stock, and a stockholders' deficit of $114.31 million. * * * As reported by the TCR on Nov. 15, 2018, S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Pittsburgh-based vitamin and supplement retailer GNC Holdings Inc. and removed all of its ratings on the company from CreditWatch, where S&P placed them with negative implications on Feb. 14, 2018. "The affirmation reflects our belief that GNC's capital structure remains unsustainable over the long term in light of its current operating performance, including its cash flow generation, because of increased competitive threats amid the ongoing secular changes in the retail industry. GOGO INC: Launches $20 Million Senior Secured Notes Offering ------------------------------------------------------------ Gogo Inc. has commenced a private offering of $20 million aggregate principal amount of additional 9.875% senior secured notes due 2024 to be issued by its direct wholly owned subsidiary, Gogo Intermediate Holdings LLC, and its indirect wholly owned subsidiary, Gogo Finance Co. Inc. The initial 9.875% Senior Secured Notes due 2024 were issued in an aggregate principal amount of $905 million on April 25, 2019. On May 3, 2019, the Issuers obtained the consent of the majority of the holders of the Initial Notes (excluding Initial Notes held by the Issuers or any affiliates of the Issuers) to amend the indenture that governs the Initial Notes to increase the amount of indebtedness under Credit Facilities (as defined in the indenture) that may be incurred by $20 million. The Additional Notes and the Initial Notes will be treated as the same series for all purposes under the indenture and collateral agreements that govern the Initial Notes and will govern the Additional Notes. The Additional Notes will be guaranteed on a senior secured basis by Gogo Inc. and all of Holdings LLC's existing and future restricted subsidiaries (other than the Co-Issuer), subject to certain exceptions. The Additional Notes and the related guarantees will be secured by first-priority liens (subject to certain exceptions) on substantially all of the Issuers' and the Guarantors' assets, including pledged equity interests of the Issuers and (subject to certain exceptions) all of Holdings LLC's existing and future restricted subsidiaries guaranteeing the Notes, except for certain excluded assets and subject to permitted liens. There can be no assurance that the proposed offering of Additional Notes will be completed. The Issuers intend to use the net proceeds from the sale of the Additional Notes for general corporate purposes. The Additional Notes and the guarantees will be offered in a private offering exempt from the registration requirements of the United States Securities Act of 1933, as amended. The Additional Notes and the guarantees will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The Additional Notes and the guarantees have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. About Gogo Gogo Inc. -- http://www.gogoair.com/-- is a global provider of broadband connectivity products and services for aviation. The Company designs and sources innovative network solutions that connect aircraft to the Internet and develop software and platforms that enable customizable solutions for and by its aviation partners. Gogo's products and services can be found on thousands of aircraft operated by global commercial airlines and thousands of private aircraft, including those of the largest fractional ownership operators. Gogo is headquartered in Chicago, IL, with additional facilities in Broomfield, CO, and locations across the globe. Gogo reported a net loss of $162.03 million for the year ended Dec. 31, 2018, compared to a net loss of $172.0 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Gogo Inc. had $1.26 billion in total assets, $1.53 billion in total liabilities, and a total stockholders' deficit of $268.8 million. * * * As reported by the TCR on April 18, 2019, Moody's Investors Service changed the outlook on Gogo Inc. to stable from negative. Concurrently, Moody's has affirmed Gogo's corporate family rating at Caa1. Moody's said that despite the improvement in liquidity, Gogo's Caa1 CFR remains warranted given the company's high leverage which Moody's expects at around 9.9x (Moody's adjusted debt/EBITDA) by end 2019 along with the continued need for Gogo to invest heavily in technology and equipment installs to pursue its growth ambitions outside of North America. Gogo's Caa1 also reflects the company's small scale relative to other players in the wider telecommunications industry as well as the highly competitive environment it operates in. S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Gogo Inc, according to a TCR report dated April 19, 2019. S&P said the company's proposed refinancing of its capital structure will boost its short-term liquidity by extending the maturity profile of its obligations but the rating agency expects the company to burn cash over the next year. The rating agency said it affirmed its 'CCC+' issuer credit rating because it does not envision a default within the next year. GOODYEAR TIRE: Moody's Cuts CFR to Ba3 & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of The Goodyear Tire & Rubber Company including the Corporate Family and Probability of Default ratings to Ba3 from Ba2, and Ba3-PD from Ba2-PD, respectively. In a related action Moody's downgraded Goodyear's senior secured second-lien term loan, to Ba1 from Baa3; senior unsecured guaranteed notes to B1 from Ba3, senior unsecured unguaranteed notes to B2 from B1; and on Goodyear Europe B.V.'s senior unsecured guaranteed notes to Ba2 from Ba1. The Speculative Grade Liquidity Rating is downgraded to SGL-3 from SGL-2. The rating outlook is stable. The following ratings were downgraded: Downgrades: Issuer: Goodyear Europe B.V. Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD2) from Ba1 (LGD2) Issuer: Goodyear Tire & Rubber Company (The) Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Corporate Family Rating, Downgraded to Ba3 from Ba2 Senior Secured Bank Credit Facility, Downgraded to Ba1 (LGD2) from Baa3 (LGD2) Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD6) from B1 (LGD6) GTD Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD4) from Ba3 (LGD4) Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Issuer: Goodyear Europe B.V. Outlook, Changed To Stable From Negative Issuer: Goodyear Tire & Rubber Company (The) Outlook, Changed To Stable From Negative RATINGS RATIONALE The downgrade of Goodyear's CFR to Ba3 incorporates Moody's view that the company's pricing actions, rationalization initiatives in Germany, and other cost savings programs initiated to help mitigate ongoing elevated raw material cost pressures could be effective over the longer term, but are unlikely to restore Debt/EBITDA to below 3x, or EBITA/Interest to above 3x over the intermediate-term. Moody's believes these actions will help mitigate raw material cost headwinds of approximately $300 million expected by Goodyear in 2019. Yet, there are other industry pressures including the slowdown in global automotive original equipment manufacturer sales, and industry expectations of flattish replacement tire volumes in the U.S. For the LTM period ending March 31, 2019 Goodyear's Debt/EBITDA, and EBITA/interest approximated 4.4x and 2.2x, respectively (inclusive of Moody's adjustments. Further, while the company's actions will help mitigate expected raw material cost headwinds over the next several months, additional actions will be need to restore profits to levels experienced in 2016. Goodyear's EBITDA has deteriorated by approximately $475 million (as adjusted by Moody's) from year-end 2016 to year-end 2018. Goodyear's Ba3 CFR will continue to be supported by the company's strong global competitive position in the automotive aftermarket and longstanding customer relationships with automotive original equipment manufacturers, which supports aftermarket sales. Goodyear's broad geographic revenue base has helped diversify the impact of business conditions in one particular region. Goodyear's continues to outpace industry trade association member replacement tire volume growth rates in higher margin =17 inch tire category in both the U.S. and European regions. Management also has prudently discontinued share repurchases to preserve liquidity, as the company operates through challenging industry conditions. The stable rating outlook reflects the expectation that Goodyear's Debt/EBITDA will remain in the 4.5x range over the next 12-18 months before the impact of pricing actions by the company will start to offset the effect of expected raw material cost increases. Goodyear's Speculative Grade Liquidity Rating of SGL-3 incorporates Moody's expectation continued strong availability under the company's credit facilities, balanced by weaker cash balances, and anticipated weak cash flow generation over the next 12-15 months. As of March 31, 2019, the $2.0 billion ABL revolving credit facility had $285 million of borrowings and $37 million of letters of credit outstanding resulting in $1.3 billion of availability after considering the borrowing base. The facility matures in 2021. Goodyear's Euro 800 million revolving credit facility (recently increased from Euro 550 million) had $140 million of borrowings and the pan-European accounts receivable securitization facility was fully utilized at $246 million. As of March 31, 2019, Goodyear's global cash on hand approximated $860 million (excluding $50 million of restricted cash) which is lower than historical trends of over $1 billion. Moody's expects Goodyear to generate close to breakeven free cash flow over the next 12-15 months due to headwinds from raw material costs and flattish volumes. Also, pressuring Goodyear's liquidity profile is the August 2020 $282 million 8.75% note maturity. This maturity could be funded with availability under the revolvers. However, Goodyear's competitive position a strong supplier of automotive OEM and aftermarket suppliers should support access to the capital markets. The covenant test under the $2.0 billion ABL revolver is a coverage ratio which comes into effect only when availability, plus cash balances of the parent and guarantor subsidiaries under the facility, goes below $200 million, which is unlikely to occur in the near-term. Important to Goodyear's liquidity profile is its ability to factor receivables. At March 31, 2019 the gross amount of receivables sold was $550 million. Moody's consider this a potential funding risk if markets are not available to enter into further factoring arrangements. The ratings on the Goodyear Europe B.V. senior unsecured Euro notes include a one-notch down override. The override considers the recent increase in the size and potential usage of the secured revolving credit facility at this entity. A higher rating over the near term is unlikely. Over the long-term, a higher rating could result from sustained improving demand which supports widening profit margins and debt reduction. A higher rating could result from EBITA/interest approaching 3.0x, and debt/EBITDA approaching 3.0x. A lower rating could result if industry conditions deteriorate through weakening volume trends, competitive pressures, or increasing raw material costs which are not offset by improved product mix, pricing, or restructuring actions. EBITA margins expected to approach 3% on a sustained basis, the inability to generate positive free cash flow sufficient to maintain debt/EBITDA below 4.5x, or EBITA/Interest above 2x could also result in a downgrade. Ratings pressure could also arise from a meaningful decline in the liquidity profile. The principal methodology used in these ratings was the Global Automotive Supplier Industry published in June 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. The Goodyear Tire & Rubber Company, based in Akron, OH, is one of the world's largest tire companies with 47 manufacturing facilities in 21 countries around the world. Revenues for the LTM period ending March 31, 2019 were approximately $15.2 billion. GOODYEAR TIRE: S&P Alters Outlook to Neg., Affirms 'BB' Debt Rating ------------------------------------------------------------------- S&P Global Ratings revised its outlook on The Goodyear Tire & Rubber Co. (Goodyear) to negative from stable and affirmed its 'BB' issuer credit rating. In addition, the 'BBB-' issue-level ratings on its second-lien secured debt and 'BB' rating on its senior unsecured notes are affirmed. Goodyear has not yet raised prices sufficiently to recover increases in raw material costs over the last two years, which has put pressure on the company's sales and profitability. Other factors, such as declining OE production, are adding to these pressures. S&P assumes for the rating that the company is able to maintain a debt-to-EBITDA ratio below 4.0x and free operating cash flow (FOCF)-to-debt ratio above 10%. "Our negative outlook on Goodyear reflects our view that there is at least a one-third chance that we could lower the issuer credit rating if we came to believe the company could not generate a FOCF-to-debt ratio of at least 10% over the next 12 months, because the company is unable to sufficiently recover past increases in commodity costs," S&P said. S&P said it could lower its rating on Goodyear if the company is unable to raise prices sufficiently to recover past increases in raw material costs, or if declining global tire demand makes it unlikely that Goodyear could maintain metrics in line with the rating agency's expectations for the current financial risk profile, namely: a debt-to-EBITDA ratio below 4.0x and a FOCF-to-debt ratio above 10% on a sustained basis. "We could consider revising the outlook back to stable if we came to believe that the company is able to generate a FOCF-to-debt ratio of at least 10% and maintain a debt-to-EBITDA metric of less than 4x on a sustained basis," S&P said, adding that this could occur if the company is able to recover raw material costs by increasing price, if it can materially streamline operating expenses, thereby expanding margins, or if it pursues a program of meaningful debt reduction. GRCDALLASHOMES LLC: Case Summary & 12 Unsecured Creditors --------------------------------------------------------- Debtor: GRCDallasHomes LLC 13220 Beach Club Road The Colony, TX 75056 Business Description: GRCDallasHomes LLC is a real estate investor in The Colony, Texas. Chapter 11 Petition Date: May 3, 2019 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Case No.: 19-41186 Judge: Hon. Brenda T. Rhoades Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 12720 Hillcrest Road, Suite 625 Dallas, TX 75230 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: joyce@joycelindauer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kazem Daneshmandi, member. A full-text copy of the petition containing, among other items, a list of the Debtor's 12 unsecured creditors is available for free at: http://bankrupt.com/misc/txeb19-41186.pdf GTT COMMUNICATIONS: Fitch Affirms 'B' LT Issuer Default Rating -------------------------------------------------------------- Fitch Ratings has affirmed GTT Communications, Inc. and GTT Communications BV's Long-Term Issuer Default Rating at 'B'. The Rating Outlook is Stable. Fitch has also affirmed the 'BB-'/'RR2' rating for the company's $200 million first-lien secured revolver, $1.8 billion first-lien secured term loan, and EUR$750 million first-lien secured term loan. In addition, Fitch has affirmed the rating for the company's $575 million senior unsecured notes at 'CCC+'/'RR6'. KEY RATING DRIVERS Debt Funded M&A: Fitch expects GTT Communications, Inc. to maintain pro forma gross leverage between 4.5x and 5.5x over the rating horizon as the company continues to pursue and execute on multiple acquisitions annually. These transactions are expected to be primarily debt funded in order to minimize equity dilution. Fitch recognizes that acquisitions can provide increased scale in a capital-intensive industry; however, Fitch is also aware of the risk of delays in the integration process, and shortfalls in expected synergies. Elevated Leverage: Fitch believes management's historical track record of maintaining net leverage above the upper end of its target range is a constraint to the rating. Total net leverage was near 6x as of Dec. 31, 2018, based on a pro forma EBITDA that includes all prior acquisitions and expected cost synergies. Fitch expects the company will be below its established negative gross leverage sensitivity of 5.5x within the next 12 months on a pro forma basis as a result of synergies and continued EBITDA growth. Fitch would only expect GTT's leverage to decline towards the lower end of management's target range in a less intensive M&A environment. Recurring Revenue and Contract Matching: Fitch expects the recurring nature of GTT's revenue to provide a significant amount of stability and visibility into future cash generation. Over 90% of the company's revenue is recurring with contracts generally ranging between one to three years. GTT will typically match the contract length of its last mile leases with the customer's contract length in order to insulate itself from price fluctuations. Approximately 80% of the company's network costs are related to these last mile leases, providing the company with a significant amount of capacity to downsize if customers choose not to renew. Strong Secular Trends: GTT's credit profile benefits from the ongoing secular trends its industry is experiencing. Enterprises are continuing to increase their demand for networking bandwidth due to the rapid adoption of cloud-based applications and an increasing amount of data usage across locations as a result of increasing files sizes, voice, video conferencing and real-time collaboration tools. Competitive Position and Limited Scale: Fitch believes GTT's modest scale provides the company with limited room for operational headwinds or unexpected industry shifts. Many of the company's competitors are significantly larger, better capitalized, and have a stronger market presence. The company's capex-lite business model places it in a slightly inferior competitive position due to its dependency on third party providers for fiber connectivity, which is primarily in the last mile where there are significantly less providers of fiber connectivity. Fitch believes this dependency is somewhat mitigated by the company's partial ownership of its core network. Customer Diversification, Supplier Concentration: Fitch expects the company's credit profile to continue to benefit from broad customer diversification. GTT's largest customer accounted for less than 5% of monthly recurring revenue, while its top 20 customers are expected to have made up less than 25% of MRR. These customers are multi-national corporations with significant access to capital and liquidity. Fitch believes the majority of the company's monthly recurring costs are tied to its top 20 suppliers. GTT's diverse base of over 3,500 suppliers partially mitigates risks stemming from the potential for increased margin pressure related to supplier pricing. DERIVATION SUMMARY The ratings reflect the company's highly recurring revenue and diversified customer base, the strong secular trends driving industry demand, and its profitability on an EBITDA less capex basis. Fitch expects these factors to provide a significant amount of visibility for and stability to the company's cash flows over the rating horizon. The ratings also incorporate Fitch's expectation for a high level of M&A activity over the rating horizon. Forecasted transactions are expected to be majority debt-funded in order to minimize equity dilution and drive equity returns. This acquisitive posture introduces integration risks to the company's credit profile and drives Fitch's expectation for leverage to remain at an elevated level over the rating horizon. Fitch believes these factors position the company well in the 'B' rating category relative to similarly rated peers, such as CenturyLink, Frontier Communications Corp, and Uniti Group Inc. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Revenue growth in the high single-digits at GTT, and low single-digit revenue growth at Interoute. -- Annual spend on small acquisitions between $100 million and $200 million per year, and one large acquisition in fiscal 2021. -- Overall EBITDA margin expansion toward 30% due to increased scale and approximately $55 million of remaining cost synergies, as of fiscal year end 2018, related to Interoute. EBITDA margin expansion is expected to be hampered by smaller acquisitions that are expected to be lower margin than the overall company. -- Acquisition related charges near $50 million per year. -- Capital intensity expanding toward 7% due to larger acquisitions that are expected to be more asset-heavy, similar to Interoute and Hibernia. GTT's Recovery Ratings reflect Fitch's expectation that the enterprise value for the company, and, hence, the Recovery Rating for its creditors will be maximized as a going concern rather than in liquidation. Fitch estimates a distressed enterprise valuation of $2.6 billion, using a 5.5x multiple and an approximate $480 million going concern EBITDA. Fitch's going concern EBITDA assumption is primarily driven by margin pressure from last mile providers, resulting in a decline from LTM pro forma EBITDA. Its 5.5x emergence multiple assumption is reflective of the company's asset-lite business model, partially offset by the acquisition of Hibernia and Interoute. The multiple is also in line with the median for telecom companies published in Fitch's Telecom, Media and Technology Bankruptcy Enterprise Values and Creditor Recoveries report and historical trading multiples in the telecom sector. The senior secured euro tranche term loan is considered pari passu with the debt located at GTT due to the collateral allocation mechanism that would come into effect during a bankruptcy. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action -- Gross leverage sustained at or below 4.5x; -- FCF to total adjusted debt sustained in the mid-single-digit range. Developments that May, Individually or Collectively, Lead to Negative Rating Action -- Gross leverage sustained at or above 5.5x; -- FCF to total adjusted debt approaching zero; -- Delays in the integration process, or shortfalls in the expected synergies of current or future acquisitions. LIQUIDITY Solid Liquidity: Fitch expects GTT's liquidity to remain solid over the rating horizon. As of December 2018, liquidity was supported by $55 million of cash on hand, $130 million available under its new revolver, and Fitch's expectation for the company to generate close to $100 million of FCF in 2019. The company's financial flexibility is also enhanced by the lenient 1% amortization schedule under its term loan. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: GTT Communications, Inc. -- Long-term IDR at 'B'; Outlook Stable; -- Senior secured revolving credit facility at 'BB-'/'RR2'; -- Senior secured USD term loan at 'BB-'/'RR2'; -- 7.875% senior unsecured notes at 'CCC+'/'RR6'. GTT Communications BV -- Long-term IDR at 'B'; Outlook Stable; -- Senior secured EUR term loan at 'BB-'/'RR2'. GUITAR CENTER: Moody's Alters Outlook on Caa1 CFR to Stable ----------------------------------------------------------- Moody's Investors Service revised Guitar Center Inc.'s rating outlook to stable from negative. GCI's Caa1 Corporate Family Rating and Caa1-PD Probability of Default Rating were affirmed along with the company's Caa1 senior secured and Caa3 senior unsecured note ratings. The outlook revision to stable from negative considers the continuation and sustainability of the modest improvement in GCI's consolidated revenue and EBITDA performance that has taken place during the past twelve months. Despite having one less week in the current fiscal year-ended February 2, 2019, GCI's net sales grew about 1.5% while consolidated EBITDA on a Moody's adjusted basis grew about 3%. The stable outlook also incorporates its view that a majority of GCI's ABL facility will remain drawn throughout the year as the company does not typically hold a material amount of cash on it's balance sheet, and is also not likely to generate enough free cash flow after all debt service and capital spending to material reduce ABL amounts outstanding. The affirmation of GCI's Caa1 Corporate Family Rating considers that despite recent and expected further modest improvements in sales and EBITDA, Moody's expects GCI will remain highly leveraged with debt/EBITDA on a Moody's adjusted basis at about 6.1 times. This high leverage, combined with the relatively limited revenue visibility regarding the retail environment for musical instruments, will challenge the company's ability to improve its leverage by October 2020, about one year prior to the proposed senior secured note maturity date. As a result, GCI's Caa1 Corporate Family Rating continues to incorporate some level of refinancing risk. Outlook Actions: Issuer: Guitar Center Inc. Outlook, Changed To Stable From Negative Affirmations: Issuer: Guitar Center Inc. Probability of Default Rating, Affirmed Caa1-PD Corporate Family Rating, Affirmed Caa1 Senior Secured Regular Bond/Debenture, Affirmed Caa1 (LGD4) Senior Unsecured Regular Bond/Debenture, Affirmed Caa3 (LGD5) RATINGS RATIONALE GCI's credit profile (Caa1 stable) considers that the company remains highly leveraged with debt/EBITDA on a Moody's adjusted basis at about 6.1 times. Additionally, while GCI offers a broad array of musical instruments and related products, in general, the company's product offering is targeted to a very specific type of customer. GCI's products also have a high discretionary component to them. This, combined with GCI's high leverage, limits the company's operating and financial flexibility. The Caa1 Corporate Family Rating also incorporates some level of refinancing risk as Moody's does not expect any material improvement in GCI's leverage by October 2020, about one year prior to the proposed senior secured note maturity date. Positive rating consideration is given to GCI's well-regarded reputation as a retailer of musical instruments and recording tools. Within the highly fragmented specialty retailing segment for musical instrument sales and rentals, the company has a highly recognized brand name among its core customers. GCI is also the largest retailer of music products in the United States based on revenues, and as a result, enjoys tangible advantages in sourcing, merchandising, and operations relative to other music retailers because of its dominant market position within this very narrow retail segment. A higher rating requires that GCI push out its debt maturities without any impairment as well as improve its credit metrics -- achieve and maintain debt/EBITDA on a Moody's adjusted basis below 5.5 times. A higher rating would also require further demonstrated earnings stability. Ratings could be downgraded if earnings or margins deteriorate, debt/EBITDA increases much above its current level, and/or it appears there will any level of impairment to existing creditors as part of any future refinancing effort by GCI. GCI is a wholly-owned subsidiary of Guitar Center Holdings, Inc. The company has three reportable business segments, comprised of Guitar Center, Musician's Friend and Music & Arts. GCI's parent company, Guitar Center Holdings, Inc., owns 100% of the outstanding common stock of Guitar Center, Inc. Guitar Center, Holdings Inc. has no material asset or operations other than its ownership of GCI. GCI is a private company and does not publicly disclose detailed financial information. H K FINE PROPERTIES: Cuevas Buying Baytown Property for $53K ------------------------------------------------------------ H.K. Fine Properties, LLC, asks the U.S. Bankruptcy Court for the Southern District of Texas to authorize the real property commonly known as 705 Ward Street, Baytown, Texas to Sergio and Aurea Cuevas for $53,000. Objections, if any, must be filed within 21 days of the date the Motion was served. On Oct. 5, 2015, the Debtor's affiliate Supply Pro Sorbents, LLC, received two loans from Texas Citizens. The first loan was for $675,000 and had a 7-year term. The second loan was for $250,000 and had a 1-year term. Both loans were secured by Supply Pro's physical assets. The second loan's maturity date was extended several times. On Sept. 23, 2016, the Debtor pledged all its real property, including the Property, to Texas Citizens with a deed of trust dated Sept. 23, 2016. At the time, Supply Pro was not in default on either of its loans with Texas Citizens. No consideration was transferred to the Debtor and neither the Debtor nor Supply Pro received any value from Texas Citizens in exchange for the Debtor's pledge of its real property and deed of trust. On Nov. 5, 2018, Ecosorb acquired the Supply Pro loans from Texas Citizens. The Buyers have expressed interest in purchasing Ward Street. Their daughter lives next door. The purchase price will be $53,000 and financed by the Debtor. The down payment will be $2,000, the $51,000 balance will be financed at 10% interest with a 15-year amortization, and a balloon at the end of month 39. The first payment will be due ninety days after the closing. The Debtor asks the Court authorize its sale of the Property free and clear of all liens. Presently, the Property produces no income for the estate because the house on the Property is uninhabitable. Significant investment would be required to make the home habitable. The sale of the Property allows the estate to receive an income stream from the Property without having to invest any resources. The Debtor has not received any other offers. About H.K. Fine Properties H K Fine Properties' principal assets are located at 1210 Shotwell/1231 Hahlo, Houston, Texas, and 705 Ward Rd., Baytown, Texas. The Company is an affiliate of Supply Pro Sorbents, LLC and Supply Pro, Inc., both of which sought bankruptcy protection on Dec. 19, 2018 (Bankr. S.D. Tex. Case Nos. 18-20580 and 18-20581, respectively). Supply Pro offers safety and cleaning supplies utilized in the cleanup of hazardous oil and chemical spills. H K Fine Properties, LLC, based in Houston, TX, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 19-31828) on April 1, 2019. In the petition signed by Harmon K. Fine, president/manager, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Eduardo V. Rodriguez oversees the case. Alan Sanford Gerger, Esq., at The Gerger Law Firm PLLC, serves as bankruptcy counsel. HELIOS AND MATHESON: Swaps Warrants for 12% Debentures Due 2020 --------------------------------------------------------------- Helios and Matheson Analytics Inc. entered into separate exchange agreements on April 30, 2019, with the holders of outstanding Series F-2 Preferred Stock Purchase Warrants to purchase 60,240 shares of the Company's Series B Preferred Stock, par value $0.01 per share, which are convertible into 1,004,020,080 shares of the Company's common stock, for the purpose of exchanging those Warrants for 12% Debentures Due Nov. 1, 2020 in the aggregate principal amount of $2,100,000. As a result, the Warrants have been cancelled. Additionally, the Exchange Agreements amended the Securities Purchase Agreements entered into by the Company on March 25, 2019 with the holders of the outstanding Warrants and described in the Form 8-K filed with the Securities and Exchange Commission on March 26, 2019. As a result, the Purchase Agreements have been amended to remove the requirement that the Company obtain stockholder approval of an amendment of its certificate of incorporation to effect a reverse stock split of the Company's common stock. Debentures On April 30, 2019, the Company issued the Debentures in an aggregate principal amount of $2,100,000 in exchange for the Warrants. Commencing on July 1, 2019, the Debentures will bear interest at a rate of 12% per annum, payable on Nov. 1, 2020. The Debentures are unsecured. If stockholder approval of the Reverse Split is obtained, the Company may, at its option, redeem the Debentures in cash in an amount equal to the Optional Redemption Amount, or at the Company's option, pursuant to Section 3(a)(9) of the Securities Act, through the exchange of Debentures for newly issued Warrants exercisable into such number of shares of Preferred Stock equal to the Optional Redemption Amount divided by $34.8606. The Optional Redemption Amount is equal to 100% of the principle amount of the Debentures, plus accrued but unpaid interest, if any, plus liquidated damages, if any. Unless earlier redeemed, the Debentures will mature on Nov. 1, 2020. Events constituting events of default under the Debentures include (i) any default in the payment of the principal amount of any Debenture or other amount owing to a holder any Debenture, (ii) the Company's failure to observe or perform in any material respect any other covenant or agreement contained in the Debentures or in any Transaction Document, which is not cured within certain cure periods, (iii) any representation or warranty made in the Debenture or the Exchange Agreement, or other statements or reports pursuant thereto shall be untrue or incorrect in any material respect, (iv) the Company or any Significant Subsidiary being subject to a Bankruptcy Event (each, as defined in the Debenture), (v) the Company's or any of its subsidiaries' default on any of its obligations under any financial instrument or accommodations that (a) involves an obligation greater than $500,000, and (b) results in the related indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; (vi) the Company's being a party to any Change of Control Transaction (as defined in the Debenture) or agreeing to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction) other than the transfer by the Company to a wholly-owned subsidiary of the Company of all of the Company's ownership interests in MoviePass Inc., MoviePass Films, LLC, MoviePass Ventures LLC and Moviefone related assets and the subsequent distribution of shares of Spinco to the stockholders of the Company and holders of convertible notes, warrants or other outstanding equity or equity-linked instruments of the Company to the extent required by such instruments; or (vii) any monetary judgment, writ or similar final process entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $500,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days. About Helios and Matheson Helios and Matheson Analytics Inc. -- http://www.hmny.com/-- is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, business intelligence, and consumer-centric technology. More recently, to provide greater value to stockholders, the Company has sought to expand its business primarily through acquisitions that leverage its capabilities and expertise. The Company is headquartered in New York City, has an office in Miami Florida and has an office in Bangalore India. Helios and Matheson reported a net loss of $150.8 million for the year ended Dec. 31, 2017, compared to a net loss of $7.38 million for the year ended Dec. 31, 2016. The Company's amended balance sheet at Sept. 30, 2018, showed $134.30 million in total assets, $68.86 million in total liabilities, and $65.44 million in total stockholders' equity. The report from the Company's independent accounting firm Rosenberg Rich Baker Berman, P.A., in Somerset, New Jersey, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and negative cash flows from operating activities. This raises substantial doubt about the Company's ability to continue as a going concern. 2018 Form 10-K Filing Delay Helios and Matheson had filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Annual Report on Form 10-K for the year ended Dec. 31, 2018. The Company said it requires additional time to provide its independent registered public accounting firm with the information and documentation regarding its assessment of its internal control over financial reporting to enable its independent registered public accounting firm to provide the required attestation report. HELIOS AND MATHESON: Will be Delisted from Nasdaq ------------------------------------------------- The Nasdaq Stock Market, Inc. has determined to remove from listing the common stock of Helios and Matheson Analytics Inc., effective at the opening of the trading session on May 13, 2019. Based on review of information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rule 5550(a)(2). The Company was notified of the Staff's determination on Dec. 19, 2018. The Company appealed the determination to a Hearing Panel. Upon review of the information provided by the Company, the Panel issued a decision dated Feb. 11, 2019, denying the Company continued listing and notified the Company that trading in the Companys securities would be suspended on Feb. 13, 2019. The Company did not request a review of the Panel's decision by the Nasdaq Listing and Hearing Review Council. The Listing Council did not call the matter for review. The Panel's Determination to delist the Company became final on March 28, 2019. About Helios and Matheson Helios and Matheson Analytics Inc. -- http://www.hmny.com/-- is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, business intelligence, and consumer-centric technology. More recently, to provide greater value to stockholders, the Company has sought to expand its business primarily through acquisitions that leverage its capabilities and expertise. The Company is headquartered in New York City, has an office in Miami Florida and has an office in Bangalore India. Helios and Matheson reported a net loss of $150.8 million for the year ended Dec. 31, 2017, compared to a net loss of $7.38 million for the year ended Dec. 31, 2016. The Company's amended balance sheet at Sept. 30, 2018, showed $134.30 million in total assets, $68.86 million in total liabilities, and $65.44 million in total stockholders' equity. The report from the Company's independent accounting firm Rosenberg Rich Baker Berman, P.A., in Somerset, New Jersey, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and negative cash flows from operating activities. This raises substantial doubt about the Company's ability to continue as a going concern. 2018 Form 10-K Filing Delay Helios and Matheson had filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Annual Report on Form 10-K for the year ended Dec. 31, 2018. The Company said it requires additional time to provide its independent registered public accounting firm with the information and documentation regarding its assessment of its internal control over financial reporting to enable its independent registered public accounting firm to provide the required attestation report. HELIOS SOFTWARE: Moody's Alters Outlook on B3 CFR to Stable ----------------------------------------------------------- Moody's Investors Service affirmed the ratings of Helios Software Holdings, Inc., an operating subsidiary of parent company, ION Corporate Solutions Finance Limited, affirming the B3 Corporate Family Rating and the B3-PD Probability of Default Rating. Concurrently, Moody's affirmed the B3 rating on the issuer's proposed senior secured first lien credit facility as well as the B3 ratings of co-borrower ION Corporate Solutions Finance S.a r.l.'s proposed first lien bank debt. The outlook was revised from negative to stable. The outlook revision reflects the combined entity's improved credit protection metrics as a result of a proposed $250 million reduction in total pro forma borrowings and the elimination of a proposed dividend distribution, with trailing pro forma adjusted Debt/EBITDA falling by 0.8x as compared to the previously anticipated debt structure. Upon completion of this transaction, expected in early May 2019, Wall Street Systems Inc., Allegro, Openlink Financial, LLC, and Triple Point Technology, Inc., all of which are operating units owned by holding company ION Investment Group, will be consolidated into ION as a single entity. Moody's expects the debt of the predecessor entities which will be consolidated to form ION to be repaid and all existing ratings on these issuers to be withdrawn. Moody's affirmed the following ratings: Issuer: Helios Software Holdings, Inc.: Corporate Family Rating - B3 Probability of Default Rating - B3-PD Senior Secured Revolving Credit Facility expiring 2024 -- B3 (LGD3) Senior Secured Term Loan due 2023 -- B3 (LGD3) Senior Secured Term Loan due 2026 -- B3 (LGD3) Outlook revised from Negative to Stable Issuer: ION Corporate Solutions Finance S.a r.l. (EUR-denominated) Senior Secured Term Loan due 2023 -- B3 (LGD3) (EUR-denominated) Senior Secured Term Loan due 2026 -- B3 (LGD3) Outlook revised from Negative to Stable RATINGS RATIONALE Helios' B3 CFR reflects the combined company's high pro forma trailing debt leverage of more than 6x (Moody's adjusted for operating leases) as well as relatively limited scale as a niche provider of software and services for treasury risk management, foreign exchange processing, and energy and commodity trading risk management (E/CTRM) applications. Debt leverage is over 7.0x when expensing capitalized software costs. The company's credit profile is also negatively impacted by recent weakness in business performance as sales have contracted by approximately 2% over the past year and Moody's believes that the software provider's organic revenue growth prospects will be modest over the intermediate term due to the maturity of its target markets. Additionally, possible business disruptions related to the integration of disparate operating units into one cohesive business entity as well as the potential for incremental acquisitions and shareholder distributions could constrain deleveraging efforts. However, these risks are partially mitigated by ION's solid market position within its niche serving over 2,200 of the world's largest corporations, financial institutions, central banks, and energy and utility companies. The company's credit quality is also supported by a largely subscription based sales model that provides a degree of top-line visibility given a significant proportion of recurring revenue and minimal client attrition. These factors, coupled with improving projected profitability metrics, should facilitate free cash flow production which is expected to exceed 5% of total debt over the coming year. The company's adequate liquidity is supported by a pro forma cash balance of approximately $40 million following the completion of the transaction as well as Moody's expectation of free cash flow generation exceeding 5% of debt over the next 12 months. The company's liquidity is also bolstered by an undrawn $30 million revolving credit facility, but the revolver is considered small in relation to the company's projected interest expense. While the term loans are not subject to financial covenants, the revolving credit facility has a springing covenant based on a maximum net leverage ratio which the company should be comfortably in compliance with over the next 12-18 months. The stable outlook reflects Moody's expectation that ION will generate modest organic revenue growth over the next 12 to 18 months, but could be impacted by a degree of sales volatility principally from professional services offerings. Concurrently, the realization of anticipated cost synergies that would be the principal driver of EBITDA growth and deleveraging is subject to material execution risk, but should fuel a contraction in debt leverage to below 6x over the next year. The rating could be upgraded if the company realizes consistent revenue growth and successfully implements planned cost rationalization programs while adhering to a conservative financial policy such that debt to EBITDA (Moody's adjusted) is expected to be sustained below 6.0x. The rating could be downgraded if ION were to experience a weakening competitive position, sustained free cash flow deficits, or the company maintains aggressive financial policies that prevent meaningful deleveraging. The principal methodology used in these ratings was Software Industry published in August 2018. Helios and its parent company ION, both owned by ION Investment, provide software and services for treasury risk management, foreign exchange processing, and energy and commodity trading risk management (E/CTRM) applications. Moody's expects the company's revenues to approximate $670 million in 2019. HI-CRUSH PARTNERS: Moody's Alters Outlook on B2 CFR to Negative --------------------------------------------------------------- Moody's Investors Service affirmed Hi-Crush Partners LP B2 Corporate Family Rating, B2-PD Probability of Default Rating and B3 rating on the company's existing senior unsecured notes. Concurrently, Moody's downgraded Hi-Crush's Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The outlook changed to negative from stable. Downgrades: Issuer: Hi-Crush Partners LP Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Issuer: Hi-Crush Partners LP Outlook, Changed To Negative From Stable Affirmations: Issuer: Hi-Crush Partners LP Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD4) RATINGS RATIONALE Hi-Crush's B2 CFR reflects its high leverage, limited scale, earnings volatility and risks associated with the volatile oil & gas industry. Since mid-2018, prices for frac sand have declined by more than 20% due to overcapacity and the displacement of Northern White Sand in certain basins by cheaper in-basin sand. Despite recent improvement in the price of oil, mine closures, and production cuts, Moody's does not expect any significant price recovery as many miners have committed to higher volumes at lower prices. The negative outlook reflects Moody's expectations that industry weakness will persist and Hi-Crush's credit metrics will deteriorate further. For 2019, Moody's projects revenues and operating profits to decline by 4% and 64%, respectively, total debt-to-EBITDA to increase to 4.4x from 2.3x and EBIT-to-Interest expense to decline to 1.2x from 5.3x (all ratios and calculations inclusive of Moody's standard adjustments). In addition, the SGL-3 rating reflects the company's adequate liquidity profile, a deterioration due to increased volatility of end markets. For 2019, Moody's projects the company to rely on its cash on hand to supplement cash flows, fund its operations, service its debt, and deploy growth capital. Liquidity gains support from cash on hand of $61.5 million (as of Feb. 14, 2019) and a lack of near-term debt maturities as its $200 million ABL credit facility expires in 2023 and its $450 million senior notes mature in 2026. The principal financial covenant under the ABL credit facility is a springing fixed charge coverage ratio of 1.0x, tested only when excess availability is less than (1) the greater of $12.5 million, or (2) 12.5% of the lesser of the borrowing base or commitment. Moody's expects Hi-Crush will have good cushion in its financial covenants over the next 12-18 months. The SGL-3 rating assumes that the company will not utilize the revolver to meet internal uses of cash, but rather use cash on hand. Moody's indicated that the ratings could be stabilized if adjusted debt-to-book capitalization is maintained under 50%, adjusted EBIT-to-interest is sustained above 2.0x, and adjusted operating margin is above 20%. A stable outlook would also require robust liquidity, free cash flow generation, and healthy oil and natural gas end markets. The ratings could be downgraded if adjusted EBIT-to-interest declined below 1.0x, adjusted operating margin deteriorates to below 10% for an extended period of time, or adjusted debt-to-book capitalization is above 50%. In addition, a ratings downgrade could result from a deterioration in liquidity or weakened financial flexibility, possibly due to aggressive growth, large debt-funded acquisitions or shareholder friendly activities. The principal methodology used in these ratings was Building Materials Industry published in January 2017. Based in Houston, Texas, Hi-Crush Partners LP is an integrated producer, transporter, marketer and distributor of high-quality monocrystalline sand, which is a specialized mineral used as a proppant to recover hydrocarbons from oil and natural gas wells. Hi-Crush owns, operates and develops sand reserves and related excavation, processing and distribution facilities. At year-end 2018, the company held approximately 412 million tons of proven recoverable reserves of frac sand meeting API specifications, had 13.4 million tons of annual processing capacity, owned or leased 4,986 railcars and owned 12 destination terminals (two of which are currently idled). For the 12 months ended December 31, 2018, the company generated $843 million in revenues and $187 million in operating profits (inclusive of Moody's Adjustment). IDEANOMICS INC: Swings to $19.9 Million Net Income in Q1 -------------------------------------------------------- Ideanomics, Inc. has filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $19.90 million on $26.94 million of total revenue for the three months ended March 31, 2019, compared to a net loss of $3.81 million on $185.93 million of total revenue for the three months ended March 31, 2018. As of March 31, 2019, the Company had $146.22 million in total assets, $72.26 million in total liabilities, $1.26 million in convertible redeemable preferred stock, and $72.69 million in total equity. As of March 31, 2019, the Company had cash of approximately $2.0 million. Approximately $1.5 million was held in its Hong Kong, US and Singapore entities and $0.5 million was held in its PRC entities. Cash used in operating activities increased by $1.4 million for the three months ended March 31, 2019 compared to the same period in 2018, primarily due to (1) an increase in operating results from net loss $3.8 million in the first quarter of 2018 to net income $19.9 million in the first quarter of 2019, (2) total non-cash adjustments increase (decrease) to net income (loss) was $(25.1) million and $0.15 million for the three months ended March 31, 2019 and 2018, respectively; and (3) total changes in operating assets and liabilities resulted in an increase of $0.4 million and of $0.3 million in cash used in operations activities for the three months ended March 31, 2019 and 2018, respectively. Cash used in investing activities increased by $0.8 million, primarily used for the additional costs incurred for Fintech Village, the related costs (approximately $0.6 million) and an increase of approximately $0.2 million related to acquisitions of long term investments. The Company received $2.1 million from the issuance of convertible notes and $2.5 million in proceeds in a private placement from the issuance of restricted shares for the three months ended March 31, 2019, to certain investors, including officers, directors and other affiliates. While in the same period in 2018, the Company received $0.5 million. Ideanomics said, "Currently, our primary source of liquidity is cash on hand and we have relied on debt and equity financings to fund our operations to date. We believe that our cash balance and our expected cash flow will be sufficient to meet all of our financial obligations for the twelve months from the date of this report... [I]n March 2019, we received 1,250,000 GTB tokens under asset purchase agreement and 7,083,333 GTB tokens under our Digital Asset Management Services Agreement with GTD. "In the future, it is possible that we will need additional capital to fund our operations and growth initiatives, which we expect we would raise through a combination of equity offerings, debt financings, related party or third-party funding. We may also convert all or a portion of our GTB tokens to fiat currency or U.S. Dollars as needed. "The fact that we have incurred significant continuing losses and could raise substantial doubt about our ability to continue as a going concern. The unaudited consolidated financial statements included in this report have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty." The Company's independent registered public accounting firm's report of the financial statements for year ended December 31, 2018, contained an explanatory paragraph regarding the Company's ability to continue as a going concern. The Company's report on Form 10-Q is available from the SEC's website at https://is.gd/xj4Rek. About Ideanomics Ideanomics, formerly known as Seven Stars Cloud Group, Inc., is a global fintech advisory and Platform-as-a-Service company. Ideanomics combines deal origination and enablement with the application of blockchain and artificial intelligence technologies as part of the next-generation of financial services. The company is headquartered in New York, NY, and has offices in Beijing, China. It also has a planned global center for Technology and Innovation in West Hartford, CT, named Fintech Village. Ideanomics reported a net loss of $28.42 million for the year ended Dec. 31, 2018, compared to a net loss of $10.86 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, the Company had $94.23 million in total assets, $49.76 million in total liabilities, $1.26 million in convertible preferred stock, and $43.21 million in total equity. B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor since 2018, 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 Company incurred recurring losses from operations, has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. INTERCONTINENTAL AFFORDABLE HOUSING: S&P Cuts Bond Rating to 'BB-' ------------------------------------------------------------------ S&P Global Ratings lowered its rating on California Statewide Communities Development Authority's series 2011I-1 multifamily housing revenue bonds, issued for Intercontinental Affordable Housing Inc.'s (IAHI) Casa Grande apartments project, three notches to 'BB-' from 'BBB-'. The outlook is negative. The rating action reflects S&P's opinion of the project's volatile financial performance, evidenced by a debt service coverage ratio that decreased significantly to 1.02x in fiscal 2018 from 1.11x in fiscal 2016 to levels the rating service considers more commensurate with a 'BB-' rating. In S&P's opinion, loss coverage is now highly vulnerable due to a significant increase in the loan-to-value ratio. The negative outlook reflects S&P's view that it could lower the rating further if fiscal 2019 operations were to generate debt service coverage below 1x and loss coverage were to remain highly vulnerable. "We could lower the rating further within the one-year outlook period if fiscal 2019 operations were to generate debt service coverage below 1x and loss coverage were to remain highly vulnerable," said S&P credit analyst Emily Avila. "We, however, could revise the outlook to stable if debt service coverage were to stabilize at levels above 1x." K&D INDUSTRIAL: Selling Operations and Business Assets for $1.2M ---------------------------------------------------------------- K&D Industrial Services Holding Co., Inc., and affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to authorize the bidding procedures in connection with the sale of certain of their ongoing operations and business assets to Job Site Services, Inc. for $1.22 million, subject to any closing adjustments and pro-rations on the closing date, subject to overbid. The principal assets of the Debtors estate include business equipment, personal property, permits, warranties, purchased intellectual property, ongoing operations and contracts, work in progress, and unpaid accounts receivables. Prior to the Petition Date and thereafter, the Debtors are in the business of environment waste hauling and industrial cleaning. The Debtors have received an Asset Purchase Agreement from Job Site, for the purchase of certain of the Debtors ongoing operations and business assets. Job Site proposes to purchase these assets from the Debtors: (a) all vehicles and equipment listed on Exhibit A of the Job Site Purchase Agreement, including all spare parts, hoses, pumps, tools and accessories related thereto ("Equipment"”); (b) office equipment and furniture located in and on that certain real property owned by L&P Industries LLC at 1250 Lincoln Road, Allegan, Michigan ("Allegan Personal Property"); (c) all office equipment and furniture located in and on that leased real property located at 2962 E Venture Dr., Midland, Michigan ("Midland Personal Property"); (d) all licenses and permits, and other approvals issued by any state, federal or local authority relating to the use, maintenance or operation of the Purchased Assets, if any, and only to the extent that they may be transferred or assigned ("Acquired Permits"); (e) all warranties or guaranties, if any, applicable to the Purchased Assets, to the extent such warranties or guaranties are assignable in connection with the Purchased Assets ("Warranties"); (f) all patents, patent applications, patent rights, trademarks, trademark applications, trade names, product names, service marks, copyrights, copyright applications domain name registrations, software, know-how and other intellectual property related to the Purchased Assets ("Purchased Intellectual Property"); and (g) the contracts and leases listed on Exhibit B of the Job Site Purchase Agreement ("Contracts") provided, however, that the Purchaser will have the right to exclude any Contract from Exhibit B by giving notice to Seller and the counterparty to such contract three business days prior to the Closing. The Purchase Price for the Purchased Assets in the Job Site Purchase Agreement is $1.22 million, subject to any closing adjustments and pro-rations on the closing date. Pursuant to the Closing Conditions, the Job Site Purchase Agreement is conditioned upon either (i) the Bankruptcy Court’s approval of a Real Estate Purchase Agreement for the sale of the Debtors' property located at 1250 Lincoln Road, Allegan Michigan to the Purchaser, or (ii) the Purchaser and L&P Industries, LLC will have entered into a lease for the Allegan Property on terms and conditions acceptable to Purchaser including a term of not less than 18 months. The Debtors intend for the Job Site Purchase Agreement to serve as the Stalking Horse Bid throughout the proposed sale process. If Job Site is the successful bidder, the Debtors intend to request Court approval at the Sale Hearing of a lease between L&P Industries and Job Site for the Allegan Property as conditioned in the Job Site Purchase Agreement and pending the sale of the Allegan Property. The Debtors believe and assert that the proposed procedures for the asset sale, free of all liens, claims and interests, should be approved because a going-concern sale will maximize the value and recovery for the Debtors estates. The salient terms of the Bidding Procedures are: a. Bid Deadline: No later than 5:00 p.m. (ET) on the day that is two Business Days prior to the Auction Date b. Initial Bid: The bid will equal or exceed the Purchase Price in the Job Site Purchase Agreement plus the Break-Up Fee of 50,000 plus $50,000. c. Deposit: $125,000 d. Auction: The Auction will commence at 10:00 a.m. on May 10, 2019 or 21 business days after the entry of the Bidding Procedures Order, whichever date is later, at the offices of the Debtors' counsel, Lynn M. Brimer, Strobl Sharp PLLC, 300 E. Long Lake Rd., Suite 200, Bloomfield Hills, Michigan 48304. e. Bid Increments: $25,000 The Debtors have contracts that are necessary to the successful operation of their businesses. Conversely, they may have contracts associated with their Businesses or the Purchased Assets that may interfere with the sale or are deemed detrimental to their estates, and upon sale of the Purchased Assets will no longer be beneficial to Debtors. To facilitate the sale of the Purchased Assets as outlined in the Sale Motion, they authority to assume and assign certain executory contracts and unexpired leases to the Successful Bidder to the extent required by the Success Bid. Within three business days of the entry of the Bid Procedures Order, the Debtors will provide all Qualified Bidders with a list and a copy of all contracts and leases related to the Purchased Assets, along with the Cure Schedule. Three business days after the entry of the Bidding Procedures Order, the Debtors will serve on the counterparties to the contracts on the Contract Lists the Assumption and Assignment Notice. The counterparties to the Assumed Contracts and Assumed Leases will file any objections to the assumption and assignment of the Assumed Contracts and Assumed Leases or the Pre-Petition Cure Amount at least three business days prior to the Auction. The Debtors will make cure payments within 30 days after the date of the closing of the sale of the Purchased Assets and any letters of credit associated with any assumed contract or assumed lease will be replaced by a new letter of credit provided by the Successful Bidder. Subject to Bankruptcy Court approval, the Debtors propose to establish the following timetable: Proposed Date Proposed Event Prior to April 19, 2019 Entry of Bid Procedures Order April 27 and May 4, 2019 Publish Notice April 27, 2019 Serve Sale Notice April 27, 2019 Serve Assumption Notice May 6, 2019 Deadline for Objections to Assumptions May 7, 2019 Deadline for Qualified Bids May 10, 2019 at 10:00 a.m. Auction May 14, 2019 Submission of Proposed Sale Order May 23, 2019 Deadline for Objections to Sale May 24, 2019 at 10:00 a.m. Sale Hearing The Debtors ask the Court to sell the Assets free and clear of all liens, claims, interests and encumbrances, with such Liens attaching to proceeds. Due to the need to transition the Purchased Assets as quickly as possible in order to maintain the Debtors' goodwill, the Debtors assert that cause exists to waive the requirements of Fed. R. Bankr. P. 6004(g) and 6006(d), and they ask that the Order approving the sale (as well as the assumption and assignment of the Assumed Contracts and Assumed Leases) provide that it will be effective immediately and that the 10-day stay will not apply to the sale transaction (and the assumption and assignment of the Assumed Contract and Assumed Leases). A copy of the Bidding Procedures and APA attached to the Motion is available for free at: http://bankrupt.com/misc/k&D_Industrial_59_Sales.pdf About K&D Industrial Since 1974, K&D Industrial Services -- http://www.kdigroup.com/-- has provided industrial and environmental services to customers in virtually every industry. Founded by Ken Liabenow and Dennis Springer, K&D focuses on cleaning, removing and treating hazardous and non-hazardous materials originating from process residual or industrial waste. Key business areas include industrial cleaning services, environmental remediation services, hazardous and non-hazardous transportation services, and treatment services. K&D services the entire Midwest through its six office locations in Michigan, Ohio and Kentucky. K&D Industrial Services Holding Co., Inc. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-43823) on March 15, 2019. At the time of the filing, K&D Industrial disclosed zero assets and $3,369,495 in liabilities. K&D Industries, one of K&D Industrial affiliates, disclosed $937,714 in assets and $8,736,715 in liabilities. The cases are assigned to Judge Phillip J. Shefferly. Strobl Sharp PLLC is the Debtors' counsel. KBC ENTERPRISE: Unsecureds to Get $1,500 Per Quarter for 5 Years ---------------------------------------------------------------- KBC Enterprise LLC filed a Chapter 11 Plan and accompanying Disclosure Statement proposing that holders of Allowed General Unsecured Claims, classified in Class 10, will receive pro rata quarterly distributions equal to its proportionate share of the entire class, paid quarterly, over the five-year Plan Term, at a total collectively of $1,500 per quarter for 20 quarters or five years years, without interest. The Reorganized Debtor will issue the quarterly distribution checks each quarter on the first of the months of January, April, July and October, with the first payments being made on October 1, 2019. Class 11 consists of those Persons holding the prepetition equity membership Interests in the Debtor, being Carlos "Doc" Carpenter holding 50% interest and Karen Carpenter holding 50% interest. Carlos "Doc" Carpenter and Karen Carpenter will continue to hold their interests in the Reorganized Debtor; provided, however, that the Exit Loan contains an option to convert the loan balance at the end of year one to a 19% equity interest, at the discretion of the Exit Lender. There will be no dividends, no member distributions, or any other payments to or on account of the Equity Membership Interests (except for the regular salary (guaranteed payment) to Doc Carpenter in the ordinary course) unless and until all other Allowed Claims have been paid in full over the Plan Term. The Reorganized Debtor will fund the Plan payments to Creditors in the ordinary course and according to the Plan treatment terms from post-Confirmation net profits, as well as from the Exit Loan. Under the Plan, Confirmation of the Plan shall be deemed approval of the Exit Loan in accordance with such written documentation as is necessary and standard, subject to ongoing Court oversight only in the event the Exit Loan terms change at or prior to Closing following Confirmation. As of the Effective Date, and as long as the Reorganized Debtor continues operation, the Reorganized Debtor shall have the right to collect and use all of its revenues for operations in accordance with the Plan repayment terms. A full-text copy of the Disclosure Statement dated April 18, 2019, is available at https://tinyurl.com/yy7yycj8 from PacerMonitor.com at no charge. About KBC Enterprise KBC Enterprise LLC is a frozen dessert supplier in London, Kentucky. KBC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No. 18-61316) on Oct. 22, 2018. In the petition signed by Carlos Carpenter, president, KBC estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. KBC tapped DelCotto Law Group PLLC as its legal counsel. KENDALL FROZEN: Asks Court to Approve Employment of CMR ------------------------------------------------------- Kendall Frozen Fruits, Inc., filed anew an application to approve the employment of Channel Marketing Resources, Inc. In its application, the Debtor asked the U.S. Bankruptcy Court for the Central District of California to approve the employment of its financial advisor for the period Nov. 5, 2018 to Feb. 13, 2019. The request, if granted by the court, would enable Channel to file a fee application to seek reimbursement for the services it provided to the Debtor during that period. Channel charges the Debtor for services rendered at its current hourly rate, which reflects a 25% reduction from ordinary long-term engagement hourly rate of $200 (as a voluntary effort to help return Debtor to profitability) and 40% discount from standard hourly rate. The Debtor filed its first application on Dec. 4 last year, which was denied by the court following the appointment of Howard Grobstein as Chapter 11 trustee. The court ruled that the trustee is the appropriate party to make decisions regarding employment of professionals. Mr. Grobstein plans to retain Channel as a bankruptcy professional but believes that he is not the appropriate party to seek employment of the firm for any time period prior to his appointment, according to court filings. About Kendall Frozen Fruits Newport Beach, California-based Kendall Frozen Fruits, Inc. -- https://www.kendallfruit.com/ -- is an industrial food supplier specializing in the sale and marketing of fruit and vegetable products since 1939. It offers frozen fruits, dried fruits, juice concentrates, purees, freeze dried fruit, fruit powders, vegetable products, chocolate covered dried fruit, and yogurt covered dried fruit. Kendall Frozen Fruits sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-14052) on Nov. 5, 2018. At the time of the filing, the Debtor estimated assets of $1 million to $10 million and liabilities of the same range. Judge Scott C. Clarkson oversees the case. SulmeyerKupetz, A Professional Corporation, is the Debtor's counsel. Howard Grobstein was appointed as the Debtor's Chapter 11 trustee on Feb. 14, 2019. The trustee hired Marshack Hays LLP as his legal counsel. KNOLL'S INC: Case Summary & 4 Unsecured Creditors ------------------------------------------------- Debtor: Knoll's, Inc. 1604 Grandview Drive East Garden City, KS 67846 Business Description: Knoll's, Inc., is a privately held company that operates in the crop farming industry. Chapter 11 Petition Date: May 3, 2019 Court: United States Bankruptcy Court District of Kansas (Wichita) Case No.: 19-10795 Judge: Hon. Robert E. Nugent Debtor's Counsel: David P. Eron, Esq. ERON LAW, P.A. 229 E. William, Suite 100 Wichita, KS 67202 Tel: 316-262-5500 Fax: 316-262-5559 E-mail: david@eronlaw.net Total Assets: $1,378,823 Total Liabilities: $6,504,194 The petition was signed by Robert Knoll, president. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at: http://bankrupt.com/misc/ksb19-10795.pdf KODIAK GAS: Moody's Withdraws B3 CFR on Cancelled Bond Offering --------------------------------------------------------------- Moody's Investors Service withdrew all ratings for Kodiak Gas Services, LLC. Withdrawals: Issuer: Kodiak Gas Services, LLC Probability of Default Rating, Withdrawn, previously rated B3-PD Corporate Family Rating, Withdrawn, previously rated B3 Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Caa2 (LGD5) Outlook Actions: Issuer: Kodiak Gas Services, LLC Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE The withdrawal of these ratings follows the company's withdrawn bond offering. Kodiak, headquartered in Houston, Texas, is a privately-owned provider of contract compression and related services for the oil and gas industry in the United States. KODRENYC LLC: Plan Outline Evidentiary Hearing Set for June 21 -------------------------------------------------------------- Bankruptcy Judge Karen S. Jenneman is set to hold an evidentiary hearing June 21, 2019 at 10:00 a.m. to consider and rule on Kodrenyc LLC's disclosure statement. Objections to the proposed disclosure statement may be filed with the Court at any time before or at the hearing. About Kodrenyc Kodrenyc, LLC, is a single asset real estate debtor, whose principal assets are located at 17800 State Road 9 Miami, FL 33612. Kodrenyc, LLC sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 19-00996) on Feb. 18, 2019. The petition was signed by Jeffrey Vasilas, manager of 17800 Gardens D, LLC, the manager/member of AQFC LLC, manager/member of Kobrenyc, LLC. The Debtor estimated assets and liabilities in the range of $1 million to $10 million. The Debtor tapped Scott R. Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, as counsel. KRONOS WORLDWIDE: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of Kronos Worldwide Inc. and its wholly owned subsidiary, Kronos International, Inc. at 'B+'. The Rating Outlook is Stable. Kronos' ratings reflect its low leverage, low capex requirements and conservative financial strategy. The company's leverage to the TiO2 industry is a credit concern, but Fitch expects that a more stabilized TiO2 market should lead to generally positive FCF post-dividend and maintenance of robust liquidity over the ratings horizon. In the event of a more volatile pricing environment, the company has the ability to cut its dividend, which it has done in prior periods. Additionally, current net debt to EBITDA of 0.2x illustrates the company's considerable financial flexibility to endure extended periods of stress. KEY RATING DRIVERS Expected Pricing Discipline: Globally, the TiO2 market is concentrated among a handful of top producers that Fitch believes are highly motivated to demonstrate more disciplined pricing behavior than in years past. Pro forma the Tronox/Cristal merger, Fitch estimates the top five global producers account for around 60% of total capacity. Three of the top five, Venator, Tronx/Cristal and Kronos, generate all or most of their earnings from TiO2. Chemours, the largest producer in the world, has publicly stated its intention to help stabilize TiO2 prices by better matching its production volumes with global demand. Typical year-end destocking and slowing growth in Europe and Asia resulted in reduced pricing and demand for Kronos' products in a period of rising feedstock costs. This trend continued into the first quarter of 2019, and management has guided to a 2019 outlook of lower prices and raw material headwinds. Nonetheless, Fitch believes that pricing and margins will be less impacted than in down years given the industry push towards a less volatile pricing environment and more stable earnings. Fitch's expectations for pricing to stabilize in Q2 and Q3 of 2019 on seasonally stronger demand and lower supply due to production adjustments by industry participants should result in EBITDA margins remaining in the low-mid teens throughout the forecasted period compared to a similar environment in 2015 and 2016 that saw EBITDA margins of 4.7% and 8.5%. Rising Feedstock Costs: Prices for both sulfate and chloride TiO2 feedstock increased in the back half of 2018, and Fitch expects this to continue into 2019 before stabilizing by 2020. Fitch projects Kronos' EBITDA margins (22.3% at year-end 2018) will normalize around the mid-teens by the end of the forecast horizon due to these rising raw material costs that Fitch believes will only be partially passed on. The recent consolidation among TiO2 producers should strengthen their bargaining power in price negotiations with feedstock miners. Kronos purchases its chloride-grade feedstock on the open market but is able to offset some of its third-party exposure through its ilmenite mines in Norway, which supply nearly all of its European sulfate needs. Fitch estimates that Kronos is exposed to third-party feedstock suppliers for at least 75% of its feedstock requirements. Modest Debt Load: Fitch views Kronos' current debt load as modest when compared against Fitch's view of a normalized operating EBITDA for the company. Leverage is forecasted to remain at or below 2.0x through the forecasted period, absent any acquisition activity or a return to cyclicality. Additionally, the company's upcoming maturity payments are very light, averaging roughly $1 million per year over the next four years. Fitch expects Kronos will be able to favorably refinance its secured notes prior to its maturity date in 2025. Lack of Diversification: Kronos is a pure play pigment producer that has no other business segments to act as a buffer in periods of volatility in the TiO2 industry. Fitch believes this exposure adds cash flow risk to the company's credit profile as its financial results are highly dependent on the health of the pigment market. Kronos believes it has leading market positions in both Europe and North America, but Fitch views the company as having limited ability to impact global market dynamics. Despite management's indication that it is the largest TiO2 producer in Europe, Fitch estimates the company's EBITDA generation at its European plants was severely limited during the previous downturn in TiO2 prices. DERIVATION SUMMARY Kronos' ratings reflect its relatively small size and lack of diversification compared to peers in the TiO2 space while acknowledging its low leverage and projected more stabilized cash flow profile stemming from the expected pricing discipline within the TiO2 industry. Compared to industry leaders The Chemours Co. and Tronox Ltd. (pro forma the Critsal acquisition), Kronos has limited ability to influence TiO2 supply dynamics and as a pure play pigment producer has no other business segments to act as a buffer if periods of significant volatility in the TiO2 industry reappear. However, Kronos' debt load is modest, and Fitch projects the company's gross leverage to stay around or below 2.0x, which should help offset its lack of diversification. Additionally, Kronos is expected to generate neutral to positive FCF post-dividend and maintain robust liquidity in a more disciplined pricing environment. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - TiO2 prices compress slightly year/year in 2019 and raw material pressure compresses 2019 EBITDA margins. Thereafter, prices increase in the low-single digits and EBITDA margins normalize around 13%-14%; - Volumes relatively flat in 2019 and rise in the low-single digits thereafter; - Capital expenditures and dividend payments in line with public guidance; - Annual dividends of $83 million RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Increase in size, scale or diversification and total debt to EBITDA sustained below 3.0x to 3.5x or total adjusted debt to operating EBITDAR sustained below 3.5x; - Demonstrated commitment to maintenance of robust financial flexibility. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Structural deterioration in the TiO2 market leading to expectations of negative FCF generation, weakened EBITDA margins and reduced financial flexibility; - Material debt-funded dividend payments or acquisition activity; - Total debt to EBITDA sustained above 4.0x or total adjusted debt to operating EBITDAR sustained above 4.5x. LIQUIDITY Robust Liquidity: Fitch projects Kronos will maintain a robust liquidity profile over the ratings horizon. The recovery and expectated reduced volatility in TiO2 paired with minimal CapEx requirements and manageable dividend payment should lead to the company generating slightly positive FCF post-dividend through 2022. Absent acquisitions or any special dividend activity, Fitch projects Kronos' liquidity position will stay in excess of $550 million through the next several years as its readily available cash balances remain relatively unchanged and its two revolving credit facilities remain undrawn. The company has no notable upcoming maturities until its secured note comes due in 2025. Recovery Analysis: Fitch used a going concern EBITDA of $145 million to reflect what it would view as a mid-cycle amount in a post-bankruptcy scenario, which would likely be around 2014/2016 levels. The 5.0x multiple acknowledges the commoditized nature of Kronos' TiO2 products as well as its lack of diversification. Tronox acquired Cristal for nearly $1.7 billion plus common shares equating to 24% ownership of Tronox (market cap of around $2.3 billion at the time). Fitch estimates Cristal generates around $400 million of EBITDA on a mid-cycle basis and has 840,000 tonnes of capacity compared to Kronos' 565,000 tonnes of capacity. While Fitch drew $215 million under Kronos' two revolvers, the $125 million North American facility is an ABL that would likely not have the full amount available in a distressed environment. The EUR90 million European revolver also has very restrictive financial covenants that have effectively prohibited the company from drawing on the revolver at all and would almost certainly limit availability in a distressed scenario. Under this scenario, Kronos' revolvers recover 100% for an RR1 while its secured note recovers 85% for an RR2. Fitch used $110 and $490 million as the converted USD amount of Kronos' EUR ABL and notes for these calculations. Fitch believes this amount generally represents the average amount outstanding when converted to USD. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Kronos Worldwide, Inc. -- Long-Term IDR at 'B+'; -- ABL revolver at 'BB+'/'RR1' Kronos International, Inc. -- Long-Term IDR at 'B+'; -- Senior secured revolving credit facility at 'BB+'/'RR1'; -- Senior secured notes at 'BB'/'RR2' The Rating Outlook is Stable. LAKE BRANCH: Farm Credit Objects to Plan, Disclosures ----------------------------------------------------- Farm Credit of Florida, ACA, in its sole capacity and as agent/nominee for Florida Federal Land Bank Association, FLCA, objects to the Joint Disclosure Statement and Joint Plan of Reorganization filed by Lake Branch Dairy, Inc. Farm Credit objects to the Disclosure Statement in that: (a) it omits any information regarding the leases and executory contracts which are being assumed under Article VI of the Plan; (b) it fails to include an updated cattle inventory; (c) the 5 Year Pro Forma fails to identify the assumptions used to support its revenue projections; (d) the 5 Year Pro Forma continues to include dairy cow sales in its calculation of income despite Lake Branch Dairy’s agreement with Farm Credit to continue to maintain a cull account to preserve, protect and use any cattle sales proceeds for the specific purchase of replacement cattle, until such time as Farm Credit’s secured claim is paid in full; (e) it improperly, and without the consent of Farm Credit, proposes to use the net sale proceeds from orange crops owned by a non-debtor entity and on which Farm Credit has a first priority security interest, to fund the Plan and specifically the dairy operations; (f) it fails to indicate what assumptions were used to determine the value of the Debtors' assets as of the confirmation date and how such value was determined. Farm Credit objects to confirmation of the Plan on the following bases: (a) the Plan proposes a de facto substantive consolidation of the Debtors by combining the Debtors' cash flow and creditor treatment; (b) the Plan fails to provide for the payment of interest to the unsecured creditors on account of their claims; (c) the Plan is not feasible as the Debtors' current cash flow will not support maintenance of the dairy operations, debt service, taxes, and insurance; (d) the Plan is not feasible in that it is likely to be followed by the need for further reorganization and/or liquidation; (e) absent the consent of Farm Credit, the Plan cannot be confirmed over Farm Credit's objection as there is no impaired class which likely will vote to accept the Plan. Attorney for Farm Credit of Florida, ACA: Christine L. Myatt, Esq. NEXSEN PRUET, PLLC 701 Green Valley Road, Suite 100 Post Office Box 3463 Greensboro, NC 27402 Tel: (336) 373-1600 Email: cmyatt@nexsenpruet.com Local Counsel for Farm Credit of Florida, ACA: Robert C. Schermer Greene Hamrick Quinlan & Schermer, P.A. 601 12th Street West Bradenton, Florida 34205 Tel: (941) 747-1871 Fax: (941) 747-2991 Email: rschermer@manateelegal.com About Lake Branch Dairy, Inc. Lake Branch Dairy, Inc., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 18-05951), on July 19, 2018. The Petition was signed by Roger L. Nickerson, president. The Debtor is represented by Buddy D. Ford, Esq. of Buddy D. Ford, P.A. At the time of filing, the Debtor had $3,331,161 in total assets and $7,906,868 in total liabilities. No official committee of unsecured creditors has been appointed in the Chapter 11 case of Lake Branch Dairy, Inc., as of Aug. 16. LAKE BRANCH: MetLife Objects to Disclosure Statement ---------------------------------------------------- The Metropolitan Life Insurance Company objects to the Joint Disclosure Statement and the Joint Plan of Reorganization filed by Lake Branch Dairy, Inc., Lake Branch II, LLP and Roger & Merle Nickerson Farms, LLP. MetLife points out that Exhibit A to the Disclosure Statement lists, among other things, fair market values and liquidation values for the Debtors' assets. MetLife further points out that Exhibit A provides that "for non-cash items, the Liquidation Value is 60% of the total value". According to MetLife, notwithstanding this singular, unsupported statement as to the calculation of the value of the Debtors' assets, the Disclosure Statement completely fails to provide any information substantiating the values (e.g., the basis, source, methodology, assumptions, etc.). MetLife complains that the Debtors' disclosures with respect to confirmation are woefully inadequate and do not provide reliable evidence that the Plan is feasible. MetLife asserts, it is impossible for any creditor to determine whether the Debtors' Plan is feasible because the Debtors have not provided any kind of historic budget analysis comparing pre and post-confirmation revenue with expenses. MetLife objects to the Plan as it is not feasible and the Debtors have failed to demonstrate that the Plan is not likely to be followed by the liquidation of the Debtors. MetLife objects to the Plan as it violates 11 U.S.C. Section 1129(a)(7)(A)(ii) in that it does not satisfy the "best interests" test by failing to establish that the value of MetLife's recovery is at least equal to the distribution which MetLife would receive if the assets of the Debtors were liquidated under Chapter 7 of the Bankruptcy Code by a Chapter 7 Trustee. MetLife objects to Article VII of the Plan as it provides that "current equity will retain ownership in the Debtor post-confirmation" even though the Plan does not provide for payment in full of the unsecured claims. MetLife objects to confirmation of the Debtors' Plan as it has not been proposed in good faith. Attorneys for Metropolitan Life Insurance Company: Angela N. Grewal, Esq. ADAMS AND REESE LLP 501 Riverside Avenue, Suite 601 Jacksonville, FL 32202 Phone: (904) 355-1700 Email: angela.grewal@arlaw.com -- and -- Ron C. Bingham, II, Esq. ADAMS AND REESE LLP Monarch Tower, Suite 1600 3424 Peachtree Rd. NE Atlanta, GA 30326 Tel: (470) 427-3701 Email: ron.bingham@arlaw.com About Lake Branch Dairy, Inc. Lake Branch Dairy, Inc., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 18-05951), on July 19, 2018. The Petition was signed by Roger L. Nickerson, president. The Debtor is represented by Buddy D. Ford, Esq. of Buddy D. Ford, P.A. At the time of filing, the Debtor had $3,331,161 in total assets and $7,906,868 in total liabilities. No official committee of unsecured creditors has been appointed in the Chapter 11 case of Lake Branch Dairy, Inc., as of Aug. 16. LAREDO HOUSING: S&P Puts CCC+ Rev. Bond Rating on Watch Negative ---------------------------------------------------------------- S&P Global Ratings placed its 'CCC+' rating on Laredo Housing Finance Corp., Texas' series 1994 single-family mortgage revenue bonds on CreditWatch with negative implications. "The CreditWatch placement reflects our view of the lack of sufficient information to complete our review on the bonds," said S&P credit analyst Jose Cruz. The series 1994 bonds' asset-to-liability parity ratio is approximately 71.84% as of April 1, 2019. Due to the bonds' distressed position and because the rating subject to S&P's "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', and 'CC' Ratings," it is essential to determine the likelihood of default on the bonds to appropriately determine the ratings as set forth in the criteria, according to the rating agency. S&P said it has requested and failed to receive from the trustee information regarding prior and future debt service payments, and debt service schedule to determine the appropriate default scenario. In S&P's view, there is at least a one-in-two chance that it may lower or suspend the rating on the bonds within the next 90 days. During the CreditWatch period, S&P will continue to follow up with the trustee to request prior and future debt service payments information, and debt service schedule to complete its review. "Failure to receive additional information within 90 days could result in our suspension of the affected rating, preceded, in accordance with our policies, by any change to the rating that we consider appropriate given available information," Mr. Cruz continued. "However, if we receive information that we consider sufficient and of satisfactory quality, we will conduct a full review and take a rating action within 90 days of the CreditWatch placement." LASALLE GROUP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: The LaSalle Group, Inc. aka The LaSalle Group 545 E. John Carpenter Frwy., Ste. 500 Irving, TX 75062 Business Description: The LaSalle Group, Inc., along with certain of its subsidiaries, designs, develops, builds, and owns interests in memory care assisted living communities designed specifically for people with Alzheimer's and other forms of dementia. The communities operate under the name Autumn Leaves. LaSalle is a holding company for numerous wholly owned, non-debtor subsidiaries and affiliates. LaSalle directly and indirectly owns interests in 40 memory care assisted living communities located in Texas, Illinois, Georgia, Florida, Kansas, Missouri, Oklahoma, South Carolina, and Wisconsin. http://www.lasallegroup.com/ Chapter 11 Petition Date: May 2, 2019 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Five affiliates that filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- The LaSalle Group, Inc. (Lead Case) 19-31484 West Houston Memory Care, LLC 19-31485 Cinco Ranch Memory Care, LLC 19-31486 Pearland Memory Care, LLC 19-31488 Riverstone Memory Care, LLC 19-31493 Judge: Hon. Stacey G. Jernigan Debtors' Counsel: Vickie L. Driver, Esq. Christina W. Stephenson, Esq. Christopher M. Staine, Esq. CROWE & DUNLEVY, P.C. Spaces McKinney Avenue 1919 McKinney Avenue, Suite 100 Dallas, TX 75201 Tel: 214.420.2163 Fax: 214.736.1762 E-mail: vickie.driver@crowedunlevy.com E-mail: christina.stephenson@crowedunlevy.com E-mail: christopher.stane@crowedunlevy.com Debtors' Claims Agent: DONLIN, RECANO & COMPANY, INC. https://www.donlinrecano.com/Clients/lasalle/Index Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Karen Nicolaou, chief restructuring officer. A full-text copy of The LaSalle Group, Inc.'s petition is available for free at: http://bankrupt.com/misc/txnb19-31484.pdf List of Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Hunton Andrews Kurth, LLP Trade Payable $349,068 PO Box 301276 Dallas TX 75303-1276 Tel: 713-220-4200 Fax: 713-220-4285 2. O'Brien Architects Inc. Trade Payable $135,301 5310 Harvest Hill Ste 136 LB 161 Dallas TX 75230 Tel: 972-788-1010 Email: kathy.filbert@obrienarch.com 3. Origin Bank Trade Payable $129,994 3838 Oak Law Ave Ste P100 Dallas TX 75219 Tel: 214-432-2899 Email: MAS@sbaitilaw.com 4. Cigna Health and Life Ins Co Trade Payable $113,057 P.O. Box 644546 Pittsburgh PA 15264-4546 Tel: 423-954-5730 5. CliftonLarsonAllen LLP Trade Payable $82,520 PO Box 679334 Dallas TX 75267-9334 Tel: 817-877-5000 Fax: 817-877-5330 Email: connie.bryant@claconnect.com 6. CNA Insurance Trade Payable $66,250 Paragon Asset Recovery Services Inc PO Box 6065-02 Hermitage PA 16148-1065 Tel: 888-403-7744 Fax: 800-236-2604 Email: Ame.Janaszek@recovery-group.com 7. Curtis Group Architects LTD Trade Payable $38,323 5000 Quorum Dr Ste 500 Dallas TX 75254 Tel: 214-378-9810 8. Dixon Hughes Goodman LLP Trade Payable $29,250 4350 Congress Street Ste 900 PO Box 602828 Charlotte NC 28260-2828 Tel: 404-575-8900 Fax: 404-575-8860 Email: diane.lacasse@dhg.com 9. Ogletree, Deakins, Nash, Trade Payable $18,892 Smaok & Stewart PO Box 89 Columbia SC 29202 Tel: 864-241-1900 Fax: 386-423-4649 Email: acctsreceivable@ogletreedeakins.com 10. The Village at Silver Sage Trade Payable $12,246 6363 Woodway Drive Suite 410 Houston TX 77057 Tel: 281-996-0101 11. VMG Health Trade Payable $10,350 PO Box 674046 Dallas TX 75267-4046 Tel: 214-369-4888 Fax: 214-369-0541 12. Bell Nunnally Trade Payable $9,223 3232 McKinney Ave Ste 1400 Dallas TX 75204-2429 Tel: 214-740-1400 Fax: 214-740-1499 Email: accountingdepartment@bellnunnally.com 13. Westfield Bank FSB Trade Payable $7,382 PO Box 668 Westfield Center OH 44251-0668 Tel: 800-368-8930 Fax: 330-887-8241 Email: premiumfinance@westfield-bank.com 14. SAS Architects & Planners Trade Payable $6,675 630 Dundee Rd., Ste. 110 Northbrook IL 60062 Tel: 847-564-8333 Fax: 847-564-9989 Email: lisa@sasarch.com 15. Capital Center Land Trade Payable $6,308 Condo Assn Inc. 4077 Taminami Trail North Ste D-201 Naples FL 32502 Tel: 239-261-1734 16. Cannon & Cannon INC Trade Payable $5,564 8550 Kingston Pike Knoxville TN 37919 Tel: 865-670-8555 Fax: 864-670-8866 17. Monster Worldwide Inc. Trade Payable $5,222 P.O. Box 90364 Chicago IL 60696-0364 Tel: 800-666-7837 Email: john.hunt@monster.com 18. Fidelity - 401(K) Trade Payable $4,604 P.O. Box 770001 Cincinnati OH 75277-001 Tel: 800-448-6668 19. Popp Hutcheson PLLC Trade Payable $4,578 1301 South Mopac Suite 430 Austin TX 78746 Tel: 512-473-2661 Fax: 512-479-8013 Email: pam.slack@property-tax.com 20. GSI Engineering, LLC Trade Payable $4,300 4503 East 47th Street South Wichita KS 67210-1651 Tel: 316-554-0725 Fax: 316-554-0744 Email: klewman@gsinetwork.com LIBERTY UNION: A.M. Best Affirms B(Fair) FSR, Alters Outlook to Pos ------------------------------------------------------------------- A.M. Best has revised the Long-Term Issuer Credit Rating (Long-Term ICR) outlook to positive from stable and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of "bb" of Liberty Union Life Assurance Company (Liberty Union Life) (Troy, MI). The outlook for the FSR remains stable. The ratings reflect Liberty Union Life's balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management. The revised Long-Term ICR outlook for Liberty Union Life reflects significantly higher operating and net income reported in 2018, driven by a sizable release of excess reserves that materially strengthened the company's absolute capital and surplus, as well as its estimated Bes's Capital Adequacy Ratio. However, AM Best notes that the company's level of absolute capital and surplus remains relatively modest. Liberty Union Life continues to be challenged by a limited business profile, reflecting its modest market share, a business concentration in its small group fully funded medical stop-loss product and geographic concentration in Michigan, as well as highly competitive major medical and supplemental accident and health markets, which include larger national and regional health carriers. Liberty Union Life also has been challenged by overall marginal operating performance in recent years, reflecting a downward trend in net premium that has been driven by terminations of medical stop-loss business due to rate increases and the runoff of its closed major medical and mini-med segments. Generally, unfavorable underwriting experience during this period has resulted in nominal operating gains and net income, as well as modest operating and net losses in 2017. Additionally, the company's return on equity and return on revenue metrics have been below industry averages. LOWER CADENCE: Fitch Assigns 'B+' First-Time LT IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating of 'B+' to Lower Cadence Holdings, LLC and a 'BB'/'RR2' rating to the company's proposed Senior Secured Term Loan B. The Recovery Rating of 'RR2' for the proposed Term Loan B reflects Fitch's expectation for superior recovery (71%-90%) in the event of default. The Rating Outlook is Stable. Stonepeak Cadence Holdings, LLC, an affiliate of Stonepeak Infrastructure Partners, is acquiring all assets of Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC for a purchase price of approximately $3.6 billion. The transaction will consolidate Oryx I and II into a single borrower and will be funded with a $1.5 billion Senior Secured Term Loan B, a $150 million Super Priority RCF, and $2.393 billion of Stonepeak and Management rollover Equity. A portion of the proceeds from the $1.5 billion term loan will be used to repay the remaining balance on the existing Oryx I's $800 million Term Loan and $80 million Super Priority Revolver. The ratings reflect the favorable production economics associated with Lower Cadence's footprint in the Permian basin and the expected cash flow stability under its fixed fee contract profile. The ratings recognize Lower Cadence's size and scale, high initial leverage level, counterparty risk, project execution and volumetric risk, as well as competitive risks that the company faces as a single basin crude oil Gathering and transportation service provider. Concerns focus on Lower Cadence's high initial leverage, volumetric exposure, and execution risk associated with Oryx II construction. Fitch forecasts the company's leverage (Total Debt/Adjusted EBITDA) to be initially high and above 8.5x by the end of 2019 following the issuance of its proposed $1.500 billion Term Loan during 2Q19. Deleveraging in forecast years will be largely dependent on the completion of Oryx II expansion by 1Q20 and the projected ramp in production volume in relation to the expanded system. Management expects the completion of infield build-out in 1Q20, at which point the system should be at full run rate. Term loan amortization (1% per annum) and debt payment under the excess cash flow sweep will also support deleveraging through 2021. Fitch forecasts Lower Cadence's leverage (Total Debt/Adjusted EBITDA) to be between 5.5x and 5.8x by 2020YE, which remains relatively high for a single basin crude oil gathering and transportation entity that can be subject to outsized producer or event risks. Fitch views completion risk for Oryx II as relatively low since the majority of construction for the main transport line is already finished. However, any unexpected delays or setbacks in the remaining construction would hamper volume growth and impair Lower Cadence's future cash flow, slowing its expected deleveraging pace. Additional concerns also reflect Lower Cadence's counterparty risk, limited size and scale, as well as geographic and business line diversity. Over 70% of the company's 2020E volumes are comprised of non-investment grade customers. Given its single basin focus and lack of business line diversity, Lower Cadence is subject to event risk should there be a slow-down or longer-term disruption of production in the Permian Southern Delaware region. KEY RATING DRIVERS Elevated Initial Leverage: Fitch forecasts Lower Cadence's leverage (Total debt/Adjusted EBITDA) to be initially high above 8.5X by yearend 2019 following the issuance of its proposed $1,500 million Term Loan. Fitch expects the company's leverage to improve to 5.5x-5.8x by year-end 2020 through earnings growth, term loan amortization (1% per annum) and cash flow sweep. The credit facility covenant allows restricted payments of available cash should Lower Cadence maintain Net Debt leverage 4.5x or less and Fixed Charge Ratio at 2.0x. Fitch expects the sponsor will commit to deleverage Lower Cadence to reach net debt leverage around 4.2x-4.5x, which would allow for the maximum amount of distributions to sponsors, given the cash flow sweep and restricted payments covenant. Lower Cadence has modest capex required from 2Q19 primarily for infield gathering, additional well connects and pipeline interconnects to accommodate volume growth and system maintenance. Small, Single Basin Provider: Lower Cadence is a relatively small crude oil gathering and transportation services provider that operates predominantly in the Southern Delaware region of the Permian basin and is expected to generate an annual EBITDA of less than $500 million in the near term. Given its single basin focus and lack of business line diversity, the company is subject to outsized event risk should there be a slow down or longer-term disruption in the Delaware basin production. This limiting factor is somewhat offset by Lower Cadence's geographic presence in one of North America's highest growth upstream areas where crude production is expected to remain robust in the near to intermediate term, and Lower Cadence will be a beneficiary of this growth. Counterparty Exposure: Lower Cadence has 64 rigs across approximately 22 customers with 100% fixed fee contracts that eliminate direct commodity price exposure. These contracts vary in length, with a weighted average tenor of approximately 10 years, and further supported by acreage dedications, which require that all crude production under these dedicated areas to utilize the system. Lower Cadence is, however, exposed to counterparty risk as the majority of its customers are non-investment grade counterparties, which are estimated to contribute the bulk of Lower Cadence's 2020E volumes. Fitch believes these high-yield E&P companies as lacking the geographic breadth and equivalent downside protection through hedges relative to their investment grade peers and are therefore exposed to greater credit risk amidst a volatile commodities price environment. Offsetting some of this counterparty risk, most of Lower Cadence's major producers are pure-play Permian players that have been significantly ramping up their production in recent years and are expected to continue to do so in the near term. Competitive Risk: Fitch recognizes that growth for Lower Cadence beyond its existing dedicated acreage position and areas of mutual interest (AMI) may come from a highly competitive process with producers. The company operates in an attractive producing region, and outside of its existing footprint it will need to compete with others including some midstream companies that are larger in size and scale. Oryx II Completion Risk: Fitch does not view the execution risk regarding Oryx II completion as significant given the remaining unfinished parts are largely related to infield buildouts and producer well connections that are expected to be completed over the course of 2019. However, any further delays or unexpected setback could impede Lower Cadence's projected volume growth, which would lead to a longer than expected deleveraging pace. The main 450 mbbl/d transport line was already fully constructed and placed in service December 2018, and additional volumes are expected to ramp throughout 2019. Total system volumes will remain constrained and unable to capture all the additional volumes produced by its customers under their dedicated acreage until the entire Oryx II system becomes operational by 1Q20. Supportive Sponsor: On April 2, 2019, Stonepeak agreed to acquire all the assets of Lower Cadence which are owned by affiliates of Quantum Energy Partners, Post Oak Energy Capital, Concho Resources, WPX Energy and other investors. Fitch expects Lower Cadence to receive a similar level of financial support as from the previous sponsors. Stonepeak management has a history of investments in the midstream space, with about 40% of its overall investments in this sector. Favorable Production Fundamentals: The Permian basin remains as one of the most prolific production basins in the U.S. given its strong basin economics. Crude production in the Permian has grown significantly in the past years and Fitch believes that this is expected to rise in the near term, considering theproduction economics within the region. Lower Cadence operates its gathering and transport system in the Southern Delaware basin, where it has one of the lowest breakeven costs (approximately $22-$40/bbl) and one of the highest producer IRRs in North America. Reeves County, where Lower Cadence is predominantly focussed, has also consistently been the one of the top five oil production counties throughout Texas in the past year. Lower Cadence's throughput volumes have grown since inception in early 2016 amidst commodities price volatility. Customers have dedicated approximately 940,000 acres to the company and are currently actively drilling within this dedicated acreage with 64 rigs currently running on the dedicated acres, providing growth upside should producers continue to develop their acreage. DERIVATION SUMMARY Lower Cadence's ratings are limited by the size and scale of operations of the company, a single basin focused crude oil gathering and transportation service provider operating in the Delaware Basin of the Permian. Fitch typically views the credit profiles of single asset/basin focused midstream service providers as more consistent with a 'B' range IDR. However, Lower Cadence's favorable geographical presence in the Delaware Basin of West Texas, where Fitch expects significant volume growth, along with the company's long-term fixed fee contracts with significant acreage dedications help to somewhat mitigate size and scale concerns. In addition, Fitch's size and scale concerns about midstream energy issuers tends to be focused on facilitating access to capital for meeting funding needs, with larger entities more easily able to access capital markets. Fitch does not expect Lower Cadence to have any near-term need to access capital markets until term loan maturity. By that time the company may be significantly larger with size and scale more consistent with other 'BB' rated midstream names, though it is still likely to be a single basin gathering and transportation company, which limits geographic and business line diversity. Furthermore, Fitch expects Lower Cadence to be FCF positive in 2020 through the rating horizon. This is somewhat unique relative to Fitch's other midstream energy coverage, which across most rating categories (BBB and BB) tends to be FCF (after dividends/distribution) negative due in part to the preponderance of master limited partnerships within Fitch's midstream coverage. Relative to the lower-rated 'B' Navitas Midstream, Lower Cadence is slightly larger in size with greater acreage dedication and generates more cash flow under fixed fee contracts. Fitch projects Lower Cadence to have a high initial leverage metrics (Total Debt/ Adjusted EBITDA) in the range of 8.7-8.9x for 2019 and de-lever to approximately 5.5-5.7x in 2020YE. Compared to its 'BB-' IDR peers, Medallion Midland Acquisition (BB-/Negative Outlook) and Lucid Energy Group II Borrower (BB-/Stable Outlook), Lower Cadence has weaker initial leverage metrics and a slightly weaker counterparty profile with a majority of its E&P producer customers being unrated or non-investment grade. Fitch expects production growth during the forecast period to be subdued relative to current levels. Lower Cadence faces some minor completion and volumetric risk associated with the remaining build out of the Oryx II expansion project. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Production volume ramps up through forecast years driven by the completion of Oryx II project as well as increased production from its existing customers. No new acreage dedications or new customers assumed; - Remaining portion of Oryx II to be completed by 1Q20; - Modest capex spent in forecast years for additional well connects and systems maintenance; - No dividend payments assumed, although Fitch expects dividend payments can begin in 2021 as the restricted payment covenant is met; - Deleveraging supported by term loan amortisation (1% per annum) and debt repayment under excess cashflow sweep; - Fitch's base case WTI oil price that trends up from $57.50/barrel in 2019 and 2020 and a long-term price of $55/barrel. Recovery Rating Assumptions: In its recovery analysis, Fitch assumes that Lower Cadence would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch uses a 6.0x EBITDA multiple for the recovery analysis. Reorganization multiples can vary widely based upon the commodity price environment upon emergence, as well as company specific factors that led to restructuring, including full-cycle cost positions, untenable capital structures, or debt-funded M&A activity. There have been a limited number of bankruptcies and reorganizations within the midstream sector. Two recent gathering and processing bankruptcies of companies with a short pre-bankruptcy life indicate that pro forma exit Enterprise Value over pre-distress EBITDA provide an approximate range of multiples between 3.5x and 7.0x. Lower Cadence shares a similar asset profile to these entities as a single basin midstream crude gathering and transportation service provider, but it operates in the Permian basin where Fitch has greater growth prospects guidance for E&P production. Based on Fitch's most recent Energy, Power and Commodities Bankruptcy Enterprise Vale and Credit Recoveries report (published March 2018) the median enterprise valuation exit multiple for the 29 Energy cases reviewed was 6.7x, with a wide range. The average recovery rate was 84% (equivalent to 'RR2' on Fitch's Recovery Rating scale) for 86 first-lien issues in the Energy, Power and Commodities sector case studies. Fitch's going concern EBITDA assumption is $230-240 million as a mid-cycle estimate of sustainable EBITDA for the company post default and bankruptcy emergence. Using this going concern EBITDA and assuming a fully drawn revolver as well as a 10% administrative claim in the recovery calculation, the term loan's Recovery Rating is 'RR2', indicating superior recovery prospects (71% - 90%) in the event of default. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Increases its size, scale, asset, geographic or business line diversity, with a focus on EBITDA above $300 million per annum while maintaining leverage (Total Debt/ Adjusted EBITDA) at or below 5.0x basis; - Completion of Oryx II expansion with no further delays and realized volume growth associated with the expansion will increase recovery prospect on the secured term loan and could lead to positive rating action on the term loan. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Delays in the completion of the remaining portion of Oryx II which negatively impacts production volume growth; - Slowdown in volume growth expected across Lower Cadence's dedicated acreage, as evidenced by a decline in rig count or a moderation in daily volumes through its system; - Meaningful deterioration in counterparty credit quality or a significant event at a major counterparty that impairs cash flow; - Leverage above 6.0x on a sustained basis. Fitch expects Lower Cadence's leverage to be above 8.5x by 2019 year end and gradually improve to 4.2x-4.5x by 2021 year-end; - A significant change in cash flow stability profile, driven by a move away from currently majority of revenue being fee based. If revenue commodity price exposure were to increase above 25%, Fitch would likely take negative ratings action. LIQUIDITY Liquidity Adequate: Lower Cadence will have access to a $150 million Super Secured revolving credit facility that matures in five years (2024). It will also issue $1,500 million of senior secured term loan with a manageable maturity of seven years (2026). These facilities have the option of being increased by an aggregate amount of $150 million, of which $25 million can comprise of incremental revolver borrowings. The term loan requires a six-month Debt Service Reserve Account (DSRA), which will be funded at closing, as well as a cash flow sweep and mandatory amortization of 1% per annum. Fitch expects Lower Cadence to be FCF positive in 2H20 and growing with projected volume increases. Capex is expected to remain modest and is mainly for additional well connects and system maintenance. FULL LIST OF RATING ACTIONS Fitch has assigned the following first-time ratings: Lower Cadence Holdings, LLC -- Long Term IDR 'B+'; -- Senior Secured Term Loan B 'BB'/'RR2'. The Rating Outlook is Stable. MACAULEY CONTRACTING: May 23 Plan Confirmation Hearing ------------------------------------------------------ The Disclosure Statement explaining the small business Chapter 11 combined plan filed by Macauley Contracting, LLC, is conditionally approved. A hearing will be held on May 23, 2019, at 10:00 a.m., and for confirmation of the Plan before the Honorable Andrew B. Altenburg, Jr., United States Bankruptcy Court, District of New Jersey, 400 Cooper Street, Camden, in Courtroom 4B. May 16 is fixed as the last day for filing and serving written objections to the Disclosure Statement and confirmation of the Plan. May 16 is fixed as the last day for filing written acceptances or rejections of the Plan. A full-text copy of the small business Chapter 11 combined plan and disclosure statement is available at https://tinyurl.com/yxsabzom from PacerMonitor.com at no charge. Macauley Contracting, LLC, sought Chapter 11 protection (Bankr. D.N.J. Case No. 19-10990) on Jan. 16, 2019. The Debtor tapped Maureen P. Steady, Esq., t Kurtzman | Steady, LLC, as counsel. MARINE ENVIRONMENTAL: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Two affiliates that have filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Marine Environmental Remediation Group LLC 19-18994 12 Hillcrest Road Mountain Lakes, NJ 07046-1327 MER Group Puerto Rico LLC 19-18995 Pier 3, Roosevelt Roads Ceiba, PR 00735 Business Description: MER Group -- http://www.mergroupllc.com-- provides ship recycling services at facilities in the United States and Europe. MER claims to have pioneered an environmentally-sensitive process of dismantling obsolete vessels that meets or exceeds all U.S. EPA, OSHA, state and Commonwealth regulations. Chapter 11 Petition Date: May 1, 2019 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Hon. Vincent F. Papalia Debtors' Counsel: Jeffrey D. Vanacore, Esq. PERKINS COIE LLP 30 Rockefeller Plaza, 22nd Floor New York City, NY 10112 Tel: (212) 262-6912 (212) 262-6900 Fax: (212) 977-1642 E-mail: JVanacore@perkinscoie.com - and - Schuyler G. Carroll, Esq. PERKINS COIE LLP 30 Rockefeller Plaza 22nd Floor New York, NY 10112-0085 Tel: 212-262-6900 E-mail: scaroll@perkinscoie.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petitions were signed by Martin Vulaj, chief executive officer. A full-text copy of Marine Environmental 's petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb19-18994.pdf A full-text copy of MER Group's petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb19-18995.pdf MCGRAW-HILL EDUCATION: S&P Affirms 'B' ICR on Cengage Merger Plan ----------------------------------------------------------------- S&P Global Ratings affirmed its ratings on U.S.-based education material and learning solutions provider McGraw-Hill Education Inc. (MHE), including the 'B' issuer credit rating, and assigned its preliminary 'B+' issue-level rating and preliminary '2' recovery rating to the company's proposed $3.7 billion first-lien debt. The preliminary '2' recovery rating indicates its expectation for substantial (70%-90%; rounded estimate: 85%) recovery of principal for lenders in the event of a payment default. The affirmation follows the joint announcement that MHE has agreed to merge with Cengage Learning Holdings II Inc. The transaction is a stock-for-stock deal in which MHE's existing financial sponsor (Apollo) and Cengage's existing financial sponsors in alphabetical order (Apax Partners, KKR, and Searchlight Capital) will each receive half of the stock of the combined company. The companies expect regulatory approval and closing by early 2020. As part of the proposed merger, MHE is seeking to refinance MHE's and Cengage's existing term loans and MHE's $350 million revolving credit facility into a new $3.7 billion credit facility due 2024. S&P has assigned the proposed debt its preliminary ratings, which assumes, among other things, all the existing senior secured term loans are refinanced. MHE's and Cengage's existing senior unsecured notes will remain outstanding after the merger and will be cross-guaranteed. "We expect the new company to be called McGraw Hill; it will have greater scale and improve profit margins and cash flow generation given management's expectations for about $300 million in cost savings mainly through the rationalization of sales force and other corporate functions. However, McGraw Hill will be highly leveraged, with roughly $4.5 billion in debt," S&P said. On a combined basis, adjusted debt to EBITDA was 9x and adjusted FOCF to debt was 4% as of fiscal 2019 (ended March 31). S&P expects leverage and FOCF to debt to improve to about 6.5x and 7%, respectively, in fiscal 2021. The rating agency expects leverage to decline to the 5x area in fiscal 2022 as the company realizes a majority of its synergies. S&P expects capital spending to decline over the next few years on lower digital investments. It also expects pre-publication spending to slow as digital revenue contributes an increasing portion of revenues. S&P's rating also reflects the company's exposure to declining enrollment and competition from used and rental textbooks in its higher education segment and volatile state and local budgetary spending in its K-12 segment. The rating agency expects fiscal 2020 to be a transition period for McGraw Hill as it begins implementing its cost saving plan and aligns its strategic initiatives -- such as the higher education unlimited subscription business model and book rental program, sales organization, and content development. The stable outlook reflects S&P's expectation that operating performance at stand-alone MHE will remain stable before the closing and that the combined company will benefit from meaningful cost savings that could lead to deleveraging. S&P expects debt leverage for the combined company to be about 7x at the end of fiscal 2020, and improving to about 6.5x by fiscal 2021, with FOCF to debt at 7%. "We could lower the ratings if operating performance deteriorated because of integration challenges or increased competitive results in minimal cash flow generation, such that FOCF to debt were below 5% on a sustained basis," S&P said, adding that it could also lower its ratings if the merger did not close as expected, realized cost savings fell short of expectations, or if the financial sponsors increased their financial risk tolerance, such as debt-financed dividend payments. "We believe an upgrade is unlikely over the next 12 to 24 months. However, we could raise the rating if the company successfully integrated Cengage and generated significant free cash flow, leading to leverage below 5x on a sustained basis in conjunction with the sponsors' commitment to maintain leverage at those levels," S&P said. A consideration for a higher rating would also entail substantial progress in transforming the company to a digital model to offset the natural cyclicality in the K-12 business, according to the rating agency. MCGRAW-HILL GLOBAL: Moody's Assigns B2 CFR Amid Cengage Deal ------------------------------------------------------------ Moody's Investors Service assigned a B3 Corporate Family Rating, a B3-PD Probability of Default Rating, and a stable outlook to McGraw-Hill Global Education Holdings, LLC following its announced merger of equals with Cengage Learning, Inc.. Moody's also assigned a B2 rating to McGraw's amended and extended credit facilities, comprised of a $350 million first lien senior secured revolver due 2024 and a $3,342 million first lien senior secured term loan due 2024. Moody's downgraded McGraw's existing senior secured credit facilities to B2 from B1, and ratings on these facilities will be withdrawn upon closing. Moody's also downgraded McGraw's $400 million in senior unsecured notes due 2024 to Caa2 from Caa1. Moody's has withdrawn the B2 CFR, B2-PD PDR and negative outlook for MHGE Parent, LLC as there is no rated debt outstanding at that entity. Moody's also affirmed Cengage's B3 CFR, and B3-PD PDR ratings, and expects these ratings to be withdrawn upon closing. Moody's also affirmed the B2 rating of Cengage's senior secured term loan, which is expected to be withdrawn at closing. Ratings on Cengage's $620 million senior unsecured notes due 2024 were affirmed at Caa2. The outlook for Cengage is unchanged at stable and is expected to be withdrawn upon close. Cengage Learning, Inc. (the Cengage US operating entity and borrower) will merge with and into McGraw-Hill Global Education Holdings, LLC upon closing of the transaction. The announced rating actions are subject to review of final documentation and no meaningful change in conditions of the proposed transaction as presented to Moody's. Assignments: Issuer: McGraw-Hill Global Education Holdings, LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD $3,342 Million Gtd Senior Secured 1st lien Term Loan B1 due 2024, Assigned B2 (LGD3) $350 Million Gtd Senior Secured 1st lien Revolving Credit Facility due 2024, Assigned B2 (LGD3) Affirmations: Issuer: Cengage Learning, Inc. Corporate Family Rating, Affirmed B3, to be withdrawn upon closing Probability of Default Rating, Affirmed B3-PD, to be withdrawn upon closing $1,663 million Senior Secured Term Loan due 2023, Affirmed B2 (LGD3), to be withdrawn upon closing $620 million Senior Unsecured Global Notes due 2024, Affirmed Caa2 (LGD5) Downgrades: Issuer: McGraw-Hill Global Education Holdings, LLC $1,679 Million Senior Secured Term loan B due 2022, Downgraded to B2 (LGD3) from B1 (LGD3), to be withdrawn upon closing $350 Million Senior Secured Revolving Credit Facility due 2021, Downgraded to B2 (LGD3) from B1 (LGD3), to be withdrawn upon closing $400 Million Senior Unsecured Senior Global Notes due 2024, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Withdrawals: Issuer: MHGE Parent, LLC Corporate Family Rating, Withdrawn , previously rated B2 Probability of Default Rating, Withdrawn , previously rated B2-PD Outlook Actions: Issuer: McGraw-Hill Global Education Holdings, LLC Outlook, Assigned Stable Issuer: MHGE Parent, LLC Outlook, Changed To Rating Withdrawn From Negative Issuer: Cengage Learning, Inc. Outlook, Unchanged at Stable, to be withdrawn upon closing RATINGS RATIONALE McGraw-Hill Global Education Holdings, LLC's B3 CFR is based on the large scale and diversified operations stemming from it combination with Cengage, the potential of significant synergies as the companies integrate, growth opportunities via new digital products and business partnerships and from rebounding enrollment and calendar adoptions, and adequate liquidity. The rating is constrained by elevated debt/EBITDA leverage of about 9.5x (Moody's adjusted, as at December 31, 2018, pro forma for the business combination but excluding synergies), the result of ongoing secular pressures and aggressive financial policies flowing from private equity ownership, likely execution risks that may limit synergies as the companies integrate, and uncertainties relating to calendar adoption wins and open territory purchasing, enrollment levels, student behavior towards learning courseware acquisition, and the trajectory of ongoing secular pressures. The stable outlook reflects Moody's expectations that consolidated entity will begin to return to positive revenue and operating income growth over the next 12-18 months due to stronger adoption calendar and better penetration through the unlimited subscription product in higher education. Moody's expects underlying secular challenges to remain, and anticipate some de-levering through execution of cost saving initiatives. The current rating and outlook do not incorporate any further share repurchases or debt funded distributions, which if occur, may result in a negative rating action. The outlook incorporates its expectation that McGraw will maintain good liquidity with no significant drawdowns under the revolver over the next 12 months providing the company some flexibility to execute its operating strategies. Given the secular trends within the higher education market, recent weakness in K-12 sector, pending potential integration risk and high leverage upgrade is unlikely. Improved higher education enrollment levels, demonstrated strong organic growth in K-12 segment and stronger competitive position against peers, rental and used providers and open educational resources could position the company for an upgrade if demonstrated in the financial performance. The company would also need to demonstrate organic revenue and EBITDA growth resulting in debt-to-cash EBITDA being sustained comfortably below 5x, and Moody's would need to expect that liquidity will remain good with cash balances being more than sufficient to cover outflows including seasonal working capital swings. The company would also need to demonstrate its ability to maintain good free cash flow. Ratings could be downgraded if market conditions or competitive pressures lead to the company to being unable to improve its revenue or EBITDA over the next 12 months resulting in further deterioration in liquidity. Ratings could also be downgraded if additional debt funded distributions lead to increased leverage or if liquidity were to weaken due to significant revolver usage or sustained negative free cash flow. The principal methodology used in these ratings was Media Industry published in June 2017. McGraw-Hill Global Education Holdings, LLC is a global provider of educational materials and learning services targeting the higher education, K-12, professional learning and information markets with content, tools and services delivered via digital, print and hybrid offerings. Cengage Learning, Inc. is a provider of learning solutions, software and educational services for the higher education,research, school, career, professional, and international markets. Cengage publishes college textbooks and reference materials, and supplements its print publications with digital solutions. The revenue of combined entity is approximately $3.2 billion. MGM RESORTS: Fitch Affirms 'BB' IDR Amid Macau Unit's Notes Issue ----------------------------------------------------------------- Fitch Ratings has assigned 'BB'/'RR4' ratings to MGM China Holdings Limited's proposed $1.25 billion senior unsecured notes issuance. The proceeds will be used to repay amounts outstanding on MGM China's credit facility and for general corporate purposes. In addition, Fitch has affirmed MGM China's, MGM Growth Paradise S.A.'s and MGM Resorts International's Long-Term IDRs at 'BB' as well as their respective issue ratings. The Rating Outlook is Stable. Fitch links MGM and MGM China's IDRs as MGM China, which is 56% owned by MGM, is viewed as strategically important to MGM. Fitch also views MGM China's debt covenant ring fencing vis-a-vis restricted payment covenants as not very restrictive. Linkage is currently not a material consideration in determining the IDRs as MGM China's stand-alone and MGM's consolidated credit profiles are both consistent with a 'BB' category IDR. KEY RATING DRIVERS Credit Profile Improving: Fitch forecasts MGM Resorts International to delever below 5.0x on a gross basis by YE 2020. De-levering will come primarily from EBITDA growth, as MGM Cotai and Springfield ramp up, Empire City casino is acquired (January 2019) and returns on the Park MGM investment are realized. MGM seeks to achieve net leverage of 3x-4x by YE 2020 (Fitch's calculation of net leverage is roughly 0.7x higher due to its subtraction of minority distributions from EBITDA). MGM's FCF profile is also improving and set to exceed $1.0 billion annually by 2020, although shareholder-friendly activity is also ramping up. Upward credit momentum may be slowed by a new large-scale project or a pullback in U.S. economic growth. Favorable Asset Mix: Since 2016, MGM improved its overall geographic diversification and expanded its M Life Rewards program. This was achieved through acquisitions, like Atlantic City's Borgata (2016), New York's Empire City Casino (2019) and Ohio's Northfield Park (2018), and new developments in Maryland and Massachusetts. MGM's portfolio of Las Vegas Strip assets are mostly high quality and its regional assets are typically market leaders. The regional portfolio's diversification partially offsets the more cyclical nature of Las Vegas Strip properties. MGM Growth Properties: MGP (BB+/Stable) is roughly 70% owned, pro forma for recent acquisitions and MGP's redemption of OP units from MGM for the Northfield transaction, and effectively controlled by MGM. Therefore, Fitch analyzes MGM largely on a consolidated basis. MGM wants to reduce its ownership stake in MGP to under 50%. Its ownership of the sole MGP Class B share and controlling voting power (intact until ownership falls below 30%) will support a consolidated analysis with adjustments for the minority stake in MGP. Positive on Las Vegas: Fitch is positive on the Las Vegas Strip, which represents about 45% of MGM's consolidated revenues (pro forma for recent transactions). The Strip should benefit from continued strength in the convention business and limited new lodging supply. However, Fitch expects low single-digit gaming revenue and RevPar growth as the recovery is entering its 10th year and a number of indicators have reached or surpassed prior-cycle peaks. Macau on Solid Footing: Fitch expects flat to low single-digit growth in Macau gross gaming revenues for 2019. MGM will gain market share as MGM Cotai continues to ramp up, following the introduction of VIP operations in late 2018. Fitch forecasts MGM Cotai will generate over $200 million in incremental EBITDA once fully ramped up. Fitch's favorable long-term view on Macau is supported by an expanding middle class in China and infrastructure development in and around Macau. Fitch feels upcoming concessions renewals in 2022 will be a pragmatic process as the government values stability in the marketplace. (MGM China extended its concession from 2020 to 2022.) DERIVATION SUMMARY MGM's current 'BB' IDR considers the issuer's gross debt/EBITDA slightly over 5.0x (pro forma for annualized results of new openings, acquired assets, and debt issuances), improving FCF profile following the completion of its development pipeline, and its geographically diverse, high quality assets. There is headroom for funding of another large scale project or a moderate operating downturn at the current 'BB' rating level given MGM's liquidity profile and moderate leverage. MGM's liquidity is solid with $850 million in excess cash on hand as of March 31, 2019 (net of estimated cage cash) and an improving FCF profile. Fitch links MGM China's IDR to MGM's. Fitch analyzes MGM on a consolidated basis after adjusting for distributions to minority interests and distributions from unconsolidated entities. If all of the proceeds are used to repay MGM China's credit facility amounts outstanding, the notes issuance is leverage neutral. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Same-store domestic revenues grow about 1%-2% per year on average, with higher assumed growth at properties on the Las Vegas Strip and still ramping regional properties (National Harbor, Springfield). -- EBITDA margins from wholly owned subsidiaries remain near 30%. -- MGM China generating about $700 million of aggregate EBITDA in 2019, which factors in over $200 million EBITDA at MGM Cotai. -- Roughly $250 million of incremental EBITDA in 2019 from MGM Springfield, Empire City, and Northfield Park; -- 5% annual growth for the parent level dividend and a majority of cash flow from operations less capex at MGM China and MGM Growth Properties is distributed. -- $1 billion of total capex in 2019, which includes close out costs for MGM Springfield and MGM Cotai. Maintenance capex thereafter around $600 million per year. -- $750 million in annual share repurchases. -- $4.6 billion in note maturities from 2019-2022 are refinanced. MGM China amortization is $360 million per year. -- Fitch's base case forecast does not include any additional developments in new jurisdictions (e.g. Japan). RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- MGM's IDR could be upgraded to 'BB+' as its adjusted debt/ EBITDAR after adjusting for distributions to minority holders and from unconsolidated subsidiaries approaches 4.5x on gross basis and 4.0x net basis, respectively. Fitch will consider the continuation of the stable or positive trends in Las Vegas and Macau, the renewal of the Macau concession, and MGM's commitment to its balance sheet when contemplating positive rating actions. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Fitch would consider a Negative Outlook or downgrade if adjusted gross debt/EBITDAR remains above 6.0x for an extended period of time, due to potentially weaker-than-expected operating performance, debt funding a new large-scale project or acquisition or taking a more aggressive posture with respect to financial policy. LIQUIDITY MGM's liquidity is solid and is set to improve further as annual discretionary FCF grows in excess of $1.0 billion by 2020. Per Fitch's base case, the primary use of the FCF will be to support continued ramp up in shareholder returns. MGM repurchased $1.3 billion in shares during 2018 and also pays roughly $260 million in annual parent dividends. Other uses of cash include $350 million of close out costs in 2019 for MGM Cotai, Springfield, and Park MGM (per company guidance). As of March 31, 2019, additional sources of liquidity include $850 million in consolidated excess cash (net of estimated cage cash) and $3.8 billion in consolidated revolver availability. Liquidity is hampered by MGM's maturity schedule, which remains heavy for a non-investment grade company. This is largely a by-product of MGM's unsecured notes not having call options, which is unique among its gaming peers. FULL LIST OF RATING ACTIONS Fitch has assigned the following rating: MGM China Holdings Ltd -- Senior Unsecured Notes 'BB'/'RR4'. Fitch affirms the following MGM ratings: MGM Resorts International -- Long-Term IDR at 'BB'; Outlook Stable; -- Senior secured credit facility at 'BBB-'/'RR1'; -- Senior unsecured notes at 'BB'/'RR3'. MGM China Holdings, Ltd (and MGM Grand Paradise, S.A. as co-borrower) -- Long-Term IDR at 'BB'; Outlook Stable; -- Senior secured credit facility at 'BBB-'/'RR1'.' MGM RESORTS: Moody's Affirms Ba3 CFR Amid Macau Unit's Notes Issue ------------------------------------------------------------------ Moody's Investors Service assigned a Ba3 rating to the proposed senior unsecured notes to be issued by MGM China Holdings Limited, a 55.95% owned discretely financed publicly traded subsidiary of MGM Resorts International. MGM China owns and operates two resort casinos in Macau, China that account for approximately 20% of MGM Resorts consolidated EBITDA. Moody's also affirmed MGM Resorts Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, Ba3 senior unsecured ratings and Speculative Grade Liquidity rating of SGL-1. The outlook is positive. The affirmations reflect Moody's view that credit metrics will improve over the next 12 -- 18 months due to higher earnings contributions from the ramp up of MGM Cotai and modest growth at domestic properties. Proceeds of the proposed notes will be used to repay MGM China's existing secured credit facility thereby materially extending the subsidiary's maturity profile to 2024 and 2026 from the current bullet maturity in 2022 and beyond the date for renewal of the Macau sub-concession agreements in 2022. The Ba3 assigned to MGM Resorts' and MGM China's proposed unsecured notes is based on a one-notch override of Moody's Loss Given Default model indicated rating of B1. Moody's decision to override the LGD model reflects the close proximity of the expected loss rate (within the stability band) to the Ba3 rating level and its expectation that MGM Resorts will continue to shift its capital structure to predominately unsecured over time. MGM China does not provide any guarantees to MGM Resorts other subsidiaries, and so creditors of MGM China will continue to have direct claim position with regards to MGM China's cash flows and recovery prospects. Similarly, MGM Resorts does not provide any guaranty to MGM China, and its creditors continue to have a direct claim with respect to MGM Resorts cash flows and recovery prospects. MGM Resorts' and MGM China's total debt is 43% secured and 57% unsecured (assuming full draws of existing revolvers). On a pro-forma basis 34% is secured and 66% is unsecured. As of a result of this transaction, MGM China's pro-forma debt structure will be split 58% secured and 42% unsecured thereby providing coverage for both classes of debt. Assignments: Issuer: MGM China Holdings Limited Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD4) Outlook Actions: Issuer: MGM Resorts International Outlook, Remains Positive Affirmations: Issuer: MGM Resorts International Probability of Default Rating, Affirmed Ba3-PD Speculative Grade Liquidity Rating, Affirmed SGL-1 Corporate Family Rating, Affirmed Ba3 Senior Unsecured Shelf, Affirmed (P)Ba3 Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4) RATINGS RATIONALE MGM (Ba3 positive) benefits from large scale, a diversified presence on the Las Vegas Strip across multiple customer segments, a solid position within several regional markets, and its presence in the large Macau market with favorable long-term prospects. MGM is constrained by its concentration in Las Vegas (approximately 61% of consolidated 2018 Adjusted EBITDA), exposure to the Macau gaming market that is experiencing volatility and the ramp-up risk associated with recent resort developments - MGM Cotai (opened in Q1 2018) and MGM Springfield (opened in August 2018) and the redeveloped Park MGM (completed in December 2018) and the integration of recent acquisitions (Empire City and MGM Northfield Park). Consolidated and restricted group leverage and coverage are expected to continue to improve due to material earnings growth in 2019 and 2020 principally from the ramp-up of MGM Cotai and secondarily from recently completed projections, acquisitions and modest organic growth and operational efficiencies related to the recently-announced MGM 2020 plan. The company's financial policy targets is to maintain consolidated net debt/EBITDA in a range of 3.0 - 4.0x by 2020; which roughly translates to 4.5x -5.5x on a Moody's adjusted basis. Moody's expects MGM will actively pursue other large integrated resort development projects (e.g. Japan) that would require significant equity investment and debt to finance construction and will continue to expand its domestic operations in partnership with MGM Growth Properties, LLC. The positive outlook reflects its view that consolidated operating results will improve over the next year due to higher domestic earnings, operational efficiencies achieved through the company's MGM 2020 plan and contribution from recent acquisitions and new project openings in Massachusetts, Las Vegas, and Macau that will result in an improvement in credit metrics to levels supportive of a higher rating. Ratings could be upgraded if: Consolidated debt/EBITDA is sustained below 5.0x, fixed charge coverage remains above 2.0x; the company maintains sufficient liquidity to support both recourse and non-recourse subsidiaries; operating results of MGM China operations, including MGM Cotai, track to estimated levels and share repurchases are funded with asset sale proceeds or cash on hand rather than debt. The credit ratios required for an upgrade also takes into account that reported credit metrics may experience some variability due to the timing of new resort openings and the closing of the announced and potential acquisitions. Ratings could be downgraded if the result of the independent board includes returns to shareholders that would delay the improvement in credit metrics, operating results from new project openings fall materially below estimates, if consolidated gross debt/ EBITDA is sustained above 6.0x, if EBITDA/fixed charges declines below 1.75x or the company deviates materially from its financial policy goals. MGM owns and operates the Bellagio, MGM Grand, Circus Circus located on the Las Vegas Strip in Nevada and MGM Springfield in Massachusetts which opened in late 2018. MGM owns approximately 56% of MGM China Holdings Limited, which owns the MGM Macau resort and casino and MGM Cotai which opened in February 2018. MGM also owns 50% of CityCenter in Las Vegas and approximately 69% of MGM Growth Properties (MGP), a real estate investment trust formed in April 2016. MGM has entered into a long-term triple net master lease with MGP pursuant to which the company leases and operates for MGP fourteen properties. Consolidated net revenues for the LTM period ended March 31, 2019 were approximately $12.1 billion. MGM RESORTS: S&P Affirms BB- ICR Amid Macau Unit's Notes Issuance ----------------------------------------------------------------- S&P Global Ratings related that MGM China Holdings Ltd. (MGM China), a Macau-based subsidiary of MGM Resorts International, plans to issue $1.25 billion of unsecured notes to repay a portion of its outstanding secured debt. S&P assigned its 'BB-' issuer credit rating to MGM China. S&P also assigned its 'BB-' issue-level rating to MGM China's proposed aggregate $1.25 billion unsecured notes due 2024 and 2026. In addition, S&P also affirmed its existing ratings on MGM Resorts and its other subsidiaries, including the 'BB-' issuer credit ratings. The rating actions on MGM and MGM China reflect S&P's view that although the refinancing transaction will increase MGM China's financial flexibility by improving its maturity profile and broadening its capital markets access, it will not materially alter S&P's forecast for credit measures over the next few years given it is primarily a debt-for-debt refinancing. S&P expects MGM's leverage will be in the high-4x area in 2019, and improve to the low-4x area in 2020, which provides ample cushion compared to S&P's 5.5x adjusted leverage downgrade threshold. The stable rating outlook reflects S&P's expectation that MGM's leverage will improve to the mid- to high-4x area through 2019 as a result of recently completed acquisitions and ongoing investments in the business. Although share repurchases could slow the pace of leverage improvement, S&P expects MGM's leverage will improve over the next year and the company will have good cushion relative to S&P's 5.5x downgrade threshold. MID-CITIES HOME: Seeks to Hire CR3 Partners, Appoint CRO -------------------------------------------------------- Mid-Cities Home Medical Equipment Co. seeks authority from the U.S. Bankruptcy Court for the Northern District of Texas to hire CR3 Partners, LLC and designate William Roberts as chief restructuring officer. Mid-Cities requires CR3 to: a. review and analyze the financial and operational position of the Debtor; b. evaluate and investigate potential strategies for the restructuring and refinancing of the Debtor; c. prepare data and analyses to meet the requests of the Debtor's financial constituents, including its secured lender; d. provide oversight and support to the Debtor's other professionals in connection with the execution of the Debtor's plan, sales process and the overall administration of its Chapter 11 case; e. provide oversight and assistance in connection with the preparation of financial-related disclosures required by the bankruptcy court; f. provide oversight and assistance in connection with the preparation of financial information for distribution to creditors; g. participate in meetings and provide assistance to any official committees appointed in the case, the U.S. Trustee and other other parties in interest; h. evaluate, make recommendations and implement strategic alternatives to maximize the value of the Debtor's assets; i. evaluate, analyze and make recommendations relating to the Debtor's assets; j. provide oversight and assistance in connection with the preparation of analysis of creditor claims; k. provide oversight and assistance in connection with the evaluation and analysis of avoidance actions; l. provide testimony in litigations as required; m. evaluate the cash flow generation capabilities of the Debtor for valuation maximization opportunities; n. provide oversight and assistance in connection with communications and negotiations with the Debtor's constituents including investors; o. assist in the formulation of a plan of reorganization or liquidation and in the preparation of information and analysis necessary for the confirmation of the plan; and p. perform other tasks as directed by the Debtor and agreed to by CR3, including all tasks necessary to facilitate the Debtor's restructuring. CR3's hourly rates are: Bill Roberts (CRO) $525 Consultants $250 - $300 William Roberts, a member of CR3, assured the court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: William L. Roberts CR3 Partners, LLC 13355 Noel Road, Suite 310 Dallas, TX 75240 Phone: +1 (800) 728-7176 About Mid-Cities Home Medical Equipment Co. Based in Grand Prairie, Texas, Mid-Cities Home Medical Equipment Co., Inc., a retailer of medical supplies and equipment, filed a voluntary Chapter 11 petition (Bankr. N.D. Tex. Case No. 19-41232) on March 27, 2019. At the time of filing, the Debtor had $500,000 to $1 million in estimated assets and $1 million to $10 million in estimated liabilities. The petition was signed by Scott Bays, president. MISTER CAR: Moody's Cuts CFR to B3 & Alters Outlook to Stable ------------------------------------------------------------- Moody's Investors Service downgraded Mister Car Wash Holdings, Inc.'s Corporate Family Rating and Probability of Default Rating to B3 and B3-PD respectively. In addition, Moody's assigned a B2 rating to the company's proposed senior secured first lien credit facility, which includes a $75 million revolver, a $775 million term loan, and a $40 million delayed draw term loan. The outlook was changed to stable. Proceeds from the proposed first lien term loan and $250 million second lien term loan (unrated) will be used to refinance the company's existing debt including its existing first lien credit facility (rated B1) and pay a $215 million distribution to shareholders. Upon the closing of the transaction, the rating of the existing first lien credit facility will be withdrawn. "While we view Mister Car Wash as a leading operator in the car wash sub-segment, today's downgrade of the CFR and PDR reflects the company's weak quantitative credit profile driven by its debt-financed acquisition strategy, which is now exacerbated by this substantial dividend to its sponsor/owners," stated Moody's Vice President Charlie O'Shea. "Per Moody's estimates, which give credit for run-rate EBITDA from recent acquisitions, this latest dividend causes leverage on a pro forma basis at December 31, 2018 to land in the mid 8-times range, which is well-outside the triggers set to maintain the B2 rating," continued O'Shea. Downgrades: Issuer: Mister Car Wash Holdings, Inc. Probability of Default Rating, Downgraded to B3-PD from B2-PD Corporate Family Rating, Downgraded to B3 from B2 Assignments: Issuer: Mister Car Wash Holdings, Inc. Gtd. Senior Secured Bank Credit Facility, Assigned B2 (LGD3) Outlook Actions: Issuer: Mister Car Wash Holdings, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Mister Car Wash's B3 Corporate Family Rating considers its debt-financed acquisition strategy, which results in periodic spikes in leverage, and its aggressive sponsor-driven financial policy. Ratings also consider its solid operating performance driven by consistent positive same store sales, its history of successful growth through acquisitions, as well as the significant portion of revenues generated from its unlimited wash subscription business. In addition, the rating reflects the company's strong market position in the largely fragmented car wash sub-segment, which despite its limited scope is considered by Moody's to be an asset given its strength in its chosen markets. With this refinancing, liquidity is improved, with the upsized $75 million revolver buttressed by the $40 million delayed draw term loan, though Moody's notes that given the company's increased cash requirements, particularly interest expense, the liquidity cushion is marginal. Mister Car Wash's rating is constrained by its weak credit metrics profile, with estimated pro-forma debt/EBITDA in the mid 8-times range and EBIT/interest of 1.1 times for the twelve months period ended December 2018, after giving credit for the run-rate EBITDA from recent acquisitions. The stable outlook reflects the company's strong operating performance and the expectation that the company will continue executing its acquisition strategy prudently with minimal disruption both operationally and financially. The stable outlook also reflects the expectation that leverage will decline towards 7.5 times in the next 12-18 months driven by continued earnings growth and modest debt reduction. Ratings could be upgraded if on a run-rate basis debt/EBITDA was sustained below 6.5 times, and EBIT/interest was around 1.5 times. In addition, an upgrade would require financial policies with respect to shareholder distributions to become more predictable and the company to maintain at least adequate liquidity. Ratings could be downgraded if operating performance deteriorates or further debt-financed shareholder distributions occur such that on a run-rate basis debt/EBITDA is above 7.5 times and EBIT/interest falls below 1.0 times. In addition, ratings could be downgraded if liquidity deteriorates for any reason. Mister Car Wash, headquartered in Tucson, Arizona, is the largest operator of car washes in North America, operating 300 car washes and 32 lube locations across 21 U.S. states with FY 2018 revenue of just over $500 million. MUSCLEPHARM CORP: Hires Former General Electric Executive as COO ---------------------------------------------------------------- MusclePharm Corporation has appointed Alberto Andrade as the Company's chief operating officer beginning on April 30, 2019. Mr. Andrade joins MusclePharm from Juanita's Foods, the market leader in Mexican canned foods where he was CFO and vice president of Strategic Sourcing. In this role, he successfully led numerous business improvement initiatives resulting in multi-million-dollar savings and operating efficiencies. Mr. Andrade has held various corporate leadership positions with General Electric, Spectrum Brands, Home Depot and Anderson Seafoods. Mr. Andrade brings with him the Fortune 50 sophistication, with the practical hands-on leadership of smaller company environments supported with an MBA (Finance), CPA, Certified Six Sigma Green Belt and ISO-9000 certification. "After an extensive executive search process, I couldn't be more pleased with the appointment of Alberto as Chief Operating Officer," said Ryan Drexler, chairman, CEO and president of MusclePharm. "With Alberto's 20+ years of strategic process implementation, business optimization and cost efficiency expertise, his addition will contribute significantly as MusclePharm continues to position itself for sustainable and profitable growth." On April 10, 2019, the Company entered into an offer letter agreement with Mr. Andrade. Pursuant to the Offer Letter, Mr. Andrade will report to Ryan Drexler, the Company's chief executive officer and executive chairman of the Company's Board of Directors. The Offer Letter does not provide for a specified term of employment, and Mr. Andrade's employment will be on an at-will basis and may be terminated by Mr. Andrade or by the Company at any time, with or without cause. Mr. Andrade will receive an annual base salary of $350,000 and will be part of the Company's bonus program with a yearly bonus potential of $245,000 based on the achievement of mutually agreeable objectives to be determined by Mr. Andrade and his supervisor. Additionally, Mr. Andrade will receive (i) a $30,000 one-time signing bonus, (ii) an extended stay housing allowance of up to $2,000 per month for a period of six months, (iii) a car allowance of $500 per month, (iv) reimbursement for all eligible business travel expenses and (iv) if Mr. Andrade is terminated without good cause for the benefit of the Company, a severance package dependent on the length of employment at the time of termination, as described in the Offer Letter. Mr. Andrade will also be eligible to participate in the Company's standard benefits package, including a 401(k) retirement account and health, dental, vision and life and disability insurance. About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTCQB:MSLP) -- http://www.musclepharm.com/and http://www.musclepharmcorp.com/-- develops, manufactures, markets and distributes branded nutritional supplements. Its portfolio of recognized brands includes MusclePharm Sport Series, Essential Series and FitMiss, as well as Natural Series, which was launched in 2017. These products are available in more than 100 countries worldwide. MusclePharm is an innovator in the sports nutrition industry with clinically proven supplements that are developed through a six-stage research process utilizing the expertise of leading nutritional scientists, physicians and universities. MusclePharm incurred a net loss of $10.97 million in 2017 compared to a net loss of $3.47 million in 2016. As of Sept. 30, 2018, the Company had $28.34 million in total assets, $45.82 million in total liabilities, and a total stockholders' deficit of $17.47 million. NANOMECH INC: May 6 Meeting Set to Form Creditors' Panel -------------------------------------------------------- Andy Vara, United States Trustee, for Region 3, will hold an organizational meeting on May 6, 2019, at 12:00 p.m. in the bankruptcy case of NanoMech, Inc. The meeting will be held at: Delaware State Bar Association 405 King Street, 2nd Floor Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About NanoMech Inc. NanoMech, Inc., an ISO 9001:2015 certified organization, is focused on patented platform nanomanufacturing technologies. It is a privately held company formed in 2002. NanoMech filed a voluntary Chapter 11 petition (Bankr. D. Del. Case No. 19-10851) on April 15, 2019. In the petition signed by Benjamin Waisbren, chief restructuring officer, the Debtor estimated $10 million to $50 million in both assets and liabilities. The Debtors tapped Winston & Strawn LLP as general bankruptcy counsel; Gellert Scali Busenkell & Brown, LLC as bankruptcy co-counsel; and Virtually There LLC as restructuring advisor. The case has been assigned to Judge Christopher S. Sontchi. NBM US: Fitch Rates Proposed 7-Year Senior Unsecured Notes 'BB-' ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to NBM US Holdings, Inc.'s proposed 7-year benchmark-sized senior unsecured notes. NBM US Holdings is a wholly-owned subsidiary of Marfrig Global food S.A. The notes are also unconditionally and irrevocably guaranteed by Marfrig, MARB BondCo PLC, Marfrig Holdings (Europe) B.V. and Marfrig Overseas Limited. The notes will be unsecured senior obligations and will rank pari passu with all unsecured and unsubordinated obligations of Marfrig and the subsidiaries guarantors. The proceeds are expected to be used to refinance existing indebtedness including existing notes due in 2021 and 2023. KEY RATING DRIVERS Evolving Business Profile: Marfrig divested Keystone to Tyson Foods, Inc (BBB/Stable) for a total enterprise value of USD2.4 billion at the end of 2018. The Keystone divestment came on the heels of Marfrig's acquisition of 51% of National Beef Packing Company, LLC for USD969 million in June 2018. Through these transactions Marfrig has increased its exposure to beef, however, some of the risks related to a single commodity are offset by the lack of historical correlation between the U.S. and Brazilian cattle cycles. Further, Marfrig will own 51% of much larger National Beef versus 100% of Keystone, and although National Beef's EBITDA will be consolidated 100%, there will be cash flow leakage due to substantial minority interests. The impact of this leakage on cash flow will be somewhat offset by lower capital expenditure needs at National Beef. Gradual Deleveraging: Fitch estimated that pro forma adjusted net debt/ EBITDA (excluding minority dividends) was about 3.5x in 2018 compared to 5.1x as of fiscal year-end 2017 (FYE17). Fitch expects Marfrig's net leverage to be below 3.5x in 2019 as a result of improved EBITDA due to positive domestic consumption in the USA and Brazil and the reopening of export markets. On February 8, 2019, Uruguay and Japan entered into a sanitary agreement that authorized exports of fresh beef between the two countries, which will benefit Marfrig, as it is the largest beef exporter in Uruguay. The company also made some bolt-on acquisitions in early 2019 which included Quickfood in Argentina (USD54.9 million), Varzea Grande from BRF in Brazil (BRL100 million) and Iowa Premium LLC (USD150 million) in the US. Product Concentration: While helping the company achieve its credit leverage targets, the sale of Keystone increased the company's product concentration and therefore business risk, as Keystone provided relatively stable cash flow as most of its sales were processed poultry products sold to McDonalds in the U.S.; the company is now a pure beef player with a processing capacity of 33,500 head/day. National Beef is the fourth largest beef processor in the United States with approximately 13% of the beef processing capacity in the U.S. (12,000 head/day). In South America business, Marfrig is one of the region's leading beef producers, with a primary processing capacity of over 21,000 head/day. Geographical diversification: Marfrig's ratings incorporate the company's geographic diversification in the volatile protein commodity industry. Fitch estimated that National Beef represented about 60% of the group EBITDA and the remaining in South America (mostly in Brazil). The geographic diversification helps to decrease risks related to disease and currency fluctuation. In addition, most of beef produced by National Beef is consumed in the U.S. and a small part exported to Japan and South Korea, which reduces the risks of tariffs and quotas faced by the company's operations in South America. Favorable Beef Outlook: Marfrig's competitive advantages stem from a favorable environment to raise cattle in Brazil and the U.S., the large scale of operations, access to exports markets from Brazil and the U.S. and long-term relationship with farmers, customers, and distributors. Global beef fundamentals are expected to remain positive in the next couple years for Brazilian and U.S. producers due to increased demand and better cattle availability. U.S. beef production is forecast to grow by nearly 2% in 2019 according to the USDA. In exports, Brazil and Argentina are poised to remain top suppliers to China as the country makes a concerted effort to boost its beef supplies as pork production will be hindered by disease issues. Among the significant industry risks are a downturn in the economy of a given export market, the imposition of increased tariffs or sanitary barriers, and strikes or other events that may affect the availability of ports and transportation. DERIVATION SUMMARY Marfrig ratings reflect its solid business profile and geographic diversification as a pure play in the beef industry with a large presence in South America (notably Brazil) and in the U.S. with National Beef. Marfrig is well positioned to compete in the global protein industry due to its size and geographic diversification. The business compares favorably regarding size with its regional peer Minerva S.A. (BB-/Stable), which is mainly a beef processor in South America. JBS S.A. (BB-/Stable) and Tyson Foods (BBB/Stable) enjoy a higher level of scale of operations, stronger FCF, and higher product and geographical diversification than Marfrig. JBS's rating is constrained by ongoing litigation issues. Regarding net leverage, Marfrig compares favorably to Minerva (BB-). Marfrig's leverage is higher than Tyson's. Marfrig is subject to a put option from minorities' shareholders. The put option related to National Beef could be exercised in January 2023 (payable one-third each year). The put option would be accelerated in the event of a change in control of Marfrig Global Foods S.A. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Sales are driven by positive consumer demand in the U.S. and Brazil; - Bolt-on acquisitions - Adjusted Net debt/ EBITDA below 3.5x in 2019; RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Sustainable and positive FCF; -- Improved and resilient operating margins in Marfrig Beef; -- Substantial decrease in gross and adjusted net Debt/ EBITDA (excl.dividends paid to minorities) to below 4.5x and 3.0x, respectively, on a sustained basis. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Negative FCF on a sustained basis; -- Net leverage above 4.5x on a sustainable basis. LIQUIDITY Adequate Liquidity: As of Dec. 30, 2018, Marfrig had USD1.85 Billion of cash and cash equivalent compared to USD946 million of short-term debt. The short-term debt is mainly related to the 2019 senior unsecured notes (USD0.5 billion) and trade finance lines. FULL LIST OF RATING ACTIONS Fitch currently rates Marfrig as follows: Marfrig Global Foods S.A. -- Long-Term Foreign and Local Currency IDR 'BB-'; -- National Long-Term Rating 'A(bra)'. The Rating Outlook is Stable. Marfrig Holdings (Europe) B.V. -- Senior unsecured notes due 2019, 2021, 2023 'BB-'. MARB BondCo PLC -- Senior unsecured notes due 2024 and 2025 'BB-'. NBM US Holdings, Inc Fitch has assigned a 'BB-' rating to the proposed senior unsecured notes guaranteed by Marfrig Global Food S.A. NEW START INCORPORATED: Hires Quintairos as Special Counsel ----------------------------------------------------------- A New Start Incorporated, seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Quintairos Prieto Wood & Boyer, P.A., as special counsel to the Debtor. New Start Incorporated requires Quintairos to: (a) give advice and counsel to the Debtor with respect to legal strategy, settlement posture or as is otherwise needed in connection with the lawsuit; (b) prepare motions, pleadings, orders, applications, and other legal documents necessary in the case; (c) protect the interest of the Debtor in all matters pending before the court; (d) take any and all action necessary to adequately enforce and defend the rights of the estate insofar as it is connected to the pending litigation Living Tree Laboratories, LLC v. United Healthcare Service, Inc. et al (Southern District of Florida, Case No.: 1:16-cv-24680- DPG). Quintairos will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Philip J. Kantor, partner of Quintairos Prieto Wood & Boyer, P.A., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Quintairos can be reached at: Philip J. Kantor, Esq. QUINTAIROS PRIETO WOOD & BOYER, P.A. One East Broward Boulevard, Suite 1200 Fort Lauderdale, FL 33301 Tel: (954) 523-7008 About A New Start Incorporated A New Start Incorporated -- https://anewstartincfl.com/ -- is a treatment center in Palm Beach County, Florida, providing outpatient treatment for substance abuse and chemical dependency disorders in adult clients. An outpatient program allows clients to continue working or attending school while receiving treatment and support from the company's program and team of specialists. A New Start Incorporated filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 19-13294) on March 14, 2019. In the petition signed by Eugene Sullivan, CEO, the Debtor estimated $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. The case is assigned to Judge Erik P. Kimball. Angelo A. Gasparri, Esq., at Law Office Angelo A. Gasparri, is the Debtor's counsel. NORTHERN POWER: Disposes of US Service Business ----------------------------------------------- Northern Power Systems Corp, through its wholly owned subsidiary, Northern Power Systems, Inc., had executed an Asset Purchase Agreement with Erie Renewables, Inc. pursuant to which Erie acquired the assets relating to NPS's US Service Business. At closing, (i) Erie hired two NPS employees and (ii) NPS received proceeds of approximately $230,000, subject to transactional off-sets of $123,709. In connection with this transaction, NPS made a payment to Comerica of $106,290 leaving an aggregate amount of $193,709 due and payable to Comerica by NPS under that certain Amended and Restated Loan and Security Agreement by and between NPS and Comerica dated Dec. 31, 2013 and as amended. The Company is a guarantor of NPS's obligations under the Loan. In addition, on April 25, 2019, Richard Hokin, a member of the Board of Directors of the Company provided the Board with a notice of his resignation from the Board, effective immediately. Following Mr. Hokin's resignation, the Company has a Board of Directors consisting of one person. On Feb. 7, 2019, NPS entered into the Second Amended and Restated Forbearance Agreement by and between Comerica Bank and NPS, Inc. On May 29, 2018, Comerica informed NPS that NPS was not currently in compliance with two covenants under that certain Loan. Ultimately, Comerica and NPS entered into (i) a Forbearance Agreement dated Aug. 2, 2018 which the Company previously disclosed on a Form 8-K dated Aug. 2, 2018 and an Amended and Restated Forbearance Agreement dated Nov. 30, 2018 which the Company previously disclosed on a Form 8-K dated Dec. 4, 2018. The Amended Forbearance Agreement amends and restates the Forbearance Agreement. As of April 1, 2019, NPS is in breach of its obligations under the Amended Forbearance Agreement and Comerica may immediately call the Loan. Further, Comerica has demanded NPS pay-off the Loan in its entirety as of April 30, 2019. NPS will be unable to fully discharge its obligations to Comerica under the Loan by April 30, 2019. However, in connection with the disposition of NPS's US Service Business described in above, NPS did make a payment to Comerica of $106,290 leaving an aggregate amount of $193,709 due and payable to Comerica by NPS under the Loan. Continued and prolonged cash constraints, the on-going breach of the Amended Forbearance Agreement with Comerica, the current lack of accessible commercial loans or other financing, and the continued delay in the implementation of a new Feed in Tariff in Italy with respect to distributed wind have significantly strained the Company operationally, commercially and financially. Further, the Company continues to explore all strategic alternatives and transactions for Company, including the sale of the business or some or all of its assets and business lines including its distributed wind and Italian service business segments. The Company said it is uncertain if its efforts (i) to address its cash constraints and its legal difficulties with Comerica and/or (ii) to effect one or more strategic transactions will be successful. Even if the Company is successful in identifying and completing a strategic transaction, the likelihood of any economic return to the equity owners of the Company at this point is remote. About Northern Power Systems Northern Power Systems -- http://www.northernpower.com/-- designs, manufactures, and sells distributed power generation and energy storage solutions with its advanced wind turbines, inverters, controls, and integration services. With approximately 21 million run-time hours across its global fleet, Northern Power wind turbines provide customers with clean, cost-effective, reliable renewable energy. NPS turbines utilize patented permanent magnet direct drive (PMDD) technology, which uses fewer moving parts, delivers higher energy capture, and provides increased reliability thanks to reduced maintenance and downtime. Northern Power also develops Energy Storage Solutions (ESS) based on the FlexPhase power converter platform, which features patented converter architecture and controls technology for advanced grid support and generation applications. Northern Power reported net income of $59,000 for the year ended Dec. 31, 2017, compared to a net loss of $8.94 million for the year ended Dec. 31, 2016. As of June 30, 2018, Norther Power had $8.92 million in total assets, $13.90 million in total liabilities and a total shareholders' deficiency of $4.97 million. RSM US LLP, in Boston, Massachusetts, 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 suffered recurring cash losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. ORCHIDS PAPER: Orchids Investments Offers $176M for All Assets -------------------------------------------------------------- Orchids Paper Products Co., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize the bidding procedures in connection with the sale of substantially all their assets to Orchids Investments, LLC for $175 million credit bid, plus $500,000 cash, plus assumption of liabilities, subject to overbid. Concurrently with the filing of the Motion, the Debtors have requested procedural consolidation and joint administration of the Chapter 11 Cases pursuant to Bankruptcy Rule 1015(b). Subject to their right to determine an alternative course of action is preferable, the Debtors intend to sell the Assets in the Chapter 11 Cases and the DIP Lender and the Prepetition Secured Parties have, subject to certain conditions, agreed to provide financing and to allow their cash collateral to be used to fund the Chapter 11 Cases and the potential sale. However, given the Debtors' lack of liquidity, they need to complete the sale process as expeditiously as possible. By the Motion, first the Debtors ask entry of the Bid Procedures Order: (a) authorizing and approving the Bid Procedures attached to the Bid Procedures Order as Exhibit 1 in connection with the sale of substantially all of the Debtors' assets; (b) scheduling an auction and sale hearing with respect to the Sale of the Assets; (c) approving the form and manner of notice of the Auction and the Sale Hearing; (d) authorizing the Debtors to enter into (i) that certain Asset Purchase Agreement with Orchids Investments, LLC, pursuant to which the Stalking Horse Bidder seeks to purchase the Acquired Assets from the Debtors pursuant to a credit bid and other consideration as set forth therein and (ii) that certain Option Agreement with the Stalking Horse Bidder, pursuant to which the Stalking Horse Bidder granted the Debtors the option, but not the obligation, to enter into the Stalking Horse Agreement in exchange for certain bid protections; (e) approving certain bid protections as set forth in the Option Agreement, consisting of: (i) a break-up fee equal to 3% of the Purchase Price of $5.25 million; (iii) reimbursement of the Stalking Horse Bidder's out of pocket costs, expenses, and fees incurred in connection with evaluating, negotiating, documenting and performing the transactions contemplated by the Option Agreement and the Stalking Horse Agreement in an amount equal to the lesser of (i) $2 million, and (ii) the aggregate amount of all reasonable and documented out of pocket costs, expenses and fees incurred by the Stalking Horse Bidder or those of the Stalking Horse Bidder's subsidiaries that will receive title to any Acquired Assets pursuant to the transactions contemplated by the Stalking Horse Agreement; and (iii) an initial overbid of up to $7.75 million, consisting of the sum of the Break-Up Fee, the Expense Reimbursement and $500,000. (f) approving procedures for the assumption and assignment of certain executory contracts and unexpired leases in connection with the Sale; and (g) granting related relief. Second, the Debtors may ask entry of the Sale Order at the conclusion of the Sale Hearing: (a) authorizing and approving the Sale of the Assets to the Successful Bidder on the terms substantially set forth in the Successful Bid free and clear of liens, claims, encumbrances, and other interests other than Permitted Encumbrances and Assumed Liabilities; (b) authorizing the assumption and assignment of the Contracts; and (c) granting any related relief. The Debtors reserve the right to file and serve any supplemental pleading or declaration that the Debtors deem appropriate or necessary in their reasonable business judgment, including any pleading summarizing the competitive bidding and sale process and the results thereof, in support of their request for entry of the Sale Order before the Sale Hearing. The key terms of the proposed transaction can be found in the Stalking Horse Agreement, the salient terms of which are: a. Purchase Price: (a) Subject to the terms and conditions of the Agreement, in consideration of the sale of the Acquired Assets pursuant to the terms thereof, the Purchaser will (i) credit the amount of principal due under the Loans due under the Prepetition Credit Agreements, pursuant to a credit bid in the amount of $175 million, in its capacity as Prepetition Secured; and (ii) credit an amount up to the amount outstanding under the DIP Facility at Closing, pursuant to a credit bid by Purchaser in its capacity as DIP Lender; provided, that the portion of the Loans that is not credit bid as part of the Purchase Price will remain a Claim in the Chapter 11 Cases, (iii) assume from the Sellers and become obligated to pay, perform and discharge, when due, the Assumed Liabilities, (iv) pay to the Sellers an amount of cash equal to the amount outstanding under the DIP Facility at Closing (after taking into account any credit bid); and (v) a cash payment to Orchids of $500,000 at the Closing, which will be deposited into a segregated Orchids bank account for distribution therefrom. b. Assumed Liabilities: The Purchaser will assume, and agree to pay, perform, fulfill and discharge only the Assumed Liabilitie of the Sellers. c. Sale Hearing: Not prior to June 12, 2019 d. Closing: Aug. 16, 2019 e. Relief from Bankruptcy Rule 6004(h): The Sale Order (i) will have been entered by the Bankruptcy Court, and (ii) will not have been appealed or be subject to any pending appeal as of the Closing Date, and no stay with respect thereto (including any stay under Bankruptcy Rule 6004(h)) will be in effect as of the Closing Date. The Debtors believe a prompt sale of the Assets may represent the best option available to maximize value for all stakeholders in these Chapter 11 Cases. Moreover, it is critical for them to execute on any sale transaction as expeditiously as possible, as the they are utilizing the DIP Lender's and the Prepetition Secured Lender's cash collateral and additional financing in order to explore the sale process. Therefore, time is of the essence. By the Motion, the Debtors ask the Court to approve the following general timeline, with the assumption the Bankruptcy Court will enter an order granting the Motion on shortened notice. These dates are subject to change in the event the Bankruptcy Court does not enter an order at that hearing: (a) Contract Cure Objection Deadline: Objections to the potential assumption and assignment of any Contract, including proposed cure amounts, will be filed and served no later than May 31, 2019 at 4:00 p.m. (ET). (b) Bid Deadline: Bids for the Assets, including a marked-up form of the Stalking Horse Agreement, as well as the deposit and the other requirements for a bid to be considered a Qualified Bid must be received by no later than June 6, 2019 at 4:00 p.m. (ET) or such later date as may be agreed to by the Debtors. (c) Auction: The Auction, if necessary, will be held at the offices of Polsinelli PC, 222 Delaware Avenue, Suite 1101, Wilmington, Delaware 19801 on June 10, 2019 at 10:00 a.m. (ET), or such other location as identified by the Debtors after notice to all Qualified Bidders. (d) Sale Objection Deadline: Objections to the Sale will be filed and served no later than 4:00 p.m. (ET) on June 5, 2019. (e) Sale Hearing: Consistent with the Court's availability and schedule, the Sale Hearing will commence on June 12, 2019. The salient terms of the Bidding Procedures are: a. Bid Deadline: June 6, 2019 at 4:00 p.m. (ET) b. Initial Bid: Each Bid or combination of Bids must be for all of the Assets and will clearly show the amount of the purchase price. In addition, a Bid or combination of Bids (a) must propose a purchase price equal to or greater than the sum of (i) the value of the Stalking Horse Agreement, as determined by the Debtors in consultation with the Creditors' Committee; and (ii) an initial overbid of up to $7.75 million, consisting of the sum of the Break-Up Fee, the Expense Reimbursement and $500,000, and (b) must obligate theBidder(s) to pay, to the extent provided in the Agreement, all amounts which the Stalking Horse Bidder under the Agreement has agreed to pay, including any assumed liabilities. c. Deposit: 7% of the Bid's proposed cash purchase price d. Auction: The Auction, if necessary, will be held at the offices of Polsinelli PC, 222 Delaware Avenue, Suite 1101, Wilmington, Delaware 19801 on June 10, 2019 at 10:00 a.m. (ET), or such other location as identified by the Debtors after notice to all Qualified Bidders. e. Bid Increments: $500,000 A copy of the Bidding Procedures and APA attached to the Motion is available for free at: http://bankrupt.com/misc/Orchids_Paper_25_Sales.pdf About Orchids Paper Products Company Headquartered in Pryor, Oklahoma, Orchids Paper Products Company -- http://www.orchidspaper.com/-- is a national supplier of consumer tissue products primarily serving the at home private label consumer market. The Company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins, to serve the value through ultra-premium quality market segments from its operations in northeast Oklahoma, Barnwell, South Carolina and Mexicali, Mexico. The Company provides these products primarily to retail chains throughout the United States. Orchids Paper Products Company and two of its subsidiaries filed for bankruptcy protection (Bankr. D.Del., Lead Case No. 19-10729) on April 1, 2019. The petitions were signed by Richard S. Infantino, interim chief strategy officer. As of Feb. 28, 2019, the Debtors posted total assets $322,061,000 and total debt of $260,864,000. Hon. Mary F. Walrath oversees the cases. The Debtors tapped Polsinelli PC as counsel; Deloitte Transactions And Business Analytics LLP as chief strategy officer; Houlihan Lokey Capital, Inc., as investment banker; and Prime Clerk LLC as claims and notice agent. ORIGINCLEAR INC: Liggett & Webb, P.A. Raises Going Concern Doubt ---------------------------------------------------------------- OriginClear, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $11,346,569 on $4,637,698 of sales for the year ended Dec. 31, 2018, compared to a net loss of $5,231,805 on $3,355,632 of sales for the year ended in 2017. The audit report of Liggett & Webb, P.A., states that the Company does not generate significant revenue, incurred a net loss and has negative cash flows from operations. This raises substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2018, showed total assets of $1,359,605, total liabilities of $16,241,135, and a total shareholders' deficit of $16,624,530. A copy of the Form 10-K is available at: https://is.gd/RFtuin OriginClear, Inc., provides water treatment solutions. The company licenses its Electro Water Separation technology worldwide to treat heavily polluted waters, as well as to remove harmful micro-contaminants from drinking water using minimal energy, chemicals, and materials. It also designs and manufactures a line of water treatment systems for municipal, industrial, and pure water applications. In addition, the company offers a range of services, including maintenance contracts, retrofits, and replacement assistance; and rents equipment through contracts of varying duration, as well as provides prefabricated wastewater treatment products. It operates in the United States, Canada, Japan, Argentina, and the Middle East. The company was formerly known as OriginOil, Inc. and changed its name to OriginClear, Inc. in April 2015. OriginClear was founded in 2007 and is headquartered in Los Angeles, California. PARTNERSHIPS TO UPLIFT: S&P Raises 2014A Rev. Bonds Rating to 'BB' ------------------------------------------------------------------ S&P Global Ratings raised its long-term rating on the California School Finance Authority's series 2014A tax-exempt educational facilities revenues bonds, issued for the Partnerships to Uplift Communities (PUC), to 'BB' from 'BB-'. S&P also removed the rating from CreditWatch, where it was placed with developing implications on Jan. 20, 2019. The rating agency resolved the CreditWatch action after receiving the required information. The outlook is stable. The upgrade reflects a change in the application of the group-rating methodology, published Nov. 19, 2013, on RatingsDirect. "In prior years, we viewed the 2014 obligated group's status as highly strategic to the PUC organization as a whole," said S&P credit analyst Luke Gildner. "In our opinion, the obligated group size based on enrollment and assets is considered a significant portion of the overall consolidated entity, and therefore qualifies as core status. Therefore, the obligated group's final credit rating is on par with the consolidated entity." Financial metrics cited in the report (unless otherwise indicated) reflect those of Partnerships to Uplift Communities Valley, Partnerships to Uplift Communities Los Angeles, and Partnerships to Uplift Communities Lakeview Terrace (PUC). The rating analysis encompasses all schools in PUC Lakeview Terrace, PUC LA, and PUC Valley, but does not include operations of PUC National (which provides all the back-office services for the schools), nor PUC Achieve in Rochester, N.Y. S&P understands PUC National and PUC Achieve are separate entities with separate boards and audits, and limited overlap in membership with other PUC entities. Effective July 1, 2018, PUC Achieve was turned over to local control and is no longer a PUC school. PUC National essentially operates as a charter management organization to each PUC school and operates under annual service agreements that are reviewed annually by each PUC entity. Revenue from three of PUC's 15 schools authorized under 12 petitions secures the 2014 bonds and include PUC Triumph Charter Academy and High School, PUC Lakeview Charter High School, and PUC Nueva Esperanza Charter Academy (2014 obligated group). "We assessed PUC's enterprise profile as adequate, characterized by its healthy enrollment size and growth, solid retention rates, and diverse enrollment base with 15 schools in three regions in Los Angeles. Recent enrollment declines due primarily to two school closures constrains the enterprise profile assessment," S&P said. "We assessed PUC's financial profile as vulnerable, characterized by weak liquidity, and volatile financial performance. We believe recent improvements in the organization's financial performance will be difficult to sustain over the near term due to enrollment declines in fiscal 2019," S&P said. Combined, these credit factors lead to an indicative credit profile for PUC of 'bb' and a final rating on the 2014 bonds of 'BB', according to the rating agency. PASCO COUNTY FIREFIGHTERS: Trustee Unable to Appoint Committee -------------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Pasco County Professional Firefighters Local 4420, according to court dockets. About Pasco County Professional Firefighters Local 4420 Pasco County Professional Firefighters Local 4420 sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-02963) on April 1, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of less than $500,000. The case has been assigned to Judge Catherine Peek Mcewen. ChildersLaw LLC is the Debtor's legal counsel. PAUL F. SMITH: Taps Gary Cook as Bankruptcy Attorney ---------------------------------------------------- Paul F. Smith Jr., DDS, Inc., received approval from the U.S. Bankruptcy Court for the Northern District of Ohio to hire Gary Cook, Esq. as its legal counsel. Mr. Cook will advise the Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The Debtor will pay the attorney an hourly fee of $200. Mr. Cook disclosed in court filings that he does not hold nor represent any interest adverse to the Debtor and its bankruptcy estate. Mr. Cook maintains an office at: Gary Cook, Esq. 23880 Commerce Park, Suite 2 Beachwood, OH 44122 Cell: 216-965-4410 Email: gcookesq@yahoo.com About Paul F. Smith, Jr. D.D.S. Paul F. Smith, Jr. D.D.S., Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 19-11251) on March 8, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $1 million. The case is assigned to Judge Arthur I. Harris. The Debtor tapped Gary Cook, Esq., as its bankruptcy attorney. PCI GAMING: Moody's Assigns First-Time Ba3 CFR, Outlook Stable -------------------------------------------------------------- Moody's Investors Service assigned a first-time Ba3 Corporate Family Rating and a Ba3-PD Probability of Default Rating to PCI Gaming Authority. Moody's also assigned a Ba3 rating to the company's proposed $1.4 billion first lien bank credit facilities consisting of a $100 million 5-year revolving credit facility and a 7-year $1.3 billion term loan. The outlook is stable. The ratings are subject to receipt and review of final documentation. Proceeds from the proposed $1.3 billion first lien term loan along with $150 million of cash will be used to fund the $1.3 billion purchase of the Sands Bethlehem casino property in Bethlehem, PA and to pre-fund capital expenditures associated with development and expansion of the property. PCI, d/b/a Wind Creek Hospitality, is an unincorporated instrumentality of The Poarch Bank of Creek Indians, the only federally recognized Indian Tribe in Alabama. The Restricted Group includes the company's three facilities located in Alabama and the to be acquired Sands Bethlehem located in Pennsylvania. "The Ba3 CFR reflects the high acquisition multiple paid for Sands Bethlehem, small equity contribution relative to the purchase price, and execution risk associated with PCI's entry into the highly competitive Pennsylvania commercial gaming market, said Moody's analyst Peggy Holloway. "PCI benefits from good liquidity, solid interest coverage, and below average leverage," added Holloway. Assignments: Issuer: PCI Gaming Authority Probability of Default Rating, Assigned Ba3-PD Corporate Family Rating, Assigned Ba3 Senior Secured Term Loan, Assigned Ba3 (LGD4) Senior Secured Revolving Credit Facility, Assigned Ba3 (LGD4) Outlook Actions: Issuer: PCI Gaming Authority Outlook, Stable RATINGS RATIONALE PCI's Ba3 Corporate Family Rating reflects the high multiple paid (10.5x LTM EBITDA) for Sands Bethlehem, small equity contribution supporting the purchase (11.3%), scale of the acquisition outside of the company's core Alabama market, and execution risk. In Alabama, only Class II gaming is allowed on Tribal lands, and so PCI does not have a track record operating in a highly competitive Class III gaming market such as Pennsylvania. After the acquisition, PCI will remain geographically concentrated in Alabama with more than 80% of pro-forma EBITDA generated by its three core Alabama properties. Cash needs include priority distributions ($62 million) to the Tribe which can be paid during default. The terms of the credit agreement also allows for additional distributions to the Tribe subject maximum total net leverage ratio, as defined in final documents. PCI benefits from a solid market position in the Alabama gaming market with three properties located within driving distance of the densely populated Atlanta, Birmingham, and/or Mobile metro areas and limited competition. Positive consideration is given to the company's good liquidity profile and conservative credit metrics with pro-forma debt/EBITDA-priority distributions to the Tribe of 2.6x and EBITDA-priority distributions/ interest coverage around 6x. Additionally, PCI is expected to generate around $300M in free cash flow after covering interest, capital spending, mandatory amortization, and priority distributions. PCI is likely to use the free cash flow for a combination of voluntary debt repayment and discretionary Tribal distributions. The Bethlehem casino's EBITDA will benefit modestly from PCI's plans to expand the property's hotel room capacity and develop non-gaming entertainment offerings. Ratings consider risks unique to Native American gaming issuers, which are largely a function of a tribe's status as a sovereign entity and include: (1) the high degree of uncertainty regarding the enforceability of claims; (2) the value of collateral; and (3) the effectiveness of a tribe's waiver of sovereign immunity, which if held to be ineffective, could prevent creditors from enforcing their rights and remedies. Since PCI will own a commercial asset located on non-tribal lands, the proposed term sheet includes a provision that would require lenders to seek remedies against the Tribe's commercial assets and forebear from exercising remedies against Tribal gaming operations during a default or event of default subject to paying interest, among other conditions. PCI Gaming Authority d/b/a Wind Creek Hospitality is an unincorporated instrumentality conducting gaming activities for the Poarch Band of Creek Indians. Poarch Creek is the only federally recognized Tribe in the state of Alabama and Wind Creek owns and operates the only authorized gaming facilities in Alabama. The company owns three locations in Montgomery, Wetumpka and Atmore all located on Tribal Lands. These three facilities and Sands Bethlehem comprise the restricted credit group. Estimated pro-forma revenues of the Restricted Group is approximately $1.3 billion. PETSMART INC: Moody's Alters Outlook on Caa1 CFR to Stable ---------------------------------------------------------- Moody's Investors Service changed PetSmart, Inc.'s outlook to stable from negative. Additionally, Moody's affirmed PetSmart's Corporate Family Rating and Probability of Default rating at Caa1 and Caa1-PD, respectively. Moody's also affirmed the rating of its senior secured term loan and senior secured notes at B3 and its senior unsecured notes at Caa3. "The stabilization of the outlook follows the recent amendment to the company's senior secured credit facility which removes the immediate risk of a distressed exchange and enhances the collateral value for lenders which would have been diluted had PetSmart been successful in its attempt to remove Chewy, Inc. as a guarantor without this amendment", Moody's Vice President Mickey Chadha stated. "We also expect credit metrics to improve in the next twelve months as the topline and margins stabilize, the company prepays $250 million of the term loan as required by the new amendment, and uses proceeds from the comtemplated IPO of Chewy to repay debt ", Chadha further stated. Affirmations: Issuer: PetSmart, Inc. Corporate Family Rating, Affirmed Caa1 Probability of Default Rating, Affirmed Caa1-PD Senior Secured Bank Credit Facility, Affirmed B3 (LGD3) Senior Secured Regular Bond/Debenture, Affirmed B3 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Caa3 (LGD5) Outlook Actions: Issuer: PetSmart, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE PetSmart's credit profile (Caa1 stable) reflects the company's weak credit metrics with lease adjusted debt/EBITDA of 8.2 times at February 3, 2019 with modest deleveraging to about 7.5 times expected over the next 12 months. Leverage was at 5.4 times prior to the acquisition of Chewy in 2017. Moody's still believes the acquisition of Chewy was a good strategic move by PetSmart as Chewy has exponentially increased its revenues and online penetration. However, as Chewy continues to grow its topline aggressively and incur customer acquisition costs, Moody's expects its operating losses to continue. More importantly, the increasingly competitive business environment particularly from e-commerce and mass retailers has led to increased promotional activity which has negatively impacted PetSmart's top line and margins. The rating also reflects PetSmart's position as the largest specialty retailer of pet food, supplies and services in the U.S., with a well-known brand and broad national footprint. PetSmart's sizeable services offering is a positive as it provides a defensible market position and is less vulnerable to e-commerce. The pet products industry in general remains relatively recession resilient, driven by factors such as the replenishment nature of consumables and services and increased pet ownership. The company's credit profile is supported by its very good liquidity. The rating also reflects concerns surrounding the private equity ownership which gives rise to event risk surrounding shareholder-friendly financial policies. The stable outlook reflects Moody's expectation that credit metrics will improve in the next 12 months and liquidity will remain very good. Sustained growth in revenue and profitability while demonstrating conservative financial policies, including the use of free cash flow for debt reduction, could lead to a ratings upgrade. Quantitatively, ratings could be upgraded if the company sustainably reduces debt/EBITDA to below 6.5 times and if EBIT/interest expense approaches 1.25 times while maintaining good overall liquidity. PetSmart's ratings could be downgraded if same store sales trends continue to deteriorate or if operating margins continue to erode, indicating that the company's industry or competitive profile continues to weaken. Ratings could also be downgraded if the company's financial policies were to become more aggressive, such as maintaining high leverage due to shareholder-friendly activities. Quantitatively, a ratings downgrade could occur if debt/EBITDA is sustained above 8.0 times or EBIT/interest is sustained below 1.0 times. The principal methodology used in these ratings was Retail Industry published in May 2018. PetSmart, Inc. is the largest specialty retailer of supplies, food, and services for household pets in the U.S. The company currently operates close to 1,660 stores in the U.S. and Canada. Revenues totaled 10.8 billion for fiscal year 2018. PetSmart also owns Chewy, a leading online retailer of pet food and products in the United States. PHARMACYTE BIOTECH: Accumulated Deficit Raises Going Concern Doubt ------------------------------------------------------------------ PharmaCyte Biotech, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $676,347 on $0 of revenue for the three months ended Jan. 31, 2019, compared to a net loss of $2,030,660 on $0 of revenue for the same period in 2018. At Jan. 31, 2019 the Company had total assets of $5,836,938, total liabilities of $471,243, and $5,365,695 in total stockholders' equity. As of Jan. 31, 2019, the Company has an accumulated deficit of $98,892,427 and incurred a net loss for the nine months ended Jan. 31, 2019 of $2,928,284. The Company requires substantial additional capital to finance its planned business operations and expects to incur operating losses in future periods due to the expenses related to the Company's core businesses. The Company has not realized any revenue since it commenced doing business in the biotechnology sector, and there can be no assurance that it will be successful in generating revenues in the future in this sector. These conditions raise substantial doubt about the Company's ability to continue as a going concern. For the nine months ended January 31, 2019, funding was provided by investors to maintain and expand the Company's operations. Sales of the Company's common stock were made under the Registration Statement on Form S-3 filed on September 13, 2017 ("S-3") allowing for offerings of up to $50 million dollars in transactions that are deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended ("Securities Act") or transactions structured as a public offering of a distinct block or blocks ("Block Trades") of the shares of the Company's common stock. During the nine-month period ending January 31, 2019, the Company continued to acquire funds through the Company's S-3 pursuant to which the placement agent sells shares of common stock in a program which is structured to provide up to $25 million dollars to the Company less certain commissions. From May 1, 2018 through January 31, 2019 the Company raised capital of approximately $1.9 million in Block Trade transactions. The Company plans to continue selling securities using the S-3. Also, the Company has the ability to reduce the research and development expenses significantly should further funding be delayed. Management determined that these plans alleviate substantial doubt about the Company's ability to continue as a going concern. The Company believes the cash on hand at January 31, 2019, the ability to use the S-3 to raise capital through at-the-market sales and Block Trades, sales of registered and unregistered shares of its common stock and any public offerings of common stock in which the Company may engage in will provide sufficient capital to meet the Company's capital requirements and to fund the Company's operations through March 30, 2020. A copy of the Form 10-Q is available at: https://is.gd/nw1qZm PharmaCyte Biotech, Inc., a clinical stage biotechnology company, focuses on developing and commercializing cellular therapies for cancer and diabetes in the United States. The Company was formerly known as Nuvilex, Inc., and changed its name to PharmaCyte Biotech in January 2015. PharmaCyte Biotech, Inc., was founded in 1996 and is based in Laguna Hills, California. PHOEBEN INC: $1.9M Sale of Substantially All Assets to Dothan OK'd ------------------------------------------------------------------ Judge Jeffrey P. Norman of the U.S. Bankruptcy Court for the Southern District of Texas authorized Phoeben, Inc.'s Asset Purchase Agreement, dated as of Feb. 26, 2019, with Dothan Jewelry Partners GP, LLC, in connection with the sale of substantially all assets to Dothan Jewelry Partners GP, LLC for (i) a cash in the amount of $1,902,000 and (ii) the Buyer's assumption of the Assumed Liabilities. The sale is free and clear of all liens, claims, encumbrances, and interests of any kind or nature whatsoever, and all such liens, claims, encumbrances, and interests will attach to the proceeds of the Sale. Notwithstanding anything to the contrary in the Order, the 2018 ad valorem taxes owed by the Debtor to Harris County due in the amount of $51,429 as of April 30, 2019, and any additional interest thereon accrued through Closing will attach to the sale proceeds and the Closing agent will pay the 2018 taxes immediately upon closing and prior to any disbursement of proceeds to any other person or entity. The ad valorem taxes for the tax year 2019 pertaining to the Purchased Assets will become the responsibility of the Buyer and the 2019 ad valorem tax liens will be retained against the Purchased Assets until said taxes, including any penalties and interest that may accrue, are paid in full. Pursuant to Sections 105(a), 363, and 365 of the Bankruptcy Code, the Debtor's assumption and assignment to the Buyer of the Assigned Contracts is approved, and the requirements of Section 365(b)(1) of the Bankruptcy Code with respect thereto are deemed satisfied. The Debtor will comply with its tax obligations under 28 U.S.C. Section 960, except to the extent that such obligations are Assumed Liabilities. About Phoeben, Inc. Based in Houston, Texas, Phoeben, Inc. -- https://www.armentacollection.com/ -- is manufacturer of bracelets, rings, necklaces, enhancers, earrings, and handbags. Phoeben, Inc., sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 19-31000) on Feb. 26, 2019. The case is assigned to Jeffrey P Norman. In the petition signed by CEO Emily Armenta, the Debtor estimated assets and liabilities in the range of $1 million to $10 million. The Debtor tapped Erin E. Jones, Esq., and Christopher R. Murray, Esq., at Jones Murphy & Beatty LLP, as counsel. PIONEER ENERGY: Incurs $15.1 Million Net Loss in First Quarter -------------------------------------------------------------- Pioneer Energy Services Corp. has filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $15.11 million on $146.56 million of revenues for the three months ended March 31, 2019, compared to a net loss of $11.13 million on $144.47 million of revenues for the three months ended March 31, 2018. As of March 31, 2019, the Company had $737.09 million in total assets, $586.12 million in total liabilities, and $150.96 million in total shareholders' equity. The increase in revenues from the prior quarter was primarily due to an increase across all of the Company's production services segments as operators resumed operations after temporarily slowing activity in the prior quarter as a result of lower commodity prices. Adjusted EBITDA decreased sequentially, primarily driven by the change in fair value of the Company's phantom stock awards, for which the Company recognized an expense of $0.8 million in the first quarter, while it recognized a benefit of $2.8 million in the prior quarter. The impact of the phantom stock expense was partially offset by improvement in both the coiled tubing and domestic drilling segments as well as $1.1 million of gains from the sale of certain assets, primarily spare coiled tubing equipment. Operating Results Production Services Business Revenue from the Company's production services business was $86.9 million in the first quarter, up 6% from the prior quarter. Gross margin as a percentage of revenue from the Company's production services business was 20% in the first quarter, up from 19% in the prior quarter. Both revenue and margin were positively impacted in all businesses as operators increased completion-related operations after a brief pause in activity in the prior quarter given instability in commodity prices. The increase in production services revenues from the prior quarter was attributable to improvements in all business segments, led by coiled tubing which benefited from the addition of a large diameter unit delivered late in the prior quarter. Wireline's completion-related activity stabilized over the prior quarter and well servicing gradually expanded its activity levels in both remedial and completion-related activity. Well servicing average revenue per hour was $558 in the first quarter, down from $571 in the prior quarter, while rig utilization was 54%, up from 50% in the prior quarter. Coiled tubing revenue days totaled 351 in the first quarter, as compared to 346 in the prior quarter. The number of wireline jobs completed in the first quarter decreased by 3% sequentially. Drilling Services Business Revenue from the Company's drilling services business was $59.7 million in the first quarter, reflecting a 1% increase from the prior quarter. Average margin per day was $10,349, down from $10,872 in the prior quarter. The Company's domestic drilling fleet was fully contracted during the current quarter and the prior quarter with average revenues per day of $26,767 in the first quarter, up from $25,794 in the prior quarter. Domestic drilling average margin per day was $10,944 in the first quarter, up from $10,252 in the prior quarter due to the full impact of rate increases effective during the prior quarter as well as a benefit of $0.3 million, or approximately $235 per day, from recognition of the early termination of a domestic drilling contract due to a customer's budget realignment, which had 34 days remaining on its term. After contract termination, the drilling rig mobilized from South Texas and resumed operations for a new client in West Texas. International drilling rig utilization was 81% for the first quarter, up from 71% in the prior quarter. Average revenues per day were $37,316, down from $41,230 in the prior quarter, while average margin per day for the first quarter was $8,894, down from $12,590 in the prior quarter. The decrease in revenue per day and margin per day was primarily due to the benefit of revenue items negotiated during the prior quarter and reversal of demobilization revenue in the first quarter as a contract that was previously expected to terminate was extended. Currently, 16 of the Company's 17 domestic drilling rigs are earning revenues, 13 of which are under term contracts, and seven of its eight rigs in Colombia are earning revenue under daywork contracts. Comments from our President and CEO "As oil prices have steadily improved in 2019 and customers have resumed activity, we are seeing stable demand for our drilling and production services," said Wm. Stacy Locke, president and chief executive officer. "We remain focused on achieving cash flow neutrality in 2019 as our capital spending program was more heavily weighted towards the first quarter, and our reduced spending program for the remainder of 2019 is primarily for routine capital expenditures. Also, we experienced a longer collection cycle in the first quarter, but we expect to improve our working capital position as we move forward through 2019. "In late March, we deployed our newest 1,500 horsepower, super-spec, new-build drilling rig, which began operations in West Texas on a three-year term contract. We believe our premium rigs are the best designed moving rigs in the market, helping customers continue to improve efficiency. By focusing on safety and performance with superior equipment, we have been able to generate industry-leading margins and have successfully extended the contract terms on several of our rigs. Our drilling services both domestically and in Colombia are benefiting from stable dayrates, extended contract coverage and solid customer demand. Internationally, the market outlook is currently strong, and we are having success extending contract coverage as our customers continue to have robust drilling programs through 2019. "Our production services business is experiencing healthy activity levels, although weather conditions in the Rockies negatively impacted our wireline business in February, and wildlife restrictions will impact activity in the Rockies in April and May. Customer demand for large diameter coiled tubing equipment contributed to a 16% increase in that segment's revenue in the first quarter as we benefited from the deployment of a large diameter unit at the end of the prior quarter. With commodity prices continuing to firm up, we expect improved activity levels for all business lines as we move through 2019." Second Quarter 2019 Guidance In the second quarter of 2019, revenue from our production services business segments is expected to be up 1% to 4% as compared to the first quarter of 2019. Margin from the Company's production services business is estimated to be 19% to 22% of revenue. Domestic drilling services rig utilization is expected to be 93% to 95% as one rig will be idle during the second quarter as it prepares to move to a new client in July, and generate average margins per day of approximately $9,700 to $10,200. International drilling services rig utilization is estimated to average 83% to 86%, and generate average margins per day of approximately $8,500 to $9,500. The Company expects general and administrative expense to be approximately $20.0 million to $21.0 million in the second quarter of 2019, which as it relates to phantom stock compensation expense, is based on the closing price of the Company's common stock of $1.77 per share at March 31, 2019. Liquidity Working capital at March 31, 2019 was $103.7 million, down from $110.3 million at Dec. 31, 2018. Cash and cash equivalents, including restricted cash, were $27.9 million, down from $54.6 million at year-end 2018. During the three months ended March 31, 2019, the Company used $16.8 million of cash for the purchase of property and equipment, and our cash used in operations was $10.8 million. Capital Expenditures Cash capital expenditures during the three months ended March 31, 2019 were $16.8 million, including capitalized interest. The Company estimates total cash capital expenditures for 2019 to be approximately $55 million to $60 million, which includes approximately $7 million for final payments on the construction of the new-build drilling rig that began operations in the first quarter, and previous commitments on high-pressure pump packages for coiled tubing completion operations. A full-text copy of the Form 10-Q is available for free at: https://is.gd/qDAtQL About Pioneer Energy Based in San Antonio, Texas, Pioneer Energy Services -- http://www.pioneeres.com/-- provides well servicing, wireline, and coiled tubing services to producers in the U.S. Gulf Coast, Mid-Continent and Rocky Mountain regions through its three production services business segments. Pioneer also provides contract land drilling services to oil and gas operators in Texas, the Mid-Continent and Appalachian regions and internationally in Colombia through its two drilling services business segments. Pioneer Energy reported a net loss of $49.01 million on $590.09 million of revenues for the year ended Dec. 31, 2018, compared to a net loss of $75.11 million on $446.45 million of revenues for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Pioneer Energy had $741.55 million in total assets, $576.49 million in total liabilities, and $165.05 million in total shareholders' equity. * * * Moody's Investors Service had upgraded Pioneer Energy Services' Corporate Family Rating to 'Caa2' from 'Caa3'. Moody's said that Pioneer's 'Caa2' CFR reflects the company's elevated debt balance pro forma for the $175 million senior secured term loan issuance. Moody's said that while the company's operating cash flow is expected to improve due to good demand for its drilling rigs and equipment services, Pioneer Energy Services' leverage metrics are weak, as reported by the Troubled Company Reporter on Nov. 13, 2017. As reported by the TCR on Jan. 25, 2019, S&P Global Ratings lowered the issuer credit rating on Pioneer Energy Services Corp. to 'CCC+' from 'B-'. S&P said, "The downgrade on Pioneer Energy Services Corp. primarily reflects what we believe to be increasing refinancing risk, as well as subdued expectations for operating results in 2019. PLAINVILLE LIVESTOCK: James Overcash Named Chapter 11 Trustee ------------------------------------------------------------- Robert E. Nugent of the U.S. Bankruptcy Court for the District of Kansas approved the appointment of James A. Overcash as the Chapter 11 Trustee for Plainville Livestock Commission, Inc. The approval was made following the United States Trustee’s application for an order approving the appointment of James A. Overcash for the Debtor. About Plainville Livestock Commission Plainville Livestock Commission, Inc. operates a livestock auction house in Kansas. It conducts a weekly cattle sale every Tuesday, selling all classes of cattle. Plainville Livestock Commission sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 19-10293) on March 1, 2019. At the time of the filing, the Debtor had estimated assets of less than $100,000 and liabilities of between $10 million and $50 million. The case has been assigned to Judge Robert E. Nugent. Hinkle Law Firm, LLC serves as the Debtor's bankruptcy counsel. PLAYPOWER INC: Moody's Cuts Ratings on 1st Lien Facilities to B3 ---------------------------------------------------------------- Moody's Investors Service affirmed PlayPower, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also downgraded its senior secured first lien credit facilities ratings to B3 from B2, and withdrew the rating on the previously proposed second lien term loan. The outlook is stable. This rating action follows PlayPower's revision to its proposed capital structure which now includes only first lien debt and a reduction in the proposed dividend. The proceeds from the new first lien credit facilities will be used to refinance all of the company's existing bank debt, fund a dividend to its private equity owners and pay transaction-related fees. The ratings of the existing first and second lien term loans and revolver will be withdrawn upon completion of the refinancing. The affirmation of the B3 CFR acknowledges that while PlayPower is raising a lower level of debt, debt-to-EBITDA will remain high at 5.7x. The one notch downgrade of the senior secured first lien credit facilities ratings to B3 reflects the company's revised capital structure, which now proposes an all first lien bank debt structure, and eliminates the loss absorption previously provided by the senior secured second lien term loan. The first lien debt, which includes a revolving credit facility and the upsized term loan, will represent the preponderance of the company's obligations following the proposed transaction. Moody's took the following rating actions on PlayPower, Inc.: Ratings Downgraded: Proposed Senior Secured First Lien Term Loan, to B3 (LGD4) from B2 (LGD3) Proposed Senior Secured First Lien Revolving Credit Facility, to B3 (LGD4) from B2 (LGD3) Ratings Withdrawn: Previously Proposed Senior Secured Second Lien Term Loan, Caa2 (LGD5) Ratings Affirmed: Corporate Family Rating, B3; Probability of Default Rating, B3-PD; Outlook, Remains Stable All ratings and the outlook are subject to the execution of the transaction as currently proposed and Moody's review of financial documentation. RATINGS RATIONALE PlayPower's B3 CFR broadly reflects the cyclical nature of its business as a manufacturer of commercial playground equipment, indoor play systems, shade structures, and marine accessories. PlayPower's products represent deferrable discretionary purchases exposing the company to sharp declines in earnings and cash flow during economic downturns. The rating also reflects an aggressive financial policy under private equity ownership and high financial leverage with pro forma debt to EBITDA of 5.7 times at December 31, 2018 (on Moody's adjusted basis). PlayPower's modest size limits its negotiating power with raw material suppliers and increases its operating risk due to its reliance on certain key manufacturing facilities. The rating is supported by PlayPower's good market position within its niche product lines. The rating also benefits from company's good profit margins, as well as its wide geographic presence within the United States and Europe. Ratings could be upgraded if PlayPower effectively manages its acquisition growth strategy, maintains stable operating performance, and reduces financial leverage such that debt/EBITDA is sustained below 5.0 times. An upgrade would also require the company to demonstrate good liquidity in part supported by a meaningful increase in free cash flow generation. The ratings could be downgraded if revenues or margins materially decline, liquidity deteriorates, including sustained negative cash flow or a higher reliance on its revolving credit facility, or if EBITA to interest approaches 1.25 times. The ratings could also be downgraded if debt-to-EBITDA is sustained above 6.0 times. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. PlayPower, Inc. based in Huntersville, North Carolina, primarily manufactures commercial playground equipment used in parks and schools throughout North America and Europe. Commercial play products account for over 70% of revenue. PlayPower also manufactures shade structures that provide protection to people and assets from the sun and weather, commercial indoor play systems, site amenities, and marine accessories such as floating modular dock systems and watercraft lifts. The company's primary markets are North America and Europe, with some exposure to Asia and the Middle East. PlayPower generated $503 million of revenue for the fiscal year ended December 31, 2018. PlayPower was acquired in June 2015 by private equity firm Littlejohn & Co., LLC. POST PRODUCTION: Asks Court to Approve 1st Amended Plan Outline --------------------------------------------------------------- Post Production, Inc. filed a motion asking the U.S. Bankruptcy Court for the Central District of California to approve its first amended disclosure statement referring to its first amended plan of reorganization. The Debtor asserts that the disclosure statement meets the relevant factors set forth in Metrocraft for adequacy of a disclosure statement. The disclosure statement provides a brief description of the Debtor's assets and business and the proponents plan for them if the plan is confirmed. Further details relating to the Debtor's financial condition and post-confirmation operation of the Debtor are found in sections X, XI, XII, XVI, and XV of the disclosure statement. About Post Production Post Production, Inc. -- http://www.postproduction.com/-- is a full-service post production company headquartered in Los Angeles, California. Formerly known as SonicPool, Post Production provides industry professionals with services including editorial, color, visual effects and digital delivery. It also offers post-production rentals and technology products. The company was founded in 2001 by John W. Frost and Patrick Bird. Post Production sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-17028) on June 18, 2018. In the petition signed by John Frost, president, the Debtor disclosed $1.45 million in assets and $1 million in liabilities. Judge Vincent P. Zurzolo oversees the case. The Debtor tapped Kogan Law Firm, APC, as its legal counsel. PREFERRED CARE: Taps Daniel Sherman as Consultant ------------------------------------------------- Preferred Care Partners Management Group, L.P., and Kentucky Partners Management, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Daniel Sherman to provide consulting services and expert testimony in their Chapter 11 cases. Mr. Sherman will be paid an hourly fee of $545 for his services and will receive reimbursement for work-related expenses. In court filings, Mr. Sherman disclosed that he is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Sherman maintains an office at: Daniel J. Sherman Sherman & Yaquinto, L.L.P. 509 N. Montclair Ave. Dallas, TX 75208-5498 Phone: 214-942-5502 Email: Corky@syllp.com About Preferred Care Partners Headquartered in Plano, Texas, Preferred Care Partners Management Group and Kentucky Partners operate skilled nursing care facilities. Preferred Care Partners Management Group, L.P., and affiliate Kentucky Partners Management, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 17-34296 and 17-34297) on Nov. 13, 2017. Travis Eugene Lunceford, manager of general partner, signed the petition. The jointly administered cases were later transferred to the Fort Worth Division and assigned Case No. 17-44741. Mark Edward Andrews, Esq., Jane Anne Gerber, Esq., and Aaron Michael Kaufman, Esq., at Dykema Cox Smith, serve as the Debtors' bankruptcy counsel. Preferred Care estimated its assets at between $50,000 and $100,000, and its liabilities at between $10 million and $50 million. Kentucky Partners estimated its assets at up to $50,000 and its liabilities at between $10 million and $50 million. PTC INC: S&P Affirms 'BB' ICR; Outlook Stable --------------------------------------------- S&P Global Ratings affirmed its 'BB' issuer credit rating on U.S.-based industrial design and manufacturing software and services provider PTC Inc. and its 'BB' issue-level rating on the company's $500 million senior unsecured notes due May 15, 2024. "The rating affirmation reflects our view that PTC Inc. will maintain leverage well below 3x supported by good growth in core product areas and increasing market penetration of its internet of things (IoT) and augmented reality (AR) product offerings," S&P said. The rating agency expects leverage to increase to about 2.5x in fiscal year (FY) 2019 due to the acquisition of Frustum for about $70 million in the first quarter funded by a revolving credit facility (RCF) drawdown, as well as the impact on EBITDA margins from $45 million-$50 million of restructuring and office relocation costs. S&P said that while these factors will cause leverage to increase in the near term, it expects future EBITDA growth from good organic revenue growth prospects, as well as margin expansion from an increasing subscription revenue mix and reduced restructuring charges. This should reduce leverage to 2x or below over the coming 12-24 months, according to the rating agency. The stable outlook reflects S&P's expectation that PTC will make sufficient investments in its salesforce and leverage its various partnerships to grow bookings in the double-digit area over the next 12-24 months. S&P expects this to result in at least mid-single-digit revenue growth based on comparable revenue accounting standards, and that increasing subscription revenues and cost discipline will lead to EBITDA margins of at least 20% and deleveraging to 2x or below. "We could raise the rating if leverage improves to below 2x on a sustained basis while EBITDA interest coverage remains above 6x. This is combined with PTC maintaining a financial policy in line with these metrics, even when accounting for shareholder returns and strategic acquisitions," S&P said, adding that this could be driven by expected revenue growth in the mid- to high-single-digit area supported by continued strong growth in the IoT segment, and improvement in EBITDA margins to at least around 25% helped by operating leverage and lower restructuring expenses. Furthermore, S&P said it would expect the company to only undertake tuck-in acquisitions and a level of share repurchases that allow for positive cash flow available for debt repayments. "We could lower the rating if we expect PTC to sustain leverage at above 3x. This could be due to weaker-than-expected revenue growth from competitive pressures or prolonged sales execution issues, as well as EBITDA margins of below 20%," S&P said, adding that this could also be the result of large debt-funded acquisitions or more aggressive shareholder returns. PUC SCHOOLS, CA: S&P Affirms BB Bond Rating; Rating Off Watch Dev. ------------------------------------------------------------------ S&P Global Ratings has affirmed its 'BB' long-term rating on the California Municipal Finance Authority's series 2012A (tax-exempt) and 2012B (taxable) charter school revenues bonds, issued for PUC Schools. S&P also removed the rating from CreditWatch, where it was placed with developing implications on Jan. 30, 2019. The rating agency resolved the CreditWatch action after receiving the required information from the school. The outlook is stable. "The stable outlook reflects our expectation that operations will be close to break-even on a full-accrual basis, resulting in sufficient (relative to the debt covenant) lease-adjusted maximum annual debt services coverage," said S&P credit analyst Luke Gildner. Revenue from four of PUC's 15 schools authorized under 12 petitions secures the 2012 bonds and include PUC Community Charter Middle School and PUC Community Charter Early College High School, Lakeview Charter Academy, and California Academy for Liberal Studies Charter Middle School and Early College High School (2012 obligated group). Financial metrics cited in the report (unless otherwise indicated) reflect those of Partnerships to Uplift Communities Valley, Partnerships to Uplift Communities Los Angeles, and Partnerships to Uplift Communities Lakeview Terrace (PUC). The rating analysis encompasses all schools in PUC Lakeview Terrace, PUC LA, and PUC Valley, but does not include operations of PUC National (which provides all the back-office services for the schools), nor PUC Achieve in Rochester, N.Y. S&P understands PUC National and PUC Achieve are separate entities with separate boards and audits, and limited overlap in membership with other PUC entities. Effective July 1, 2018, PUC Achieve was turned over to local control and no is no longer a PUC school. PUC National essentially operates as a charter management organization to each PUC school and operates under annual service agreements that are reviewed annually by each PUC entity. The rating is based on PUC's group credit profile (GCP) and S&P's view that the obligated group supporting the 2012 bonds is core to the entire PUC organization as the larger group, under S&P's Group Rating Methodology published Nov. 19, 2013, on RatingsDirect. S&P views the 2012 obligated group as important to the entire PUC organization as the larger group, with support of the obligated group being likely in the event of it having operating difficulties. Its core status could change and will be evaluated as the organization evolves. The rating applies only to the 2012 bonds and not to the entire PUC organization as the larger group. "We assessed PUC's enterprise profile as adequate, characterized by its healthy enrollment size, solid retention rates, and diverse enrollment base with 13 schools in three regions in Los Angeles. Recent enrollment declines due primarily to two school closures constrains the enterprise profile assessment," S&P said. "We assessed PUC's financial profile as vulnerable, characterized by a history of weak liquidity and variable financial performance. We believe recent improvements in the organization's financial performance will be difficult to sustain over the near term due to enrollment declines in fiscal 2019," S&P said. Combined these credit factors lead to an indicative credit profile for PUC of 'bb' and a final rating on the 2012 bonds of 'BB', according to the rating agency. QUORUM HEALTH: Receives Noncompliance Notice from NYSE ------------------------------------------------------ Quorum Health Corporation was notified on April 30, 2019, by the New York Stock Exchange, Inc. that it was not in compliance with the NYSE's continued listing standards as a result of the Company's average market capitalization being less than $50 million over a consecutive 30 trading-day period and the most recently reported stockholders' equity of the Company also being less than $50 million. As set forth in the Notice, as of April 25, 2019, the 30-trading day average market capitalization of the Company was approximately $44.0 million and the Company's last reported stockholders' deficit as of Dec. 31, 2018 was approximately ($90.4) million. In accordance with the NYSE rules, the Company intends to notify the NYSE within 10 business days of receipt of the Notice that the Company intends to cure the deficiency. Under the NYSE rules, the Company has 45 days from the receipt of the Notice to submit a plan advising the NYSE of definitive action the Company has taken, or is taking, which would bring the Company into conformity with continued listed standards within 18 months of receipt of the Notice. Within 45 days of receipt of the plan, the NYSE will make a determination as to whether the Company has made a reasonable demonstration of an ability to come into conformity with the relevant standards in the 18 month period. If the NYSE accepts the plan, the Company's common stock will continue to be listed and traded on the NYSE during the 18 month cure period, subject to the Company's compliance with other continued listing standards, and the Company will be subject to quarterly monitoring by the NYSE for compliance with the plan. The Company's common stock will continue to trade under the symbol "QHC", but will have an added designation of ".BC" to indicate the status of the common stock as being "below compliance". The NYSE notification does not affect the Company's business operations or its Securities and Exchange Commission reporting requirements, nor does it conflict with or cause an event of default under any of the Company's debt agreements. About Quorum Health Headquartered in Brentwood, Tennessee, Quorum Health -- http://www.quorumhealth.com/-- is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 26 affiliated hospitals in rural and mid-sized markets located across 14 states with an aggregate of 2,458 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business. Quorum Health incurred net losses attributable to the Company of $200.24 million in 2018, $114.2 million in 2017, and $347.7 million in 2016. As of Dec. 31, 2018, the Company had $1.57 billion in total assets, $1.64 billion in total liabilities, $2.27 million in redeemable non-controlling interests, and a total deficit of $74.93 million. * * * In March 2019, S&P Global Ratings lowered its issuer credit rating on Brentwood, Tenn.-based Quorum Health Corp. to 'CCC+' from 'B-'. "The downgrade reflects our decreased confidence in the company's ability to successfully refinance its capital structure and achieve material interest-cost savings given its weak operating trends and our expectation that it may face some difficulty in divesting its underperforming hospitals. In our view, a failure to successfully divest the mostly low-margin hospitals could make it significantly more difficult for the company to refinance its capital structure," S&P said. RUBIO & ASSOCIATES: U.S. Trustee Forms 4-Member Committee --------------------------------------------------------- The Office of the U.S. Trustee on May 1 appointed four creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Rubio & Associates LLC. The committee members are: (1) Apex Pharmacy Attention: Jeff Brooks 165 Ragland Road Beckley, WV 25801 681-207-7334 (Phone) 681-207-7338 (Fax) jbrooks@apexrx.biz (2) Cocca Development, Ltd. Attention: Anthony Cocca 100 DeBartolo Place, Suite 400 Boardman, OH 44512 330-729-1010 (Phone) 330-729-1008 (Fax) acocca@coccadevelopment.com (3) Martek Pharmacal Attention: Andrew E. Steck, Jr. 575 Prospect Street #213 Lakewood, NJ 08701 201-264-2324 (Phone) 732-905-7893 (Fax) info@martekpharmacal.com (4) John Mauer 4232 Rhodes Avenue Studio City, CA 91604 248-227-0193 (Phone) John.mauer@gmail.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Rubio & Associates LLC Based in West Virginia, Rubio & Associates, LLC, which conducts business under the name Imagine Medispa, provides medical weight loss and skin care treatments. The company opened its first location in Beckley, W.Va. in August 1996. Over the next 20 years, the company opened five additional locations in Charleston (Imagine Medispa - Charleston and Spa Bliss), Princeton, Ronceverte, and Barboursville. The company also offers non-surgical aesthetic skin care and laser hair removal. Rubio & Associates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-20148) on April 8, 2019. At the time of the filing, the Debtor disclosed $2,082,500 in assets and $965,000 in liabilities. The case has been assigned to Judge Frank W. Volk. Kavitz Law PLLC is the Debtor's bankruptcy counsel. S&S FOREST CITY: Seeks to Hire Jones & Walden as Legal Counsel -------------------------------------------------------------- S&S Forest City NC, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to hire Jones & Walden, LLC as its legal counsel. The firm will advise the Debtor of its rights and duties under the Bankruptcy Code; represent the Debtor with respect to a bankruptcy plan; conduct examination; and provide other legal services in connection with its Chapter 11 case. The firm's hourly rates are: Attorneys $200 - $350 Legal Assistants $125 As of the petition date, Jones & Walden holds a retainer in the amount of $22,017. Cameron McCord, Esq., a partner at Jones & Walden, disclosed in court filings that she and her firm neither hold nor represent any interest adverse to the Debtor and its estate. Jones & Walden can be reached through: Cameron M. McCord, Esq. Jones & Walden, LLC 21 Eighth Street, NE Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 Email: cmccord@joneswalden.com info@joneswalden.com About S&S Forest City NC S&S Forest City NC, LLC is a home health agency that provides skilled nursing services and other therapeutic services. S&S Forest City NC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-40886) on April 16, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of $1 million to $10 million. The case has been assigned to Judge Barbara Ellis-Monro. SCHELL & KAMPETER: Filing of 3rd Amended Classick Suit Due May 7 ---------------------------------------------------------------- In the case, RICHARD DAVID CLASSICK, JR. Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. SCHELL & KAMPETER, INC. d/b/a DIAMOND PET FOODS, and DIAMOND PET FOODS INC., Defendants, Case No. 2:18-cv-02344-JAM-AC (E.D. Cal.), Judge John A. Mendez of the U.S. District Court for the Eastern District of California has issued an order setting (i) deadline to file the Plaintiff's Third Amended Complaint, and (ii) the briefing schedule of the Defendant's Motion to Dismiss the Plaintiff's Third Amended Complaint. On Oct. 18, 2018, the Plaintiffs filed a Second Amended Class Action Complaint. On Nov. 20, 2018, the Defendant filed a Motion to Dismiss Plaintiffs' Second Amended Complaint. On Dec. 20, 2018, the Plaintiffs filed their Opposition to Defendant's Motion to Dismiss. On Jan, 15, 2019, the Defendant filed a Reply Brief in support of its Motion to Dismiss. On March 21, 2019, the Court issued an order granting in part and denying in part the Defendant's Motion to Dismiss. The Plaintiff's current deadline to file a Third Amended Complaint is April 9, 2019, and the Defendant's responsive pleading is due on April 29, 2019. The Parties' current deadline to hold a discovery conference is April 11, 2019. The Counsel for Parties conferred regarding a briefing schedule for the Defendant's anticipated motion to dismiss the Plaintiff's Third Amended Complaint. The Parties agreed and stipulated, and Judge Mendez approved, as follows: a. The Defendant's deadline to file and serve its Motion to Dismiss Plaintiff's Third Amended Complaint is continued from April 29, 2019 to May 7, 2019; b. The Plaintiff will file and serve an opposition to the Defendant's Motion to Dismiss on May 30, 2019; c. The Defendant will file and serve its reply in support of its Motion to Dismiss on June 13, 2019; and d. The Parties must conduct a discovery conference by May 11, 2019. A full-text copy of the Court's April 10, 2019 Order is available at https://is.gd/rKnLxQ from Leagle.com. Richard David Classick, Jr., Plaintiff, represented by Rebecca A. Peterson -- rapeterson@locklaw.com -- Lockridge Grindal Nauen P.L.L.P., Robert K. Shelquist, Lockridge Grindal Nauen P.L.L.P. & Steven M. McKany -- smckany@robbinsarroyo.com -- Robbins Arroyo LLP. Schell & Kampeter, Inc., also known as Diamond Pet Foods & Diamond Pet Foods Inc., Defendants, represented by Amir M. Nassihi , Shook, Hardy & Bacon L.L.P., Emily M. Weissenberger , Shook Hardy & Bacon & Steven D. Soden -- ssoden@shb.com -- Shook, Hardy and Bacon L.L.P, pro hac vice. SIMKAR LLC: Sandeep Gupta Appointed Chapter 11 Trustee ------------------------------------------------------ William K. Harrington, the United States Trustee for Region 2, asked the U.S. Bankruptcy Court for the Southern District of New York to enter an order approving the appointment of Sandeep Gupta as the Chapter 11 Trustee for SIMKAR LLC. The appointment of Sandeep Gupta was made following the U.S. Trustee's consultation with Bruce Bronson, Esq., proposed counsel to the Debtor; Jonathan L. Flaxer, Esq., proposed counsel to the Committee; and Joseph Corneau, Esq., counsel for Capstone Credit, LCC and Capstone Capital Group LLC, regarding the appointment of the Chapter 11 Trustee. Meanwhile, Sandeep Gupta disclosed that he is a disinterested person within the meaning of and eligible and competent to perform the duties of a Trustee for the Debtor. About Simkar, LLC Based in Tarrytown, New York, SIMKAR LLC -- http://www.simkar.com -- is an internationally known designer, developer, and manufacturer of lighting products. Since 1952, the Company has provided a diverse selection of high-quality LED lighting fixtures, along with other technologies to contractors, specifiers, and other strategic partners. The Company designs and manufactures lighting fixtures at its 283,500 square foot manufacturing facility in Philadelphia, PA. SIMKAR LLC filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 19-22576) on March 6, 2019. The Debtor's counsel is H. Bruce Bronson, Jr., Esq., in Harrison, New York. At the time of filing, the Debtor had estimated assets and estimated liabilities of $10 million to $50 million. The petition was signed by Alfred Heyer, Neo Lights Holdings Inc., president of managing member. SIZMEK INC: Taps FTI Capital Advisors as Financial Advisor ---------------------------------------------------------- Sizmek Inc. received approval from the U.S. Bankruptcy Court for the Southern District of New York to hire FTI Capital Advisors, LLC. The firm will provide financial advisory and investment banking services in connection with a possible merger, consolidation, sale or similar transaction involving all or a substantial portion of the business, assets and equity interest of the company and its affiliates. FTI will be paid a monthly fee of $175,000 for its services. In the event that the Debtors close on one or more transactions either during the term or within 12 months following the termination or expiration of the term of the firm's employment, then FTICA will earn a "success fee" equal to 2% of the "aggregate value" of each transaction. The minimum success fee is $1.5 million and is payable in cash on the date of the closing of each transaction. Prior to their bankruptcy filing, the Debtors paid FTI a retainer in the amount of $175,000. Glenn Tobias, chief executive officer of FTI, disclosed in court filings that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. FTI can be reached through: Glenn Tobias FTI Capital Advisors, LLC Three Times Square, 9th Floor New York, NY, 10036 Phone: +1 212 247 1010 Fax: +1 212 841 9350 Email: glenn.tobias@fticonsulting.com About Sizmek Inc. Sizmek Inc. is an online advertising campaign management and distribution platform for advertisers, media agencies, and publishers. Sizmek and its affiliates filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19-10971) on March 29, 2019. At the time of the filing, Sizmek estimated assets of between $100 million and $500 million and liabilities of between $100 million and $500 million. Judge Stuart M. Bernstein oversees the cases. The Debtors tapped Katten Muchin Rosenman LLP as their legal counsel; FTI Consulting Inc. as financial advisor; and Stretto as claims and noticing agent. SIZMEK INC: Taps Muchin Rosenman as Legal Counsel ------------------------------------------------- Sizmek Inc. received approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Katten Muchin Rosenman LLP as its legal counsel. The firm will advise the company and its affiliates of their powers and duties under the Bankruptcy Code; represent them in negotiation with their creditors; give advice concerning the sale of their assets; prepare a bankruptcy plan; and provide other legal services in connection with their Chapter 11 cases. The firm's hourly rates are: Partners $720 - $1,430 Of Counsel $850 - $1,405 Associates $395 - $930 Paraprofessionals $185 - $545 Steven Reisman, Esq., at Katten Muchin, disclosed in court filings that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Reisman disclosed that his firm has not agreed to a variation of its standard billing arrangements for its employment with the Debtors, and that no Katten professional has varied his rate based on the geographic location of the Debtors' bankruptcy cases. The attorney further disclosed that his firm did not represent the Debtors in the 12-month period prior to the petition date. Mr. Reisman also disclosed that the Debtors have already approved the firm's budget and staffing plan for the period March 31 to April 23. Katten can be reached through: Steven J. Reisman, Esq. Cindi M. Giglio, Esq. Jerry L. Hall, Esq. Katten Muchin Rosenman LLP 575 Madison Avenue New York, NY 10022 Telephone: (212) 940-8800 Facsimile: (212) 940-8876 Email: sreisman@kattenlaw.com Email: cindi.giglio@kattenlaw.com Email: jerry.hall@kattenlaw.com -- and -- Peter A. Siddiqui, Esq. Katten Muchin Rosenman LLP 525 W. Monroe Street Chicago, IL 60661 Telephone: (312) 902-5455 Facsimile: (312) 902-1061 Email: peter.siddiqui@kattenlaw.com About Sizmek Inc. Sizmek Inc. is an online advertising campaign management and distribution platform for advertisers, media agencies, and publishers. Sizmek and its affiliates filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19-10971) on March 29, 2019. At the time of the filing, Sizmek estimated assets of between $100 million and $500 million and liabilities of between $100 million and $500 million. Judge Stuart M. Bernstein oversees the cases. The Debtors tapped Katten Muchin Rosenman LLP as their legal counsel; FTI Consulting Inc. as financial advisor; and Stretto as claims and noticing agent. SOUTH MOON BBQ: Seeks to Hire Barrick Switzer as Legal Counsel -------------------------------------------------------------- South Moon BBQ Incorporated seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Barrick, Switzer, Long, Balsley, & Van Evera LLP as its legal counsel. The firm will advise the Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. James Stevens, Esq., the firm's attorney who will be handling the case, charges an hourly fee of $300. The retainer fee is $5,000. Mr. Stevens disclosed in court filings that all members and employees of his firm are "disinterested" as defined in Section 101(14) of the Bankruptcy Code. Barrick can be reached through: James E. Stevens, Esq. Barrick, Switzer, Long, Balsley, & Van Evera LLP 6833 Stalter Drive Rockford, IL 61108 Phone: (815) 962.6611 Fax: (815) 962.0687 E-mail: jimstevens@bslbv.com About South Moon BBQ Inc South Moon BBQ Incorporated sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-80759) on April 1, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $1 million. The case is assigned to Judge Thomas M. Lynch. Barrick, Switzer, Long, Balsley, & Van Evera LLP is the Debtor's counsel. STRAIGHT UP: Taps Winegarden Haley as Legal Counsel --------------------------------------------------- Straight Up Enterprises, Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire Winegarden, Haley, Lindholm Tucker & Himelhoch, P.L.C. as its legal counsel. The firm will advise the Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. Winegarden holds a retainer in the sum of $29,300. The firm can be reached through: Dennis M. Haley, Esq. Winegarden, Haley, Lindholm Tucker & Himelhoch, P.L.C. G-9460 S. Saginaw Street, Suite A Grand Blanc, MI 48439 Tel: (810) 579-3600 Email: ecf@winegarden-law.com About Straight Up Enterprises Straight Up Enterprises, Inc., is a retailer of sports apparel and other miscellaneous sports gear and accessories. Straight Up Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-31010) on April 23, 2019. At the time of the filing, the Debtor disclosed $1,985,246 in assets and $5,557,303 in liabilities. The case has been assigned to Judge Daniel S. Opperman. SUNGARD AVAILABILITY: Case Summary & 30 Top Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Sungard Availability Services Capital, Inc. 50 Main Street, Suite 1014 White Plains, NY 10606 Business Description: Sungard Services Capital, Inc., together with its debtor and non-debtor subsidiaries, is a provider of information technology production and recovery services for companies in the financial services, manufacturing, retail, healthcare, business services, transportation, telecommunications, utilities, and government sectors across North America, Europe, and India. The Debtors' core business segments involve providing managed information technology, information availability consulting, business continuity management software, and disaster recovery services. The Debtors and their non-Debtor affiliates own and/or operate over 80 data centers and recovery locations worldwide, and provide services to approximately 3,250 customers in nine countries with approximately 2,500 employees. The Debtors are headquartered in Wayne, Pennsylvania, and have corporate offices in the United Kingdom, Canada, Ireland, France, India, Belgium, Luxembourg, and Poland. Visit www.sungardas.com for more information. Chapter 11 Petition Date: May 1, 2019 Court: United States Bankruptcy Court Southern District of New York (White Plains) Seven affiliates that filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Sungard Availability Services, LP 19-22914 Sungard Availability Services Capital, Inc. 19-22915 Sungard Availability Services Holdings, LLC 19-22916 Sungard Availability Services Technology, LLC 19-22917 Inflow LLC 19-22918 Sungard Availability Services VeriCenter, Inc. 19-22919 Sungard Availability Network Solutions Inc. 19-22920 Judge: Hon. Robert D. Drain Debtors' Counsel: Jonathan S. Henes, P.C. Emily E. Geier, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 Email: jonathan.henes@kirkland.com emily.geier@kirkland.com - and - Ryan Blaine Bennett, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Tel: (312) 862-2000 Fax: (312) 862-2200 Email: ryan.bennett@kirkland.com Debtors' Restructuring Advisor: ALIXPARTNERS, LLP Debtors' Financial Advisor and Investment Banker: CENTERVIEW PARTNERS LLC Debtors' Notice and Claims Agent: PRIME CLERK, LLC https://cases.primeclerk.com/sungardASballots Estimated Assets (on a consolidated basis): $100 million to $500 million Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petition was signed by Eric S. Koza, chief restructuring officer. A full-text copy of Sungard Availability Services Capital's petition is available for free at: http://bankrupt.com/misc/nysb19-22915.pdf Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Gartner Inc. Trade $2,560,792 P.O. Box 911319 Dallas, TX 75391 2. Dell Marketing L.P. Trade $1,528,643 Attn: Scott Minor One Dell Way Mail Stop 8129 Round Rock, TX 78682 Tel: 1-610-608-4212 Tel: Scott.Minor@dell.com 3. Element Critical Trade $1,102,258 4. Veritas Technologies LLC Trade $783,310 Attn: Don Harrison 500 East Middlefield Road Mountain View, CA 94043 Tel: (856) 372 – 0360 Email: Donald.Harrison@veritas.com 5. Mulesoft, Inc. Trade $640,286 77 Geary Street, St 400 San Francisco, CA 94108 6. Russo Family Limited Partnership Trade $299,840 P.O. Box 15012 Newark, NJ 07191 7. Intech Construction, Inc. Trade $240,211 Attn: Ron Podlesny 3020 Market Street Philadelphia, PA 19104 Tel: 215-243-4957 Email: RPodlesny@intechconstruction.com 8. 410 Commerce LLC Trade $225,912 71 Hudson St Hackensack, NJ 07601 9. Access IT Group, Inc Trade $215,427 Attn: Mark Spencer 2000 Valley Forge Circle, Suite 106 King of Prussia, PA 19406 Tel: 610-783-5200 x204 Email: marks@accessitgroup.com 10. Curvature, Inc. Trade $206,705 Attn: Ari Fischbein 10420,Harris Oaks Blvd, Suite C Charlotte NC 28269 Tel: 516.351.0520 Email: AFischbein@curvature.com 11. G4S Secure Solutions (USEA) Inc. Trade $182,840 Attn: James Kimmel 1395 University Blvd. Jupiter, FL 33458 Tel: 646-895-3902 Email: james.kimmel@usa.g4s.com 12. 1500 Net-WORKS Associates, L.P. Trade $163,991 c/o Nightingale Realty, LLC 1430 Broadway, Suite 1605 New York, NY 10018 13. Oracle America, Inc. Trade $157,881 Attn: Katrina Gody 500 Oracle Parkway Redwood Shores, CA 94065 Tel: 1(888)545-4577 Email: katrina.gody@oracle.com 14. Microland, Limited Trade $148,773 Attn: Deepanjan Biswas 1B Ecospace, Bellandur Outer Ring Road Bangalore, India 560103 Tel: +44-7725257948 Email: DeepanjanB@microland.com 15. D&B Trade $148,630 P.O. Box 75434 Chicago, IL 60675 16. The Collective Group, LLC Trade $134,062 9433 Bee Caves Road Building III, Suite 200 Austin, TX 78733 17. Xactly Corporation Trade $131,032 Dept CH 16399 Palatine, IL 60055 18. Nexii Labs Inc. Trade $126,368 Attn: Srini Unnava 2050 Brunswick Plaza-1 State Highway 27, Suite#201 North Brunswick, NJ-08902 Tel: 91-9848361224 Email: srini.unnava@nexiilabs.com 19. 760 Washington Avenue LLC Trade $121,346 71 Hudson Street Hackensack, NJ 07601 20. Cisco Systems, Inc. Trade $117,299 PO Box 742927 Los Angeles, CA 90074 21. Haynes Mechanical Systems Inc. Trade $86,190 Attn: Scott Day 5654 Greenwood Plaza Blvd Greenwood Village, CO 80111 Tel: 303-710-6531 Email: sday@haynesmechanical.com 22. DLA Piper LLP (US) Professional $82,832 PO Box 75190 Services Baltimore, MD 21275 23. ABB. Inc. Trade $80,155 305 Gregson Drive Cary, NC 27511 24. Iron Mountain Off-Site Data Trade $71,753 Protection P.O. Box 915026 Dallas, TX 75391 25. McCollister's Transportation Group Trade $67,040 PO Box 37794 Baltimore, MD 21297 26. Cannella Roofing Inc. Trade $65,500 783 Market Street Paterson, NJ 07513 27. VSS LLC Trade $64,130 201 E Baltimore St., Suite 1400 Baltimore, MD 21202 28. FIS Avantgard LLC Trade $64,015 PO Box 40949 Jacksonville, FL 32203 29. EMC Corporation Trade $63,289 Attn: Lucien Shelton 176 South Street Hopkinton, MA 01748 Tel: 303-601-3133 Email: lucien.shelton@dell.com 30. Parkway Corporation Trade $60,274 150 N. Broad Street Philadelphia, PA 19102 SUNGARD AVAILABILITY: Moody's Cuts PDR to D-PD Amid Bankr. Filing ----------------------------------------------------------------- Moody's Investors Service downgraded Sungard Availability Services Capital Inc.'s probability of default rating to D-PD from Ca-PD/LD following the announcement that the company voluntarily filed a petition for reorganization under Chapter 11 of the US Bankruptcy Code on May 1, 2019. Sungard AS's corporate family rating was affirmed at Ca, its senior secured bank credit facility rating was affirmed at Caa3, and its unsecured rating was affirmed at C. Subsequent to its actions, Moody's will withdraw the ratings due to Sungard AS's bankruptcy filing. Downgrades: Issuer: Sungard Availability Services Capital Inc. Probability of Default Rating, Downgraded to D-PD from Ca-PD/LD Outlook Actions: Issuer: Sungard Availability Services Capital Inc. Outlook, Remains Negative Affirmations: Issuer: Sungard Availability Services Capital Inc. Corporate Family Rating, Affirmed Ca Senior Secured Bank Credit Facility, Affirmed Caa3 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed C (LGD5) RATINGS RATIONALE The downgrade of the PDR reflects Sungard AS's bankruptcy filing on May 1, 2019. The Ca CFR, Caa3 senior secured and C unsecured ratings reflect Moody's view of estimated recovery. Under the prepackaged plan of reorganization, the company's funded debt obligations would decline by more than $900 million, and annual cash interest payments would decline by about $100 million. Sungard Availability Services Capital Inc. is a provider of disaster recovery services and managed IT services. SYNIVERSE HOLDINGS: S&P Lowers ICR to 'B-' on Elevated Leverage --------------------------------------------------------------- S&P Global Ratings lowered all of its ratings on U.S.-based Syniverse Holdings Inc. by one notch, including its issuer credit rating, to 'B-' from 'B'. The downgrade reflects the challenges Syniverse is facing as it attempts to grow its revenue and EBITDA amid industry pressures arising from shifts in mobile technology and the proliferation of over-the-top (OTT) messaging apps, which will likely constrain any meaningful leverage improvement. As a result, S&P expects adjusted debt to EBITDA to remain above 7x over the next year. The stable outlook on Syniverse reflects S&P's expectation that the company's adjusted leverage will remain in the low 7x area over the next year as modest EBITDA declines driven by reductions in higher margin legacy roaming and P2P messaging revenue is offset by a moderate level of required debt repayment. "We could lower our rating on Syniverse if its operating performance is materially weaker than we expect because of lower growth in its strategic products, such as A2P messaging and LTE-based solutions, which leads to a sharp decline in its FOCF and weaker liquidity," S&P said, adding that it could also lower the rating if the company's financial commitments appear unsustainable over the long term. "Although unlikely in the near term, we could raise our rating on Syniverse if it replaces its lost roaming and messaging revenue with revenue from profitable new business such that its total revenue consistently increases and it sustains margins in the mid-to-high 30% area while correspondingly lowering its leverage below 6.5x," S&P said. Given its private-equity ownership, an upgrade would require Syniverse's owners to maintain financial policies that allow the company to sustain leverage of comfortably below 6.5x, according to the rating agency. TELESCOPE MANAGEMENT: SBFC Objects to Plan, Disclosures ------------------------------------------------------- Small Business Financial Solutions, LLC, objects to the First Amended Chapter 11 Plan and Amended Disclosure Statement filed by Telescope Management Group, LLC, complaining that the Plan pursuant to 11 U.S.C. Section 1129(b)(2)(B) on the basis that the current proposed Plan is not fair and equitable and violates the absolutely priority rule. According to Creditor, the proposed Plan impairs the claims of SBFC, and SBFC does not consent to the treatment. Attorney for SBFC: Amy P. Hunt, Esq. Horack, Talley, Pharr & Lowndes, P.A. 2600 One Wells Fargo Center 301 S. College St. Charlotte, NC 28202-6006 Telephone: (704) 377-2500 Facsimile: (704) 714-7935 Email: ahunt@horacktalley.com Based in Morrisville, North Carolina, Telescope Management Group, LLC, dba Bevello, a privately held company in the management services business, filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 18-04012) on August 10, 2018. The case is assigned to Hon. David M. Warren. The Debtor is represented by William P. Janvier, Esq., in Raleigh, North Carolina. At the time of filing, the Debtor had estimated assets and liabilities of $1 million to $10 million. THE9 LIMITED: Grant Thornton Raises Going Concern Doubt ------------------------------------------------------- The9 Limited filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F, disclosing a net loss of RMB239,284,796 on RMB17,492,415 of revenues for the year ended Dec. 31, 2018, compared to a net loss of RMB112,092,907 on RMB73,208,166 of revenues for the year ended in 2017. The audit report of Grant Thornton states that the Group has an accumulated deficit of approximately RMB3,233.1 million (US$470.2 million) as of December 31, 2018, and incurred a net loss of approximately RMB239.3 million (US$34.8 million) for the year ended December 31, 2018. These conditions, along with other matters, raise substantial doubt about the Group's ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2018, showed total assets of RMB164,687,440, total liabilities of RMB908,423,767, and RMB1,084,810,866 in total shareholders' deficit. A copy of the Form 20-F is available at: https://is.gd/cnxx6N The9 Limited, together with its subsidiaries, operates as an online game developer and operator in the People's Republic of China. The company offers online games, including massively multiplayer online games, mobile games, Web games, and TV games. It also provides training services, such as smartphone application programming training services to college students. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was founded in 1999 and is headquartered in Shanghai, the People's Republic of China. THOMSON-SHORE INC: Taps Eby Conner as Special Counsel ----------------------------------------------------- Thomson-Shore, Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire Eby Conner Smillie & Bourque, PLLC. The firm will serve as special counsel to the Debtor in connection with the sale of its operating assets and will assist its management with other business law matters. The firm's hourly rates are: Senior Attorneys $300 Paralegals $50 Eby Conner received an initial retainer in the amount of $15,000. Mark Eby, Esq., at Eby Conner, disclosed in court filings that all personnel of the firm are "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Mark J. Eby, Esq. Eby Conner Smillie & Bourque, PLLC 301 N. Main Street, Suite 250 Ann Arbor, MI 48104 Phone: (734) 769-2691 E-mail: mark.eby@eecsb.com Eby@ecsblaw.com About Thomson-Shore Thomson-Shore, Inc. -- https://thomsonshore.com/ -- is a 100 percent employee-owned full service book manufacturing, printing, publishing, production and distribution company. It specializes in fulfilling the needs of book publishers, from an author's initial Word document to the end reader. Its business solutions span the entire publishing supply chain. Thomson-Shore was founded in 1972 and is located in Dexter, Mich. Thomson-Shore sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-44343) on March 25, 2019. At the time of the filing, the Debtor disclosed $14,454,993 in assets and $11,622,522 in liabilities. The case is assigned to Judge Thomas J. Tucker. Eby Conner Smillie & Bourque, PLLC, is the Debtor's counsel. THOMSON-SHORE INC: Taps Goldstein Bershad as Legal Counsel ---------------------------------------------------------- Thomson-Shore, Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire Goldstein Bershad & Fried PC as its legal counsel. The firm will provide legal services in connection with the Debtor's Chapter 11 case, which include the preparation of its bankruptcy plan, negotiation with creditors, and advising the Debtor concerning the sale of its assets. The firm's hourly rates are: Senior Attorneys $400 Paralegals $75 Goldstein received an initial retainer in the amount of $51,717, of which $46,779.50 was used to pay its pre-bankruptcy services. Aaron Scheinfield, Esq., at Goldstein, disclosed in court filings that all personnel of the firm are "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Aaron J. Scheinfield, Esq. Goldstein Bershad & Fried PC 4000 Town Center, Suite 1200 Southfield, MI 48075 Tel: (248) 355-5300 Fax: (248) 355-4644 Email: aaron@bk-lawyer.net About Thomson-Shore Thomson-Shore, Inc. -- https://www.thomsonshore.com/ -- is a 100 percent employee-owned full service book manufacturing, printing, publishing, production and distribution company. It specializes in fulfilling the needs of book publishers, from an author's initial Word document to the end reader. Its business solutions span the entire publishing supply chain. Thomson-Shore was founded in 1972 and is located in Dexter, Mich. Thomson-Shore sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-44343) on March 25, 2019. At the time of the filing, the Debtor disclosed $14,454,993 in assets and $11,622,522 in liabilities. The case is assigned to Judge Thomas J. Tucker. TOPAZ SOLAR: Fitch Affirms C Rating on $1.1BB Senior Secured Notes ------------------------------------------------------------------ Fitch Ratings has affirmed Topaz Solar Farms, LLC's $1.100 billion ($908.5 million outstanding) senior secured notes at 'C'. KEY RATING DRIVERS Summary: The rating reflects Topaz's exposure to a bankrupt utility counterparty, Pacific Gas & Electric, for all of its revenue under a long-term power purchase agreement. Fitch expects Topaz can continue making its scheduled debt service payments as long as PG&E continues paying the project under the current terms of the PPA. PG&E may seek to terminate the PPA or weaken its terms materially during the bankruptcy resolution process. Topaz's operational performance has exceeded the base case forecasts for over four years of commercial operating history and exhibits healthy financial metrics, with modest leverage and strengthening debt service coverage ratios. Metrics are consistent with the 'A' category, but the project rating is constrained by the offtaker. Stable Contracted Revenues - Revenue Risk (Price): Stronger (was Weaker) The fixed-price, 25-year PPA with PG&E extends one month beyond debt maturity. The PPA provides reimbursement for curtailment directed by the utility. This structure is consistent with a stronger assessment under Fitch's current criteria (earlier criteria incorporated the revenue counterparty credit quality in this key rating driver). Solid Solar Resource - Revenue Risk (Volume): Midrange Total generation output in Fitch's rating case is based on a one-year P90 estimate of electric generation to mitigate the potential for lower-than-expected solar resource. The project can meet debt obligations under a one-year P99 generation scenario in all years. Proven Technology and Experienced Operator - Operation Risk: Midrange Thin-film photovoltaic technology has a long operating history, which mitigates plant performance risks. First Solar, as the plant operator, has a track record of high plant availability. Long-term agreements support routine and unscheduled maintenance needs. Fitch's financial analysis incorporates operating cost increases to mitigate unforeseen events including the risk of contractor replacement. Conventional Debt Structure - Debt Structure: Stronger The senior-ranking, fully amortizing, fixed-rate debt benefits from a six-month debt service reserve backed by a letter of credit and strong 1.20x forward and backward looking debt service coverage equity distribution test. Financial Profile Base case DSCR average is 1.83x with a minimum of 1.67x. Fitch's rating case includes stresses that increase expenses and reduce energy output, resulting in an average DSCR of 1.60x with a minimum of 1.50x. In both scenarios, annual DSCRs generally increase over time, reflecting increasing ability to withstand additional stresses. PEER GROUP Topaz's average rating case DSCR is above Fitch's indicative coverage guidance of 1.40x for an 'A-' rating and higher than Solar Star Funding, LLC (BBB-/Rating Watch Negative), which has an average rating case DSCR of 1.37x. Similarly rated projects include a privately rated PV project that also demonstrates strong operating history and high projected DSCRs but is constrained by the same offtaker. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- Modification or rejection of the PPA resulting in a material adverse effect upon projected cash flows leading to a default on the project's debt repayment obligations. Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- High confidence that PG&E will continue to make PPA payments sufficient to meet the project's debt repayment obligations. CREDIT UPDATE Performance Update Topaz continues to display a very stable profile to date. In 2018, actual output was 109% above the sponsor's P50 forecast and 21% above Fitch's rating case. Plant effective availability was also strong at 99.7% (compared to Fitch's base case estimate of 97%). The energy lost due to maintenance events and soiling did not impact operations significantly. PG&E-requested curtailment totaled approximately 13,900 MWh in 2018, down from 62,000 MWh last year. All curtailed generation is paid for by PG&E as per the terms of the PPA. Sponsor does not know exact reasons for curtailment but suspects it occurs when PG&E is trying to balance the system when demand is low and solar production is high. Year-to-date 2019 availability is lower than last year at 98% due to rain in California holding back generation and some maintenance issues, however generation is still in line with budget. 2018 revenues grew by 3% to $220 million vs. $213 million in 2017 due to an 4% increase in power generation (including compensated curtailents), and operating expenses fell 2%. Work orders, while numerous, are appropriate for a project this size (approximately 3,000 acres). Cash flow available for debt service increased 8% in 2018. DSCR grew in 2018 to 2.01x vs. 1.85x in 2017 as the project benefited from slightly lower debt service and higher revenues during the period. 2018 results beat budget estimates with 11% higher revenues than budgeted, 10% lower opex and 13% higher CFADS. DSCR was subsequently stronger than predicted at 2.01x vs. a budget of 1.78x. Management also notes that contracted O&M fees with First Solar were renegotiated in 2018, and costs will go down by about 50% starting late 2019. PG&E filed for bankruptcy protection on Jan. 29, 2019, and Fitch downgraded PG&E to 'D' on Jan. 30, 2019. According to management, PG&E has been current on all payments with the exception of the payment for pre-petition January deliveries and certain reimbursements under the interconnection agreements. PG&E is precluded from paying pre-petition amounts post-petition without bankruptcy court approval. Topaz filed a 503(b)(9) claim to have energy deliveries for January 9th-28th treated as an administrative expense. If unsuccessful in pursuing the 503(b)(9) claim, Topaz will have an unsecured claim in the PG&E bankruptcy for the $10.3 million of unpaid revenues and $2.8 million, for unpaid reimbursements under the interconnection agreements. Fitch Cases Fitch's base case utilizes the P50 electric generation estimate, 97% availability, 0.9% annual panel degradation, a 2% energy output reduction, and a 2.5% inflation assumption. The resulting profile produces an average DSCR of 1.83x and a minimum of 1.67x. Fitch's rating case utilizes the same degradation, output reduction, and inflation assumptions but further sensitizes performance using the one-year P90 and a 10%-15% increase in costs. The resulting profile produces an average DSCR of 1.60x and a minimum of 1.50x. The minimum and average rating case metrics are well above the minimum threshold for investment grade. Moreover, annual DSCRs are projected to increase over time, providing a greater cushion on debt repayment during the outer years, when financial performance is less certain. Asset Description Topaz is a 550-MW AC solar PV facility operating on 4,900 project-owned acres in San Luis Obispo County, California. Topaz employs PV modules designed and manufactured by First Solar using commercially proven thin-film cadmium telluride PV cell technology mounted at a fixed tilt of 25-degrees with no tracking risks. TRIBUNE CO: Court Bars Fraudulent Transfer Claims v. Shareholders ----------------------------------------------------------------- Michael L. Cook. Esq., of Schulte Roth & Zabel, disclosed that the U.S. District Court for the Southern District of New York, on April 23, 2019, denied the litigation trustee's motion for leave to file a sixth amended complaint that would have asserted constructive fraudulent transfer claims against 5,000 Tribune Company ("Tribune") shareholders. In re Tribune Co. Fraudulent Conveyance Litigation, 2019 WL 1771786 (S.D.N.Y. April 23, 2019). The safe harbor of Bankruptcy Code ("Code") Sec. 546(e) barred the trustee's proposed claims, held the court. Id., at * 12. Based on undisputed facts, it reasoned that the debtor, Tribune, "was a 'customer' of CTC" [Computershare Trust Company N.A.]; CTC was "acting as Tribune's 'agent or custodian'. . . 'in connection with a securities contract'"; and that both entities were a "financial institution" as defined by the Code. Id., at * 9. Also, held the court, "at this stage of the litigation," allowing the trustee to amend his complaint "would result in undue prejudice to the [defendant] Shareholders." Id., at * 12. This decision means, as a practical matter, that (a) the trustee cannot assert federal constructive fraudulent transfer claims against the shareholders; (b) the court has now resolved all of the trustee's other claims in the action; and that (c) separate individual creditor suits asserting state law constructive fraudulent transfer claims will also probably be barred. In any event, the court has now effectively dismissed all of the trustee's claims against the shareholder defendants. Relevance Code Sec. 546(e), the so-called "safe harbor" defense, "shields from [a bankruptcy trustee's] avoidance proceedings [e.g., fraudulent transfer, preferential transfers]" based on "transfers by or to financial intermediaries effectuating settlement payments in securities transactions or made in connection with a securities contract, except through an intentional fraudulent [transfer] claim." In re Tribune Co. Fraudulent Conveyance Litigation, 818, F.3d 98, 105 (2d Cir. 2016). Section 546(e) "is a very broadly-worded safe harbor provision that was enacted to minimize the displacement caused in the commodities and securities markets in the event of a major bankruptcy affecting those industries." In re Bernard L. Madoff Inv. Sec. LLC, 773 F.3d 411, 416 (2d Cir. 2014) (citation omitted). "The safe harbor limits this risk by prohibiting the avoidance of 'settlement payments' made by, to, or on behalf of a number of participants in the financial markets." Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V., 651 F.3d 329, 334 (2d Cir. 2011). Accord, Peterson v. Somers Dublin Ltd., 729 F.3d 741, 748 (7th Cir. 2013); Grede v. FC Stone, LLC, 746 F.3d 244, 252 (7th Cir. 2014). The Tribune trustee relied on the Feb. 27, 2018 decision of the U.S. Supreme Court in Merit Management GRP, LP v. FTI Consulting, Inc., 138 S. Ct. 883, 893 (2018), which held that "the relevant transfer for purposes of Sec.546(e) safe-harbor inquiry is the overarching transfer," rejecting the argument that a bank or trust company acting as a "mere conduit" can be sufficient ground to invoke the safe harbor provision. According to the trustee, "reading the [Code's] definition of "financial institution" to cover an entity like Tribune would [also] run counter to the spirit of the Supreme Court's decision in Merit Management. . . . " 2019 WL 1771786, at * 12. Facts The suit against Tribune shareholders arose out of a 2007 leveraged buyout ("LBO") of Tribune. As part of the LBO, Tribune purchased its outstanding stock from the defendant shareholders for about $8 billion. It first sent to CTC, which had agreed to act as "Depository," the required cash to repurchase its shares as part of a tender offer. CTC received tendered shares on Tribune's behalf, paying out $34 per share to the tendering shareholders. When the tender offer was oversubscribed, Tribune repurchased more shares, engaging CTC as an "Exchange Agent" to perform essentially the same function as before. The bankruptcy court confirmed Tribune's reorganization plan in 2012. That plan transferred the claims asserted here to a litigation trust after several rounds of litigation begun by the trust's predecessor, the Tribune creditors' committee. The district court consolidated about 40 state law actions against the shareholders across the country. After several rounds of litigation, in separate actions brought by Tribune's creditors with bankruptcy court permission, the Second Circuit held that individual creditors' "state law, constructive fraudulent [transfer] claims . . . are pre-empted by . . . Code Section 546(e)." 818 F.3d at 105. In response to the creditors' petition for certiorari, the Supreme Court deferred its consideration of the petition to "allow the [Second Circuit] or the District Court to consider whether to recall the [Second Circuit's] mandate, entertain a . . . motion to vacate the earlier judgment, or provide any other available relief in light of [the Supreme Court's] decision in Merit Management." Deutsche Bank TR. Co. Americas v. Robert R. McCormick Found., 138 S. Ct. 1162, 1162-63 (2018). The district court later resolved all outstanding motions in the trustee's litigation and dismissed claims against various remaining defendants. After noting settlements with other defendants, the district court here was left with "only the Trustee's request to amend" his complaint to add constructive fraudulent transfer claims under Code Sec. 548(a)(1)(B) against former Tribune shareholders. 2019 WL 1771786, at * 4. Analysis The court rejected the defendants' arguments based on judicial estoppel, bad faith, undue delay by the trustee and the statute of limitations. Id., at * 5-* 6. As noted earlier, though, it found that "[s]tanding alone, undue prejudice to the shareholders provides a sufficient basis upon which to deny the Trustee's motion" to add the constructive fraudulent transfer claim. Id., at * 6. More significant, the court held that the "Trustee's proposed amendment would be futile because his [federal constructive fraudulent transfer claims] are barred by Section 546(e) notwithstanding the Supreme Court's holding in Merit Management." Id., at * 7. The relevant language in Sec. 546(e), said the court, "bars a Trustee from asserting a claim for constructive fraudulent [transfer] with respect to a 'settlement payment . . . made by . . . [a] financial institution [or] financial participant' or 'a transfer made by . . . [a] financial institution [or] financial participant . . . in connection with a securities contract . . . .' Id. The parties agreed that the transfers here were "settlement payments" and in connection with a securities contract and that the transfers were made "by" Tribune. Id. at * 8. They disagreed, though, as to whether Tribune was an entity covered by Code Sec. 546(e), namely, that it was "either a financial institution or a financial participant." Id. Because a financial participant had to be "an entity" that "entered into a covered transaction with "the debtor or any other entity," Tribune, the debtor, could not fall within the definition of "financial participant," held the court. Id., at * 9. But the court found Tribune to be a "customer" of CTC. Although the court did not define the term, the court relied on current dictionary definitions of "customer" as "a buyer or purchaser of goods or services" and "a person having an account with a bank or for whom a bank has agreed to collect items." Id., at * 9, quoting Black's Law Dictionary (10th ed. 2014). "Tribune was CTC's customer in connection with the LBO transactions at issue here," found the court. Id., at * 10. Rejecting the trustee's reliance on the narrow definitions of "customer" in the Code's sub-chapter that deals with stockbroker and commodity broker liquidations, these limited definitions, said the court, did not apply here. The "transactions addressed in Section 546(e) are not so limited and the express disclaimer of a limited definition is both appropriate and understandable." Id., at * 10. CTC was also Tribune's "agent." Id. Code Sec. 101(22)'(s) definition of "financial institution" includes an agent. "CTC was entrusted with billions of dollars of Tribune cash and was tasked with making payments on Tribune's behalf to Shareholders upon the tender of their stock certificates to CTC. . . . [—] a paradigmatic principal-agent relationship." Id., at * 11. Finally, ruled the court, "CTC acted 'in connection with a securities contract.'" Id. Because Tribune used CTC to repurchase Tribune stock from Shareholders at both steps of the LBO, that fact confirmed "CTC's involvement in these LBO transactions . . .' was in connection with a securities contract,'" consistent with Sec. 546(e). Id. The court rejected the trustee's argument based on the "independent legal significance doctrine" to call the LBO a "merger." Id. According to the court, the LBO was "a securities transaction" and the trustee was "not free to define the transfer it seeks to avoid in any way it chooses." Id., quoting Merit Management, 138 S.Ct. 1894. Most important, the court stressed that the Supreme Court in Merit Management had "specifically declined to address the scope of the definition of 'financial institution,'" and had declined to "address what impact, if any, Sec. 101(22)(A) would have in the application of the Sec. 546(e) safe harbor." Id., at * 12, quoting Merit Management, 138 Ct. at 890 n.2. Because the "text of Section 101(22)(A) compels a conclusion that Tribune itself was a 'financial institution,' it "would be futile" to allow the trustee to assert federal constructive fraudulent transfer claims. Id., at * 12. Comment The court's ruling "is consistent with Section 546(e)'s goal of promoting stability and finality in securities markets and protecting investors from claims precisely like" those sought to be asserted by the trustee here. Id. Although the trustee argued that Tribune was not a "systemically important" institution, the court stressed that Tribune had been "a publicly traded, Fortune 500 company" and that the trustee had sued "over 5,000 Shareholders of Tribune." Id. The shareholders' "only involvement in this transaction was receiving payment for their shares." Id. On these facts, the trustee's attempt "to unwind securities transactions" of this kind "is precisely the sort of risk that Section 546(e)" was intended to minimize." Id. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TROIANO TRUCKING: Seeks to Hire Nickless Phillips as Legal Counsel ------------------------------------------------------------------ Troiano Trucking, Inc. and Troiano Realty LLC seek approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Nickless, Phillips and O'Connor as their legal counsel. The firm will advise the Debtors of their powers and duties under the Bankruptcy Code and will provide other legal services in connection with their Chapter 11 cases. The firm's hourly rates are: Attorney $200 - $375 Paralegal $150 David Nickless, Esq., the firm's attorney who will be handling the cases, disclosed in court filings that he and other members of the firm are "disinterested" as defined in Section 101(14) of the Bankruptcy Code. Nickless Phillips can be reached through: David M. Nickless, Esq. Nickless, Phillips and O'Connor 625 Main Street Fitchburg, MA 01420 Tel: (978) 342-4590 Fax: (978) 343-6383 Email: dnickless@npolegal.com About Troiano Trucking and Troiano Realty Troiano Trucking, Inc. -- http://www.troianotrucking.com/-- is a privately held company in Grafton, Mass., in the waste hauling business. The company maintains a fleet of four trucks, which allows it to service its customers with removal of bakery waste, rubbish, demolition materials and recyclables. It serves construction companies, roofing companies, bakeries and individual home owners. Troiano Realty, LLC, is a real estate lessor whose principal assets are located at 109 Creeper Hill Road, North Grafton, Mass. The property is valued at $1.48 million based on tax valuation assessment method. Troiano Trucking and Troiano Realty sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Lead Case No. 19-40656) on April 23, 2019. At the time of the filing, Troiano Trucking estimated assets and liabilities of between $1 million and $10 million. Troiano Realty disclosed $1,485,000 in assets and $4,220,210 in liabilities. TWISTLEAF HOLDINGS: Seeks to Hire RPD Analytics as Appraiser ------------------------------------------------------------ Twistleaf Holdings LLC seeks authority from the U.S. Bankruptcy Court for the District of Nevada to hire an appraiser and valuation expert. In an application filed in court, the Debtor proposes to employ RPD Analytics, LLC to prepare an appraisal report on its four properties in Las Vegas. RPD Analytics will charge a flat fee of $600 for each property. For additional services, the firm will charge $450 per hour for testimony and $400 per hour for consultation. RPD Analytics is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached at: Michael Brunson RPD Analytics 9550 S. Eastern Avenue, Suite 253 Las Vegas, NV 89123 Phone: (702) 641-5657 Email: mike@rpdExpert.com About Twistleaf Holdings Based in Las Vegas, Twistleaf Holdings LLC filed a Chapter 11 petition (Bankr. D. Nev. Case No. 19-10654) on Feb. 4, 2019. In the petition signed by Shawn Samol, authorized representative, the Debtor disclosed $399,233 in assets and $1,306,756 in liabilities. The Hon. August B. Landis oversees the case. Andersen Law Firm, Ltd. is the Debtor's bankruptcy counsel. U.S. STEM CELL: Incurs $2.16-Mil. Net Loss for Year Ended Dec. 31 ----------------------------------------------------------------- U.S. Stem Cell, Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $2,160,427 on $6,700,888 of total revenue for the year ended Dec. 31, 2018, compared to a net loss of $3,481,491 on $5,520,537 of total revenue for the year ended in 2017. The audit report of RBSM LLP states that the Company has suffered recurring losses from operations, will require additional capital to fund its current operating plan, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2018, showed total assets of $1,817,089, total liabilities of $8,699,299, and a total stockholders' deficit of $6,882,210. A copy of the Form 10-K is available at: https://is.gd/DoJYFt U.S. Stem Cell, Inc., a biotechnology company, focuses on the discovery, development, and commercialization of autologous cellular therapies for the treatment of chronic and acute heart damage, and vascular and autoimmune diseases in the United States. The Company was formerly known as Bioheart, Inc. and changed its name to U.S. Stem Cell, Inc. in October 2015. U.S. Stem Cell, Inc. was founded in 1999 and is headquartered in Sunrise, Florida. UNITED EMERGENCY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: United Emergency Medical Corp. P.O. Box 1880 Bayamon, PR 00960 Business Description: United Emergency Medical Corp. is a privately held company that provides medical transportation services. Chapter 11 Petition Date: May 2, 2019 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Case No.: 19-02477 Judge: Hon. Mildred Caban Flores Debtor's Counsel: Ruben Gonzalez Marrero, Esq. GONZALEZ & VELASCO LAW OFFICE URB Santa Rosa Carr 174 BLQ 21-24 Bayamon, PR 00959 Tel: 787 798-8600 E-mail: rgm@microjuris.com; velascolaw@hotmail.com; rgmattorney1pr@gmail.com Total Assets: $1,681,407 Total Liabilities: $825,705 The petition was signed by Josue Quintero Barroso, 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/prb19-02477.pdf USG CORP: S&P Withdraws 'BB+' ICR After Gebr Knauf Acquisition -------------------------------------------------------------- S&P Global Ratings withdrew its ratings, including the 'BB+' issuer credit rating, on Chicago-based USG Corp. following completion of its acquisition by Germany-based building materials manufacturer Gebr. Knauf KG (Knauf; not rated). S&P also withdrew its 'BB+' issue-level ratings on the company's senior unsecured notes and various IRBs. With the closing of the merger, USG is required to make an offer to repurchase any and all of the approximately $350 million outstanding 2025 notes and approximately $500 million outstanding 2027 notes at a purchase price equal to 101% of the principal, plus accrued and unpaid interest. VCLS HOLDINGS: Seeks to Hire Portfolio Real Estate as Broker ------------------------------------------------------------ VCLC Holdings LLC seeks authority from the U.S. Bankruptcy Court for the Western District of Texas to hire a real estate broker. In an application in court, the Debtor proposes to employ Portfolio Real Estate—KW to list and sell its property located at 114 Rosemary, San Antonio, Texas. The firm will receive 6% of the sales price as commission. Edward Alanis, a partner at Portfolio, attests that his firm does not hold an interest adverse to the Debtor's estate and is a "disinterested person" pursuant to Section 327 of the Bankruptcy Code. The firm can be reached at: Edward Alanis Portfolio Real Estate—KW 10999 IH-10 West 175 San Antonio, TX 78230 Phone: 210-771-5603 About VCLC Holdings LLC Based in San Antonio, Texas, VCLC Holdings LLC filed a voluntary Chapter 11 petition (Bankr. W.D. Tex. Case No. 19-50231) on February 4, 2019, listing under $1 million in both assets and liabilities. The case has been assigned to Judge Craig A. Gargotta. Villa & White LLP is the Debtor's bankruptcy counsel. VERISIGN INC: Moody's Hikes CFR & Sr. Unsecured Debt Rating to Ba1 ------------------------------------------------------------------ Moody's Investors Service upgraded VeriSign, Inc.'s Corporate Family Rating to Ba1 from Ba2, Probability of Default Rating to Ba1-PD from Ba2-PD and its senior unsecured notes rating to Ba1 from Ba2. Concurrently, the company's Speculative Grade Liquidity Rating was affirmed at SGL-1. The ratings outlook is stable. The upgrade of the CFR reflects steadily improving revenue and earnings, solid credit metrics for the rating category, large cash balances as well as the benefit from the new cooperative agreement with the U.S. Department of Commerce. The agreement between Verisign and the DoC clears the way for the company to change its .com registry agreement with the Internet Corporation for Assigned Names and Numbers to increase wholesale prices on .com top-level domains, while removing some regulatory oversight, among other provisions. Enhanced pricing flexibility will enable the company to increase its already-robust free cash flow beginning in 2021. Moody's anticipates that Verisign will generate at least $650 million in free cash flow over the next 12-18 months, sustain its high EBITDA margin (above 65%) and prudently manage its cash sources towards share repurchases that will not materially weaken its credit metrics. Moody's took the following rating action on VeriSign, Inc.: -- Corporate Family Rating, upgraded to Ba1 from Ba2 -- Probability of Default Rating, upgraded to Ba1-PD from Ba2-PD -- $750 million senior unsecured notes due 2023, upgraded to Ba1 (LGD4) from Ba2(LGD4) -- $550 million senior unsecured notes due 2027, upgraded to Ba1 (LGD4) from Ba2 (LGD4) -- $500 million senior unsecured notes due 2025, upgraded to Ba1 (LGD4) from Ba2 (LGD4) -- Speculative Grade Liquidity Rating, affirmed at SGL-1 Outlook Action: -- Ratings Outlook Stable RATINGS RATIONALE The Ba1 CFR is supported by Versign's dominant position as the exclusive global registry operator for the most commercially visible .com top-level domain, its strong profitability and the recurring revenue stream. Verisign maintains very good liquidity and Moody's expects the company will generate at least $650 million in free cash flow in 2019 (approximately 39% of total debt). The company's debt-to-EBITDA (Moody's adjusted), estimated at 2.3x as of March 31, 2019, has remained in the low 2.0x range for more than a year but Moody's expects that over the next 12-18 months Verisign may incur additional debt to pursue more aggressive share repurchases in excess of internally generated free cash flow, temporary driving debt-to-EBITDA above 3.0x. Verisign faces strong competition from alternative TLDs and other online platforms, and the increasingly mature demand for .com domains will constrain its organic growth. Verisign will remain the sole registry operator of .com and .net TLDs through 2024 and 2023, respectively, under its registry agreements with Internet Corporation for Assigned Names and Numbers. The .com registry agreement with ICANN restricts Verisign's ability to raise prices for .com domains and expand into certain related businesses. The U.S. Department of Commerce maintains oversight of Verisign's .com registry operations through the Cooperative Agreement between the two parties. Verisign has renewal rights under its agreements with ICANN and DoC and a track record of renewing these agreements. Verisign's ratings are further constrained by modest scale, lack of revenue diversification and history of distributing the majority of internally generated cash flow towards share repurchases, including periodically debt-financed buybacks. Moody's expects Verisign to have very good liquidity over the next 12-18 months, as reflected in the SGL-1 rating. The company's liquidity is supported by solid cash balances (including short-term investments) of $1.25 billion as of March 31, 2019, Moody's expectation for annual free cash flow above $650 million in 2019, and full availability under its $200 million revolving credit facility through April 2020. These cash sources are robust, compared to Moody's expectation of annual capital spending requirements of $50 million and no debt maturities or mandatory amortization until May 2023. The revolver is subject to two financial maintenance covenants consisting of a maximum debt-to-EBITDA leverage ratio of 2.5x and interest coverage of at least 3.0x. Moody's expects the company will have a significant cushion under both ratios over the next 12-18 months. The stable outlook reflects Moody's anticipation of a moderate improvement in financial strength metrics in fiscal 2019 driven by low-single digit domain name growth and stable renewal rates. Moody's expects Verisign will generate over $800 million in EBITDA (Moody's adjusted) and more than $650 million in free cash flow in 2019. While unlikely in the near term, Verisign's ratings could be upgraded if the company were able to maintain consistent organic topline growth and commit to clear and conservative financial policy. Moody's could downgrade Verisign's ratings if changes in the terms of the registry agreement with ICANN adversely affect Verisign's business, earnings decline, the company pursues more aggressive financial policies that lead to material weakening of the credit metrics, or Moody's expects Verisign's debt-to-EBITDA (Moody's adjusted) to be sustained above 3.5 times. Verisign is a publicly-traded global provider of domain name registry services and internet infrastructure services. The company operates the authoritative directory of and/or back-end systems for all .com, .net, .cc, .tv, .gov, .jobs, .edu and .name domain names, among others. Verisign generated revenues of approximately $1.2 billion in the last twelve months ended March 31, 2019. VISION INVESTMENT: June 19 Plan Confirmation Hearing ---------------------------------------------------- Bankruptcy Judge Robert E. Grant approved Vision Investment Group, Inc.'s disclosure statement filed on Feb. 20 2019. The confirmation hearing will be held on June 19, 2019 at 11:00 AM. The Troubled Company Reporter previously reported that unsecured creditors under the plan will get $2,000 payment for five years. A full-text copy of the Disclosure Statement dated February 20, 2019, is available at https://tinyurl.com/y3hc6wrw from PacerMonitor.com at no charge. About Vision Investment Group Based in Bluffton, Indiana, Vision Investment Group, Inc., filed a Chapter 11 petition (Bankr. N.D. Ind. Case No. 18-10864) on May 11, 2018, estimating $100,001 to $500,000 in assets and $1 million to $10 million in liabilities. Daniel J. Skekloff, at Haller & Colvin, PC, is the Debtor's counsel. WEYERBACHER BREWING: Seeks to Hire Ciardi Ciardi as Counsel ----------------------------------------------------------- Weyerbacher Brewing Company, Inc., seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to hire Ciardi Ciardi & Astin, P.C., as its legal counsel. The firm will advise the Debtor its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The attorneys and paralegal expected to provide the services are: Albert Ciardi, III $515 Jennifer McEntee $350 Daniel Siedman $300 Stephanie Frizlen, Paralegal $120 The firm received a pre-bankruptcy retainer in the amount of $30,000. Albert Ciardi III, Esq., a partner at Ciardi, disclosed in court filings that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Albert A. Ciardi, III, Esq. Ciardi Ciardi & Astin, P.C. One Commerce Square 2005 Market Street, Suite 3500 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: 215-557-3551 E-mail: aciardi@ciardilaw.com - and - Jennifer E. Cranston, Esq. Ciardi Ciardi & Astin, P.C. One Commerce Square 2005 Market Street, Suite 3500 Philadelphia, PA 19103 Tel: 215 557 3550 E-mail: jcranston@ciardilaw.com About Weyerbacher Brewing Co Weyerbacher Brewing Company, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 19-12558) on April 22, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Richard E. Fehling. Ciardi Ciardi & Astin, P.C., is the Debtor's counsel. WHEEL PROS: Moody's Affirms B3 CFR Amid Mobile Hi-Tech Deal ----------------------------------------------------------- Moody's Investors Service affirmed Wheel Pros, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating on its proposed acquisition of Mobile Hi-Tech Wheels. Concurrently, Moody's affirmed its ratings on the company's senior secured first lien term loan and second lien term loan at B2 and Caa2, respectively. The outlook is stable. Wheel Pros has signed a definitive agreement to acquire MHT, a distributor of custom aftermarket wheels, through the issuance of $326 million in incremental first lien and $90 million in second lien term loans borrowings and equity contributions from the current sponsor, Clearlake Capital Group, L.P. and rollover equity from MHT. In addition to supporting the acquisition of MHT, proceeds will be used to repay existing borrowings under the asset-based loan revolver, cover transaction fees & expenses, and add cash to the balance sheet. The company's current $60 million ABL (unrated) will remain in place. According to Moody's Analyst Andrew MacDonald, "Wheel Pro's transformational acquisition of MHT positions the company as a leader in a highly fragmented market with potential upside for margins and cash flow, but it also views the acquisition as being aggressive given the amount of debt being issued that will weaken credit metrics and the potential for integration risk." Moody's took the following ratings on Wheel Pros, Inc.: Corporate Family Rating, affirmed at B3 Probability of Default Rating, affirmed at B3-PD $554.3 million (including $326 million add-on) Gtd Senior Secured First-Lien Term Loan due 2025, affirmed at B2 (LGD3) $160 million (including $90 million add-on) Gtd Senior Secured Second-Lien Term Loan due 2026, affirmed at Caa2 (LGD5) Outlook, Remains Stable RATINGS RATIONALE Wheel Pros' B3 CFR is broadly constrained by the company's high leverage, increasingly aggressive financial policy evidenced by recent debt funded acquisitions, highly discretionary and narrow product focus that is also exposed to volatile raw material costs (albeit partially mitigated by pricing programs), and seasonal working capital needs. The company's rating is supported, however, by a good market position within its proprietary branded wheel products that has increased materially with the addition of MHT, a presence in the aftermarket that provides a degree of revenue stability, favorable customer diversification, and a history of good sales growth. However, Moody's believes that the acquisition of MHT will require significant investment over time to fully integrate the two businesses and expects the company will continue to make strategic acquisitions to broaden its product offerings that could delay deleveraging. Moody's expects Wheel Pros' liquidity profile will remain adequate during the next twelve months, but the company may rely on its modestly sized ABL to fund seasonal working capital needs. Pro-forma for the acquisition of MHT, the company's debt-to-EBITDA and EBITA-to-interest for the twelve months ended December 31, 2018 is 6.3 times and 1.7 times, respectively (all ratios are Moody's-adjusted unless otherwise stated). Moody's expects leverage to fall below 6.0 times during the next 12-18 months as revenues grow in the mid-single digit percent range and debt is repaid from a combination of $5.6 million of annual mandatory debt amortization and from excess cash flows payments. The stable outlook reflects Moody's forecasts that the company will continue to modestly grow revenue and generate positive free cash flow on an annual basis, leading to improved earnings and a gradual reduction in leverage over the next eighteen months. The stable outlook is also predicated on the expectation that adequate liquidity will be maintained. Wheel Pro's ratings could be upgraded if the company is able to integrate MHT with minimal challenges while continuing to grow both revenue and EBITDA. An upgrade would also require a financial policy that supports debt-to-EBITDA sustained below 5.5 times even when considering its acquisition growth strategy, and retained cash flow-to-debt maintained above 10%. At least an adequate liquidity profile would also need to be maintained for consideration of an upgrade. Conversely, downward ratings pressure could ensue if debt-to-EBITDA is expected to be sustained above 7.0 times, operating margins deteriorate or free cash flows turn negative. A significant reduction in liquidity, or a debt financed dividend and/or acquisition could also result in a ratings downgrade. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. Wheel Pros, headquartered in Greenwood Village, Colorado, is a wholesale distributor of custom and proprietary branded wheels, performance tires and related accessories in the aftermarket automotive segment. The company owns fifteen proprietary customizable wheel and accessory brands and a network of distribution centers, primarily in North America. The company is majority-owned by private equity financial sponsor Clearlake Capital Group, L.P. Management reported revenue (pro forma for the acquisition of MHT) for the year ended December 31, 2018 of approximately $782 million. WMC MORTGAGE: May 7 Meeting Set to Form Creditors' Panel -------------------------------------------------------- Andy Vara, United States Trustee, for Region 3, will hold an organizational meeting on May 7, 2019, at 10:30 a.m. in the bankruptcy case of WMC Mortgage, LLC. The meeting will be held at: The Doubletree Hotel 700 King Street Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About WMC Mortgage WMC Mortgage, LLC, directly and through various predecessors, was in the business of originating residential mortgage loans for more than 60 years. The collapse of the housing and financial markets presaging the Great Recession decimated WMC's loan origination business. WMC Mortgage sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10879) on April 23, 2019. The Debtor had estimated assets of $1 million to $10 million and liabilities of $100 million to $500 million. The petition was signed by Mark V. Asdourian, president and chief executive officer. The cases have been assigned to Christopher S. Sontchi. The Debtor tapped Richards, Layton & Finger, P.A. as bankruptcy counsel; Jenner & Block LLP as special litigation counsel; Alvarez & Marsal Disputes and Investigatons LLC as financial advisor; and Epiq Corporate Restructuring, LLC as claims, noticing and solicitation agent. WOODLAWN COMMUNITY: Trustee Taps Millennium Properties as Broker ---------------------------------------------------------------- Gina Krol, the Chapter 11 trustee for Woodlawn Community Development Corp., received authority from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Millennium Properties Real Estate as real estate broker. The Debtor is the owner of the following parcels of real property: 4108 S. King Drive Commercial Building 4112 S. King Drive Vacant Building 1 E. Cermak (2201 S. State) Undeveloped 6121 S. Rhodes Residential 2211 S. State Undeveloped 1437 E. 65th Vacant Building 6521 S. Evans Undeveloped 6445 S. Kimbark Undeveloped 6312 S. Woodlawn Undeveloped 4123-57 S. Calumet Undeveloped 6537 S. Maryland Vacant Building 6547 S. Maryland Undeveloped Millennium Properties will be paid a 5% commission by the purchasers on all sales. Any cooperating broker is anticipated to receive 2% of the brokerage commission. Daniel Hyman, chairman and chief executive officer of Millennium Properties, disclosed in court filings that he is a disinterested person and does not hold any interest adverse to the Debtor's bankruptcy estate. The firm can be reached at: Daniel J. Hyman Millennium Properties Real Estate 205 W. Wacker Dr., Suite 1750 Chicago, IL 60660 Phone: +1 312-338-3000 About Woodlawn Community Development Founded in 1972, Woodlawn Community Development Corp. -- https://www.wcdcchicago.com/ -- manages and develops affordable housing for families in the Greater Metro Chicago area. The company is based in Chicago. Woodlawn Community Development filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 18-29862) on Oct. 24, 2018. In the petition signed by Leon Finney, Jr., president and chief executive officer, the Debtor estimated $50 million to $100 million in both assets and liabilities. The Hon. Carol A. Doyle oversees the case. David R. Herzog, Esq., at Herzog & Schwartz, P.C., is the Debtor's bankruptcy counsel. WYNN RESORTS: Moody's Alters Outlook on Ba3 CFR to Positive ----------------------------------------------------------- Moody's Investors Service revised the outlook for Wynn Resorts, Limited to positive from negative in response to the report by the Massachusetts Gaming Commission that the company's license to own and operate the Encore Boston Harbor, which is scheduled to open in approximately 2 months, has been maintained. WYNN's Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, Ba3 backed senior secured bank credit facility were affirmed. In addition, Wynn America, LLC's senior secured bank credit facility was affirmed at Ba2, Wynn Las Vegas, LLC's senior unsecured rating was affirmed at B1, and Wynn Macau, Limited's senior unsecured B1. The Speculative Grade Liquidity Rating remains unchanged at SGL-1. "The outlook revision to positive reflects the MGC's decision to maintain WYNN's gaming license in the State thereby alleviating Moody's concern regarding WYNN's ability to own and operate Encore Boston Harbor," stated Keith Foley, a Senior Vice President at Moody's. "The MGC's decision, combined with Moody's expectation that Boston Encore Harbor will ramp up quickly and perform well over the long term strongly suggests that WYNN's credit profile will improve," added Foley. Although the MGC did not find substantial evidence that the company willfully provided false or misleading information, they did find certain violations and failures of policies and procedures to investigate allegations of wrongdoing, and as a result, the MGC did impose certain penalties. Moody's view is that these penalties, albeit it concerning to some degree, were not material enough to affect Moody's decision to revise the outlook to positive from negative. The penalties instituted by the MGC included: (1) a $35 million fine to the company; (2) a $500,000 fine to the current CEO and requirement of training and executive coaching on certain management issues; (3) the employment of an independent monitor to conduct a full review and evaluation of internal policies; and (4) a requirement that WYNN maintain the separation of Chair and CEO for the duration of its 15 year gaming license. The positive outlook also considers Moody's continued favorable long-term revenue and earnings prospects for the company's Macau, China, and Las Vegas Strip, Nevada casino resort properties. Outlook Actions: Issuer: Wynn Resorts, Limited Outlook, Changed To Positive From Negative Affirmations: Issuer: Wynn America, LLC Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD2) Issuer: Wynn Las Vegas, LLC Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5) Issuer: Wynn Macau, Limited Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5) Issuer: Wynn Resorts, Limited Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD4) RATINGS RATIONALE WYNN's Ba3 Corporate Family Rating is supported by the quality, popularity, and favorable reputation of the company's resort properties -- a factor that continues to distinguish it from most other gaming operators -- along with the company's well-established and very successful track record of building large, high quality destination resorts. WYNN's very good liquidity profile and relatively low cost of debt capital also support the ratings. Key credit concerns include WYNN's limited diversification despite the fact that it is one of the largest U.S. gaming operators in terms of revenue. WYNN's revenue and cash flow will remain heavily concentrated in the Macau gaming market, even after Encore Boston Harbor opens. Moody's also expect that WYNN will be presented with and pursue other large, high profile, integrated resort development opportunities around the world. As a result there will likely be periods where the company's leverage experiences periods of increases due to partially debt-financed, future development projects. An upgrade would require that the initial ramp-up of Encore Boston Harbor supports WYNN's ability to maintain net debt/EBITDA on a Moody's adjusted basis below 5.0 times. Net debt/EBITDA was about 4.7 times for the fiscal year-ended Dec. 31, 2018 applying about 50% of the company's cash to the net debt calculation. Ratings could be downgraded if adjusted net debt/ EBITDA rises above 6.0 times for any reason and/or the any future material issues arise that could affect the company's operations or ability to maintain its license. Wynn Resorts, Limited, is a developer, owner and operator of integrated casino resorts. In the Macau Special Administrative Region of the People's Republic of China, the company owns approximately 72% of Wynn Macau, Limited, which includes the operations of the Wynn Macau and Wynn Palace resorts. In Las Vegas, Nevada, the company operates and, with the exception of certain retail space, owns 100% of Wynn Las Vegas. Consolidated net revenue for the fiscal year-ended Dec. 31, 2018 was $6.7 billion. XPLOSION INC: Continued Losses Cast Going Concern Doubt ------------------------------------------------------- Xplosion Incorporated filed its quarterly report on Form 10-Q, disclosing a net loss of $84,240 on $0 of revenue for the three months ended Jan. 31, 2019, compared to a net loss of $67,872 on $2,908 of revenue for the same period in 2018. At Jan. 31, 2019 the Company had total assets of $3,489,024, total liabilities of $271,386, and $3,217,638 in total stockholders' equity. At Jan. 31, 2019 and Oct. 31, 2018, the Company had cash of $158 and $200, respectively, and negative working capital of $271,228 as at Jan. 31, 2019 and $222,230 as at Oct. 31, 2018. For the three months ended Jan. 31, 2019 and 2018 the Company had net losses of $84,240 and $67,872, respectively. Continued losses may adversely affect the liquidity of the Company in the future. Company President Eugenio Gregorio states that the factors noted raise substantial doubt about the Company's ability to continue as a going concern. Mr. Gregorio further stated, "The recoverability of a major portion of the recorded assets amounts shown in the accompanying consolidated financial statements is dependent upon continued operations of the Company, which in turn is dependent on the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's existence is dependent upon management's ability to develop profitable operations and resolve its liquidity problems." A copy of the Form 10-Q is available at: https://is.gd/Fr5vFd Xplosion Incorporated markets and distributes innovative lifestyle and enhancement products and complimentary goods through a global distribution license for the SayberX line of self-stimulation devices for men and couples. The Company was incorporated on October 6, 2015, and is headquartered in California. ********* 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. 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