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/raid1/www/Hosts/bankrupt/TCR_Public/190611.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 11, 2019, Vol. 23, No. 161 Headlines 17/21 GROUP: July 31 Plan Confirmation Hearing 18 FREMONT: Moody's Gives 'B3' CFR & Rates $550MM Term Loan 'B3' 99 CENTS: S&P Cuts ICR to 'CC' After Debt Exchange Announcement ADAMIS PHARMACEUTICALS: Faces Patent Litigation Over Naloxone AFFINITY GAMING: S&P Downgrades ICR to 'B-'; Outlook Stable ALTA MESA: Delays Filing of First Quarter Form 10-Q ALTA MESA: Posts $2 Billion Net Loss in Fiscal Year 2018 AMERICAN ENERGY: Moody's Affirms 'Ca' CFR, Outlook Negative AUTO EARTH: Case Summary & 15 Unsecured Creditors BUEHLER INC: June 26 Approval Hearing on Plan Outline C & S JANITORIAL: Seeks to Expand Scope of Enrolled Agent Services CARE NEW ENGLAND HEALTH SYSTEM: S&P Alters Outlook to Stable CAROL ROSE: Plan Discloses Treatment of Gainesville ISD Claims CARTHAGE SPECIALTY: June 27 Hearing on Disclosure Statement CC CARE LLC: July 1 Plan Confirmation Hearing COLOGIX HOLDINGS: Moody's Affirms B3 CFR on Expected Pay Down COMMUNITY HEALTH: Paul Smith Resigns as Division President CONEX EQUIPMENT: June 27 Plan Confirmation Hearing CONFERENCE SERVICES: Voluntary Chapter 11 Case Summary CONFLUENT HEALTH: Moody's Assigns B3 CFR, Outlook Stable DARP INC: Reconsideration of Class Certification in Fochtman Denied DATACOM SYSTEMS: June 27 Plan Confirmation Hearing DAVID CROWE: U.S. Trustee Forms 3-Member Committee DEL MAR ENTERPRISES: July 30 Plan Confirmation Hearing DIFFUSION PHARMACEUTICALS: Armistice Has 5.5% Stake as of May 23 DON FRAME: Unsecureds to Get Payments from Sale Proceeds DON ROBERTS: Roggow Law Represents PCA and FLCA DOWN NECK: June 27 Plan Confirmation Hearing DREAM WORKS: Unsecureds to Get 100% in Monthly Payments Over 7 Yrs DTI HOLDCO: S&P Downgrades ICR to 'B-' on Weakening Liquidity EDEN HOME: July 2 Plan Confirmation Hearing EDGEMARC ENERGY: Seeks to Hire Evercore Group as Investment Banker EDGEMARC ENERGY: Seeks to Hire Landis Rath as Delaware Counsel EDGEMARC ENERGY: Seeks to Hire Opportune as Restructuring Advisor EDGEMARC ENERGY: Taps Prime Clerk as Administrative Advisor ELEVATE TEXTILES: S&P Alters Outlook to Negative, Affirms 'B' ICR ELK PETROLEUM: July 18 Combined Disclosure, Plan Approval Hearing FC GLOBAL: Shareholders OK Name Change to "Gadsden Properties" FC GLOBAL: Signs Cancellation and Exchange Agreement with Gadsden FIRSTENERGY SOLUTION: Plan Confirmation Hearing Set for Aug. 20 FLIPDADDY'S LLC: Unsecured Creditors to Get $75,000 Under Plan FOUAD MARKET: Unsecureds to Get 10% in 4 Annual Installments FRESHSTART HOME: DOJ Watchdog Seeks Ch. 11 Trustee Appointment GENERAL MOTORS: Fitch Affirms BB+ Rating on Preferred Stock GENTIVA HEALTH: Moody's Hikes CFR to B1, Outlook Stable GREAT WESTERN PETROLEUM: Fitch Alters Outlook on 'B-' IDR to Pos. GTC WORKS: U.S. Trustee Unable to Appoint Committee HAWAIIAN AIRLINES: Moody's Cuts Class B Debt Rating to Ba2 HCA INC: Fitch Rates $35BB Sr. Secured Notes 'BB+', Outlook Stable HENRY COUNTY HEALTH: S&P Cuts Tax Anticipation Bonds Rating to BB+ HEXION HOLDINGS: Amends Plan to Add Insurance Contracts Provisions HGIM CORP: S&P Affirms 'B-'Issuer Credit Rating; Outlook Stable HIGH TIMES: Plan Hearing Moved to Sept. 10 to Continue CMIYA Talks HOME CARE: June 26 Hearing on Plan Confirmation IDEAL DEVELOPMENT: Amends Plan to Address U.S. Trustee's Objections IMAGE FIRST: Court Grants Campanelli Settlement INSYS THERAPEUTICS: Case Summary & 30 Largest Unsecured Creditors INSYS THERAPEUTICS: Files Chapter 11 Petition to Facilitate Sale JAGUAR HEALTH: CEO and Board Members Invest in Bridge Financing JAMES MEDICAL: U.S. Trustee Unable to Appoint Committee JEFFERIES FINANCE: Fitch Hikes LongTerm IDR to BB, Outlook Stable JILL ACQUISITION: S&P Lowers ICR to 'B-'; Outlook Stable JONAH ENERGY: S&P Lowers ICR to 'CCC+' on Weakening Cash Flows KBC ENTERPRISE: Guarantees, Insurance Policy Added to Plan Funding KNB HOLDINGS: S&P Alters Outlook to Negative on Tariff Pressures KONA GRILL: Seeks to Hire Piper Jaffray as Investment Banker LAUREATE EDUCATION: Moody's Hikes CFR to B1, Outlook Stable LIVE NATION: Moody's Hikes CFR to Ba2 & Unsec. Notes Rating to Ba3 MCAFEE LLC: Moody's Affirms B2 CFR & Cuts First Lien Debt to B2 MESOBLAST LIMITED: Reports $25 Million Net Loss for Third Quarter MJJW PORTFOLIO: June 25 Plan Confirmation Hearing MURRAY-CALLOWAY COUNTY: Moody's Cuts Rating to Ba2, Outlook Neg. NELSON WELLNESS: To Continue Operation of Franchise Under Plan NEOVASC INC: Nasdaq Continuing to Monitor Market Value Deficiency NEOVASC INC: Shareholders Reelect Five Existing Directors NORTHERN DYNASTY: Incurs C$16.2 Million Net Loss in First Quarter NORTHERN DYNASTY: Subsidiary Inks Right-of-Way Deal with Iliamna NORTHWEST FARM: June 27 Plan Confirmation Hearing NOVABAY PHARMACEUTICALS: All Proposals Approved at Annual Meeting PARQ HOLDINGS: S&P Discontinues 'SD' ICR After Refinancing PENINSULA RESEARCH: Plan Confirmation Hearing Continued to Sept. 11 PLASTIC2OIL INC: Delays Q1 Form 10-Q Over Staffing Limitations PLUTO ACQUISITION: Moody's Assigns B3 CFR & Rates Secured Loans B2 PULMATRIX INC: May Issue 336,995 Shares Under Incentive Plan PULMATRIX INC: Sabby Volatility Has 5.2% Stake as of May 30 R & C PROPERTIES: Adds Claims Objection Provisions in Amended Plan RENT-A-CENTER INC: S&P Hikes ICR to 'B' on Performance Improvement REWALK ROBOTICS: Appoints Chunlin Han to its Board of Directors ROCK SPRINGS: Business Income to Fund Proposed Chapter 11 Plan SEARS HOLDINGS: Plus Mark Objects to Disclosure Statement SEARS HOLDINGS: Santa Rosa Mall Objects to Disclosure Statement SEARS HOLDINGS: School District 300 Objects to Disclosure Statement SIRIUS XM: Moody's Rates Proposed $1BB Sr. Unsecured Notes 'Ba3' SNAP LINE: June 25 Plan Confirmation Hearing SOUTHEASTERN METAL: Trustee Appoints 3 New Committee Members SOUTHERN GRAPHICS: Moody's Lowers CFR to Caa1, Outlook Stable SPECTRUM BRANDS: Fitch Affirms BB LongTerm IDR, Outlook Stable SPECTRUM HOLDINGS: S&P Downgrades ICR to 'B-' on Weak Performance STERICYCLE INC: Fitch Assigns BB IDR & Rates $550M Notes BB+ TGP HOLDINGS III: Moody's Alters Outlook on B3 CFR to Negative TMK HAWK: Moody's Lowers CFR to Caa1, Outlook Negative UNITED CONSTRUCTION: June 18 Hearing on Disclosure Statement UNITI GROUP: Stockholders Elect Five Directors VAST BROADBAND: Moody's Assigns B3 CFR, Outlook Stable VAST BROADBAND: S&P Assigns 'B' ICR; Outlook Negative VG LIQUIDATION: Beachfront Media Resigns as Committee Member VISTRA ENERGY: Fitch Assigns 'BB' LT Issuer Default Rating VISTRA ENERGY: Moody's Affirms Ba2 Corp. Family Rating WEATHERFORD INTERNATIONAL: More Creditors Sign Restructuring Deal WESTERN COMMUNICATIONS: Unsecureds' Recovery Unknown Under Plan WHATCOM COUNTY, WA: Filing of 17-Page Kortlever Deal Approved [^] Large Companies with Insolvent Balance Sheet ********* 17/21 GROUP: July 31 Plan Confirmation Hearing ---------------------------------------------- With the modifications to the Amended Disclosure Statement and Plan of The 17/21 Group, LLC, a California limited liability company, the Amended Disclosure Statement is approved for dissemination. The hearing on confirmation of the Plan is set for July 31, 2019, at 11:00 a.m. in Courtroom 1675, Roybal Federal Building, 255 East Temple Street, Los Angeles, California 90012. Page 18 of the Amended Disclosure Statement must be modified to include an estimated percentage of distribution to Class 3 General Unsecured Claims. The Plan must be modified to withdraw any reference to the Debtor receiving a discharge and include language that the Debtor will not receive a discharge under 11 U.S.C. Section 1141(d)(3)(A) where the Plan provides for liquidation of all or substantially all of the property of the estate. Ballots accepting or rejecting the Plan must be returned so that they are actually received on or before 5:00 p.m. (PST) on June 14, 2019. Any opposition to confirmation of the Plan must be filed with the Court and served on all necessary parties on or before June 14, 2019. The ballot summary and memorandum in support of confirmation of the Plan must be filed with the Court and served on all necessary parties on or before June 28, 2019. A full-text copy of the Order dated May 23, 2019, is available at https://tinyurl.com/y4rn7cr5 from PacerMonitor.com at no charge. Counsel for the Debtor is Brett H. Ramsaur, Esq., and Natalie B. Daghbandan, Esq., at Ramsaur Law Office, in Costa Mesa, California. About The 17/21 Group The 17/21 Group LLC's line of business includes the wholesale distribution of women's, children's, and infants' clothing and accessories. The Company posted gross revenue of $15.69 million in 2017 and gross revenue of $13.34 million in 2016. The Company's principal place of business is located at 4700 S Boyle Ave, Suite A, Los Angeles California. The 17/21 Group, LLC, based in Simi Valley, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-13300) on March 26, 2018. In the petition signed by CEO Michael Geliebter, the Debtor disclosed $473,637 in assets and $1.78 million in liabilities. The Hon. Robert N. Kwan presides over the case. Brett Ramsaur, Esq., at Ramsaur Law Office, serves as bankruptcy counsel. 18 FREMONT: Moody's Gives 'B3' CFR & Rates $550MM Term Loan 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to 18 Fremont Street Acquisition, LLC's $550 million senior secured first lien term loan. A B3 Corporate Family Rating, B3-PD Probability of Default Rating, and stable outlook were also assigned. Fremont, a privately held company, currently owns and operates two casinos, the D Las Vegas and Golden Gate Resort and Casino. Both casinos are located in downtown Las Vegas, Nevada. Proceeds from the proposed term loan along with $303 million of cash equity will go towards the funding of Fremont's new $860 million downtown Las Vegas casino development called Circa Resort and Casino. Circa is currently scheduled to open in December 2020. Initial construction broke ground in February and so far over $232 million of cash equity has been spent. Fremont's two existing casinos -- D Las Vegas and Golden Gate Resort and Casino -- will be contributed and become part of the borrowing and collateral group. Assignments: Issuer: 18 Fremont Street Acquisition, LLC Probability of Default Rating, Assigned B3-PD Corporate Family Rating, Assigned B3 Senior Secured Bank Credit Facility, Assigned B3 (LGD4) Outlook Actions: Issuer: 18 Fremont Street Acquisition, LLC Outlook, Assigned Stable RATINGS RATIONALE The B3 Corporate Family Rating considers Fremont's management team's knowledge and success operating in the downtown Las Vegas gaming market along with the considerable amount of cash equity supporting the development project. In total, equity contributions in the form of new cash and the contribution of D Las Vegas and Golden Gate Resort and Casino to the Fremont borrowing group, accounts for about 50% of the total project development costs. Also considered is Moody's expectation that the downtown Las Vegas gaming market will continue to gain in popularity as the quality of gaming and non-gaming options in that market, including Circa Resort and Casino, continues to improve. Fremont's rating also reflects two inherent risks associated with large casino development projects -- the ability to open on-time and on-budget, and the ability to ramp-up at a pace and level that adequately covers its fixed charges. While Moody's has a favorable view of the Circa project development and the downtown Las Vegas gaming market's future performance, the ratings are prospective in nature and until such time that the project is completed and demonstrates an ability to cover its fixed charges, these two risks will heavily influence Fremont's ratings. Also a key credit concern is Fremont's relatively small size in terms of revenue and cash flow compared to other more diversified gaming companies throughout the U.S., and lack of geographic diversification. All of Fremont's revenues are derived from one gaming market. The B3 rating on Fremont's $550 million senior secured first lien term loan considers that it is the only debt in the company's capital structure, and as a result, does not receive any credit support from debt below it, or provide any credit support to debt located above it in the capital structure. The stable outlook considers the credit protections during the construction phase of Circa, including an interest reserve that extends three months past the scheduled completion date. The stable outlook also considers Moody's confidence that Fremont's two existing casinos will generate the $34 million of cash flow budgeted to fund the Circa development as planned. Additionally, to the extent those funds fall short, there is a $45 million completion guaranty backed by a letter of credit that is available to close the gap. Fremont's ratings could be upgraded if Circa opens on-time and on-budget and initial ramp-up results provide a high level of confidence on Moody's part that Fremont will comfortably meet its fixed charges and achieve debt/EBITDA around 4.5 times for the first full year of operations. Ratings could be downgraded if at any time during the 18-month construction horizon it appears there will be a construction delay that will go past the 21-month interest reserve, gaming market conditions in downtown Las Vegas deteriorate, and/or it appears Fremont will not be able to meet its fixed charge or achieve debt EBITDA below 5.0 times. 99 CENTS: S&P Cuts ICR to 'CC' After Debt Exchange Announcement --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on 99 Cents Only Stores LLC to 'CC' from 'CCC+' 99 Cents Only Stores has recently reached an agreement with its financial sponsors, Ares Management and Canada Pension Plan Investment Board (CPPIB), and a majority of the holders of its second-lien term loan and secured notes facilities (both unrated) to execute a debt exchange for its common and preferred equity. S&P views the proposed transaction for the secured notes as a distressed exchange that offers the debtholders less than they were originally promised. Meanwhile, S&P's 'CCC+' issue-level rating and '3' recovery on 99 Cents Only Stores' first-lien debt and its 'CCC-' issue-level rating and '6' recovery rating on its unsecured notes are unaffected because they are not subject to the exchange offer. The downgrade follows 99 Cents Only Stores' announcement of a proposed debt exchange wherein it will issue a combination of common and preferred equity in return for its outstanding $146 million second-lien term loan facility and $143 million secured notes facility. The company's proposal for the preferred equity includes a deferred cash interest payment at a lower rate than currently offered by the existing debt. The new securities will be subordinated to the remaining debt facilities in its capital structure. "The negative outlook reflects the likelihood that we will lower our rating on 99 Cents Only Stores to 'SD' upon the completion of the exchange. We will reassess our rating on the company, as well as our issue-level ratings on its rated debt, following the completion of the exchange," S&P said. ADAMIS PHARMACEUTICALS: Faces Patent Litigation Over Naloxone ------------------------------------------------------------- Adamis Pharmaceuticals Corporation received on May 20, 2019 notice that it had been named and served as a defendant in a lawsuit filed by kaleo Inc. in the U.S. District Court for the District of Delaware regarding Adamis' higher dose naloxone injection product candidate for the treatment of opioid overdose, for which Adamis has previously submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) that is being reviewed by the agency. The complaint alleges, among other things, that the Company's product candidate infringes patents purportedly held by kaleo relating to its naloxone auto-injector product. The action was filed under the provisions of the Hatch-Waxman Act in response to Adamis' Paragraph IV certification regarding the kaleo patents as part of the Company's NDA process, and results in an automatic stay of any final approval by the FDA of Adamis' NDA. Adamis does not anticipate this stay would interrupt or delay the FDA's ongoing review of the NDA; however, if the patent dispute is unresolved by the time the FDA was prepared to grant an approval, the Company believes that the agency would grant conditional approval until the sooner of Oct. 4, 2021 or until final resolution of the matter before the court, whichever occurs sooner. Adamis believes that its naloxone injection product, which combines a generic formulation of naloxone with Adamis' proprietary injection device, does not infringe any valid and enforceable patent held by kaleo and that kaleo's complaint is without merit. Adamis intends to defend against kaleo claims and pursue all available legal remedies available to the company against kaleo and, if appropriate, its outside counsel. Background In December 2018, Adamis filed an NDA relating to its higher dose naloxone injection product. In March 2019, Adamis received a notice from the FDA that the NDA was sufficiently complete to permit a substantive review with a target action date of Oct. 31, 2019. As is part of this kind of application, Adamis' NDA included Paragraph IV certification with respect to certain patents listed in the FDA's Orange Book for kaleo, Inc.'s EVZIO product. As contemplated under the applicable federal laws and procedures, Adamis certified that each was invalid, unenforceable, or will not be infringed by the Adamis naloxone injection product and sent a notice letter to kaleo informing kaleo of the Paragraph IV certification. About Naloxone Injection Naloxone is an opioid antagonist used to treat narcotic overdoses. Naloxone, which is generally considered the drug of choice for immediate administration for opioid overdose, blocks or reverses the effects of the opioid, including extreme drowsiness, slowed breathing, or loss of consciousness. Common opioids include morphine, heroin, tramadol, oxycodone, hydrocodone and fentanyl. According to statistics published by the Centers for Disease Control and Prevention, in 2017, drug overdoses resulted in approximately 72,000 deaths in the United States - nearly 200 deaths per day. Drug overdoses are now the leading cause of death for Americans under 50, and the proliferation of more powerful synthetic opioids, such as fentanyl and its analogues, could result in future increases in the number of deaths resulting from opioid overdoses. Based on the current opioid epidemic, particularly involving the more potent fentanyl narcotics, the company and others have published reports supporting the need for a higher dose naloxone product. In December 2018, the joint meeting of the Anesthetic and Analgesic Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee voted in favor of adding labeling language that recommends co-prescription of naloxone for all or some patients prescribed opioids. Medicare (HHS) has also recommended co-prescribing naloxone with opioids under certain conditions. These recommendations could significantly increase the naloxone market. About Adamis San Diego, Calif.-based Adamis Pharmaceuticals Corporation (OTCQB:ADMP) -- http://www.adamispharmaceuticals.com/-- is a specialty biopharmaceutical company primarily focused on developing and commercializing products in various therapeutic areas, including respiratory disease and allergy. The Company's Symjepi (epinephrine) Injections 0.3mg and 0.15mg were approved for use in the emergency treatment of acute allergic reactions, including anaphylaxis. Adamis recently announced a distribution and commercialization agreement with Sandoz, a division of Novartis Group, to market Symjepi in the U.S. Adamis is developing a sublingual tadalafil product candidate as well as additional product candidates, using its approved injection device, and a metered dose inhaler and dry powder inhaler devices. The company's subsidiary, U.S. Compounding, Inc., compounds sterile prescription drugs, and certain nonsterile drugs for human and veterinary use, to patients, physician clinics, hospitals, surgery centers and other clients throughout most of the United States. Adamis incurred a net loss of $39 million in 2018, following a net lsos of $25.53 million in 2017. As of March 31, 2019, Adamis had $52.66 million in total assets, $12.88 million in total liabilities, and $39.77 million in total stockholders' equity. Mayer Hoffman McCann P.C., in San Diego, California, the Company's auditor since 2007, issued a "going concern" qualification in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2018. The auditors noted that the Company has incurred recurring losses from operations, and is dependent on additional financing to fund operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. AFFINITY GAMING: S&P Downgrades ICR to 'B-'; Outlook Stable ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S. gaming operator Affinity Gaming to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's senior secured credit facility to 'B' from 'B+', and its issue-level rating on the company's second-lien term loan to 'CCC' from 'CCC+'. The downgrade reflects S&P's expectation for sustained leverage exceeding 6.5x caused by weakened operating performance and a downward revision to its EBITDA forecast through 2020. Following its outlook revision to negative in September 2018, S&P underestimated the impact that operational headwinds would have on the company in the second half, which led to higher year end leverage than previously expected. By S&P's measure, Affinity ended 2018 with adjusted leverage in the high-7x area. Combined with the adverse impact of severe weather in multiple markets in first-quarter 2019, this underperformance has left Affinity's current leverage significantly above the downgrade threshold for a 'B' rating. S&P continues to believe the company will be able to deleverage, particularly by using the bulk of the proceeds from the planned sale of its Colorado assets, which the rating agency expects will close in first-quarter 2020, to pay down debt. Even so, S&P is not confident that Affinity will be able to reduce leverage to less than 6.5x until late 2020. "The stable ratings outlook reflects our belief that despite its current high leverage, Affinity Gaming will maintain decent EBITDA coverage of interest in the high-1x to 2x area over the forecast period," S&P said, adding that it also expects the company to use expected asset sale proceeds to repay debt in early 2020, which should support deleveraging. "We could lower our ratings on Affinity over the next six to 12 months if continued weak operating performance leads to EBITDA coverage of interest of less than 1.5x, or the company depletes its excess cash reserves, which would suggest an unsustainable capital structure. We might also consider a lower rating if a covenant breach appears imminent, and we were not confident that Affinity would be able to receive an amendment or waiver," the rating agency said. To raise Affinity's rating, S&P said it would need to believe the company could realize leverage of less than 6x. "We believe this level would allow the company to sustain leverage below our current threshold of 6.5x, incorporating expected volatility in operating results. To achieve the 6x threshold, Affinity will most likely need a return to organic EBITDA growth, minimal capital spending on development, and a commitment to using free cash flow to repaying outstanding debt, S&P said. ALTA MESA: Delays Filing of First Quarter Form 10-Q --------------------------------------------------- Alta Mesa Holdings, LP, filed a Form 12b-25 with the U.S. Securities and Exchange Commission notifying the delay in the filing of its quarterly report on Form 10-Q for the period ended March 31, 2019. As previously disclosed, Alta Mesa has not completed the filing of its Annual Report on Form 10-K for the year ended Dec. 31, 2018. The Company is finalizing its year-end financial statements and related disclosures and its assessment of the effectiveness of its internal control over financial reporting, which is expected to result in the reporting of material weakness. Following the filing of the 2018 Form 10-K, the Company will work towards becoming current in its filings as soon as practicable. Due to the Company's efforts in resolving the aforementioned matters, the Company is not able to finalize the financial statements and related information for inclusion in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, and therefore is unable to file it within the prescribed time period without unreasonable effort or expense. As discussed in the Company's previous filings with the Commission, the Company was acquired pursuant to a business combination on Feb. 9, 2018. As a result of the business combination, the Company is considered the accounting predecessor to the acquiror. Accordingly, the results of operations for the quarter ended March 31, 2018 include both the successor and predecessor periods. The Company currently estimates the quarter ended March 31, 2019 will result in a net loss of approximately $22 million as compared to a net loss of $49 million for the quarter ended March 31, 2018. The primary drivers to the change in net loss are $26 million of increased revenue associated with increased production, $8 million in increased unrealized derivative losses, $13 million of increased lease operating expense and $8 million of increased depletion associated with increased production, $33 million of decreased general and administrative expense as a result of the non-recurrence of transactions associated with the business combination, $2 million of increased interest expense and other more insignificant fluctuations. The Company is currently in discussions with the lenders under its credit facility in order to seek relief, including with respect to the leverage ratio financial covenant. If unsuccessful in obtaining that relief, the Company may be unable to comply with the terms of the facility during 2019, which would permit the lenders to cease making amounts available under the facility, to require cash collateral for outstanding letters of credit and to exercise other rights under the facility. The Company has determined that there is substantial doubt about its ability to continue as a going concern due to the uncertainty of the negotiations with its lenders. About Alta Mesa Headquartered in Houston, Texas, Alta Mesa Holdings, LP -- http://www.altamesa.net/-- is an independent exploration and production company focused on the acquisition, development, exploration and exploitation of unconventional onshore oil and natural gas reserves in the eastern portion of the Anadarko Basin in Oklahoma. The Company was formed in 1987 as a private Texas limited partnership. 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. For the period from Feb. 9, 2018, through Dec. 31, 2018, the Company reported a net loss of $2.07 billion. As of Dec. 31, 2018, Alta Mesa had $935.71 million in total assets, $918.92 million in total liabilities, and $16.79 million in partners' capital. * * * As reported by the TCR in February 2019, Moody's Investors Service downgraded Alta Mesa Holdings' 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. ALTA MESA: Posts $2 Billion Net Loss in Fiscal Year 2018 -------------------------------------------------------- Alta Mesa Holdings, LP, filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K reporting a net loss of $2.07 billion on $409.01 million of total revenue for the period from Feb. 9, 2018, through Dec. 31, 2018. For the period from Jan. 1, 2018 through Feb. 8, 2018, the Company reported a net loss of $14.86 million on $47.63 million of total revenue. The Company reported a net loss of $77.66 million on $279.36 million of total revenue for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Alta Mesa had $935.71 million in total assets, $918.92 million in total liabilities, and $16.79 million in partners' capital. KPMG LLP, in Houston, Texas, the Company's auditor since 2018, issued a "going concern" qualification in its report dated May 17, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has suffered recurring losses from operations, and is facing risks and uncertainties surrounding its credit facility covenant compliance that raise substantial doubt about its ability to continue as a going concern. Liquidity and Capital Resources Alta Mesa said, "Our principal requirements for capital are to fund our day-to-day operations, development activities and to satisfy our contractual obligations related to servicing our debt and hedges. During 2018, our main sources of liquidity and capital resources came from the cash balance held following the Business Combination, cash flows generated from operations and borrowings under the Alta Mesa RBL. "Our future drilling plans and capital budgets are subject to change based upon various factors, some of which are beyond our control, including drilling results, oil and gas prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, midstream availability, other working interest owner participation and regulatory matters. Any deferral of planned capital expenditures, particularly with respect to bringing new wells onto production, could reduce our anticipated production, revenue and cash flow, and may result in the expiry of certain leases. However, because a large percentage of our acreage is held by production,we can alter our drilling program to minimize the risk of losing significant acreage. "We strive to maintain financial flexibility and, if they are available to us on terms we find acceptable, may access the capital markets to facilitate our development program, to selectively expand our acreage position or to redesign our capital structure. If our operating cash flow is materially less than anticipated and other sources of capital are not available on acceptable terms, we may decide to curtail our capital spending. "During January 2019, we received an audit report from our external reserve engineers regarding their opinion of our 2018 ending proved reserves, which included multi-year development of our proved undeveloped reserves. During April 2019, in finalizing our financial reporting for 2018, we determined that we may fail to satisfy the leverage covenant under the Alta Mesa RBL during 2019, possibly as soon as the June 2019 testing period, the results of which to be reported in August 2019. Accordingly, if we were to fail the leverage covenant, access to capital under the Alta Mesa RBL would likely be impaired, thus limiting our ability to satisfy the ability-to-drill threshold under the SEC's reserve recognition rule with respect to our future drilling locations. Thus, we did not recognize any proved undeveloped locations in the final December 31, 2018 reserve report. Should our ability to fund the required development costs improve in the future, we expect to re-recognize all or a portion of those reserves as proved. "Despite the absence of PUD locations in the 2018 reserve report, we expect to operate between 2 and 3 rigs during 2019 to develop our assets, particularly to focus on testing the spacing patterns we believe to be optimal, and to implement cost reduction strategies. If we have adequate liquidity to fund such operations, we expect to drill and bring online approximately 60 wells during 2019 while incurring approximately $140.0 million to $155.0 million of capital expenditures related to this development program. We also expect that an additional $18.0 million to $23.0 million could be incurred for non-operated projects, leasehold costs and capitalized workover activity. We do not expect our operating cash flow to provide sufficient proceeds to meet this level of expenditure and we would be required to utilize proceeds from borrowings under the Alta Mesa RBL, if capacity becomes available to us. "During April 2019, our borrowing base was reduced from $400.0 million to $370.0 million as part of the semi-annual redetermination. In addition, we drew our remaining capacity to bring our outstanding borrowings to approximately $350.0 million and outstanding letters of credit of $20.0 million, with approximately $86.0 million of cash on hand after completing that borrowing. We did not obtain covenant relief as part of the redetermination, but that remains an important objective for us as we strive to continue to comply with all the terms of our debt. We believe that the combined operating cash flow and cash currently on our balance sheet will be sufficient to allow us to carry out the desired development program, despite the associated negative free cash flow. Our ability to reduce well costs and to more precisely assess the productivity of wells under our new spacing design tests are important to our success in 2019 and beyond as we evaluate our future prospects and opportunities. As we execute our business strategy, we will continually monitor the capital resources available to meet future financial obligations and planned capital expenditures. We believe our cash flows provided by operating activities and funds sourced by the Alta Mesa RBL will allow us to pursue our currently planned development activities. We cannot provide assurance that operations and other needed capital will be available on acceptable terms, or at all." A full-text copy of the Form 10-K is available for free at: https://is.gd/E5AIsw 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 in February 2019, Moody's Investors Service downgraded Alta Mesa's 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 ENERGY: Moody's Affirms 'Ca' CFR, Outlook Negative ----------------------------------------------------------- Moody's Investors Service appended a limited default designation to American Energy -- Permian Basin, LLC's (AEPB) Probability of Default Rating, to change the PDR to Ca-PD/LD from Ca-PD. This action follows AEPB's continued non-payment of interest after the 30-day grace period, on it's Floating Rate Senior Notes due 2019, Senior Notes due 2020, Senior Notes due 2021 and the Exchangeable Junior Subordinated Notes due 2022. Concurrently, Moody's affirmed AEPB's Ca Corporate Family Rating (CFR), B3 rating on its senior secured first-lien notes, Caa2 rating on its senior secured second-lien notes, and C rating on its senior unsecured notes. The outlook remains negative. Affirmations: Issuer: American Energy - Permian Basin, LLC Probability of Default Rating, Affirmed at Ca-PD/LD (/LD appended) Corporate Family Rating, Affirmed at Ca Senior Secured First Lien Notes, Affirmed at B3 (LGD1) Senior Secured 2nd Lien Notes, Affirmed at Caa2 (LGD2) Senior Unsecured Notes, Affirmed at C (LGD5) Outlook Actions: Issuer: American Energy - Permian Basin, LLC Outlook remains Negative RATINGS RATIONALE AEPB elected not to make its interest payment due on May 1, 2019, on its Floating Rate Senior Notes due 2019, the 7.125% Senior Notes due 2020, 7.375% Senior Notes due 2021 and the 8% Exchangeable Junior Subordinated Notes due 2022. Additionally, the company elected to not make interest payment on May 30, 2019, within the 30-day grace period. On May 31, 2019, AEPB announced that the company had entered into a forbearance agreement with certain noteholders representing over 75% of the total aggregate principal amount of the outstanding Floating Rate Senior Notes due 2019, 7.125% Senior Notes due 2020, and 7.375% Senior Notes due 2021. These noteholders have agreed to forbear from exercising their default-related rights and remedies against the company until June 14, 2019, following the company's failure to make the scheduled interest payment due on May 1, 2019. Moody's considers AEPB's non-payment of interest on the unsecured notes within the contractual grace period as a default. As noted above, Moody's appended the Ca-PD PDR with a "/LD" designation indicating limited default. Although, the company has entered into a forbearance agreement with noteholders, Moody's deems this event an avoidance of default. AEPB's Ca CFR reflects the company's extremely tight liquidity situation, high likelihood of default, and Moody's view on the potential overall recovery. The senior unsecured notes rating of C reflects Moody's view of potential recovery on the notes. If the company files for bankruptcy protection or performs an out of court restructuring, the PDR will be downgraded to D-PD. A ratings upgrade is unlikely unless the debt is reduced significantly to result in an improved capital structure with adequate liquidity. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. American Energy -- Permian Basin, LLC (AEPB) is an independent oil and natural gas company with reserves primarily in the Southern Midland Basin within the Permian Basin of West Texas. AEPB is headquartered in Houston, TX. AUTO EARTH: Case Summary & 15 Unsecured Creditors ------------------------------------------------- Debtor: Auto Earth, Inc. PO Box 448 Anasco, PR 00610 Business Description: Auto Earth, Inc. owns a multi-tenant commercial property in Puerto Rico having a comparable sale value of $1.20 million. Chapter 11 Petition Date: June 8, 2019 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Case No.: 19-03291 Judge: Hon. Enrique S. Lamoutte Inclan Debtor's Counsel: Nydia Gonzalez Ortiz, Esq. SANTIAGO & GONZALEZ LAW, LLC 11 Calle Betances Yauco, PR 00698 Tel: 787 267-2205 E-mail: bufetesg@gmail.com Total Assets: $1,200,000 Total Liabilities: $1,134,373 The petition was signed by Victor Caraballo Santiago, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 15 unsecured creditors is available for free at: http://bankrupt.com/misc/prb19-03291.pdf BUEHLER INC: June 26 Approval Hearing on Plan Outline ----------------------------------------------------- Bankruptcy Judge Basil H. Lorch, III will convene a hearing on June 26, 2019 at 10:00 a.m. to consider approval of Buehler, Inc. and Buehler, LLC's disclosure statement referring to their chapter 11 plan dated May 3, 2019. Any objection to the disclosure statement must be filed and served at least five days prior to the hearing date. The Troubled Company Reporter previously reported that the Plan provides for the substantive consolidation of the Debtors' bankruptcy estates only for purposes of voting, confirmation and distribution. In addition to what is set forth in this Plan, the Debtors will file a motion for substantive consolidation. A copy of the Disclosure Statement dated May 3, 2019 is available at https://tinyurl.com/y5etusr4 from Pacermonitor.com at no charge. About Buehler Inc. Based in Jasper, Indiana, Buehler, Inc., et al., operate a chain of 15 grocery stores located in Indiana, Kentucky and Illinois. Buehler, Inc., and affiliates sought Chapter 11 protection (Bankr. S.D. Ind. Lead Case No. 18-71145) on Oct. 17, 2018. In the petition signed by CEO David Buehler, debtor Buehler, Inc., estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Buehler, LLC, estimated $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Hon. Basil H. Lorch III oversees the case. James R. Irving, Esq., at Bingham Greenebaum Doll LLP, serves as bankruptcy counsel. C & S JANITORIAL: Seeks to Expand Scope of Enrolled Agent Services ------------------------------------------------------------------ C & S Janitorial Services Inc. asked the U.S. Bankruptcy Court for the Southern District of Texas to authorize Murray Novy, an enrolled agent with the Internal Revenue Service, to provide additional services. In its supplemental application, the Debtor asked the court to authorize the enrolled agent to prepare the sales tax audit compliance documents and provide other business services directly related to its Chapter 11 case. The Debtor will pay the enrolled agent an hourly fee of $300. It is estimated that it will cost $6,000 to complete the sales tax audit. Mr. Novy disclosed in court filings that he does not represent any interest adverse to the Debtor and its estate. Mr. Novy maintains an office at: Murray R. Novy 3900 Essex Lane, Suite 540 Houston, TX 77027 Phone: 713-623-4192 Fax: 713-623-4195 About C & S Janitorial Services C & S Janitorial Services, Inc., a full-service janitorial company based in Houston, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-31497) on March 19, 2019. It previously sought bankruptcy protection on July 10, 2014 (Bankr. S.D. Tex. Case No. 14-33846). At the time of the new filing, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. The Debtor tapped the Law Office of Margaret M. McClure as its legal counsel. CARE NEW ENGLAND HEALTH SYSTEM: S&P Alters Outlook to Stable ------------------------------------------------------------ S&P Global Ratings has revised its outlook to stable from positive and affirmed its 'BB-' long-term rating on Rhode Island Health & Educational Building Corp.'s (RIHEBC) debt, issued for Care New England Health System (CNE), R.I. "The outlook revision reflects Partners Healthcare System's decision to have its subsidiary Brigham Health--the parent company of Brigham & Women's Hospital, one of Partner's two flagship entities--withdraw from the definitive agreement it previously signed to become the sole corporate member of CNE," said S&P Global Ratings credit analyst Martin Arrick. The withdrawal reflects recent developments within Rhode Island that made it clear a regulatory approval of the acquisition by Brigham Health was highly unlikely. "As a result, the likely improvement in our credit rating on CNE, which would have likely occurred had the merger proceeded, and which drove the positive outlook, will not occur," added Mr. Arrick. The stable outlook and rating affirmation reflects CNE's vulnerable financial profile reflecting its long history of financial losses, combined with CNE's adequate enterprise profile, according to S&P. The rating agency said recent financial performance is broadly consistent with its most recent analysis. CAROL ROSE: Plan Discloses Treatment of Gainesville ISD Claims -------------------------------------------------------------- Carol Rose, Inc. and Carol Alison Ramsay Rose filed an immaterially modified second amended joint chapter 11 plan dated May 23, 2019. In this latest filing, Gainesville ISD's Allowed Secured Claim and Allowed Administrative Expense Claim will be treated as follows: Gainesville ISD will receive interest on its Allowed Secured Claim from the Petition Date through the Effective Date and from the Effective Date through payment in full at the statutory rate. With regard to Gainesville ISD's Allowed Secured Claim and Administrative Expense Claim for year 2018 taxes, the Reorganized Debtor will pay all base tax, penalties and interest that have accrued within five business days of receipt of the proceeds of the sale of the Eminent Domain Property. With regard to ad valorem property taxes that will come due to Gainesville ISD for year 2019, the Reorganized Debtors will pay such tax liability, prior to the state law delinquency date on same, from proceeds from, and at the time of, the sale of the Eminent Domain Property, which will be held in the Escrow Account by the Disbursing Agent until such taxes will be in the amount equal to the 2018 taxes. Gainesville ISD will retain the liens that secure the prepetition and post-petition ad valorem property taxes along with their senior priority pursuant to state law until all amounts owed are paid in full. A redlined copy of the Immaterially Modified Second Amended Joint Plan is available at https://tinyurl.com/y5q54k85 from Pacermonitor.com at no charge. About Carol Rose Carol Rose, Inc. -- http://www.carolrose.com/-- owns a horse breeding facility in Gainesville, Texas. It provides on-site breeding, cooled semen, embryo transfer, mare care and maintenance and foaling services. It is owned by Carol Rose, a National Reined Cow Horse Association (NRCHA) and National Reining Horse Association (NRHA) breeder. Ms. Rose is the sole director and shareholder of the Debtor. Carol Rose, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 17-42058) on Sept. 19, 2017. In the petition signed by owner Carol Rose, the Debtor estimated assets of $10 million to $50 million and liabilities of less than $500,000. Judge Brenda T. Rhoades presides over the case. Gardere Wynne Sewell LLP is the Debtor's bankruptcy counsel. The Debtor tapped Kelly Hart & Hallman LLP/Kelly Hart & Pitre as its special counsel. CARTHAGE SPECIALTY: June 27 Hearing on Disclosure Statement ----------------------------------------------------------- The hearing to consider the approval of the Disclosure Statement explaining the Chapter 11 Plan of Carthage Specialty Paperboard, Inc., will be held on June 27 2019, at 11:30 A.M. Written objections to the Disclosure Statement, if any, must be filed and served no later than seven days prior to the Disclosure Hearing date. Class 4 General Unsecured Claims estimate to total $8 to $36 million. Class 4 General Unsecured Claims are Impaired. On the Initial Distribution Date, or as soon thereafter as is reasonably practicable, and on one or more Subsequent Distribution Dates, if any, the Reorganized Debtor will, in full satisfaction, settlement and release of, and in exchange for each and every Allowed Class 4 Claim, distribute Pro Rata to or for the benefit of Holders of Allowed Class 4 Claims, the ratable portion of the Net Proceeds of the Assets to be transferred into the General Unsecured Claims Fund. Class 3 KeyBank Claims estimate to total $3,831,365. Class 3 KeyBank Claims are Impaired. On the Initial Distribution Date, or as soon thereafter as is reasonably practicable, and on one or more Subsequent Distribution Dates, if any, the Reorganized Debtor shall, in full satisfaction, settlement and release of, and in exchange for all Allowed KeyBank Claims which have not been paid or satisfied by prior Bankruptcy Court order, distribute to the Holder of the Allowed KeyBank Claim all Net Proceeds of the Assets transferred into the KeyBank Residual Claims Fund. Class 5 Equity Interests are Impaired. On the Effective Date, the Class 5 Equity Interests will be cancelled and the Holders of such Interests shall not receive or retain any property or distribution on account of such Class 5 Interests. On the Effective Date or as soon as practicable thereafter, after the payment of all Allowed Claims which are payable on the Effective Date in accordance with the terms of the Plan, the Reorganized Debtor shall: (a) fund the Administrative/Priority Claims Reserve (i) in an amount sufficient to pay all Administrative Claims, Priority Tax Claims, Non-Tax Priority Claims and Miscellaneous Secured Claims which have been Filed or otherwise asserted prior to any applicable Bar Date and which have not been Disallowed plus (ii) such additional amount as in the Responsible Person's business judgment may be necessary to pay any additional Administrative Claims that may have been incurred by the Debtor and which are not, as of the Effective Date, subject to a Bar Date which has expired; (b) fund the Reorganized Debtor Reserve in an amount sufficient in the Responsible Person's business judgment to pay the estimated amount of the Reorganized Debtor Expenses and the estimated amount of the Responsible Person Compensation; (c) deposit $730,000 into the General Unsecured Claims Fund; and (d) deposit all remaining Cash in the Reorganized Debtors' possession into the KeyBank Residual Claims Fund. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/yxj97svb from PacerMonitor.com at no charge. The Plan was filed by Stephen A. Donato, Esq., and Grayson T. Walter, Esq., at Bond, Schoeneck & King, PLLC, in Syracuse, New York, on behalf of the Debtor. About Carthage Specialty Paperboard Carthage Specialty Paperboard, Inc. -- http://www.carthagespbd.com/ -- is a paperboard manufacturer in Carthage, New York, serving a diverse range of markets from pulp-substitute specialty paperboard to industrial grade chipboards. Carthage Specialty Paperboard and its affiliate Carthage Acquisition, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Lead Case No. 18-30226) on Feb. 28, 2018. In the petitions signed by Donald Schnackel, vice president of finance, Carthage Specialty estimated assets and liabilities of $10 million to $50 million; and Carthage Acquisition estimated assets of $1 million to $10 million and liabilities of $10 million to $50 million. The Debtors tapped Bond, Schoeneck & King, PLLC as their legal counsel, and Bradley Woods & Co. Ltd., as their financial advisor and investment banker. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors. The committee is represented by Lowenstein Sandler LLP. CC CARE LLC: July 1 Plan Confirmation Hearing --------------------------------------------- A combined hearing on the adequacy of the Disclosure Statement and confirmation of the Plan proposed by CC Care, LLC, et al., and the Official Committee of Unsecured Creditors will be held on July 1, 2019 at 02:00 PM. Ballots accepting or rejecting the Plan are due by June 25, 2019. Objections to confirmation and final approval of the Disclosure Statement are due by June 25. Responses to any objections are due by June 27. Class 7 Claims Class 7 Claims consist of the Allowed General Unsecured Claims, including the GU Rent Claim. Class 7 Claims are estimated to total $37,887,009.00, which is comprised of: (i) the GU Rent Claim that totals $20,984,488.10; and (ii) all other General Unsecured Claims (referred to as the "GU Subset Claims" that total approximately $16,902,521). Class 7 Claims shall be paid from the Net Receivable Collections and Net Liquidation Proceeds after satisfaction of the Class 1 Claims, Class 2 Claims, Class 3 Claims, Class 4 Claims and Class 5 Claims, provided that the GU Subset Claims shall receive up to $1 million from the amounts paid to Class 5 Claims. The estimated percentage recovery for the GU Subset Claims is 5.9%. The estimated percentage recovery for the GU Rent Claim is 0%. On the Effective Date, 25 Capital, Laureate, or one of their affiliates will commit to fund loans to the Debtors and their Estates in an amount that is estimated as being sufficient to fund at least $50,000 into the Creditor Trust and to pay (to the extent otherwise unpaid as of the Effective Date) Allowed Administrative Expense Claims (other than the Administrative Rent Claim), Allowed Professional Fee Claims, fees of the U.S. Trustee through the Effective Date, Allowed 503(b)(9) Claims, Allowed Priority Tax Claims, and Allowed Priority Claims; provided, however, that normal trade claims incurred prior to the Effective Date shall be paid by the related Operating Debtor in the ordinary course of business and in accordance with the approved budget under the Cash Collateral Order for the period through the Effective Date accordingly, shall be excluded from such estimate. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y3c7szdo from PacerMonitor.com at no charge. The Plan was filed by David K. Welch, Esq., and Brian P. Welch, Esq., at Burke, Warren, MacKay & Serritella, P.C., in Chicago, Illinois, on behalf of the Debtors; and Shelly DeRousse, Esq., and Devon J. Eggert, Esq., at Freeborn & Peters LLP, in Chicago, Illinois, on behalf of the Committee. About CC Care, LLC CC Care, LLC, and its affiliates are Delaware limited liability companies owned by JLM Financial Healthcare, LP, that operate long-term care facilities that provide nursing, healthcare, therapeutic and social services to the chronically ill with a diagnosis of mental illness. The operating entities own these nursing care facilities: Entity Facility Name/Location ------ ---------------------- CC Care Community Care Center, Chicago, Illinois BT Care Bourbonnais Terrace Nursing Home, Bourbonnais, Ill. CT Care Crestwood Terrace Nursing Center, Crestwood, Ill. FT Care Frankfort Terrace Nursing Center, Frankfort, Ill. JT Care Joliet Terrace Nursing Center, Joliet, Illinois KT Care Kankakee Terrance Nursing Center, Bourbonnais, Ill. SV Care Southview Manor, Chicago, Illinois TN Care Terrace Nursing Home, Waukegan, Illinois WCT Care West Chicago Terrace Nursing Home, West Chicago, Ill. On Oct. 30, 2017, Chapter 11 bankruptcy petitions were filed by CC Care, LLC, doing business as Community Care Center (Bankr. N.D. Ill. Lead Case No. 17-32406), and BT Bourbonnais Care, LLC, doing business as Bourbonnais Terrace Nursing Home (Case No. 17-32411), CT Care, LLC (17-32417), FT Care, LLC (17-32423), JT Care, LLC (17-32425), KT Care, LLC (17-32427), SV Care, LLC (17-32430), TN Care, LLC (17-32429), WCT Care, LLC (17-32433), JLM Financial Healthcare, LP (17-32421). Patrick Laffey, their manager and designated representative, signed the petitions. The cases are jointly administered under Case No. 17-32406 and assigned to Judge Janet S. Baer. At the time of filing, CC Care estimated $1 million to $10 million in assets and liabilities. The Debtors tapped Burke Warren Mackay & Serritella P.C. and Crane, Simon, Clar & Dan as attorneys. Development Specialists, Inc., is the Debtors' financial advisor. On Nov. 27, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. Province, Inc., was tapped as financial advisor to the Committee, effective as of June 11, 2018. COLOGIX HOLDINGS: Moody's Affirms B3 CFR on Expected Pay Down ------------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family rating and B3-PD probability of default rating of Cologix Holdings, Inc. in connection with the expected pay down of its Caa2 rated $155 million 2nd lien term loan. Upon repayment Moody's will withdraw the rating on this 2nd lien term loan. The B2 rating on the company's existing senior secured 1st lien credit facilities, which consists of a $353.4 million senior secured 1st lien term loan, a $64.4 million senior secured 1st lien term loan and a $75 million senior secured 1st lien revolver, is also affirmed. The outlook remains stable. Recent proceeds from a $155 million 7-year secured term loan (unrated) issued at Cologix's ultimate parent, Stonepeak Claremont Topco, Inc. (Stonepeak TopCo), were contributed to Cologix and will be used to fully pay down the $155 million 2nd lien term loan. The Stonepeak TopCo secured term loan is secured by a first priority interest and pledge of all assets of Stonepeak TopCo and a first priority pledge by Stonepeak TopCo of 100% of the equity of its direct subsidiaries. Cologix also issued a CAD $150 million 7-year unsecured term loan (unrated) at its Canadian operating subsidiary, Cologix Canada, Inc. (Cologix Canada). Proceeds from Cologix Canada's unsecured term loan issuance will be used to pay related costs, fees and expenses, repay outstanding revolver borrowings, fund data center construction and land acquisition, and for general corporate purposes. Affirmations: Issuer: Cologix Holdings, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Gtd Senior Secured 1st lien Term Loan, Affirmed B2 (LGD3) Gtd Senior Secured 1st lien Revolving Credit Facility, Affirmed B2 (LGD3) Gtd Senior Secured Delayed Draw Term Loan, Affirmed B2 (LGD3) Outlook Actions: Issuer: Cologix Holdings, Inc. Outlook, Remains Stable RATINGS RATIONALE Cologix's B3 CFR reflects its small scale, high leverage and weak cash flow profile primarily resulting from its high capital intensity and growth profile. These limiting factors are offset by Cologix's stable base of contracted recurring revenue, high margins and established position within the high-growth, niche market segments of interconnection and colocation services. The company has an opportunity for rapid deleveraging if it can continue to add new customers and also increase its interconnection footprint density. Discretionary capital spending in 2019 is meaningfully funded by the recent and substantial equity contributions of Cologix's equity sponsor, Stonepeak Infrastructure Partners (Stonepeak Partners). Stonepeak Partners' investments largely funded the acquisition of Colo-D Inc. (Colo-D) in December 2018. Although the company has adequate liquidity to meet its maintenance capital spending, Moody's expects additional equity investments from the sponsor to aid in funding the company's future growth opportunities. Colo-D, which operated the second largest data center footprint in Canada across two Montreal facilities, expands Cologix's scale and solidifies its solid position in the Canadian market by leveraging its unique connectivity edge combined with Colo-D's scaled infrastructure and hyperscale customer base. The company's negative free cash flow during this currently capital intensive growth period and its small scale are key determinants of its rating. Moody's has ranked the unsecured term loan debt at Cologix Canada at the same level as the senior secured 1st lien credit facilities at Cologix in its Loss Given Default waterfall given the claim the unsecured term loan has with respect to the Canadian assets, which comprise about 40% of overall company-defined EBITDA. The company's senior secured 1st lien credit facilities have guarantees from and first priority liens on substantially all assets of Cologix's intermediate holding company parent, Stonepeak Claremont MidCo, Inc., and all direct and indirect US subsidiaries. In addition, the security granted to the senior secured credit facilities benefits from 65% of the equity of these Canadian-based entities. The senior secured first lien credit facilities were affirmed at B2, one notch higher than the B3 CFR, given the loss absorption provided by the structurally subordinated and unrated secured term loan facility at Stonepeak TopCo. The stable outlook reflects Moody's view that Cologix will continue to produce solid revenue and EBITDA growth while aggressively growing the business. The outlook also reflects its expectation that debt/EBITDA (Moody's adjusted and which includes Stonepeak Topco debt) will fall towards 7x by year end 2020. The B3 rating could upgraded if leverage was on track to fall below 5.5x (Moody's adjusted) and free cash flow was positive, both on a sustainable basis. The rating could be downgraded if liquidity deteriorates further or if leverage is sustained above 7x (Moody's adjusted). The principal methodology used in these ratings was Communications Infrastructure Industry published in September 2017. Based in Denver, Colorado, Cologix is a leading North American provider of cloud and network-neutral colocation, operating a portfolio of 27 connectivity-centric data centers across nine strategic North American markets. COMMUNITY HEALTH: Paul Smith Resigns as Division President ---------------------------------------------------------- Paul P. Smith, division president with reporting responsibilities for affiliated facilities in Georgia, Missouri, North Carolina, Virginia, and West Virginia as well as portions of Florida and Indiana, tendered his resignation from Community Health Systems, Inc. and its subsidiaries to be effective June 30, 2019. The Company has identified interim leadership to work with these facilities. 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 March 31, 2019, Community Health had $16.30 billion in total assets, $17.39 billion in total liabilities, $505 million in redeemable non-controlling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $1.59 billion. * * * In July 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. CONEX EQUIPMENT: June 27 Plan Confirmation Hearing -------------------------------------------------- The Disclosure Statement explaining the Chapter 11 Plan filed by Conex Equipment Manufacturing, LLC, C.R.P. Machine & Welding, Inc., and Ronald L. and Cathy L. Perdue, is approved. The confirmation hearing, the confirmation objection deadline, and the deadline for filing responses to objections to confirmation will be as follows: Confirmation Hearing: June 27, 2019, 2:30 P.M. CT Filing of Objections to Confirmation: June 17, 2019 Filing of Responses to Objections: June 20, 2019 About Conex Equipment Manufacturing Conex Equipment Manufacturing LLC, C.R.P. Machine and Welding Inc. and their owners Ronald Lynn and Cathy Lea Perdue sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case Nos. 18-43727, 18-43729 and 18-43731) on Sept. 24, 2018. At the time of the filing, Conex estimated assets of less than $100,000 and liabilities of less than $100,000. C.R.P. Machine estimated less than $500,000 in assets and less than $1 million in liabilities. CONFERENCE SERVICES: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Conference Services International, LLC dba Conference Services International ETC, LLC dba CSI ETC 4802 W Van Buren Street Phoenix, AZ 85043 Business Description: CSI etc. -- http://www.meetcsi.com-- is a national trade show and exposition services contractor. The Company has 30 years experience in the trade show, exposition, convention, conference, and freight industry. Chapter 11 Petition Date: June 9, 2019 Court: United States Bankruptcy Court District of Arizona (Phoenix) Case No.: 19-07122 Judge: Hon. Madeleine C. Wanslee Debtor's Counsel: Harold E. Campbell, Esq. CAMPBELL & COOMBS, P.C. 1811 S. Alma School Rd. Ste. 225 Mesa, AZ 85210 Tel: 480-839-4828 Fax: 480-897-1461 E-mail: heciii@haroldcampbell.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Kenneth Porter, managing 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/azb19-07122.pdf CONFLUENT HEALTH: Moody's Assigns B3 CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and a B3-PD Probability of Default Rating to Confluent Health, LLC. Moody's also assigned B3 ratings to the company's proposed senior secured first lien credit facilities. The senior secured first lien credit facilities are comprised of a $50 million revolver expiring in 2024 and a $200 million term loan due 2026. The outlook is stable. Proceeds from the $200 million term loan, along with new sponsor cash equity of approximately $260 million, will be used to finance Partner Group's significant investment in Confluent. After the transaction, Confluent will be approximately 74% owned by Partner Group. The remaining stake will be owned by the company's management and other shareholders. Ratings Assigned: Confluent Health, LLC Corporate Family Rating at B3 Probability of Default Rating at B3-PD $50 million senior secured 1st lien revolver expiring 2024 at B3 (LGD3) $200 million senior secured 1st lien term loan due 2026 at B3 (LGD3) Confluent Health, LLC Outlook stable RATINGS RATIONALE The B3 CFR reflects Confluent's small scale relative to other rated physical therapy peers, geographic concentration in three states that contribute over half of the company's revenues and high financial leverage. The company's adjusted debt/EBITDA (including Moody's standard adjustments as well as pro forma adjustments to reflect recently acquired clinics) was approximately 5.7 times at the end of March 31, 2019. Excluding Moody's standard operating lease adjustment, this figure would be 6.6 times. The rating also reflects relatively low barriers to entry in the physical therapy business and risks associated with the company's rapid expansion strategy. The company has more than doubled its number of clinics over the last three years both organically and through acquisitions. The rating is supported by Moody's expectation that the company will generate positive free cash flow given good profit margins, low working capital requirements and low capital expenditure needs. Most of Confluent's cash flow will be directed toward establishing new physical therapy clinics/practices. Moody's expects that the demand for physical therapy will continue to grow given it is relatively low-cost and can prevent the need for more expensive treatments. The outlook is stable. The stable outlook reflects Moody's expectation that, although operating earnings will grow, Confluent's leverage will remain high as it is likely to add debt to pursue its growth strategy. Ratings could be downgraded if the company's liquidity and/or operating performance weakens, or if the company fails to effectively manage its rapid growth. The ratings could also be downgraded if the company's financial policies become more aggressive. Ratings could be upgraded if Confluent materially increases its size and scale and demonstrates stable organic growth at the same time it effectively executes on its expansion strategy. The company made a relatively large acquisition (RET Physical Therapy, LLC) in late 2018. Moody's would also expect the company to demonstrate its ability to successfully integrate this acquisition before considering a positive rating action. Additionally, adjusted debt/EBITDA sustained below 5.0 times could support an upgrade. Confluent Health, LLC, headquartered in Louisville, Kentucky, is a provider of physical rehabilitation services which includes outpatient physical therapy, workplace injury prevention programming, and advanced education courses and degrees for physical therapists. After completion of the leveraged buyout transaction, the company will be majority owned by a Zurich-based private equity firm with a regional base in Denver, CO -- Partner Group. The company's pro forma revenues (including contributions from recent acquisitions) are approximately $198 million. DARP INC: Reconsideration of Class Certification in Fochtman Denied ------------------------------------------------------------------- In the case, MARK FOCHTMAN, et al., Individually, and on Behalf of All Others Similarly Situated, Plaintiffs, v. DARP, INC.; HENDREN PLASTICS, INC.; and JOHN DOES 1-29, Defendants, Case No. 5:18-CV-5047 (W.D. Ark.), Judge Timothy L. Brooks of the U.S. District Court for the Western District of Arkansas, Fayetteville Division, denied both (i) Defendant DARP's Motion to Stay Order Granting Plaintiffs' Proposed Plan of Notice; and (ii) Defendant Hendren Plastics's Motion for Reconsideration of the Court's Order granting class certification. Both Motions bring to the Court's attention that after the Court certified a class action under Rule 23 of the Federal Rules of Civil Procedure, and after the Eighth Circuit denied the Defendants' separate petitions for permission to appeal the class certification decision on an interlocutory basis, the Arkansas General Assembly passed Act 853, which purports to amend the Arkansas Minimum Wage Act ("AMWA") in a number of material ways. The parties advise that the Act will become law in July of 2019; however, the Defendants both contend that at least two of the new provisions of the Act should be retroactively applied, and that retroactive application warrants either staying the issuance of class notice or reconsidering and reversing the Court's decision on class certification altogether. The Plaintiffs filed a single Response in opposition to both of the Defendants' motions, which the Court has also considered. After reviewing the briefing on the motions, as well as the text of Act 853, Judge Brooks finds that it appears that DARP's motion focuses on only one amendment to the Act, while Hendren Plastics' motion focuses on that amendment, plus one more. Of course, Act 853 contains multiple amendments to the AMWA, but since the Defendants base their requests for relief on only two of those amendments, the Judge will confine its discussion to the two amendments discussed in the motions: (1) a new requirement that employees who wish to become party plaintiffs to an AMWA class action first give consent in writing, or opt in to such actions (Act 853, Section 4); and (2) the elimination of the $0.30 per-hour cap on the value of employer-provided, in-kind services to employees, such as board, lodging, apparel, and facilities (Act 853, Section 2). In analyzing the new "opt in" requirement for AMWA class actions, as contained in Act 853, the Judge finds that it is procedural in nature, rather than substantive. Even so, that amendment will not be given retroactive application here due to the Supreme Court's holding in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co. In Shady Grove, the Court determined that Rule 23, which is, of course, a federal rule of procedure, trumps any state law that is also procedural in nature and that conflicts with it. The Court is in federal court, not state court, and the class in the case at bar was certified under Federal Rule of Civil Procedure 23. As such, it remains an "opt out" class, and Act 853's purported amendment does not apply. Since Defendant DARP's Motion to Stay is premised entirely on the retroactive application of the "opt in" requirement of Act 853, the Judge denied it for the reasons stated. Hendren Plastics' Motion to Reconsider argues that the Court's decision to grant class certification should be reconsidered for two reasons. First, Hendren Plastics maintains that Act 853's new opt-in requirement necessitates reconsideration of class certification. As explained above, that argument is rejected because the Act's opt-in provision is trumped by Rule 23. Second, Hendren Plastics contends that the Court should reconsider its Order because of the Act's elimination of the $0.30 per-hour cap on the value of employer-provided, in-kind services. This second argument merits a bit more discussion. The Judge disagrees with Hendren Plastics that any aspect of the class certification Order turned on the existence of the $0.30 cap. The Order emphasized that all class members received the same types of in-kind compensation from DARP (meals, lodging, and other amenities) when they resided there. The Order also observed that the Court was "not persuaded" that any variations in the particular in-kind benefits that the residents received "were so significant that they cannot be easily accounted for in the calculation of damages, if such becomes necessary." Finally, though the Court did note that the $0.30 statutory cap on in-kind credits "would make the damages calculation a bit more straightforward than the Defendants would have the Court believe" (if it came to calculating damages at all), the bottom line was that any variations in the in-kind benefits DARP provided to its residents were not significant enough to defeat class certification, in the Court's view. For a court order to merit reconsideration under Rule 60(b), a request for reconsideration of a court order is "extraordinary relief" that should only be granted upon an adequate showing of exceptional circumstances. Hendren Plastics has not identified any reason under Rule 60(b) to reconsider the Court's class certification Order. Even if Section 2 of Act 853 were given retroactive effect-which is a big "if," in the Court's view-the deletion of the statutory cap on the valuation of in-kind services would not cause the Court to find that class treatment was inappropriate here, or that the commonality requirement of Rule 23 was not met. For all these reasons, the Judge denied Defendant Hendren Plastics's Motion for Reconsideration of the Court's Order granting class certification. A full-text copy of the Court's April 30, 2019 Opinion and Order is available at https://is.gd/teM1O9 from Leagle.com. Mark Fochtman, individually, and on behalf of all others similarly situated, Corby Shumate, individually, and on behalf of all others, Michael Spears, individually and on behalf of all others, Andrew Daniel, individually and on behalf of all others, Fabian Aguilar, individually and on behalf of all others & Sloan Simms, individually and on behalf of all others, Plaintiffs, represented by Jerry D. Garner, Holleman and Associates P.A., John Holleman -- jholleman@johnholleman.net -- Holleman & Associate P.A. A Professional Association & Timothy A. Steadman, Holleman & Associates, P.A. DARP, Inc., Defendant, represented by William B. Putman, Putman Law Office. Hendren Plastics, Inc., Defendant, represented by Laurence M. McCredy, Reece Moore Pendergraft LLP, Timothy Chad Hutchinson, Reece Moore Pendergraft LLP & James Robert Renner, RMP, LLP DATACOM SYSTEMS: June 27 Plan Confirmation Hearing -------------------------------------------------- The Disclosure Statement explaining the Chapter 11 Plan of Datacom Systems Inc. is approved. Hearing on confirmation of the plan is set for 11 :30 a.m. on June 27, 2019, at the U.S. Bankruptcy Court, 100 South Clinton Street, 2nd Floor, Syracuse, NY. Objections to confirmation of the plan must be filed and served no later than seven (7) days prior to the hearing on confirmation. June 17 2019 is fixed as the last day for filing written acceptances or rejections of the Plan. About Datacom Systems Datacom Systems, Inc. -- https://new.datacomsystems.com/ -- is a Network TAP (test access point), Network Packet Broker, and Bypass Switch manufacturer that has worked with major telecommunication companies, government agencies and financial institutions. It provides secure In-Line access to its clients' network for security, analysis and monitoring. It is a wholly owned subsidiary of Datacom Systems Holdings, LLC. The company is headquartered in East Syracuse, New York. Datacom Systems and Datacom Systems Holdings sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Lead Case No. 18-30766) on May 25, 2018. The Debtors' Chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to an order of the Court entered on May 30, 2018. In the petition signed by CFO Patrick McKenna, both debtors estimated assets of less than $1 million and liabilities of $1 million to $10 million. Judge Margaret M. Cangilos-Ruiz presides over the cases. Cullen and Dykman LLP, led by Maureen T. Bass, and Travis Powers, serves as the Debtors' counsel. No official committee of unsecured creditors has been appointed in the Debtors' bankruptcy cases. DAVID CROWE: U.S. Trustee Forms 3-Member Committee -------------------------------------------------- The Office of the U.S. Trustee on June 6 appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of David and Colleen Crowe. The committee members are: (1) Tucson Embedded Systems Attn: Dennis Kenman 5620 N. Kolb Rd., Suite 160 Tucson, AZ 85750 Contracts@TucsonEmbedded.com (2) Turbine Powered Technology, LLC Attn: Ted McIntyre 298 Louisiana Road Franklin, Louisiana 70538 ted@marineturnbine.com (3) Lindsay Brew Miller, Pitt, Feldman & McAnally One South Church Avenue, Suite 900 Tucson, AZ 85701 Lbrew@MPFMLAW.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 David K. Crowe and Colleen M. Crowe David K. Crowe and Colleen M. Crowe sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 19-04406) on April 12, 2019. Mesch, Clark & Rothschild, P.C. is the Debtors' bankruptcy counsel. DEL MAR ENTERPRISES: July 30 Plan Confirmation Hearing ------------------------------------------------------ The Disclosure Statement explaining the Chapter 11 Plan of Del Mar Enterprises Inc. is approved. A hearing for the consideration of confirmation of the Plan and of such objections as may be made to the confirmation of the Plan will be held on July 30, 2019 at 10:00 AM. Objections to claims must be filed 45 days prior to the hearing on confirmation. Acceptances or rejections of the Plan may be filed in writing by the holders of all claims on/or before 14 days prior to the date of the hearing on confirmation of the Plan. Any objection to confirmation of the plan shall be filed on/or before 21 days prior to the date of the hearing on confirmation of the Plan. About Del Mar Enterprises Del Mar Enterprises Inc. is a real estate company that owns in fee simple a commercial real estate located at Aguadilla, Puerto Rico, consisting of a two-storey commercial building with an appraised value of $1 million. The company also owns a lot of land located at Barrio Borinquen Aguadilla, Puerto Rico having an appraised value of $100,000. Del Mar Enterprises previously filed for bankruptcy protection on April 9, 2013 (Bankr. D.P.R. Case No. 13-02735). Del Mar Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. P.R. Case No. 18-05767) on Oct. 1, 2018. In the petition signed by Edgardo L. Delgado Colon, president, the Debtor disclosed $1,102,823 in assets and $2,166,875 in liabilities. Judge Mildred Caban Flores oversees the case. The Debtor tapped C. Conde & Assoc. as its legal counsel. DIFFUSION PHARMACEUTICALS: Armistice Has 5.5% Stake as of May 23 ---------------------------------------------------------------- Armistice Capital, LLC, Armistice Capital Master Fund Ltd., and Steven Boyd disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of May 23, 2019, they beneficially own 256,516 shares of common stock of Diffusion Pharmaceuticals Inc., which represents 5.5 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at https://is.gd/kBLQku About Diffusion Pharmaceuticals Based in Charlottesville, Virginia, Diffusion Pharmaceuticals Inc. -- http://www.diffusionpharma.com/-- is biotechnology company developing new treatments that improve the body's ability to bring oxygen to the areas where it is needed most, offering new hope for the treatment of life-threatening medical conditions. Diffusion's lead drug TSC was originally developed in conjunction with the Office of Naval Research, which was seeking a way to treat hemorrhagic shock caused by massive blood loss on the battlefield. Diffusion reported a net loss attributable to common stockholders of $26.62 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders of $2.61 million for the year ended Dec. 31, 2017. As of March 31, 2019, Diffusion had $15.98 million in total assets, $3.03 million in total liabilities, and $12.95 million in total stockholders' equity. KPMG LLP, in McLean, Virginia, the Company's auditor since 2015, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring losses from operations, has limited resources available to fund current research and development activities, and will require substantial additional financing to continue to fund its research and development activities that raise substantial doubt about its ability to continue as a going concern. DON FRAME: Unsecureds to Get Payments from Sale Proceeds -------------------------------------------------------- Don Frame Trucking, Inc., filed a Chapter 11 Plan and accompanying Disclosure Statement. Class 3 Allowed General Unsecured Claims are impaired and entitled to vote. Class 3 Claims will receive an initial pro-rata distribution of 55% of the cumulative allowed amounts of Allowed Class 3 Claims, with the Debtor permitted to reserve cash in excess of the initial pro rata distribution in the estimated initial amount of $256,250, for ongoing expenses, as soon as practicable after the Effective Date. Thereafter, Class 3 Claims will receive semi-annual, pro-rata distributions over the next 18 months based upon proceeds net of ongoing administrative, disposition and holding expenses from the continuing sale of the Debtor's assets, with the Debtor required to distribute amounts in excess of (i) $192,187 available six months after the Effective Date; (h) in excess of $128,125 available 12 months after the Bffective Date; and (iii) in excess of $64,062 available 18 months after the Effective Date. Class 1 Allowed Secured Claim of Jamestown Macadam, Inc. Class 1 consists of the Allowed Secured Claim of Jamestown Macadam on its two mortgages on the Real Property in the principal amounts of $240,000 and $260,000. Jamestown Macadam's Allowed Secured Claim shall be paid in full under the Plan out of the proceeds of the sale of the Real Estate. Class 1 is impaired and entitled to vote. Interest on the Allowed Secured Claim of Jamestown Macadam shall accrue at the rates provided for in the promissory notes from the Debtor to Jamestown Macadam until 18 months after the Effective Date. Class 2 Allowed Unsecured Priority Wage Claims Class 2 consists of allowed claims for wages, salary, incentives, vacation, sick, holiday, shift, severance and other compensation for personal services rendered to the Debtor ninety (90) days before the Filing. Allowed Class 2 Claims will be paid in full, are not impaired and are not entitled to vote. Class of Interests. This Class consists of holders of Equity Security. Bonnie Covert- Frame and John D. Frame are the Debtor's officers and shareholders as follows: Bonnie Covert-Frame, President and Secretary owns 5 Non-Voting Preferred Shares and 23 shares of the Debtor's common stock. John D. Frame, Vice President and Treasurer owns 22 shares of the Debtor's common stock. Once creditors are paid in full, the shareholders will receive distributions of the remaining funds in accordance with their interests. The shareholders will retain their equity interests, are not impaired and are not entitled to vote on the Plan. The Debtor's principal assets are the Real Property, a modest amount of remaining trucks and other personal property with an estimated fair market value of $75,000-$110,000. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y5krwjq8 from PacerMonitor.com at no charge. About Don Frame Trucking Don Frame Trucking, Inc., is a trucking company in Fredonia, New York specializing in the transport of dry bulk commodities, construction and hazardous materials. Don Frame Trucking filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 18-11147) on June 13, 2018. In the petition signed by John D. Frame, vice president/treasurer, the Debtor estimated $1 million to $10 million in assets and liabilities. The Hon. Carl L. Bucki oversees the case. Gross Shuman P.C., led by Robert J. Feldman, serves as bankruptcy counsel to the Debtor. Woods Oviatt Gilman LLP, is special counsel. DON ROBERTS: Roggow Law Represents PCA and FLCA ----------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Roggow Law, LLC, provided notice in the Chapter 11 cases of Don Roberts and Vickie Roberts that the law firm represents: (1) Production Credit Association of Southern New Mexico PO Box 94330 Albuquerque, NM 87199 (2) Farm Credit of New Mexico, FLCA PO Box 94330 Albuquerque, NM 87199 The law firm represents Production Credit Association of Southern New Mexico ("PCA") and Farm Credit of New Mexico ("FLCA") both subsidiaries of Farm Credit of New Mexico, "ACA", who were Plaintiffs in a foreclosure action against the Debtors in State Court proceeding before the filing of the Debtor's bankruptcy. PCA is owed the sum of $2,316,915; and FLCA is owed the amount of $1,289,934, and the Creditors, FLCA and PCA are generally secured with real estate, motor vehicles, equipment, crops, cattle, water rights and FSA guarantees. FLCA has a senior lien on the real estate and PCA has a senior lien on essentially all of Debtors’ personal property and junior lien on Debtors' real estate. The Firm can be reached at: James A. Roggow, Esq. Roggow Law, LLC 205 W. Boutz Rd., Bldg. 2, Suite C Las Cruces, NM 88005 (575) 526-248 (575) 524-0160 Fax jarroggow@qwestoffice.net The Chapter 11 case is In re Don Roberts and Vickie Roberts (Bankr. D.N.M. Case No. 18-11927) filed July 31, 2018. The Debtors are represented by Jennie Behles, at BEHLES LAW FIRM PC. DOWN NECK: June 27 Plan Confirmation Hearing -------------------------------------------- The First Amended Disclosure Statement explaining the First Amended Chapter 11 Plan of Down Neck LLC, d/b/a Lombardi's Bar & Restaurant, is conditionally approved. A hearing will be held on June 27, 2019 at 11:00 a.m. for final approval of the Disclosure Statement (if a written objection has been timely filed) and for confirmation of the Plan before the Honorable Vincent F. Papalia, United States Bankruptcy Court, District of New Jersey, M.L. King, Jr. Federal Building, 50 Walnut Street, Newark, New Jersey, in Courtroom 3B. June 20, 2019 is fixed as the last day for filing and serving written objections to the Disclosure Statement and confirmation of the Plan. June 20, 2019 is fixed as the last day for filing written acceptances or rejections of the Plan. About Down Neck LLC Down Neck LLC conducts business under the name Lombardi's Bar & Restaurant. It is based in Cedar Grove, N.J. Down Neck filed a Chapter 11 petition (Bankr. D.N.J. Case No. 19-18522) on April 26, 2019, listing under $1 million in both assets and liabilities. At the time of the filing, the Debtor had estimated assets of less than $500,000 and liabilities of less than $1 million. Richard D. Trenk, Esq., at McManimon, Scotland & Baumann, LLC represents the Debtor as counsel. DREAM WORKS: Unsecureds to Get 100% in Monthly Payments Over 7 Yrs ------------------------------------------------------------------ The Dream Works, Inc., filed a Chapter 11 Plan of Reorganization and accompanying disclosure statement proposing to pay holders of Unsecured Non-Priority Claims 100% of their Approved Claims within no interest in equal monthly installments over seven years, commencing on December 31, 2019 and by the end of each month thereafter. The Class Four Claimant is Edgar McInnis, the sole shareholder of the Debtor. He will not receive any payment for any claims that he has unless all other creditors are paid in full. Class 4 is impaired. The Debtor will continue to operate its businesses in Missouri and Kansas. The Debtor confirms that it can operate profitably, after paying its regular and on-going expenses as well as the expenses set forth in the Plan (see $10,500 per month). A full-text copy of the Disclosure Statement is available at https://tinyurl.com/y6zmh73x from PacerMonitor.com at no charge. The Dream Works, Inc., filed a Chapter 11 Petition (Bankr. W.D. Mo. Case No. 18-43126) on December 6, 2018, and is represented by Erlene W. Krigel, Esq., at Krigel & Krigel, P.C. DTI HOLDCO: S&P Downgrades ICR to 'B-' on Weakening Liquidity ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based legal process outsourcing provider DTI Holdco to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's senior secured credit facility to 'B-' from 'B'. The '3' recovery rating remains unchanged, indicating the rating agency's expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default. The downgrade reflects revenue declines from DTI Holdco Inc.'s (Epiq's) eDiscovery business--its most profitable business line, with first-quarter 2019 legal services segment revenues of $131.2 million, down 6% from the prior year period. Lower large new case work contributed to the decline, as well as integration challenges from recent investments, and S&P expects legal services to be down in the low-single-digits for 2019 as the challenging environment of a low number of large legal litigations persists. In response to declines in the eDiscovery business, the company has tried to reorganize its sales force by adding 50 new sales executives, which S&P expects will increase sales expenses by roughly $10 million for 2019 and further weigh on margins. Revenue growth in the class action & mass tort settlements (ECAR) segment, has been a bright spot and should help to diversify the company's revenue over the longer term. However, ECAR –- similar to the legal services segment –- is dependent on the level of new case activity. Epiq divested its North American court reporting business in March 2019. The company's executive management has also changed, with new CEO David Dobson announced in first-quarter 2019. Mr. Dobson's technology and turnaround experience as CEO includes Digital River and Corel Corp. The negative outlook reflects Epiq's ongoing transaction costs, weak operating performance from its eDiscovery business, and negative free cash flow generation. Over the next 12 months, S&P expects modest revenue growth and moderate margin expansion due to the realization of synergies and gradual reduction in transaction costs. S&P anticipates that the company's adjusted leverage will be in the high-7x area in 2019. "We could lower our rating on Epiq over the next 12 months if continued weak operating performance in its eDiscovery business causes margins to deteriorate further, or if the company's total liquidity drops below $45 million. We could also lower our rating if the company has difficulty in integrating its acquisitions, forecast a payment default, or we view the capital structure as unsustainable," S&P said. "We could revise the outlook to stable if Epiq grows revenue organically, improves margins, and generates sustained positive FOCF and its cash and revolver availability is at least $60 million. This would occur because of improved operating performance from the company's eDiscovery business, the realization of synergies from recent acquisitions, improved accounts receivable collections, and new contract wins," S&P said. EDEN HOME: July 2 Plan Confirmation Hearing ------------------------------------------- A hearing to consider confirmation of the Second Amended Chapter 11 Plan of Reorganization of Eden Home, Inc., will be on July 2, 2019 at 9:00 a.m., Central Time. Objections, if any, to confirmation of the Plan be filed and served on the Debtor's limited service list or before 4:00 p.m., Central Time, on June 21, 2019. Class 3 - General Unsecured Claims are unimpaired with estimated amount of claims $368,000. The Debtor proposes that the Debtor or Reorganized Debtor will make payment in Cash in the full amount to each Holder of an Allowed General Unsecured Claim on or before the Distribution Date. The Debtor reserves its rights to dispute the validity of any General Unsecured Claim by the Claims Objection Deadline. Class 1 - Bond Claims are impaired with estimated amount of claims $59,024,419.50. On the Effective Date, the Claims on the Bonds (and any Liens securing payment and performance of such Claims) shall be affirmed, assumed and deemed Allowed by the Debtor and the Reorganized Debtor, provided, however, that such Bond Claims shall be subject to the terms and conditions of the Forbearance Agreement and those terms are incorporated herein. The result of such treatment hereunder is that the Bond Claims, any related Liens and the Bond Documents shall pass through the Chapter 11 Case with the same legal, equitable and contractual rights in existence prior to the Petition Date. Although the Debtor does not have a recent valuation of its real property, its personal property (including cash) on the Petition Date was valued at $10,996,569.25. Approximately $1,800,000 of the Debtor's cash on the Petition Date is restricted cash, primarily donations made to the Debtor or its predecessor organizations, and may not be used for ordinary course operations or to pay down the Debtor's bond debt. A full-text copy of the Second Amended Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y28mp4sg from PacerMonitor.com at no charge. The Debtor is represented by Mark E. Andrews, Esq., Andrew G. Sherwood, Esq., Aaron M. Kaufman, Esq., and Jane A. Gerber, Esq., at Dykema Gossett LLP, in Dallas, Texas. About Eden Home Located in New Braunfels, Texas, Eden Home, Inc., d/b/a EdenHill Communities -- https://www.edenhill.org/ -- is a not-for-profit, faith-based organization that provides independent living, affordable housing, assisted living, skilled nursing an rehabilitation, long-term care and memory care services. The EdenHill Communities Transportation Department provides ADA services in support of seniors and individuals with disabilities. Eden Home, Inc., filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 18-50608) on March 16, 2018. In the petition signed by Laurence P. Dahl, CEO and executive director, the Debtor estimated assets and liabilities of $10 million to $50 million. Judge Craig A. Gargotta is the case judge. Dykema Cox Smith is the Debtor's counsel; Langley & Banack, and Gravely & Pearson, L.L.P., as special counsels; Cushman & Wakefield as real estate broker. Cushman & Wakefield has entered into a Co-Broker Agreement with CF Commercial Brokerage, LLC d/b/a San Antonio Commercial Advisors. On March 26, 2018, the U.S. Trustee appointed Susan N. Goodman as the Patient Care Ombudsman in the case. On May 30, 2018, the Official Committee of Unsecured Creditors was appointed by the Bankruptcy Court. The Committee retained Martin & Drought, P.C., as counsel. EDGEMARC ENERGY: Seeks to Hire Evercore Group as Investment Banker ------------------------------------------------------------------ EdgeMarc Energy Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Evercore Group, LLC as its investment banker. The firm will provide services to the company and its affiliates in connection with their Chapter 11 cases, which include reviewing their business, operations and financial projections, and assisting them in a retructuring, financing, divestiture or sale transaction. Evercore will be paid pursuant to this fee arrangement: (1) A monthly fee of $150,000. (2) A one-time "completion fee" of $4 million payable upon the earlier of (i) consummation of a restructuring or (ii) consummation of a sale subject to a fee cap. (3) One or more "financing fees" payable upon consummation of each financing and incremental to any completion fee equal to these applicable percentages: Third Party As a Percentage of Financing Provided Financing Gross Proceeds ------------------ ---------------------------- Indebtedness secured by 1.0% a first lien and any debtor-in-possession financing Indebtedness secured by 2.0% a junior lien, unsecured or subordinated Equity or equity-linked 2.5% securities/obligations To the extent financing is provided by sponsors as of the date of the engagement agreement between Evercore and the Debtors, the firm will be entitled to a fixed fee of $300,000 on the gross proceeds provided by sponsors in lieu of the applicable percentages. (4) One or more "divestiture" fees payable upon consummation of any divestiture equal to 2.5 percent of the aggregate consideration of such transaction. In no event shall the aggregate divestiture fees payable be less than $1 million or in excess of $2.5 million. Fifty percent of any divestiture fee paid shall be credited (one time only and without duplication) against the completion fee. Stephen Goldstein, senior managing director of Evercore, disclosed in court filings that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. Evercore can be reached through: Stephen Goldstein Evercore Group, LLC 55 East 52nd Street New York, NY 10055 Tel: +1.212.857.3100 About EdgeMarc EdgeMarc Energy Holdings, LLC -- http://www.edgemarcenergy.com/-- is a locally based natural gas exploration and production company headquartered in Canonsburg, Pa. It is engaged in the acquisition, production, exploration and development of natural gas and natural gas liquids from underground deposits in the Appalachian Basin. EdgeMarc Energy conducts its drilling and exploration activities in the "stacked" liquid-rich Marcellus shale in Pennsylvania and dry gas Utica shale in Ohio. EdgeMarc Energy and its 8 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11104) on May 15, 2019. EdgeMarc Energy estimated assets of $100 million to $500 million and liabilities of the same range as of the bankruptcy filing. The Hon. Brendan Linehan Shannon is the case judge. The Debtors tapped Landis Rath & Cobb LLP as counsel; Davis Polk & Wardwell LLP as corporate counsel; Evercore Partners as investment banker; Opportune LLC and Dacarba LLC as financial advisor; and Prime Clerk LLC as claims agent. EDGEMARC ENERGY: Seeks to Hire Landis Rath as Delaware Counsel -------------------------------------------------------------- EdgeMarc Energy Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Landis Rath & Cobb LLP. The firm will serve as Delaware counsel for the company and its affiliates in connection with their Chapter 11 cases. The services to be provided by the firm include legal advice regarding their rights, powers and duties under the Bankruptcy Code; negotiations with creditors; and assistance in the preparation of a bankruptcy plan. The firm's hourly rates are: Partners $610 - $895 Associates $295 - $545 Paralegals $250 Legal Assistants $125 - $160 Landis Rath received retainer payments in the total amount of $175,000. Kerri Mumford, Esq., at Landis Rath, disclosed in court filings that her 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, Ms. Mumford disclosed that her firm has not agreed to a variation of its standard or customary billing arrangements for its employment with the Debtors, and that no Landis Rath professional has varied his rate based on the geographic location of the Debtors' bankruptcy cases. The attorney also disclosed that the firm's hourly rates and financial terms for services provided prior to the petition date are identical to the hourly rates and financial terms for the proposed post-petition employment. The firm, in conjunction with the Debtors, is developing a prospective budget and staffing plan for their bankruptcy cases, according to Ms. Mumford. Landis Rath can be reached through: Adam G. Landis, Esq. Kerri K. Mumford, Esq. Kimberly A. Brown, Esq. Holly M. Smith, Esq. Landis Rath & Cobb LLP 919 Market Street, Suite 1800 Wilmington, DE 19801 Tel: (302) 467-4400 Fax: (302) 467-4450 Email: landis@lrclaw.com mumford@lrclaw.com brown@lrclaw.com smith@larclaw.com About EdgeMarc EdgeMarc Energy Holdings, LLC -- http://www.edgemarcenergy.com/-- is a locally based natural gas exploration and production company headquartered in Canonsburg, Pa. It is engaged in the acquisition, production, exploration and development of natural gas and natural gas liquids from underground deposits in the Appalachian Basin. EdgeMarc Energy conducts its drilling and exploration activities in the "stacked" liquid-rich Marcellus shale in Pennsylvania and dry gas Utica shale in Ohio. EdgeMarc Energy and its 8 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11104) on May 15, 2019. EdgeMarc Energy estimated assets of $100 million to $500 million and liabilities of the same range as of the bankruptcy filing. The Hon. Brendan Linehan Shannon is the case judge. The Debtors tapped Landis Rath & Cobb LLP as counsel; Davis Polk & Wardwell LLP as corporate counsel; Evercore Partners as investment banker; Opportune LLC and Dacarba LLC as financial advisor; and Prime Clerk LLC as claims agent. EDGEMARC ENERGY: Seeks to Hire Opportune as Restructuring Advisor ----------------------------------------------------------------- EdgeMarc Energy Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Opportune LLP as its restructuring advisor. The firm will provide services in connection with the Chapter 11 cases filed by the company and its affiliates, which include assistance in the preparation of financial-related disclosures and information necessary for confirmation of a bankruptcy plan; fresh start accounting and valuation services; analysis of proposed transactions; and tax advisory services. The firm's hourly rates are: Partner $965 Managing Director $835 Director $740 Manager $660 Senior Consultant $475 Consultant $430 Administrative Professional $275 Ryan Bouley, a partner at Opportune, 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: Ryan Bouley Opportune LLP 711 Louisiana Street, Suite 3100 Houston, TX 77002 Phone: 713.490.5050 E-mail: rbouley@dacarba.com About EdgeMarc EdgeMarc Energy Holdings, LLC -- http://www.edgemarcenergy.com/-- is a locally based natural gas exploration and production company headquartered in Canonsburg, Pa. It is engaged in the acquisition, production, exploration and development of natural gas and natural gas liquids from underground deposits in the Appalachian Basin. EdgeMarc Energy conducts its drilling and exploration activities in the "stacked" liquid-rich Marcellus shale in Pennsylvania and dry gas Utica shale in Ohio. EdgeMarc Energy and its 8 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11104) on May 15, 2019. EdgeMarc Energy estimated assets of $100 million to $500 million and liabilities of the same range as of the bankruptcy filing. The Hon. Brendan Linehan Shannon is the case judge. The Debtors tapped Landis Rath & Cobb LLP as counsel; Davis Polk & Wardwell LLP as corporate counsel; Evercore Partners as investment banker; Opportune LLC and Dacarba LLC as financial advisor; and Prime Clerk LLC as claims agent. EDGEMARC ENERGY: Taps Prime Clerk as Administrative Advisor ----------------------------------------------------------- EdgeMarc Energy Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Prime Clerk LLC as administrative advisor. The firm will provide bankruptcy administrative services to the company and its affiliates, which include the solicitation, balloting and tabulation of votes for their bankruptcy plan, and assisting them in managing distributions to creditors. Prime Clerk will charge these hourly fees: Claim and Noticing Rates: Analyst $30 - $50 Technology Consultant $35 - $95 Consultant/Senior Consultant $70 - $165 Director $175 - $195 COO/Executive VP No charge Solicitation, Balloting and Tabulation Rates: Solicitation Consultant $190 Director of Solicitation $210 Benjamin Steele, vice president of Prime Clerk, disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. Prime Clerk can be reached through: Benjamin J. Steele Prime Clerk LLC One Grand Central Place 60 East 42nd Street, Suite 1440 New York, NY 10165 Direct: 212-257-5455 About EdgeMarc EdgeMarc Energy Holdings, LLC -- http://www.edgemarcenergy.com/-- is a locally based natural gas exploration and production company headquartered in Canonsburg, Pa. It is engaged in the acquisition, production, exploration and development of natural gas and natural gas liquids from underground deposits in the Appalachian Basin. EdgeMarc Energy conducts its drilling and exploration activities in the "stacked" liquid-rich Marcellus shale in Pennsylvania and dry gas Utica shale in Ohio. EdgeMarc Energy and its 8 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11104) on May 15, 2019. EdgeMarc Energy estimated assets of $100 million to $500 million and liabilities of the same range as of the bankruptcy filing. The Hon. Brendan Linehan Shannon is the case judge. The Debtors tapped Landis Rath & Cobb LLP as counsel; Davis Polk & Wardwell LLP as corporate counsel; Evercore Partners as investment banker; Opportune LLC and Dacarba LLC as financial advisor; and Prime Clerk LLC as claims agent. ELEVATE TEXTILES: S&P Alters Outlook to Negative, Affirms 'B' ICR ----------------------------------------------------------------- S&P Global Ratings revised its ratings outlook to negative from stable on North Carolina-based Elevate Textiles Inc., while affirming all ratings on the company, including the 'B' issuer credit rating. "The outlook revision reflects the risk that the company's credit metrics and cash flow could weaken from our base case projections, as its Chinese and Mexican operations could be further disrupted by the outcome of current trade disputes if the company's customers shift their volume to regions not exposed to tariffs," S&P said. "The company's margins and cash flow could also shrink if raw material costs spike again and it cannot offset the increase in a timely manner." S&P projects the company will have about $10 million of FOCF in 2019, but more than $25 million in free operating cash flow (FOCF) in 2020. S&P said the negative outlook indicates that it could lower its ratings in the next 12 months if Elevate's operations worsen, possibly because of the U.S. trade disputes with China and potential tariffs on Mexican imports. Either or both of these could result in weaker credit metrics and cash flows, according to the rating agency. "We could lower our ratings if the company is unable to generate positive FOCF in 2019, and we see little chance for improvement in 2020. We could also lower our ratings if the company's margin deteriorates, possibly reflecting excess capacity in China and additional input cost pressures, such that adjusted leverage is sustained above 7x," S&P said, adding that it estimates EBITDA would need to decline by less than 5% from current levels for this to occur. "We could revise the outlook to stable if the uncertainties related to the ongoing trade disputes with Mexico and China are resolved in a way that minimizes any damage to the company's sales and profits. We would also expect the company to effectively manage input costs such that FOCF rebounds to about $20 million- a year, and adjusted leverage is well below 7x," the rating agency said. ELK PETROLEUM: July 18 Combined Disclosure, Plan Approval Hearing ----------------------------------------------------------------- The Combined Hearing, at which time the Bankruptcy Court will consider, among other things, the adequacy of the Disclosure Statement and confirmation of the Joint Plan of Reorganization, will commence on July 18, 2019 at 10:00 a.m. (ET). Any objections to the adequacy of the Disclosure Statement or confirmation of the Plan must be filed with this Court, together with proof of service, no later than July 11, 2019 at 4:00 p.m. (ET). Class 5. This Class consists of all General Unsecured Claims against Aneth. The Plan Debtors believe that the only General Unsecured Claims against the Aneth are the AB Parties' claim on account of the Unsecured Term Loan Agreement and the deficiency claims of the AB Parties arising in connection with the First Lien Credit Agreement Secured Claims and that no other Claims will be Allowed in this Class. The Plan Debtors do not believe there are any deficiency claims held by Riverstone after application of section 4.4(b) of the Plan. Subject to the entry of the Confirmation Order, the AB Parties will waive any recovery or distribution on account of such General Unsecured Claims. In the event that any other General Unsecured Claims are Allowed against Aneth, any Cash proceeds of the Aneth Trust Assets, net of the expenses of administering the Aneth Trust, shall be distributed to Holders of Allowed General Unsecured Claims of Aneth on a pro rata basis until such Claims are paid in full. Class 3. This Class consists of all Claims which may be asserted under the Revolving Facility Credit Agreement Claims. Such creditors shall receive Cash payments from the Exit Facility, to the extent that availability remains after the Exit Facility is used: first, to provide for $10,000,000 of availability to fund future operations of the Reorganized Debtors, second, to pay the DIP Claims in full, and third, to pay the Class 4 Claims in full (First Lien Credit Agreement Secured Claims). To the extent that the availability under the Exit Facility is not sufficient to satisfy these Claims, such creditor shall receive pro rata shares of 100% of the New Equity Interests in Reorganized Aneth (subject to dilution for a management incentive plan). Class 4. This Class consists of Claims which may be asserted under the First Lien Credit Agreement. The treatment of these Claims will depend on whether such Claims are Claims of Riverstone or its Affiliates or Claims of one or more of the AB Parties. In the case of Riverstone or its Affiliates, such creditors shall receive Cash payments from the Exit Facility, to the extent that availability remains after the Exit Facility is used: first, to provide for $10,000,000 of availability to fund future operations of the Reorganized Debtors, and second, to pay the DIP Claims in full. To the extent that the availability under the Exit Facility is not sufficient to satisfy these Claims in full, Riverstone or its Affiliates shall receive, on account of such remaining Claims, an unsecured take-back loan in the amount sufficient to satisfy the Riverstone Class 4 Claims that were not satisfied in Cash, on terms to be agreed to by Riverstone, the AB Parties, and the Debtors (the terms of which shall be set forth in the Plan Supplement). The applicable AB Parties shall receive (A) the net Cash proceeds of the Exit Facility, if any, after the satisfaction of the Class 4 Claims of Riverstone of its Affiliates (as set forth herein) and (B) pro rata shares of 100% of the New Equity Interests in Reorganized Aneth (subject to dilution for a management incentive plan). Class 3. This Class consists of all Claims which may be asserted under the Revolving Facility Credit Agreement Claims. Such creditors shall receive Cash payments from the Exit Facility, to the extent that availability remains after the Exit Facility is used: first, to provide for $10,000,000 of availability to fund future operations of the Reorganized Debtors, second, to pay the DIP Claims in full, and third, to pay the Class 4 Claims in full (First Lien Credit Agreement Secured Claims). To the extent that the availability under the Exit Facility is not sufficient to satisfy these Claims, such creditor shall receive pro rata shares of 100% of the New Equity Interests in Reorganized Resolute (subject to dilution for a management incentive plan). Class 4. This Class consists of Claims which may be asserted under the First Lien Credit Agreement. The treatment of these Claims will depend on whether such Claims are Claims of Riverstone or its Affiliates or Claims of one or more of the AB Parties. In the case of Riverstone or its Affiliates, such creditors shall receive Cash payments from the Exit Facility, to the extent that availability remains after the Exit Facility is used: first, to provide for $10,000,000 of availability to fund future operations of the Reorganized Debtors, and second, to pay the DIP Claims in full. To the extent that the availability under the Exit Facility is not sufficient to satisfy these Claims in full, Riverstone or its Affiliates shall receive, on account of such remaining Claims, an unsecured take-back loan in the amount sufficient to satisfy the Riverstone Class 4 Claims that were not satisfied in Cash, on terms to be agreed to by Riverstone, the AB Parties, and the Debtors (the terms of which shall be set forth in the Plan Supplement). The applicable AB Parties shall receive (A) the net Cash proceeds of the Exit Facility, if any, after the satisfaction of the Class 4 Claims of Riverstone of its Affiliates (as set forth herein) and (B) pro rata shares of 100% of the New Equity Interests in Reorganized Resolute (subject to dilution for a management incentive plan. On the Effective Date, the Exit Facility will close. The Exit Facility will be a credit facility on terms that are reasonably acceptable to the Plan Debtors and the AB Parties and will be for an amount that will be sufficient to satisfy certain obligations under the Plan. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y5hsn7dc from PacerMonitor.com at no charge. A full-text copy of the Plan dated May 22, 2019, is available at https://tinyurl.com/yxt2vnmu from PacerMonitor.com at no charge. The Plan is filed by Matthew P. Ward, Esq., and Morgan L. Patterson, Esq., at Womble Bond Dickinson (US) LLP, in Wilmington, Delaware; and Gregory M. Wilkes, Esq., Kristian W. Gluck, Esq., John N. Schwartz, Esq., and Shivani Shah, Esq., at Norton Rose Fulbright US LLP, in Dallas, Texas. About ELK Petroleum Elk Petroleum -- https://www.elkpet.com -- is an oil and gas company specializing in enhanced oil recovery (EOR). Elk Petroleum and its affiliate, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-11157) on May 22, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of less than $50,000. The petition was signed by Scott M. Pinsonnault, chief restructuring officer. The Debtors tapped Norton Rose Fulbright US LLP and Womble Bond Dickinson (US) LLP as legal counsel; Ankura Consulting Group, LLC as restructuring advisor; Opportune LLP as valuation analysis provider; and Bankruptcy Management Solutions, Inc. as claims and noticing agent. FC GLOBAL: Shareholders OK Name Change to "Gadsden Properties" -------------------------------------------------------------- Stockholders of FC Global Realty Incorporated collectively holding 361,768,517 shares of the Company's Common Stock, constituting approximately 92.97% of the issued and outstanding shares of the Company's Common Stock, and all of the Company's issued and outstanding 7% Series A Cumulative Convertible Perpetual Preferred Stock, Series B Non-Voting Convertible Preferred Stock and 10% Series C Cumulative Convertible Preferred Stock, have consented in writing to approve a Certificate of Amendment to amend the Company's Amended and Restated Articles of Incorporation to, among other things, (i) change the name of the Company to "Gadsden Properties, Inc."; (ii) increase the number of authorized shares of the Company's Common Stock from 500,000,000 shares to 5,000,000,000 shares; and (iii) add certain provisions restricting the ownership and transfer of shares to comply with requirements under the Internal Revenue Code for real estate investment trusts. Such consent is sufficient under Nevada law and the Company's Amended and Restated Articles of Incorporation and Amended and Restated Bylaws to approve the foregoing amendments. Stockholder approval of the Certificate of Amendment will become effective on the 20th day following the filing and mailing to the Company's stockholders of record a definitive Information Statement on Schedule 14C. The Company will promptly thereafter file the Certificate of Amendment with the Nevada Secretary of State to effect the foregoing amendments. The Company also announced that, effective May 20, 2019, its corporate headquarters was moved to Scottsdale, Arizona. About FC Global Realty Formerly known as PhotoMedex, Inc., FC Global Realty Incorporated (and its subsidiaries) founded in 1980, is transitioning from its former business as a skin health company to a company focused on real estate development and asset management, concentrating primarily on investments in high quality income producing assets, hotel and resort developments, residential developments and other opportunistic commercial properties. The Company is headquartered in Scottsdale, Arizona. FC Global reported a net loss attributable to common stockholders and participating securities of $4.66 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders and participating securities of $19.38 million for the year ended Dec. 31, 2017. As of March 31, 2019, the Company had $4.17 million in total assets, $4.79 million in total liabilities, and a total stockholders' deficit of $622,000. Fahn Kanne & Co. Grant Thornton Israel, in Tel Aviv, Israel, 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 has incurred net losses for each of the years ended Dec. 31, 2018 and 2017 and has not yet generated any significant revenues from real estate activities. As of Dec. 31, 2018, there is an accumulated deficit of $139.7 million. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. FC GLOBAL: Signs Cancellation and Exchange Agreement with Gadsden ----------------------------------------------------------------- As previously reported, on March 13, 2019, FC Global Realty Incorporated entered into a stock purchase agreement with Gadsden Growth Properties, Inc., pursuant to which Gadsden agreed to transfer and assign to the Company all of its general partnership interests and Class A limited partnership interests in Gadsden Growth Properties, L.P., a Delaware limited partnership p ("OPCO"), the operating partnership of Gadsden that holds all of its assets and liabilities, in exchange for shares of the Company's common stock, 7% Series A Cumulative Convertible Perpetual Preferred Stock, Series B Non-Voting Convertible Preferred Stock and 10% Series C Cumulative Convertible Preferred Stock. The closing of the transactions contemplated by the Purchase Agreement was completed thereafter on April 5, 2019. In connection with the Purchase Agreement, on May 16, 2019, the Company entered into a Cancellation and Exchange Agreement, effective May 15, 2019 with Gadsden and the stockholders of Gadsden, pursuant to which the Company issued to the Stockholders an aggregate of 91,489,610 shares of FCG Common Stock in consideration for the cancellation (i) by the Stockholders of 481,004 shares of Gadsden's common stock and an aggregate of 3,264,993 shares of Gadsden's series B preferred stock and (ii) by Gadsden of 11,747,705 shares of the FCG Common Stock and 3,264,993 shares of the FCG Series B Preferred Stock. About FC Global Realty Formerly known as PhotoMedex, Inc., FC Global Realty Incorporated (and its subsidiaries) founded in 1980, is transitioning from its former business as a skin health company to a company focused on real estate development and asset management, concentrating primarily on investments in high quality income producing assets, hotel and resort developments, residential developments and other opportunistic commercial properties. The Company is headquartered in Scottsdale, Arizona. FC Global reported a net loss attributable to common stockholders and participating securities of $4.66 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders and participating securities of $19.38 million for the year ended Dec. 31, 2017. As of March 31, 2019, the Company had $4.17 million in total assets, $4.79 million in total liabilities, and a total stockholders' deficit of $622,000. Fahn Kanne & Co. Grant Thornton Israel, in Tel Aviv, Israel, 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 has incurred net losses for each of the years ended Dec. 31, 2018 and 2017 and has not yet generated any significant revenues from real estate activities. As of Dec. 31, 2018, there is an accumulated deficit of $139.7 million. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. FIRSTENERGY SOLUTION: Plan Confirmation Hearing Set for Aug. 20 --------------------------------------------------------------- The Hon. Alan M. Koschik of the U.S. Bankruptcy Court for the Northern District of Ohio will hold a hearing on Aug. 20, 2019, at 9:30 a.m. (Prevailing Eastern Time) in John F. Seiberling Federal Building and U.S. Courthouse, 260 U.S. Courthouse, 2 South Main Street, Akron, Ohio 44308, to consider confirmation of the fifth amended joint Chapter 11 plan of reorganization of FirstEnergy Solutions Corp. and its debtor-affiliates. Objections to the confirmation of the Debtors' amended Chapter 11 plan, if any, must be filed no later than 4:00 p.m. (Prevailing Eastern Time) on Aug. 2, 2019. The Court approved the adequacy of the Debtors' disclosure statement explaining their amended joint Chapter 11 plan on May 29, 2019. Deadline to cast votes to accept or reject the Debtors' amended joint Chapter 11 plan is on 4:00 p.m. (Prevailing Eastern Time) on Aug. 2, 2019. About FirstEnergy Solutions Corp Akron, Ohio-based FirstEnergy Solutions, Corp. (FES) is a subsidiary of FirstEnergy Corp (NYSE:FE). FES -- http://www.firstenergycorp.com/-- provides energy-related products and services to retail and wholesale customers; and owns and operates 5,381 MWs of fossil generating capacity through its FirstEnergy Generation subsidiaries. FES also owns 4,048 MWs of nuclear generating capacity through its FirstEnergy Nuclear Generation subsidiary. Nuclear generating plants are operated by FirstEnergy Nuclear Operating Company (FENOC), which is a separate subsidiary of FirstEnergy Corp. On March 31, 2018, FirstEnergy Solutions and 6 affiliates, including FENOC, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 18-50757). The cases are pending before the Honorable Judge Alan M. Koschik and their cases be jointly administered under Case No. 18-50757. Parent company, First Energy Corp. and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process. First Energy Corp. listed $42.2 billion in total assets against $4.07 billion in total current liabilities, $21.1 billion in long-term debt and other long-term obligations and $13.1 billion in non-current liabilities as of Dec. 31, 2017. The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as bankruptcy counsel; Brouse McDowell LPA as co-counsel; Lazard Freres & Co. as investment banker; Alvarez & Marsal North America, LLC, as restructuring advisor and Charles Moore as chief restructuring officer; and Prime Clerk as claims and noticing agent. The Debtors also tapped Willkie Farr & Gallagher LLP, Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan, LLP as special counsel. The U.S. Trustee for Region 9 appointed an official committee of unsecured creditors on April 12, 2018. Milbank, Tweed, Hadley & McCloy LLP and Hahn Loeser & Parks LLP serve as counsel to the committee. FLIPDADDY'S LLC: Unsecured Creditors to Get $75,000 Under Plan -------------------------------------------------------------- Flipdaddy's, LLC, filed a Chapter 11 Plan and accompanying disclosure statement. Class 7 - Unsecured Claims, Rejected Executory Contracts Claims and Convertible Notes are impaired with projected amount of claim $2,658,738 and projected recovery of 0.0282%. Each holder of an allowed claim in this Class shall be entitled to receive its Pro rate Share of the sum of $75,000. Class 1 - Park National Bank are impaired with projected amount of claim $1,248,663. The Obligations to Park National Bank shall be assumed by the Reorganized Debtor and paid according to terms, with the exception of the claim filed under Proof of Claim 19 in the amount of $250,000. This claims will be reduced to $200,000 by a payment of $50,000 from the Debtor or FDXII under the Backstop Commitment Agreement and upon such payment the balance of $200,000 will be re-amortized over 8 years and accrue interest at the rate of 6% per annum. Class 9 - Equity Interests are impaired. On the Effective Date, each Existing Equity Interest in Flipdaddy's will be canceled and of no further force and effect. The holder of any existing Class A Membership shall be issued 75% of a new Class A Voting Membership Interest by contribution of new value under the Contribution and Backstop Commitment Agreement. The remaining 25% of the new Class A Voting Membership Interest shall be distributed pro rata to each holder of existing Class B Membership Interests in accordance with their contribution of new value, subject to dilution by new Class A Voting Membership Interests issued in connection with the Management Incentive Plan or the Rights Offering. If Class 9 existing Class B Membership votes to reject the Plan they shall not receive any distribution under the Plan on account of such Existing Membership Interests.. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y4jvuc63 from PacerMonitor.com at no charge. Attorneys for the Debtor is Steven L. Diller, Esq., at Diller & Rice, LLC, in Van Wert, Ohio. About Flipdaddy's LLC Flipdaddy's, LLC, which conducts business under the name Flipdaddy's Brillant Burgers and Craft Beer Bar, is a restaurant group with four locations in Ohio and Kentucky. Its menu includes salads, paninis, burgers and beers. The company was founded in 2010. Flipdaddy's filed a voluntary Chapter 11 petition (Bankr. S.D. Ohio Case No. 18-14408) on Dec. 6, 2018. In the petition signed by Thomas Sacco, chief executive officer, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Jeffery P. Hopkins is the case judge. Diller and Rice, LLC is the Debtor's bankruptcy counsel. FOUAD MARKET: Unsecureds to Get 10% in 4 Annual Installments ------------------------------------------------------------ Fouad Market Halal Food, Inc., filed a small business combined plan of reorganization and accompanying disclosure statement. Class Two consists of all Unsecured Claims and are impaired. The general unsecured debt as scheduled by the Debtor excluding the claim of Malway Realty Associates, Limited Partnership, were in the sum of $68,083. The Class Two claims as adjusted for the Proofs of Claim are in the sum of $67,613. The Debtor will pay the sum of $6,761 to the Class Two Claimants in four annual installments with an initial distribution of $1,690 on the Effective Date of confirmation of the Plan to be distributed pro rata among the unsecured claims in Class Two with the remaining three additional payments to be distributed on the anniversary of the Effective Date. The Debtor estimates that these payments will result in a dividend of approximately 10%, which sums are in excess of what would be received upon liquidation of the Debtor. Class One consists of the Allowed Claim of Malway in the sum of $52,432 pursuant to the Proof of Claim filed on April 8, 2019 arising from lease obligations owed to Malway arising under the Lease dated January 19, 2016 between Malway and the Debtor for premises located in the Shopping Center known as Broadway Plaza located in the City of Malden, Massachusetts. During the course of the proceedings, the Debtor made monthly rental payments as prescribed by the Lease. The Plan provides that the Lease, which was terminated prepetition, will be reinstated under the same terms and conditions and that arrears due under the Plan in the sum of $52,432 shall be cured, in full over a term of 72 months in monthly installments of $725, which sums shall be paid in addition to the rent required under the Lease. Class Three consists of the interests of the equity holder, Fouad F. Fakhiri who is the sole shareholder of the Debtor. The Debtor believes that the assets have no present value and therefore the equity interest holder, Fouad F. Fakhiri will retain his equity interests by contribution of new value in the sum of $1,690, which sums shall be used to fund the initial dividend distribution to the Class Two claimants. On Confirmation, all property of the Debtor, tangible and intangible, including, without limitation, the reinstatement of the Lease for the premises occupied by the Debtor, all licenses, furniture, fixtures and equipment, will revert, free and clear of all claims and interests except as provided herein, to the Reorganized Debtor. The Debtor will pay the claims described above from its operations post-Confirmation and from contributions of new value by the equity interest holder. The Debtor estimates that on the Effective Date the funds to be distributed are approximate $2,500 in addition to the payment of the quarterly fee due to the United States Trustee. The Debtor expects to have sufficient cash on hand to make the payments required on the Effective Date. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y2onjatu from PacerMonitor.com at no charge. Fouad Market Halal Food Inc. filed a Chapter 11 Petition (Bankr. D. Mass. Case No. 18-14721) on December 20, 2018, and is represented by Nina M. Parker, Esq., at Parker & Associates. FRESHSTART HOME: DOJ Watchdog Seeks Ch. 11 Trustee Appointment -------------------------------------------------------------- The United States Trustee, Peter C. Anderson, asked the U.S. Bankruptcy Court for the Central District of California for an order to appoint a Chapter 11 trustee for Freshstart Home Solutions, LLC, or, in the alternative, convert the Chapter 11 case to one under Chapter 7 or dismiss the case. According to the U.S. Trustee, the Debtor's managing member, Mr. Patrick Wong, is not adequately in control or in charge of the Debtor. The U.S. Trustee reported that the Debtor is managed by a principal who has been removed from control of his bank accounts and access to the property of the estate by his attorney, for reasons that are not entirely clear. Moreover, Mr. Wong asserted his Fifth Amendment privilege and refused to answer multiple questions asked by one creditor regarding how her investment funds were used in connection with one of the properties at the meeting of creditors. Therefore, the U.S. Trustee believed that an independent Chapter 11 trustee is in the best interests of the creditors, whose funds are at stake. Further, the U.S. Trustee requested that if the Court declines to order the appointment of a Chapter 11 trustee for the Debtor, then the same reason may be considered for the Court to dismiss the case or convert the same to Chapter 7. About Freshstart Home Solutions Freshstart Home Solutions, LLC, is a real estate company that owns in fee simple eight singe-family homes in various parts of California having an aggregate current value of $12.2 million. Based in Sherman Oaks, California, Freshstart Home Solutions, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-10954) on April 18, 2019. In its petition, the Debtor disclosed $14,418,487 in assets and $13,078,091 in liabilities. The Hon. Martin R. Barash oversees the case. Michael R. Totaro, Esq., at Totaro & Shanahan, serves as the Debtor's bankruptcy counsel. GENERAL MOTORS: Fitch Affirms BB+ Rating on Preferred Stock ----------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of General Motors Company and its General Motors Financial Company, Inc. finance subsidiary at 'BBB'. The Rating Outlook for both companies is Stable. KEY RATING DRIVERS - GM Ratings Overview: GM's ratings continue to be supported by its strong market position in the regions where it competes, its solid profitability, and its commitment to maintaining a relatively conservative balance sheet. Although less globally diversified than its peers, with no meaningful presence in Europe, Fitch expects the margin performance of GM's key North American operations to remain strong relative to its peers, while its Chinese business, largely conducted through unconsolidated joint ventures, has continued to perform relatively well despite growing pressures in that market. The company's GM Cruise LLC (Cruise) autonomous vehicle unit is one of the leaders in autonomous vehicle technology, attracting substantial external investments from SoftBank Vision Fund, Honda Motor Co., Ltd. and others, while its current transformation plan should lead to increased profitability and FCF, as well as a more flexible cost structure over the intermediate term. Credit Risks: Key credit risks include rising global trade tensions, volatile commodity costs, plateauing U.S. auto demand, weaker demand in China, and rapidly evolving industry technological changes. GM's business is also heavily reliant on two key markets, the U.S. and China, which combined accounted for 79% of the company's retail unit sales volume in 2018. A severe downturn in either market would have an outsized impact on the company's financial performance. In addition, although Fitch has a positive view of the transformation plan and expects the planned benefits to be achievable within the expected time frame, GM has embarked on these initiatives in a year when contracts between the United Automobile Workers (UAW) union and the Detroit manufacturers are up for negotiation, which could make those discussions even more challenging than normal. Potential tariffs on Mexico are once again a concern, as GM produced about 834,000 vehicles in the country in 2018, or about 26% of its total North American production (according to WardsAuto.com). The majority of these vehicles were exported to the U.S. The vast majority of the vehicles GM produces in Mexico are pickups and crossovers, as the only passenger car produced in the country in 2018 was a version of the Chevrolet Cruze. As such, tariffs could potentially crimp margins on some of the company's more profitable vehicles. Notably, GM produced about 39% of its full-size pickups in Mexico in 2018. The global auto industry also remains vulnerable to economic cycles, and in a moderate to severe downturn Fitch expects that GM would likely experience a significant cash outflow due to its inherent operating leverage, working capital profile, and capital expenditure needs. However, Fitch expects that the company's average automotive cash target of $18 billion (excluding Cruise's cash), along with $17.5 billion of automotive revolver availability (including the $3.0 billion supplemental revolver entered into in January 2019), would provide it with sufficient financial flexibility to withstand a severe decline in auto demand in one or more key markets. Solid FCF Potential: Fitch expects GM to generate minimal automotive FCF after dividends in 2019, largely due to spending on the transformation plan, as the majority of the $2.0 billion in spending related to the transformation plan is likely to affect cash flow in 2019. Fitch expects GM's post-dividend automotive FCF to strengthen significantly in 2020 and beyond as transformation spending winds down and the company benefits from the transformation plan's cost savings initiatives, leading to post-dividend FCF margins growing from the low-single-digit range in 2020 toward the mid-single-digit range over the following several years. Excluding restructuring-related cash usage, Fitch expects GM's post-dividend FCF margin would be around 2% in 2019. Fitch expects capex as a percentage of revenue to run at about 6% in 2019 and then decline toward 5% or lower over the following years as the company passes its peak capex period. Fitch expects capex will total about $8.5 billion in 2019, down a little from $8.7 billion in 2018. Fitch expects dividends to remain relatively flat as the company works through its transformation plan, with share repurchases used as the primary means to return any excess cash to shareholders. Conservative Capital Deployment: GM's capital allocation strategy continues to prioritize investing in its business, maintaining strong credit metrics, maintaining an average automotive cash balance of $18 billion (excluding Cruise's cash) and then returning any remaining available cash to shareholders through dividends and share repurchases. GM currently has a $5 billion share repurchase authorization that was put in place in 2017 and has no end date. Through March 31, 2019, the company had repurchased a total of $1.6 billion shares under this authorization since inception. Going forward, Fitch expects GM to generally manage its liquidity according to its cash target and increase or decrease share repurchases as necessary to keep its automotive cash around its $18 billion target level. As such, Fitch expects the company will likely dial back on share repurchases while its transformation program is underway. Strong Credit Metrics: GM's credit profile is relatively strong for an auto manufacturer, and Fitch expects it to remain strong over the intermediate term. Fitch expects EBITDA leverage (debt/Fitch-calculated EBITDA, including minority dividends) to generally remain close to 1.0x over the next several years. Actual automotive EBITDA leverage (according to Fitch's calculations) at March 31, 2019 was 1.1x, but this was slightly inflated due to about $400 million in temporary transformation plan-related borrowings on the company's supplemental revolver that Fitch expects will be repaid in the near term. Funds from operations (FFO) adjusted leverage was 1.8x at March 31, 2019, but this was also slightly inflated due to the temporary increase in debt. Fitch expects GM's automotive EBIT margin (as calculated by Fitch) to run in the 6% to 7% range over the intermediate term, which is relatively solid for an auto manufacturer, given the low-margin nature of the global auto manufacturing industry. GM's margins could be pressured over the intermediate term by moderating industry sales in North America, but the transformation plan should help to offset that pressure by lowering costs and improving cost flexibility. Fitch expects North American margins to continue running in the high-single-digit range to near 10%, despite some weakness in the first quarter of 2019 due largely to the product changeover in the full-size SUV program. Longer term, North American margins will be supported by the company's decision to reallocate capacity away from low-margin passenger cars and toward higher-margin pickups, crossovers and SUVs. Transformation Plan: Following a number of significant profit improvement initiatives undertaken in various regions over the past several years, in November 2018, GM announced a further transformation plan to reorganize its global product development staff, realign its manufacturing capacity, particularly in North America, and reduce its salaried workforce. The company expects these actions increase its annual adjusted automotive free cash flow (based on the company's calculations) by about $6 billion on an annual run-rate basis by the end 2020. The cash savings will be driven by about $4.5 billion in cost reductions and a lower annual capex run rate of nearly $1.5 billion. The company expects that it will spend about $2 billion in cash and record charges of $3.0 billion to $3.6 billion related to the program, but the initiatives that make up the plan will be relatively quick to implement, leading to a fairly rapid payback. As the transformation plan is largely cost focused, Fitch expects GM will be able to achieve the benefits at the expected costs and within the planned timeframe. The company noted at the time of the announcement that it wanted to undertake the transformation actions while the macro environment was still relatively strong so it would be in a better position to withstand an eventual downturn and would be able to avoid the complexity of attempting a restructuring in weak demand environment. However, GM and the other two Detroit automakers will begin negotiating a new UAW labor agreement this summer, and although the company has positions at other plants for most UAW-represented workers who are affected by the transformation plan, the union has concerns about potential plant closures, which could be a sticking point in the discussions. KEY RATING DRIVERS - GMF IDRs and Senior Debt: GMF's ratings are directly linked to GM's ratings as Fitch considers GMF to be a core subsidiary of GM, which reflects the actual and potential support provided by GM, strong financial and operational linkages between the firms and the formal support agreement between GM and GMF. The ratings also reflect GMF's seasoned management team, diversified funding profile, consistent operating performance, strengthening asset quality and strong liquidity. GMF's portfolio mix has improved since the launch of a retail prime product in the U.S. in 2014, the attainment of GM's lease exclusivity in 2015, and subvented loan exclusivity in 2016. At March 31, 2019, earning assets were $97.2 billion, up 10.3% from the prior year, supported by strong growth in both subvented and non-subvented prime loan products. Subprime loans (defined as loans with a FICO score below 620) represented 27% of the North American retail auto loan portfolio at YE18, down from 37% at YE17. Similarly, the subprime portfolio represented approximately 10% of earning assets at YE18 compared to 12% at YE17. About 90.4% of GMF's U.S. loans and leases related to financing new GM vehicles in 1Q19. North American lease originations declined 8.8% in 1Q19 year over year, and the lease portfolio shrank by 0.9% over the same period. At 1Q19, GMF's lease portfolio represented 44.3% of earning assets, down from 49.3% a year ago. The proportion of leases in the portfolio is expected to continue to moderate over time as GMF increases its market share of non-subvented retail auto loan originations. Leasing exposes GMF to residual value impairment, the risk of which may increase as used vehicle values are negatively impacted by an increase in the supply of off-lease vehicles. GMF uses Automotive Lease Guide origination data to project expected residual values and the return volume of its leased vehicles at the beginning of the lease period and adjusts carrying values as necessary. Fitch expects GMF to appropriately assess residual values to minimize future losses as lease vehicles are returned and sold, particularly with used car values expected to moderate over the near to medium term. GMF's credit performance has improved modestly in recent years given the portfolio shift toward prime assets and an improvement in recovery rates. Retail auto net charge-offs were 1.6% in 1Q19, down from 2.1% in 1Q18, while recovery rates were 52% in 2018, which was roughly flat from 2017. Fitch expects recovery rates to experience downward pressure as used car values continue to moderate from elevated levels, which will yield some normalization in credit trends over the near term. GMF's profitability is solid, driven by growth in earning assets, but profitability metrics continue to gradually compress reflecting the shift in the loan origination mix from higher-yielding, higher-risk subprime loans to lower-yielding, lower-risk prime and commercial loans. This trend is partially offset by stronger credit performance and an improvement in operating expense efficiency, given a higher prime credit mix and increased scale. GMF's pre-tax return on assets declined to 1.4% on an annualized basis in 1Q19 from over 3.0% in 2011. Fitch expects this downward trend to continue over the near-term, albeit at a more moderate pace, as the portfolio mix continues to shift. The pre-tax margin declined to 9.8% in 1Q19 from 13.0% in 1Q18, largely driven by higher interest costs and lower residual gains on lease terminations, which more than offset revenue growth. Fitch expects GMF to remain solidly profitable in 2019, supported by earning asset growth, stable credit performance and improved operating cost efficiency. Partially offsetting these positive drivers include further net interest margin compression, reflecting the mix shift towards lower-yielding prime assets and downward pressure on used car values. GMF's funding profile and diversification has steadily improved over the past few years with greater unsecured debt issuance. Unsecured debt as a percentage of total debt increased to 54.8% at 1Q19 from 52.8% at 1Q18, which Fitch views favorably as it improves the firm's funding flexibility. However, the company still has a heavier reliance on secured funding compared to captive finance peers, given its use of cost efficient ABS debt and secured revolving (warehouse) facilities. Leverage, measured as debt to tangible equity, declined to 9.2x at March 31, 2019 from 9.3x a year ago when affording GMF's preferred stock 50% equity credit. The management-calculated leverage ratio (earning assets to tangible equity) declined to 8.8x from 9.1x over the same period, which was below the 11.5x ceiling currently permitted by the support agreement between GM and GMF. Fitch expects leverage to increase over the near term as earning assets continue to grow. Once net earning assets exceed $100 billion, the support agreement permits leverage to increase to 12.0x, which Fitch views as high in relation to peers, most of which also have a lower-risk portfolio composition. Further increases in GMF's leverage without a commensurate improvement in portfolio risk would be viewed negatively by Fitch. Fitch believes GMF's liquidity position is strong. Available liquidity was $28.3 billion at March 31, 2019, including $5.3 billion in unrestricted cash, $19.7 billion of borrowing capacity on unpledged assets, $0.3 billion of borrowing capacity on committed unsecured credit lines, $1.0 billion borrowing capacity on its intercompany junior-subordinated credit facility and $2.0 billion borrowing capacity on its intercompany revolving 364-day credit facility. GMF initiated an annual dividend to GM in 2018 that resulted in a $375 million dividend being paid in 4Q18. Fitch expects GMF to make additional dividend payments to GM in 2019 and beyond, while maintaining adequate liquidity and appropriate leverage levels. GMF's unsecured debt ratings are equalized with the long-term IDR and reflect the proportion of unsecured debt in the capital structure and the expectation for average recovery prospects under a stress scenario. The affirmation of GMF's Short-term IDR reflects the institutional support from GM as well as GM's financial flexibility, which makes GMF eligible for the higher Short-term IDR at the 'BBB' level. The affirmation also reflects GMF's good standalone liquidity profile, in terms of the short duration of its assets relative to its overall debt, low reliance on short-term debt, solid asset quality and strong cash flow generation capacity. GMF's commercial paper rating remains equalized with the company's Short-term IDR, reflecting Fitch's view that GMF is a core subsidiary of GM. The Stable Outlook is linked to GM and reflects Fitch's expectation for continued portfolio growth while executing on its strategy of a predominately prime portfolio which will yield solid asset quality, consistent operating performance, a funding profile that maintains a meaningful amount of unsecured debt, and a leverage profile commensurate with portfolio risk. The Stable Outlook also reflects Fitch's view that GMF will remain a core subsidiary of GM. GMF Canada's long-term IDR and senior unsecured debt ratings are directly linked to GMF's ratings as GMF has an unconditional guarantee on GMF Canada's unsecured debt. Other Hybrid Securities: GMF's preferred stock is rated two notches lower than GMF's Long-term IDR in accordance with Fitch's 'Corporate Hybrids Treatment and Notching Criteria', dated Nov. 9, 2018. The preferred stock rating includes two notches for loss severity, reflecting the preferred units' subordination and heightened risk of non-performance relative to other obligations, namely existing secured and unsecured debt. Fitch affords the preferred stock 50% equity credit given the cumulative nature of the dividends and because the preferred stock is perpetual. DERIVATION SUMMARY GM's operating profile is generally in line with mass-market automotive peers at a similar rating level, such as Volkswagen AG (BBB+/Stable), Ford Motor Company (BBB/Negative), and Renault SA (BBB/Stable). GM has a relatively strong competitive position, with a top-five share in most of the markets where it operates. The company's product lineup has also improved significantly in the post-recession period, which has translated to higher revenue and profit per vehicle, particularly in North America. Traditionally, GM has been one of the most globally diversified auto manufacturers, with operations in nearly every major market. However, over the past several years, the company has aggressively restructured its business to improve profitability. This has included divesting its European operations, ending manufacturing in Australia, ending Chevrolet sales in India, and scaling back or ending operations in several other countries. These actions have resulted in a smaller company this is significantly more profitable but much less globally diversified than it was a few years ago. GM's product diversity is relatively high, with Chevrolet and Cadillac serving as its global anchor brands, augmented by a host of smaller regional brands. The company manufactures a wide range of passenger and light commercial vehicles spanning the mass-market and luxury segments. However, luxury sales, represented by the Cadillac brand, remain much lower than those of dedicated luxury manufacturers or even the luxury divisions of certain global mass-market competitors, such as Toyota Motor Corporation (A+/Stable). GM has also re-entered the medium-duty truck market in North America through collaborations with Isuzu Motors Ltd. and Navistar International Corporation (B/Stable). GM's financial profile is somewhat strong relative to similarly rated peers, such as Ford. EBIT and EBITDA margins have recently been at the higher end of its peer group, driven by GM's strong performance in North America, and Fitch expects the company's restructuring actions to support margins going forward. Post-dividend FCF margins have also been at the higher end of the peer set and will be enhanced by lower capital spending needs going forward. Leverage remains low relative to its BBB-rated peer group, with debt/EBITDA generally running slightly below 1x. However, capital deployment has been more shareholder-focused than many of its global peers, with the company planning to allocate all available FCF to share repurchases going forward. No country-ceiling, parent/subsidiary or operating environment aspects impact the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- U.S. industry light vehicle sales decline to 16.9 million units in 2019, while global sales decline slightly on weakness in China and Europe; -- Beyond 2019, U.S. industry sales run in the 16.5 million to 17 million unit range annually, while global sales rise slightly, driven largely by a return to modest growth in China; -- Over the intermediate term, GM's revenue growth is tied primarily to unit volume growth, positive mix and modest price increases, while global market share is held about constant; -- Automotive EBITDA margins improve in 2019 following the full-size pickup program changeover in 2018, and then run in the roughly 10% to 11% range over the next few years; -- Capex runs at about 6% of revenue in 2019 and then declines to below 5% revenue over the next several years as the company gains traction on its capex savings plans; -- The company returns excess cash to shareholders via share repurchases; -- The company maintains an average automotive cash balance of about $18 billion (excluding Cruise cash), and automotive liquidity is augmented by about $17.5 billion of revolver capacity in the near term, declining to $16.5 billion in mid-2020. RATING SENSITIVITIES GM Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Sustained North American automotive EBIT margin of 10%; -- Sustained global automotive EBIT margin near 6%; -- Sustained FCF margin near 2.5%, excluding restructuring costs; -- Sustained FFO adjusted gross leverage near 0.5x, excluding restructuring costs. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A decision to reduce the company's automotive cash target to below $18 billion (excluding Cruise's cash); -- Sustained global automotive EBIT margin near 2%; -- Sustained FCF margin near 0.5%, excluding restructuring costs; -- Sustained FFO adjusted leverage near 2.5x, excluding restructuring costs; -- A significant weakening in the company's credit profile as a result of tariffs or other trade issues. GMF GMF's IDRs and Rating Outlook are linked to the ratings of GM and would be expected to move in tandem. However, any change in Fitch's view on whether GMF remains core to its parent could change this rating linkage. Fitch cannot envision a scenario where GMF would be rated higher than its parent. A material increase in leverage without a corresponding improvement in the risk profile of the portfolio, an inability to access funding for an extended period of time, consistent and sustained operating losses and/or significant deterioration in the credit quality of the underlying loan and lease portfolio, or material impairment of the liquidity profile could become constraining factors on the parent's ratings. GMF's short-term IDR could also be negatively impacted by a downgrade in GM's financial flexibility score below 'bbb+'. The unsecured debt rating is primarily sensitive to changes in the long-term IDR and is expected to move in tandem. However, a material increase in the proportion of secured funding could result in the unsecured debt rating being notched down from the IDR. The commercial paper rating is sensitive to changes in GMF's Short-term IDR and, therefore, would be expected to move in tandem. Other Hybrid Securities: The preferred stock rating is sensitive to changes in GMF's Long-term IDR and would be expected to move in tandem. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity Position: Fitch expects GM's automotive liquidity, including both cash and revolver capacity, to remain relatively strong, which will provide the company with a substantial cushion in the event of an unexpected downturn. The company currently targets maintaining an average cash balance of about $18 billion, not including Cruise's cash, which Fitch believes will provide the company with sufficient liquidity protection in a downturn. At March 31, 2019, GM's actual automotive cash and marketable securities, excluding cash at Cruise, totaled a little under $16 billion, below the target level, due in large part to typical seasonality in GM's business. Fitch expects the cash balance will return to the target level later in 2019. Including $2.1 billion in cash at Cruise, GM's operational cash and marketable securities totaled about $18 billion. To increase liquidity while it undertakes its transformation plan, in early 2019 GM added a supplemental $3.0 billion revolver to its existing $4.0 billion and $10.5 billion revolvers. (Fitch treats the company's $2.0 billion 364-day revolver as a component of GMF's liquidity.) The limit on the supplemental revolver will decline to $2.0 billion in July 2020, and the facility matures in 2022. As of March 31, 2019, GM had a little under $17 billion available across the three revolvers, with about $400 million in borrowings on the supplemental revolver and about $300 million in letters of credit backed by the facilities. Including revolver capacity, GM had automotive liquidity of nearly $33 billion at March 31, 2018 or nearly $35 billion when including Cruise's cash. According to Fitch's Corporate Rating Criteria, when analyzing a corporate issuer with a captive finance subsidiary Fitch calculates a target debt-to-equity ratio for the finance subsidiary based on its asset quality, funding and liquidity. If the finance subsidiary's target debt-to-equity ratio, based on Fitch's calculations, is lower than the actual ratio, Fitch assumes that the parent injects additional equity into the finance subsidiary to bring the debt-to-equity ratio down to the target level. Fitch then considers the effect of this equity injection in its analysis of the parent's credit profile. Fitch calculated a target debt-to-equity ratio of 4.0x for GMF at March 31, 2019, below the actual ratio of 9.2x. As a result of its analysis, Fitch has assumed that GM makes a $10.5 billion equity injection into GMF, funded with available cash, to bring GMF's debt-to-equity ratio down to 4.0x. The resulting adjustment reduces GM's readily available automotive cash, but the company's metrics remain supportive of its 'BBB' IDR. In addition to the captive-finance adjustment, according to its criteria, Fitch has treated an additional $3.3 billion of GM's automotive cash as "not readily available" for purposes of calculating net metrics. This is based on Fitch's estimate of the amount of cash needed to cover seasonality in GM's automotive business. However, even after excluding the amounts from its liquidity calculations, Fitch views GM's automotive liquidity position as relatively strong and sufficient to help the company withstand a moderate to severe downturn. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- General Motors Company LT IDR BBB Affirmed BBB senior unsecured LT BBB Affirmed BBB General Motors Financial Company, Inc. ST IDR F2 Affirmed F2 senior unsecured LT BBB Affirmed BBB preferred LT BB+ Affirmed BB+ senior unsecured ST F2 Affirmed F2 LT IDR BBB Affirmed BBB General Motors Financial of Canada, Ltd. LT IDR BBB Affirmed BBB senior unsecured LT BBB Affirmed BBB GENTIVA HEALTH: Moody's Hikes CFR to B1, Outlook Stable ------------------------------------------------------- Moody's Investors Service upgraded Gentiva Health Services, Inc.'s (dba Kindred at Home, or KAH) Corporate Family Rating to B1 from B2 and Probability of Default Rating to B1-PD from B2-PD. Moody's also affirmed the B1 on the first lien senior secured credit facilities, inclusive of the proposed add-on term loan. The outlook is stable. The proceeds from the proposed $410 million first lien term loan add-on and $77 million of cash from the balance sheet will be used to refinance the existing second lien term loan. The ratings on the second lien term loan will be withdrawn upon close. The upgrade of the CFR follows the successful separation from Kindred Healthcare, Inc. and merger with Curo Health Services, LLC in July 2018. KAH has performed well since completing these transactions, and is ahead of plan with respect to realizing benefits of cost saving initiatives. As a result, the company has deleveraged meaningfully over the last year and generated over $100 million of free cash flow since the separation. Additionally, the proposed refinancing transaction will modestly reduce leverage and result in about $18 million in annual interest expense savings. Gentiva Health Services, Inc. Ratings Upgraded: Corporate Family Rating, to B1 from B2 Probability of Default Rating, to B1-PD from B2-PD Ratings affirmed: Senior secured first lien credit facilities (including the $410 million term loan add-on) at B1 (LGD3) The rating outlook is stable. Ratings with no action, to be withdrawn upon close: $475 million second lien term loan due 2026, Caa1 (LGD6) RATINGS RATIONALE The B1 CFR reflects the company's high, though declining, financial leverage. Moody's recognizes that adjusted debt/EBITDA has declined from 7.5x at the time of the separation transaction, to 6.3x for the twelve months ended 3/31/2019. Moody's believes that adjusted debt/EBITDA will decline to the mid-5.0x range by the end of 2019 given the deleveraging impact of the refinancing transaction, organic revenue growth and further realization of cost savings. The rating is constrained by the high exposure to Medicare and Medicaid in the home care and hospice businesses as well as the considerable risk of adverse government reimbursement changes. In particular, there is risk around the shift in Medicare reimbursement expected in 2020 to the patient driven grouping model (PDGM). Further, Moody's anticipates that the company will continue to be acquisitive as it consolidates the highly fragmented home care and hospice industries. Supporting the B1 rating is Humana's ownership stake in KAH. Moody's believes that Humana will work with KAH to expand the scope of services offered to Humana's Medicare Advantage memberships by KAH, providing an important source of potential growth for KAH. Further, Moody's believes the risk of aggressive debt funded dividends is low given Humana's eventual full ownership of the company. Further, KAH has minimal capital expenditures and cash taxes due to large net operating losses (NOLs), which allows KAH to generate substantial free cash flow. Lastly, the rating is supported by KAH's good scale, with roughly $3 billion of revenue, in an industry with good long-term demand fundamentals. Moody's anticipates very good liquidity supported by an undrawn $350 million revolving credit facility (inclusive of the delayed draw facility). Moody's expects KAH to generate consistently positive free cash flow given its strong cash flow track record. This very good liquidity gives KAH ample cushion to absorb potential operating disruption from the shift to the PDGM. The stable outlook reflects Moody's view that the company will continue to de-lever as it realizes continued cost saving benefits, while maintaining very good liquidity and solid growth. The ratings could be upgraded if the company is expected to sustain debt/EBITDA below 4.5x. Additionally, a successful shift to PDGM without substantial operating disruptions or margin decline would be required for an upgrade. The ratings could be downgraded if the company experiences material operating disruption from the shift to PDGM or fails to realize substantial further cost savings. The ratings could also be downgraded if there is material weakening of liquidity or if the company is not expected to generate consistently positive free cash flow. Additionally, the rating could be downgraded if leverage is not expected to decline and remain below 5.5x. Gentiva Health Services (doing business as Kindred at Home) is one of the largest home health and hospice operators in the US. Proforma LTM 3/31/19 revenues are over $3 billion. GREAT WESTERN PETROLEUM: Fitch Alters Outlook on 'B-' IDR to Pos. ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating of Great Western Petroleum, LLC at 'B-'. The Rating Outlook is revised to Positive from Stable. In addition, Fitch has affirmed the senior secured credit facility at 'BB-'/'RR1' and senior unsecured notes due 2021 at 'B+'/'RR2.' Fitch is assigning a new 'B+'/'RR2' rating to the senior unsecured notes due 2025. The Positive Outlook reflects the company's growing liquids focused production in the DJ Basin (2018 exit rate of 38.5 mboepd and 1Q19 production of 34.3 mboepd), low-breakeven inventory and competitive cost structure leading to solid netbacks ($22.2/bbl in 1Q 19), a hedging policy that supports continued asset development and expectations of manageable leverage throughout its growth period. These considerations are offset by the company's exposure to, albeit moderated, regulatory risks, forecasted negative free cash flow profile, and the relatively weak capital market environment for high-yield energy issuer. This elevates near-term refinancing risk for Great Western's 2021 debt maturity. Fitch believes positive rating actions are likely upon successful refinancing of the 2021 debt maturity. KEY RATING DRIVERS Near-Term Political Risk Largely Mitigated: The Colorado State Senate passed a House-approved bill on April 3, 2019 that would place further limits on the oil and gas industry. The governor has signed the bill, and the Colorado Oil& Gas Conservation Commission (GOGCC) is working on the final rule making process. The bill would allow local governments to determine the location of oil and gas drilling operations as long as these regulations would be done in a "reasonable manner". In addition, the COGCC would be cut from nine members to seven, with the industry allowed one member instead of three. Finally, rules on forced pooling, which "forces" property right owners who object to drilling to be included in the revenue pool as long as one property owner consents. The new measure sets this number at 45% of all property owners. Fitch believes Great Western has a strong historical track record of working with local governments with 200 existing permits approved and years of operational/economic drilling success in Adams and Weld Counties. Great Western has also maintained operational momentum despite new regulations. The company received approval for seven new pads in Adams County in 2019, adding, over 200 wells and two years of inventory, assuming its current drilling program. Fitch views near-to-medium term operational risks have been moderated under the new regulatory environment, but consistent with Prop 112, there is potential for other initiatives. Fitch highlights that, in order for an initiative to become a new ballot measure, 5% of the latest voter turnout must provide signatures, which is now approximately 125,000, up about 27,000. Single DJ Basin Asset: Great Western has 61,198 net acres in the core of the Wattenberg Field of the DJ basin, primarily in the volatile oil window of Adams County with the remaining acreage in Weld County. The company has identified approximately 1,700 gross potential horizontal drilling locations, assuming 80% of inventory producing a 10% IRR at a breakeven price of $31.00 and 1.5 mile wells, equating to 35 rig years. Fitch believes the size and location of the asset base is generally consistent with 'B' category peers. The Colorado regulatory environment has created a capital market overhang for DJ basin operators, which may inhibit Great Western's ability to grow its reserve base and drilling inventory while maintaining its conservative financial policy. Strong Unit Economics: Although the asset base is relatively small, Fitch believes Great Western has some of the best acreage within the play, especially its blocky Adams County position where the average breakevens are $21/bbl in the Codell formation and $26/bbl in the Niobrara formation (10% IRRs), according to the company. Within this acreage, Great Western has identified 823 locations at IRRs of 94% ($60/bbl and $3/mmbtu) and 272 locations at IRRs greater than 100% given the same assumptions, or approximately 10 years of inventory assuming a two rig program. The lower breakevens are supported by the company's position in the highest pressure zone, high oil content, less proppant (1,000lbs/foot) as well as shorter drilling times (about 7 days per well). The company's twinning rig and frac crew program has further improved operational efficiencies, reducing spud to sales by 50% as well as lower F&D and operating expenses per boe. Fitch calculated 1Q 19 unhedged netbacks were $22.2/bbl (64% margin) greater than publicly rated 'B' category peers. Fitch expects netback margins to stay relatively flat over the long-term as Great Western continues to improve its drilling efficiencies and realizes better pricing offset by the Fitch's forecasted lower liquids mix. Strong Credit Metrics; Positive FCF Expected: Under Fitch's base case assumptions, Fitch is expecting strong credit metrics for the 'B' rating category, with debt/EBITDA trending from 3.1x at YE 18 to 2.0x by YE 2020 through EBITDA growth supported by the company's twin rig and frac crew program's production ramp up and hedge book. Fitch expects Great Western to transition to positive FCF for the full year ending 2021, under base case assumptions, further accelerating the company's de-levering capability in the form of gross debt reduction. Fitch is also projecting significant debt/flowing bbl improvement throughout the forecast, which is currently slightly higher than peers (above $24,000/bbl), trending below metrics currently consistent with higher rated peers by YE 20 ($18,500). DERIVATION SUMMARY Great Western's production profile (34.3 mmboepd in 1Q19) is relatively small compared to other 'B' operators such as direct peer and DJ Basin operator Extraction Oil & Gas (B+/Stable; 80.4 mmboepd), Unit Corporation (B+/Stable; 45.8 mmboepd), SM Energy (B+/Stable; 118.7 mmboepd), Comstock Resources (B-/Positive; 70.4 mmboepd) and Magnolia Oil and Gas (B/Positive; 62.4 mmboepd). Great Western's acreage position in the play (approximately 60,000 net acres) is significantly smaller than Extraction's 179,300 net acres. As single-basin DJ Basin operators, both companies are exposed to Colorado regulatory risk. Fitch believes Great Western has taken a proactive approach to the new legislation and has mitigated the new regulations associated with Bill 181. Great Western has a higher liquids-cut (73% vs. 68%) and higher unhedged netbacks ($22.2/bbl vs. $18.6/bbl) than Extraction and the rest of the peer group except for Magnolia ($27.1/bbl netbacks) as of March 31, 2019. Great Western's credit metrics are well positioned amongst the peer group with debt/1P of $4.2/boe, better than the peer group with Comstock and Magnolia the only peers lower at $3.3/boe and $4.0/boe, respectively. The small production size, coupled with the 0% equity credit on the preferred units negatively position Great Western on a $/flowing barrel basis at $24,964. Fitch expects this number to trend substantially lower throughout the forecast below $18,500/bbl in 2020 and below $13,500/bbl in the long-term, in line with 'B' and 'B+' rated peers. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - WTI oil prices of $57.50/bbl in 2019 and 2020, decreasing to $55.00/bbl in 2021 and thereafter; - Henry Hub natural gas prices of $3.25/mcf in 2019, decreasing to $3.00/mcf in 2020, 2021 and thereafter; - Robust double-digit production growth through 2021 before tailing off to mid-single digit growth; - Cash Costs increasing from 2020 to 2022 driven by higher G&T expenses and production taxes; - Capex of $610 million in 2019, $625 million in 2020 and $550 million thereafter; - Allocation of forecasted FCF towards revolver repayment in 2021 and 2022; - Improving oil & natural gas differentials. Fitch's Key Recovery Rating Assumptions for the Issuer Fitch's recovery analysis for Great Western used both an asset value based approach on observed transactions of like assets and a going-concern (GC) approach, with the following assumptions: Transactional and asset based valuations, such as recent transactions for the DJ Basin on a $/acre, $/drilling location, $/flowing bbl and $/1P basis as well as SEC PV-10 estimates, at YE 18 strip pricing, were used to determine a reasonable sales price for the company's assets. Using valuations from DJ Basin transactions, Fitch assigned an asset value of approximately $900 million to the oil and gas properties. Assumptions for the going-concern approach include: -- Fitch assumed a bankruptcy scenario exit EBITDA of $275 million in line with the 2021 stress case EBITDA. The EBITDA estimate takes into account a slight uptick in oil and natural gas prices following a prolonged commodity price downturn ($45/bbl WTI and $2.25/mcf gas in 2019 trending to $47.50/bbl WTI and $2.75/mcf gas in the long-term, with the inflection point in 2020) coupled with an unexpected regulatory change, causing lower than expected production, less economic drilling inventory and liquidity constraints. -- GC enterprise value (EV) multiple of 3.75x versus a historical E&P energy sub-sector exit multiple of 5.5x. The multiple is reflective of Great Western's footprint in the DJ Basin, which is smaller, subject to increased regulatory risks, and cored up, leading to fewer available assets to increase reserves and inventory. The recovery estimate is based on a net enterprise value of approximately $928 million, after a 10% reduction for administrative claims. Fitch assumes the credit facility is drawn at 80% as a commodity price downturn would likely result in a lower borrowing base and reduced commitments. The credit facility recovers fully and is rated 'BB-'/'RR1'. The senior unsecured notes due 2021 and 2025 also recover strongly and are rated 'B+'/'RR2'. Fitch caps the Recovery Rating on the unsecured notes at 'RR2' given the structural subordination and the potential for additional priority debt beyond the current credit facility in the form of an upsized borrowing base and/or new debt. Fitch does not rate the preferred units. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Successful refinancing of the 2021 debt maturity; - Maintenance of operational and financial momentum evidenced by production trending above 40 mboe/d, maintenance of mid-cycle debt/EBITDA below 3.0x and debt/flowing barrel below $27,500; - Sustained reduction in regulatory risk. Fitch believes Great Western's asset base and operational and financial profiles are generally consistent with 'B' rating tolerances. Continued operational execution and the successful refinancing of the 2021 debt maturity, eliminating the currently elevated refinancing risk, is likely to lead to a positive rating action in the next 12-24 months. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Potential regulatory actions that materially impact DJ Basin operator's operational financial profiles; - Loss of operational momentum evidenced by production trending below 15-20 mboepd; - Mid-cycle debt/EBITDA at or above 3.5x; - Change in financial/operational policy resulting in a more aggressive debt-funded growth strategy and/or a less proactive hedge book. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity for Near-Term Development: As of March 31, 2019, GWP had approximately $255 million of revolver availability and the company had cash on hand of approximately $10 million as of 1Q19. In September 2018, the borrowing base was increased from $400 million to $500 million however GWP chose an elected commitment amount of $450 million. This amount can be increased at the company's election without condition. Fitch believes GWP will continue to fund incremental cash flow deficits with revolver borrowings until the company turns FCF positive for the full year ending 2021. Fitch believes the company's economic asset base and improved drilling efficiencies support continued development and production growth facilitating future borrowing base improvement, providing adequate liquidity under Fitch's base case assumptions. Refinancing Risk: Capital market access for high-yield energy issuers has been limited in 2019, and Fitch believes that access for DJ basin operators such as Great Western is even weaker given the elevated regulatory environment. Fitch believes this elevates the company's near-term refinancing risk. Successful refinancing on the 2021 notes will extend the company's maturity profile; the credit facility will be automatically extended five years if the bonds are repaid or refinanced prior to March 30, 2021 and the debt maturity of the refinanced bonds is greater than six months after the extended maturity date. Additionally, Great Western has a $75 million maturity in 2025. Fitch believes liquidity could be further improved if the company upsizes the unsecured notes refinancing to further reduce revolver borrowings. Preferred Units: On April 11, 2018, GWP issued 275,000 preferred units at $1,000 par value. GWP is required to make cumulative annual dividends payable quarterly at 8% until April 2023, the greater of 8% and L+625 thereafter, and 10% following a qualified IPO. Until March 2020, GWP has the option to PIK dividends up to 100%. As detailed in the Hybrids Security Section, the units received 0% equity credit. GTC WORKS: U.S. Trustee Unable to Appoint Committee --------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of GTC Works, LLC as of June 6, according to a court docket. About GTC Works LLC GTC Works LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 19-04090) on April 8, 2019. At the time of the filing, the Debtor estimated assets and liabilities of less than $1 million. The case is assigned to Judge Paul Sala. Kelly G. Black, PLC, is the Debtor's counsel. HAWAIIAN AIRLINES: Moody's Cuts Class B Debt Rating to Ba2 ---------------------------------------------------------- Moody's Investors Service downgraded its ratings assigned to Hawaiian Airlines, Inc. Pass Through Certificates, Series 2013-1: Class A to Baa1 from A3, Class B to Ba2 from Ba1. The Ba3 Corporate Family rating and stable outlook assigned to Hawaiian Airlines' parent, Hawaiian Holdings, Inc. are unaffected by this rating action. These Enhanced Equipment Trust Certificates (EETCs) finance six of the Airbus A330-200 wide-body aircraft the company operates from Hawaii west across the Pacific and to the continental United States. RATINGS RATIONALE The ratings reflect the weakening trend in the market values of Airbus A330-200s that have meaningfully trailed Moody's projections, leading to higher loan-to-value (LTV) of the two classes versus Moody's expectations. Moody's does not foresee a catalyst that would reverse the trend, so it does not expect noticeable improvement in the LTVs over the transaction's remaining life. The Class A has a scheduled maturity date of January 15, 2026. Moody's now projects the current (and peak) LTV of the Class A at about 69% versus its original peak projection of 54%, and for the Class B peak at 94% versus the original peak at 74%. The lowered ratings reflect these revised expectations and the relative quality of the collateral. Airlines are favoring the larger variant in the family, the A330-300. However, the market values of even the A330-300 are being pressured by the introduction of A330-900neo (the 'new engine option') aircraft. Pressure on the values of the -300 model trickles down to the smaller variant, the -200. Notwithstanding the decline in the equity cushions (1 minus the LTVs), Moody's expects the A330-200 will remain important to Hawaiian's long-haul network through the transaction's maturity date. The aircraft in the transaction are about six years old, the same as the average age of the company's A330 fleet. Hawaiian's total A330 fleet stands at 24 aircraft, including 12 that it leases. In July 2018, Hawaiian placed an order for 10 Boeing 787-9 wide-body aircraft, with deliveries scheduled between 2021 and 2025. Moody's believes these will be mostly for replacement of the then oldest A330s in the fleet. The EETC ratings consider Moody's assessment of the credit quality of Hawaiian Holdings, Inc. ("Hawaiian") and the structural benefits of EETCs, including the applicability of Section 1110 of the United States Bankruptcy Code, cross-default and cross-collateralization of the equipment notes, cross subordination under the intercreditor agreement and the support of 18-month liquidity facilities. The ratings also consider 1) the strategic importance of the Airbus A330-200 aircraft to Hawaiian's operations, 2) the estimated market value of the aircraft, and 3) aircraft characteristics including demand for the model type, passenger capacity, age and operating efficiency. Future changes in the credit quality of the airline, in Moody's opinion of the importance of particular aircraft models to an airline's network, or in its estimates of aircraft value trends which will affect estimates of loan-to-value can result in changes to EETC ratings. Changes to Corporate Family ratings can also result in upgrades or downgrades of EETC ratings. Hawaiian Holdings, Inc., headquartered in Honolulu, HI, is the holding company parent of Hawaiian Airlines, Inc. ("Hawaiian"). Hawaiian is Hawaii's biggest and longest-serving airline. Hawaiian offers non-stop service to Hawaii from 13 U.S. gateway cities, along with service from Japan, South Korea, Australia, New Zealand, American Samoa and Tahiti. Hawaiian also provides approximately 170 jet flights daily between the Hawaiian Islands, with a total of more than 260 daily flights system-wide. The company reported revenue of $2.8 billion in the 12 months ended March 31, 2019. The methodologies used in these ratings were Enhanced Equipment Trust and Equipment Trust Certificates published in July 2018, and Passenger Airline Industry published in April 2018. Downgrades: Issuer: Hawaiian Airlines, Inc. Senior Secured Enhanced Equipment Trust Class A, Downgraded to Baa1 from A3 Senior Secured Enhanced Equipment Trust Class B, Downgraded to Ba2 from Ba1 HCA INC: Fitch Rates $35BB Sr. Secured Notes 'BB+', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB+'/'RR1' rating to HCA Inc.'s senior secured note issuance. The ratings apply to approximately $35 billion of debt at March 31, 2019. The Rating Outlook is Stable. KEY RATING DRIVERS Industry-Leading Financial Flexibility: HCA has for-profit hospital industry-leading operating margins and generates consistent and ample discretionary FCF (operating cash flows less dividends, payments to minority interests and capex). Financial flexibility has improved significantly in recent years as a result of organic growth in the business and proactive management of the capital structure. Stable Leverage: Fitch forecasts HCA will produce cash flow from operations of $6.4 billion in 2019 and will prioritize use of cash for organic investment in the business, tuck-in M&A and payments to shareholders, including a common dividend that consumes about $500 million of cash. At 3.8x at March 31, 2019, HCA's leverage is below the average of the group of publicly traded hospital companies, and Fitch does not believe there is a compelling financial incentive for the company to use cash for debt reduction. Secular Headwinds Buffet Operating Outlook: Measured by revenues, HCA is the largest operator of for-profit acute care hospitals in the country, with a broad geographic footprint and good depth of care delivery assets. This favorable operating profile makes the company relatively resilient although not immune to weak organic operating trends in the for-profit hospital industry. HCA's top-line growth has consistently outpaced most industry peers, but secular challenges, including a shift to lower-cost care driven by health insurer scrutiny, increasing healthcare consumerism, and growing Medicare volumes relative to commercial volumes will be headwinds to organic growth and profitability for the hospital industry . Increasing Focus on M&A: HCA has recently increased the pace of acquisitions, which will help to bolster growth in the intermediate term. Recent transactions have been tuck-in in nature, as HCA follows a strategy of adding hospitals, mainly in existing markets. The recent acquisitions of Memorial Health System in Savannah, GA and Mission Health, in Asheville, NC represent the first new hospital markets HCA has entered in more than a decade, signaling openness to geographic expansion in the right situations. The company has the financial flexibility to complete a larger transaction that is more transformative to the operating profile, but Fitch thinks it is more likely the company will continue to focus on smaller targets. Regulatory Environment In-Flux: With the Democrat majority takeover of the House of Representatives in the November 2018 midterm election, Affordable Care Act (ACA) repeal and replace legislation appears to be off the table at least until 2020 given partisan gridlock. HCA's management has stated that the company has benefited from the ACA, and that enrollees in the ACA health insurance marketplaces comprised 2.6% of admissions in 2017 and 2.5% in first-quarter 2018, the last data points provided. Any changes to the ACA that result in more uninsured or underinsured individuals will result in a weaker payor mix for acute care hospitals, which would pressure margins unless offset by cost-saving measures or higher reimbursement through a rollback of the fees and payment cuts required by the ACA. ACA Insurance Expansion Undermined: The Trump administration has made several changes that weaken the insurance expansion elements of the ACA. These include removal of the individual mandate penalty effective in 2019; an extended timeline for short-term, less comprehensive health plans; increased state Medicaid waiver flexibility and cuts to ACA healthcare exchange open enrolment advertising spending. Such changes are expected to lead to small increases in the number of uninsured and underinsured individuals and will not influence business profiles enough to change any ratings in the for-profit hospital industry. Expect Continuity Under New CEO: HCA's prior CEO, Milton Johnson, stepped down at the end of 2018 and the former COO, Sam Hazen, assumed the role. Fitch does not anticipate any change in the company's financial or operational strategy under the new leadership. Mr. Hazen is a 36-year veteran of the company and has held numerous roles with escalating levels of responsibility over the years. Fitch sees him as a logical successor for the CEO role. Thomas Frist, III, the son of the founder, Thomas Frist, Jr., succeeds Mr. Johnson as chairman of the board. Mr. Frist has been a board member since 2006 and the founding Frist family remains the largest holder of HCA's public equity. DERIVATION SUMMARY HCA's 'BB' IDR reflects the company's good financial flexibility with moderate financial leverage relative to the other four publicly traded hospital compan ies (Tenet Healthcare Corp. (B/Positive), Community Health Systems, Inc. (CCC), Universal Health Services, Inc. (BB+/Stable), and Quorum Healthcare Corp.), industry leading profitability and FCF generation. HCA's operating profile is the strongest in the investor owned acute care hospital category, benefiting from good geographic diversification and depth of operating assets within the company's markets. The hospital industry is facing secular headwinds to organic growth, but HCA's hospitals are primarily located in urban or large suburban markets that have relatively favorable prospects. The IDRs of HCA Healthcare Inc. and HCA Inc. are the same due to strong legal and operational ties between the entities. HCA Healthcare Inc.'s only asset is 100% ownership of HCA Inc., which is the indirect owner of all the operating subsidiaries. There are cross default provisions on the debt of the two entities. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: -- Organic revenue growth of 4%-5% in 2019-2021, driven equally by pricing and volume. -- Operating EBITDA margin in 2019 is compressed by about 50bp versus 2018, primarily the result of integrating lower-margin hospitals. In 2020-2021 margins level off at around 19.2%. -- Fitch forecasts 2019 EBITDA before associate and minority dividends of $9.6 billion and 2019 FCF after associate and minority distributions of $2.0 billion for HCA, with capex of about $3.8 billion and dividend payments of about $500 million. Higher capital spending versus historical levels is related to growth projects that support the expectation of EBITDA growth through the forecast period. -- Debt due in 2019-2021 is refinanced, and the company issues debt to fund share repurchases and M&A, resulting in gross debt/EBITDA after associate and minority dividends maintained just under 4.0x through the forecast period. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- The 'BB' rating considers HCA operating with leverage (total debt/EBITDA after associate and minority dividends) around 4.0x with a FCF margin of 3%-4%. -- An upgrade to 'BB+' from 'BB' is possible if HCA maintains leverage (total debt/EBITDA after associate and minority dividends) at 3.5x or below. Developments That May, Individually or Collectively, Lead to Negative Rating Action A downgrade to 'BB-' could be caused by leverage sustained above 4.5x, but this is unlikely in the near term because these targets afford HCA with significant financial flexibility to increase acquisitions and organic capital investment, while still returning a substantial amount of cash to shareholders. LIQUIDITY AND DEBT STRUCTURE Good Financial Flexibility: HCA's liquidity profile is solid for the 'BB' IDR. Proceeds of the new senior secured notes are expected to be used to refinance the $3.0 billion of HCA Inc. secured notes maturing in February 2020. Other upcoming maturities include the final $1.1 billion on the term loan A in June 2020 and the $1 billion unsecured, structurally subordinated HCA Healthcare, Inc. notes in February 2021. Fitch's forecast assumes that HCA will refinance this debt. Cash on hand is typically $500 million-$600 million, with the full amount considered 'readily available' by Fitch. HCA does not have large cash needs for working capital or exhibit much seasonality in cash flow generation. The company has $5.75 billion in revolving credit capacity and in recent periods has maintained at least $2.0 billion in available capacity on these credit lines. HCA also has good flexibility under the debt agreement covenants. The bank agreement includes a financial maintenance covenant that limits consolidated net leverage to 6.75x or below and an incurrence covenant for first-lien secured net leverage (includes debt under the bank facilities and first-lien secured notes) of 3.75x. At March 31, 2019, Fitch estimates that HCA had incremental secured first-lien debt capacity of about $13.0 billion and a 47% EBITDA cushion under the 6.75x consolidated leverage ratio test. Debt Issue Notching: The notes outstanding at the HCA Healthcare Inc. (Hold Co) level are structurally subordinate to the debt outstanding at HCA Inc. and are rated 'B+'/'RR6', two notches below the IDR, to reflect this subordination. The ABL facility has a first-lien interest in substantially all eligible accounts receivable (A/R) of HCA, Inc. and the guarantors, while the other bank debt and first-lien notes have a second-lien interest in certain of the receivables. Due to this priority secured interest, the ABL is rated 'BBB-', two notches higher than the IDR. The availability on the ABL facility is based on eligible A/R as defined per the credit agreement. The cash flow revolver, term loans and first lien secured notes, are rated 'BB+'/'RR1', one notch above the IDR. These obligations are not notched up to investment grade because of a large amount of non-guarantor value in the capital structure (operating subsidiaries that are not guarantors of the secured debt comprise about 40% of total assets), and a relatively lenient secured debt incurrence covenant that allows for net secured debt/EBITDA of up to 3.75x. HENRY COUNTY HEALTH: S&P Cuts Tax Anticipation Bonds Rating to BB+ ------------------------------------------------------------------ S&P Global Ratings has lowered its long-term rating on Henry County Health Care Authority, Ala.'s series 2011, 2013, 2014, and 2016 health care facilities tax anticipation bonds to 'BB+' from 'A' and removed the bonds from CreditWatch negative where they were placed on Feb. 6, 2019. At the same time, S&P assigned its 'BB+' long-term rating to the authority's $3.8 million series 2019 health care facilities tax anticipation bonds. The outlook is stable. Bond proceeds from the series 2019 issue will refund series 2011 bonds, fund a renovation project at the skilled nursing facility (SNF) named the Henry County Health and Rehabilitation Facility, and pay a portion of the issuance costs. S&P placed the series 2011, 2013, 2014, and 2016 bonds on CreditWatch with negative implication on Feb. 6 to determine the appropriate criteria for analyzing the bonds. In prior reviews, the rating agency applied its "Special Tax Bonds" criteria, published June 13, 2007. However, these criteria were retired and superseded by other criteria, including "Issue Credit Ratings Linked To U.S. Public Finance Obligors' Creditworthiness," published Jan. 22, 2018. "The downgrade reflects that we have determined that our 'Senior Living' criteria published June 18, 2007, apply best to analyze the bonds because the authority's operations reflect that of a long-term care organization," said S&P credit analyst Anne Cosgrove. Under these criteria, S&P has assigned the authority a 'bb-' indicative credit profile. While the Senior Living criteria capture the preponderance of risk factors necessary for the rating agency to analyze the debt, they do not include a provision to recognize the authority's additional credit strength, such as its ability to benefit from taxing district support. To analyze this characteristic of the debt, S&P has determined that a specific aspect of its "U.S. And Canadian Not-For-Profit Acute Care Health Care Organizations" criteria, published March 19, 2018, also applies. This allows the rating agency to notch up the rating based on this additional financial flexibility. Specifically, S&P's rating on the authority incorporates a positive adjustment under the Acute Care criteria to the indicative credit profile based on proven and ongoing tax-support, exemplified by the tax revenue encompassing about 6% of total operating revenue, and the tax base's expected stability. This strength, however, does not significantly offset the risks reflected by the Senior Living criteria, leading to an overall bond rating of 'BB+'. The rating reflects the authority's essentiality to the service area as the only SNF provider in the county, although its location in a service area with a small, declining population tempers this. Because the facility has a large portion of governmental payers, S&P also recognizes the associated risks with funding, especially as Alabama has not expanded Medicaid. However, demand for services is stable and financial performance has improved over the past couple of years, with more focus from the board and management on managing costs and capturing charges for service provided. S&P expects that as management continues to find operating efficiencies and other revenue sources, operations will remain near current levels. In conjunction with the bond issuance, the authority will start a renovation project of its SNF, to refresh both resident rooms and common spaces. S&P believes management will maintain its census and the renovations should have minimal impact on operations. The management expects the project to take approximately a year. The stable outlook reflects the authority's improving operations in fiscal 2018 and fiscal 2019 year-to-date, with the expectation that positive operations will continue at least through 2020 given the board's renewed focus on financial viability. The outlook also reflects the authority's increasing tax revenue that covers debt service and supports operations. S&P also believes the renovations, for which the bonds are being issued, will not disrupt the business and will be completed on time and budget. "Although we believe the renovations will be relatively minimal, we could revise the outlook to negative if the project affects the SNF's operations or is over budget. In addition, we could lower the rating if unrestricted reserves decline, operations weaken to previous levels, or demand for the authority's service fall," S&P said. "Although unlikely during our year-long outlook period, we could revise the outlook to positive or raise the rating if the authority increases and diversifies its revenue base, grows unrestricted reserves, especially relative to long-term debt, and maintains at least strong operating margins," S&P said. HEXION HOLDINGS: Amends Plan to Add Insurance Contracts Provisions ------------------------------------------------------------------ The Confirmation Hearing of Hexion Holdings LLC, et al.'s Second Amended Chapter 11 Plan of Reorganization will be on June 24, 2019 at 10:00 a.m. prevailing Eastern Time. The Confirmation Objection Deadline for filing and serving objections to confirmation of the Plan shall be June 17, 2019 at 5:00 p.m. (prevailing Eastern time). Ballots for accepting or rejecting the Plan must be received by the Voting and Claims Agent on or before 5:00 p.m. (prevailing Eastern time) on June 19, 2019 to be counted. Prior to the hearing on the approval of the Disclosure Statement, the Debtors filed a second amended disclosure statement to include provisions on insurance contracts. The Plan provides that, "Notwithstanding anything to the contrary in the Disclosure Statement, the Plan, the Plan Supplement, the Confirmation Order, any bar date notice or claim objection, any other document related to any of the foregoing or any other order of the Bankruptcy Court (including, without limitation, any other provision that purports to be preemptory or supervening, confers Bankruptcy Court jurisdiction, grants an injunction or release, or requires a party to opt out of any releases): (a) on the Effective Date, the applicable Reorganized Debtors shall assume the Insurance Contracts in their entirety pursuant to sections 105 and 365 of the Bankruptcy Code and the parties to the Insurance Contracts shall remain liable for all of the obligations thereunder (including any obligations of the Debtors), regardless of when they arise; (b) nothing shall alter, modify, amend, affect, impair or prejudice the legal, equitable or contractual rights, obligations, and defenses of the Insurers, the Debtors (or, after the Effective Date, the Reorganized Debtors), or any other individual or entity, as applicable, under any Insurance Contracts; any such rights and obligations shall be determined under the Insurance Contracts and applicable nonbankruptcy law as if the Chapter 11 Cases had not occurred; (c) nothing alters or modifies the duty, if any, that Insurers have to pay claims covered by the Insurance Contracts and the Insurers' right to seek payment or reimbursement from the Debtors (or after the Effective Date, the Reorganized Debtors) or draw on any collateral or security therefor; (d) the Allowed Claims of the Insurers arising (whether before or after the Effective Date) under the Insurance Contracts (i) shall be paid in full in the ordinary course of business regardless of whether such amounts are or shall become liquidated, due or paid before or after the Petition Date or the Effective Date, and (ii) shall not be discharged or released by the Plan or the Confirmation Order or any other order of the Bankruptcy Court; (e) the Insurers shall not need to or be required to file or serve any objection to a proposed cure amount or a request, application, claim, proof or motion for payment or allowance of any Administrative Claim and shall not be subject to any bar date or similar deadline governing cure amounts or Administrative Claims; and (f) the automatic stay of section 362(a) of the Bankruptcy Code and the injunctions set forth in Article IX of the Plan, if and to the extent applicable, shall be deemed modified without further order of this Court, solely to permit: (I) claimants with valid workers' compensation claims or direct action claims against an Insurer under applicable nonbankruptcy law to proceed with their claims; (II) the Insurers to administer, handle, defend, settle, and/or pay, in the ordinary course of business and without further order of this Bankruptcy Court, (A) workers' compensation claims, (B) claims where a claimant asserts a direct claim against any Insurer under applicable non-bankruptcy law, or an order has been entered by this Court granting a claimant relief from the automatic stay to proceed with its claim, and (C) all costs in relation to each of the foregoing; (III) the Insurers to collect from any or all of the collateral or security provided by or on behalf of the Debtors (or the Reorganized Debtors, as applicable) at any time and to hold the proceeds thereof as security for the obligations of the Debtors (and the Reorganized Debtors, as applicable) and/or apply such proceeds to the obligations of the Debtors (and the Reorganized Debtors, as applicable) under the applicable Insurance Contracts, in such order as the applicable Insurer may determine; and (IV) the Insurers to cancel any Insurance Contracts, and take other actions relating thereto, to the extent permissible under applicable non-bankruptcy law, and in accordance with the terms of the Insurance Contracts." A full-text copy of the Second Amended Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y6flasz7 from PacerMonitor.com at no charge. A blacklined version of the Second Amended Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/yy5gavoz from PacerMonitor.com at no charge. Counsel for the Debtors are George A. Davis, Esq., Andrew M. Parlen, Esq., Hugh Murtagh, Esq., at Latham & Watkins LLP, in New York; Caroline A. Reckler, Esq., and Jason B. Gott, Esq., at Latham & Watkins LLP, in Chicago, Illinois; and Mark D. Collins, Esq., Michael J. Merchant, Esq., Amanda R. Steele, Esq., and Brendan J. Schlauch, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. About Hexion Holdings Based in Columbus, Ohio, Hexion Inc. -- https://www.hexion.com/ -- is a producer of thermoset resins or thermosets, and a producer of adhesive and structural resins and coatings. The company is incorporated in New Jersey while most of its co-debtors are Delaware limited liability companies or Delaware corporations. Hexion Inc. is the direct or indirect parent of the debtors and the non-debtor affiliates. Hexion Holdings LLC is the sole member of Hexion LLC, which is the sole owner of Hexion Inc. Hexion Inc. employs 4,000 people around the world, including 1,300 in the U.S. across 27 production facilities. Hexion Holdings LLC and its co-debtors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10684) on April 1, 2019. At the time of the filing, the Debtors estimated assets and liabilities of between $1 billion and $10 billion. The cases are assigned to Judge Kevin Gross. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger, P.A., as bankruptcy counsel; Paul Weiss Rifkind Wharton & Garrison LLP, as special financing and securities; Moelis & Company LLC as financial advisor; AlixPartners LLP as restructuring advisor; and Omni Management Group as claims, noticing, solicitation and balloting agent. The Office of the U.S Trustee appointed an official committee of unsecured creditors on April 10, 2019. The committee tapped Bayard P.A. and Kramer Levin Naftalis & Frankel LLP as its legal counsel. HGIM CORP: S&P Affirms 'B-'Issuer Credit Rating; Outlook Stable --------------------------------------------------------------- S&P Global Ratings affirmed its 'B-'issuer credit rating on New Orleans-based HGIM Corp. At the same time, S&P affirmed its 'B' issue-level rating on the company's $350 million first-lien term loan due 2023. The '2' recovery rating is unchanged, indicating the rating agency's expectation for substantial (70%-90%; rounded estimate: 75%) recovery in the event of a payment default. The rating affirmation reflects S&P's expectation that HGIM's leverage will remain high but stable, over the next one to two years, as offshore service providers continue to face weak market conditions, with oil and gas exploration and production (E&P) companies favoring lower-cost, less-risky onshore projects. S&P expects demand for offshore services to show some improvement starting in the next 12-24 months but that day rate and margin improvements will be more muted as service providers will have to price contracts more competitively given industry overcapacity. Although still among the highest in the offshore vessel industry, S&P expects HGIM's EBITDA margins to subside to around 35% this year from over 40% in 2017 and 2018, resulting in funds from operations (FFO) to debt of close to 10% in 2019 and 2020. The stable outlook reflects S&P's expectation that HGIM will maintain adequate liquidity and generate positive FOCF despite low utilization and day rates on the company's fleet. The rating agency expects continued weak conditions in the offshore oilfield service sector for at least the next 12 months and HGIM's credit ratios to remain weak through 2020, with average FFO to debt about 10% and debt to EBITDA about 5.5x. "We could lower the rating if liquidity or leverage weaken to levels we consider unsustainable, or if we expect covenant compliance to be at risk. This would most likely result from continued instability of oil prices delaying a recovery in the offshore drilling market, which would negatively impact demand for HGIM's services," S&P said. "We could raise our rating if HGIM increases revenues and improves margins sufficiently beyond our expectations, to the extent that FFO to debt comfortably exceeds 12% for a sustained period. This could occur if conditions in the offshore drilling market improve more rapidly than we anticipate, increasing the demand for HGIM's services and leading to improved utilization and day rates," S&P said. HIGH TIMES: Plan Hearing Moved to Sept. 10 to Continue CMIYA Talks ------------------------------------------------------------------ The hearing for the consideration of the final approval of the Amended Disclosure Statement and the confirmation of the Plan filed by High Times Corp. is rescheduled to September 10, 2019 at 10:00 AM. Any objection to the final approval of the Disclosure Statement and/or the confirmation of the Plan shall be filed on/or before ten (10) days prior to the date of the hearing on confirmation of the Plan. A plan confirmation hearing was originally scheduled for June 4 following conditional approval of the disclosure statement during the May 22 disclosure statement hearing. On May 30, the Debtor filed a statement pursuant to Section 1129 of the Bankruptcy Code. A full-text copy of the 1129 Statement is available for free at https://tinyurl.com/y2hodfdl from PacerMonitor.com. Prior to the June 4 plan confirmation hearing, secured creditor CMIYA Investments Inc. filed objections to the final approval of the Disclosure Statement and confirmation of the Plan and its ballot rejecting the amended Small Business Plan. In line with this, at the Debtor and CMIYA's urgent motion, the Court rescheduled the hearing on the final approval of the disclosure statement and confirmation of the Plan and extended the timing provisions within Sections 1121(e) and 1129(e). The parties said they have been consistently having settlement conversations towards a potential stipulation. Further, the parties have been exchanging potential adjustments to the proposed treatment which may provide for a consensual confirmation. However, the time constraints due to the upcoming hearing, the parties and principally CMYIA, hasn't been able to obtain all necessary authorization to a potential final treatment as being discussed by the parties. Pursuant to this, the parties require a reasonable additional timeframe to conclude their ongoing negotiations as to the final treatment of CMYIA. The parties assert that their request is made in good faith and in attention to ongoing negotiations. It is their position that to have this additional opportunity to conclude negotiations may result in a consensual confirmation with would be in the best interest of all creditors, debtor, and the estate. Accordingly, the hearing on the final approval and confirmation hearing is scheduled for September 10, 2019, at 10:00 A.M., and the time periods prescribed by Sections 1121(e)(2) and 1129(e) are extended until September 10. About High Times Corp. High Times Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-04770) on August 21, 2018. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $500,000. Judge Enrique S. Lamoutte Inclan presides over the case. Alexis A. Betancourt Vincenty, Esq., at Lugo Mender Group LLC, is the Debtor's bankruptcy counsel. HOME CARE: June 26 Hearing on Plan Confirmation ----------------------------------------------- The Disclosure Statement explaining the Chapter 11 Plan of Home Care Options, Inc., a New Mexico corporation, is conditionally approved. A hearing to consider final approval of the Disclosure Statement and confirmation of the Plan will be held before the Honorable Robert H. Jacobvitz on Wednesday, June, 26, 2019 at 10:00 a.m. in the Gila Courtroom, fifth floor, Pete V. Domenici United States Courthouse, 333 Lomas Blvd. NW, Albuquerque, New Mexico. June 14, 2019 is fixed as the last day for filing and serving written objections to the Disclosure Statement. June 26, 2019 is the deadline for filing complaints objecting to the discharge of the Debtor. About Home Care Options Based in Gallup, New Mexico, Home Care Options, Inc., a home health care services provider, filed a voluntary Chapter 11 Petition (Bankr. D.N.M. Case No. 18-13030) on December 3, 2018, and is represented by George D. Giddens, Jr., Esq., at Giddens & Gatton Law, P.C., in Albuquerque, New Mexico. At the time of filing, the Debtor had estimated assets of $0 to $50,000 and estimated liabilities of $1 million to $10 million. The petition was signed by Grace Laurence, president/owner. IDEAL DEVELOPMENT: Amends Plan to Address U.S. Trustee's Objections ------------------------------------------------------------------- Ideal Development Corporation filed a second amended Plan of Reorganization and accompanying second amended disclosure statement to address the objections of the U.S. Trustee. The U.S. Trustee complained that Section III A (The Debtor's Assets and Liabilities), Section IV (Reasons for Filing), and Section V A (Treatment of Leases and Contracts), among other things, are inadequate. To address the U.S. Trustee's objection, the second amended Plan provides an operating budget for 10 months and an estimated payment schedule based on the negotiated payments that will be in the plan confirmation order. The Debtor explained that it filed for protection under Chapter 11 of Title 11 of the U.S. Code to stop the foreclosure sale of its real property located at 550 Fairburn Road, Suites B-2, B-3, and B-4, in Atlanta, Georgia. The Debtor also disclosed that, as of May 22, the only lease the Debtor is a party to is as a lessor regarding its real property located at 2125 County Line Road, SW, Atlanta, Georgia 30331 with Butler Learning Academy and Ms. Tashia Harrison as the jointly liable tenants. The term of the 2125 Lease expired on 10/31/2018, and the tenant exercised an option to renew for an additional 1 year period of time to 10/31/2019. Debtor shall assume the 2125 Lease. Class 5 (General Unsecured Claims). Holders of Class 5 claims shall be paid a pro rata share of $12,000 in semi-annual installments beginning on the 6th month anniversary after the Effective Date and continuing for six years for a total of 12 payments. Funds necessary to fund the plan will be derived from the profits of DP, Inc. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y348my3x from PacerMonitor.com at no charge. Attorney for the Debtor is Will B. Geer, Esq., in Atlanta, Georgia. About Ideal Development Corporation Ideal Development Corporation, a Georgia-based corporation that operates as a real estate holding company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-63172) on Aug. 6, 2018. In the petition signed by its president, James T. Walker, the Debtor estimated assets and liabilities of less than $1 million. The Debtor tapped Wiggam & Geer, LLC, as its legal counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. IMAGE FIRST: Court Grants Campanelli Settlement ----------------------------------------------- In the case, KYLE L. CAMPANELLI, Plaintiff, v. IMAGE FIRST HEALTHCARE LAUNDRY SPECIALISTS, INC., et al., Defendants, Case No. 15-cv-04456-PJH (N.D. Cal.), Judge Phyllis J. Hamilton of the U.S. District Court for the Northern District of California granted the parties' joint request for approval of an individual settlement between Campanelli and Defendants ImageFirst Healthcare Laundry Specialist, Inc. and ImageFirst of California, LLC. ImageFIRST of California employed Campanelli as a delivery person from March 2014 to March 2015. In general, Campanelli alleges that he worked over 40 hours a week but was denied meal and rest periods and was never paid overtime compensation, in violation of the Fair Labor Standards Act ("FLSA") and the California Labor Code. Campanelli originally brought the action as a putative collective action under the FLSA and as a class action under Federal Rule of Civil Procedure 23. On Dec. 21, 2018, the Court denied the Defendants' motion to deny FLSA certification and granted their motion to deny Rule 23 class certification. From that point, therefore, the action has proceeded as only a putative collective action under the FLSA. On April 5, 2019, the parties filed the now pending joint request for approval of settlement. Subsequently, in response to a court order, the parties filed additional support for that request. After reviewing the settlement agreement, the factual representations made by the parties, the allegations in the complaint, and the legal issues presented by this case, Judge Hamilton finds that the settlement is fair and warrants approval under the standard articulated in Lynn's Food Stores, Inc. v. United States. Moreover, after considering the Diaz v. Tr. Territory of Pac. Islands factors and other possible sources of prejudice, he finds that dismissal of the action will not prejudice the putative FLSA collective. In light of the foregoing, JUdge Hamilton approved the parties' settlement. He granted the parties' motion to seal the settlement amount. The action in its entirety is dismissed with prejudice. The dismissal, however, is without prejudice to non-present putative FLSA collective action members. A full-text copy of the Court's April 30, 2019 Order is available at https://is.gd/OoJgoM from Leagle.com. Kyle L. Campanelli, Plaintiff, represented by David C. Feola -- David@Feolalaw.com -- Hoban & Feola, LLC & Brian J. Malloy -- info@brandilaw.com -- The Brandi Law Firm. Image First Healthcare Laundry Specialists, Inc. & Image First of California, LLC, Defendants, represented by Eric Meckley, Esq. -- eric.meckley@morganlewis.com -- Morgan, Lewis and Bockius LLP, Kathryn M. Nazarian -- kate.nazarian@morganlewis.com -- Morgan, Lewis and Bockius & Nancy Villarreal -- nancy.villarreal@morganlewis.com -- Morgan Lewis & Bockius LLP. INSYS THERAPEUTICS: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------------- Seven affiliates that have filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Insys Therapeutics, Inc. (Lead Case) 19-11292 aka Neopharm, Inc. 1333 South Spectrum Blvd., Suite 100 Chandler, AZ 85286 IC Operations, LLC 19-11293 Insys Development Company, Inc. 19-11294 Insys Manufacturing, LLC 19-11295 Insys Pharma, Inc. 19-11296 IPSC, LLC 19-11297 IPT 355, LLC 19-11298 Business Description: INSYS Therapeutics -- http://www.insysrx.com -- is a specialty pharmaceutical company that develops and commercializes certain drugs and novel drug delivery systems for targeted therapies, with the goal of improving patients' quality of life and addressing unmet patient needs. As of the Petition Date, the Debtors have two marketed products: SUBSYS and SYNDROS. Insys Therapeutics was incorporated in Delaware in June 1990, and maintains headquarters in Chandler, Arizona. Chapter 11 Petition Date: June 10, 2019 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Kevin Gross Debtors' Legal Counsel: Paul N. Heath, Esq. John H. Knight, Esq. Amanda R. Steele, Esq. Zachary I. Shapiro, Esq. Mark D. Collins, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 N. King Street Wilmington, Delaware 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 Email: heath@rlf.com knight@rlf.com steele@rlf.com shapiro@rlf.com collins@rlf.com - and - Gary T. Holtzer, Esq. Ronit J. Berkovich, Esq. Candace M. Arthur, Esq. Olga F. Peshko, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: gary.holtzer@weil.com ronit.berkovich@weil.com candace.arthur@weil.com olga.peshko@weil.com Debtors' Financial Advisor: FTI CONSULTING, INC. Two North Central Avenue, #12000 One Renaissance Square, Phoenix, AZ 85004 Debtors' Investment Banker: LAZARD FRERES & CO. LLC 30 Rockefeller Plaza #5440 New York, NY 10020 Debtors' Claims, Noticing, & Solicitation Agent and Administrative Advisor: EPIQ CORPORATE RESTRUCTURING, LLC 777 Third Avenue, 12th Floor New York, New York 10017 https://dm.epiq11.com/case/INS/dockets Consolidated Total Assets as of March 31, 2019: $175,114,056 Consolidated Total Debts as of March 31, 2019: $262,504,755 The petitions were signed by Andrew G. Long, chief executive officer. A full-text copy of Insys Therapeutics' petition is available for free at: http://bankrupt.com/misc/deb19-11292.pdf List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. The United States Litigation See Footnote 1 United States Department of Justice Civil Division/Fraud Section 175 N. Street, N.E. Washington, DC 20002 Contact: David T. Cohen Senior Trial Counsel Tel: (202) 307-0136 Email: david.t.cohen@usdoj.gov 2. The United States Litigation $30,000,000 Chief, Health Care Fraud Unit US Attorney's Officer for the District of Massachusetts One Courthouse Way, Suite 9200 Boston, MA 02210 Contact: Amanda Strachan Tel: (617) 748-3643 Email: Amanda.Strachan@usdoj.gov 3. Wilkinson Walsh & Eskovitz LLP Indemnity- $8,894,828 2001 M Street, NW, Suite 1000 Counsel for Washington, DC 20036 John Kapoor Contact: Beth Wilkinson Tel: (202) 847-4010 Fax: (202) 847-4005 Email: bwilkinson@wilkinsonwalsh.com 4. King & Spalding Indemnity- $2,162,222 1700 Pennsylvania Avenue, NW Counsel for 2nd Floor Mike Babich Washington, DC 20006 Contact: Wick Sollers Tel: (202) 626-5612 Email: wsollers@kslaw.com 5. Nixon Peabody LLP Indemnity- $1,183,721 Exchange Place Counsel for 53 State Street John Kapoor Boston, MA 02109-2835 Contact: Brian T. Kelly Tel: (617) 345-1065 Fax: (855) 714-9513 Email: bkelly@nixonpeabody.com 6. White & Case LLP Indemnity- $1,001,378 75 State Street Counsel for Boston, MA 02109 Joe Rowan Contact: Michael Kendall Tel: (617) 979-9310 Email: michael.kendall@whitecase.com 7. Cravath, Swaine & Moore LLP Professional $827,038 Wordwide Plaza Services 825 Eigth Avenue New York, NY 10019-7475 Contact: David M. Stuart Tel: (212) 474-1519 Fax: (212) 474-3700 Email: dstuart@cravath.com 8. Paul Hastings LLP Professional $781,021 875 15th Street, N.W. Services Washington, DC 20005 Contact: Naveen Modi Tel: (202) 551-1990 Fax: (202) 551-1705 Email: naveenmodi@paulhastings.com 9. Ropes & Gray LLP Indemnity- $596,655 Prudential Tower Counsel for 800 Boylston Street John Kapoor Boston, MA 02199-3600 Contact: Brien OConnor Tel: (617) 951-7385 Fax: (617) 951-7050 Email: Brien.O'Connor@ropesgray.com 10. Paul, Weiss, Rifkind, Wharton Indemnity- $564,616 & Garrison Counsel for 1285 Avenue of the Americas John Kapoor New York, NY 10019-6064 Contact: Jacob A. Adlerstein, Partner Tel: (212) 373-3412 Fax: (212) 492-0142 Email: jadlerstein@paulweiss.com 11. DLA Piper Professional $494,639 2525 East Camelback Road Services Suite 100 Phoenix, AZ 85016-4232 Contact: Steven Pidgeon Tel: (480) 606-5124 Fax: (480) 606-5524 Email: steven.pidgeon@dlapiper.com 12. Senzer, Ltd Trade Vendor $464,431 2 Angel Square London ECIV 1NY United Kingdom Contact: Amy Holt, Legal Counsel Tel: +44-(0)203-457-0453 Email: info@senzer.com 13. Holland & Knight LLP Professional $406,531 2300 US Bancorp Tower Services 11 SW Fifth Avenue Portland, OR 97204 Contact: Matt Donohue Tel: (503) 517-2913 Fax: (503) 241-8014 Email: Matt.Donohue@hklaw.com 14. Ankura Consulting Group, LLC Professional $401,746 1220 19th Street, NW Suite 700 Services Washington, DC 20036 Contact: John Yagerline Tel: (202) 721-0948 Email: John.Yagerline@ankura.com 15. Miner Orkand Siddall LLP Indemnity- $380,965 470 Atlantic Ave Counsel for 4th Floor Mike Gurry Boston, MA 02210 Contact: Tracy Miner Tel: (617) 273-8421 Email: tminer@mosllp.com 16. Carlton Fields Professional $344,712 Corporate Center Three at Services International Plaza 4221 W. Boy Scout Blvd, Suite 1000 Tampa, FL 33607-5780 Contact: Adam Schwartz Tel: (813) 223-7000 Fax: (813) 229-4133 Email: aschwartz@carltonfields.com 17. Hogan Lovells US LLP Indemnity- $329,864 100 High Street Counsel for 20th Floor Mike Babich Boston, MA 02110 Contact: Bill Kettlewell Tel: (202) 637-5600 Fax: (617) 371-1037 Email: bill.kettlewell@hoganlovells.com 18. Nardello & Co. LLC Indemnity- $293,622 565 Fifth Ave. Counsel for Suite 200 John Kapoor New York, NY 10017 Contact: Daniel Nardello, CEO Tel: (212) 537-5300 Fax: (212) 537-5333 Email: dnardello@nardelloandco.com 19. Quinn Emanuel Urquhart & Indemnity- $282,352 Sullivan, LLP Counsel for 865 S. Figueroa Street Steve Meyer 10th Floor and Los Angeles, CA 90017 Pierre Lapalme Contact: Jonathan Bunge Tel: (312) 705-7476 Fax: (312) 705-7401 Email: jonathanbunge@quinnemanuel.com 20. PRA Health Sciences Indemnity- $230,411 4130 Parklake Avenue Counsel for Suite 400 John Kapoor Raleigh, NC 27612 Contact: Christine Rogers, Director Tel: (919) 786-8463 Email: rogerschristine@prahs.com 21. Skaden, Arps, Slate, Meagher & Professional $179,799 Flom LLP Services 155 N. Wacker Drive Chicago, IL 60606 Contact: Matthew R. Kipp Tel: (312) 407-0728 Fax: (312) 407-8575 Email: matthew.kipp@skadden.com 22. Katten Munchin Rosenman LLP Indemnity- $164,716 575 Madison Ave Counsel for New York, NY 10022 Jeff Pearlman Contact: Scott Resnik Tel: (213) 443-3000 Fax: (212) 894-5513 Email: scott.resnik@kattenlaw.com 23. Shook, Hardy & Bacon LLP Professional $160,740 2555 Grand Boulevard Services Kansas City, MO 64108 Washington, District of Columbia 20001 Contact: James Muehlberger Tel: (816) 559-2372 Fax: (816) 421-5547 Email: jmuehlberger@shb.com 24. Covington & Burling LLP Professional $138,448 One City Center Services 850 Tenth NW Washington, DC 20001 Contact: Geoffrey Hobart Tel: (202) 662-6000 Email: ghobart@cov.com 25. Special Counsel Professional $135,711 Dept CH 14305 Services Palantine, IL 60055-4305 Contact: Michael Manfredi Tel: (267) 507-2638 Emal: michael.manfredi@specialcounsel.com 26. McKesson Specialty AZ Customer $134,618 4343 N Scottsdale Rd Program Ste 150 Scottsdale, AZ 85251-3351 Contact: Jeff Reinke, SVP Tel: (480) 663-4000 Email: jeff.reinke@mckesson.com 27. K&L Gates LLP Professional $122,693 K&L Gates Center Services 210 Sixth Avenue Pittsburgh, PA 15222-2613 Contact: Jeffrey W. Acre, Partner Tel: (412) 355-6506 Fax: (412) 355-6501 Email: jeffrey.acre@klgates.com 28. Patterson Belknap Webb & Tyler LLP Indeminity- $122,147 1133 Avenue of the Americas Counsel for New York, NY 10036 Patrick Contact: Daniel A. Lowenthal Forteau Partner Tel: (212) 336-2720 Fax: (212) 336-1253 Email: dalowenthal@pbwt.com 29. Berkeley Research Group, LLC Indemnity- $118,555 2200 Powell Street Counsel for Suite 1200 John Kapoor Emeryville, CA 94608 Contact: Laura Dorman Managing Director & Assoc. General Counsel Tel: (510) 285-3288 Fax: (510) 654-7857 Email: ldorman@thinkbrg.com 30. Marino, Tortorella & Boyle, P.C. Professional $110,344 437 Southern Blvd Services Chatham Township, NJ 07928 Contact: Kevin H. Marino, Principal Tel: (973) 824-9300 Fax: (973) 824-8425 Email: kmarino@khmarino.com Footnote 1: Prior to filing this petition, on June 5, 2019, the Debtors entered into an agreement with the United States to settle- a civil action brought by the United States against the Debtors relating to certain Covered Conduct for $195 million paid over five years, plus interest. The Debtors intend to file a motion in short order seeking approval under Bankruptcy Rule 9019 of a stipulation to be entered into between Insys Therapeutics, Inc. and the United States after the filing of this petition that fixes a general unsecured claim of the United States in these Chapter 11 Cases in the amount of $243 million, capped at a recovery of $195 million (inclusive of a $5 million prepetition payment), on account of the Covered Conduct and any claims under the Civil Settlement Agreement, as the Debtors will set forth more fully in the motion. Absent entry into and approval of such stipulation, the United States has asserted it may have claims against the Debtors in amounts in excess of $1 billion on account of the Covered Conduct. INSYS THERAPEUTICS: Files Chapter 11 Petition to Facilitate Sale ---------------------------------------------------------------- INSYS Therapeutics, Inc. (NASDAQ: INSY), a specialty pharmaceutical development and distribution company, on June 10, 2019, disclosed that INSYS has filed voluntary cases (the "Chapter 11 Cases") under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in the District of Delaware to facilitate the sale of substantially all of the Company's assets and address the Company's legacy legal liabilities. INSYS intends to continue operating its business in the ordinary course while it pursues these transactions through the court-supervised sale process. Throughout the court-supervised Chapter 11 process, INSYS intends to utilize existing cash on hand and operating cash flows to support its continued operations, including payment of all employee wages and benefits without interruption and continuing programs offered to customers. The Company intends to pay vendors and suppliers in full under normal terms for goods and services provided after the filing date of June 10, 2019. To these ends, the Company has filed a number of customary motions seeking Court authorization to continue to support its business operations. INSYS expects to receive Court approval for all of these requests. "After conducting a thorough review of available strategic alternatives, we determined that a court-supervised sale process is the best course of action to maximize the value of our assets and address our legacy legal challenges in a fair and transparent manner," said Andrew G. Long, Chief Executive Officer of INSYS Therapeutics, Inc. "INSYS has compelling assets and a highly talented team. We believe this process will provide us with a forum to negotiate an equitable resolution with our creditors and represents the best opportunity for our people and our business." INSYS intends to conduct the asset sales in accordance with Section 363 of the U.S. Bankruptcy Code. The Chapter 11 process is intended to facilitate an orderly auction and sale process and maximize value for INSYS' creditors. INSYS aims to complete the asset sales within 90 days and address creditors' claims as efficiently and expeditiously as possible. Court documents and additional information can be found at a website administered by INSYS' claims agent, Epiq, at https://dm.epiq11.com/Insys or by calling the Company's Restructuring Hotline, toll-free in the U.S., at (855) 424-7683. For calls originating outside of the U.S., please dial +1 (503) 520-4461. Weil, Gotshal & Manges LLP is serving as legal counsel to INSYS, Lazard Frères & Co. LLC is serving as investment banker, and FTI Consulting, Inc. is serving as financial advisor. About INSYS Headquartered in Chandler, Arizona, INSYS Therapeutics -- http://www.insysrx.com-- is a specialty pharmaceutical company that develops and commercializes innovative drugs and novel drug delivery systems of therapeutic molecules that improve patients' quality of life. Using proprietary spray technology and capabilities to develop pharmaceutical cannabinoids, INSYS is developing a pipeline of products intended to address unmet medical needs and the clinical shortcomings of existing commercial products. INSYS is committed to developing medications for potentially treating anaphylaxis, epilepsy, Prader-Willi syndrome, opioid addiction and overdose, and other disease areas with a significant unmet need. Insys Therapeutics reported a net loss of $124.50 million for the year ended Dec. 31, 2018, compared to a net loss of $226.8 million for the year ended Dec. 31, 2017. As of March 31, 2019, Insys had $172.6 million in total assets, $336.3 million in total liabilities, and a total stockholders' deficit of $163.7 million. JAGUAR HEALTH: CEO and Board Members Invest in Bridge Financing --------------------------------------------------------------- Lisa Conte, Jaguar Health, Inc.'s president and chief executive officer, James Bochnowski, chairman of the Company's board of directors, and Jonathan Siegel, a member of the Company's board of directors, have participated in the Company's bridge financing transaction by entering into securities purchase agreements as part of an offering. On March 18, 2019, Jaguar began entering into securities purchase agreements with selected accredited investors, pursuant to which the Company may issue up to $5.5 million aggregate principal amount of promissory notes to those Investors. The Company will use the proceeds for working capital and other general corporate purposes. As an inducement for entering into the Securities Purchase Agreement, each Investor also received warrants exercisable for shares of common stock. The initial offering closed on March 18, 2019, and as of June 4, 2019, approximately $4.3 million aggregate principal amount of Notes were issued in offerings, including the Notes issued to Conte, Bochnowski, and Siegel, and the proceeds from such offerings were paid to the Company. About Jaguar Health Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial stage pharmaceuticals company focused on developing novel, sustainably derived gastrointestinal products on a global basis. Its wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on developing and commercializing proprietary human gastrointestinal pharmaceuticals for the global marketplace from plants used traditionally in rainforest areas. Jaguar Health's principal executive offices are located in San Francisco, California. Jaguar Health reported a net loss of $32.14 million for the year ended Dec. 31, 2018, compared to a net loss of $21.96 million for the year ended Dec. 31, 2017. As of March 31, 2019, Jaguar Health had $40.66 million in total assets, $24.86 million in total liabilities, $9 million in series A convertible preferred stock, and $6.79 million in total stockholders' equity. BDO USA, LLP, in San Francisco, California, the Company's auditor since 2013, issued a "going concern" opinion in its report dated April 10, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring losses from operations and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. JAMES MEDICAL: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of James Medical Equipment, Ltd. as of June 7, according to a court docket. About James Medical Equipment James Medical Equipment, Ltd.'s line of business includes renting or leasing medical equipment. The company was founded in 1979 and is based in Campbellsville, Kentucky. James Medical Equipment filed a voluntary Chapter 11 petition (Bankr. W.D. Ky. Case No. 19-10187) on March 1, 2019. At the time of filing, the Debtor estimated $1,000,001 to $10 million in both assets and liabilities. The case is assigned to Judge Joan A. Lloyd. The Debtor tapped David M. Cantor, Esq., at Seiller Waterman LLC, as its legal counsel. JEFFERIES FINANCE: Fitch Hikes LongTerm IDR to BB, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Rating of Jefferies Finance LLC and its debt co-issuing subsidiary, JFIN Co-Issuer Corporation to 'BB' from 'BB-' given the completion of the planned refinancing transaction. The Rating Watch Positive has been removed, and the Rating Outlook is Stable. Fitch has also assigned final ratings of 'BB+' to JFIN and JFIN Co-Issuer Corporation's $275 million senior secured priority revolving credit facility, 'BB' to the $750 million senior secured term loan due 2026 and 'BB' to the $400 million 6.250% senior secured notes due 2026. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- Jefferies Finance LLC LT IDR BB Upgrade BB- senior unsecured LT BB- Affirmed BB- senior secured LT WD Withdrawn BB senior secured LT BB New Rating BB(EXP) super senior LT BB+ New Rating BB+(EXP) senior unsecured LT WD Withdrawn BB- JFIN Co-Issuer Corporation LT IDR BB Upgrade BB- senior secured LT WD Withdrawn BB senior secured LT BB New Rating BB(EXP) super senior LT BB+ New Rating BB+(EXP) senior unsecured LT BB- Affirmed BB- senior unsecured LT WD Withdrawn BB- On June 3, 2019, JFIN repaid its $246.9 million term loan due 2024, 7.375% senior unsecured notes due 2020, 7.500% senior unsecured notes due 2021 and 6.875% senior unsecured notes due 2022. As a result, Fitch has withdrawn the 'BB' secured debt rating for the term loan and the 'BB-' senior unsecured notes for the three notes issuances. Fitch has affirmed the existing 'BB-' senior unsecured debt rating for the 7.250% senior unsecured notes due 2024, which remain outstanding. KEY RATING DRIVERS IDR AND SENIOR DEBT The ratings upgrade is supported by Fitch's expectation for continued improvement in leverage levels, as debt-to-tangible equity declined to 4.4x, pro forma for the refinancing transactions, down from 4.8x at Feb. 28, 2019 and down from 6.1x at Feb. 28, 2017. Leverage has been maintained below 5.0x over the past year, which is below Fitch's 'bb' rating category quantitative leverage benchmark range of 5.0x-7.0x for balance sheet intensive finance and leasing companies. Fitch expects JFIN's leverage will remain at or below current levels over the Outlook horizon. JFIN's ratings remain supported by the benefits of its relationship with Jefferies Group LLC (Jefferies; BBB/Stable), which provides the firm with ample access to underwriting deal flow and the resources of the broader platform. The ratings are also supported by a strong and experienced management team, focus on senior lending relationships in the funded portfolio, absence of material portfolio concentrations, solid asset quality performance, variable cost structure and supportive owners, including Jefferies and Massachusetts Mutual Life Insurance Company (MassMutual; AA/Stable). Both Jefferies and MassMutual have provided JFIN with debt funding and incremental equity investments over time to support business expansion. Rating constraints include higher-than-peer leverage, albeit declining; a primarily secured funding profile; potential liquidity and leverage impacts of meaningful draws on revolver commitments; and sensitivity of deal flow and syndication capabilities to market conditions. The ratings also contemplate the current aggressive underwriting conditions in the broadly syndicated market, which include higher underlying leverage, meaningful EBITDA adjustments, and, in many cases, the absence of financial covenants, all of which could lead to meaningful deterioration in asset quality performance in a more challenged operating environment. The Stable Rating Outlook reflects Fitch's expectation that JFIN's leverage will remain at or below its current level over the Outlook horizon and that Jefferies will maintain its strong market position, thus providing JFIN with sufficient access to deal flow. The Outlook also reflects expectations for solid asset quality metrics over time, stable earnings performance and the maintenance of sufficient liquidity. The 'BB+' super senior debt rating for the senior secured priority revolving credit facility is one-notch above the IDR, reflecting Fitch's expectation for good recovery prospects given strong asset coverage and the relatively low portion of first-out debt in JFIN's funding profile. The 'BB' secured debt rating is equalized with the IDR, reflecting average recovery prospects under a stress scenario. The compressed notching, relative to the IDR, reflects the increase in secured funding as a proportion of JFIN's total debt outstanding and recourse non-funding debt, which Fitch believes reduces prospects for secured debtholders under a stressed scenario. The 'BB-' senior unsecured debt rating for the senior unsecured notes is one-notch below the IDR, reflecting the higher balance sheet encumbrance and the largely secured funding profile following the refinancing transaction, which Fitch believes indicates weaker recovery prospects under a stressed scenario. SUBSIDIARY AND AFFILIATED COMPANY The Long-Term IDR and debt ratings of JFIN Co-Issuer Corporation are equalized with those of its parent, JFIN. JFIN Co-Issuer Corporation is essentially a shell finance subsidiary, with no material operations and is a co-issuer on the revolving credit facility, secured term loan, senior secured notes and senior unsecured notes. RATING SENSITIVITIES IDR AND SENIOR DEBT Fitch views rating upside as limited in the near term. Longer term, rating upside could be driven by enhanced funding diversity, including an increase in the proportion of unsecured funding, a decline in leverage approaching 3.0x over the outlook horizon, a continued improvement in the firm's liquidity profile particularly as it relates to undrawn revolver commitments, evidence of strong asset quality performance of the funded loan portfolio through a credit cycle, increased revenue diversity, and improved consistency of operating performance over time. Negative rating action could be driven by a change in the firm's exclusive relationship with Jefferies, an increase in leverage on a consolidated basis to above 5.0x and/or on a non-funding basis approaching or exceeding the covenanted level, a weakening liquidity profile particularly as it relates to undrawn revolver commitments, meaningful deterioration in asset quality, and/or an extended inability to syndicate transactions, which results in material operating losses and/or weakens the firm's reputation and market position. The super senior debt, secured debt and unsecured debt ratings are sensitive to changes in JFIN's Long-Term IDR and to the relative recovery prospects of the instruments. The debt ratings are expected to move in tandem with JFIN's Long-Term IDR, although the notching could change if there is a material change in the quality or amount of the unencumbered asset pool and/or a significant shift in the levels of secured and/or unsecured debt. SUBSIDIARY AND AFFILIATED COMPANY JFIN Co-Issuer Corporation's ratings are expected to move in tandem with JFIN's ratings. JFIN is a commercial finance company that structures, underwrites and syndicates primarily senior secured loans to corporate borrowers. JFIN also purchases performing loans in the syndicated markets. JILL ACQUISITION: S&P Lowers ICR to 'B-'; Outlook Stable -------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Jill Acquisition LLC, U.S.-based specialty apparel retailer J. Jill Inc.'s (Jill) borrowing subsidiary, to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's senior secured term loan facility to 'B-' from 'B'. The recovery rating remains '3'. The downgrade reflects J. Jill Inc.'s (Jill's) volatile operating performance and weaker profitability per its most recent quarterly results. S&P believes marketing and merchandising missteps in the first quarter will continue to hurt operating performance over the next 12 months. The company failed to deliver on trend colors and styles in the first quarter and faced execution risks related to delivering fashion merchandise that resonates with its customer base. In second-quarter 2019, Jill has guided that gross margins will shrink by a hefty 750 basis points (bps) relative to the same period last year as the company engages in heavy promotional activity to clear excess inventory. Recent results follow significant merchandising missteps in late fiscal 2017, which also resulted in heightened promotional activity and margin pressure and which S&P now believes reflects underlying business volatility and an uneven execution track record. The rating agency believes increased earnings volatility will persist over the next 12 months associated with the timing and execution of the company's correction strategy. As such, S&P is revising its business risk profile assessment to vulnerable from weak. The stable outlook reflects S&P's expectation that due to the recent operating issues, the company's performance will remain under pressure, resulting in weaker credit metrics in 2019. Despite these pressures, the rating agency expects Jill will continue to generate modestly positive free operating cash flow (FOCF) and maintain adequate sources of liquidity over the next 12 months. "We could lower the rating if we view the company's capital structure as unsustainable. This would occur if, for example, further operating missteps lead us to expect leverage will deteriorate and we expect negligible or negative FOCF generation," S&P said, adding that it could also lower the rating if the company cannot address the impending May 2020 maturity of its currently undrawn asset-based lending (ABL) revolver facility, raising concerns about its liquidity position. "We could raise the rating if the company successfully stabilizes operating performance such that we expect adjusted EBITDA margins will remain closer to historical levels of around 20%. We would also need to believe that periodic operating execution volatility has been mitigated," S&P said, adding that this would likely be driven by effective resolution of merchandise missteps and a well-executed marketing mix between its catalog and digital advertising initiatives. The rating agency said it would also need to expect sustainable positive FOCF for an upgrade. JONAH ENERGY: S&P Lowers ICR to 'CCC+' on Weakening Cash Flows -------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on U.S.-based oil and gas exploration and production (E&P) company Jonah Energy LLC to 'CCC+' from 'B'. The rating agency also lowered the issue-level rating on the company's unsecured debt to 'B-' from 'B+' with a '2' recovery rating, and the issue-level rating on the company's credit facility to 'B' from 'BB-' with a '1' recovery rating. The downgrade reflects S&P's expectation that Jonah's cash flow and financial measures will deteriorate over the next 12 months as favorable hedges roll off and weaker natural gas prices decrease cash flows. In addition, the yield on Jonah's senior notes has meaningfully increased and resulting price declined S&P believes due to the market's current preference for oil-focused companies combined with the rolloff of Jonah's favorable hedges. "If the current elevated yield and related discount to par value persists, we believe a refinancing we would view as a selective default could occur. Finally, we expect Jonah's liquidity could come under pressure due to significant outstanding borrowings on its credit facility as well as a tightening covenant cushion," S&P said. Jonah operates exclusively in the Jonah Field and Pinedale Anticline in southwest Wyoming. Jonah has a moderate reserve base of about 2.6 trillion cubic feet equivalent (tcfe) as of year-end 2018, of which 47% is developed and 82% is natural gas. S&P views the relatively low percentage of proved developed reserves as a weakness because it will take significant spending to bring these reserves to production. About 85% of Jonah's first-quarter 2019 production was natural gas, which S&P expects will continue to have lower profitability than crude oil production. The company has a history of significant hedging that has helped support profitability and cash flows. In addition, Jonah has hedged a material portion of its basis differential, which can at times be wide in the Rocky Mountain region, adding further stability to cash flows. However, although its hedge profile covers around 100% of 2019 production and roughly 85% of 2020 expected production, these hedges are at average prices lower than historical levels, leading to lower cash flows than historically seen. In addition, S&P expects any hedging for 2021 will likely be well below current hedge prices. The negative outlook reflects S&P's expectation that Jonah's cash flows and financial measures will weaken through 2019, resulting in a declining cushion to the covenants of its credit facility and lower liquidity. Additionally, S&P believes there is a heightened risk of the company entering a refinancing of its senior notes that the rating agency would consider a distressed transaction and a selective default, given the current discount to par on the notes. "We could lower ratings if Jonah announced a refinancing of the senior notes we considered a selective default. This likely occurs if natural gas prices remain soft and cash flows and resulting financial measures and liquidity continue to weaken. Additionally, if Jonah failed to proactively address any potential covenant violations, or liquidity significantly weakened we could lower ratings," S&P said. S&P said it could stabilize the issue credit rating if it expects cash flows and resulting financial measures stabilize or improve, with FFO/debt remaining comfortably above 12%. "Additionally, we would need to view the potential for a selective default to be remote. Both likely occur in conjunction with improving natural gas prices that should boost cash flows and financial performance," S&P said. KBC ENTERPRISE: Guarantees, Insurance Policy Added to Plan Funding ------------------------------------------------------------------ KBC Enterprise LLC filed a First Amended Disclosure Statement explaining its Chapter 11 Plan to disclose that the funding of the Plan will come from an exit loan, up to a maximum of $350,000, secured by a lien junior to existing liens, the personal guarantees of Carlos and Karen Carpenter, and the assignment of a life insurance policy, and which includes an option, at the Lender's discretion, to convert the loan to a 19% equity interest or be repaid in full over time. Class 10 consists of the Allowed Unsecured Claims against the Debtor other than unclassified Claims, Cure Claims, Priority Tax Claims, Priority Non-Tax Claims, Secured Claims and Equity Interests. The Plan provides that each holder of an Allowed Claim 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, 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. A full-text copy of the First Amended Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y5b879gh from PacerMonitor.com at no charge. Counsel for the Debtor is Laura Day DelCotto, Esq., at Delcotto Law Group PLLC, in Lexington, Kentucky. 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. KNB HOLDINGS: S&P Alters Outlook to Negative on Tariff Pressures ---------------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable on U.S-based KNB Holdings Corp. At the same time, S&P affirmed all ratings, including its 'B' issuer credit rating on the company and its 'B' issue-level rating on the company's senior secured first-lien term loan. The recovery rating on the loan is '3', reflecting the rating agency's expectation for meaningful (50%-70%; rounded estimate: 55%) recovery for the first-lien loan holders in its simulated default scenario. The outlook revision to negative reflects the company's already weak credit metrics and the risk they could worsen over the next 12 months due to margin pressure if the U.S. increases tariffs on certain imports from China, according to S&P. The rating agency believes the company will not be able to fully offset the higher 25% tariff levels on certain goods sourced from China, which will likely result in adjusted leverage above 7x and minimal free cash flow generation in 2019. The company's credit metrics have weakened significantly over the past six months with last-12-months adjusted leverage increasing to above 7x as of March 31, 2019, primarily as a result of the U.S import tariffs of 10% implemented in September 2018. S&P believes there could be further risk as there is uncertainty around incremental tariffs and the goods impacted. The negative outlook reflects the potential for a lower rating on KNB over the next 12 months if performance deteriorates further, likely stemming from lower margins from higher tariff levels, such that adjusted debt to EBITDA is sustained above 7x and free cash flow (FOCF) turns negative. The negative outlook takes into account the uncertainty concerning the full extent and timing of the impact of tariffs, as well as the company's ability to mitigate the impact on margins through sales price increases or other productivity initiatives. "We could lower the rating if we expected the company to maintain leverage over 7x and generate negative or minimal free cash flow on a sustained basis, possibly from either an aggressive financial policy despite tariff impacts or if tariffs reduced margins and cash flow more than expected," S&P said. This would occur if the company were unable to pass on the tariffs to customers in the form of higher prices, if performance were hurt by foreign currency exchange risks (primarily the Chinese renminbi), or if the U.S. government imposed additional tariffs on Chinese imports, according to the rating agency. "We could revise the outlook back to stable if we expected adjusted debt to EBITDA to improve to below 7x on a sustained basis, and it generated free cash flow in the $10 million area," S&P said. "This would likely be the result of some combination of sales price increases, favorable currency movements, or a smaller-than-anticipated impact from tariffs, which would give us confidence that leverage will be managed below 7x despite ongoing debt-financed tuck-in acquisitions." KONA GRILL: Seeks to Hire Piper Jaffray as Investment Banker ------------------------------------------------------------ Kona Grill Inc. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Piper Jaffray & Co. The firm will provide investment banking services to the company and its affiliates in connection with the sale of substantially all of their assets or obtaining an investment necessary to complete a financial restructuring of the Debtors. Piper Jaffray will be paid pursuant to this fee structure: (1) A $50,000 non-refundable monthly advisory fee during the term of the employmeny. (2) In the event an opinion is requested and rendered by Piper Jaffray, a fee in the amount of $750,000. The entire amount, to the extent received by PJC, shall be credited against the sale fee. (3) In the event the Debtors consummate a sale during the term of the engagement or during the 12-month period following termination of the engagement, a cash fee payable at closing of a sale in an amount equal to 2.25 percent of the aggregate transaction value up to $57 million, plus 5 percent of the aggregate transaction value above $57 million, provided that the total sale fee will not be less than $1.25 million. (4) In the event the Debtors consummate a refinancing, a non-refundable fee in the amount of 3 percent of the amount refinanced (with a minimum fee of $1 million) payable in cash and payable promptly upon consummation of the transaction. The refinancing arrangement fee shall be 50 percent creditable against the sale fee. (5) In the event the Debtors consummate a "board refinancing transaction," a non-refundable arrangement fee in the amount of $500,000, payable in cash and payable promptly upon consummation of the transaction. (6) In the event an amendment to the Debtors' existing credit agreement is effected during the term of the engagement or during the "tail period," which results in an extension of the maturity date, the Debtors shall pay Piper Jaffray a fee in the amount of $375,000, payable in cash. No amendment fee shall be payable in connection with a board refinancing transaction. Piper Jaffray is "disinterested" as defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Teri Stratton Piper Jaffray & Co. 444 South Flower Street, Suite 1675 Los Angeles, CA 90071 Tel: +1 310 297-6030 About Kona Grill Kona Grill, Inc. -- https://www.konagrill.com/ -- owns and operates 27 casual dining restaurants in 18 states, as well as Puerto Rico, serving contemporary American favorites, sushi, and alcoholic beverages throughout the United States and Puerto Rico. Kona Grill, Inc., and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. Del. Lead Case No. 19-10953) on April 30, 2019. As of Dec. 31, 2018, the Debtors disclosed total assets of $53,613,000 and total liabilities of $74,049,000. The petition was signed by Christopher J. Wells, the CRO. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as counsel; Piper Jaffray as investment banker; Alvarez & Marsal North America, LLC as restructuring advisor and Epiq Corporate Restructuring, LLC, as claims and noticing agent. LAUREATE EDUCATION: Moody's Hikes CFR to B1, Outlook Stable ----------------------------------------------------------- Moody's Investors Service upgraded Laureate Education, Inc. Corporate Family Rating to B1 following successful execution of planned asset sales and announcement of pending term loan repayment in full, which is expected to occur this week. Moody's also upgraded the company's Probability of Default Rating to B1-PD from B2-PD. The Senior Secured First Lien Revolving Credit Facility due 2022 rating was upgraded to Ba3 from B2, and the Senior Unsecured Bond due 2025 was also upgraded to B3 from Caa1. The outlook remains stable. The rating on the Senior Secured First Lien Term Loan due 2024, which Moody's expects to be fully repaid, was also upgraded to Ba3 from B2, and will be withdrawn upon debt repayment. The Speculative Grade Liquidity rating has been upgraded to SGL-2 from SGL-3. Upgrades: Issuer: Laureate Education, Inc. Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Senior Secured 1st lien Term Loan B, Upgraded to Ba3 (LGD3) from B2 (LGD3) Senior Secured 1st lien Revolving Credit Facility, Upgraded to Ba3 (LGD3) from B2 (LGD3) Senior Unsecured Regular Bond/Debenture, Upgraded to B3 (LGD5) from Caa1 (LGD6) Outlook Actions: Issuer: Laureate Education, Inc. Outlook, Remains Stable RATINGS RATIONALE Moody's upgrade reflects Laureate's continued focus on leverage reduction through asset sales as the company continues to optimize the operating performance of its international portfolio of higher education assets. The rating is supported by the company's prominent market position in the international for-profit, post-secondary education space, solid enrollment growth supported by scale in multiple geographies and favorable industry fundamentals within its core markets. In addition, because the company operates primarily outside of the US and its public funding of tuition is 29% of total tuition proceeds, it does not face the same regulatory pressures relating to Title IV funding that negatively affects many US-based for-profit education providers. Nevertheless, Laureate remains exposed to the US and international regulatory and compliance environment related to its higher education business, with one of its institutions undergoing regulatory challenges. The company's international model results in high exposure to foreign currency volatility, creating increased uncertainty regarding meeting financial goals even if enrollment and operational targets are met. Laureate management states that it retains strong control over its educational curricula with the goal of ensuring that its graduates are successful in completing their education and attaining relevant employment. Over the last several years, Laureate has decided to review its portfolio of assets and rationalize core parts of the business. This has resulted in over $2 billion of non-core asset sales signed or executed, of which most of the proceeds are used towards debt repayment. Though reduced geographic footprint provides for increased likelihood of earnings volatility in the event of weakness in any individual market, Moody's believes that reduced debt levels partially offset such risk to Laureate's credit profile. Laureate has historically generated negative free cash flow, which has turned positive in 2018 and which it expects to be positive in 2019. Moody's assesses Laureate's liquidity condition as good with an SGL-2 speculative grade liquidity rating. The company carries substantial cash balances ($279 million as of March 31, 2019), although only $35 million is held in the US. Moody's notes that to some extent the company can rely on the sale of unencumbered assets, such as real estate, as an alternative source of liquidity. Laureate's revolving credit facility has a limit of $385 million, providing the company with good liquidity to accommodate working capital swings. The for-profit education sector faces moderate to high exposure to governance risk. Reputation risk is highly relevant to the education sector, as an event that would undermine the educator's reputation as an institution would cause significant harm to the company's operating metrics. Additionally, legal and regulatory challenges, if not remedied, can present increased risk of operating performance deterioration, if specific institution licenses are withdrawn. Laureate's position as a for-profit education university increases reputational risk for the company. The company must balance its duties to shareholders and profits with its duties to students looking for a degree and future job placement. Moody's views Laureate's exposure to these legal and regulatory challenges as part of its ongoing operations in a highly complex industry across multiple jurisdictions. The company's financial strategy has largely focused on debt repayment, with estimated $1.7bn in debt repayment executed (or expected to occur shortly) in 2018 and 2019 via use of proceeds from asset sales. The shareholder base remains concentrated with dual-class stock structure. Wengen owns 46% of the shares, and controlling shareholders have approximately 92% voting control. The stable ratings outlook reflects its expectations that the company will continue modest organic growth over the next 12-18 months, with some de-levering via low single digit growth in enrollments and improvement to EBITDA. Moody's expects the company's operations to remain exposed to foreign currency exchange risk, with a potential for negative impact on earnings. Ratings could be raised if the company further sustains its de-levering trajectory, while clarifying further its broader strategy in its core markets. Laureate would need to maintain overall growth and positive cash-flow generation while remaining committed to its reduced debt capital structure and prudent financial policy. In addition, the company would need to maintain revolver availability while generating positive free cash flow (before consideration of proceeds from asset sales) that would demonstrate good liquidity. Credit metrics sustained at the following levels would support higher rating consideration: debt to EBITDA sustained below 2x times, EBITA to interest in excess of 2x, retained cash flow to debt sustained above 20% and positive free cash flow. The ratings could be lowered if the company experiences a weakening in enrollments, or if the company cannot successfully improve its operating margins while continuing to manage foreign currency risk, possibly resulting in weaker liquidity or further increases in debt to support operations. A downgrade may also be warranted if the company's learning institutions become subject to a negative financial action due to regulatory concerns, such as reduced funding, or removal of license to operate. Specifically, a downgrade could be warranted if debt to EBITDA exceeds 3x times for a prolonged period, if EBITA to interest is sustained below 1.5x time, or if total unrestricted liquidity falls below $300 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Laureate is based in Baltimore, Maryland, and operates a leading international network of accredited campus-based and online universities with over 25 institutions primarily focused in Latin America, offering academic programs to approximately 875,000 students at over 150 campuses and online delivery. Laureate reported revenues of approximately $3.4 billion for fiscal year 2018. LIVE NATION: Moody's Hikes CFR to Ba2 & Unsec. Notes Rating to Ba3 ------------------------------------------------------------------ Moody's Investors Service upgraded Live Nation Entertainment, Inc.'s corporate family rating to Ba2 from Ba3. At the same time, the company's probability of default rating was upgraded to Ba2-PD from Ba3-PD, its senior unsecured notes rating was upgraded to Ba3 from B1 and its senior secured rating was affirmed at Ba1. Live Nation's speculative grade liquidity rating remains at SGL-1 (very good) and the outlook remains stable. "We upgraded Live Nation's rating because the company's business profile is gradually strengthening and we expect strong liquidity to be maintained and leverage of debt-to-EBITDA to trend below 4.0x through 2020," said Bill Wolfe, a senior vice president at Moody's. Issuer: Live Nation Entertainment, Inc. Corporate Family Rating, Upgraded to Ba2 from Ba3 Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD Senior Secured Bank Credit Facilities, Affirmed at Ba1 (LGD2) Senior Unsecured Global Notes, Upgraded to Ba3 (LGD4) from B1 (LGD4) Speculative Grade Liquidity Rating, Affirmed at SGL-1 Outlook, Remains Stable RATINGS RATIONALE Live Nation Entertainment Inc.'s ratings (Ba2 stable) benefits from sustainable and predictable cash flow, good scale and competitive positioning, strong liquidity and expectations of below 4x debt/EBITDA during 2020 (4.0x at 31Mar19, Moody's adjusted). In March 2018, Live Nation used a refinance transaction to raise $425 million of cash; the company now has a $1.8 billion war chest (31Mar19; up from $1.5 billion at 31Dec18) which Moody's presumes is earmarked to fund opportunistic acquisitions. While the cash position reduces the potential of a large, debt-financed acquisition, Live Nation's rating is constrained by a lack of articulated capital structure/allocation parameters and risks that the company's growth imperative results in higher leverage, event risks, such as shareholder distributions, new ticketing competitors, and regulatory changes addressing the company's substantial market position or mandated consumer protection initiatives. Live Nation has very good liquidity (SGL-1) based on free cash flow of about $300 million/year (depending upon capital expenditure levels), a large available cash balance of about $1.8 billion (at 31Mar19, $848 million of Live Nation's $2.67 billion cash balance relates to deferred revenue to be remitted to performing artists), and $276 million of availability under a $365 million revolving credit facility (committed to October, 2021). The company's next significant debt maturity is June 2022 when $250 million of convertible/ exchangeable notes come due. Moody's anticipates > 25% financial covenant cushions and do not expect compliance issues to restrict access to the facility. The stable outlook reflects expectation of Live Nation's leverage of debt/EBITDA declining below 4x by 2020 (4.0x at 31Mar19). What Could Change the Rating - Up - Debt/EBITDA trending towards 3x on a sustained basis (4.0x at 31Mar19) - FCF/Debt to be sustained above 10% (6.7% at 31Mar19) - Favorable business conditions - Solid liquidity What Could Change the Rating - Down - If Moody's expected Debt/EBITDA to be sustained above 4.25x (4.0x at 31Mar19) - FCF/Debt below 5% (6.7% at 31Mar19) - Unfavorable business conditions - Weak liquidity The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Live Nation Entertainment, Inc., headquartered in Beverly Hills, California, operates a leading live entertainment ticketing and marketing company (Ticketmaster), owns, operates and/or exclusively books venues and promotes live entertainment with operations in North America, Europe, Asia and South America. In addition, Live Nation has long term relationships with several globally recognized performing artists under contracts of varying scope and duration. Annual revenues are approximately $10.8 billion. MCAFEE LLC: Moody's Affirms B2 CFR & Cuts First Lien Debt to B2 --------------------------------------------------------------- Moody's Investors Service affirmed McAfee, LLC's B2 Corporate Family Rating, B2-PD Probability of Default Rating (PDR), and Caa1 second lien rating. Moody's also downgraded the first lien credit facility to B2 from B1. The outlook remains stable. The affirmation follows McAfee's announcement of a debt-funded dividend, as part of which McAfee will issue incremental first lien term loans. Proceeds from the incremental issuance will be used primarily to make a distribution of approximately $600 million to shareholders. The downgrade of the first lien debt reflects its increase as a proportion of the capital structure. Pro forma for the incremental debt, the company's leverage as of last twelve months ended March 31, 2019 is over 7x (but mid- 6x excluding certain one time and unusual costs) and pro forma free cash flow to debt is approximately 4%. Though metrics weaken as part of the transaction, Moody's expects they will improve over the next 12-18 months in line with other B2 software companies. RATINGS RATIONALE McAfee's B2 Corporate Family Rating reflects the aggressive financial policies, high leverage, modest free cash flow and limited cash equity in the capital structure. The credit profile is supported by the company's leading position across the consumer and enterprise endpoint security markets, track record of steady revenue growth, solid liquidity position and an expectation that leverage will improve towards 6.5x (including one-time costs) over the next 12-18 months. McAfee has grown at moderate rates since 2014 and Moody's expects low to mid-single digit growth rates over the next several years. Recent consumer revenue growth, which is expected to continue has been driven by price increases, new partner programs and good retention rates. Consumer growth has been partially offset by softness in its enterprise business due to competitive pressures. McAfee is attempting to offset competitive pressure in its enterprise business with the introduction of its MVISION line of cloud products. The majority of McAfee's sales come from its significant installed base and reflect relatively strong renewal rates. The consumer business is the largest and most profitable segment of the company. The consumer business is however, less "sticky" than traditional enterprise software and more susceptible to free alternatives and changes in the popularity of PC's. The stable outlook reflects its expectations that revenues will continue to grow and that EBITDA will improve driving leverage to the mid-6x's and free cash flow to debt to greater than 5%. The ratings could be upgraded if leverage is sustained below 5x, free cash flow to debt exceeds 10% and the owners are expected to maintain less aggressive financial policies. The ratings could be downgraded if revenue or profitability pressures or aggressive financial policies lead to an expectation that leverage will remain above 7x or free cash flow to debt below 5% on other than a temporary basis. The B2 ratings for McAfee's first lien senior secured term loan and revolver are the same as the Corporate Family Rating as the first lien comprises the majority of the capital structure. The first lien senior secured term loan and revolver are secured by a first lien pledge of substantially all the tangible and intangible assets of the borrower and its domestic subsidiaries. The Caa1 rating on the second lien secured term loan, two notches below the Corporate Family Rating, reflects the significant amount of first lien debt ahead of it in the capital structure. McAfee's good liquidity position is supported by approximately $200 million in cash balances as of March 31, 2019 pro forma for the dividend recapitalization and Moody's expectation that the company will generate free cash flow of about $200 million in 2019. McAfee's liquidity is also supplemented by a $500 million revolving credit facility which will be undrawn pro forma for the transaction. Affirmations: Issuer: McAfee, LLC Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Gtd. Senior Secured 2nd Lien Term Loan, Affirmed Caa1 (LGD6) Downgrades: Issuer: McAfee, LLC Gtd. Senior 1st Lien Secured Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Gtd. Senior 1st Lien Secured Term Loan (Euro), Downgraded to B2 (LGD3) from B1 (LGD3) Gtd. Senior Secured Revolving Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Outlook Actions: Issuer: McAfee, LLC Outlook, Remains Stable The principal methodology used in these ratings was Software Industry published in August 2018. McAfee is a leading security software provider to consumer and corporate customers. The company, headquartered in Santa Clara, CA is owned by private equity sponsors TPG and Thoma Bravo and Intel Corp. MESOBLAST LIMITED: Reports $25 Million Net Loss for Third Quarter ----------------------------------------------------------------- Mesoblast Limited reported its financial results and operational highlights for the three and nine months ended March 31, 2019. Financial results for the periods are in line with expectations including the Company's cash position at March 31, 2019 of US$70.4 million (A$99.3 million). Mesoblast reported a net loss attributable to owners of the Company of $24.97 million on $1.24 million of revenue for the three months ended March 31, 2019, compared to a net loss attributable to owners of the Company of $21.13 million on $1.07 million of revenue for the same period a year ago. For the nine months ended March 31, 2019, Mesoblast reported a net loss attributable to owners of the Company of $69.07 million on $14.75 million of revenue compared to a net loss attributable to owners of the Company of $14.45 million on $15.64 million of revenue for the nine months ended March 31, 2018. As of March 31, 2019, Mesoblast had $675.70 million in total assets, $174.76 million in total liabilities, and $500.94 million in total equity. Research and development expenses were US$48.4 million for the nine months of FY2019, stable when compared to the nine months of FY2018. For the third quarter, research and development expenses decreased by US$2.4 million versus the comparative quarter in FY2018. Manufacturing expenses were US$12.9 million for the nine months of FY2019, compared with US$3.4 million for the nine months of FY2018. This reflects commercial manufacturing investment to support potential launch for aGVHD product. Management and administration expenses were US$16.0 million for the nine months of FY2019, a decrease of US$0.7 million on the comparative period of FY2018. Mesoblast Chief Executive Dr. Silviu Itescu stated: "We achieved a significant corporate milestone by initiating our first BLA submission to the FDA. We will focus our efforts on launch activities in preparation for our first product roll-out in the United States, and on our supply chain to meet the projected market demand for this and our follow-on products." Recent Corporate Highlights * The United States Food and Drug Administration (FDA) has agreed to a rolling Biologics License Application (BLA) review of remestemcel-L for the treatment of steroid- refractory acute Graft Versus Host Disease (aGVHD) in children. * Mesoblast has initiated the rolling submission of the BLA to the FDA, with filing of the first module. The rolling process will provide opportunity for ongoing communication, and during this process the Company expects it will be able to adequately address any substantial matters raised by the FDA. * Mesoblast and the International Center for Health Outcomes and Innovation Research at the Icahn School of Medicine at Mount Sinai entered into a Memorandum of Understanding to conduct a confirmatory clinical trial using Revascor for reduction of gastrointestinal (GI) bleeding in end-stage heart failure patients implanted with a left ventricular assist device (LVAD). * Mesoblast's Phase 3 trial in advanced heart failure has completed patient enrollment, with 566 patients randomized to receive Revascor or placebo. The study, conducted across 55 centers in North America, will complete when sufficient primary endpoint events have accrued. * Mesoblast's Phase 3 trial in chronic low back pain has completed enrollment with 404 patients randomized to receive MPC-06-ID or placebo. All assessable patients have now completed at least 12 months of safety and efficacy follow- up. * Mesoblast extended its license with JCR Pharmaceuticals Co., Ltd. (JCR) in Japan for use of TEMCELL1 HS Inj. in patients with Epidermolysis Bullosa. JCR has now filed to extend marketing approval for this indication. * The Board appointed Joseph R. Swedish as Chairman in April 2019. Mr. Swedish brings deep healthcare expertise and a track record in healthcare resource allocation and reimbursement metrics, as the Company enters commercial stage. Key milestones anticipated for CY2019 include: * Completion of BLA filing for remestemcel-L in the treatment of steroid refractory aGVHD in children. * Phase 3 trial in advanced heart failure continues accrual of primary endpoints through to completion. * Meet with FDA to discuss pathway for approval of Revascor for the reduction of GI bleeding in end-stage heart failure patients implanted with a LVAD. * Mesoblast's partner Tasly plans to meet with the National Medical Products Administration of China to discuss the regulatory approval pathway for Revascor in China. * Patient follow up continues through 24-month assessment of safety and efficacy in the Company's Phase 3 trial of MPC- 06-ID for chronic lower back pain. Going concern For the nine months ended March 31, 2019, and 2018, the Group incurred a total comprehensive loss after income tax of $68.9 million and loss after income tax of $14.9 million, respectively, and had net cash outflows from operations of $38.7 million, and $54.8 million, respectively. As of March 31, 2019, the Group held total cash and cash equivalents of $70.4 million. The Group has committed to entering into non-dilutive commercial partnering transactions to fund operations. The Group also continues to work on various cost containment and deferment strategies. A fully discretionary equity facility remains for up to A$120.0 million/US$90.0 million over the next three months to provide additional funds as required. The Group may also consider equity-based financing and drawing further debt funding on current debt arrangements to fund future operational requirements. "There is uncertainty related to the Group's ability to partner programs, raise capital or debt at terms to meet the Group's requirements. Additionally, there is uncertainty related to the Group's ability to sustainably maintain implemented cost reductions and further defer programs on a timely basis while achieving expected outcomes. "The continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon non-dilutive funding in the form of commercial partnering transactions or equity-based financing to fund future operations, together with maintaining implemented cost containment and deferment strategies. "Management and the directors believe that the Group will be successful in the above matters and, accordingly, have prepared the financial report on a going concern basis, notwithstanding that there is a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern and that it may be unable to realize its assets and liabilities in the normal course of business," Mesoblast stated. A full-text copy of the Form 6-K is available for free at: https://is.gd/5mbgDv About Mesoblast Headquartered in Melbourne, Australia, Mesoblast Limited (ASX:MSB; Nasdaq:MESO) -- http://www.mesoblast.com/-- is a global developer of innovative cell-based medicines. The Company has leveraged its proprietary technology platform to establish a broad portfolio of late-stage product candidates with three product candidates in Phase 3 trials - acute graft versus host disease, chronic heart failure and chronic low back pain due to degenerative disc disease. Through a proprietary process, Mesoblast selects rare mesenchymal lineage precursor and stem cells from the bone marrow of healthy adults and creates master cell banks, which can be industrially expanded to produce thousands of doses from each donor that meet stringent release criteria, have lot to lot consistency, and can be used off-the-shelf without the need for tissue matching. Mesoblast has facilities in Melbourne, New York, Singapore and Texas and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). Mesoblast reported a net loss attributable to the owners of Mesoblast of US$35.29 million for the year ended June 30, 2018, compared to a net loss attributable to the owners of Mesoblast of US$76.81 million for the year ended June 30, 2017. As of Dec. 31, 2018, the Company had US$688.33 million in total assets, US$163.77 million in total liabilities, and US$524.55 million in total equity. PricewaterhouseCoopers, in Melbourne, Australia, the Company's auditor since 2008, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended June 30, 2018. The auditors noted that the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. MJJW PORTFOLIO: June 25 Plan Confirmation Hearing ------------------------------------------------- The Disclosure Statement explaining the Chapter 11 Plan of MJJW Portfolio, Inc., is conditionally approved. The Court will conduct a hearing on confirmation of the Plan, on June 25, 2019 at 1:30 PM in Tampa, FL − Courtroom 9A, Sam M. Gibbons United States Courthouse, 801 N. Florida Avenue. Parties in interest shall submit to the Clerk's office their written ballot accepting or rejecting the Plan no later than eight (8) days before the date of the Confirmation Hearing. Objections to confirmation will be filed and served no later than seven (7) days before the date of the Confirmation Hearing. The Plan Proponent will file a ballot tabulation no later than 96 hours prior to the time set for the Confirmation Hearing. About MJJW Portfolio Inc. MJJW Portfolio, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-07533). The Debtor tapped Miriam L. Sumpter-Richard, Esq., at Fresh Start Law Firm, P.A., as its bankruptcy counsel. MURRAY-CALLOWAY COUNTY: Moody's Cuts Rating to Ba2, Outlook Neg. ---------------------------------------------------------------- Moody's Investors Service has downgraded Murray-Calloway County Public Hospital Corporation's (KY) (MCCH) rating to Ba2 from Baa3, affecting $23 million of outstanding bonds. The outlook remains negative. RATINGS RATIONALE The downgrade to Ba2 reflects its expectation that performance will show below average margins for the remainder of fiscal 2019 given performance through the first half of the year and following the material variance to budget in 2018. Lower levels of operating cash flow, driven by losses at the physician enterprise, volume variability and a high governmental revenue mix, will reduce MCCH's financial flexibility and likely result in a decline in liquidity to meet capital needs. Moody's expects MCCH will meet its covenants in fiscal 2019 although headroom will narrow. These challenges will be partially mitigated by its expectation that MCCH will maintain a leading market position given the absence of nearby competition. A manageable pension obligation and an all fixed rate debt structure will also lower the risk of unexpected demands on liquidity. RATING OUTLOOK The negative outlook reflects the expectation that fiscal 2019 performance will show continued operating losses. Inability to stabilize performance in fiscal 2020, a decline in liquidity and further narrowing to the covenants will pressure the rating. FACTORS THAT COULD LEAD TO AN UPGRADE - Significant expansion of service lines or geographic reach resulting in overall growth and revenue diversification - Material and sustained multi-year improvement in operating margins and liquidity FACTORS THAT COULD LEAD TO A DOWNGRADE - Inability to meaningfully improve and maintain operating performance during fiscal 2020 - Decline in absolute unrestricted cash and relative liquidity metrics - Notable increase in debt without restoration of cash flow - Further narrowing of headroom to financial covenants LEGAL SECURITY The bonds are secured by a pledge of gross revenues and a first mortgage lien on MCCH's facilities. The obligated group includes all divisions of the MCCH including the physician enterprise division. PROFILE MCCH is an independent acute care public hospital with 152 licensed beds located in a rural area of southwest Kentucky. In FY 2018, MCCH generated $127 million of operating revenue and saw 4,737 inpatient admissions. The hospital is jointly owned by the city and county, but it does not receive any tax revenue or direct financial support from the city or county. NELSON WELLNESS: To Continue Operation of Franchise Under Plan -------------------------------------------------------------- Nelson Wellness Center, Inc., filed a Chapter 11 plan and accompanying disclosure statement proposing that payments and distributions made pursuant to the Plan will be in full and final satisfaction, settlement, release, and discharge, as against the Debtor, of any and all claims against, and interests in, the Debtor, as defined in the Bankruptcy Code, including, without limitation, any Claim or Equity Interest accrued or incurred on or before the Confirmation Date, whether or not (i) a proof of claim or interest is filed or deemed filed under section 501 of the Bankruptcy Code, (ii) such Claim or Equity Interest is allowed under section 501 of the Bankruptcy Code, or (iii) the holder of such Claim or Equity Interest has accepted the Plan. The plan contemplates a continuation of the debtor's business. in accordance with the plan, the debtor intends to satisfy creditor claims from income earned through continued operations of its business. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/y663spne from PacerMonitor.com at no charge. Attorneys for the Debtor: Clayton W. Cheek, Esq. Ciara L. Rogers, Esq. PO Box 1584 New Bern, NC 28563 Tel: (252) 633-1930 Fax: (252) 633-1950 Email: clayton@olivercheek.com ciara@olivercheek.com Based in Onslow County, North Carolina, Nelson Wellness Center, Inc., an operator of a Smoothie King franchise, filed a Chapter 11 Petition (Bankr. E.D.N.C. Case No. 19-00276) on January 22, 2019, and is represented by Clayton W. Cheek, Esq., at The Law Offices of Oliver & Cheek, PLLC, in New Bern, North Carolina. NEOVASC INC: Nasdaq Continuing to Monitor Market Value Deficiency ----------------------------------------------------------------- Following 10 consecutive business days with a market value of listed securities of over US$35 million, Neovasc Inc. has been advised by staff of The Nasdaq Stock Market LLC that the Nasdaq will exercise its discretion to continue to monitor the Company's MVLS pursuant to Nasdaq Listing Rule 5810(c)(3)(G) in connection with the Company's deficiency under the US$35 million minimum MVLS requirement. Nasdaq Listing Rule 5810(c)(3)(G) provides that Nasdaq staff may require satisfaction of the US$35 million minimum MVLS requirement for a period in excess of 10 consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. The Company will continue to monitor its MVLS and endeavor to regain compliance with the Nasdaq minimum MVLS requirement; however, there can be no assurance that it will be able to do so. Since May 30, 2019, the Company has had 74,811,888 common shares issued and outstanding. The Company's MVLS has been in excess of US$35 million since May 23, 2019. On Jan. 3, 2019, the Company received written notification from the Nasdaq Listing Qualifications Department notifying the Company that it was not in compliance with the $35 million minimum market value requirement set forth in the Nasdaq Marketplace Rules. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided 180 calendar days, or until July 2, 2019, to regain compliance. To regain compliance, the market value of the Company's listed securities must exceed $35 million for a minimum of 10 consecutive business days. On Jan. 14, 2019, the Company received written notification from the Nasdaq Listing Qualifications Department that the Company was not in compliance with the $1.00 minimum bid price requirement set forth in the Nasdaq Marketplace Rules. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until July 15, 2019, to regain compliance. About Neovasc Inc. Based in Richmond, British Columbia, Neovasc Inc. -- http://www.neovasc.com-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently available in the United States and has been available in Europe since 2015, and the Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada and Europe. Neovasc reported a net loss of US$108.04 for the year ended Dec. 31, 2018, compared to a net loss of US$22.90 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Neovasc had US$11.99 million in total assets, US$21.66 million in total liabilities, and a total deficit of US$9.66 million. Grant Thornton LLP, in Vancouver, BC, the Company's auditor since 2002, issued a "going concern" opinion in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company incurred a net loss of $108,042,868 during the year ended Dec. 31, 2018, and as of that date, the Company's liabilities exceeded its assets by $9,666,884. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. NEOVASC INC: Shareholders Reelect Five Existing Directors --------------------------------------------------------- Neovasc Inc. announced the results of the votes on matters considered at its Annual General and Special Meeting of Shareholders held on June 4, 2019 in Vancouver, B.C. At the Meeting, the shareholders of the Company re-elected board members Steven Rubin, Paul Geyer, Doug Janzen, Dr. Jane Hsiao and Alexei Marko and elected Fred Colen to serve in office until the next annual meeting or until their successors are duly elected or appointed. At the Meeting, the Shareholders also approved resolutions authorizing the Company's Board of Directors to, at their discretion, execute a common share consolidation (72.43% of votes cast in favour) and re-appointing Grant Thornton LLP, Chartered Accountants as auditors of the Company. Neovasc Reducer Update As previously announced during Neovasc's first quarter 2019 earnings call, the Company confirms that a U.S. Food and Drug Administration Sprint discussion took place in May to discuss the Company's approach to demonstrating long term Reducer fatigue life. A further FDA Sprint discussion about clinical strategy is scheduled to be held on June 26, 2019. About Neovasc Inc. Based in Richmond, British Columbia, Neovasc Inc. -- http://www.neovasc.com-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently available in the United States and has been available in Europe since 2015, and the Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada and Europe. Neovasc reported a net loss of US$108.04 for the year ended Dec. 31, 2018, compared to a net loss of US$22.90 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Neovasc had US$11.99 million in total assets, US$21.66 million in total liabilities, and a total deficit of US$9.66 million. Grant Thornton LLP, in Vancouver, BC, the Company's auditor since 2002, issued a "going concern" opinion in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company incurred a net loss of $108,042,868 during the year ended Dec. 31, 2018, and as of that date, the Company's liabilities exceeded its assets by $9,666,884. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. NORTHERN DYNASTY: Incurs C$16.2 Million Net Loss in First Quarter ----------------------------------------------------------------- Northern Dynasty Minerals Ltd. filed with the U.S. Securities and Exchange Commission its condensed consolidated interim financial statements for the three months ended March 31, 2019 and 2018. Northern Dynasty reported a net loss of C$16.21 million for the three months ended March 31, 2019, compared to a net loss of C$11.09 million for the three months ended March 31, 2018. As of March 31, 2019, Northern Dynasty had C$164.34 million in total assets, C$17.14 million in total liabilities, and C$147.19 million in total equity. The condensed consolidated interim financial statements of the Company as at and for the three months ended March 31, 2019, include financial information for the Company and its subsidiaries (together referred to as the "Group" and individually as "Group entities"). The Company is the ultimate parent. The Group's core mineral property interest is the Pebble Copper-Gold-Molybdenum Project located in Alaska, United States of America. As at March 31, 2019, the Group had C$20,246,000 in cash and cash equivalents for its operating requirements. The Group said it has prioritized the allocation of its financial resources in order to meet key corporate and Pebble Project expenditure requirements in the near term. Additional financing will be required in order to progress any material expenditures at the Pebble Project and for working capital requirements. Additional financing may include any of or a combination of debt, equity and/or contributions from possible new Pebble Project participants. There can be no assurances that the Group will be successful in obtaining additional financing. If the Group is unable to raise the necessary capital resources and generate sufficient cash flows to meet obligations as they come due, the Group may, at some point, consider reducing or curtailing its operations. As such, there is material uncertainty that raises substantial doubt about the Group's ability to continue as a going concern. "The Group is in the process of exploring and developing the Pebble Project and has not yet determined whether the Pebble Project contains mineral reserves that are economically recoverable. The Group's continuing operations and the underlying value and recoverability of the amounts shown for the Group's mineral property interests, is entirely dependent upon the existence of economically recoverable mineral reserves; the ability of the Group to obtain financing to complete the exploration and development of the Pebble Project; the Group obtaining the necessary permits to mine; and future profitable production or proceeds from the disposition of the Pebble Project," Northern Dynasty stated in the report. A full-text copy of the Form 6-K is available for free at: https://is.gd/U5GNVc About Northern Dynasty Minerals Northern Dynasty -- http://www.northerndynastyminerals.com/-- is a mineral exploration and development company. Northern Dynasty's principal asset, owned through its wholly-owned Alaska-based US subsidiary Pebble Limited Partnership, is a 100% interest in a contiguous block of 2,402 mineral claims in southwest Alaska, including the Pebble deposit. The Company is listed on the Toronto Stock Exchange under the symbol "NDM" and on the NYSE American Exchange under the symbol "NAK". The Company's corporate office is located at 1040 West Georgia Street, 15th floor, Vancouver, British Columbia. Northern Dynasty reported a net loss of C$15.95 million for the year ended Dec. 31, 2018, compared to a net loss of C$64.86 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, the Company had C$161.92 million in total assets, C$13.71 million in total liabilities, and C$148.21 million in total equity. Deloitte LLP, in Vancouver, Canada, the Company's auditor since 2009, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company incurred a net loss during the year ended Dec. 31, 2018 and, as of that date, the Company's consolidated deficit was $487 million. These conditions, along with other matters, raise substantial doubt about its ability to continue as a going concern. NORTHERN DYNASTY: Subsidiary Inks Right-of-Way Deal with Iliamna ---------------------------------------------------------------- Northern Dynasty Minerals Ltd. reports the Pebble Limited Partnership has finalized a right-of-way agreement with Iliamna Natives Limited ("INL"), securing the right to use defined portions of INL lands for the construction and operation of transportation infrastructure associated with the Pebble Project. The Pebble Partnership is a wholly owned US subsidiary of Northern Dynasty and proponent of southwest Alaska's Pebble Project. INL is an Alaska Native village corporation with extensive land holdings proximal to the Pebble site, and represents more than 150 Alaska Native shareholders, many of whom live in the nearby village of Iliamna. "We're very pleased to have reached an agreement with Iliamna that will involve them and their shareholders in a meaningful way in the future development of the Pebble Project," said Northern Dynasty President & CEO Ron Thiessen. "Not only does today's announcement demonstrate that the Alaska Native landowners and those who live in closest proximity to the project support the work we are doing to advance Pebble in an environmentally sound and socially responsible manner, it also ensures they will benefit in a meaningful way from the jobs and other economic opportunities associated with the project." The Right-of-Way Agreement reached with INL this month is the second such agreement the Pebble Partnership has reached with Alaska Native landowners to secure access to the project site for construction and operation of the proposed mine. A similar agreement was reached with Alaska Peninsula Corporation, a village corporation with land holdings both north and south of Lake Iliamna, last November. The INL agreement provides the Pebble Partnership with an important alternative ferry landing site and road/utility corridor on the north side of Lake Iliamna, and greater flexibility as the project advances toward a final Record of Decision on the federal Environmental Impact Statement permitting process next year. "INL and PLP have been working together for over 15 years," said INL President Lorene Anelon. "INL sees the opportunities that Pebble could provide for Iliamna, and we want our community to grow and prosper with responsible development. INL will work with Pebble to make sure it is done responsibly, and we are looking forward to working together to make our shareholders and community a healthy place to aspire our dreams." In February 2019, the US Army Corps of Engineers released the Draft EIS for the Pebble Project, confirming there are no data gaps or other outstanding information requirements with potential to block or delay regulatory approval for the project. The Draft EIS also indicates that development of the Pebble resource can proceed without harm to the salmon fisheries of western Alaska or other significant impacts. The INL lands addressed in the Right-of-Way Agreement reflect one of the transportation corridors identified in Draft EIS. Specifically, it includes a ferry landing site east of the village of Iliamna at Eagle Bay, as well as road and pipeline corridors and associated material borrow sites to link the Pebble mine site to the Iliamna airport, and to the Eagle Bay ferry landing site. To secure its right to use defined portions of INL land for the construction and operation of transportation infrastructure, PLP will make annual toll payments to INL, and pay other fees prior to and during project construction and operations. In addition, INL will be granted 'Preferred Contractor' status at Pebble, which provides a preferential opportunity to bid on Pebble-related contracts located on INL lands. PLP transportation infrastructure is expected to benefit INL, its shareholders and local residents of Iliamna through access to lower costs for power, equipment and supplies, as well as enhanced economic activity in the region. Roads connecting to the villages of Iliamna and Newhalen will allow local residents to access jobs at the Pebble mine site and associated infrastructure sites. Finally, the two parties have agreed to negotiate a profit sharing agreement that will ensure INL and its shareholders benefit directly from the profits generated by mining activity in the region. "INL has been an important stakeholder and business partner in the Pebble enterprise for some time, and we're pleased to formalize that partnership today," said Tom Collier, Pebble Partnership president & CEO. Collier said the Pebble Partnership continues to negotiate with Alaska Native corporations, and expects to make additional partner announcements this year. About Northern Dynasty Minerals Northern Dynasty -- http://www.northerndynastyminerals.com/-- is a mineral exploration and development company. Northern Dynasty's principal asset, owned through its wholly-owned Alaska-based US subsidiary Pebble Limited Partnership, is a 100% interest in a contiguous block of 2,402 mineral claims in southwest Alaska, including the Pebble deposit. The Company is listed on the Toronto Stock Exchange under the symbol "NDM" and on the NYSE American Exchange under the symbol "NAK". The Company's corporate office is located at 1040 West Georgia Street, 15th floor, Vancouver, British Columbia. Northern Dynasty reported a net loss of C$15.95 million for the year ended Dec. 31, 2018, compared to a net loss of C$64.86 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, the Company had C$161.92 million in total assets, C$13.71 million in total liabilities, and C$148.21 million in total equity. Deloitte LLP, in Vancouver, Canada, the Company's auditor since 2009, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company incurred a net loss during the year ended Dec. 31, 2018 and, as of that date, the Company's consolidated deficit was $487 million. These conditions, along with other matters, raise substantial doubt about its ability to continue as a going concern. NORTHWEST FARM: June 27 Plan Confirmation Hearing ------------------------------------------------- The amended disclosure statement explaining the amended Chapter 11 Plan of Northwest Farm & Supply Co. is approved. A confirmation hearing on Debtor's Modified Plan will be held June 27, 2019 at 1:30 p.m. (Mountain) [2:30 p.m. (Central)]. Any written acceptances or rejections (ballots) regarding Debtor's Modified Plan of Reorganization will be filed on or before June 24, 2019. Any written objection to Debtor's Modified Plan shall be filed on or before June 24, 2019. About Northwest Farm & Supply Co. Northwest Farm & Supply Co. -- https://www.nwsupply.biz -- is an independent and locally owned business that sells automotive supplies; building materials, cleaning supplies; doors & windows; electrical; farm & ranch supplies; hardware; heating, ventilation and air conditioning; housewares; lawn & garden supplies; paint and painting supplies; power tools and accessories; and storage and organization supplies. The Company has a complete feed and farm and ranch department along with a retail store. Northwest Farm & Supply filed a Chapter 11 petition (Bankr. D.S.D. Case No. 19-50031), on March 1, 2019. The petition was signed by Douglas A. Peterson, president. At the time of filing, the Debtor had $1,820,027 in assets and $3,106,223 in debts. The case is assigned to Judge Charles L. Nail, Jr. The Debtor is represented by Donald L. Swanson, Esq., at Koley Jessen P.C., L.L.O. NOVABAY PHARMACEUTICALS: All Proposals Approved at Annual Meeting ----------------------------------------------------------------- NovaBay Pharmaceuticals, Inc., held its 2019 Annual Meeting on May 30, at which the Company's stockholders: (a) elected Paul E. Freiman and Gail Maderis as Class III directors nominated by the Company's Board of Directors to hold office for a term of three years and until their respective successors are elected and qualified; (b) approved, on an advisory basis, the compensation of the Company's named executive officers; (c) approved, on an advisory basis, the preferred frequency of triennial stockholder advisory votes on the compensation of the Company's named executive officers; and (d) ratified the appointment by the Company's Audit Committee of OUM & Co. LLP as its independent registered public accounting firm for the fiscal year ending Dec. 31, 2019. About NovaBay Pharmaceuticals Based in Emeryville, California, NovaBay Pharmaceuticals -- http://www.novabay.com/-- is a medical device company predominately focused on eye care. The Company is currently focused primarily on commercializing Avenova, a prescription product sold in the United States for cleansing and removing foreign material including microorganisms and debris from skin around the eye, including the eyelid. Novabay reported a net loss and comprehensive loss of $6.54 million for the year ended Dec. 31, 2018, compared to a net loss and comprehensive loss of $7.40 million for the year ended Dec. 31, 2017. As of March 31, 2019, Novabay had $9.72 million in total assets, $8.59 million in total liabilities, and $1.12 million in total stockholders' equity. OUM & CO. LLP, in San Francisco, California, the Company's auditor since 2010, issued a "going concern" opinion in its report dated March 29, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has experienced operating losses for most of its history and expects expenses to exceed revenues in 2019. The Company also has recurring negative cash flows from operations and an accumulated deficit. All of these matters raise substantial doubt about its ability to continue as a going concern. PARQ HOLDINGS: S&P Discontinues 'SD' ICR After Refinancing ---------------------------------------------------------- S&P Global Ratings discontinued its 'SD' (selective default) issuer credit rating on Vancouver-based casino operator Parq Holdings L.P. and its 'B-' issue-level rating on the company's first-lien senior secured debt. This follows the company's recent refinancing, which closed on May 10, 2019, after which no rated debt was outstanding. PENINSULA RESEARCH: Plan Confirmation Hearing Continued to Sept. 11 ------------------------------------------------------------------- A hearing on the adequacy of the disclosure statement explaining the Chapter 11 Plan of Peninsula Research Ormond Beach, LLC, and the confirmation of the Plan was held on May 23. The Court held that the confirmation hearing will be continued to September 11, 2019 at 2:00 pm. Class 8. General Unsecured Claims (Estimated amount: $1,000,000). General unsecured claims shall include allowed unsecured claims; allowed deficiency claims; and unsecured, nonpriority tax claims. Holders of allowed unsecured claims will be paid pro rata. Distributions will be made quarterly for a term of two years (for a total of eight distributions) to begin on the Effective Date. Each Distribution will be in the sum of $20,000, for a total dividend to holders of general unsecured claims of $160,000. Class 9. The Equity interests of the Debtor. It is anticipated that ownership of all property of the estate shall vest with the Debtor on the Effective Date, with Mr. Ribo to retain his ownership of the Debtor, however Mr. Ribo expressly waives any claims against the Debtor for repayment of loans made by Mr. Ribo to the Debtor pre-petition. The payments required under this plan will be funded from the business revenues of the Debtor. A full-text copy of the Second Amended Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/yynyuunt from PacerMonitor.com at no charge. Attorneys for the Debtor is Scott W. Spradley, Esq., at Law Offices of Scott W. Spradley, P.A., in Flagler Beach, Florida. About Peninsula Research Ormond Beach Peninsula Research Ormond Beach, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-04498) on July 27, 2018. In the petition signed by Angel Ribo, CEO and president, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The Debtor is represented by the Law Offices of Scott W. Spradley, P.A. No official committee of unsecured creditors has been appointed in the Chapter 11 case of Peninsula Research Ormond Beach, LLC as of Sept. 17, according to a court docket. PLASTIC2OIL INC: Delays Q1 Form 10-Q Over Staffing Limitations -------------------------------------------------------------- Plastic2Oil, Inc. said in a Form 12b-25 filed with the Securities and Exchange Commission that it was unable to file its quarterly report on Form 10-Q for the period ended March 31, 2019 within the prescribed time period due to staffing limitations. Accordingly, the Company is unable to file such report within the prescribed time period without unreasonable effort or expense. The Company is seeking to file its Quarterly Report within the extension period provided under Rule 12b-25, however, due to the delay in the start of the auditor review, there can be no assurance that the Company will be successful in filing prior to the expiration of the extension period. About Plastic2Oil Plastic2Oil, Inc., is an innovative North American fuel company that transforms unsorted, unwashed waste plastic into ultra-clean, ultra-low sulphur fuel without the need for refinement. The Company's patent-pending Plastic2Oil (P2O) is a proprietary, commercially viable, and scalable process designed to provide immediate economic benefit for industry, communities, and government organizations faced with waste plastic recycling challenges. Plastic2Oil reported a net loss of $2.77 million for the year ended Dec. 31, 2018, compared to a net loss of $1.47 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, the Company had $795,610 in total assets, $15.51 million in total liabilities, and a total stockholders' deficit of $14.71 million. D. Brooks and Associates CPA's, P.A., in Palm Beach Gardens, Florida, the Company's auditor since 2014, issued a "going concern" qualification in its report dated June 3, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has incurred operating losses, has incurred negative cash flows from operations and has a working capital deficit. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. PLUTO ACQUISITION: Moody's Assigns B3 CFR & Rates Secured Loans B2 ------------------------------------------------------------------ Moody's Investors Service assigned a B3 Corporate Family Rating and B3-PD Probability of Default Rating to Pluto Acquisition I, Inc. (parent company of AccentCare, Inc.). At the same time, Moody's assigned B2 (LGD3) ratings to the proposed $40 million revolving credit facility and $355 million first lien term loan. The rating outlook is stable. Proceeds from the first lien credit facility, along with a $130 million second lien term loan (unrated) and $424 million of new cash equity will be used to fund the acquisition of AccentCare by Advent International and pay transaction related expenses. Ratings Assigned: Pluto Acquisition I, Inc. Corporate Family Rating at B3 Probability of Default Rating at B3-PD $40 million senior secured revolving credit facility due 2024 at B2 (LGD3) $355 million senior secured 1st lien term loan due 2026 at B2 (LGD3) Outlook Stable RATINGS RATIONALE The B3 CFR reflects AccentCare's high financial leverage, moderate scale compared to larger rated peers, and limited geographic diversification with a substantial concentration in Texas. Moody's expects debt/EBITDA to remain above 6.0x for the next 12 months. The rating is also constrained by the company's limited track record of free cash flow generation. Further, there is industry-wide risk around the shift in Medicare reimbursement to the patient driven grouping model (PDGM) beginning in 2020. The rating is supported by AccentCare's solid organic growth prospects, driven by growing demand for home health services. This is driven by patient preference to receive care in their homes as well a substantive cost advantages versus facility based care. AccentCare also has a strong competitive presence in Texas, supported by its strong relationships with key medical centers. The rating is also supported by the generally low capital expenditure requirements of the business. Moody's anticipates that AccentCare will maintain adequate liquidity, supported by an undrawn $75 million ABL facility (unrated) and a $40 million revolving credit facility (which will be partially used to backstop letters of credit). The stable outlook reflects Moody's view that the company will continue to grow both organically and through acquisitions, but that it will remain highly levered. The ratings could be upgraded if the company generates a track record of consistently positive free cash flow and debt/EBITDA sustained below 6.0x. Additionally, an upgrade would be supported by a smooth transition to PDGM, without substantial operating disruption or margin decline. The ratings could be downgraded if the company experiences material operating disruption or margin degradation related to the shift to PDGM. The ratings could also be downgraded if there is material weakening of liquidity or if the company is not expected to generate consistently positive free cash flow. AccentCare is one of the largest for-profit home healthcare providers in the U.S. The Company offers home health, personal care, hospice and medical care services. AccentCare had revenue of $814 million for the twelve months ended March 31, 2019. AccentCare will be owned by Advent International. PULMATRIX INC: May Issue 336,995 Shares Under Incentive Plan ------------------------------------------------------------ Pulmatrix, Inc., has filed with the U.S. Securities and Exchange Commission a Form S-8 registration statement to register: * 324,999 shares of its common stock underlying options previously granted and outstanding as of June 4, 2019 with underlying shares from the 2018 Evergreen Shares and the 2019 Evergreen Shares; and * 11,996 shares of common stock to be offered to participants under the Plan, consisting of 11,996 shares of Common Stock reserved for issuance pursuant to future awards under the Plan from the 2019 Evergreen Shares. At the time the Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan was initially amended and restated, it reserved a total of 345,055 shares of common stock, par value $.0001 per share, of Pulmatrix, Inc. for issuance thereunder. The Original Plan included an "evergreen" provision that provides for an annual increase in the total number of shares of Common Stock reserved for issuance thereunder on the first day of each fiscal year beginning in calendar year 2016. Pursuant to the Original Evergreen Provision, the annual increase in the number of shares of Common Stock was equal to the lowest of: (i) 90,360 shares of Common Stock; (ii) five percent of the number of shares of Common Stock outstanding as of the date of the increase; and (iii) an amount determined by the Company's board of directors. As a result of the Original Evergreen Provision, effective Jan. 1, 2017, 74,252 shares of Common Stock were added to the total number of shares of Common Stock reserved for issuance under the Plan, and effective Jan. 1, 2018, 90,360 shares of Common Stock were added to the total number of shares of Common Stock reserved for issuance under the Original Plan. At the 2018 annual meeting of stockholders held on June 5, 2018, the Company's stockholders approved amendments to the Original Plan (i) to increase the number of shares of Common Stock authorized to be issued under the Original Plan by 740,333 to a total of 1,250,000 shares and (ii) to modify the Original Evergreen Provision by removing the cap on the number of shares that may be reserved for issuance, so that on January 1st of each year, commencing on Jan. 1, 2019, the number of shares reserved for issuance under the Plan will automatically increase by 5% of the number of outstanding shares of common stock on that date. As a result of the Evergreen Provision, on Jan. 1, 2019, 246,637 shares of Common Stock were added to the total number of shares of Common Stock reserved for issuance under the Plan. A full-text copy of the Registration Statement is available for free at https://is.gd/U8gkzQ About Pulmatrix Pulmatrix, Inc. -- http://www.pulmatrix.com/-- is a clinical stage biotechnology company focused on the discovery and development of novel inhaled therapeutic products intended to prevent and treat respiratory diseases and infections with significant unmet medical needs. The Company's proprietary product pipeline is focused on advancing treatments for serious lung diseases, including PulmazoleTM, inhaled anti-fungal itraconazole for patients with ABPA, and PUR1800, a narrow spectrum kinase inhibitor for patients with obstructive lung diseases including asthma and chronic obstructive pulmonary disease. Pulmatrix's product candidates are based on iSPERSE, its proprietary engineered dry powder delivery platform, which seeks to improve therapeutic delivery to the lungs by maximizing local concentrations and reducing systemic side effects to improve patient outcomes. Pulmatrix incurred a net loss of $20.56 million in 2018, following a net loss of $18.05 million in 2017. As of March 31, 2019, Pulmatrix had $13.99 million in total assets, $3.79 million in total liabilities, and $10.19 million in total stockholders' equity. Marcum LLP, in New York, NY, the Company's auditor since 2015, issued a "going concern" qualification in its report dated Feb. 19, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company continues to have negative cash flow from its operations, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. PULMATRIX INC: Sabby Volatility Has 5.2% Stake as of May 30 ----------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Sabby Volatility Warrant Master Fund, Ltd., Sabby Management, LLC, and Hal Mintz disclosed that as of May 30, 2019, they beneficially own 1,008,500 shares of common stock of Pulmatrix, Inc., which represents 5.19 percent of the shares outstanding. Sabby Management, LLC and Hal Mintz each beneficially own 1,008,500 shares of the common shares, representing approximately 5.19% of the common shares. Sabby Management, LLC and Hal Mintz do not directly own any common shares, but each indirectly owns 1,008,500 common shares. Sabby Management,LLC, a Delaware limited liability company, indirectly owns 1,008,500 common shares because it serves as the investment manager of Sabby Volatility Warrant Master Fund, Ltd., a Cayman Islands company. Mr. Mintz indirectly owns 1,008,500 common shares in his capacity as manager of Sabby Management,LLC. A full-text copy of the regulatory filing is available for free at: https://is.gd/Q0IG26 About Pulmatrix Pulmatrix, Inc. -- http://www.pulmatrix.com/-- is a clinical stage biotechnology company focused on the discovery and development of novel inhaled therapeutic products intended to prevent and treat respiratory diseases and infections with significant unmet medical needs. The Company's proprietary product pipeline is focused on advancing treatments for serious lung diseases, including PulmazoleTM, inhaled anti-fungal itraconazole for patients with ABPA, and PUR1800, a narrow spectrum kinase inhibitor for patients with obstructive lung diseases including asthma and chronic obstructive pulmonary disease. Pulmatrix's product candidates are based on iSPERSE, its proprietary engineered dry powder delivery platform, which seeks to improve therapeutic delivery to the lungs by maximizing local concentrations and reducing systemic side effects to improve patient outcomes. Pulmatrix incurred a net loss of $20.56 million in 2018, following a net loss of $18.05 million in 2017. As of March 31, 2019, Pulmatrix had $13.99 million in total assets, $3.79 million in total liabilities, and $10.19 million in total stockholders' equity. Marcum LLP, in New York, the Company's auditor since 2015, issued a "going concern" qualification in its report dated Feb. 19, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company continues to have negative cash flow from its operations, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. R & C PROPERTIES: Adds Claims Objection Provisions in Amended Plan ------------------------------------------------------------------ R & C Properties of Wilmington, LLC, filed an amended Chapter 11 Plan and accompanying disclosure statement to add provisions on objections to claims and fee applications and investigation and prosecution of any actions pursuant to Sections 547 and 548 of the Bankruptcy Code. The Debtor assumes any unexpired lease agreements relating to the rental of the Debtor's real property. All objections to claims, fee applications (with the exception of applications under 11 U.S.C. Section 506(c) and fee applications by counsel for the Debtors), will be filed with the Court within 180 days of the Effective Date; provided however, that the Debtor retains the right to extend this deadline upon a showing of cause, and the Debtor may object or otherwise pursue any claims against secured creditors relating to the payoff and/or satisfaction of their secured claims at any time. Applications for fees and expenses under 11 U.S.C. Section 506(c), shall be filed within 30 days of the sale of the Debtor's real property. The statute of limitations of any and all Adversary Proceedings, and actions in State or Federal Court, not hereinbefore filed, shall be governed by their respective statutes of limitations, 11 U.S.C. Section 108(a)(2), or 11 U.S.C. Section 546(a)(1)(A), whichever deadline shall be later. The Debtor may investigate and pursue avoidance actions pursuant to 11 U.S.C. Sections 547 and 548. Any funds collected through such actions will be distributed in accordance with the priorities established by the Bankruptcy Code and Orders of this Court. A full-text copy of the Amended Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/yyja2xpg from PacerMonitor.com at no charge. About R & C Properties Based in Wilmington, North Carolina, R & C Properties of Wilmington, LLC, owner of buildings and land at 5006 Randall Parkway, and 4951 University Drive, filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 18-05996) on December 14, 2018, and is represented by Richard P. Cook, Esq., at Richard P. Cook, PLLC, in Wilmington, North Carolina. At the time of filing, the Debtor had estimated assets and debts of $1 million to $10 million. RENT-A-CENTER INC: S&P Hikes ICR to 'B' on Performance Improvement ------------------------------------------------------------------ S&P Global Ratings raised the issuer credit rating on Plano, Texas-based rent-to-own retailer Rent-A-Center Inc. to 'B' from 'B-' and revised the outlook to positive. Concurrently, S&P raised the issue-level ratings on the company's senior unsecured notes to 'B'. The recovery rating remains '3'. The upgrade reflects continued improvement in performance, including positive comparable sales and margin expansion, leading to S&P's expectation for modest deleveraging over the next 12 months and improved stability in the business after substantial volatility over the past few years. The rating agency also highlights its expectation for a successful refinancing of the company's capital structure in the near term, ahead of the December 2019 maturity of the asset-based lending (ABL) facility. "The positive outlook reflects our view that operating performance will continue to improve and cost savings initiatives will contribute to increasing EBITDA and modest deleveraging over the next 12 months. The outlook also reflects our expectation for a successful refinancing of the company's capital structure," S&P said. "We could raise the rating if the company is on track to refinance the capital structure and reduce funded debt with a portion of cash, reducing overall interest burden and supplementing free cash flow generation. Credit measures are currently good, but performance has included periods of significant volatility historically," the rating agency said. For a higher rating, S&P said it would expect adjusted debt to EBITDA to likely remain under 5x, even in an operating trough. For an upgrade, the rating agency said it would also need to believe that the company will continue to execute on strategic initiatives, leading to growth in EBITDA and demonstrating that performance has stabilized. "We could revise the outlook to stable if operating performance is below our expectations leading to minimal margin expansion. Under this scenario we would anticipate adjusted debt to EBITDA would exceed 5x and cash flow would be pressured in an operating trough," S&P said. REWALK ROBOTICS: Appoints Chunlin Han to its Board of Directors --------------------------------------------------------------- ReWalk Robotics Ltd. has appointed Mr. Chunlin (Allen) Han to the board of directors of the Company. Ms. Ning Cong has departed the Board as of May 14, 2019 and Mr. Han has been appointed to ReWalk Board as of May 15, 2019 pursuant to the investment agreement with Timwell Corporation Limited. Mr. Han is an executive director of Liquid Harmony Limited and serves as Head of Investment and Financing for Realcan Pharmaceutical Group Co. Ltd. (Shenzen: 002589.SZ), a large distributor of medical drugs and equipment in China with access to more than 8,000 hospitals and 33,000 primary medical institutions, where he has been instrumental in acquiring more than 50 distribution companies and participated in three joint venture investments. Mr. Han holds a Bachelor of Science degree in pharmacology from McGill University in Montreal, Canada. His father, Xu Han, and his mother, Renhua Zhang, indirectly control Timwell affiliate Realcan Ambrum Healthcare Industry Investment (Shenzhen) Partnership Enterprise (Limited Partnership), and Mr. Xu Han is the sole shareholder of Timwell. "We would like to thank Ning for her service on the ReWalk board, and are pleased to welcome Allen to our Board of Directors as a Timwell representative. We look forward to working with Allen and Timwell," said ReWalk CEO Larry Jasinski. About ReWalk Robotics ReWalk Robotics Ltd. -- http://www.rewalk.com/-- develops, manufactures and markets wearable robotic exoskeletons for individuals with lower limb disabilities as a result of spinal cord injury or stroke. ReWalk's mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies. Founded in 2001, ReWalk has headquarters in the U.S., Israel and Germany. ReWalk incurred a net loss of $21.67 million in 2018, a net loss of $24.71 million in 2017, and a net loss of $32.50 million in 2016. As of March 31, 2019, the Company had $17.03 million in total assets, $14.98 million in total liabilities, and $2.05 million in total shareholders' equity. Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, in Haifa, Israel, issued a "going concern" qualification in its report dated Feb. 8, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. ROCK SPRINGS: Business Income to Fund Proposed Chapter 11 Plan -------------------------------------------------------------- Rock Springs Energy Group, LLC, filed a disclosure statement describing its chapter 11 plan of reorganization, which contemplates distributions from the proceeds of a loan from a third-party lender and the use of funds from future business. The Class 3 Unsecured Creditor SEI, in the amount of $300,000 is listed in the Schedules as disputed and it did not file a proof of claim by the Bar Date. SEI will not be paid in the Plan. The Class 3 Unsecured Creditor Office of Ivan Ramirez, PLLC, in the amount of $1,000 will be paid 30 days after the effective date of the Plan. The remaining unsecured Creditors, Advanced Magnetronics, LLC, ($24,000); DR Griffin & Associates Inc. ($15,106.33); Separation Process Systems, LLC ($200,000); and Winn-Marion Companies ($375,388.14) will be paid upon completion of their respective contracts with the Debtor. Class 3 is unimpaired by the Plan. The Debtor in this case discloses the following: 1. The Debtor will not be generating any income other than from the operation of its business. 2. Other than those claims which will be paid from the proceeds of the Exit Financing, the Debtor anticipates realizing sufficient income to pay all claims pursuant to the terms of the Plan. 3. It is anticipated that the cash flow from the operation of the Debtor's business will be sufficient to meet all the fixed and contingent obligations for the Debtor under the Plan other than the BHI Settlement which will be paid from the Exit Financing, as well as those incurred in the ordinary course of business. 4. The Debtor is sufficiently qualified to handle the operational, financial and other problems likely to be encountered. There is a risk, though not anticipated, that the Debtor will not be able to generate sufficient cash flow to satisfy the terms of the Plan. Notwithstanding that, the Debtor expects to complete the Project and be able to operate its businesses profitably to pay the claims pursuant to the terms of the Plan. A copy of the Disclosure Statement is available at https://tinyurl.com/yxfrugtk from Pacermonitor.com at no charge. About Rock Springs Energy Group Rock Springs Energy Group, LLC, operates a crude oil distillation and storage tank facility in Rock Springs, Wyoming. The Company was formed for the purpose of constructing modular technology systems at key locations to convert readily available feeds into high quality and highly marketable products. Its Wyoming Facility project is designed to process up to 5,000 barrels per day of sweet crude oil, condensate and related feeds available in Utah, Wyoming and Colorado. The feeds are to be processed primarily into paint solvents, marine diesel, and paraffinic oils. Rock Springs Energy Group filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 18-52772) on Nov. 28, 2018. In the petition signed by Alberto Schroeder, manager, the Debtor estimated $10 million to $50 million in assets and liabilities. The Hon. Ronald B. King oversees the case. The Debtor is represented by The Vasquez Law Firm and Willis & Wilkins, LLP. SEARS HOLDINGS: Plus Mark Objects to Disclosure Statement --------------------------------------------------------- Plus Mark LLC files a limited joinder in the Objection of the Official Committee of Unsecured Creditors to Sears Holdings Corporation's Motion for an Order (I) Approving Disclosure Statement; (II) Establishing Notice and Objection Procedures for Confirmation of the Plan; (III) Approving Solicitation Packages and Procedures for Distribution Thereof; (IV) Approving Forms of Ballots and Establishing Procedures for Voting on the Plan; and (V) Granting Related Relief. Plus Mark points out that as aptly explained in the UCC Objection, the Amended Disclosure Statement fails to provide adequate information regarding the legal and factual bases to support the debtors' proposed substantive consolidation of Kmart's estate with the estates of the other debtors, particularly those debtors that are or appear to be administratively insolvent. Plus Mark further points out as the UCC Objection makes apparent, the Amended Plan appears to fail the best interests of creditors test, at least with regard to general unsecured creditors of Kmart, given other alternatives (whether a stand-alone plan for Kmart or a chapter 7 liquidation) under which it appears that Kmart’s general unsecured creditors would fair far better. Counsel to Plus Mark LLC: Eric R. Goodman, Esq. Adam L. Fletcher, Esq. BAKER & HOSTETLER LLP Key Tower 127 Public Square, Suite 2000 Cleveland, OH 44114 Tel: (216) 621-0200 Fax: (216) 696-0740 Email: egoodman@bakerlaw.com afletcher@bakerlaw.com About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc., as investment banker. SEARS HOLDINGS: Santa Rosa Mall Objects to Disclosure Statement --------------------------------------------------------------- Santa Rosa Mall, LLC, objects to the Disclosure Statement for Amended Joint Chapter 11 Plan filed by Sears Holdings Corporation and its Affiliated Debtors. Santa Rosa Mall adopted the US Trustee's Objection and reserved its rights with regard to the insurance monies due under Insurance Policy No. PTNAM1701557, to the extent they are not part of the bankruptcy estate and to the extent of its interest on account of the damages caused by Hurricanes Irma and Maria to Store No. 1915 Santa Rosa Mall points out that the Amended Disclosure Statement and/or its supplement exhibits do(es) not afford any information whatsoever as to the existence, status or whereabouts of Insurance Policy No. PTNAM1701557 and/or its proceeds, claims, adjustments, settlement payments or related information. Santa Rosa Mall further points out that the Amended Disclosure Statement does not afford adequate information on the following matters: (a) the possession and itemization of the insurance settlements for rejected leases; (b) whether the insurance proceeds from rejected leases were transferred to Buyer or remain in the bankruptcy estate, and if so, in which amounts and for what considerations; and (c) the amounts of insurance proceeds that remain with the bankruptcy estate and how they have been identified, quantified, separated and/or earmarked from the rest of the estate. Santa Rosa Mall complains that[P]olicy proceeds are not available to all creditors. Attorneys for Santa Rosa Mall, LLC: Sonia E. Colon Colon, Esq. Gustavo A. Chico-Barris, Esq. FERRAIUOLI, LLC 390 N. Orange Avenue, Suite 2300 Orlando, Florida 32801 Telephone: (407) 982-7310 Facsimile: (787) 766-7001 Email: scolon@ferraiuoli.com gchico@ferraiuoli.com About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc., as investment banker. SEARS HOLDINGS: School District 300 Objects to Disclosure Statement ------------------------------------------------------------------- Community Unit School District 300 filed a limited objection and reservation of rights to the Disclosure Statement for Amended Joint Chapter 11 Plan of Sears Holdings Corporation and its Affiliated Debtors. The School District believes that the Debtors have failed to maintain certain statutorily required levels of full-time equivalent jobs at their corporate campus in Hoffman Estates, Illinois, in 2018 and 2017, and failed to do so for a number of prior years. The School District has noted that to the extent the Debtors improperly received real estate tax rebates, those funds and proceeds of the same are to be restored under the Illinois EDA Act and arguably should be deemed held in a constructive trust for the benefit of the School District and other impacted taxing districts, or, alternatively, that the resulting improper tax rebates to the Debtors, together with all penalties, interests and costs, might be subject to being re-imposed on the real estate in question as liens arising under applicable Illinois state law. The School District points out that Section E. of Article V of the Amended Disclosure Statement dealing with the Liquidating Trust is identical, whether the cases are substantively or not, which is counterintuitive. The School District further points out that the Amended Disclosure Statement should describe how, in a non-substantive consolidation scenario the selected liquidating trustee and liquidating trust board will transparently resolve conflicts arising from intercompany claims, loans, rights and causes of action in a scenario where the trustee and board will, necessarily, be acting as a fiduciary for both parties involved in the intercompany transaction. The School District asserts that the Disclosure Statement should also among other matters, (i) describe the methodology (and the logic for the same) by which: (a) administrative expenses and claims will be allocated among the various estates; (b) fees and expenses related to Avoidance and Litigation Actions will be allocated among the various estates; and (c) any excess funds in the Wind Down and/or Carve-Out Accounts will be allocated among the various estates. The School District objects to any release or disposition of claims or property that could impair the implementation of the School District’s rights as may be determined in litigation, against real estate or proceeds to which the School District may have a claim or lien, or the imposition of other remedies. Attorneys for Community Unit School District 300: Allen G. Kadish, Esq. Lance A. Schildkraut, Esq. ARCHER & GREINER, P.C. 630 Third Avenue New York, NY 10017 Tel: (212) 682-4940 Email: akadish@archerlaw.com lschildkraut@archerlaw.com -- and -- Kenneth M. Florey, Esq. M. Neal Smith, Esq. ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD. 631 E. Boughton Road, Suite 200 Bolingbrook, IL 60440 Tel: (630) 929-3639 Email: kflorey@robbins-schwartz.com nsmith@robbins-schwartz.com -- and -- Matthew T. Gensburg, Esq. GENSBURG CALANDRIELLO & KANTER, P.C. 200 West Adams Street, Suite 2425 Chicago, IL 60606 Tel: (312) 263-2200 Email: mgensburg@gcklegal.com About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc., as investment banker. SIRIUS XM: Moody's Rates Proposed $1BB Sr. Unsecured Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Sirius XM Radio Inc.'s proposed $1 billion senior unsecured notes offering. Sirius XM's Ba3 Corporate Family Rating and stable outlook remain unchanged. Following is a summary of the rating actions: Assignments: Issuer: Sirius XM Radio Inc. $1.0 Billion Gtd Senior Unsecured Global Notes due 2029, Assigned Ba3 (LGD4) Unchanged: Issuer: Sirius XM Radio Inc. Senior Unsecured Global Notes due 2022, Ba3 (LGD4) Senior Unsecured Global Notes due 2023, Ba3 (LGD4) Senior Unsecured Global Notes due 2027, Ba3 (LGD4) Gtd Senior Unsecured Global Notes due 2024, Ba3 (LGD4) Gtd Senior Unsecured Global Notes due 2025, Ba3 (LGD4) Gtd Senior Unsecured Global Notes due 2026, Ba3 (LGD4) RATINGS RATIONALE The transaction is leverage and credit neutral since Moody's expects Sirius XM to use the offering proceeds to repay a like amount of outstanding borrowings on its revolver. The company's Ba3 CFR is buttressed by a moderate leverage profile (3.5x total debt to EBITDA, Moody's adjusted as of 31 March 2019), high EBITDA margins in the 30%-35% area (Moody's adjusted, pro forma for the Pandora acquisition) and free cash flow conversion of roughly 60%. The rating is further supported by Sirius XM's sizable self-pay satellite radio subscriber base, unique mix of content and curated channels, Moody's forecast for domestic new light vehicle volume of 16.8 million deliveries in 2019 (-2.9% yoy decline) and 16.7 million in 2020, and increasing penetration (currently around 44%) in the used car segment. The Ba3 rating also considers the revenue diversification and scale benefits from the Pandora acquisition, which helps Sirius XM extend its presence to the in-home and mobile entertainment markets in North America, and enables the creation of new curated content. As the leading ad-supported digital audio platform in the US, Pandora gives Sirius XM more ways to monetize the trial user funnel through additional service offerings to facilitate higher conversions and up-selling of listeners to paid subscribers. The Ba3 rating is constrained by Sirius XM's historically aggressive financial policy, which includes funding sizable share repurchases with debt. Moody's expects Sirius XM will continue to use debt and free cash flow to fund buybacks or engage in M&A activity. Despite higher debt levels, financial leverage ratios along with other credit metrics have remained well-positioned at the Ba3 level. Further weighing on the rating is the company's majority ownership by Liberty Media Corporation, which poses event risk given Liberty Media's track record for M&A and shareholder-friendly transactions. The rating also reflects the high monthly churn rate (roughly 1.7%-1.9%) and slowing subscriber and revenue growth in Sirius XM's core vehicle market at a time when rising capex levels (for satellite replacements) and quarterly dividends will increasingly consume free cash flow generation. Outlook The stable outlook reflects its view that Sirius XM will increase its self-pay subscriber base due to new vehicle sales in excess of 16.5 million units and growing availability of satellite radio in used cars both of which will contribute to higher revenue and EBITDA. The outlook incorporates its expectation that Sirius XM will maintain very good liquidity, even during periods of satellite construction, potentially increase leverage above current levels consistent with management's 4x as-reported leverage target, and share repurchases and/or dividends will likely be funded from revolver advances, new debt issuance and/or operating cash flow. Factors That Could Lead to an Upgrade - Management demonstrates a commitment to balance debt holder returns with those of its shareholders, which would include sizing share repurchases within annual free cash flow generation and limiting debt-funded buybacks. - Assurances that Sirius XM will operate in a financially prudent manner consistent with a higher rating. - A track record for sustaining total debt to EBITDA below 3.5x (including Moody's standard adjustments) and free cash flow to debt above 12% (Moody's adjusted) even during periods of satellite construction. Factors That Could Lead to a Downgrade - Moody's expects total debt to EBITDA will be sustained above 4.5x (including Moody's standard adjustments). - Free cash flow generation falls below targeted levels as a result of subscriber losses due to a potentially weak economy or customer migration to competing media services or due to functional problems with satellite operations. - A weakening of liquidity below expected levels as a result of share repurchases, dividends, capital spending, or more acquisitions. The principal methodology used in these ratings was Media Industry published in June 2017. Headquartered in New York, NY, Sirius XM Radio Inc., is a wholly-owned operating subsidiary of Sirius XM Holdings Inc., which provides satellite radio services in the United States and Canada through a fleet of five owned satellites (SIRIUS FM-5, SIRIUS FM-6, XM-3, XM-4 and XM-5). The company creates and broadcasts commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and comprehensive Latin music, sports and talk programming. Sirius XM services are available in vehicles from every major automobile manufacturer in the US, and programming is also available online as well as through applications for smartphones and other internet connected devices. Sirius XM reported 34.2 million subscribers at the end of March 2019 . The company holds a 70% equity interest and 33% voting interest in Sirius XM Canada and owns 100% of Pandora Media, LLC, which has 66.0 million active users and 6.9 million subscribers. Sirius XM is publicly traded and a controlled company of Liberty Media Corporation, which owns approximately 68% of its common shares. Revenue totaled $6.14 billion for the twelve months ended 31 March 2019 ($6.3 billion with the inclusion of Pandora Q1 2019 revenue). SNAP LINE: June 25 Plan Confirmation Hearing -------------------------------------------- The Court conditionally approved the disclosure statement explaining the Chapter 11 Plan of Snap Line Services, Inc. June 25, 2019 is fixed as the date for the hearing on confirmation of the Plan of, and a hearing for that purpose will be held at 1:30 p.m. in Courtroom 1404, United States Courthouse, 75 Ted Turner Drive, S.W., Atlanta, Georgia. June 21, 2019 is fixed as the last day for holders of claims and interests to file written Ballots with acceptances or rejections of the Plan. June 21, 2019 is fixed as the last day for filing and serving written objections or briefs regarding confirmation of the Plan. About Snap Line Services Snap Line Services, Inc. specializes in providing credit services to dealers and retailers. Snap Line was incorporated in July, 2013 as a domestic profit corporation. Snap Line Services, Inc. filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 18-21223) on June 19, 2018, and is represented by Michael D. Robl, Esq., in Tucker, Georgia. Movant, Ted Ridlehuber, Trustee of VM Trust #1, filed a motion asking the Court to appoint a Chapter 11 trustee for the Debtor. SOUTHEASTERN METAL: Trustee Appoints 3 New Committee Members ------------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, on June 7 appointed Joseph T. Ryerson & Son Inc., D.B. Roberts Inc. and Metals USA Carbon Flat Rolled, Inc. as new members of the official committee of unsecured creditors in the Chapter 11 case of Southeastern Metal Products LLC. Meanwhile, Commercial Vehicle Group, Inc. resigned as committee member. As of June 7, the members of the committee are: (1) Phoenix Metal Company Attn: Frank Cook P.O. Box 805 Norcross, GA 30091 Phone: 678-250-7008 Fax: 770-246-8168 (2) Superior Productions LLC Attn: Mike McKeivier 2301 Fairwood Avenue Columbia, Ohio 43207 Phone: 614-444-2181 Fax: 614-444-4417 (3) Joseph T. Ryerson & Son, Inc. Attn: Kenny Wine 7701 Lindsey Road Little Rock, AR 72206 Phone: 501-490-3005 Fax: 501-490-3001 (4) D.B. Roberts Inc. Attn: James Lewis 56 Jonspin Road Wilmington, MA 01887 Phone: 978-988-3424 Fax: 978-658-9942 (5) Metals USA Carbon Flat Rolled, Inc. Attn: Brian Schmidt 1070 W. Liberty Street Wooster, OH 44691 Phone: 330-264-8416 x203 Fax: 330-264-8420 About Southeastern Metal Products Southeastern Metal Products LLC is a contract manufacturing company that specializes in fabrication and stampings for various industries including telecommunications, transportation, appliance and health and safety industries. Southeastern Metal Products LLC and its affiliates SEMP Texas, LLC and Hospital Acquisition LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10998) on May 6, 2019. At the time of the filing, Southeastern Metal disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. SEMP Texas had estimated assets of less than $1 million and liabilities of less than $500,000 while Hospital Acquisition had estimated assets of less than $50,000 and liabilities of less than $50,000. The Debtor hired Weir & Partners LLP as counsel; Finley Group as financial advisor; and Omni Management Group as claims and noticing agent. Andrew Vara, acting U.S. trustee for Region 3, on May 20, 2019, appointed an official committee of unsecured creditors. Lowenstein Sandler LLP is the committee's legal counsel. SOUTHERN GRAPHICS: Moody's Lowers CFR to Caa1, Outlook Stable ------------------------------------------------------------- Moody's Investors Service downgraded its ratings for Southern Graphics Inc., including the company's Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. The ratings for its senior secured first lien credit facilities were also downgraded (to B3 from B2) as well as the rating for its senior secured second lien credit facility (to Caa3 from Caa2). The outlook is stable. The downgrade of Southern Graphics' ratings reflects Moody's view that operating performance will remain challenged as a weaker pricing environment persists, resulting in debt/EBITDA remaining above 7x and EBITA/interest below 1.25x area over the next 12-18 months. It also acknowledges that Southern Graphics' free cash flow will remain constrained with free cash flow-to-debt of around 1% over the next twelve months. Downgrades: Issuer: Southern Graphics Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured First Lien Term Loan, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured First Lien Revolving Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured Second Lien Term Loan, Downgraded to Caa3 (LGD6) from Caa2 (LGD6) Outlook Actions: Issuer: Southern Graphics Inc. Outlook, Remains Stable RATINGS RATIONALE Southern Graphics' Caa1 CFR reflects the elevated risks associated with very high leverage and weak interest coverage in a challenging industry environment with softness in volumes and pricing pressures. Moody's expects modest continued organic revenue declines over the next 12-18 months. However, the impact to EBITDA will be partially offset as savings from cost reduction initiatives are realized, enabling Southern Graphics to maintain double-digit EBITDA margins, albeit at a lower level of EBITDA. Moody's expects free cash flow will be suppressed in 2019 due to further upfront cash spend for restructuring and strategic initiatives (at lower levels than 2018), purchase obligations, and deferred acquisition payments. Positively, the company maintains long-standing customer relationships and offers them the benefits associated with economies of scale. As customers continue to repackage their products into various shapes and sizes to garner consumer interest, the company maintains an established position to serve them. Moody's expects Southern Graphics will maintain adequate liquidity over the next twelve months. However, the adequacy of liquidity during this period is only marginal and pressures could readily result in a weakening profile. As of March 31, 2019, the company had $7 million of cash and $11.5 million drawn on its $75 million revolver due 2022. The first lien term loan amortizes at about $6 million per year. The revolver has a springing maximum first lien net leverage ratio of 6.75x when 35% of the facility is used. Moody's forecasts that without a reversal in operating performance, the cushion to meet this covenant will erode over the next twelve to eighteen months and anticipates the company's ability to draw on the revolver could become constrained in mid-2020 due to this financial covenant. Southern Graphics' $75 million first lien revolver due 2022 and $568 million first lien term loan due 2022 are rated B3, one notch above the CFR. The notching reflects the priority liens on the collateral relative to the $105 million second lien term loan due 2023 which is rated Caa3, two notches below the CFR. The stable outlook reflects Moody's expectation that debt/EBITDA will remain high at over 7x during the next 12-18 months as challenging industry conditions persist resulting in modest organic revenue declines but that lack of debt maturities during this period provides some flexibility. Factors that could lead to a downgrade include deterioration of liquidity; increased risk of debt restructuring; or expectation of lower recovery prospects for lenders. Factors that could lead to an upgrade include sustained profitable, organic revenue growth while maintaining adequate liquidity; debt/EBITDA below 6.5x; EBITA/interest sustained over 1.5x, and free cash flow to debt sustained above 2%. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Southern Graphics, headquartered in Louisville, Kentucky, is a privately-held company that provides design-to-print graphics services to branded consumer product goods companies and retailers. The company is owned by Onex Partners. Revenue for the twelve months ended March 31, 2019 was $555 million. SPECTRUM BRANDS: Fitch Affirms BB LongTerm IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating of Spectrum Brands, Inc. at 'BB'. The Rating Outlook is Stable. Spectrum's ratings reflect the company's diversified portfolio across products and categories, strong brand portfolio, renewed financial discipline as evidenced by its public commitment to maintain net leverage (net debt/EBITDA) at or below 3.5x over the long term, expectations for stable to low-single-digit organic revenue growth, solid profitability with an EBITDA margin of approximately 15% pro forma for the divestitures of the Global Batteries and Lightning (GBL) and Global Auto Care (GAC) divisions, and historically consistent FCF. These positive factors are offset by strong competition, profit margin pressures across three of its four core segments, the company's acquisitive nature historically and potentially greater overall business cyclicality due to the increased contribution of Hardware and Home Improvement (HHI) to total EBITDA post divestitures. KEY RATING DRIVERS Profitability Pressures: Spectrum's adjusted EBITDA margin pro forma for divestitures declined nearly 128 basis points (bps) year-over-year to 14.9% in the latest 12 months (LTM) ended March 31, 2019 compared with the corresponding year-ago period, with three of Spectrum's segments, consisting of Home & Garden (H&G: -366 bps.), Global Pet Supplies (Pet: -268 bps.) and Home and Personal Care (HPC: -254 bps), each declining by more 250 basis points and collectively representing nearly 64% of total pro forma revenue. The margin declines primarily reflect lower sales volumes partially attributable to one-time factors in PET (product recall) and H&G (unfavorable weather), unfavorable product mix, higher material input, manufacturing and distribution costs, and increased marketing and advertising spend, particularly in the HPC segment in 2019. Fitch forecasts EBITDA margin of 15% in fiscal 2019 ending Sept. 30 compared with a pro forma margin of 16.6% in fiscal 2018. Divestitures Lessens Diversification: Spectrum's product and geographic diversity lessened subsequent to the sale of its GBL division for $2 billion and GAC division for $1.25 billion to Energizer on Jan. 2, 2018 and Jan. 28, 2019, respectively. Spectrum initially intended to sell its appliances business, but bids were lower than anticipated due to the division's deteriorating financial performance. Spectrum subsequently sold the GAC division after receiving a favorable, unsolicited bid from Energizer. The company's North American business increased to 74% of total pro forma revenue compared with 67% in 2017. The GBL division consisted of consumer batteries products and battery-powered portable lighting products under the Rayovac and VARTA brand, and other licensed brands. GBL generated revenue of $866 million, 17% of Spectrum's total revenue, and adjusted EBITDA of approximately $170 million (19.6% margin) in fiscal 2017 ended Sept. 30. The GAC division consisted of appearance, A/C recharge and performance products for automobiles primarily sold under the Armor All and STP brand names. GAC generated revenue of $447 million, 8.9% of Spectrum's total revenue, and adjusted EBITDA of approximately $148 million (33.2% margin) in fiscal 2017. Spectrum previously announced on Jan. 3, 2018 that it was exploring strategic alternatives for both its global batteries and appliances business (GBA), which generated $2 billion in revenue (40% of total) and $317 million in EBITDA (approximately one-third of total) in fiscal 2017. Revenue in the GBA division declined mid-single digits in fiscal 2015 and 2016, trailing the overall company's modestly positive organic growth. Batteries in particular have been in secular decline given increased reliance on chargeable devices and diminishing use of battery powered devices. Divestitures Proceeds Maintain Financial Structure: The divestitures reduced EBITDA by over $300 million or 35% from fiscal 2017 level of approximately $970 million. Post divestitures, gross debt/EBITDA is expected to return to approximately 4.0x by year-end fiscal 2019, similar to the 4x in fiscal 2017 given Spectrum repaid $2.4 billion of debt funded with nearly $3 billion of cash proceeds from asset sales. In addition to maintaining gross leverage at 4.0x, Spectrum reduced the amount of secured debt in its debt structure to $295 million, or 12.8% of total debt, as of March 31, 2019 from nearly $1.5 billion, or 33.9%, of total debt as of Sept. 30, 2018 following the prepayment in full of nearly $1.3 billion of senior secured term loans. The remaining $295 million of secured debt consists of $126 million of revolver borrowings and $169 million of capital leases. Renewed Financial Discipline: Spectrum publicly committed to a net leverage target (net debt/EBITDA) of 3.5x on a long-term basis and has made considerable progress toward achieving this objective through debt reduction funded by asset sales. Fitch believes the company will likely meet its net leverage target by year-end fiscal 2019. The company is evaluating small tuck-in acquisitions, but these are not expected to materially affect the company's credit metrics. Greater HHI Contribution Increases Cyclicality: Spectrum's financial performance will be more cyclical than historically given the greater contribution of HHI to the company's overall financial results due to divestitures of the GBL and GAC divisions, profitability pressures in the HPC and PET divisions and the vulnerability of the HHI business to shifts in housing demand. HHI represented 36.2% and 43.7% of pro forma revenue and adjusted EBITDA, respectively, in fiscal 2018 compared with 25.5% and 26.6%, respectively, as reported in fiscal 2017. HHI is vulnerable to the U.S. housing market because 25% - 30% of its revenue is derived from new housing starts. The remainder of the business is in the replacement area, which is less affected by swings in the housing market. The combination of rising mortgage rates and higher home prices in late fall of 2018 contributed to a slowdown in the U.S. housing market and softer demand for HHI products in the fiscal first quarter ended Dec. 31. The second quarter saw moderate improvement and Fitch expects new housing starts to regain momentum in the second half of the fiscal year due to declining mortgage rates and strong consumer confidence. Renewed Tariff Risk: Deteriorating U.S. and China trade negotiations reintroduced significant uncertainty regarding tariffs, which would adversely affect demand for a broad range of consumer products, including those from Spectrum, given the significant volume of consumer products manufactured in China that would be subject to a 25% U.S. tariff. President Trump increased the tariff rate on $200 billion worth of Chinese imports (list three) to 25% from 10% and started legal proceedings necessary to add 25% tariffs to the remaining $300 billion of Chinese products sold in the U.S. The company intends to pass on the increased tariff costs to the end consumer, but this may adversely affect demand. Corporate Governance Overhang Eliminated: On July 13, 2018, the company completed its planned merger with HRG, the company's largest shareholder with a 60% controlling stake. Prior to the Spectrum Merger, Spectrum Brands Holdings, Inc. (SBH) was a holding company doing business as HRG Group, Inc. (HRG) and conducting its operations principally through its majority owned subsidiaries. Prior to the merger, HRG had been dependent on Spectrum for cash flow, particularly as the holding company had divested the majority of its other portfolio assets. The merger removed outstanding concerns regarding HRG directing cash flow deployment or strategic decision-making for its benefit rather than other Spectrum stakeholders. DERIVATION SUMMARY Spectrum's ratings reflect the company's diversified portfolio across products and categories, strong brand portfolio, renewed financial discipline as evidenced by its public commitment to maintain net leverage (net debt/EBITDA) at or below 3.5x over the long-term, expectations for stable to low-single-digit organic revenue growth, solid profitability with EBITDA margin of approximately 15% pro forma for the divestitures of the GBL and GAC divisions and historically consistent FCF. These positive factors are offset by strong competition, profit margin pressures across three of its four core segments, the company's acquisitive nature historically and potentially greater overall business cyclicality due to the increased contribution of HHI to total EBITDA pro forma for divestitures. Spectrum is similarly rated to ACCO Brands Corporation (BB/Stable) and Levi Strauss & Co. (BB/Positive). ACCO's IDR of 'BB' reflects the company's consistent FCF and reasonable gross leverage around 3x given ongoing debt repayment post recent acquisitions. The ratings are constrained by secular challenges in the office products industry and channel shifts within the company's customer mix, as evidenced by recent results, along with the risk of further debt-financed acquisitions. Levi Strauss & Co.'s 'BB' rating reflects its position as one of the world's largest branded apparel manufacturers with broad channel and geographic exposure, while also considering the company's somewhat narrow focus on the Levi brand (86% of sales) and in bottoms (72% of sales). EBITDA has stabilized as a result of its cost-reduction program, and Fitch expects EBITDA growth in the low single digits beginning in 2019 from $610 million in fiscal 2017. Adjusted leverage is anticipated to remain in the low 3.0x range over the next two or three years. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue growth pro forma for divestitures is forecasted to be flat in fiscal 2019 ending Sept. 30 and grow in the low single-digit range annually thereafter through fiscal 2022. - Pro forma EBITDA is forecast to decline approximately 9.3% in fiscal 2019 to $572 million due to profitability pressures and increased investments. Fitch expects EBITDA margin will start improving in fiscal 2020 due to the realization of operating efficiencies and revenue growth driven by increased investments in marketing and new product innovation. - FCF is forecast to be negative $368 million in fiscal 2019, primarily reflecting the timing of business divestitures and adverse effect on typically working capital inflows, $261.6 million of cash usage from discontinued operations, $200 million payment related to the prior sale of the battery business to Energizer and $43.5 million of cash restructuring. FCF is expected to be approximately $250 million annually thereafter through fiscal 2022. On May 29, 2019, Energizer sold the Varta consumer battery business, including manufacturing and distribution facilities in Germany, which was a prerequisite to obtaining regulatory approval for the GBL transaction. Spectrum will pay $200 million to Energizer in connection with the sale of the Varta business since the company agreed to share in any decline in value on the divestiture of the Varta Business below the targeted sale price, up to a maximum of $200 million. Fitch assumes this cash payment occurs in Spectrum's fiscal fourth quarter ended Sept. 30, 2019 and is funded with existing cash on hand. However, the cash payment may occur in fiscal 2020 and a portion may be funded with incremental revolver borrowings. - Near-term capital allocation policy will likely emphasis share repurchases given the pressured stock price, but may include tuck-in acquisitions in the intermediate term. In the event of a debt-financed acquisition, Fitch expects the company to focus on debt reduction in lieu of share repurchases in order to return net leverage (net debt/ EBITDA) to approximately 3.5x within 24-36 months of closing the acquisition. - Gross leverage (total debt/ EBITDA) is forecast to remain relatively flat at 4.0x through 2022. - The base case excludes any effects associated with increased U.S. tariffs on China imports. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - A positive rating action could result if Spectrum commits to sustain gross leverage (total debt/ EBITDA) and gross adjusted leverage (total adjusted debt/EBITDA) below 4.0x and 4.3x, respectively. Developments That May, Individually or Collectively, Lead to Negative Rating Action - A negative rating action could result in the event of a material debt-financed transaction or a low-single digit sales decline, resulting in EBITDA erosion and sustained leverage above 4.5x. LIQUIDITY AND DEBT STRUCTURE Ample Liquidity: Liquidity was $820.4 million as of March 31, 2019, consisting of $168.0 million of cash and equivalents and $652.4 million of availability on an $800 million RCF due March 2022. RCF borrowing availability is net of $126 million of outstanding borrowings, $20 million of LOC, and $1.5 million allocated to a foreign subsidiary. Debt Structure: As of March 31, 2019, the debt capital structure primarily consisted of an $800 million secured RCF due March 2022 with $126 million of outstanding borrowings, approximately $1.5 billion of senior unsecured USD notes, $477 million of senior unsecured EUR notes and $169.4 million of capital leases. Spectrum has minimal near-term maturities, with its earliest maturities consisting of the RCF in March 2022, $285 million of notes due November 2022 and $250 million of notes due December 2024. In the fiscal second quarter ended March 31, 2019, Spectrum utilized a significant portion of the divestiture proceeds to redeem outstanding debt. The company fully repaid its $1.23 billion U.S. term loan due 2022 and $890 million of 7.75% senior unsecured notes due 2022 and redeemed $285 million, or 50%, of its 6.625% senior unsecured notes due 2022. Recovery Considerations Fitch has assigned Recovery Ratings (RRs) to the various debt tranches in accordance with Fitch criteria, which allows for the assignment of RRs for issuers with IDRs in the 'BB' category. Given the distance to default, RRs in the 'BB' category are not computed by bespoke analysis. Instead, they serve as a label to reflect an estimate of the risk of these instruments relative to other instruments in the entity's capital structure. Fitch assigned the first-lien secured debt an 'RR1', notched up two from the IDR and indicating outstanding recovery prospects given default. Unsecured debt will typically achieve average recovery, and thus was assigned an 'RR4'. SUMMARY OF FINANCIAL ADJUSTMENTS Financial statement adjustments that depart materially from those contained in the published financial statements of the relevant rated entity or obligor are disclosed below: -- Historical and projected EBITDA is adjusted to exclude non-cash stock-based compensation, restructuring and integration charges and other non-recurring items. In 2018, Fitch's derivation of EBITDA pro forma for divestitures excludes non-cash stock-based compensation of $11.9 million, restructuring and integration expenses totaling $90.9 million, pet safety recall expenses of $18.9 million and intangible asset impairment of $20.3 million. SPECTRUM HOLDINGS: S&P Downgrades ICR to 'B-' on Weak Performance ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Spectrum Holdings III Corp. to 'B-' from 'B', its issue-level rating on the company's first-lien credit facility to 'B-' from 'B', and its issue-level rating on the company's second-lien debt to 'CCC' from 'CCC+'. The downgrade reflects S&P's expectation for lower cash flows and higher leverage in 2019 and 2020 following Spectrum's underperformance in the first quarter of 2019 and its weaker-than-expected credit measures for 2018. The rating agency now expects the company's leverage to be approximately 10x in 2019 before improving to about 9x in 2020, which is materially lower than its previous forecast for leverage in the 7.5x-8.0x range in 2019-2020. The stable outlook on Spectrum reflects S&P's expectation that its organic revenue will increase by the low-to-mid single digit percent area in 2020, supplemented by acquisitions, as the company expands its margins, which will gradually improve its cash flows and leverage. "We could lower our rating on Spectrum if the company faces persistent free cash flow deficits, which may suggest that its capital structure is unsustainable. This scenario would entail little to no organic growth and no margin expansion or significant integration challenges related to future acquisitions," S&P said. "We could raise our rating on Spectrum if we believe it will generate a free operating cash flow-to-debt ratio of more than 2.5% on a sustained basis, which we believe would coincide with a reduction in its adjusted debt leverage to the mid-7x area," S&P said. STERICYCLE INC: Fitch Assigns BB IDR & Rates $550M Notes BB+ ------------------------------------------------------------ Fitch Ratings has assigned Stericycle, Inc. a first-time Long-Term Issuer Default Rating of 'BB'. Fitch has also assigned SRCL's proposed $550 million in senior unsecured notes a rating of 'BB+'/'RR3'. The Rating Outlook is Stable. The new notes, along with incremental term loan and revolver borrowings, will be used to replace SRCL's $1.1 billion of existing senior unsecured notes. KEY RATING DRIVERS Pressured Profitability Should Improve: The progression of SRCL's profitability improvement is key to its credit profile and heavily dependent on more stable small quantity pricing conditions and successful implementation of its restructuring initiative. Fitch expects EBITDA margins to reach a bottom in 2019 at slightly below 20% before improving beginning in 2020. FCF margins have recently been pressured by restructuring spending, legal costs and weaker operating performance, but Fitch expects margins will improve in the next few years. Risks include potential cost overruns, additional legal charges or a persistently challenging pricing environment that could moderate or delay the improvement. Leverage Peaks in 2019: Fitch expects adjusted debt/EBITDAR to remain elevated and FCF/adjusted debt to remain low in 2019, approaching 5.0x and below 5%, respectively, notably weaker than investment-grade waste management firms. However, the company has committed to meaningful deleveraging in the next couple years, with capital allocation targeted primarily toward debt repayment. Fitch also expects proceeds from divestitures will be used for deleveraging, which could incrementally improve the credit profile. Leverage has been elevated following the acquisition of Shred-It in 2015, pricing pressure in the small quantity end markets, and large legal settlements that the company paid in 2018. New Leadership Team: Much of SRCL's management team and Board of Directors have changed over the last two years. The company appointed ex-UPS executive Cindy Miller as CEO (effective May 2019) and has appointed a new CFO (effective June 2019). SRCL also made changes in other key leadership positions. Miller has experience leading a $3 billion organization for UPS, though she has a relatively short tenure at SRCL, having joined as the President and COO in October 2018. The company initiated a large restructuring program in 2017, which is unchanged under the new management team, though strategic changes may occur as the new team gains its footing. Established Market Position: SRCL holds the top or a leading market position in many of its end markets, including medical waste, paper shredding and recall services. Its competitive position is supported by its broad network of complementary services, regulatory know-how and established reputation. SRCL's large scale also supports its position as a regular acquirer and industry consolidator. Despite its leading position, competition is often local, where small competitors may compete on price. These concerns are highlighted by the recent pressure in the small quantity customer segment. Core Business Cyclically Stable: SRCL has historically benefitted from a high degree of demand stability in its core operations and should continue to do so, provided the small quantity market conditions stabilize as expected in 2019. The company benefits from steady demand dynamics associated with medical waste production, which is broadly regulated. However, it is also exposed to more cyclical recycled paper prices, the event-driven nature of its recall business and the cyclical manufacturing and industrial waste industries. It has announced intentions to divest of the recall businesses, which would further improve the stability of the company. Financial Flexibility: SRCL's flexibility was temporarily weak in 2018, weighed by a large legal settlement payment of $295 million and early investment in the restructuring program. Restructuring investment is expected to continue to add some pressure through the intermediate term but at a declining rate, and the absence of large legal charges should provide adequate cash flow to begin deleveraging. Ratings Notching: The 'BB+'/'RR3' rating on SRCL's senior unsecured notes reflects the absence of secured debt and good recovery prospects in a distressed scenario. The one-notch uplift from the company's IDR reflects Fitch's notching criteria for issuers with IDRs in the 'BB' category. DERIVATION SUMMARY SRCL's ratings consider the company's top market positions in most of its core and non-core markets, and expectations that profitability and leverage will improve after 2019. These considerations are weighed against near- to intermediate-term execution risks that could challenge improvement in these metrics. The risks primarily surround the restructuring initiatives and improvements in the small quantity portion of its core regulated waste business. While SRCL does not have substantial direct peers, Fitch compares the company to the large municipal solid waste firms Waste Management (WM; BBB+), Waste Connections (WCN; BBB+) and Republic Services (RSG; BBB). Compared to these firms, SRCL carries notably higher leverage with adjusted debt/EBITDAR projected to be slightly below 5.0x in 2019 versus approximately 3.0x for RSG and mid-2.0x for WCN and WM (pro forma for the Advanced Disposal acquisition). Fitch estimates FCF margins will improve following large one-time payments in 2018 and could moderately surpass WM's and RSG's in the mid-single digits though will likely remain below WCN's margins, which are near the mid-teens. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Revenue growth declines by a low-to mid-single digit rate in the near term reflecting declines in small quantity customers, lower recall events and divestitures. Organic growth improves in the intermediate term; -- EBITDA margin falls to about 20% in 2019 before business transformation and organic growth drives improvement in the following years; -- Substantially all FCF is used for debt repayment in the next two years; -- No unfavorable legal developments; -- Acquisition activity is paused in the near term but resumes as the business improves; -- No substantial divestitures of non-core assets. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Strong business transformation performance, deleveraging divestitures and/or a dedicated financial policy leads to maintaining adj. debt/EBITDAR below 4.25x; -- FCF margin sustainably above the mid-single digits. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Beyond the near term, continued margin pressures or a less conservative financial policy leads to maintaining adj. debt/ EBITDAR above 5.0x; -- EBITDA and/or FCF margin sustained below the mid-teens and below the mid-single digits, respectively; -- Substantial strategic changes under the new leadership team lead to a deterioration in its credit profile. LIQUIDITY Liquidity: As of March 31, 2019, Stericycle's sources of liquidity consisted of: (i) $48 million of cash on its balance sheet, (ii) $516 million of availability under its $1.2 billion revolving credit facility, and (iii) strong FCF generation that has ranged from $330 million to $425 million annually over the past three years (normalized for a $295 million class action settlement payment made during 2018). Fitch estimates FCF will be negatively impacted again in 2019 by the company's ERP implementation but could still be in the $100 million to $200 million range. Debt Structure: The company is in the process of refinancing its debt structure, replacing its private placement notes with new publicly offered senior unsecured notes and incremental borrowings under its term loan and revolving facilities. The refinancing is expected to be effectively leverage neutral. The note refinancing is expected to extend SRCL's maturity schedule whereas it previously had all of its $1.1 billion of notes maturing over the next five years. FULL LIST OF RATING ACTIONS Fitch has assigned the following first-time ratings: Stericycle, Inc. -- Long-term IDR 'BB'; -- Proposed senior unsecured notes 'BB+'/'RR3'; The Rating Outlook is Stable. TGP HOLDINGS III: Moody's Alters Outlook on B3 CFR to Negative -------------------------------------------------------------- Moody's Investors Service revised TGP Holdings III LLC's (Traeger) outlook to negative from stable. The B3 Corporate Family Rating, B3-PD Probability of Default Rating and first and second lien ratings were affirmed. These actions follow Traeger's weak operating performance in the second half of 2018, while also acknowledging its Q1 improvements. "Traeger's credit metrics were materially worse than Moody's previous expectations, with debt/EBITDA exceeding 8 times," said Kevin Cassidy, a Senior Credit Officer at Moody's Investors Service. Traeger's weak H2 2018 performance was primarily caused by three factors: (1) revenue deceleration, particularly in Q4 2018, that preceded a new product launch and cutover in Q1 2019, (2) gross margin erosion due to macro headwinds, and isolated promotional activity, and (3) planned investments in product innovation and growth infrastructure. The negative outlook reflects the uncertainty of Traeger's ability to maintain recent improvements in its operating performance, and the risk of a potential increase in tariffs. The negative outlook also reflects the company's adequate liquidity position with moderate amounts available under the revolving credit facility that the company may need if were to encounter further operational difficulties. The affirmation of the ratings reflects the recovery in performance in early 2019 on the back of newer product launches that resulted in improved sales. The affirmation also reflects Moody's view that the company maintains strong brand equity with its customers and retail partners. Issuer: TGP Holdings III LLC Ratings affirmed: Corporate Family Rating at B3; Probability of Default Rating at B3-PD; Senior Secured Revolving Credit Facility expiring 2022 at B2 (LGD 3); Senior Secured 1st Lien Term Loan due 2024 at B2 (LGD 3); Senior Secured Delayed Draw Term Loan due 2024 at B2 (LGD 3); Senior Secured 2nd Lien Term Loan due 2025 at Caa2 (to LGD 5 from LGD 6) Outlook actions: Changed to Negative from Stable RATINGS RATIONALE Traeger's B3 Corporate Family Rating reflects the company's high leverage at over 8 times debt/EBITDA, modest scale and limited product and geographic diversification. The rating also reflects the discretionary nature of the more expensive grills TGP sells, the company's limited operating history and risks associated with private equity ownership. Supporting the rating are TGP's strong operating margins, adequate liquidity and leading share within the niche wood pellet grilling industry. Ratings could be upgraded if the company can profitably grow its scale, improve its product and geographic diversification, and sustain debt to EBITDA below 5.0 times. Ratings could be downgraded if the company's operating performance or liquidity deteriorates for any reason, or if debt/EBITDA does not steadily improve in the next 12 months. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Headquartered in Salt Lake City, Utah, Traeger Pellet Grills, LLC is a designer and marketer of wood pellet grills and grilling accessories primarily to consumers in the U.S. market. The company is principally owned and controlled by private equity firm AEA Investors. TMK HAWK: Moody's Lowers CFR to Caa1, Outlook Negative ------------------------------------------------------ Moody's Investors Service downgraded TMK Hawk Parent, Corp.'s Corporate Family Rating and Probability of Default Rating to Caa1 (from B3) and Caa1-PD (from B3-PD), respectively. In addition, the company's senior secured first lien credit facilities were downgraded to Caa1 (from B3) and its senior secured second lien credit facility was downgraded to Caa3 (from Caa2). The outlook remains negative. "The downgrade of TriMark's ratings to Caa1 is largely the result of an unsustainable capital structure with excessive leverage, limited interest coverage, and negative free cash flow generation. The company's debt-to-EBITDA is in excess of ten times on a Moody's adjusted basis, while its interest coverage is less than one time EBITA-to-interest" said Moody's Vice President and lead analyst for the company, Brian Silver. "TriMark's profit margins have contracted, in part from a greater proportion of business garnered from lower margin chain customers, but also from continued investment in its strategic initiatives in an effort to enhance its margins, which has yet to prove successful. The company's first lien term loan matures in 2024, so the company has some time to turn things around, but Moody's needs to see a material improvement in credit metrics and associated cash flow generation prior to stabilization of the outlook." The following ratings for TMK Hawk Parent, Corp. have been downgraded: Downgrades: Issuer: TMK Hawk Parent, Corp. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured 1st Lien Delayed Draw Term Loan, Downgraded to Caa1 (LGD4) from B3 (LGD3) Senior Secured 1st Lien Term Loan, Downgraded to Caa1 (LGD4) from B3 (LGD3) Senior Secured 2nd Lien Term Loan, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: TMK Hawk Parent, Corp. Outlook, Remains Negative RATINGS RATIONALE TriMark's Caa1 CFR is constrained by its high financial leverage and weak interest coverage of roughly 12 times debt-to-EBITDA and less than 1 time EBITA-to-interest for the twelve months ended March 29, 2019 (all ratios are Moody's adjusted and exclude extraordinary add-backs). The company has also experienced margin deterioration from both internal investment and a sales mix-shift toward lower margin chain customers. The company has also generated negative free cash flow over the last year and Moody's expects the company to generate limited if any free cash flow over the next 12-18 months. TriMark has historically had a largely acquisition based growth strategy, but its acquisition appetite has been tempered of late as it focuses on its strategic initiatives in an effort to improve its profit margins. TriMark also had revenue concentration by end market, customer and state. However, TriMark's credit profile benefits from its relatively steady and recurring revenue stream from equipment replacement and supply replenishment and low capital expenditure requirements. In addition, the company's increasing and healthy backlog bodes well for topline growth going forward. The company also has adequate liquidity supported by access to its recently upsized $250 million ABL and no near term debt maturities, with the closest being the ABL in April 2024 followed by its first lien term loan in August 2024. The negative outlook reflects Moody's view that TriMark's profitability will remain pressured over the next 12-18 months, and Moody's believes it will be difficult for the company to significantly improve its leverage and coverage from current levels. The ratings could be upgraded if the debt-to-EBITDA is sustained below 6.5 times, EBITA-to-interest is sustained above 1.5 times, and the company has at least an adequate liquidity profile. Alternatively, the ratings could be downgraded if the company is unable to strengthen debt-to-EBITDA to under 9 times over the next 24 months, or there is a deterioration in liquidity for any reason, highlighted by increasing revolver reliance. The principal methodology used in these ratings was Distribution & Supply Chain Services published in June 2018. TMK Hawk Parent, Corp. is a distributor of foodservice equipment and supplies in North America, providing all non-food products used by restaurants and other foodservice operators. TMK is majority owned by Centerbridge Partners, L.P. The company is private and does not publicly disclose its financials. The company generated approximately $2 billion of revenue for the twelve months ended March 29, 2019. UNITED CONSTRUCTION: June 18 Hearing on Disclosure Statement ------------------------------------------------------------ The hearing on the approval of the Disclosure Statement, confirmation of the Plan, and fee applications of United Construction Engineering, Inc., will be held on June 18, 2019 at 10:30 a.m. Deadline for Objections to Confirmation: June 13, 2018 Deadline for Objections to Approval of the Disclosure Statement: June 13, 2018 About United Construction Engineering United Construction Engineering, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 18-24015) on Nov. 9, 2018, estimating less than $1 million in assets and liabilities. The Law Offices of Richard R. Robles, P.A., led by senior attorney Nicholas G. Rossoletti, serves as the Debtor's counsel. UNITI GROUP: Stockholders Elect Five Directors ---------------------------------------------- At the Annual Meeting of Stockholders of Uniti Group Inc. held virtually on May 16, 2019, stockholders of the Company elected Jennifer S. Banner, Scott G. Bruce, Francis X. ("Skip") Frantz, Kenneth A. Gunderman, and David L. Solomon to the Company's Board of Directors. The stockholders approved an advisory non-binding resolution approving the compensation of the Company's named executive officers. The stockholders also ratified the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accountant for 2019. About Uniti Group Little Rock, Arkansas-based Uniti -- http://www.uniti.com-- is an internally managed real estate investment trust engaged in the acquisition and construction of mission critical communications infrastructure, and is a provider of wireless infrastructure solutions for the communications industry. The Company is principally focused on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. As of March 31, 2019, Uniti owns 5.6 million fiber strand miles, approximately 500 wireless towers, and other communications real estate throughout the United States. Uniti reported net income attributable to common shareholders of $7.98 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common shareholders of $16.55 million for the year ended Dec. 31, 2017. As of March 31, 2019, Uniti had $4.69 billion in total assets, $6.16 billion in total liabilities, $87.25 million in convertible preferred stock, and a total shareholders' deficit of $1.55 billion. PricewaterhouseCoopers LLP, in Little Rock, Arkansas, 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, 2018, citing that the Company's most significant customer, Windstream Holdings, Inc., which accounts for approximately 68.2% of consolidated total revenues for the year ended Dec. 31, 2018, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, and uncertainties surrounding potential impacts to the Company resulting from Windstream Holdings, Inc.'s bankruptcy filing raise substantial doubt about the Company's ability to continue as a going concern. * * * As reported by the TCR on Feb. 25, 2019, S&P Global Ratings lowered its issuer credit rating on Unti Group's Corporate Family Rating to 'CCC-' from 'CCC+'. The lower rating follows the downgrade of Uniti's principal leasing tenant, Windstream Holdings Inc. Also in February 2019, Moody's Investors Service downgraded downgraded Uniti Group Inc.'s corporate family rating (CFR) to 'Caa2' from 'Caa1' following the downgrade of Windstream Services. VAST BROADBAND: Moody's Assigns B3 CFR, Outlook Stable ------------------------------------------------------ Moody's Investors Service has assigned a B3 corporate family rating and a B3-PD probability of default rating to Clarity Telecom, LLC, doing business as Vast Broadband. Concurrently, Moody's assigned a B2 rating to the company's senior secured first lien facilities, which consist of a $75 million revolver and a $237.5 million term loan. The financing will also include a $75 million senior secured second lien facility (unrated). The outlook is stable. Current Vast owner, Pamlico Capital, has agreed to sell 50% of Vast to Oak Hill Capital partners. The co-owners will contribute new common equity which, along with the proposed financing, will be used to refinance $158 million debt at Vast, fund the acquisition by Oak Hill and fund the acquisition of Texas based fiber-based communications solutions provider, NTS Communications ("NTS"). Assignments: Issuer: Clarity Telecom, LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Gtd Senior Secured 1st lien Term Loan, Assigned B2 (LGD3) Gtd Senior Secured 1st lien Revolving Credit Facility, Assigned B2 (LGD3) Outlook Actions: Issuer: Clarity Telecom, LLC Outlook, Assigned Stable RATINGS RATIONALE The B3 CFR reflects (1) the small scale of the company relative to other cable operators, some of which have footprints that overlap with that of the company - pro-forma for the NTS acquisition, Vast's 2019 revenue is estimated around $128 million and EBITDA around $51.5 million; (2) the company's aggressive financial policy as evidenced by the high leverage (Moody's adjusted debt to EBITDA) of around 6x in 2019 pro-forma for the NTS acquisition and expected to remain well above 5.5x in the coming 18-24 months; (3) the high growth capex to be spent and execution risk inherent to the company's growth strategy which relies materially on building out the NTS network and refocusing that business towards residential subscribers; (4) the industry-endemic erosion of fixed-voice and video services subscribers which, while currently contained at low single digit, could accelerate with a generational shift in consumer behavior and preferences. Vast's B3 CFR also reflects (1) the high quality of both networks with a fully DOCSIS 3.1 updated network for Vast and a fully fiber to the premise network for NTS which limits maintenance capex needs and allows the company to remain attractive to new subscribers who value broadband speed; (2) high profitability of the company's products with pro-forma Moody's adjusted EBITDA margin around 40% in 2019; (3) the low churn both companies benefit from and the good broadband subscriber growth which more than offsets declines in video and voice subscribers. Vast provides high speed broadband, as well as video and voice services, to residential (67% of 2018 revenue) as well as business customers (27% of revenue). Through its fully DOCSIS 3.1 upgraded network, it is able to offer residential broadband speeds of up to 1 GB, which allows it to compete at the top of current speed offerings. The company reports more than 7,500 business customers to which it offers mostly internet and voice services. In the three years to December 2018, Vast increased high-speed data penetration to 38% from 33% and expects to be able to achieve penetration around 40% in the future. The fact it operates in Tier 2 and Tier 3 markets makes deeper penetration achievable, however, it also restricts the company from gaining any meaningful scale. In the past, NTS has been mostly focused on commercial and business customers as evidenced by its residential fiber penetration of only 19%. Vast has plans to build out the NTS network to increase the number of homes passed and replicate its success in residential data subscriber growth in the NTS footprint. To do so, the company is embarking on a multi-year build-out capex program. With payback on build-out projects around 18-24 months, should the build-out yield the planned subscriber growth, the financial impact will not be materially reflected in Vast's EBITDA until 2022. As such, Moody's expects the company's de-leveraging trajectory to remain modest until then. The acquisition of NTS should bring with it $3 million of cost synergies, mostly through headcount reduction which Moody's believes is achievable. Vast has an adequate liquidity profile which is supported by a decently sized revolver of $75 million which Moody's expects the company will draw on in the coming 24 months to fund network expansion. The revolver, along with the secured facilities, will have a net leverage covenant which will be set at a 35% headroom to leverage at closing of the transaction. The company's liquidity profile is also supported by the company's long dated maturity profile. There is however little room for the company to accumulate cash given the senior secured facilities include a mandatory cash sweep. Vast's B3-PD PDR, at the same level as the CFR, reflects its assumption of a 50% recovery rate, as is customary for capital structures made up of a mixed priority of claims. The capital structure also includes unrated claims for trade payables and lease rejection claims. The senior secured first lien facilities are rated B2, one notch above the CFR given their secured, priority first lien claim on material owned property and assets and substantial lift provided by the subordinated senior secured second lien term loan. The facilities will be guaranteed by restricted subsidiaries which at closing of the transaction account for 100% of the company's assets and EBITDA generation. Rationale for the stable outlook The stable outlook reflects Moody's expectations that the company is likely to operate at a high leverage around 6x in the coming 12-18 months. The stable outlook also reflects Moody's views that Vast's data subscriber growth will continue to outpace declines in voice and video customers. What could change the rating up Given the company's scale, upward pressure is limited but could develop should Vast's Moody's adjusted debt/EBITDA decrease to below 5.5x on a sustainable basis on the back of a successful implementation of the company's strategy to grow EBITDA through success based and build-out capex plans. An upgrade would also require the company to maintain a good liquidity profile. What could change the rating down Downward pressure on the rating could arise should Moody's adjusted debt/EBITDA increase above 6.5x or should the company's liquidity deteriorate. The principal methodology used in these ratings was Pay TV published in December 2018. Headquartered in Sikeston, Missouri, Vast provides high-speed broadband, video and voice services to residential and business customers in South Dakota and southwestern Minnesota. Headquartered in Lubbock, Texas, NTS is a provider of fiber-based communications solutions for both residential and business customers across West Texas and Louisiana. For the year ended December 31, 2018, the companies' combined revenue would have been $127.4 million. VAST BROADBAND: S&P Assigns 'B' ICR; Outlook Negative ----------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Clarity Telecom LLC (doing business as Vast Broadband). At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to Vast's proposed first-lien credit facilities, which comprise a $75 million revolving credit facility due 2024 and a $237.5 million first-lien term loan due 2026. The '3' recovery rating indicates S&P's expectation for meaningful 50%-70% (rounded estimate: 55%) recovery in the event of a default. S&P's ratings on Vast reflect the aggressive financial policy of the company's private-equity owners, resulting in pro forma leverage of about 6.2x in 2019 (compared to 4.4x as of year-end 2018), and the rating agency's expectation that the company's leverage will remain elevated over the next few years as it engages in debt-funded network expansion projects. The ratings also reflect the intense competition the company faces from larger players (including incumbent telephone companies, cable providers, and fiber providers), its limited geographic diversity, its small scale, and the potential for integration missteps arising from its acquisition of NTS, which will increase its size by 50%. Positive attributes include Vast's healthy EBITDA margins, in the low 40% area, and its favorable growth trends due to rising demand for bandwidth. The negative outlook on Vast reflects the execution risks arising from its acquisition of NTS, which will increase its size by 50%. The outlook also incorporates the company's limited cushion for underperformance given its elevated pro forma leverage of about 6.2x. S&P believes there is a high degree of uncertainty around whether Vast has the operating and financial resources to execute its integration plans. "We could lower our ratings on Vast if it is unable to improve its operating performance in NTS' markets because of competitive pressures or execution missteps that constrain the growth of its HSD revenue or that leads to sustained free operating cash flow deficits," S&P said, adding that it could also lower the rating if a debt-financed acquisition or dividend causes the company's leverage to rise above 7x on a sustained basis. S&P said it could revise its outlook on Vast to stable if the company successfully integrates NTS while growing its revenue in the low-to-mid-single digit percent area and maintaining margins in the 40% area. "Over the longer term, we could raise our rating on Vast if it captures significant residential broadband share in NTS' markets while generating positive FOCF and maintaining leverage of less than 5x. However, even under that scenario, an upgrade would be contingent on the company's owners maintaining a financial policy that allows it to sustain leverage comfortably below 5x," S&P said. VG LIQUIDATION: Beachfront Media Resigns as Committee Member ------------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, on June 6 announced in a filing with the U.S. Bankruptcy Court for the District of Delaware that Beachfront Media LLC resigned as member of the official committee of unsecured creditors in the Chapter 11 cases of VG Liquidation and its affiliates on June 5. The remaining committee members are: (1) GroupM UK Digital Ltd. Attn: Robert Schneider 498 7th Avenue New York, NY 10018 Phone: 212-231-7919 (2) FMEX, LLC dba Futures Media Attn: Joshua Winograd 876 6th Avenue New York, NY 10001 Phone: 646-334-2009 (3) SpotX, Inc. Attn: Steven Swoboda 8181 Arista Place, Suite 400 Broomfield, CO 80021 Phone: 303-345-6888 (4) Teads Finance SAS Attn: Christine Quilichini 97 Rue du Cherche Midi 75006 Paris, France Phone: 917-968-9262 (5) Telaria, Inc. Attn: Aaron Saltz 1501 Broadway New York, NY 10036 Phone: 917-885-7446 About VG Liquidation VG Liquidation, formerly known as Videology, Inc., is a privately-held, venture-backed company specializing in television and video advertising. It was founded in 2007 by Scott Ferber and is headquartered in Baltimore. VG Liquidation and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 18-11120) on May 10, 2018. In the petitions signed by CEO Scott A. Ferber, the Debtors estimated assets of $10 million to $50 million and liabilities of $100 million to $500 million. Judge Brendan Linehan Shannon presides over the cases. The Debtors tapped Cole Schotz P.C. as their legal counsel; Hogan Lovells US LLP and Hogan Lovells International LLP as special corporate counsel; and Berkeley Research Group as financial advisor. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on May 17, 2018. The Committee tapped Cooley LLP as its lead counsel; Whiteford, Taylor & Preston LLC as its Delaware counsel; and Gavin/Solmonese LLC as its financial advisor. VISTRA ENERGY: Fitch Assigns 'BB' LT Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has assigned a 'BBB-'/RR1' rating to Vistra Operations Company LLC's proposed $1.0 billion senior secured notes with two tranches due 2024 and 2029, respectively. The 'RR1' Recovery Rating denotes outstanding recovery in the event of default. Fitch rates the Long-term Issuer Default Rating of Vistra Operations and that of its parent company, Vistra Energy Corp. 'BB'. The Rating Outlook is Stable. Vistra Operations plans to use the net proceeds from the issuance to prepay a portion of existing senior secured term loans. The new senior secured notes will be pari passu with Vistra Operations' existing first lien debt, which includes a $2.7 billion revolving credit facility maturing 2023, a $2.8 billion term loan B1 due 2023, a $977 million term loan B2 due 2023 and a $2.04 billion term loan B3 due 2025. The first lien secured debt at Vistra Operations receives an upstream guarantee from the asset subsidiaries under Vistra Operations, which consists of a substantial portion of property, assets and rights owned by Vistra Operations, as well as a downstream guarantee from Vistra Intermediate Company LLC, a direct subsidiary of Vistra. The secured notes have a security fall away provision wherein the collateral securing the notes will be released if Vistra's senior unsecured notes obtain an investment-grade rating from two out of the three rating agencies. The fall away provision will be reversed if the investment-grade ratings for the senior unsecured notes are withdrawn or downgraded below investment grade. Fitch currently rates Vistra's senior unsecured notes 'BB'/'RR4', where 'RR4' denotes average recovery in the event of default. The 'BB' IDR for Vistra reflects its size and scale as the nation's largest independent power producer; fuel and geographic diversity amassed through the acquisition of Dynegy Inc.; a high margin retail electricity business in Texas and strategic priority to grow its retail business outside of Texas; strong FCF generation; and commitment to conservatively manage its balance sheet, with a goal to attain net debt/EBITDA of 2.5x (or gross debt/EBITDA of 2.7x) by YE 2020. KEY RATING DRIVERS Transition to Investment Grade: Management appears committed to an investment-grade rating and the proposed issuance of senior secured notes with a security fall away provision marks a first step toward aligning the capital structure with that of an investment-grade entity. Currently, more than 50% of Vistra's consolidated capital structure consists of secured debt. Fitch would expect this proportion to be significantly lower before the IDR can be migrated to investment grade. Strong Cash Flow Generation Supports Deleveraging: Fitch believes the company should be able to deliver adjusted EBITDA within management's guidance ranges of $3.22 billion-$3.42 billion in 2019. Realization of synergy benefits and O&M cost control should offset the drag from declining capacity revenues in 2020, according to Fitch. Management expressed confidence in its ability to generate approximately similar levels of adjusted EBITDA in 2020 and generate $3 billion in adjusted EBITDA in any commodity environment. Fitch expects Vistra to generate FCF of more than $2.0 billion in 2019 and beyond, prior to return of capital to shareholders. In 2018, Vistra's board authorized a $1.75 billion share repurchase program, of which just over $1.0 billion has been completed. It also announced an annual dividend of $0.50 per share beginning in the first quarter of 2019, which is expected to grow at an annual rate of 6%-8%. Capex is largely attributable to maintenance items for the generation assets and is projected to be approximately $500 million annually. The retail business generates a substantial amount of FCF because capex requirements are modest. The strong FCF generation affords management ample financial flexibility to execute its leverage reduction goals and reinvest and/or return capital to shareholders. Fitch believes management's 2.5x net debt/EBITDA target by YE 2020 is achievable given the FCF profile and ability to call legacy Dynegy notes. Large Scale and Diversity: Fitch favorably views Vistra's generation portfolio with approximately 41 gigawatts (GW) of installed capacity. The acquisition of Dynegy diversified Vistra's fleet away from Texas, which, while exhibiting a favorable demand-supply dynamic, lacks the additional revenue support that capacity markets provide in other regions, such as PJM Interconnection and New England. Dynegy's combined-cycle gas turbine fleet boosts the combined entity's natural gas share of generation to 52% from 36%, thereby lowering the overall fleet's sensitivity to natural gas prices. Vistra is on track to realize material synergy savings from its combination with Dynegy, which will result in EBITDA uplift from synergies and operational improvements of $565 million by 2020. Vistra also expects to realize $310 million of run-rate FCF benefits from deleveraging and capital structure efficiencies, and projects a substantial decline in federal cash taxes and tax receivable agreement payments over 2018-2022 due to the ability to utilize Dynegy's net operating losses. As a partial offset, the combination with Dynegy significantly increases Vistra's long generation position, and in this regard, Fitch views favorably management's strategic goal to grow its retail presence outside Texas. In February 2019, Vistra announced the acquisition of Crius Energy, which expands Vistra's geographic footprint in the Midwest and Northeast in the high margin residential and small business customer segments. Demonstrated Stability of the Texas Retail Business: TXU Energy, Vistra's retail electricity operation in Texas, is a high-margin business that offers an effective sales channel and a partial hedge for its wholesale generation. Retail margins in the commercial and industrial segment generally remained range-bound during commodity cycles, and residential retail margins are usually countercyclical, given the length and stickiness of the customer contracts. Strong brand recognition, tailored customer offerings and effective customer service are driving high customer retention, and TXU Energy's attrition rates declined over the years. Residential customer count has remained largely stable at 1.5 million since 2015. Vistra's integrated model (wholesale plus retail) in Texas resulted in relatively stable EBITDA over 2012-2018. Constructive Power Market Developments: The power prices in ERCOT increased in 2018 following portfolio rationalization announcements by other generators. With electricity demand in the region projected to continue its strong growth, the reserve margins are expected to fall to 10.5% for summer 2020, rise to 15% in 2021 and fall to 10% in 2023 and 8% in 2024 (below ERCOT's 13.75% threshold), as per ERCOT's May 2019 Capacity, Demand and Reserves report. This is expected to put upward pressure on power prices. Scarcity premiums remain leveraged to weather, wind performance during peak hours and Operation Reserve Demand Curves (ORDC) parameters and, as a result, the power prices are still below the levels needed to incentivize new gas fired build. Other markets including PJM continue to push forward with market reforms that will potentially help mitigate issues associated with state-sponsored subsidies for specific types of power generation. Long-Term Headwinds to Margin Growth: The competitive markets continue to face structural imbalances brought on by the onslaught of renewables and the growth in supply of efficient natural gas-fired plants in certain markets, due to extremely low natural gas prices, even as power demand growth remains flat to down in most markets, excluding ERCOT. State intervention to save struggling nuclear plants via subsidies has the potential to skew market price-setting mechanisms. Rapid advancements in battery storage technologies also have the potential to accelerate the generation mix shift away from fossil fuel power plants, leading to long-term uncertainty for merchant generation business models. Given the uncertain long-term backdrop, Fitch views management's strategic initiatives to grow its retail presence, rationalize generation capacity in markets such as the Midwest and California, and start focusing on renewables and battery storage as positive. DERIVATION SUMMARY Vistra is well positioned relative to Calpine Corporation (B+/Stable), Exelon Generation (ExGen; BBB/Stable) and PSEG Power LLC (BBB+/Stable) in terms of size, scale and geographic and fuel diversity. Vistra is the largest independent power producer in the country with approximately 41 GW of generation capacity compared to Calpine's 26 GW, ExGen's 33 GW and PSEG Power's 12 GW. Vistra's generation capacity is well diversified by fuel compared with Calpine's natural gas heavy and ExGen's nuclear heavy portfolio. Similarly, Vistra's portfolio is well diversified geographically as compared with the Northeast dominant portfolio of ExGen and PSEG Power. Both Vistra and ExGen benefit from their ownership of large retail electricity businesses, which are typically countercyclical to wholesale generation given the length and stickiness of customer contracts. Vistra has a dominant position in the mass retail market in Texas, which has generated stable EBITDA over 2012-2018 despite power price volatility. A key benefit of acquiring Dynegy has been the drop in sensitivity of Vistra's EBITDA to changes in natural gas prices and heat rates. Vistra's gross debt/EBITDA (pro forma for Dynegy's acquisition) of 3.7x and the target to reach 2.7x by 2020 compares favorably with Calpine's projected gross leverage in the mid to high 4.0x by 2022. Exgen's gross debt/EBITDA is projected to trend down to 3.0x or below over the next few years. For PSEG Power, debt/EBITDA is expected to decline to less than 2.5x by 2020. The ratings of both ExGen and PSEG Power benefit considerably from their ownership by a utility holding company. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Estimated generation of 198 Terawatt Hours (TWH) in 2019 and 190 TWHs in 2020; -- Hedged generation in 2019-2020 per management's guidance; -- Retail load of approximately 65-70 TWHs; -- Power price assumption based on Fitch's base deck for natural gas prices of $3.25/MMBtu in 2019 and $3.00/MMBtu in 2020 and beyond and current market heat rates; -- Capacity revenues per past auction results and no material upside in future auctions; -- Synergies of $400 million realized in 2019 and $500 million in 2020; -- Maintenance capex of approximately $500 million over 2019 to 2020; -- Deleveraging in 2019-2020 to reach 2.7x gross debt/EBITDA target; -- No new generation contemplated after the 180 MW Upton solar plant is complete; -- Crius acquisition is not included. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Execution of deleveraging as per management's stated goal such that gross debt to EBITDA is below 3.0x on a sustainable basis; -- Track record of stable EBITDA generation; -- Measured approach to growth; -- Balanced allocation of FCF that maintains balance sheet flexibility while maintaining leverage within stated goal. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Weaker power demand and/or higher-than-expected supply depressing wholesale power prices and capacity auction outcomes in its core regions; -- Unfavorable changes in regulatory construct/rules in the markets that Vistra operates in; -- Rapid technological advancements and cost improvements in battery and renewable technologies that accelerate the shift in generation mix away from fossil fuels; -- An aggressive growth strategy that diverts a significant proportion of free cash flow toward merchant generation assets and/or overpriced retail acquisitions; -- Gross debt/EBITDA above 3.5x on a sustainable basis. LIQUIDITY AND DEBT STRUCTURE Fitch views Vistra's liquidity as adequate. Vistra Operations currently has a $2.67 billion revolving credit facility that matures in 2023, which includes a $2.35 billion LC sub-facility. Approximately $922 million of LCs were outstanding as of March 31, 2019, which reduces the available revolver capacity to $1.75 billion. As of March 31, 2019, Vistra had $546 million of unrestricted cash on hand. Fitch expects Vistra to generate a sizable amount of FCF annually and maintain a minimum of $400 million of cash on its balance sheet for working capital purposes.A. VISTRA ENERGY: Moody's Affirms Ba2 Corp. Family Rating ------------------------------------------------------ Moody's Investors Service affirmed all of the ratings of Vistra Energy Corp. and Vistra Operations Company LLC, including Vistra's Ba2 CFR and assigned a senior secured rating of Ba1 to Vistra Ops approximately $1 billion of Senior Secured Notes due 2024 and 2029. These notes are pari passu with Vistra Ops senior secured term loans, which are also rated Ba1. The transaction proceeds will be used to pay down some of the Vistra Ops outstanding secured term loans. Vistra Ops is Vistra's principal subsidiary and their credit profiles are nearly identical. Vistra and Vistra Ops outlooks remain positive. Assignments: Issuer: Vistra Operations Company LLC Senior Secured Regular Bond/Debenture, Assigned Ba1 (LGD3) Outlook Actions: Issuer: Vistra Energy Corp. Outlook, Remains Positive Issuer: Vistra Operations Company LLC Outlook, Remains Positive Affirmations: Issuer: Vistra Energy Corp. Probability of Default Rating, Affirmed Ba2-PD Speculative Grade Liquidity Rating, Affirmed SGL-1 Corporate Family Rating, Affirmed Ba2 Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5) Issuer: Vistra Operations Company LLC Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3 from LGD2) Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5) RATINGS RATIONALE Vistra's credit fundamentals reflect that of a large independent power producer in the US. Vistra's business activities -- merchant power generation and retail supply -- have a high degree of business risk given their sensitivity to commodity price movements. The high business risk activities are, however, tempered by a large fleet of high-efficiency gas-fired power plants as well as the strong market position of its retail operations in the ERCOT market, which covers about 90% of Texas. Vistra merged with Dynegy Inc. (Dynegy) in April 2018. The company's debt leverage increased significantly when it assumed Dynegy's debt but is set to fall sharply over the next two years as it executes on its debt reduction plans. The company expects to achieve 2.96x net debt to EBITDA by year-end 2019 and 2.5x by 2020. As of 31 March 2019 Vistra's net debt to EBITDA according to Moody's adjustments was at 3.4x. The company has three major sources of cash flow -- Texas retail, Texas generation and Northeast generation. Moody's estimates that Texas retail and Texas generation will each generate about 30% of the consolidated EBITDA, while the remaining 40% will come mostly from Northeast generation. Because retail operations have only a minor amount of capital expenditures, Texas retail's free cash flow contribution is markedly higher than its EBITDA contribution. Vistra has an elevated carbon transition risk within the utility sector on account of its business model as an unregulated power generator with significant fossil fuel exposure. Vistra owns nearly 13.2 GW of coal fired generation and 24.6 GW of natural gas fired generation out of total owned generation of approximately 40.5 GW. Vistra's exposure to carbon regulations in California is not very material to the credit profile because this region makes up less than 5% of the company's owned capacity. Although there are no carbon regulations elsewhere in the US, Vistra's power plants in Texas and Midwest US have been severely affected by the growth of cleaner fuels such as natural gas and renewables. The continued decline in the cost of renewables poses a substantial ongoing pressure on power prices in markets where Vistra operates. Vistra recorded 18.5% cash flow from operations pre-working capital (CFO Pre-WC) to debt in LTM March 31, 2019. Despite merging with Dynegy, which only produced 5% CFO Pre-WC to debt in 2017, Moody's expects Vistra's CFO Pre-WC to debt to still be around 20% for the full year 2019, mainly due to synergies, operational performance improvements and debt reduction. Vistra's management has indicated that it plans to further reduce debt in 2019 and expects gross debt to EBITDA to be 3x or lower by the end of 2019. Should the company achieve this target, Moody's believes Vistra's CFO Pre-WC to debt will be in the mid-20% range. Liquidity Vistra's SGL-1 speculative liquidity rating reflects very good liquidity. The company is expected to have the capacity to meet its obligations over the coming 12 months through internal resources without relying on external sources of committed financing. Moody's expects Vistra to produce more than $1.5 billion of annual free cash flow and maintain a minimum of $500 million of unrestricted cash on hand. Additionally, Vistra's strong liquidity profile is supported by about $2.675 billion of secured revolving credit facilities that can be used to support letters of credit or fund short-term cash needs. As of 31 March 2019, $1.8 billion was available under the revolving credit facilities. The revolving credit facility at Vistra Operations has a covenants of 4.25x consolidated first lien net debt to EBITDA and the company was compliant with this requirement as of the end of the first quarter of 2019. Upcoming major debt maturities include $479 million of senior notes due 2022 and $500 million of senior notes due 2023. Outlook Vistra's positive ratings outlook reflects management's deleveraging plan for 2019 and 2020, which includes reducing net debt to EBITDA to 2.9x for 2019 and 2.5x for 2020. The positive outlook also incorporates the favorable power price environment in ERCOT. Factors that Could Lead to an Upgrade Vistra could be upgraded if the company achieves CFO Pre-WC to Debt of 20% or higher on a sustained basis, assuming forward power prices do not deteriorate significantly. Factors that Could Lead to a Downgrade Vistra could be downgraded if the company does not follow through on its deleveraging plans or its CFO Pre-WC to Debt falls to the low teens. A negative action is also possible if Vistra's market environment for retail operations or generation experiences a sudden deterioration. Company Profile Vistra is one of the largest independent power producers in the US, with 40.5 gigawatts of generating capacity and 191 terawatt hours of power production. Its retail operations sell about 64 terawatt hours of power a year and has about 2.8 million residential customers. Vistra has large operations in its incumbent territory of North Texas but also has sizable generating and retail positions in Ohio, Illinois, Pennsylvania and Massachusetts. WEATHERFORD INTERNATIONAL: More Creditors Sign Restructuring Deal ----------------------------------------------------------------- Weatherford International plc announced that additional holders of its senior notes have signed the restructuring support agreement previously announced by the Company on May 10, 2019. With the new signatories, over 74% of the Company's senior unsecured note holders are now parties to the Restructuring Agreement, an increase of approximately 12% following the Company's initial disclosure of the Restructuring Agreement last week. The proposed comprehensive financial restructuring contemplated by the Restructuring Agreement would significantly reduce the Company's long-term debt and related interest costs, provide access to additional financing, and establish a more sustainable capital structure. The Company and noteholder parties to the Restructuring Agreement are in the process of negotiating definitive documentation relating to the transactions contemplated by the Restructuring Agreement, including commitments for debtor-in-possession financing facilities. About Weatherford Weatherford (NYSE: WFT), an Irish public limited company and Swiss tax resident -- http://www.weatherford.com/-- is a multinational oilfield service company providing innovative solutions, technology and services to the oil and gas industry. The Company operates in over 80 countries and has a network of approximately 650 locations, including manufacturing, service, research and development and training facilities and employs approximately 26,000 people. Weatherford reported a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2018, compared to a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Weatherford had $6.60 billion in total assets, $10.26 billion in total liabilities, and a total shareholders' deficiency of $3.66 billion. Weatherford's credit ratings have been downgraded by multiple credit rating agencies and these agencies could further downgrade the Company's credit ratings. On Dec. 24, 2018, S&P Global Ratings downgraded the Company's senior unsecured notes to CCC- from CCC+, with a negative outlook. Weatherford's issuer credit rating was lowered to CCC from B-. On Dec. 20, 2018, Moody's Investors Services downgraded the Company's credit rating on its senior unsecured notes to Caa3 from Caa1 and its speculative grade liquidity rating to SGL-4 from SGL-3, both with a negative outlook. The Company said its non-investment grade status may limit its ability to refinance its existing debt, could cause it to refinance or issue debt with less favorable and more restrictive terms and conditions, and could increase certain fees and interest rates of its borrowings. Suppliers and financial institutions may lower or eliminate the level of credit provided through payment terms or intraday funding when dealing with the Company thereby increasing the need for higher levels of cash on hand, which would decrease the Company's ability to repay debt balances, negatively affect its cash flow and impact its access to the inventory and services needed to operate its business. WESTERN COMMUNICATIONS: Unsecureds' Recovery Unknown Under Plan --------------------------------------------------------------- Western Communications, Inc., filed a Chapter 11 plan and accompanying disclosure statement. Class 4 consists of all Allowed General Unsecured Claims are impaired. A General Unsecured Claim is any Unsecured Claim not otherwise treated or classified under the Plan. At this time, Debtor estimates that General Unsecured Claims will range from approximately $6,000,000 to $8,000,000. The Plan provides that on each Distribution Date each holder of a General Unsecured Claim will receive a Pro Rata Distribution of Available Cash with respect to its General Unsecured Claim. Debtor is still analyzing General Unsecured Claims and cannot at this time accurately estimate the total amount of General Unsecured Claims, or the expected recovery on General Unsecured Claims. Class 5 consists of the Allowed Unsecured Claims for payments owing under Debtor's Supplemental Executive Retirement Plan ("SERP") are impaired. Debtor estimates that Class 5 Claims will total approximately $3,000,000. Pursuant to the terms of the SERP, SERP claims are subordinate to the claims of Debtor's general unsecured creditors. Accordingly all Class 5 Claims are subordinate to the payment in full of all other Allowed Claims, including Class 4 General Unsecured Claims. If all such other Allowed Claims have been paid in full, including all Class 4 General Unsecured Claims, then each holder of an Allowed Class 5 Claim will receive a pro rata distribution on account of such Claims as and when cash is available for distribution. Class 6 consists of all Equity Interests and any and all Claims arising from or relating to such Equity Interests. The Plan provides that on the Effective Date, all Equity Interests will be deemed cancelled and that no holder of an Equity Interest will receive or retain on account of such Equity Interest any distributions, money, or other consideration under the Plan. Class 6 is impaired by the Plan. Because all Equity Interests will be cancelled, and holders of Equity Interests will not receive or retain on account of their Equity Interests any distributions, money, or other consideration under the Plan, Class 6 is deemed to have rejected the Plan and, accordingly, Class 6 is not entitled to vote for or against the Plan. The Plan provides that Debtor will fund its Plan obligations and its ongoing expenses and liabilities from Cash on hand as of the Effective Date, and Cash available to Debtor from and after the Effective Date from, among other things, liquidation of any assets remaining as of the Effective Date. A full-text copy of the Disclosure Statement dated May 22, 2019, is available at https://tinyurl.com/yxsq7nky from PacerMonitor.com at no charge. Attorneys for the Debtor are Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, Portland, Oregon. About Western Communications Western Communications, Inc. is a small market newspaper, niche publishing, printing, and digital media company with publications spread throughout Oregon (six publications) and California (two publications). It is headquartered in Bend, Oregon. Western Communications sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 19-30223) on Jan. 22, 2019. It previously sought bankruptcy protection (Bank. D. Oregon Case No. 11-37319) on Aug. 23, 2011. At the time of the filing, the Debtor estimated assets of $10 million to $50 million and liabilities of $10 million to $50 million. The case has been assigned to Judge Trish M. Brown. Tonkon Torp LLP is the Debtor's counsel. WHATCOM COUNTY, WA: Filing of 17-Page Kortlever Deal Approved ------------------------------------------------------------- In the case, GABRIEL KORTLEVER, SY EUBANKS, and ALL OTHERS SIMILARLY SITUATED, Plaintiffs, v. WHATCOM COUNTY, WASHINGTON; WHATCOM COUNTY SHERIFF'S OFFICE, Defendants, Case No. 2:18-cv-00823 (W.D. Wash.), Judge James L. Robart of the U.S. District Court for the Western District of Washington, Seattle, permitted the Plaintiffs to file an over-length motion for preliminary approval of class action settlement not to exceed 17 pages in length. The matter came before the Court on the parties' Stipulated Motion to File an Over-length Motion Pursuant to W.D. Wash. Local Rule LCR 7(f), requesting that the Plaintiffs be permitted to file a motion for preliminary approval of class action settlement totaling 17 pages. Judge Robart has considered the Motion and other pleadings and papers in the matter and, being fully informed, he granted the parties' Motion. A full-text copy of the Court's April 30, 2019 Order is available at https://is.gd/E8kXd8 from Leagle.com. Gabriel Kortlever & Sy Eubanks, and all others similarly situated, Plaintiffs, represented by Bart J. Freedman -- bart.freedman@klgates.com -- K&L GATES LLP, Christina A. Elles -- Christina.Elles@klgates.com -- K&L GATES LLP, John B. Midgley, ACLU OF WASHINGTON, Mark M. Cooke, ACLU OF WASHINGTON, Todd L. Nunn -- todd.nunn@klgates.com -- K&L GATES LLP & Lisa Nowlin, ACLU OF WASHINGTON. Whatcom County, Washington & Whatcom County Sheriff's Department, Defendants, represented by George C. Roche, WHATCOM COUNTY PROSECUTING ATTORNEY'S OFFICE. [^] Large Companies with Insolvent Balance Sheet ------------------------------------------------ Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABBVIE INC ABBV US 56,769.0 (7,826.0) 509.0 ABBVIE INC ABBVUSD EU 56,769.0 (7,826.0) 509.0 ABBVIE INC ABBVEUR EU 56,769.0 (7,826.0) 509.0 ABBVIE INC ABBV AV 56,769.0 (7,826.0) 509.0 ABBVIE INC 4AB GR 56,769.0 (7,826.0) 509.0 ABBVIE INC ABBV SW 56,769.0 (7,826.0) 509.0 ABBVIE INC ABBV* MM 56,769.0 (7,826.0) 509.0 ABBVIE INC 4AB GZ 56,769.0 (7,826.0) 509.0 ABBVIE INC 4AB TH 56,769.0 (7,826.0) 509.0 ABBVIE INC 4AB QT 56,769.0 (7,826.0) 509.0 ABBVIE INC 4AB TE 56,769.0 (7,826.0) 509.0 ABBVIE INC-BDR ABBV34 BZ 56,769.0 (7,826.0) 509.0 ABSOLUTE SOFTWRE ABT CN 93.0 (51.2) (30.8) ABSOLUTE SOFTWRE OU1 GR 93.0 (51.2) (30.8) ABSOLUTE SOFTWRE ALSWF US 93.0 (51.2) (30.8) ABSOLUTE SOFTWRE ABT2EUR EU 93.0 (51.2) (30.8) AIXIN LIFE INTER AIXN US - (0.2) (0.2) AMERICA'S 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ISRAMCO INC ISRL US 110.9 (3.7) (8.7) ISRAMCO INC IRM GR 110.9 (3.7) (8.7) ISRAMCO INC ISRLEUR EU 110.9 (3.7) (8.7) JACK IN THE BOX JACK US 832.1 (592.5) (76.8) JACK IN THE BOX JBX GR 832.1 (592.5) (76.8) JACK IN THE BOX JBX GZ 832.1 (592.5) (76.8) JACK IN THE BOX JBX QT 832.1 (592.5) (76.8) JACK IN THE BOX JACK1EUR EU 832.1 (592.5) (76.8) KIMBERLY-CLARK KMY GR 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMY TH 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMB US 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMY SW 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMBUSD EU 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMY GZ 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMBEUR EU 15,204.0 (18.0) (1,942.0) KIMBERLY-CLARK KMY QT 15,204.0 (18.0) (1,942.0) KIMBERLY-CEDEAR KMB AR 15,204.0 (18.0) (1,942.0) L BRANDS INC LB US 10,998.0 (898.0) 750.0 L BRANDS INC LTD TH 10,998.0 (898.0) 750.0 L BRANDS INC LBUSD EU 10,998.0 (898.0) 750.0 L BRANDS INC LBRA AV 10,998.0 (898.0) 750.0 L BRANDS INC LTD GR 10,998.0 (898.0) 750.0 L 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OMEREUR EU 101.2 (121.0) 32.4 OMEROS CORP 3O8 TH 101.2 (121.0) 32.4 ONDAS HOLDINGS I ONDS US 2.8 (20.7) (17.2) OPTIVA INC OPT CN 122.5 (24.0) 18.9 OPTIVA INC RKNEF US 122.5 (24.0) 18.9 PAPA JOHN'S INTL PZZAEUR EU 739.1 (56.6) (19.2) PAPA JOHN'S INTL PZZA US 739.1 (56.6) (19.2) PAPA JOHN'S INTL PP1 GR 739.1 (56.6) (19.2) PHILIP MORRIS IN PM1 EU 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN 4I1 GR 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PM US 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PM1CHF EU 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PM1 TE 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN 4I1 TH 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PM1EUR EU 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PMI SW 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PMOR AV 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN 4I1 GZ 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PM* MM 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PMIZ IX 38,042.0 (10,185.0) (2,745.0) PHILIP MORRIS IN PMIZ 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RH RS1 GR 1,806.0 (23.0) (235.5) RH RHEUR EU 1,806.0 (23.0) (235.5) RIMINI STREET IN RMNI US 124.2 (135.8) (110.6) ROSETTA STONE IN RS8 GR 174.8 (9.8) (71.6) ROSETTA STONE IN RST US 174.8 (9.8) (71.6) ROSETTA STONE IN RST1USD EU 174.8 (9.8) (71.6) ROSETTA STONE IN RST1EUR EU 174.8 (9.8) (71.6) SALLY BEAUTY HOL S7V GR 2,092.6 (145.1) 753.4 SALLY BEAUTY HOL SBHEUR EU 2,092.6 (145.1) 753.4 SALLY BEAUTY HOL SBH US 2,092.6 (145.1) 753.4 SBA COMM CORP SBAC US 9,312.8 (3,302.8) (1,104.1) SBA COMM CORP 4SB GR 9,312.8 (3,302.8) (1,104.1) SBA COMM CORP SBACUSD EU 9,312.8 (3,302.8) (1,104.1) SBA COMM CORP SBJ TH 9,312.8 (3,302.8) (1,104.1) SBA COMM CORP 4SB GZ 9,312.8 (3,302.8) (1,104.1) SBA COMM CORP SBAC* MM 9,312.8 (3,302.8) (1,104.1) SBA COMM CORP SBACEUR EU 9,312.8 (3,302.8) (1,104.1) SCIENTIFIC GAMES SGMS US 8,837.0 (2,423.0) 660.0 SCIENTIFIC GAMES SGMSUSD EU 8,837.0 (2,423.0) 660.0 SCIENTIFIC GAMES TJW GR 8,837.0 (2,423.0) 660.0 SCIENTIFIC GAMES TJW TH 8,837.0 (2,423.0) 660.0 SCIENTIFIC GAMES TJW GZ 8,837.0 (2,423.0) 660.0 SEALED AIR CORP SDA GR 5,155.0 (292.4) 74.1 SEALED AIR CORP SEE US 5,155.0 (292.4) 74.1 SEALED AIR CORP SEE1EUR EU 5,155.0 (292.4) 74.1 SEALED AIR CORP SDA TH 5,155.0 (292.4) 74.1 SEALED AIR CORP SDA QT 5,155.0 (292.4) 74.1 SHELL MIDSTREAM SHLX US 1,915.0 (254.0) 246.0 SHELL MIDSTREAM SHLXUSD EU 1,915.0 (254.0) 246.0 SHELL MIDSTREAM 49M GR 1,915.0 (254.0) 246.0 SHELL MIDSTREAM 49M TH 1,915.0 (254.0) 246.0 SILK ROAD MEDICA SILK US 38.7 (52.8) 18.3 SILK ROAD MEDICA 2OW GR 38.7 (52.8) 18.3 SILK ROAD MEDICA 2OW GZ 38.7 (52.8) 18.3 SILK ROAD MEDICA SILKEUR EU 38.7 (52.8) 18.3 SILK ROAD MEDICA 2OW TH 38.7 (52.8) 18.3 SILK ROAD MEDICA SILKUSD EU 38.7 (52.8) 18.3 SINO UNITED WORL SUIC US 0.1 (0.1) (0.1) SIX FLAGS ENTERT 6FE GR 2,724.9 (239.9) (308.6) SIX FLAGS ENTERT SIX US 2,724.9 (239.9) (308.6) SIX FLAGS ENTERT SIXEUR EU 2,724.9 (239.9) (308.6) SIX FLAGS ENTERT SIXUSD EU 2,724.9 (239.9) (308.6) SLEEP NUMBER COR SL2 GR 770.7 (124.6) (399.8) SLEEP NUMBER COR SNBR US 770.7 (124.6) (399.8) SLEEP NUMBER COR SNBREUR EU 770.7 (124.6) (399.8) STARBUCKS CORP SRB GR 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SRB TH 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX* MM 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX SW 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX TE 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUXEUR EU 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX IM 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX US 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX CI 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUXUSD SW 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUXUSD EU 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SRB GZ 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUX AV 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SRB QT 17,641.9 (5,035.2) (321.1) STARBUCKS CORP SBUXCHF EU 17,641.9 (5,035.2) (321.1) STARBUCKS-BDR SBUB34 BZ 17,641.9 (5,035.2) (321.1) STARBUCKS-CEDEAR SBUX AR 17,641.9 (5,035.2) (321.1) STEALTH BIOTHERA S1BA GR 15.5 (175.3) (27.3) STEALTH BIOTHERA MITO US 15.5 (175.3) (27.3) SUNPOWER CORP S9P2 GR 2,307.7 (221.5) 190.3 SUNPOWER CORP SPWR US 2,307.7 (221.5) 190.3 SUNPOWER CORP S9P2 TH 2,307.7 (221.5) 190.3 SUNPOWER CORP SPWREUR EU 2,307.7 (221.5) 190.3 SUNPOWER CORP SPWRUSD EU 2,307.7 (221.5) 190.3 SUNPOWER CORP S9P2 QT 2,307.7 (221.5) 190.3 SUNPOWER CORP S9P2 SW 2,307.7 (221.5) 190.3 TAUBMAN CENTERS TU8 GR 4,451.4 (331.9) - TAUBMAN CENTERS TCO US 4,451.4 (331.9) - TRANSDIGM GROUP TDG US 17,797.2 (1,482.2) 3,869.3 TRANSDIGM GROUP T7D GR 17,797.2 (1,482.2) 3,869.3 TRANSDIGM GROUP T7D TH 17,797.2 (1,482.2) 3,869.3 TRANSDIGM GROUP TDGUSD EU 17,797.2 (1,482.2) 3,869.3 TRANSDIGM GROUP TDGEUR EU 17,797.2 (1,482.2) 3,869.3 TRANSDIGM GROUP T7D QT 17,797.2 (1,482.2) 3,869.3 TRANSDIGM GROUP TDG* MM 17,797.2 (1,482.2) 3,869.3 TRANSMEDICS GROU TMDX US 42.2 (4.8) 22.2 TRIUMPH GROUP TG7 GR 2,854.6 (573.3) 265.8 TRIUMPH GROUP TGI US 2,854.6 (573.3) 265.8 TRIUMPH GROUP TGIEUR EU 2,854.6 (573.3) 265.8 TUPPERWARE BRAND TUP GR 1,438.8 (184.0) (141.3) TUPPERWARE BRAND TUP US 1,438.8 (184.0) (141.3) TUPPERWARE BRAND TUP TH 1,438.8 (184.0) (141.3) TUPPERWARE BRAND TUP1EUR EU 1,438.8 (184.0) (141.3) TUPPERWARE BRAND TUP1USD EU 1,438.8 (184.0) (141.3) TUPPERWARE BRAND TUP GZ 1,438.8 (184.0) (141.3) TUPPERWARE BRAND TUP QT 1,438.8 (184.0) (141.3) UNISYS CORP USY1 TH 2,484.5 (1,282.5) 345.4 UNISYS CORP USY1 GR 2,484.5 (1,282.5) 345.4 UNISYS CORP UIS US 2,484.5 (1,282.5) 345.4 UNISYS CORP UIS1 SW 2,484.5 (1,282.5) 345.4 UNISYS CORP UISEUR EU 2,484.5 (1,282.5) 345.4 UNISYS CORP UISCHF EU 2,484.5 (1,282.5) 345.4 UNISYS CORP USY1 GZ 2,484.5 (1,282.5) 345.4 UNISYS CORP USY1 QT 2,484.5 (1,282.5) 345.4 UNISYS CORP UIS EU 2,484.5 (1,282.5) 345.4 UNITI GROUP INC CSALUSD EU 4,697.3 (1,463.5) - UNITI GROUP INC 8XC TH 4,697.3 (1,463.5) - UNITI GROUP INC 8XC GR 4,697.3 (1,463.5) - UNITI GROUP INC UNIT US 4,697.3 (1,463.5) - VALVOLINE INC VVVUSD EU 1,914.0 (298.0) 343.0 VALVOLINE INC 0V4 TH 1,914.0 (298.0) 343.0 VALVOLINE INC VVVEUR EU 1,914.0 (298.0) 343.0 VALVOLINE INC 0V4 GR 1,914.0 (298.0) 343.0 VALVOLINE INC 0V4 QT 1,914.0 (298.0) 343.0 VALVOLINE INC VVV US 1,914.0 (298.0) 343.0 VANTAGE DRILL-UT VTGGF US 1,107.9 (112.5) 228.5 VECTOR GROUP LTD VGR US 1,429.2 (590.1) 324.7 VECTOR GROUP LTD VGR GR 1,429.2 (590.1) 324.7 VECTOR GROUP LTD VGREUR EU 1,429.2 (590.1) 324.7 VECTOR GROUP LTD VGR QT 1,429.2 (590.1) 324.7 VERISIGN INC VRS GR 1,919.7 (1,406.1) 374.0 VERISIGN INC VRSN US 1,919.7 (1,406.1) 374.0 VERISIGN INC VRS TH 1,919.7 (1,406.1) 374.0 VERISIGN INC VRSN* MM 1,919.7 (1,406.1) 374.0 VERISIGN INC VRSNUSD EU 1,919.7 (1,406.1) 374.0 VERISIGN INC VRSNEUR EU 1,919.7 (1,406.1) 374.0 VERISIGN INC VRS GZ 1,919.7 (1,406.1) 374.0 VERISIGN INC VRS QT 1,919.7 (1,406.1) 374.0 VERISIGN INC VRS SW 1,919.7 (1,406.1) 374.0 W&T OFFSHORE INC UWV GR 842.5 (372.6) 14.6 W&T OFFSHORE INC WTI1EUR EU 842.5 (372.6) 14.6 W&T OFFSHORE INC WTI1USD EU 842.5 (372.6) 14.6 W&T OFFSHORE INC UWV TH 842.5 (372.6) 14.6 W&T OFFSHORE INC WTI US 842.5 (372.6) 14.6 WAYFAIR INC- A W US 2,113.9 (479.1) (112.0) WAYFAIR INC- A 1WF QT 2,113.9 (479.1) (112.0) WAYFAIR INC- A 1WF GR 2,113.9 (479.1) (112.0) WAYFAIR INC- A WEUR EU 2,113.9 (479.1) (112.0) WEIGHT WATCHERS WW6 GR 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WW US 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WW6 TH 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WTWUSD EU 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WW6 GZ 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WTW AV 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WTWEUR EU 1,526.2 (815.1) (44.7) WEIGHT WATCHERS WW6 QT 1,526.2 (815.1) (44.7) WESTERN UNION W3U TH 9,432.0 (374.2) 190.9 WESTERN UNION WU* MM 9,432.0 (374.2) 190.9 WESTERN UNION W3U GR 9,432.0 (374.2) 190.9 WESTERN UNION WU US 9,432.0 (374.2) 190.9 WESTERN UNION WUUSD EU 9,432.0 (374.2) 190.9 WESTERN UNION WUEUR EU 9,432.0 (374.2) 190.9 WESTERN UNION W3U GZ 9,432.0 (374.2) 190.9 WESTERN UNION W3U QT 9,432.0 (374.2) 190.9 WESTERN UNIO-BDR WUNI34 BZ 9,432.0 (374.2) 190.9 WIDEOPENWEST INC WOW US 2,462.2 (284.2) (97.6) WIDEOPENWEST INC WU5 GR 2,462.2 (284.2) (97.6) WIDEOPENWEST INC WOW1EUR EU 2,462.2 (284.2) (97.6) WIDEOPENWEST INC WU5 QT 2,462.2 (284.2) (97.6) WINGSTOP INC WING1EUR EU 151.5 (220.5) 5.4 WINGSTOP INC WING US 151.5 (220.5) 5.4 WINGSTOP INC EWG GR 151.5 (220.5) 5.4 WINMARK CORP GBZ GR 46.8 (21.5) 6.9 WINMARK CORP WINA US 46.8 (21.5) 6.9 WYNDHAM DESTINAT WD5 TH 7,370.0 (584.0) 525.0 WYNDHAM DESTINAT WD5 GR 7,370.0 (584.0) 525.0 WYNDHAM DESTINAT WYND US 7,370.0 (584.0) 525.0 WYNDHAM DESTINAT WD5 QT 7,370.0 (584.0) 525.0 WYNDHAM DESTINAT WYNEUR EU 7,370.0 (584.0) 525.0 YELLOW PAGES LTD Y CN 418.5 (106.1) 82.7 YELLOW PAGES LTD YLWDF US 418.5 (106.1) 82.7 YUM! BRANDS INC TGR TH 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC TGR GR 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUM US 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUMUSD SW 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUMUSD EU 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC TGR GZ 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUM AV 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUMEUR EU 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC TGR QT 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUM SW 4,744.0 (7,904.0) (141.0) YUM! BRANDS INC YUM* MM 4,744.0 (7,904.0) (141.0) ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***