/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/190819.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, August 19, 2019, Vol. 23, No. 230 Headlines 160 ROYAL PALM: Seeks to Extend Exclusivity Period to Oct. 1 2140 DRUID HILL: Oct. 9 Disclosure Statement Hearing Set A NEW START: Court Permits Cash Use Until Aug. 22 Hearing A'GACI LLC: Hires Prime Clerk as Claims Agent A'GACI, L.L.C: Court OKs Cash Use, $10M DIP Loan on Interim Basis ACADIAN CYPRESS: Case Summary & 20 Largest Unsecured Creditors AERKOMM INC: Incurs $1.68 Million Net Loss in Second Quarter ALTA MESA: Credit Agreement Borrowing Base Lowered to $200-Mil. ALTA MESA: Delays Filing of Second Quarter Form 10-Q AMERICANN INC: Delays Form 10-Q for Quarter Ended June 30 AMERIQUEST SECURITY: Plan Confirmation Hearing Set for Oct. 3 AURORA COMMERCIAL: Exclusivity Period Extended Until Oct. 21 AVENUE STORES: Case Summary & 30 Largest Unsecured Creditors BIG COOP'S: Unsecureds to Recoup 25% With 2% Interest Per Annum BLACKJEWEL LLC: Law Firm of Russell Represents Utility Companies BLINK CHARGING: Widens Net Loss to $2.233 Million in Second Quarter BLUE BEVERAGE: Disclosure Statement Hearing Set for Sept. 9 BLUE WAGON: To Repay Unsecureds in 6 Months at 0% Interest BP FISHER LAW: Trustee Taps Marshack Hays as Legal Counsel BRICK OVEN PIZZA: Hires Robert C. Nisenson as Attorney BRIGHT MOUNTAIN: Completes Acquisition of Slutzky & Winshman BRIGHT MOUNTAIN: Needs More Time to File its Form 10-Q BROOKLYN BUILDINGS: Secured Creditors Impaired Under New Plan BUSINESS FIRST: Provides New Deadline for Admin Claims Objection CAMBER ENERGY: Incurs $1.28 Million Net Loss in First Quarter CAMBER ENERGY: Starts Gas Gathering Line Project Budgeted at $2.3M CARBUCKS OF CAROLINA: U.S. Trustee Unable to Appoint Committee CARTI: Fitch Affirms 'BB+' Issuer Default Rating CENTER CITY HEALTHCARE: Comm. Taps Berkeley as Financial Advisor CENTER CITY HEALTHCARE: Committee Tap Sills Cummis as Co-Counsel CENTER CITY HEALTHCARE: Committee Taps Fox Rothschild as Counsel CENTERSTONE LINEN: Aug. 19 Hearing on Plan Outline Set CHARMING CHARLIE: Seeks to Hire Klehr Harrison as Co-Counsel CHEYENNE HOTEL: U.S. Trustee Unable to Appoint Committee CLEARWATER TRANSPORTATION: Seeks Aug. 23 Hearing Continuation COLORADO GROUP 3: Seeks to Hire DLG Law Group as Legal Counsel COMMUNITY HEALTH: Files Second Quarter Form 10-Q COMPASS GROUP: Moody's Affirms B1 CFR, Outlook Stable CONDUENT INC: Fitch Affirms BB IDR & Alters Outlook to Negative COSTA CAFE: Taps Ehrhard & Associates as Legal Counsel CPI CARD: Swings to $1.52 Million Net Income in Second Quarter CR COMMERCIAL: Seeks to Extend Exclusivity Period to Nov. 15 CREATIVE PYROTECHNICS: Sept. 19 Plan, Disclosures Hearing DAVID & SUKI: Sept. 17 Hearing on Plan Confirmation Set DELTA MATERIALS: Exclusive Filing Period Extended Through Aug. 29 DIGNITY GROUP: Seeks to Hire Eric A. Liepins as Legal Counsel DISASTERS STRATEGIES: Plan Confirmation Hearing Set for Sept. 19 DISH NETWORK: Egan-Jones Lowers Senior Unsecured Ratings to B+ DR. RICHARD R. ROLLE: Case Summary & 18 Unsecured Creditors ELIANA ENTERPRISES: Case Summary & 7 Unsecured Creditors FERNLEY & FERNLEY: New Plan Modifies Treatment of VB Secured Claim FIERRO & FIERRO: Seeks to Hire Russell Van Beusting as Attorney FLEX LIMITED: Egan-Jones Lowers Senior Unsecured Ratings to BB FORT BRAGG: Directed to File Amended Plan, Disclosures by Aug. 21 FRONTDOOR INC: S&P Affirms 'B+' ICR, Alters Outlook to Positive FURIE OPERATING: Hires Prime Clerk as Claims Agent GAMBOA BROTHERS: U.S. Trustee Unable to Appoint Committee GLOBAL HEALTHCARE: Delays Second Quarter Form 10-Q GREEN NATION: Trustee Taps Rodeo Realty as Real Estate Broker HEART OF FLORIDA: To Pay Unsecs. $2,500 in Quarterly Distributions INVENERGY THERMAL: S&P Affirms 'BB' ICR on Term Loan B Upsize IPIC-GOLD CLASS: U.S. Trustee Forms 5-Member Committee JAGUAR HEALTH: Widens Net Loss to $16.7 Million in Second Quarter JASON INC: S&P Downgrades ICR to 'CCC+' on Refinancing Risk JOY ENTERPRISES: Seeks to Extend Exclusivity Period Through Sept. 5 JRND LLC: Unsecureds to be Paid in Full Over 120 Months Under Plan JUST ONE MORE: Exclusivity Period Extended Until Sept. 9 KADMON HOLDINGS: Posts $9.2 Million Net Income in Second Quarter LAKEVIEW TOWERS: To Pay $3M for Fannie Mae Secured Claim LATEX FOAM: Hires Wiggin and Dana as Special Corporate Counsel LEA POWER: Fitch Affirms BB+ on $212.4MM Secured Notes Due 2033 LEGACY RESERVES: Plan Outline Hearing Set for Sept. 10 LF RUNOFF 2: Trustee Taps Marshack Hays as Legal Counsel LNB-002-2013: Exclusivity Period Extended Until Sept. 27 LSC COMMUNICATIONS: Moody's Cuts CFR to B3 & Alters Outlook to Neg. M/I HOMES: Egan-Jones Lowers Commercial Paper Ratings to B MAGNUM CONSTRUCTION: Plan Proposes Bridge Collapse Claim Trust MATTEL INC: Fitch Withdraws B+ Rating on New $250MM Notes Due 2027 MAUSER PACKAGING: Fitch Assigns BB LongTerm IDR, Outlook Stable MILLERBERND SYSTEMS: Sale of Assets to Fund Creditor Trust MONGE PROPERTY: Court Issues Tentative Ruling Confirming Plan MONITRONICS INTERNATIONAL: Court Confirms Prepackaged Plan MR. TORTILLA: Aug. 29 Disclosure Statement Hearing MURPHY USA: S&P Affirms BB+ ICR on Solid Execution; Outlook Stable NAMR1726 LLC: Seeks to Hire Ure Law Firm as Counsel NASSAU FINANCIAL: Fitch Assigns BB+ IFS Rating, Outlook Stable NEONODE INC: Incurs $1.26 Million Net Loss in Second Quarter NOVABAY PHARMACEUTICALS: Incurs $2.50-Mil. Net Loss in 2nd Quarter OLB GROUP: Incurs $473K Net Loss in Second Quarter OMNIMAX INT'L: Moody's Lowers CFR to Caa2 & Alters Outlook to Neg. PARKINSON SEED: G. Rainsdon Appointed Chapter 11 Trustee PBF HOLDING: Fitch Assigns BB LongTerm IDR, Outlook Positive PBF LOGISTICS: Fitch Assigns 'BB' LongTerm Issuer Default Rating PERKINS & MARIE: U.S. Trustee Forms 5-Member Committee PLUS THERAPEUTICS: Reports $9.14 Million Net Loss for 2nd Quarter PROGRESSIVE SOLUTIONS: Plan Confirmation Hearing Set for Sept. 19 Q HOLDING: Moody's Affirms B3 Corp. Family Rating, Outlook Stable QUECHAN INDIAN: Fitch Affirms B IDR & Alters Outlook to Positive RELIABLE ASSOCIATES: U.S. Trustee Unable to Appoint Committee RORA LLC: Unsecureds to Recoup Full Payment Plus 2.60% Interest RUDIS HOLDINGS: Case Summary & 19 Unsecured Creditors SALIENT CRGT: S&P Downgrades ICR to 'B-'; Outlook Negative SANCHEZ ENERGY: Case Summary & 30 Largest Unsecured Creditors SENIOR CARE: Disclosure Statement Hearing Continued to Aug. 20 SHARING ECONOMY: Delays Filing of Second Quarter Form 10-Q STANDLEY ENTERPRISES: Case Summary & 19 Unsecured Creditors STARR PASS: Seeks to Hire DeConcini McDonald Yetwin as Counsel SUNSHINE WIND DOWN: Court Confirms Chapter 11 Liquidation Plan SYMANTEC CORP: Fitch Affirms BB+ IDR & Alters Outlook to Negative TENET HEALTHCARE: Fitch Rates $4.2BB 1st Lien Notes 'BB-' TODAY'S KIDS: U.S. Trustee Unable to Appoint Committee TRES GENERACIONES: Seeks to Hire Eric A. Liepins as Legal Counsel TRESHA-MOB LLC: Plan Outline OK'd; Plan Hearing Set for Aug. 28 US STEEL: Moody's Reviews B1 CFR for Downgrade on Market Conditions VMW INVESTMENTS: Seeks to Hire SVN Dunn as Real Estate Broker WALL TO WALL: Committee Hires Pachulski Stang as Lead Counsel WALL TO WALL: Committee Taps Leonard Law Group as Legal Counsel WEATHERFORD INT'L: Hires PricewaterhouseCoopers as Consultant WEWORK COMPANIES: Fitch Lowers LT IDR to B, Outlook Stable WEYERBACHER BREWING: Unsecureds to Recoup $186K Under Plan WINDSTREAM HOLDINGS: Shearman Updates Midwest Noteholders WING PALACE: Unsecureds to Get $7,500 via Quarterly Payments WMC MORTGAGE: Sept. 13 Approval Hearing on Disclosures Set WOW WEE: New Note Balance Owed to CFR Provided in Latest Plan XPEERANT INC: Cuts Unsecured Creditors' Recovery to 20% in New Plan YORAVI INVESTMENT: To Pay Treasury's Claim in Full in 60 Months [^] BOND PRICING: For the Week from August 12 to 16, 2019 ********* 160 ROYAL PALM: Seeks to Extend Exclusivity Period to Oct. 1 ------------------------------------------------------------ 160 Royal Palm, LLC asked the U.S. Bankruptcy Court for the Southern District of Florida to extend the period during which the company can solicit acceptances for its proposed Chapter 11 plan of reorganization to Oct. 1 from Aug. 27. The company filed its plan and disclosure statement on June 27, and obtained court approval to solicit votes from creditors ahead of the Sept. 24 hearing on confirmation of the plan. Since the petition date, the company's management and bankruptcy professionals have made progress to reorganize its business affairs. They obtained court orders estimating KK-PB Financial, LLC's $39 million secured claim against the company at zero, and approving the sale of substantially all of the company's properties for $39.6 million. Both orders are currently subject to appeal. About 160 Royal Palm 160 Royal Palm, LLC is a Florida limited liability company, which owns prime real property consisting of a partially constructed hotel/condominium located at 160 Royal Palm Way, Palm Beach, Florida. The property is under state court receivership. 160 Royal Palm filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-19441) on Aug. 2, 2018. In the petition signed by Cary Glickstein, sole and exclusive manager, the Debtor disclosed $16,447,759 in total assets and $114,926,976 in total liabilities. The case has been assigned to Judge Erik P. Kimball. The Debtor tapped Philip J. Landau, Esq., at Shraiberg, Landau & Page, P.A., as its counsel; and Greenberg Traurig, P.A. as its special counsel and title agent. No official committee of unsecured creditors has been appointed in the Debtor's case. 2140 DRUID HILL: Oct. 9 Disclosure Statement Hearing Set -------------------------------------------------------- The hearing to consider the adequacy of the disclosure statement explaining the Chapter 11 Plan filed by 2140 Druid Hill Ave, LLC, is scheduled for Oct. 9, 2019 at 02:00 p.m.. The last day to oppose the approval of the disclosure statement is Sept. 16. General unsecured creditors are classified in Class 2, and will receive a distribution of 100% of their allowed claims if approved after objection to proof of claim, paid over five-year period starting one month after the effective date of the Plan. The Debtor presently does not have any unsecured claims. The Plan will be funded by the following: (1) income from the debtor's business and personal income. Although, the Debtor's business income has been drastically reduced this year, the Debtor expects an increase in her business income once she starts collecting all the monthly rents from the tenants. Moreover, based on the plan monthly payments, it is expected that Debtor's income would be sufficient to make all payments in the plan. A full-text copy of the Disclosure Statement dated Aug. 14, 2019, is available at https://tinyurl.com/yyd28nph from PacerMonitor.com at no charge. 2140 Druid Hill Ave, LLC, filed a Chapter 11 Petition (Bankr. D. Md. Case No. 18-26821) on Dec. 27, 2018, and is represented by Jasmin Marie Torres, Esq., at Torres & Associates, LLC. A NEW START: Court Permits Cash Use Until Aug. 22 Hearing --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida approved, on an interim basis, the request of A New Start Incorporated to use cash collateral pursuant to the budget, pending final hearing on the motion. The Debtor is prohibited from making any member distribution and subsidy to any external entities, specifically, to make direct payments to support ANS Houses, Promises Housing or Fast Vans Inc. The Debtor shall pay $6,000 to Fundation Inc., as adequate protection and shall provide it a post-petition security interest and lien in any and all of the Debtor’s assets, to the same extent and priority that Fundation held a properly perfected prepetition security interest in such assets. The Debtor shall continue lease payments to Cherules, LLC and EG Holdings, LLC, for the Debtor’s facilities, and to U.S. Bank Equipment Finance for office equipment, without prejudice to the Debtor's future acceptance or rejection of the real estate leases with Cherules and EG Holdings. The budget provided for disbursements of $36,255 for cost of goods sold, and $306,006 for operating costs, for the month of August 2019. A copy of the Court Order and the Budget is accessible free of charge at http://bankrupt.com/misc/New_Start_Cash_Ord.pdf The Debtor's continued use of cash collateral will be considered at a hearing on Aug. 22, 2019 at 10:30 a.m. About A New Start Inc. A New Start Incorporated -- https://anewstartincfl.com/ -- is a treatment center in Palm Beach County, Florida, providing outpatient treatment for substance abuse and chemical dependency disorders in adult clients. An outpatient program allows clients to continue working or attending school while receiving treatment and support from the company's program and team of specialists. A New Start Incorporated filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 19-13294) on March 14, 2019. In the petition signed by Eugene Sullivan, CEO, the Debtor estimated $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. The case is assigned to Judge Erik P. Kimball. Angelo A. Gasparri, Esq., at Law Office Angelo A. Gasparri, is the Debtor's counsel. A'GACI LLC: Hires Prime Clerk as Claims Agent --------------------------------------------- A'GACI LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Prime Clerk LLC as claims, noticing, and solicitation agent. The firm will oversee the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in the Debtor's Chapter 11 case. Prime Clerk will be paid at these hourly rates: Director of Solicitation $210 Solicitation Consultant $190 COO and Executive VP No charge Director $175-$195 Consultant/Senior Consultant $65-$165 Technology Consultant $35-$95 Analyst $30-$50 The Debtor was able to secure a 10 percent discount of Prime Clerk's standard rates. The firm will also be reimbursed for work-related expenses incurred. Benjamin Steele, a partner at Prime Clerk, disclosed in court filings that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. Prime Clerk can be reached at: Benjamin J. Steele Prime Clerk LLC 830 3rd Avenue, 9th Floor New York, NY10022 Tel: (212) 257-5450 Email: bsteele@primeclerk.com About A'GACI, L.L.C. Headquartered in San Antonio, Texas, A'GACI is a fast-fashion retailer of women's apparel and accessories. It operates specialty apparel and footwear stores under the A'GACI banner as well as a direct-to-consumer business comprised of its e-commerce website www.agacistore.com. Stores feature an assortment of tops, dresses, bottoms, jewelry, and accessories sold primarily under the Debtor's exclusive A'GACI label. In addition, the Debtor sells shoes under its sister brand labels of O'Shoes and Boutique Five. A'GACI filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 19-51919) on August 7, 2019. The Debtor previously sought bankruptcy protection on Jan. 9, 2018 (Bankr. W.D. Tex. Case No. 18-50049). In the petition signed by manager David Won, the Debtor disclosed $10 million to $50 million in total assets and $50 million to $100 million in total liabilities. The case is assigned to Judge Ronald B. King. The Debtor tapped Eric Terry Law, PLLC as bankruptcy counsel; SierraConstellation Partners, LLC as financial advisor; and Prime Clerk LLC as claims, noticing and balloting agent. A'GACI, L.L.C: Court OKs Cash Use, $10M DIP Loan on Interim Basis ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas approved, on an interim basis, the motion for authority filed by A'GACI, L.L.C., to use cash collateral and to enter into a DIP Credit Agreement for the use of funds of up to $10,000,000 entered into with Second Avenue Capital Partners, LLC, as Administrative Agent and Collateral Agent. Judge Ronald B. King ruled, among others, that, subject to the terms and conditions of the Interim Order, the DIP Loan Documents, and the Approved Budget, the Debtor is authorized to use Cash Collateral until the termination date; provided, however, that during the Remedies Notice Period the Debtor may use Cash Collateral in accordance with the terms and provisions of the Approved Budget solely to meet payroll obligations (other than severance), make remittances of trust fund taxes collected by the Debtor during the Remedies Notice Period, and for other expenses approved critical to the preservation of the Debtor and its estate as agreed by the DIP Agent. A copy of the Interim Order, the DIP Agreement, and the Cash Budget for the period from August 9 through August 30, 2019 can be accessed for free at: http://bankrupt.com/misc/AGACI_Cash_Ord.pdf The Budget for the week ending August 23, 2019 forecasts total operating disbursements at $640,000, of which $318,000 is for property tax, among others. A final hearing on the Debtor's request to approve the DIP facility is scheduled for Aug. 28, 2019, at 2 p.m. (Central Time). Objections must be filed by Aug. 23, 2019 at 4 p.m. (Central Time). About A'GACI, L.L.C. Headquartered in San Antonio, Texas, A'GACI is a fast-fashion retailer of women's apparel and accessories. A'GACI operates specialty apparel and footwear stores under the A'GACI banner as well as a direct-to-consumer business comprised of its e-commerce Web site http://www.agacistore.com/ Stores feature an assortment of tops, dresses, bottoms, jewelry, and accessories sold primarily under the Debtor's exclusive A'GACI label. In addition, the Debtor sells shoes under its sister brand labels of O'Shoes and Boutique Five. The Debtor previously sought bankruptcy protection (Bankr. W.D. Tex. Case No. 18-50049) on Jan. 9, 2018, and exited bankruptcy in July 2018 after reducing the number of stores from 75 to 55. A'GACI, L.L.C., again sought Chapter 11 protection (Bankr. W.D.Tex. Case No. 19-51919) on Aug. 7, 2019, disclosing plans to close all store locations. The Hon. Ronald B. King is the case judge. ERIC TERRY LAW, PLLC is serving as counsel to the Debtor. SIERRA CONSTELLATION PARTNERS is the financial advisor. Prime Clerk LLC is the claims agent. ACADIAN CYPRESS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Acadian Cypress & Hardwoods, Inc. aka Acadian Cypress aka Acadian Hardwoods aka Acadian Hardwoods of Arkansas aka Acadian Hardwoods of Louisiana aka Acadian Hardwoods of Texas 1 Industrial Parkway Ponchatoula, LA 70454 Business Description: Acadian Cypress & Hardwoods, Inc. -- http://www.acadianhardwoods.net-- manufactures lumber, plywood, siding, shingles, flooring, fencing, and molding profiles. Chapter 11 Petition Date: April 15, 2019 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Case No.: 19-12205 Judge: Hon. Jerry A. Brown Debtor's Counsel: Douglas S. Draper, Esq. HELLER, DRAPER, PATRICK, HORN & MANTHEY, LLC 650 Poydras Street, Suite 2500 New Orleans, LA 70130 Tel: (504) 299-3300 Fax: (504) 299-3399 E-mail: dsd@hellerdraper.com ddraper@hellerdraper.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Frank Vallot, president. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/laeb19-12205_creditors.pdf A full-text copy of the petition is available for free at: http://bankrupt.com/misc/laeb19-12205.pdf AERKOMM INC: Incurs $1.68 Million Net Loss in Second Quarter ------------------------------------------------------------ Aerkomm Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $1.68 million on $1.59 million of net sales for the three months ended June 30, 2019, compared to a net loss of $2.13 million on $0 of net sales for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss of $4.06 million on $1.59 million of net sales compared to a net loss of $3.58 million on $0 of net sales for the same period last year. As of June 30, 2019, the Company had $54.28 million in total assets, $10.09 million in total liabilities, and $44.19 million in total stockholders' equity. As of June 30, 2019, the Company had cash and cash equivalents of $6,005,967. To date, the Company has financed its operations primarily through cash proceeds from financing activities, including through our ongoing public offering, short-term borrowings and equity contributions by our stockholders. Net cash used for operating activities was $840,311 for the six months ended June 30, 2019, as compared to $4,819,801 for the six months ended June 30, 2018. In addition to the net loss of $4,068,430, the increase in net cash used for operating activities during the six-month period ended June 30, 2019 was mainly due to increase in accounts receivable and inventory of $1,209,964 and $386,750, respectively, and decrease in other payable – related parties of $418,091, offset by the decrease in temporary deposit - related party of $100,067 and increase in accounts payable, accrued expense and other payable - others of $1,587,222, $743,910 and $1,458,198, respectively. In addition to the net loss of $3,589,314, the decrease in net cash used for operating activities during the six-month period ended June 30, 2018 was mainly due to increase in prepaid expenses of $666,712 and decrease in accrued expenses, other payable - related parties and other payable - others of $220,042, $166,919 and $1,252,209, respectively, offset by the increase in other receivable – related party and deposits - others of $46,743 and $93,548, respectively. Net cash used for investing activities for the six months ended June 30, 2019 was $2,297 as compared to $18,379,752 for the six months ended June 30, 2018. The net cash used for investing activities for the six months ended June 30, 2019 was mainly for the purchase of property and equipment. The net cash used for investing activities for the six months ended June 30, 2018 was mainly due to the $18 million deposits paid toward the purchase of a parcel of land to build the Company's first satellite ground station and data center. Net cash provided by financing activities for the six months ended June 30, 2019 and 2018 was $6,294,972 and $23,762,346, respectively. Net cash provided by financing activities for the six months ended June 30, 2019 were mainly attributable to net proceeds from the issuance of common stock from ongoing public offering, borrowing of short-term loans from affiliates and a long-term loan in the amounts of $6,047,630, 194,600 and 47,742. Net cash provided by financing activities for the six months ended June 30, 2018 were mainly attributable to proceeds from the issuance of common stock from public offering, issuance of stock warrants related to the public offering and increase in subscribed capital in the amounts of $23,223,979, $492,367 and $56,000, respectively, offset by the repayment of short-term bank loan of $10,000. The Company said its operations continue to require significant capital expenditures primarily for technology development, equipment and capacity expansion. Capital expenditures are associated with the supply of airborne equipment to its prospective airline partners, which correlates directly to the roll out and/or upgrade of service to its prospective airline partners' fleets. Capital spending is also associated with the expansion of the Company's network, ground stations and data centers and includes design, permitting, network equipment and installation costs. The Company anticipates an increase in capital spending in its fiscal year ended Dec. 31, 2019 and estimates that capital expenditures will range from $6 million to $60 million as it starts airborne equipment installations and continue to execute its expansion strategy. A full-text copy of the Form 10-Q is available for free at: https://is.gd/SZpoSW About Aerkomm Headquartered in Nevada, USA, Aerkomm Inc. -- http://www.aerkomm.com/-- is a full-service development stage provider of in-flight entertainment & connectivity (IFEC) solutions, intended to provide airline passengers with a broadband in-flight experience that encompasses a wide range of service options. Those options include Wi-Fi, cellular, movies, gaming, live TV, and music. The Company plans to offer these core services, which it is currently still developing, through both built-in in-flight entertainment systems, such as a seat-back display, as well as on passengers' own personal devices. Chen & Fan Accountancy Corporation, in San Jose, California, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 22, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring loss from operations that raises substantial doubt about its ability to continue as a going concern. As of March 31, 2019, the Company had $47.18 million in total assets, $7.55 million in total liabilities, and $39.62 million in total stockholders' equity. Aerkomm reported a net loss of $6.68 million for the nine months ended Dec. 31, 2018, following a net loss of $6.24 million for the nine months ended Dec. 31, 2017. ALTA MESA: Credit Agreement Borrowing Base Lowered to $200-Mil. --------------------------------------------------------------- Alta Mesa Holdings, LP received notice on Aug. 13, 2019, from the administrative agent under the Eighth Amended and Restated Credit Agreement dated Feb. 9, 2018, that the borrowing base was reduced from $370 million to $200 million. The Company's combined borrowings and letters of credit outstanding exceed the new borrowing base by $162.4 million. As provided under the Alta Mesa RBL, the Company will elect to repay the excess utilization in five equal monthly installments of $32.5 million, the first of which will be due in September 2019. As of July 31, 2019, the Company had cash on hand of approximately $79.7 million. The new borrowing base will be in effect until the next borrowing base redetermination, which is scheduled to be completed on or before Nov. 1, 2019. 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 March 31, 2019, the Company had $949.39 million in total assets, $955.7 million in total liabilities, and a total partners' deficit of $6.27 million. * * * As reported by the TCR on June 26, 2019, Moody's Investors Service downgraded Alta Mesa Holdings, LP's corporate family rating to Ca from Caa1, Probability of Default Rating to Ca-PD from Caa1-PD, and senior unsecured notes to Ca from Caa2. "These rating actions reflect the high likelihood of a potential debt restructuring in the near term," said Sajjad Alam, Moody's senior analyst. "The company has very limited liquidity cushion and is facing a potential financial covenant breach as early as June 30, 2019." ALTA MESA: Delays Filing of Second Quarter Form 10-Q ---------------------------------------------------- Alta Mesa Holdings, LP filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its quarterly report on Form 10-Q for the period ended June 30, 2019, as the Company is finalizing its quarter-end financial statements and related disclosures. The Company has not finalized the financial statements and related information for inclusion in its Quarterly Report because of the effort being directed toward completing 2018 financial reporting for the Company's parent, Alta Mesa Resources, Inc. Therefore, the Company was unable to file the Q2 2019 Form 10-Q within the prescribed time period without unreasonable effort or expense. 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 March 31, 2019, the Company had $949.39 million in total assets, $955.66 million in total liabilities, and a total partners' deficit of $6.27 million. * * * As reported by the TCR on June 26, 2019, Moody's Investors Service downgraded Alta Mesa Holdings, LP's corporate family rating to Ca from Caa1, Probability of Default Rating to Ca-PD from Caa1-PD, and senior unsecured notes to Ca from Caa2. "These rating actions reflect the high likelihood of a potential debt restructuring in the near term," said Sajjad Alam, Moody's senior analyst. "The company has very limited liquidity cushion and is facing a potential financial covenant breach as early as June 30, 2019." AMERICANN INC: Delays Form 10-Q for Quarter Ended June 30 --------------------------------------------------------- Americann, Inc. filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its quarterly report on Form 10-Q for the period ended June 30, 2019. The Company did not complete its financial statements for the period ended June 30, 2019 in sufficient time so as to allow the filing of the report by Aug. 14, 2019. About Americann Headquartered in Denver, Colorado, AmeriCann is a specialized cannabis company that is developing state-of-the-art product manufacturing and greenhouse cultivation facilities. Its business plan is based on the continued growth of the regulated marijuana market in the United States. AmeriCann uses greenhouse technology which is superior to the current industry standard of growing cannabis in warehouse facilities under artificial lights. Americann reported a net loss of $4.43 million for the year ended Sept. 30, 2018, compared to a net loss of $2.77 for the year ended Sept. 30, 2017. As of March 31, 2019, Americann had $9.86 million in total assets, $2.61 million in total liabilities, and $7.25 million in total stockholders' equity. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2016, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Sept. 30, 2018, stating that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. AMERIQUEST SECURITY: Plan Confirmation Hearing Set for Oct. 3 ------------------------------------------------------------- The Bankruptcy Court has issued an order approving the amended disclosure statement explaining the Ameriquest Security Service's Amended Chapter 11 Plan and set the hearing to consider confirmation of the Plan for Oct. 3, 2019 at 10:00 a.m. The last day to object to the confirmation of the Plan is Sept. 12. The Amended Plan provides that the $204,543 portion of the Internal Revenue Service's secured claim which is entitled to priority treatment will be paid at monthly amortized payment of $4,896 over five years from the Petition Date of Sept. 25, 2018, at an interest rate pursuant to Section 511(b) of the Bankruptcy Code, currently 5%. The first payment of $4,896 will be due on the Effective Date of the Amended Plan, followed by an additional 45 payments, until the priority secured claim is full satisfied. The $286,624 portion of the IRS' claim which is not entitled to priority treatment will be paid over 76 months through the Amended Plan at an interest rate pursuant to Section 511(b), currently 5%, with the first payment of $1,000 due on the Effective Date of the Amended Plan followed by an additional 45 payments of $1,000 per month until and including month 46 of the Amended Plan. Starting with month 47 of the Amended Plan, the monthly amortized periodic payments will be $9,905 until and including month 76 of the Amended Plan, until the non-priority secured claim is fully satisfied. A full-text copy of the Amended Disclosure Statement is available at https://tinyurl.com/yx8p6576 from PacerMonitor.com at no charge. About Ameriquest Security Service Ameriquest Security Service is in the security guard service business based in Culver City, California. Ameriquest filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-21241) on Sept. 25, 2018. In the petition signed by Akram Gendy, president and CEO, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The Hon. Julia W. Brand oversees the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, serves as bankruptcy counsel. AURORA COMMERCIAL: Exclusivity Period Extended Until Oct. 21 ------------------------------------------------------------ Judge Shelley Chapman of the U.S. Bankruptcy Court for the Southern District of New York extended the period during which only Aurora Commercial Corp. and Aurora Loan Services LLC can file a Chapter 11 plan to Oct. 21 and the period during which they can solicit acceptances for the plan to Dec. 19. Brenda Darnell, senior vice president of the companies, said an extension of the exclusivity period "will provide the Debtors an opportunity to review and, where necessary, object to claims which will maximize the potential recovery to holders of valid claims. The companies have to reconcile hundreds of millions of dollars in claims prior to filing a plan. To date, approximately $343 million in claims have been asserted against the companies, of which approximately $320 million of the claims asserted are litigation claims." As of March 24, there were a number of litigations pending against the companies. In part, the companies sought bankruptcy protection to ensure efficient and timely resolution of all claims against them while they expeditiously wind-down their estates. By the June 10 Bar Date, 71 proofs of claims were filed, of which 27 relate to long-standing and in some instances -- serial -- litigation against the companies. The companies are currently coordinating with their various local counsel to efficiently object to claims they believe have already been litigated to conclusion or are frivolous. "Adjudicating and resolving at least a substantial portion of the litigation claims is a necessary precursor to filing a Chapter 11 plan and determining the ultimate plan structure," Ms. Darnell said, adding that most, if not all, of these claims lack validity. "Given the circumstances of these Chapter 11 cases, it is more efficient to conduct the Debtors' claims resolution process prior to confirming a plan, when there are a relatively limited set of claims to reconcile as opposed to proposing a plan providing for reserves and other similar mechanisms," Ms. Darnell said. About Aurora Commercial Corp. and Aurora Loan Services LLC Aurora Commercial Corp. is a wholly-owned subsidiary of Lehman Brothers Holdings Inc. that offers banking, loan servicing, and investor services. Aurora Commercial and its subsidiary Aurora Loan Services LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-10843) on March 24, 2019. At the time of the filing, Aurora Commercial estimated assets of $50 million to $100 million and liabilities of less than $50,000. The Debtors tapped Togut, Segal & Segal LLP as their legal counsel, and Prime Clerk, LLC as their claims and noticing agent. AVENUE STORES: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Avenue Stores, LLC (Lead Case) 19-11842 aka Ornatus URG Acquisition, LLC Avenue Stores, LLC 365 West Passaic Street, Suite 230 Rochelle Park, NJ 07662 Ornatus URG Holdings, LLC 19-11843 Ornatus URG Real Estate, LLC 19-11844 Ornatus URG Gift Cards, LLC 19-11845 Business Description: Headquartered in Rochelle Park, New Jersey, the Debtors are national specialty fashion retailers of women's plus-sized apparel, intimates, footwear, and accessories that is dedicated to providing real-sized women with modern and fashionable clothes at affordable prices. Avenue's product line almost exclusively features a marketplace sourced and procured assortment of branded merchandise, including: (i) "Avenue" brand apparel, undergarments, loungewear, intimates, accessories, and gifts; (ii) a line of trendy, fashion-forward apparel, intimates, and swimwear for plus-sized women sold under the "Loralette" brand; and (iii) wide-width shoes sold under the "Cloudwalkers" brand. In addition, Avenue sells a select assortment of national brands within their shoe and accessory departments. The Debtors have two primary units: the retail store business and an e-commerce business. Through their retail business, the Debtors operate 255 leased stores in 35 states, which are primarily located in suburban areas and in malls or shopping centers. In addition to their retail operations, the Debtors sell and distribute merchandise through the Avenue.com and Loralette.com websites. As of the Petition Date, the Debtors employ approximately 2,000 people. Chapter 11 Petition Date: August 16, 2019 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Laurie Selber Silverstein Debtors' Bankruptcy Counsel: Robert S. Brady, Esq. Andrew L. Magaziner, Esq. Ashley E. Jacobs, Esq. Allison S. Mielke, Esq. Betsy L. Feldman, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: rbrady@ycst.com amagaziner@ycst.com ajacobs@ycst.com amielke@ycst.com bfeldman@ycst.com Debtors' Financial Advisor: BERKELEY RESEARCH GROUP, LLC Debtors' Investment Banker: CONFIGURE PARTNERS, LLC Debtors' Sale Consultants: HILCO MERCHANT RESOURCES, LLC - AND - GORDON BROTHERS RETAIL PARTNERS, LLC Debtors' Notice, Claims, Solicitation & Balloting Agent: PRIME CLERK LLC https://cases.primeclerk.com/AvenueStores Avenue Stores' Estimated Assets: $50 million to $100 million Avenue Stores' Estimated Liabilities: $100 million to $500 million The petitions were signed by David Rhoads, chief financial officer. A full-text copy of Avenue Stores' petition is available for free at: http://bankrupt.com/misc/deb19-11842.pdf List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. FB Flurry LLC Trade $1,554,084 Jeff Zisk, CEO 10300 Sanden Drive Dallas, TX 75238 Tel: 214-632-4498 Email: jzisk@fbflurry.com 2. Land 'N Sea Inc. Trade $783,997 Robert Sobel, CEO 1440 Broadway 3rd Flr New York, NY 10018 Tel: (212) 444-6000 Email: gprusakowski@landnseaco.com 3. Valentine USA Inc. Trade $678,333 Simone Dominici, CEO The CIT Group/Commercial Service Inc. Assigned to Merchant Factors Corp Charlotte, NC 28201-1036 Tel: 212-840-8866 Fax: 212-840-8845 4. All-In Investment and Trade $654,821 Development (Group) Co Ltd. President or General Counsel 499 7th Avenue New York, NY 10018 Tel: 323-201-6468 Fax: 323-722-7175 5. Revise Clothing Inc. Trade $597,287 President or General Counsel 215 W40th Street, Suite 2 New York, NY 10018 Tel: 201-727-9339 Fax: 201-727-9704 6. Bluprint Clothing Corp Trade $441,360 Ju Hyu Kim, CEO 5600 Bandini Blvd. Bell Gardens, CA 90201 Tel: 323-780-4347 Fax: 323-780-9332 7. Greena aka Ava James Trade $338,273 President or General Counsel 1439 S Herbert Ave Commerce, CA 90023 Email: info@avajamesnyc.com 8. Woodland Trading Inc. Trade $331,595 Sudhir Kakar, President 1407 Broadway, RM 905 New York, NY 10018 Tel: 212-819-0123 Fax: 212-819-0080 Email: woodlandtrading@yahoo.com 9. OneWorld Apparel LLC Trade $266,007 Arthur Gordon, CEO 13071 Temple Ave La Puente, CA 91746 Tel: (213) 891-0177 Email: sbundy@oneworldapparel.com 10. C.P. International, Corp. Trade $251,965 President or General Counsel 165 North Dean Street Englewood, NJ 07631 Tel: 201-816-8111 Fax: 201-816-0226 Email: cpi.shoes@prodigy.net 11. Notations Inc. Trade $239,213 Kurt Erman, President 539 Jacksonville Rd Warminster, PA 18974 Tel: 212-921-5495 Email: Scotte@notations.com 12. HMS Productions, Inc. Trade $234,837 President or General Counsel 250 W 39th Street, 12th Floor New York, NY 10018 Tel: 212.719.9190 Email: info@hmsplroductions.nyc 13. Byer California Trade $232,443 President or General Counsel 62685 Collection Center Dr Chicago, IL 60693-0626 Tel: (415) 626-7844 ext. 6324 Email: lsanchez@byer.com 14. Expressions Lingerie Divison Trade $231,064 of Mustang Assets President or General Counsel 333 Fifth Avenue Pelham, NY 10803 Tel: 914-227-9357 Email: Steven@bankmilker.com 15. Republic Clothing Corp. Trade $228,982 Steven Sall, Chairman 1411 Broadway, Suite 12 New York, NY 10018 Tel: (212) 719-3000 Fax: (212) 302-4367 16. Google Trade $227,571 Sundar Pichai, CEO 1600 Ampitheatre Parkway Mountainview, CA 94043 Tel: 650-253-0000 Email: collections@google.com 17. Richa Global Exports Pvt Ltd. Trade $218,168 President or General Counsel A-41, Mayapuri Industrial Area New Delhi, India Tel: +91-124-4314000 Fax: +91-124-4290303 Emai: info@richaglobal.com 18. Corra Technology Inc. Trade $215,600 President or General Counsel 363 Bloomfield Ave Montclair, NJ 07042 Email: ar@corra.com 19. Chinex Apparel, Inc. Trade $214,613 President or General Counsel 209 West 40th Street 7th FL, Suite 708 New York, NY 10018 Tel: 212-510-8576 Fax: 212-658-9629 Email: wu@chinexusa.com 20. Fred David International USA Inc. Trade $198,258 President or General Counsel 1407 Broadway Suite 710 New York, NY 10018 Tel: 714-521-0121 Fax: 714-521-0122 Email: info@freddavid.com hr@freddavid.com 21. Jiangsu Guotai Int'l Group Trade $193,928 President or General Counsel Guotai USA Co. Ltd. 1501 Rio Vista Ave Los Angeles, CA 90023 Tel: 323-881-3279 ext. 253 22. Homestreet Bank Trade $190,000 Mark K. Mason, CEO 601 Union St, Suite 2000 Seattle, WA 98101 Fax: 206-621-2538 23. Zinntex LLC Trade $183,323 Ricky Zinn, CEO 53 Orchard CT Woodbury, NY 11797 Tel: (212) 584-9229 Fax: (212) 656-1891 Email: billing@zinntex.com 24. Horizon Trade $180,000 Karen McGrath, CEO 949 Raymond Blvd Newark, NJ 07105 Tel: 605-772-4514 25. International Direct Group, Inc. Trade $175,026 President or General Counsel 525 7th Avenue, Suite 208 New York, NY 10018 Tel: 212-921-9036 Fax: 212-921-9038 Email: Joel@InternationalDG.com; info@internationaldg.com 26. Volumecocomo Apparel Inc. Trade $161,875 President or General Counsel Hana Financial Inc. Dept. LA 24406 Pasadena, CA 91185-4406 Tel: 323-881-1830 Fax: 323-881-1840 27. Vesture Group Inc. Trade $147,028 Attn: Robert Galishoff 2220 N Screenland Dr Burbank, CA 91505 Tel: (818) 842-0200 Fax: (818) 842-0400 Email: info2@vesturegroupinc.com 28. Jump Design Group Trade $141,301 Ashesh Amin, CEO 1400 Broadway, FL 2 New York, NY 10018 Tel: (201) 558-9191 Email: GlennS@jumpdesigngroup.com 29. Hot Line Industries Inc. Trade $138,330 Howard Negrin, President 2648 Grand Ave Bellmore, NY 11710 Tel: 516-764-0400 Fax: 516-764-6009 30. Tanya Creations Inc. Trade $136,982 President or General Counsel 360 Narragansett Park Drive East Providence, RI 2916 Tel: 401-438-8050 Fax: 401-438-4890 BIG COOP'S: Unsecureds to Recoup 25% With 2% Interest Per Annum --------------------------------------------------------------- The U.S. Bankruptcy Court has issued an order granting preliminary approval of Big Coop's Trucking, LLC, combined plan and disclosure statement. The confirmation hearing will be held on Sept. 17, 2019 at 10:30 a.m. Ballots are due on Sept. 10. Objections to Disclosure and Confirmation of Plan are due on Sept. 10. Non-Priority Unsecured Claims total approximately $4,921. An unsecured creditor possessing an Allowed General Unsecured Claim will receive a total distribution of 25% of its Allowed General Unsecured Claim combined with 2% interest per annum. The Debtor will pay $400 each month toward Allowed General Unsecured Claims on a pro-rata basis after the Effective Date. Payments shall be made in equal monthly payments on a pro-rata basis upon the claims filed and approved. The Debtor shall generate the funds necessary for the execution of this Plan through the earnings of the Reorganized Debtor A full-text copy of the Combined Plan and Disclosure Statement is available at https://tinyurl.com/y367ryfu from PacerMonitor.com at no charge. About Big Coop's Big Coop's Trucking is a licensed and bonded freight shipping and trucking company running freight hauling business from Swartz Creek, Michigan. Big Coop's filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 19-30180) on Jan. 25, 2019. The petition was signed by Adam Cooper, member. The Hon. Daniel S. Opperman Flint is assigned to the case. The Debtor is represented by David W. Brown, Esq. at the Law Office of David W. Brown PLLC. At the time of filing, the Debtor estimated $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. BLACKJEWEL LLC: Law Firm of Russell Represents Utility Companies ---------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the Law Firm of Russell R. Johnson III, PLC, provided notice that it is representing the utility companies Appalachian Power Company d/b/a American Electric Power and Kentucky Power Company d/b/a American Electric Power in the Chapter 11 cases of Blackjewel, L.L.C., et al. As of August 13, 2019, both of the Utilities held surety bonds that they will make claims upon for payment of the prepetition debt that the Debtors owe to the Utilities. The Law Firm of Russell R. Johnson III, PLC was retained to represent the foregoing Utilities in July 2019. The circumstances and terms and conditions of employment of the Firm by the Utilities is protected by the attorney-client privilege and attorney work product doctrine. The Utilities can be reached at: Appalachian Power Company d/b/a American Electric Power and Kentucky Power Company d/b/a American Electric Power Attn: Dwight C. Snowden American Electric Power 1 Riverside Plaza, 13th Floor Columbus, OH 43215 The Firm can be reached at: LAW FIRM OF RUSSELL R. JOHNSON III, PLC Russell R. Johnson III, Esq. 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Telephone: (804) 749-8861 Facsimile: (804) 749-8862 E-mail: russell@russelljohnsonlawfirm.com A copy of the Rule 2019 filing is available at Pacermonitor.com at http://bankrupt.com/misc/Blackjewel_LLC_697_Rule2019.pdf About Blackjewel L.L.C. Blackjewel L.L.C.'s core business is mining and processing metallurgical, thermal and other specialty and industrial coals. Blackjewel operates 32 properties, including surface and underground coal mines, preparation or wash plants, and loadouts or tipples. Combined, Blackjewel and its affiliates hold more than 500 mining permits. Operations are located in the Central Appalachian Basin in Virginia, Kentucky and West Virginia and the Powder River Basin in Wyoming. Blackjewel L.L.C. and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel estimated $100 million to $500 million in asset and $500 million to $1 billion in liabilities as of the bankruptcy filing. The Hon. Frank W. Volk is the case judge. The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI Consulting Inc. as financial advisor; Jefferies LLC as investment banker; and Prime Clerk LLC as the claims agent. BLINK CHARGING: Widens Net Loss to $2.233 Million in Second Quarter ------------------------------------------------------------------- Blink Charging Co. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $2.23 million on $715,828 of total revenues for the three months ended June 30, 2019, compared to a net loss of $1.23 million on $624,418 of total revenues for the three months ended June 30, 2018. The Company's net loss for the quarter ended June 30, 2019, increased by $1,004,435 or 81% as compared to the quarter ended June 30, 2018. The increase was primarily attributable to an increase in operating expenses of $679,601, a decrease in other income of $468,603, partially offset by an increase in gross profit of $143,769. For the six months ended June 30, 2019, the Company reported a net loss of $4.13 million on $1.29 million of total revenues compared to net income of $971,303 on $1.22 million of total revenues for the same period during the prior year. As of June 30, 2019, the Company had $16.86 million in total assets, $4.21 million in total liabilities, and $12.64 million in total stockholders' equity. Other Highlights: * Hardware sales for the quarter ended June 30, 2019 increased 97% to $282,014 from $142,839 for the quarter ended June 30, 2018. * Network fee revenue for the quarter ended June 30, 2019 increase 36% to $76,359 as compared to $56,034 for the quarter ended June 30, 2018. * Blink's electric vehicle charging network had approximately 153,288 registered members as of June 30, 2019 as compared to approximately 125,000 registered members as of June 30, 2018, representing a 23% increase year over year in registered network members. * Signed a multi-year agreement with Carasso Motors, the world's oldest Renault importer and one of the largest (EV) charging equipment suppliers in Israel. * Focusing on upgrading and repairing first-generation equipment. Approximately 1,153 units have been repaired or replaced with second generation chargers during 2019. * The Blink IQ 200 has been approved for inclusion in New York's Charge Ready NY Rebate initiative, a $31.6 million program which provides rebates of $4,000 per installation of Level 2 charging equipment. * Increased investment in marketing and sales support infrastructure correlating with the increased demand for the new Blink equipment. These efforts have focused on brand awareness, including live demonstrations of the latest equipment during industry tradeshows and reaching new host location audiences. * Blink customer service is now available 24 hours a day, seven days a week, providing Blink hosts, members and guest drivers immediate access to assistance anywhere across the U.S. Michael D. Farkas, chairman and chief executive officer, stated "We continue to ramp up our sales and operations as charging infrastructure demand continues to increase in the United States and abroad. Blink is well positioned to take advantage of improving demand for charging in and outside the home and we have invested in our ability to grow the business rapidly as charging demand continues to ramp up." A full-text copy of the Form 10-Q is available for free at: https://is.gd/f1Kd5L About Blink Charging Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID), formerly known as Car Charging Group, Inc. -- http://www.CarCharging.com/, http://www.BlinkNetwork.com/and http://www.BlinkHQ.com/-- is a provider of public electric vehicle (EV) charging equipment and services. Blink Charging designs, owns, operates and sells EV charging equipment under the Blink brand, as well as a number of other charging station equipment manufacturers such as Chargepoint, General Electric (GE) and SemaConnect. Blink Charging also offers connectivity to the Blink Network, a cloud-based platform that operates, manages and tracks Blink's EV charging stations and all associated data. As of Dec. 31, 2018, Blink Charging had $21.65 million in total assets, $5.55 million in total liabilities, and $16.09 million in total stockholders' equity. Blink Charging reported a net loss of $3.42 million for the year ended Dec. 31, 2018, compared to a net loss of $75.36 million for the year ended Dec. 31, 2017. BLUE BEVERAGE: Disclosure Statement Hearing Set for Sept. 9 ----------------------------------------------------------- According to a notice, a hearing will be held on Sept. 9, 2019 at 10:00 a.m. before the Honorable Robert D. Drain, to consider approval of Blue Beverage Group, Inc. and 152 Broadway Haverstraw NY LLC’s disclosure statement in support of their chapter 11 plan of reorganization. Written objections must be submitted at least seven days prior to the hearing. Under the plan, Class 7 consists of the general unsecured creditors. The general unsecured claims amount to $16,336,912, plus the Allowed Amount of any Class 5 deficiency Claim. This class will be paid in Cash to each such Claimant of its pro-rata share of available Cash after payment of administration claims, unclassified priority tax claims, and Class 1, 2, 3, 5 and 6 Claims. The Debtor estimates that $700,000 will be available for distribution representing an approximate 3% distribution to each Claimant if all Class 2, 3, 4, 5, 6 and 7 Claims are Allowed without reduction. If the Class 5 Claim is recharacterized as a Class 7 Claim, The Debtors estimate an approximate 22% distribution. If the Class 5 Claim is avoided as a fraudulent conveyance or equitably subordinated, the Debtors estimate an approximate 37% distribution. Payments under the Plan will be made from the proceeds of sale of the Debtors' New York Property under the Hebrew language agreement, and the liquidation of the Debtor’s remaining Assets, if any. A copy of the Disclosure Statement is available at https://tinyurl.com/yyq6weax from Pacermonitor.com at no charge. About Blue Beverage Group Blue Beverage Group Inc. is a privately held company in Haverstraw, N.Y., that provides food sterilization services. Its retort operation makes beverages sterile by processing aluminum cans at high heat. Blue Beverage Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Case No. 19-22835) on April 19, 2019. At the time of the filing, the Debtor disclosed $1,218,000 in assets and $27,850,225 in liabilities. The case is assigned to Judge Robert D. Drain. Backenroth Frankel & Krinsky, LLP is the Debtor's legal counsel. BLUE WAGON: To Repay Unsecureds in 6 Months at 0% Interest ---------------------------------------------------------- Blue Wagon, LLC filed a disclosure statement with respect to its plan of reorganization dated April 25, 2019. The Debtor was a Raymond, Maine limited liability company, as of the Petition Date. The Debtor owns several buildings comprising rental units, as well as multiple vacant lots of land, minimal cash reserves, and some accounts receivable. Class 3 under the plan consists of the Allowed Unsecured Claims which will be repaid over six months at 0% interest. The payments required under the Plan will be made primarily from the following sources: (a) cash on hand of the Debtor; (b) monthly rental income generated from landlord-tenant leases; (c) sale of vacant lots; and/or (d) proceeds of causes of action, if any, which the Debtor and/or the estate have brought and/or may elect to bring, including without limitation, any proceeds of causes of action and claims for recovery of avoidable transfers, pursuant to state law and/or chapter 5 of the Bankruptcy Code (although the Debtor does not believe that any recoveries will be material). More specifically, the Assets currently include the following: The Debtor holds approximately $6,500 in cash reserves, with a further $2,550 in a checking account. The Account has been funded from, among other sources, pre and post-petition rental income. A copy of the Disclosure Statement is available at https://tinyurl.com/y5b2o6lk from Pacermonitor.com at no charge. About Blue Wagon Blue Wagon, LLC filed for chapter 11 bankruptcy protection (Bankr. D. Maine Case No. 19-20208) on April 25, 2019, and is represented by Scott J. Logan, Esq., at Law Office of J. Scott Logan, LLC. BP FISHER LAW: Trustee Taps Marshack Hays as Legal Counsel ---------------------------------------------------------- Richard Marshack, the Chapter 11 trustee for BP Fisher Law Group, LLP, received approval from the U.S. Bankruptcy Court for the Central District of California to hire Marshack Hays LLP as his legal counsel. The firm will provide services to the trustee in connection with the Debtor's Chapter 11 case, which include an evaluation of the Debtor's assets, investigation and prosecution of claims, and analysis of the Debtor's ability to reorganize and confirm a Chapter 11 plan of reorganization. The firm's hourly rates are: Richard Marshack Partner $650 D. Edward Hays Partner $650 Chad Haes Partner $450 David Wood Partner $450 Kristine Thagard Of Counsel $530 Matthew Grimshaw Of Counsel $500 Judith Marshack Associate $410 Laila Masud Associate $350 Tinho Mang Associate $300 Pamela Kraus Paralegal $270 Chanel Mendoza Paralegal $240 Layla Buchanan Paralegal $240 Cynthia Bastida Paralegal $240 Laurie McPherson Paralegal $175 Kathleen Frederick Paralegal $175 D. Edward Hays, Esq., a partner at Marshack Hays, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Marshack Hays can be reached through: D. Edward Hays, Esq. David A. Wood, Esq. Marshack Hays LLP 870 Roosevelt Irvine, CA 92620 Telephone: (949) 333-7777 Facsimile: (949) 333-7778 E-mail: ehays@marshackhays.com E-mail: dwood@marshackhays.com About BP Fisher Law Group BP Fisher Law Group, LLP, a law firm in Irvine, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-10158) on Jan. 15, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. The case is assigned to Judge Theodor Albert. Goe & Forsythe, LLP is the Debtor's legal counsel. Richard A. Marshack was appointed as Chapter 11 trustee for the Debtor. Marshack Hays LLP is the Debtor's legal counsel. BRICK OVEN PIZZA: Hires Robert C. Nisenson as Attorney ------------------------------------------------------ Brick Oven Pizza, LLC, seeks authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Robert C. Nisenson, LLC, as attorney to the Debtor. Brick Oven Pizza requires Robert C. Nisenson to represent and provide legal services to the Debtor in the Chapter 11 bankruptcy proceedings. Robert C. Nisenson will be paid at the hourly rate of $300. Robert C. Nisenson will be paid a retainer in the amount of $5,000. Robert C. Nisenson will also be reimbursed for reasonable out-of-pocket expenses incurred. Robert C. Nisenson, the firm's founding partner, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Robert C. Nisenson can be reached at: Robert C. Nisenson, Esq. ROBERT C. NISENSON, LLC 10 Auer Court East Brunswick, NJ 08816 Tel: (732) 238-8777 About Brick Oven Pizza Brick Oven Pizza, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 19-24678) on July 30, 2019, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Robert C. Nisenson, LLC, serving as counsel. BRIGHT MOUNTAIN: Completes Acquisition of Slutzky & Winshman ------------------------------------------------------------ Effective Aug. 15, 2019, the closing of the previously announced Share Exchange Agreement and Plan of Merger by and among Bright Mountain Media, Inc. and its wholly-owned subsidiary Bright Mountain Israel Acquisition Ltd, an Israeli corporation (the "Merger Sub"), Slutzky & Winshman Ltd., an Israeli company and the shareholders of S&W occurred. On the Closing Date, and upon the terms and subject to the conditions set forth in the Merger Agreement, the Company acquired all of the outstanding shares of S&W from the Shareholders in exchange for (i) the issuance an aggregate of 13,000,000 shares of the Company's common stock, and (ii) promissory notes in the aggregate principal amount of $750,000. Effective on the Closing Date the Company issued an aggregate of 12,070,799 of the Consideration Shares, and the balance will be issued post-Closing following the approval of certain equity compensation plans as required under Israeli law. Upon Closing, the Company has agreed to pay Spartan Capital Securities, LLC, a broker-dealer and member of FINRA, a finder's fee equal to (i) $165,000 in cash, payable from the proceeds of a future offering, and (ii) issue it 650,000 shares of the Company's common stock valued at $1,137,500. Under the terms of the Merger Agreement, following the Acquisition, Merger Sub will merge with and into S&W, then, a wholly-owned subsidiary of Parent on the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the provisions of Sections 314-327 of the Companies Law, 5759-1999 of the State of Israel, following which, Merger Sub will cease to exist. As soon as practicable after Closing, Bright Mountain Media agreed to cause each of Merger Sub and S&W to deliver to the Registrar of Companies of the State of Israel a merger proposal (in the Hebrew language), in accordance with ICL and the customary practice of the Companies Registrar informing the Companies Registrar of the Merger and requesting that the Companies Registrar declare the Merger effective and issue a certificate evidencing completion of the Merger in accordance with Section 323(5) of the ICL. Under the provisions of the ICL, at least 50 days shall have elapsed after the filing of the Merger Proposal with the Companies Registrar and at least 30 days shall have elapsed after the approval of the Merger by the shareholder of S&W and Merger Sub. On the Effective Time, in accordance with the customary practice of the Companies Registrar, Merger Sub will request that the Companies Registrar declare the Merger effective and issue the Certificate of Merger, at which time the separate existence of the Merger Sub will terminate. Following the Closing but prior to the Effective Time, the Acquisition may be terminated if any Israeli Governmental Entity (as that term is defined in the Merger Agreement) issues an order restraining or enjoying the Merger, and such order has become final and non-appealable. In that event, the S&W Shares would be returned by the Company to the Shareholders, the Consideration Shares would be returned to the Company by the Shareholders and the escrow agreements would be terminated, the Notes would be surrendered, and the Acquisition would be considered null and void. The Notes do not bear interest and are unsecured. 50% of the principal amount is due on or before one year from the Closing and the balance is due two years from the Closing. The amounts due under two of the Notes will be forgiven by the Shareholders in the event: * (a) the (i) payee ceases to provide continuous services to S&W, or any affiliate thereof employing or retaining the payee, in the capacity of an employee, consultant or other service provider following termination of the employment or consulting agreement by and between S&W and the payee, (ii) for "Cause", as that term is defined in the Note; or (ii) voluntary termination by the payee pursuant to the Note, other than termination for Good Reason, other than for death or Disability; and (b) S&W fails to achieve the following milestones on or before the "Milestone Date" (as that term is defined in the Note): (i) develop a minimum of ten Smart TV applications, and (ii) API integration with a minimum of two platforms. The amount due under the third Note will be forgiven by that Shareholder in the event the Milestones are not achieved. At Closing, Bright Mountain Media and the Shareholders entered into an 24 month Escrow Agreement with a third party escrow agent pursuant to which: * the S&W Shares were deposited with the Escrow Agent, which, by virtue of the Merger and without any action on the part of the Shareholders, will be released to Bright Mountain Media at the Effective Time. Prior to the Effective Time the Company has the right to vote the S&W Shares. In the event there is no Effective Time, the Escrow Agent will disburse the S&W Shares pursuant to written instructions by the Shareholders and Bright Mountain Media; and * an aggregate of 1,809,171 of the Consideration Shares were deposited with the Escrow Agent. Pursuant to the terms of the Merger Agreement, the Escrow Share Amount will be released to Bright Mountain Media in the event of any AR Collection Shortfall or in connection with adjudicated indemnification claims, in which event such shares will be cancelled and returned to the treasury with the status of authorized but unissued shares of the Company's common stock. If there is no AR Collection Shortfall or adjudicated indemnification claim, the Escrow Share Amount will be released to the Shareholders. At Closing, Bright Mountain Media, S&W and the Escrow Agent also entered into the Converted RSU (Restricted Stock Unit) Escrow Agreement related to certain stock options granted by S&W which were outstanding prior to the execution of the Merger Agreement. Under the terms of the Merger Agreement and the Converted RSU Escrow Agreement, 223,154 of the Consideration Shares when issued following the Israeli Sub Plan Approval will be deposited in escrow pending the lapse of 30 days from the filing by the Merger Sub of the Israeli Sub-Plan with the Israel Tax Authority, or if permitted under applicable Law or pursuant to the Options Tax Ruling or Interim Tax Ruling, if obtained (as all such terms are defined in the Merger Agreement), after which such options will be converted to restricted stock units of Bright Mountain Media, vesting in accordance with the terms of the original options. Upon the Effective Time, such options shall be deemed to have been cancelled against issuance of the Converted RSUs, without any further action of the parties or the option holders of such options. The escrow created thereunder will terminate upon the earlier to occur of (i) the release of all Converted RSUs to the option holders and/or redistribution to the 103K Trustee (as that term is defined in the Merger Agreement) and the Shareholders, or (ii) 24 months following the Closing Date. An option holder (and Shareholder) does not have any voting rights or any other rights as a shareholder of Bright Mountain Media with respect to the Converted RSUs until such time as they are delivered to the option holder (or transferred to the 103 Trustee) in accordance with the Converted RSU Escrow Agreement. At Closing, Mr. W. Kip Speyer, chairman of the Board and chief executive officer of Bright Mountain Media, entered into an lock up leak out agreement covering 9,543,546 shares of the Company's common stock owned by him, the terms of which are identical to the Lock Up Leak Out Agreement. Following the Closing the Company also issued an aggregate of 60,000 shares of the Company's common stock valued at $105,000 to the employees of S&W as compensation. The recipients were non-U.S. persons and the issuances were exempt from registration under the Securities Act in reliance on an exemption provided Regulation S thereof. Following the Closing the Company issued Spartan Capital 650,000 shares of the Company's common stock valued at $1,137,500 as partial consideration under a Finder's Fee Agreement. The recipient was an accredited investor and the issuance was exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(a)(2) of that act. Director Appointment On Aug. 15, 2019 Mr. Joey Winshman was appointed to the Company's board of directors in connection with the Closing. Mr. Winshman, 31, has served as chief marketing officer of S&W since co-founding the company in February 2015. Since June 2018 he has also served as chief marketing officer of Lumynox, a subsidiary of S&W. Prior to co-founding S&W, from June 2013 until January 2015 Mr. Winshman was media manager for Taptica International Ltd., now known as Tremor International Ltd. (AIM: TRMR), a leader in advertising technologies with operations in more than 60 countries. Mr. Winshman, who is a citizen of both Israel and the U.S., received a B.S. in Business Administration, Management Information Systems, from the University of Vermont. Mr. Winshman will not be considered an independent director and will not receive any compensation for his services on the board of directors. Bylaws Amendment On July 18, 2019 the Company's board of directors adopted a resolution fixing the number of members of the Company's board of directors at six in accordance with the provisions of the Company's Bylaws, thereby creating a vacancy on the board which was filled by Mr. Winshman' appointment. Employment and consulting agreements At Closing the Company also entered into employment or consulting agreements with the Shareholders to ensure the continuity of the operations of S&W post-Closing, including: Employment agreement with Joey Winshman. At the Closing, S&W entered into a two year employment agreement with Mr. Winshman to serve as its chief marketing officer. Mr. Winshman will be entitled to a monthly salary of NIS 46,500 (approximately $13,800). Mr. Winshman will be entitled to an annual cash bonus in an amount and subject to terms and conditions to be agreed upon, and reimbursement of certain expenses. S&W is obligated to contribute an amount of approximately 6.5% of his base salary to a pension plan and 7.5% of his base salary to an education fund. Mr. Winshman will be entitled to 20 days of paid vacation annually, and paid sick days and convalescence days in accordance with Israeli law. The initial term of the agreement may be extended by notice for an additional one year term. Prior to the expiration of the initial term, the agreement may only be terminated for "cause" as defined in the agreement; and thereafter it may be terminated by either party upon 60 days notice. In connection with the employment agreement, S&W also entered into a non-competition, proprietary information and inventions agreement. Consulting agreements with Nadav Slutzky and Eli Desatnik At Closing S&W entered into two year consulting agreement with each of Mr. Slutzky and Mr. Desatnik. Under the terms of these agreements, S&W will pay each of them a consulting fee of NIS 57,308 (approximately $16,500) plus value added taxes, and they are entitled to receive to an annual cash bonus in an amount and subject to terms and conditions to be agreed upon, and reimbursement of certain expenses. The initial term of each of the agreements may be extended by notice for an additional one year term. Prior to the expiration of the initial term, the agreement may only be terminated for "cause" as defined in the agreement; and thereafter it may be terminated by either party upon 60 days notice. In connection with the consulting agreement, S&W also entered into a non-competition, proprietary information and inventions agreement with each of Mr. Slutzky and Mr. Desatnik. Business of S&W Following the Closing, S&W is now a subsidiary of Bright Mountain Media. S&W, headquartered in Tel Aviv, Israel, is a data-driven marketing company which utilizes programmatic solutions for over the top, or "OTT", video and mobile advertising. Leveraging machine learning data, S&W provides technology for content creators to deploy, distribute, and monetize their content. S&W generates approximately 60% of its revenues from its video department, with the balance of approximately 40% from its mobile and display department. At Aug. 14, 2019, S&W had 18 full time and four part-time employees, all of whom are located in Israel. About Bright Mountain Based in Boca Raton, Fla., Bright Mountain Media, Inc. -- http://www.brightmountainmedia.com-- is a digital media holding company whose primary focus is connecting brands with consumers as a full advertising services platform. Bright Mountain Media's assets include an ad network, an ad exchange platform and 25 websites (owned and/or managed) that provide content, services and products. The websites are primarily geared for a young, male audience with several that focus on active, reserve and retired military audiences as well as law enforcement and first responders. Bright Mountain reported a net loss attributable to common shareholders of $5.33 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common shareholders of $3.01 million for the year ended Dec. 31, 2017. As of March 31, 2019, Bright Mountain had $5.39 million in total assets, $1.88 million in total liabilities, and $3.51 million in total shareholders' equity. EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 12, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has experienced recurring net losses, cash outflows from operating activities, and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. BRIGHT MOUNTAIN: Needs More Time to File its Form 10-Q ------------------------------------------------------ Bright Mountain Media, Inc. filed with the Securities and Exchange Commission a Form 12b-25 notifying the delay in the filing of its quarterly report on Form 10-Q for the period ended June 30, 2019. The Company needs additional time to complete the financial statements to be included in the Form 10-Q. About Bright Mountain Based in Boca Raton, Fla., Bright Mountain Media, Inc. -- http://www.brightmountainmedia.com-- is a digital media holding company whose primary focus is connecting brands with consumers as a full advertising services platform. Bright Mountain Media's assets include an ad network, an ad exchange platform and 25 websites (owned and/or managed) that provide content, services and products. The websites are primarily geared for a young, male audience with several that focus on active, reserve and retired military audiences as well as law enforcement and first responders. Bright Mountain reported a net loss attributable to common shareholders of $5.33 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common shareholders of $3.01 million for the year ended Dec. 31, 2017. As of March 31, 2019, Bright Mountain had $5.39 million in total assets, $1.88 million in total liabilities, and $3.51 million in total shareholders' equity. EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 12, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has experienced recurring net losses, cash outflows from operating activities, and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. BROOKLYN BUILDINGS: Secured Creditors Impaired Under New Plan ------------------------------------------------------------- Brooklyn Buildings LLC filed a first amended Chapter 11 plan and accompanying first amended disclosure statement to modify the treatment of Classes 1 (Allowed Secured Claim of HPD), 2 (Allowed Secured Claim of Frimhar Associates LLC), 3 (Allowed Other Secured Claims of New York City), and 4 (Allowed Secured Claim of Judgment Creditors), from unimpaired to impaired, and to include an updated GCRE Advisors' projection and analysis. The HPD Claim arises out of a first priority mortgage lien on the Properties. The Class 1 Claim is broken down by individual Property in the HPD Project Worksheet as the "HPD Subsidy." With respect to the three (3) Properties which are being sold at "market" (1145 St. Johns Place, 1582 Pacific and 942 Pacific Street) (collectively, the "Market Properties"), the HPD Subsidy will be paid in full at the sale closing. With respect to the remaining Properties, the HPD Subsidy will be assigned to and assumed by the Purchaser as contemplated under the LDA and the underlying loan documents and forgiven after completion and compliance of the residency requirement (7 years) by the buyer. As each HPD Subsidy on the Regulated Properties is assigned to the respective buyer, the Debtor shall be released (and deemed satisfied as to the Debtor only) from that portion of the Class 1 Claim. The Allowed Class 1 Claim shall continue to be secured by its lien on the unsold Properties until such time as it is fully satisfied under the Plan. The Class 1 Claim shall be deemed paid in full when each HPD Subsidy is either paid in full on Market Rate Properties or assumed by the buyers of the non "market rate" Properties. The Allowed Secured Class 2 Claim arises out of a second priority mortgage loan on the Properties in the approximate $700,000. The Class 2 Claim shall be refinanced at the contract rate of interest, in connection with the closing of the Exit Loan such that the Class 2 Claim shall be assigned to the Exit Lender. The (post-assignment) Class 2 Claim shall be paid in full, by the Debtor, at the contract rate of interest, in installments as each Property is sold. Class 3 consists of Holders of Other Allowed Secured Claims of New York City which includes all Allowed Claims of Department of Finance, Water Board, judgments held by OATH and tax lien trusts which are for claims of unpaid real estate taxes which liens have been sold by the City of New York. The Allowed Class 3 Claims shall be paid in full together with applicable statutory interest, upon the sale of the particular Property to which the respective Allowed Class 3 Claim relates. Until such time that each Allowed Class 3 Claim is paid in full, the liens which secure each Class 3 Claims shall remain in full force and effect. The Debtor estimates that the Class 3 Claims total approximately $1,050,000. Class 4 consists of the Holders of the Allowed judgment liens on the Properties not held by the City of New York and not arising out of an obligation due to the City of New York. The Secured Class 4 Claims include judgments obtained by creditors of Heights Houses which judgments became liens against the Properties upon recordation. The Debtor took title to the Properties subject to the judgment liens. The Allowed Class 4 Claims shall be paid in full inclusive of statutory interest from the proceeds of sale of the Properties after the payment of Class 1, 2 and 3 Claims in full. The Debtor estimates that the Class 3 Allowed Secured Claims total approximately $30,000. A full-text copy of the First Amended Disclosure Statement dated Aug. 14, 2019, is available at https://tinyurl.com/yysbc7ux from PacerMonitor.com at no charge. About Brooklyn Buildings Brooklyn Buildings LLC is a privately held real estate company. Its principal place of business is located at 1600 Bergen Street Brooklyn, New York. Brooklyn Buildings filed for bankruptcy protection (Bankr. E.D.N.Y., Case No. 18-43971) on July 11, 2018. In the petition signed by Yehoshua Allswang, managing member, the Debtor estimated assets of $10 million to $50 million and estimated liabilities of $1 million to $10 million. Judge Carla Craig oversees the case. Kirby Aisner & Curley LLP represents the Debtor. BUSINESS FIRST: Provides New Deadline for Admin Claims Objection ---------------------------------------------------------------- Business First, LLC filed a second amended combined disclosure statement and chapter 11 plan of liquidation dated August 2, 2019. This latest filing provides that the administrative claims objection deadline will be 14 days after an application for Administrative Claim is filed with the Court unless otherwise extended by agreement between the applicant and the Debtor or by order of the Court. A copy of the Disclosure Statement dated August 2, 2019 is available at https://tinyurl.com/y45mbuvz from Pacermonitor.com at no charge. About Business First, LLC Business First, LLC -- https://www.telemarusa.com/ -- provides navigation and communication equipment and services to the maritime industry. It also offers equipment installation, repairs, inspections and satellite airtime solutions. Business First filed a voluntary Chapter 11 petition (Bankr. D. Del. Case No. 19-11223) on May 31, 2019. In the petition signed by Thomas Collins, officer, the Debtor estimated $62,608 in assets and $6,323,821 in liabilities. The case is assigned to the Hon. Mary F. Walrath. Kate R. Buck, Esq. at McCarter & English, LLP, represents the Debtor as counsel. CAMBER ENERGY: Incurs $1.28 Million Net Loss in First Quarter ------------------------------------------------------------- Camber Energy, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $1.28 million on $121,351 of total revenues for the three months ended June 30, 2019, compared to a net loss of $3.51 million on $1.69 million of total revenues for the three months ended June 30, 2018. As of June 30, 2019, the Company had $7.16 million in total assets, $1.97 million in total liabilities, and $5.19 million in total stockholders' equity. At June 30, 2019, the Company's total current assets of $6.7 million exceeded its total current liabilities of approximately $1.7 million, resulting in working capital of $5.0 million, while at March 31, 2019, the Company's total current assets of $8.2 million exceeded its total current liabilities of approximately $2.1 million, resulting in working capital of $6.1 million. The $1.1 million decrease in working capital is primarily related to general and administrative costs incurred during the quarter ended June 30, 2019, including costs related to the Lineal acquisition. Management believes that with the elimination of its outstanding debt and the funds raised through equity transactions, along with revenues the Company anticipates generating through Lineal, the Company has sufficient capital to fund operating costs and planned capital expenditures through the end of August 2020. Additionally, moving forward, management intends to use a portion of the Company's working capital (including $4 million which was set aside for acquisitions as of the closing of the Lineal transaction) to facilitate other targeted acquisitions and mergers. If additional financing is required to consummate transactions, management intends to seek additional equity and debt financing, as needed, of which no financing arrangements are currently in place. A full-text copy of the Form 10-Q is available for free at: https://is.gd/ym0HG0 About Camber Energy Based in San Antonio, Texas, Camber Energy, Inc. (NYSE American: CEI) -- http://www.camber.energy/-- is an independent oil and gas company engaged in the development of crude oil, natural gas and natural gas liquids in the Hunton formation in Central Oklahoma in addition to anticipated project development in the Texas Panhandle. The Company also provides midstream and downstream pipeline specialty construction, maintenance and field services via its recently announced acquisition agreement with Lineal Star Holdings LLC. Camber Energy reported net income of $16.64 million for the year ended March 31, 2019, following a net loss of $24.77 million for the year ended March 31, 2018. As of March 31, 2019, the Company had $8.58 million in total assets, $2.40 million in total liabilities, and $6.17 million in total stockholders' equity. Camber Energy received on July 2, 2019, a deficiency letter from NYSE American LLC stating that the Company is not in compliance with the continued listing standards as set forth in Section 103(f)(v) of the NYSE American Company Guide. The Deficiency Letter indicated that the Company's securities have been selling for a low price per share for a substantial period of time. CAMBER ENERGY: Starts Gas Gathering Line Project Budgeted at $2.3M ------------------------------------------------------------------ Camber Energy, Inc.'s recently acquired subsidiary Lineal Industries, Inc -- www.LinealStar.com -- has commenced work on a recently awarded contract from a master limited partnership owned by one of the top tier oil and gas companies in the United States. The project entails the construction of a new 12", well pad to well pad gas pipeline system, running over 8,900 feet in South Western Pennsylvania. Budget for this project is approximately $2.3 million (US); the project is well underway and is anticipated to be completed within the next 90 days. Louis Schott, interim CEO of Camber Energy, commented, "We appreciate the confidence shown by the master limited partnership in awarding us this project, the second from this client in the last two weeks. This enables Lineal to keep its teams fully deployed and continues to drive the growth of our company in the pipeline specialty construction, maintenance and field services market." About Camber Energy Based in San Antonio, Texas, Camber Energy, Inc. (NYSE American: CEI) -- http://www.camber.energy-- is an independent oil and gas company engaged in the development of crude oil, natural gas and natural gas liquids in the Hunton formation in Central Oklahoma in addition to anticipated project development in the Texas Panhandle. The Company also provides midstream and downstream pipeline specialty construction, maintenance and field services via its recently announced acquisition agreement with Lineal Star Holdings LLC. Camber Energy reported net income of $16.64 million for the year ended March 31, 2019, following a net loss of $24.77 million for the year ended March 31, 2018. As of June 30, 2019, the Company had $7.16 million in total assets, $1.97 million in total liabilities, and $5.19 million in total stockholders' equity. Camber Energy received on July 2, 2019, a deficiency letter from NYSE American LLC stating that the Company is not in compliance with the continued listing standards as set forth in Section 103(f)(v) of the NYSE American Company Guide. The Deficiency Letter indicated that the Company's securities have been selling for a low price per share for a substantial period of time. CARBUCKS OF CAROLINA: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Carbucks of Carolina, Inc., according to court dockets. About Carbucks of Carolina Inc. Carbucks of Carolina, Inc. -- http://www.carbuckscorp.com/-- is a car and vehicle title loan company operating in Georgia, South Carolina, and Delaware, and nationally with its online title lending service. The company provides financing based on the value of its clients' cars, truck commercial vehicles, boats, and motorcycles. Carbucks of Carolina filed a voluntary Chapter 11 petition (Bankr. M.D. Fla. Case No. 19-06503) on July 10, 2019. In the petition signed by Philip Heitlinger, president, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Alberto F. Gomez Jr., Esq., at Johnson Pope Bokor Ruppel & Bums, LLP, represents the Debtor as counsel. CARTI: Fitch Affirms 'BB+' Issuer Default Rating ------------------------------------------------ Fitch Ratings has affirmed the rating on the $48.245 million Pulaski County Public Facilities Board health facilities revenue bonds, series 2013, issued on behalf of the Central Arkansas Radiation Therapy Institute (d/b/a CARTI) at 'BB+'. In addition, Fitch has affirmed CARTI's Issuer Default Rating at 'BB+.' The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of gross revenues, a first-mortgage lien, and a debt service reserve fund. ANALYTICAL CONCLUSION The 'BB+' IDR and revenue bond rating reflect Fitch's expectation that CARTI will maintain a weaker but stable financial profile with net adjusted leverage of approximately 4x. The rating incorporates CARTI's late position in its capital cycle with manageable spending needs. CARTI's revenue defensibility is midrange, characterized by low Medicaid and self-pay exposure and a leading market share for its services in the stable and growing service area. In addition, Fitch's assessment of CARTI's revenue defensibility is informed by enhanced revenue defensibility analysis using the 'U.S. Not-For-Profit Hospitals and Health Systems Rating Criteria'. KEY RATING DRIVERS Revenue Defensibility: Midrange Fitch's assessment of 'midrange' revenue defensibility corresponds to a revenue defensibility assessment of 'bbb' under the 'U.S. Not-For-Profit Hospitals and Health Systems Rating Criteria'. The 'bbb' assessment reflects CARTI's strong regional reputation that solidifies its market share and provides bargaining power on key revenue contracts with commercial payors and clinical affiliates. Demographic characteristics in CARTI's primary operating location of Little Rock, AR are stable, as is its payor mix, evidenced by very low Medicaid and self-pay as a percentage of gross revenues. Operating Risk: Weaker Fitch's assessment of operating risk at 'weaker' reflects CARTI's consistent history of operating deficits over the last five fiscal years, with considerable revenue and expense volatility prior to expense controls and improved collections that have materialized over the past couple of years. Over time, Fitch expects CARTI's revenue growth to track expenses, with expectations for CARTI to operate at modest deficits over the outlook period. Resource management outcomes are adequate, with CARTI's growing reputation assisting in recruitment efforts of a highly specialized medical staff at both its main facility and affiliate locations. Capital spending from operations is expected to be manageable over the next five years. Large scale strategic capital projects are possible, but no material plans have been developed to date and Fitch expects capital spending needs to be manageable over the intermediate term. Financial Profile: Weaker CARTI's limited balance sheet resources and history of weak cash flow, relative to its adjusted debt through the cycle, support a 'weaker' assessment of its leverage profile. The assessment of CARTI's overall financial profile is further constrained by an asymmetric rating factor consideration of its very low liquidity cushion relative to operating expenses (around 0.2x), which compromises financial flexibility relative to Fitch's 'weaker' assessment of its operating risk. Asymmetric Risk Additive Considerations There were no overall asymmetric additive risk factors applied in the rating determination. RATING SENSITIVITIES CHANGE IN OPERATIONAL PERFORMANCE: A demonstrated track record of breakeven operations resulting in material improvement in CARTI's liquidity cushion would be necessary for Fitch to take positive rating action. Conversely, any deterioration in operating performance, though not expected, could be cause for negative rating action, especially if it results in erosion of key leverage metrics. CREDIT PROFILE CARTI is a freestanding outpatient cancer care provider, serving the Little Rock and central Arkansas area with radiation, medical, surgical, and other cancer treatment services. Total revenues were $218 million in fiscal unaudited 2019 (fiscal year end June 30). Revenue Defensibility CARTI's leadership in outpatient cancer services within Little Rock and the surrounding market remains a key strength and is further buttressed by relatively low levels of Medicaid and self-pay gross revenues owing largely to CARTI's specialization, generally totaling less than 5%. High government payor exposure remains, as Medicare is a significant component of payor mix at approximately 57% of fiscal 2018 gross revenues. CARTI's favorable payor mix is expected to remain stable, given overall stability in the greater Little Rock area that CARTI serves. The city of Little Rock and Pulaski County both exhibit moderately lower wealth and income levels than the national average, although this concern is offset somewhat by continued population growth and favorable unemployment trends. Patient revenues make up essentially all of CARTI's operating revenue base, making long-term demand prospects for services central to future revenue defensibility. CARTI's leading market position, prudent affiliation with partnering inpatient providers, and stable service area characteristics have resulted in consistent, healthy volume growth in recent years. Operating Risk CARTI has a consistent history of operating deficits in each of the last five fiscal years. Revenue growth has historically lagged expense growth, especially following the completion of CARTI's cancer center facility in late 2015, which effectively consolidated many core operations that had previously been conducted in disparate leased spaces. The lag, coupled with higher startup costs in the new facility, resulted in a missed debt service covenant of 1.2x in fiscal 2016. A consultant was engaged in early calendar 2016, which gave CARTI a waiver on its 2017 and 2018 debt service covenant requirements. Performance improved accordingly, with CARTI exceeding the requirement in fiscal 2017 and covenanted coverage of over 2x in fiscal 2018. Furthermore, fiscal 2018 was the first in several years in which CARTI met budgeted expectations. Unaudited fiscal 2019 performance reflects further operating improvements and CARTI's third consecutive year of revenue growth in excess of expense inflation and coverage is projected to remain solid on covenant and cash flow bases. Initiatives in place since fiscal 2018 have resulted in financial improvement, including strengthened revenue cycle management, enhanced physician alignment, and tighter management of salaries and wages. Oncology therapy drugs are CARTI's greatest expense, resulting in a relatively variable expense base and providing some flexibility to vary costs with demand fluctuation. Management indicates that additional clinical uses for some of these new treatments has resulted in growing levels of coverage from commercial insurers, but Fitch believes that CARTI's high government payor mix limits its ability to pass costs on through charges for services and will require ongoing efficiencies in revenue cycle performance and expense control to maintain these recent operating improvements. Resource management risk is expected to remain limited, as CARTI's strong and growing regional reputation has facilitated the recruitment of physicians with unique cancer therapy specializations that enhance CARTI's outpatient performance as well as affiliations with inpatient treatment providers. Capital planning and management is neutral to CARTI's rating, as budgeting and planning for facility expansions and improvements have historically proven prudent. Future capital planning is limited to the addition of equipment related to increased volumes since opening the cancer center campus. Longer-term capital needs are being considered relative to CARTI's service growth needs but no specific plans or investment levels are currently known. Financial Profile CARTI's adjusted debt totaled $60.6 million in fiscal 2018, including non-cancellable operating leases. There is no exposure to defined benefit pension plans or variable rate instruments. Net of available funds (AF), adjusted debt is about $20 million, with AF approximating 67% of total adjusted debt. Unaudited expectations for fiscal 2019 indicate moderate improvement in these ratios. Fitch's base case scenario, which aligns with its expectations based on historical performance and recent trends, assumes that revenue will grow at a moderate pace through fiscal 2023. The base case further assumes that revenue growth will generally match expense growth, given CARTI's largely variable cost structure. Net income is expected to remain negative, trending closer to breakeven operations in the last year of Fitch's forward look. CARTI's very new facilities and outpatient setting allow for some deferred capital spending in future years. As a result, Fitch expects capital spending from unrestricted sources to remain below depreciation in the near to intermediate term. The rating case incorporates Fitch's view that revenue growth may be subject to higher volatility, based on normal cyclical variations, but that CARTI would have limited ability to respond with expense cuts based on its 'weaker' operating risk assessment. In a plausible stress scenario, Fitch expects revenue would still grow based on CARTI's continuing success with affiliations and strong market position, but that margin pressure would mount in years one and two of the stress scenario. In this scenario, Fitch estimates that CARTI's leverage would stabilize around 4x net adjusted debt to funds available, which is consistent with a weaker leverage profile. A sustained track record of material growth in CARTI's liquidity cushion relative to operating expenses would be necessary to elicit positive rating action. CARTI's financial profile is characterized by weak leverage metrics and a limited liquidity cushion. AF (cash and investments less permanently restricted net assets) totaled $40.7 million at June 30, 2018, down from about $68.0 million in 2015. Including AF, credit line availability and cash flow, CARTI maintained a thin 0.2x liquidity cushion against operating expenses, resulting in a negative liquidity assessment. Leverage is also elevated on an AF to debt basis, with net debt remaining consistently positive throughout the forward look. Fitch's application of the standard rating case stress described - consistent with a moderate decline in operating revenues followed by a rebound - further weakens these ratios, though at levels still consistent with the 'BB+' rating. CENTER CITY HEALTHCARE: Comm. Taps Berkeley as Financial Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Center City Healthcare, LLC, d/b/a Hahnemann University Hospital, and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the District of Delaware to retain Berkeley Research Group, LLC, as financial advisor to the Committee. Advisory services BRG will render are: a) advise and assist the Committee in its analysis and monitoring of the historical, current and projected financial affairs of the Debtors, including, schedules of assets and liabilities and statement of financial affairs; b) advise and assist the Committee with respect to any debtor-in-possession financing arrangements and/or use of cash; c) scrutinize cash disbursements on an on-going basis for the period subsequent to the commencement of these Cases; d) prepare and issue periodic monitoring reports to enable the Committee to evaluate effectively the Debtors' performance, ability to realize or settle claims for avoidance actions, 363 sale process, and subsequent wind-down activities on an ongoing basis; e) advise and assist the Committee in reviewing and evaluating any court motions (including any assumption or rejection motions or objections thereto), applications, or other forms of relief filed or to be filed by the Debtors, or any other parties-in-interest; f) analyze the Debtors' and non-Debtor affiliates' assets (tangible and intangible) and possible recoveries to creditor constituencies under various scenarios; g) develop strategies to maximize recoveries from the Debtors' assets and advise and assist the Committee with such strategies; h) as appropriate and in concert with the Committee's other professionals, analyze and monitor any prior sale processes and transactions and assess the reasonableness of the process and the consideration received; i) monitor Debtors' claims management process, analyze claims, analyze guarantees, and summarize claims by entity; j) advise and assist the Committee in identifying and/or reviewing any preference payments, fraudulent conveyances, and other potential causes of action that the Debtors' estates may hold against insiders and/or third parties; k) review and provide analysis of any bankruptcy plan and disclosure statement relating to the Debtors including, if applicable, the development and analysis of any bankruptcy plans proposed by the Committee; l) advise and assist the Committee in its assessment of the Debtors' employee needs and related costs, to insure they are appropriate in the context of the case; m) analyze both historical and ongoing intercompany and/or related party transactions of the Debtors and non-Debtor affiliates; n) advise and assist the Committee in the evaluation of the Debtors' operations and/or investments; o) attend Committee meetings, court hearings, and auctions as may be required; p) work with the Debtors' tax advisors to ensure that any restructuring or sale transaction is structured to minimize tax liabilities to the estate; q) provide other services as may be requested from time to time by the Committee and its counsel, consistent with the role of a financial advisor. BRG's current standard hourly rates are: Managing Director $775 - $1,050 Director $595 - $815 Professional Staff $275 - $720 Support Staff $135 - $275 Christopher Kearns $1,050 Haywood Miller $895 Andrew Cowie $715 Albert Jiang $415 Christopher J. Kearns, Managing Director of Berkeley Research Group, LLC, attests that BRG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and BRG represents no interest adverse to the Committee, the Debtors, their estates, or any other party in interest in the matters upon which it is to be engaged. The advisor can be reached through: Christopher J. Kearns BERKELEY RESEARCH GROUP, LLC 810 Seventh Avenue, Suite 4100 New York, NY 10019 Phone: 646-205-9320 Fax: 646-454-1174 Email: ckearns@thinkbrg.com About Center City Healthcare d/b/a Hahnemann University Hospital Center City Healthcare, LLC, is a Delaware limited liability company that operates Hahnemann University Hospital. Its parent company is Philadelphia Academic Health System, LLC, which is also the parent company of St. Christopher's Healthcare, LLC and its affiliated physician groups. Center City Healthcare and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11466) on June 30, 2019. At the time of the filing, the Debtors estimated assets of between $100 million and $500 million and liabilities of the same range. The cases are assigned to Judge Kevin Gross. The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel; EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as investment banker; and Omni Management Group, Inc., as claims and noticing agent. CENTER CITY HEALTHCARE: Committee Tap Sills Cummis as Co-Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Center City Healthcare, LLC, d/b/a Hahnemann University Hospital, and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the District of Delaware to retain Sills Cummis & Gross P.C. as its co-counsel, nunc pro tunc to July 15, 2019. Services Sills Cummis will render are: a. provide legal advice regarding the Committee's rights, powers, and duties in these cases; b. prepare all necessary applications, answers, responses, objections, orders, reports, and other legal papers; c. represent the Committee in any and all matters arising in these cases, including any dispute or issue with the Debtors or other third parties; d. assist the Committee in its investigation and analysis of the Debtors, their capital structures, and issues arising in or related to these cases, including but not limited to the review and analysis of all pleadings, claims, and bankruptcy plans that might be filed in these cases, and any negotiations or litigation that may arise out of or in connection with such matters, the Debtors' operations, the Debtors' financial affairs, and any proposed disposition of the Debtors' assets; e. represent the Committee in all aspects of any sale and bankruptcy plan confirmation proceedings; and f. perform any and all other legal services for the Committee that may be necessary or desirable in these cases. Sills's hourly fees are: Members $425-$1,050 Of Counsels $425-$625 Associates $295-$495 Paralegals $95-$295 Sills agreed to provide its services to the Committee at a blended hourly rate of $625. Andrew H. Sherman, Member of the law firm Sills Cummis & Gross P.C., attests that Sills does not hold or represent any other entity having an adverse interest in connection with these cases as required by section 1103(b), and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Sherman disclosed in court filings that his firm has agreed to a variation of its standard or customary billing arrangements for its employment with the committee. Sills Cummis has agreed to provide its services to the Committee at a blended hourly rate of $625, according to the attorney. Mr. Sherman also disclosed that no professional at his firm has varied his rate based on the geographic location of the Debtors' bankruptcy cases. The committee has reviewed the budget for the period of the week week ending July 12, 2019 through the week ending October 4, 2019. Sills Cummis intends to submit a budget and staffing plan for approval to the committee in the normal course of its representation, according to Mr. Sherman. Sills Cummis can be reached through: Andrew H. Sherman, Esq. Boris Mankovetskiy, Esq. Sills Cummis & Gross P.C. One Riverfront Plaza Newark, NJ 07102 Telephone: (973) 643-6982 Email: asherman@sillscummis.com bmankovetskiy@sillscummis.com About Center City Healthcare d/b/a Hahnemann University Hospital Center City Healthcare, LLC, is a Delaware limited liability company that operates Hahnemann University Hospital. Its parent company is Philadelphia Academic Health System, LLC, which is also the parent company of St. Christopher's Healthcare, LLC and its affiliated physician groups. Center City Healthcare and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11466) on June 30, 2019. At the time of the filing, the Debtors estimated assets of between $100 million and $500 million and liabilities of the same range. The cases are assigned to Judge Kevin Gross. The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel; EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as investment banker; and Omni Management Group, Inc., as claims and noticing agent. CENTER CITY HEALTHCARE: Committee Taps Fox Rothschild as Counsel ---------------------------------------------------------------- The official committee of unsecured creditors of Center City Healthcare, LLC and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the District of Delaware to retain Fox Rothschild LLP as its legal counsel effective July 17. The professional services that Fox will render are: a. provide legal advice with respect to the committee's powers and duties as appointed under Section 1102 of the Bankruptcy Code; b. assist in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of their businesses, and any other matter relevant to their Chapter 11 cases or to the formulation of a plan of reorganization or liquidation; c. prepare on behalf of the committee necessary motions, applications, answers, orders, reports and other legal papers; d. review, analyze and respond to pleadings and appear before the court; e. represent the committee in hearings and other judicial proceedings; f. advise the committee of its fiduciary duties and responsibilities; g. advise the committee and its other professionals on practice and procedure in the bankruptcy court; and h. perform other legal services in connection with the cases if required. Fox's current rates range from $335 to $925 per hour for partners, from $215 to $570 per hour for associates and from $105 to $440 per hour for paraprofessionals. The firm's hourly rates for attorneys are: Attorney Title Rate -------- ----- ---- Thomas M. Horan Partner $610 Johnna M. Darby Of-Counsel $450 Katelyn Crawford Associate $340 Thomas Horan, Esq., a partner at Fox, disclosed in a court filing that he and other attorneys of the firm do not have interest adverse to the committee and the Debtors' estates or creditors. Fox Rothschild can be reached through: Thomas M. Horan, Esq. Fox Rothschild LLP 919 North Market Street, Suite 300 Wilmington, DE 19801 Tel: 302-480-9412 Fax: 302-656-8920 Email: thoran@foxrothschild.com About Center City Healthcare d/b/a Hahnemann University Hospital Center City Healthcare, LLC, is a Delaware limited liability company that operates Hahnemann University Hospital. Its parent company is Philadelphia Academic Health System, LLC, which is also the parent company of St. Christopher's Healthcare, LLC and its affiliated physician groups. Center City Healthcare and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11466) on June 30, 2019. At the time of the filing, the Debtors estimated assets of between $100 million and $500 million and liabilities of the same range. The cases are assigned to Judge Kevin Gross. The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel; EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as investment banker; and Omni Management Group, Inc., as claims and noticing agent. CENTERSTONE LINEN: Aug. 19 Hearing on Plan Outline Set ------------------------------------------------------ Bankruptcy Judge Margaret Cangilos-Ruiz is set to hold a hearing on August 19, 2019 to consider approval of Centerstone Linen Services, LLC, and its debtor-affiliates' disclosure statement in connection with its chapter 11 plan of liquidation dated August 2, 2019. The Plan is predicated on the sales of substantially all of the Debtors' Assets, the liquidation of Remaining Assets, the collection of Accounts Receivable. The Plan will be implemented through this process and the Debtors will make Distributions from the proceeds as set forth in the Plan. As a result of the foregoing, the Plan contemplates the payment in full in Cash of all Administrative Claims, Fee Claims, U.S. Trustee Fees and the HSBC Administrative DIP Claim against the Debtors, unless the holders of such Claims agree otherwise to less favorable treatment. The Priority Claims and general unsecured Claims will be paid pursuant to the terms of the Liquidation Trust Agreement to be implemented by the Committee. The primary objectives of the Plan are: (i) to provide a mechanism for Distribution of the remaining proceeds of the Asset Sales being held in trust for the benefit of the Estates; (ii) completing the liquidation of the Debtors' remaining assets, including, for example, Avoidance Actions, Recovery Actions and Causes of Action held by, or in favor of, the Debtors; (iii) reconciling and fixing the Claims asserted against the Debtors; and (iv) distributing the net liquidation proceeds in conformity with the Distribution scheme provided by the Bankruptcy Code. A substantial portion of the Debtors' Assets have already been sold to third parties. The balance of the Assets will be administered as set forth herein pursuant to the terms of the Liquidation Trust Agreement. The Debtors ceased operating their last facility effective July 19, 2019 and will sell or otherwise dispose of their Remaining Assets and wind down their affairs consistent with the Plan. Because the Plan is a plan of liquidation, pursuant to Section 1141(d)(3) of the Bankruptcy Code, the Debtors will not receive a discharge. All Interests in the Debtors will be canceled and, because the Allowed Claims of general unsecured Creditors will not be paid in full due to insufficient funds, no Distributions will be made under the Plan on account of any such Interests in the Debtors. A copy of the Disclosure Statement dated August 2, 2019 is available at https://tinyurl.com/yxrpe8wf from Pacermonitor.com at no charge. About Centerstone Linen Services Atlas Health Care Linen Services Co., LLC, Alliance Laundry & Textile Service, LLC and two other entities, all doing business as Clarus Linen Systems -- http://www.claruslinens.com/-- provide linen rental and commercial laundry services to the healthcare industry, primarily supplying scrubs, sheets, towels, blankets, patient apparel and other linen products to hospitals and healthcare clinics via long-term contacts. Atlas and Alliance currently operate five production facilities in three states (Atlas operates two facilities in New York and Alliance operates two facilities in Georgia and one in South Carolina) that provide daily pick-ups and deliveries to their customers. Centerstone Linen Services, LLC, is the corporate parent of four subsidiary corporations and provides back-office and administrative support to them. Centerstone Linen Services and its four subsidiaries (Bankr. N.D.N.Y. Lead Case No. 18-31754) in Syracuse, New York on Dec. 19, 2018. Atlas Health estimated $10 million to $50 million in assets and liabilities of the same range as of the bankruptcy filing. Centerstone Linen estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. BOND, SCHOENECK & KING, PLLC, is the Debtors' counsel. The U.S. Trustee for Region 2 on Jan. 10, 2019, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases. The Committee retained Montgomery McCracken Walker & Rhoads LLP, as counsel. CHARMING CHARLIE: Seeks to Hire Klehr Harrison as Co-Counsel ------------------------------------------------------------ Charming Charlie Holdings Inc. and its debtor-affiliated seek authority from the United States Bankruptcy Court for the District of Delaware (Delaware) to employ Klehr Harrison Harvey Branzburg LLP as co-counsel to the Debtors. The Debtors require Klehr Harrison to: (a) provide legal advice regarding the Local Rules, practices, precedent and procedures and provide substantive and strategic advice on how to accomplish the Debtors' goals in connection with the prosecution of these cases, bearing in mind that the Court relies on co-counsel such as Klehr Harrison to be involved in all aspects of each bankruptcy proceeding; (b) appear in Court, depositions, and at any meeting with the U.S. Trustee and any meeting of creditors at any given time on behalf of the Debtors as their co-counsel; (c) attend meetings and negotiate with representatives of creditors and other parties in interest, in its capacity as co-counsel to the Debtors with Paul Hastings; (d) attend, comment and/or prepare drafts of documents and discovery materials, and ensure compliance with the Local Rules, to be filed with the Court as co-counsel to the Debtors and/or served on parties or third parties in these chapter 11 cases; (e) advise and assist the Debtors with respect to the reporting requirements of the U.S. Trustee; (f) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (g) perform various services in connection with the administration of these cases, including, without limitation, (i) preparing certificates of no objection, certifications of counsel, notices of fee applications and hearings, agendas, and hearing binders of documents and pleadings, (ii) monitoring the docket for filings and coordinating with Paul Hastings on pending matters that need responses, (iii) preparing and maintaining critical dates memoranda to monitor pending applications, motions, hearing dates and other matters and the deadlines associated with the same, (iv) generally preparing and/or assisting in preparation, and file on behalf of the Debtors all necessary motions, notices, applications, answers, orders, reports and papers in support of positions taken by the Debtors, and (v) handling inquiries and calls from creditors and counsel to interested parties regarding pending matters and the general status of these cases and coordinating with Paul Hastings on any necessary responses; and (h) perform all other services assigned by the Debtors, in consultation with Paul Hastings, to Klehr Harrison as co-counsel to the Debtors, and to the extent Klehr Harrison determines that such services fall outside of the scope of services historically or generally performed by Klehr Harrison as co-counsel in a bankruptcy proceeding, Klehr Harrison will file a supplemental declaration. Klehr Harrison's current hourly rates are: Partners $350-$825 Counsel $300-$525 Associates $230-$475 Paralegals $150-$255 The Debtors paid a classic retainer to Klehr Harrison of $63,000.00 on July 8, 2019. Klehr Harrison will also be reimbursed for reasonable out-of-pocket expenses incurred. Domenic E. Pacitti, a partner at Klehr Harrison, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Klehr Harrison can be reached at: Domenic E. Pacitti, Esq. Michael W. Yurkewicz, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 N. Market Street, Suite 1000 Wilmington, DE 19801 Tel: (302) 426-1189 Fax: (302) 426-9193 About Charming Charlie Charming Charlie -- http://www.CharmingCharlie.com/-- is a Houston-based specialty retailer focused on fashion jewelry, handbags, apparel, gifts and beauty products. As of July 12, 2019, Charming Charlie had both a national, operating 261 locations across 38 states nationwide. Charming Charlie Holdings Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-12906) on Dec. 11, 2017, and emerged from bankruptcy in April 2018. Kirkland & Ellis LLP was the Company's legal counsel, Klehr Harrison Harvey Branzburg LLP was local counsel, AlixPartners LLP was the restructuring advisor, and Guggenheim Securities, LLC was the investment banker in the restructuring. On July 11, 2019, Charming Charlie Holdings and six affiliates each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11534), this time with plans to conduct going-out-of-business sales for all stores. In the new Chapter 11 cases, Paul Hastings LLP is serving as counsel, and Clear Thinking Group LLC is the restructuring advisor. Klehr Harrison Harvey Branzburg LLP is local bankruptcy counsel. Hilco Merchant Resources, LLC and SB360 Capital Partners are the sales agents. Prime Clerk LLC is the claims agent. CHEYENNE HOTEL: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Cheyenne Hotel Investments, LLC as of Aug. 14, according to a court docket. About Cheyenne Hotel Investments Cheyenne Hotel Investments operates Homewood Suites by Hilton Hotel located in Colorado Springs, Colo. Cheyenne Hotel Investments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-15473) on June 26, 2019. At the time of the filing, the Debtor had estimated assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Kimberley H. Tyson. The Debtor is represented by Thomas F. Quinn, P.C. CLEARWATER TRANSPORTATION: Seeks Aug. 23 Hearing Continuation ------------------------------------------------------------- Clearwater Transportation, Ltd. filed an unopposed motion to continue the August 8, 2019 disclosure statement hearing to August 23, 2019 at 9:30 a.m. The City of Austin, Austin Conrac, LLC, the U.S. Trustee for the Western District of Texas, and Newtek Small Business Finance, LLC have filed objections to the disclosure statement. The Debtor and its counsel are actively engaged in disclosure statement and plan negotiations with those and other parties, including Selig Leasing Company. The Debtor anticipates continuing to address the disclosure statement and plan issued with other active creditors in the case. Thus, Debtor seeks additional time to attempt to negotiate consensual Plan terms and agreements with the aforementioned parties and/or to at least resolve pending formal or informal objections to the disclosure statement with a subsequent revision of the disclosure statement. Debtor believes a continuance of the disclosure statement hearing to allow such negotiations and discussions is warranted and is in the best interest of the Debtor's estate. About Clearwater Transportation Clearwater Transportation, Ltd., a company in San Antonio, Texas, that provides car rental services, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 19-50292) on Feb. 7, 2019. At the time of the filing, the Debtor estimated assets of $1 million to $10 million and liabilities of the same range. The case is assigned to Judge Craig A. Gargotta. Dykema Gossett PLLC is the Debtor's legal counsel. COLORADO GROUP 3: Seeks to Hire DLG Law Group as Legal Counsel -------------------------------------------------------------- Colorado Group 3 LLC seeks approval from the U.S. Bankruptcy Court for the District of Colorado to hire DLG Law Group, LLC as its legal counsel. The Debtor requires DLG Law to: (a) consult with the Debtor concerning its powers and duties in the continued operation of its business and the management of the financial and legal affairs of its estate; (b) consult with the Debtor and with other professionals concerning the preparation and prosecution of a Chapter 11 plan and disclosure statement; (c) confer and negotiate with the Debtor's creditors and other parties in interest concerning its financial affairs and property, bankruptcy plans, claims, liens, and other aspects of its bankruptcy case; (d) appear in court on behalf of the Debtor when required, and prepare, file and serve such applications, motions, complaints, notices, orders, reports, and other documents; and (e) provide the Debtor with other legal services if requested. Michael Davis, Esq., the firm's attorney who will be handling the case, will charge $325 per hour for his services. On July 25, DLG received a retainer in the amount of $5,500 from Aspen Development Inc., an entity owned by the managing member of the Debtor, Ernest Todd Proffit. Mr. Davis disclosed in court filings that his firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael J. Davis, Esq. DLG Law Group, LLC 4100 E. Mississippi Ave. Ste. 420 Denver, CO 80246 Phone: 303-758-5100 Fax : 303-758-5055 Email: mdavis@dlglaw.net About Colorado Group 3, LLC Based in Aspen, Colorado, Colorado Group 3, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-16388) on July 26, 2019, listing under $1 million in both assets and liabilities. Michael J. Davis, Esq., at DLG Law Group LLC represents Colorado Group 3 as counsel. On July 26, 219, Colorado Group LLC I filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-16386). It has common ownership with Colorado Group 3. Michael J. Davis and DLG Law Group are also representing Colorado Group LLC I in it bankruptcy proceedings. No claim has been asserted against Colorado Group LLC I and Colorado Group 3. COMMUNITY HEALTH: Files Second Quarter Form 10-Q ------------------------------------------------ Community Health Systems, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss attributable to the Company's stockholders of $167 million on $3.30 billion of net operating revenues for the three months ended June 30, 2019, compared to a net loss attributable to the Company's stockholders of $110 million on $3.56 billion of net operating revenues for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss attributable to the Company's common stockholders of $285 million on $6.67 billion of net operating revenues compared to a net loss attributable to the Company's common stockholders of $135 million on $7.25 billion of net operating revenues for the same period last year. As of June 30, 2019, the Company had $16.13 billion in total assets, $17.38 billion in total liabilities, $503 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $1.75 billion. Net cash provided by operating activities increased $171 million, from approximately $94 million for the six months ended June 30, 2018, to approximately $265 million for the six months ended June 30, 2019. The increase in cash provided by operating activities was primarily the result of lower interest payments due to the timing of payments resulting from the refinancing activity during the six months ended June 30, 2019, as well as from an increase in cash flow from patient accounts receivable collections. Such increases were offset by higher malpractice claim payments compared to the same period in 2018. Total cash paid for interest during the six months ended June 30, 2019 decreased to approximately $318 million compared to $486 million for the six months ended June 30, 2018. Cash paid for income taxes, net of refunds received, resulted in a net refund of $3 million and $9 million during the six months ended June 30, 2019 and 2018, respectively. The Company's net cash used in investing activities was approximately $147 million for the six months ended June 30, 2019, compared to approximately $241 million for the six months ended June 30, 2018, a decrease of approximately $94 million. The cash used in investing activities during the six months ended June 30, 2019, was primarily impacted by an increase in proceeds from the divestitures of hospitals and other ancillary operations of $73 million in the first six months of 2019 compared to the same period in 2018, and a decrease in the cash used in the purchase of property and equipment of $83 million for the six months ended June 30, 2019 compared to the same period in 2018. The decreases in cash used in investing activities were also impacted by a decrease in cash provided by the net impact of the purchases and sales of available-for-sale securities and equity securities of $12 million, an increase of $3 million in the cash used in the acquisition of facilities and other related equipment as there was a hospital acquisition during the six months ended June 30, 2019, a decrease in the proceeds from sale of property and equipment of $3 million for the six months ended June 30, 2019 compared to the same period in 2018 and an increase in cash used for other investments (primarily from internal-use software expenditures and physician recruiting costs) of $44 million. The Company's net cash used in financing activities was $107 million for the six months ended June 30, 2019, compared to approximately $208 million for the six months ended June 30, 2018, a decrease of approximately $101 million. The decrease in cash used in financing activities, in comparison to the prior year period, was primarily due to the net effect of the Company's debt repayment, refinancing activity, and cash paid for deferred financing costs and other debt-related costs. There have been no material changes outside of the ordinary course of business to its upcoming cash obligations during the six months ended June 30, 2019 from those disclosed in its 2018 Form 10-K related to debt refinancing activity during 2019. Cash expenditures for purchases of facilities and other related businesses were $13 million for the six months ended June 30, 2019, compared to $10 million for the six months ended June 30, 2018. The Company's expenditures for the six months ended June 30, 2019 were primarily related to the purchase of one hospital in Mississippi, physician practices and other ancillary services. The Company's expenditures for the six months ended June 30, 2018 were primarily related to physician practices and other ancillary services. No hospital acquisitions were completed during the six months ended June 30, 2018. Capital Resources Net working capital was approximately $981 million at June 30, 2019, compared to $1.2 billion at Dec. 31, 2018. Net working capital decreased by approximately $176 million between Dec. 31, 2018 and June 30, 2019. This decrease is primarily due to the increase in current operating lease liabilities, partially offset by an increase in cash and cash equivalents during the six months ended June 30, 2019. The Company has senior secured financing under a credit facility with a syndicate of financial institutions led by Credit Suisse, as administrative agent and collateral agent, which at Dec. 31, 2018 included (i) a revolving credit facility with commitments through Jan. 27, 2021 of approximately $425 million, or the Revolving Facility and (ii) a Term H facility due 2021, or the Term H Facility. The Revolving Facility includes a subfacility for letters of credit. As of June 30, 2019, the availability for additional borrowings under the Credit Facility, subject to certain limitations as set forth in the Credit Facility, was approximately $385 million pursuant to the Revolving Facility, of which $148 million is in the form of outstanding letters of credit. CHS has the ability to amend the Credit Facility to provide for one or more tranches of term loans or increases in the Revolving Facility in an aggregate principal amount of up to $500 million. As of June 30, 2019, the weighted-average interest rate under the Credit Facility, excluding swaps, was 6.4%. A full-text copy of the Form 10-Q is available for free at: https://is.gd/J9AQB2 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 105 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. COMPASS GROUP: Moody's Affirms B1 CFR, Outlook Stable ----------------------------------------------------- Moody's Investors Service affirmed Compass Group Diversified Holdings LLC's ratings including the company's B1 Corporate Family Rating and B1-PD Probability of Default Rating. Moody's also affirmed the Ba3 ratings on CODI's senior secured first lien credit facilities ($600 million 5-year revolving credit facility and $500 million principal 7-year term loan B), and the B3 rating on the company's $400 million senior unsecured notes. In addition, Moody's upgraded the company's Speculative Grade Liquidity rating to SGL-1 from SGL-2. The rating outlook is stable. "The upgrade of Compass' liquidity rating largely reflects its relatively high cash balances and full revolver availability, facilitated in large part by receipt of the proceeds from the sale of former subsidiaries Manitoba Harvest and Clean Earth earlier this year", said Brian Silver, Moody's Vice President and lead analyst for the company. "The company also used a portion of the proceeds to repay term loan B borrowings and reduce its leverage subsequent to 2Q19. We view the debt repayment favorably, however, leverage must be sustained below 3.75 times prior to any upward rating pressure", continued Silver. Upgrades: Issuer: Compass Group Diversified Holdings LLC Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Outlook Actions: Issuer: Compass Group Diversified Holdings LLC Outlook, Remains Stable Affirmations: Issuer: Compass Group Diversified Holdings LLC Probability of Default Rating, Affirmed B1-PD Corporate Family Rating, Affirmed B1 $600M 1st Lien Senior Secured Revolving Credit Facility due 2023, Affirmed Ba3(LGD3) $500M 1st Lien Senior Secured Term Loan B due 2025, Affirmed Ba3(LGD3) $400M Senior Unsecured Regular Bond/Debenture due 2026, Affirmed B3(LGD5) RATINGS RATIONALE Compass Group Diversified Holdings LLC's B1 CFR is broadly supported by its solid industry and product diversification resulting from its controlling ownership interest in eight businesses, as well as recent deleveraging to below 4 times debt-to-EBITDA, and its associated expectation that the company will sustain its financial leverage below 5 times debt-to-EBITDA. The company also has a very good liquidity profile as reflected in its SGL-1 speculative grade liquidity rating, highlighted by full availability on its $600 million revolving credit facility together with approximately $290 million of cash pro forma for a $194 million prepayment on its term loan subsequent to 2Q19. However, the company's credit profile is constrained by its policy of distributing the majority of its operating cash flow to shareholders, its modest albeit improving size, and Moody's expectation for future debt funded acquisitions, although deleveraging via the sale of a business and/or an equity issuance would be anticipated shortly thereafter. In addition, the company remains exposed to the challenging retail environment, and also faces the potential for headline risk among some of its businesses. The stable outlook reflects Moody's expectation that Compass will sustain debt-to-EBITDA below 5 times over the next 12 to 18 months. Moody's also expects Compass to continue distributing most of its cash flow to shareholders. The company's commitment to debt reduction following acquisitions is incorporated in the outlook. The ratings could be upgraded if debt-to-EBITDA is sustained below 3.75 times and cash flow from operations-to-debt is sustained above 17.5%. Alternatively, the ratings could be downgraded if debt-to-EBITDA is sustained above 5 times, cash flow from operations-to-debt is sustained below 12.5%, or there is a material weakening of liquidity. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Compass Group Diversified Holdings LLC is a publicly traded company (NYSE: CODI) that holds majority ownership interests in eight distinct operating subsidiaries including 5.11 Tactical, Velocity Outdoor, Advanced Circuits, Sterno Group, Arnold Magnetics, Liberty Safe, Ergobaby, and Foam Fabricators. Pro-forma for the divestitures of Clean Earth and Manitoba Harvest the company generated approximately $1.4 billion of revenue for the LTM period ending June 30, 2019. CONDUENT INC: Fitch Affirms BB IDR & Alters Outlook to Negative --------------------------------------------------------------- Fitch Ratings has affirmed Conduent Incorporated's Long-Term Issuer Default Rating and Conduent Business Services, LLC's Long-Term IDR and issue ratings, in addition to revising the Rating Outlook to Negative from Positive. Conduent previously made progress in reducing its leverage by improving margin as a result of exiting unprofitable contracts as well as using proceeds from non-core asset dispositions for debt reduction. However, core revenue declines appear likely to continue, and Conduent is now formally conducting a strategic and operational review of the company and individual business lines. Accordingly, Fitch now sees heightened uncertainty around Conduent's path to stabilize its core business, as evidenced by recent results, and sees increasing risk that FCF could be under pressure into 2020. Conduent's attempts to improve its go-to-market strategy predicated on greater client focus and industry vertical expertise as well as a commitment to increase the technological content of its offerings clearly does not appear to be working. While stabilization is feasible beyond the near term, should operating trends persist, a downgrade would be likely. KEY RATING DRIVERS Accelerating Top-Line Pressure: Strategic contract actions and lost business as a result of remediation have continued to weigh on the top line and the situation appears to be worsening. The company has guided to mid-single digit constant currency declines for the full year, noting near-term pressure from lower new business signings, losses and volume pressure. The loss of Conduent's California Medicaid contract should impact 2020 revenue materially and topline pressures are expected to persist as a result of FY19's lower new business signings, further volume declines and incremental losses. Margin Compression: While Conduent was successful in exiting unprofitable contracts, mid-single digit declines in the Commercial segment, driven by lost business and pricing pressure in addition to strategic actions, has led to low double digit adjusted EBITDA declines. Fitch now sees Conduent's overall operating EBITDA margin contracting by about a point in 2019. The company has guided to flat adjusted EBITDA margins in 2020 noting that revenue pressure headwinds will be offset by stranded cost reductions and restructuring. However, Fitch sees the potential for further downside risk should revenue declines intensify. Worsening FCF Profile: Conduent's adjusted FCF deficit, which excludes Texas settlement payments, has worsened over the course of 2019, although the company says it continues to expect positive FCF to be weighted towards Q4 given the timing of capex and business seasonality. By Fitch's measure, Fitch now anticipates FCF to be in the range of negative $90 million with the assumption of approximately $220 million capex, $118 million in total payments in the Texas settlement, increased cash interest expense associated with letters of credit to guarantee the settlement payments, and a working capital use. While FCF can stabilize in 2020, potential working capital swings and further margin pressure beyond its expectation could see the FCF deficit persist beyond 2019. Leverage and Capital Allocation Priorities: Conduent's earlier disposition proceeds used for debt reduction along with term loan amortization has seen its debt balance reduced by approximately $525 million over the past four quarters. Management has guided to net leverage (by its calculation) of approximately 2.0x at year end. Fitch-calculated gross leverage was 2.7x for the LTM period ending June 30, 2019, below Fitch's positive rating sensitivity. However, given margin pressures Fitch now expects Conduent's leverage to increase to about 3.3x by year end, a level last seen at Q1 2017. Conduent has said it continues to evaluate M&A opportunities balancing with organic investments, which are now trending higher and approaching 5% from Fitch's prior assumption of capex of 3% of revenue. In conjunction with the anticipated FCF deficit for the year this will leave little room for both M&A and further debt reduction, which each could potentially offset growth and margin challenges and ultimately leverage. DERIVATION SUMMARY Conduent is among the larger business process services-focused providers and has sizable market share in some segments it serves. It competes with a range of large-scale service and technology providers, other business process outsourcing providers, industry-specific providers as well as clients' in-house functions. Conduent is positioned favorably relative to comparably rated technology peers within Fitch's coverage universe by some measures. Its scale is larger than other 'BB' rated tech peers, but its growth profile is significantly weaker as a result of strategic contract actions in addition to core business challenges. The company has modestly lower leverage than its broad technology peers but lower profitability and FCF margin. Conduent compares weakly to large multinational service providers that are substantially larger and have much broader service offerings, many of which have a greater technology component and accordingly are rated meaningfully higher including Accenture (A+), Hewlett Packard Enterprise (BBB+) and DXC Technology (BBB+). KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Full year 2019 revenue of approximately $4.4 billion at the lower end of management guidance; 5% decline in 2020 and flat thereafter. - Approximately 1 point of operating EBITDA margin contraction in 2019 from 2018 and 1 point further in 2020 - Cash payments related to Texas settlements of $118 million in 2019 and 2020; cash taxes of $60 million in 2019 in line with management guidance; capex of 5% of revenue; 30% tax rate; $10 million preferred dividend payment - No M&A or share repurchases assumed over the near term; no particular outcome from the strategic and operational review is presumed. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Sustained positive organic revenue growth. - Annual FCF above $250 million. - Total gross leverage sustained below 3x. - Adjusted FFO gross leverage sustained below 4x. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Negative organic revenue growth. - Annual FCF sustained at breakeven to $250 million. - Total gross leverage sustained above 3.5x. - Adjusted FFO gross leverage sustained above 4.5x . LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Conduent had $285 million of readily available cash and cash equivalents at June 30, 2019, a $480 million reduction since the end of 2018. Approximately $9 million in cash is restricted. Conduent's $750 million revolving credit facility is undrawn, but its availability is $669 million mostly due to letters of credit issued in relation to the Texas settlement. Fitch expects Conduent will a FCF deficit of approximately $90 million in 2019. Manageable Debt Structure: Conduent's maturities are well staggered with its TLA maturing in 2022 and TLB maturing in 2023. Conduent's senior unsecured 10.5% notes mature in December 2024 but can be redeemed in part or whole beginning Dec. 15, 2020. Only $34 million of the 10.5% notes due 2024 remain outstanding following an earlier redemption. COSTA CAFE: Taps Ehrhard & Associates as Legal Counsel ------------------------------------------------------ Costa Cafe, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Ehrhard & Associates, P.C., as their legal counsel. The firm will provide services in connection with the Debtors' Chapter 11 cases, which include legal advice regarding their powers and duties under the Bankruptcy Code and assistance with respect to the sale, refinance or restructuring of their properties. The firm's hourly rates are: Senior Attorneys $300 Paralegals $150 James Ehrhard, Esq., at Ehrhard & Associates, disclosed in court filings that he and other members of the firm are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Ehrhard & Associates can be reached through: James P. Ehrhard, Esq. Ehrhard & Associates, P.C. 250 Commercial Street, Suite 410 Worcester, MA 01608 Tel: (508) 791-8411 Email: ehrhard@ehrhardlaw.com About Costa Cafe Costa Cafe, Inc. and its affiliates, namely, Maple Avenue Donuts Inc., Boston Donuts Inc. and W & E Trust, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case Nos. 19-41139 to 19-41142) on July 11, 2019. At the time of the filing, each Debtor had estimated assets of between $100,000 and $500,000 and liabilities of between $1 million and $10 million. Ehrhard & Associates, P.C., is the Debtors' legal counsel. CPI CARD: Swings to $1.52 Million Net Income in Second Quarter -------------------------------------------------------------- CPI Card Group Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting net income of $1.52 million on $66.90 million of total net sales for the three months ended June 30, 2019, compared to a net loss of $16.70 million on $61.45 million of total net sales for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss of $1.53 million on $133.76 million of total net sales compared to a net loss of $24 million on $116.31 million of total net sales for the same period during the prior year. Second quarter 2019 net income from continuing operations was $1.6 million, or $0.14 per diluted share, compared to a net loss of $0.8 million, or $0.07 per diluted share in the second quarter of 2018. For the year-to-date periods, net loss from continuing operations was $1.5 million, or $0.14 per diluted share, in 2019 compared to a net loss of $6.5 million, or $0.58 per diluted share, in 2018. Adjusted EBITDA, which excludes the $6 million litigation settlement gain, was $8.5 million and $16.5 million for the second quarter and first half 2019, respectively. Year over year, second quarter 2019 Adjusted EBITDA was down 4.4%, and first half 2019 Adjusted EBITDA was up 28.1%. As of June 30, 2019, the Company had $210.29 million in total assets, $359.75 million in total liabilities, and a total stockholders' deficit of $149.46 million. "Our customer-centric strategy continues to yield positive top-line momentum, as reflected in the 15% year-over-year net sales growth we have delivered so far this year," said Scott Scheirman, president and chief executive officer of CPI. "During the first half, our U.S. Debit and Credit segment increased net sales 24% on greater volume and product diversification, and our Prepaid Debit segment grew net sales 6% on top of a particularly strong first half in 2018. We've executed solidly towards our goal of being the partner of choice for our customers by providing market-leading quality products and customer service with a market-competitive business model." Balance Sheet, Liquidity, and Cash Flow from Continuing Operations During the second quarter of 2019, the Company generated cash from operating activities of $9.2 million, inclusive of the $6.0 million litigation settlement gain, and spent $0.5 million on capital expenditures. This resulted in adjusted free cash flow generation of $2.7 million in the second quarter. As expected, and consistent with historical seasonal cash flow patterns, the Company's operations generated a use of cash during the first half of 2019. As of June 30, 2019, cash and cash equivalents was $17.5 million, an increase of $9.6 million from March 31, 2019. As of June 30, 2019, the Company's revolving credit facility had no borrowings outstanding and available borrowings of $20.0 million. The revolving credit facility matures Aug. 17, 2020. Total debt principal outstanding, comprised of the Company's First Lien Term Loan, was $312.5 million at June 30, 2019, unchanged from Dec. 31, 2018. Net of debt issuance costs and discount, total debt was $306.8 million as of June 30, 2019. The Company's First Lien Term Loan matures in August 2022. John Lowe, chief financial officer, stated, "We continue to be encouraged by solid year-over-year net sales growth which, in turn, yielded greater operating leverage and enabled us to generate cash in the second quarter. We believe we have adequate cash and liquidity to support our business plan." A full-text copy of the Form 10-Q is available for free at: https://is.gd/CRFRbF About CPI Card CPI Card Group -- http://www.cpicardgroup.com/-- is a payment technology company and leading provider of credit, debit and prepaid solutions delivered physically, digitally and on-demand. CPI helps its customers foster connections and build their brands through innovative and reliable solutions, including financial payment cards, personalization and fulfillment, and Software-as-a-Service (SaaS) instant issuance. CPI has more than 20 years of experience in the payments market and is a trusted partner to financial institutions and payments services providers. Serving customers from locations throughout the United States, CPI has a large network of high security facilities, each of which is registered as PCI Card compliant by one or more of the payment brands: Visa, Mastercard, American Express and Discover. CPI Card reported a net loss of $37.46 million in 2018, following a net loss of $22.01 million in 2017. As of March 31, 2019, the Company had $205.58 million in total assets, $358.05 million in total liabilities, and $152.46 million in total stockholders' deficit. * * * As reported by the TCR on April 4, 2018, Moody's Investors Service downgraded its ratings for CPI Card Group Inc., including the company's Corporate Family Rating (to Caa1, from B3) and Probability of Default Rating (to Caa1-PD, from B3-PD). Moody's said the downgrades broadly reflect continued uncertainty about whether CPI can return to revenue and profit growth over the next 12 to 18 months, and an earnings and cash flow profile that can adequately support the company's heavy debt burden. In March 2018, S&P Global Ratings lowered its corporate credit rating on Littleton, Colo.-based CPI Card Group Inc. to 'CCC+' from 'B-'. "The downgrade reflects our view that CPI's capital structure is unsustainable at current levels of EBITDA. However, we do not anticipate a default scenario over the next 12 months given that we believe liquidity availability will be sufficient to absorb the expected negative discretionary cash flow. CR COMMERCIAL: Seeks to Extend Exclusivity Period to Nov. 15 ------------------------------------------------------------ CR Commercial Contractors, Inc. asked the U.S. Bankruptcy Court for the District of Arizona to extend the period during only the company can file a Chapter 11 plan and disclosure statement to Nov. 15. If granted, the requested extension will allow the company to continue to settle with various creditors and work with its prepetition project owners and project managers to reduce the overall amount owed to its general unsecured creditors prior to filing its Disclosure Statement and Chapter 11 Plan. Statutorily, the company has until Sept. 16 to exclusively file its Chapter 11 Plan and Disclosure Statement. Since the inception of its Chapter 11 proceeding, CR Commercial has entered into two Settlement Agreements that are pending before the Court -- the amount owed to two specific Schedule F creditors has either been substantially reduced or completely eliminated. In addition, the company is negotiating with certain pre petition project owners and project managers in an effort to settle with a portion of its pre-petition subcontractors. In fact, one such project manager, Plaza Del Rio Management Corp., has been instrumental in assisting CR Commercial by taking steps to settle lien claims with no less than nine Schedule F creditors. As a result, the company will be amending Schedule F to reduce the overall debt to be paid under a Chapter 11 Plan and will be substituting Plaza Del Rio Management Corp. for payment of the settlement amounts. The company believes this overall reduction in the amount owed will make reorganizing much more feasible. About CR Commercial Contractors Based in Phoenix, Arizona, CR Commercial Contractors, Inc. -- http://crcontractors.com/-- a privately held company that offers general contractor services, filed a voluntary Chapter 11 Petition (Bankr. D. Ariz. Case No. 19-02937) on March 18, 2019. The case is assigned to Hon. Eddward P. Ballinger Jr. The Debtor is represented by Allan D. Newdelman, Esq., Phoenix, Arizona. At the time of filing, the Debtor had total assets of $881,104 and total liabilities of $2,268,945. The petition was signed by Douglas R. Terrill, chief operating officer. The Office of the U.S. Trustee on July 29 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of CR Commercial Contractors, Inc. CREATIVE PYROTECHNICS: Sept. 19 Plan, Disclosures Hearing --------------------------------------------------------- Bankruptcy Judge Erik P. Kimball issued an order conditionally approving Creative Pyrotechnics, LLC's disclosure statement in support of its chapter 11 plan. The hearing on final approval of the Disclosure Statement and confirmation of the Plan has been set for Sept. 19, 2019 at 10:30 a.m. The deadline for filing ballots accepting or rejecting the plan is Sept. 12, 2019. The deadline for filing objection to confirmation of the plan and to final approval of the disclosure statement is Sept. 16, 2019. The Troubled Company Reporter previously reported that the undisputed general unsecured claims of Debtor total the amount of $237,030.13 after anticipated objections are filed, which will be repaid over the five-year term of the Plan at the rate of $350 per month on a pro-rata basis. The payments will commence on the Effective Date of the Plan. The dividend to this class of creditors is subject to change upon the determination of objections to claims. To the extent that the Debtor is successful or unsuccessful in any or all of the proposed Objections, then the dividend and distribution to each individual creditor will be adjusted accordingly. These claims are impaired. A copy of the Disclosure Statement is available at https://tinyurl.com/y6l5yxh7 from Pacermonitor.com at no charge. About Creative Pyrotechnics LLC Creative Pyrotechnics, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-12325) on February 21, 2019. At the time of the filing, the Debtor had estimated assets of less than $500,000 and liabilities of less than $1 million. The case has been assigned to Judge Erik P. Kimball. Kelley & Fulton, PL is the Debtor's legal counsel. DAVID & SUKI: Sept. 17 Hearing on Plan Confirmation Set ------------------------------------------------------- Bankruptcy Judge Klinette H. Kindred issued an order approving David & Suki, Inc.'s disclosure statement with respect to its chapter 11 plan of reorganization. Any Ballots accepting or rejecting the Plan and objections to confirmation of the Plan must be filed by Sept. 10, 2019. The hearing on the confirmation of the Plan will be held on Sept. 17, 2019 at 2:00 P.M. The Troubled Company Reporter previously reported that unsecured creditors will recover 8% under the plan. A copy of the Disclosure Statement is available at https://tinyurl.com/y3ttvec3 from Pacermonitor.com at no charge. About David & Suki David & Suki, Inc. is a privately-held company whose principal place of business is located at 5863 N. Washington Blvd. Arlington, Virginia. David & Suki sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 18-11631) on May 4, 2018. In the petition signed by David A. Hicks, president, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Klinette H. Kindred presides over the case. The Debtor hired Tyler, Bartl & Ramsdell, PLC as its legal counsel; and the Law Office of William B. Lawson, P.C., as special counsel. DELTA MATERIALS: Exclusive Filing Period Extended Through Aug. 29 ----------------------------------------------------------------- Judge Erik Kimball of the U.S. Bankruptcy Court for the Southern District of Florida extended the period during which only Delta Materials, LLC and its affiliate Delta Aggregate, LLC can file a Chapter 11 plan to Aug. 29 and the period during which the companies can solicit acceptances for the plan to Oct. 29. The bankruptcy judge also moved the deadline for the companies to file the plan and disclosure statement to Aug. 29. The Troubled Company Reporter previously reported that the companies sought for exclusivity extension because they are currently seeking to hire another broker to solicit potential buyers of their property since the brokerage contract with Southeast Land of North Florida Corporation is set to expire in the next few months. The companies hired Southeast on March 20, 2019 to sell the property. Southeast also worked with the companies to target 12 specific potential buyers that held the most potential to purchase the property as the mining market is a niche industry. Additionally, the companies have been in informal negotiations with their secured creditor that have not yet been concluded. The companies are also actively soliciting for financing through several debtor-in-possession financiers as well as soliciting for customers in order to operate the business as a going concern. The companies assured the court that if they can begin to operate the business as a going concern, it would significantly boost the value of the property and increase the likelihood of a sale. About Delta Materials and affiliate Delta Materials, LLC and its affiliate Delta Aggregate, LLC (Bankr. S.D. Fla. Lead Case No. 19-13191) filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code on March 12, 2019. Delta Aggregate owns a property located at 9025 Church Rd, Felda, Florida, having an appraised value of $22 million. The Debtors' counsel is Bradley S. Shraiberg, Esq., at Shraiberg Landau & Page, PA, in Boca Raton, Florida. At the time of filing, Delta Materials's total assets was $22,006,491 and total liabilities was $10,377,363. Delta Aggregate's total assets was $22,006,491 and total liabilities was $10,377,363. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Delta Materials LLC, according to court docket. DIGNITY GROUP: Seeks to Hire Eric A. Liepins as Legal Counsel ------------------------------------------------------------- The Dignity Group, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Eric A. Liepins, P.C., as its legal counsel. The firm will advise the Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm's hourly rates are: Eric Liepins, Esq. $275 Paralegals/Legal Assistants $30 - $50 The Debtor paid the firm a retainer of $5,000, plus the filing fee of $1,717. Eric Liepins, Esq., disclosed in court filings that his firm does not represent any interest adverse to the Debtor's bankruptcy estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Telecopier: (972) 991-5788 Email: eric@ealpc.com About The Dignity Group The Dignity Group LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 19-32633) on Aug. 5, 2019. At the time of the filing, the Debtor disclosed assets of between $500,001 and $1 million and liabilities of the same range. Eric A. Liepins, P.C., is the Debtor's legal counsel. DISASTERS STRATEGIES: Plan Confirmation Hearing Set for Sept. 19 ---------------------------------------------------------------- Bankruptcy Judge Karen K. Specie conditionally approved Disasters, Strategies and Ideas Group, LLC's disclosure statement referring to a chapter 11 plan. Sept. 12, 2019 is fixed as the last day for filing and serving written objections to the disclosure statement and is fixed as the last day for filing acceptances or rejections of the plan. A confirmation hearing will be held at 110 E. Park Avenue, 2nd Floor Courtroom, Tallahassee, FL 32301 on Sept. 19, 2019 at 11:00 AM, Eastern Time. Objections to confirmation must be filed and served seven days before the hearing. The Troubled Company Reporter previously reported that Class 4 under the plan consists of the general unsecured creditors. This class will be paid 5% dividend. A copy of the Disclosure Statement dated May 11, 2019 is available at https://tinyurl.com/y3g57xmk from Pacermonitor.com at no charge. About Disasters, Strategies and Ideas Group Disasters, Strategies and Ideas Group, LLC -- http://www.dsideas.com/-- is an emergency management and homeland security services consulting firm. DSI was established by former North Carolina and Florida Emergency Management Director Joe Myers in 2003 to provide emergency management services to state, local and federal agencies. Headquartered in Tallahassee, Florida, DSI serves Florida and the Southeast with a team of professionals that is expert in all aspects of homeland security and emergency management, with its primary focus being disaster recovery grant management services. Disasters, Strategies and Ideas Group filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 18-40375) on July 17, 2018. In the petition signed by Joseph Myers, vice president, the Debtor estimated less than $50,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Karen K. Specie. Bruner Wright, P.A., is the Debtor's counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. DISH NETWORK: Egan-Jones Lowers Senior Unsecured Ratings to B+ -------------------------------------------------------------- Egan-Jones Ratings Company, on August 9, 2019, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by DISH Network Corporation to B+ from BB-. DISH Network Corporation is a U.S. television provider. Based in Meridian, Colorado, it is the owner of the direct-broadcast satellite provider DISH and the over-the-top IPTV service Sling TV. The company has approximately 17,000 employees. DR. RICHARD R. ROLLE: Case Summary & 18 Unsecured Creditors ----------------------------------------------------------- Debtor: Dr. Richard R. Rolle Jr., PLLC 9615 Caldwell Commons Circle, Suite B Cornelius, NC 28031 Business Description: Dr. Richard R. Rolle Jr., PLLC -- http://rolleoralfacialsurgery.com/-- owns and operates a surgery center in Cornelius, North Carolina, specializing in oral and maxillofacial surgery and general dentistry. Chapter 11 Petition Date: August 15, 2019 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Case No.: 19-31124 Judge: Hon. Craig J. Whitley Debtor's Counsel: John C. Woodman, Esq. ESSEX RICHARDS, P.A. 1701 South Boulevard Charlotte, NC 28203 Tel: 704-377-4300 Fax: 704-372-1357 E-mail: jwoodman@essexrichards.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Richard R. Rolle, Jr., member manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 18 unsecured creditors is available for free at: http://bankrupt.com/misc/ncwb19-31124.pdf ELIANA ENTERPRISES: Case Summary & 7 Unsecured Creditors -------------------------------------------------------- Debtor: Eliana Enterprises, LLC 9615 Caldwell Commons Circle, Suite B Cornelius, NC 28031 Business Description: Eliana Enterprises LLC is a privately held company in Cornelius, North Carolina. Chapter 11 Petition Date: August 15, 2019 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Case No.: 19-31125 Judge: Hon. J. Craig Whitley Debtor's Counsel: John C. Woodman, Esq. ESSEX RICHARDS 1701 South Boulevard Charlotte, NC 28203 Tel: 704-377-4300 Fax: 704-372-1357 Email: jwoodman@essexrichards.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Richard R. Rolle, Jr., member manager. A full-text copy of the petition containing, among other items, a list of the Debtor's seven unsecured creditors is available for free at: http://bankrupt.com/misc/ncwb19-31125.pdf FERNLEY & FERNLEY: New Plan Modifies Treatment of VB Secured Claim ------------------------------------------------------------------ Fernley & Fernley, Inc. filed an amended disclosure statement in connection with its proposed chapter 11 plan of reorganization. This latest filing modifies the treatment of Vist Bank's secured claim. This claim will now be paid in accordance with the petition note and security agreement; maturity date extended until all fees and costs due are paid in full by way of additional payments equal to normal monthly payments of principal and interest. A copy of the Amended Disclosure Statement is available at https://tinyurl.com/y2u2mut6 from Pacermonitor.com at no charge. About Fernley & Fernley Founded in 1886, Fernley & Fernley, Inc., is one of the most distinguished association management companies in the nation. Bases in Philadelphia, Pennsylvania, Fernley & Fernley filed a voluntary petition for relief under Chapter 11 of title 11, United States Code (Bankr. E.D. Pa. Case No. 18-16122) on Sept. 14, 2018, estimating under $1 million in assets and liabilities. Ellen M. McDowell, Esq., at McDowell Law, PC, is the Debtor's counsel. FIERRO & FIERRO: Seeks to Hire Russell Van Beusting as Attorney --------------------------------------------------------------- Fierro & Fierro Systems, Inc. seeks authority from the United States Bankruptcy Court for the Southern District of Texas (Houston) to employ Russell Van Beusting, P.C. as legal counsel. Fierro requires RVB to: a. assist, advise and represent the Debtors relative to the administration of the chapter 11 case; b. assist, advise and represent the Debtors in analyzing the Debtors' assets and liabilities, investigating the extent and validity of lien and claims, and participating in and reviewing any proposed asset sales or dispositions; c. attend meetings and negotiate with the representatives of the secured creditors; d. assist the Debtors in the preparation, analysis and negotiation of any plan of reorganization and disclosure statement accompanying any plan of reorganization; e. take all necessary action to protect and preserve the interests of the Debtors; f. appear, as appropriate, before this Court, the Appellate Courts, and other Courts in which matters may be heard and to protect the interests of Debtors before said Courts and the United States Trustee; and g. perform all other necessary legal services in these cases. RVB's standard billing charges are $320.00 per hour for attorney time, and $125.00 per hour for the bankruptcy legal assistants. RVB received a retainer on or about April 10, 2019, from Fierro and Fierro Systems, Inc. in the amount of $42,500 for financial advice and representation of the Debtor. Prepetition professional fees and expenses owed to RVB totaling $22,997.00 were billed against this retainer prior to the petition date, leaving a retainer balance of $19,503 held by RVB as of the Petition Date for post-petition services. Russell Van Beustring assures the court that RVB does not represent any interest adverse to the Debtor, its estate, creditors, equity holders, or affiliates in the matters upon which RVB is to be engaged, and is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. The firm can be reached at: Russell Van Beustring, Esq. RUSSELL VAN BEUSTRING, P.C. 9525 Katy Fwy, Ste 415 Houston, TX 77024 Tel: 713-973-6650 Fax: 713-973-7811 E-mail: russell@beustring.com About Fierro & Fierro Systems, Inc. Fierro & Fierro Systems, Inc. is a privately held company in the specialized freight trucking industry. Fierro & Fierro Systems, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-33902) on July 12, 2019. In the petition signed by Francisco Fierro, president, the Debtor estimated $3,707,352 in assets and $4,036,254 in liabilities. The case is assigned to Judge David R. Jones. Russell Van Beustring, Esq. at Russell Van Beustring, P.C. represents the Debtor as counsel. FLEX LIMITED: Egan-Jones Lowers Senior Unsecured Ratings to BB -------------------------------------------------------------- Egan-Jones Ratings Company, on August 8, 2019, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Flex Limited to BB from BBB-. Flex Limited is an American multinational technological manufacturer. It is the third-largest global electronics manufacturing services, original design manufacturing company by revenue, behind only R.O.China's Pegatron to original equipment manufacturers. FORT BRAGG: Directed to File Amended Plan, Disclosures by Aug. 21 ----------------------------------------------------------------- The Chapter 11 case of Fort Bragg Carolina Trust came on for hearing on August 7, 2019, to consider conditional approval of the Disclosure Statement explaining the Debtor's Chapter 11 Plan. For the reasons stated in open court, the Court ordered the Debtor to file an amended plan and disclosure statement no later than August 21, 2019. About Fort Bragg Carolina Trust Fort Bragg Carolina Trust filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03388) on April 15, 2019, listing under $1 million in both assests and liabilities. The case is assigned to Judge Caryl E. Delano. Samantha L. Dammer, Esq., at Tampa Law Advocates, P.A., is serving as the Debtor's counsel. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Fort Bragg Carolina Trust, according to court dockets. FRONTDOOR INC: S&P Affirms 'B+' ICR, Alters Outlook to Positive --------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' long-term issuer credit rating on home-service plan provider Frontdoor Inc. and revised the outlook to positive from stable, reflecting improving operating results which, the rating agency said, should generate strong operating cash flows. S&P expects the management will use free cash flows to grow the business and pay down debt, improving net leverage metrics comfortably below 3x. At the same time, S&P affirmed its 'B+' debt rating on Frontdoor's $900 million first-lien credit facility ($250 million revolver due 2023 and $650 million term loan due 2025) with a recovery rating of '3'. S&P also affirmed its 'B-' debt rating on the company's $350 million unsecured note due in 2026 with a recovery rating of '6'. S&P said, "The positive outlook reflects our expectation that Frontdoor will continue to grow its revenue base, especially its direct consumer distribution channel. The company will also benefit from recent pricing actions taken, beginning to materialize and impact financial results. For 2019, we expect the company to achieve revenue growth of 7%-9%, and we expect margins of 20%-22%. This will result in a net debt-to-EBITDA ratio of about 2.8x-3.1x and EBITDA coverage in the 4x-4.5x range. We also expect Frontdoor to maintain its dominant presence in the home-services plan market, driven by its significant contractor base and enhanced technological capabilities relative to peers'." "We could affirm the current ratings if the company chooses to increase its leverage tolerance, sustaining it above 3.5x. Additionally, we could lower our ratings on Frontdoor in the next 12 months if earnings or credit metrics deteriorate, resulting in a debt-to-EBITDA ratio above 4x and/or coverage below 3x. This could occur if earnings fall due to lost market share or compressed margins from increased operational costs and undisciplined growth efforts, or if the company adopts a more-aggressive financial policy." "We could raise our ratings in the next 12 months if Frontdoor is able to leverage its educational initiatives to expand its geographic footprint and market penetration in both real estate and direct-to-consumer channel. An upgrade would also depend on reducing potential uncertainty in operating performance associated with certain risk bearing elements of its business. We would expect these efforts would lead to sustaining improved leverage metrics below 3x with coverage around 5x, and stabilizing EBITDA margins at or above 20%." Strong performance year-to-date supported by sound top-line growth, and improved margins given seasonally mild weather, and operational efficiencies have expanded EBITDA levels in line with improved credit metrics. Additionally, the business's strong cash generation and S&P's expectation that this will be used for debt pay-down versus other redeployment methods further support Frontdoor's improving credit profile. FURIE OPERATING: Hires Prime Clerk as Claims Agent -------------------------------------------------- Furie Operating Alaska, LLC and its affiliated debtors received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Prime Clerk LLC as claims and noticing agent. The firm will oversee the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in the Chapter 11 cases of the company and its affiliates. Prime Clerk will be paid at these hourly rates: Director of Solicitation $190 Solicitation Consultant $185 COO and Executive VP No charge Director $170-$190 Consultant/Senior Consultant $70-$160 Technology Consultant $35-$95 Analyst $30-$45 Prime Clerk will also be reimbursed for work-related expenses incurred. Benjamin Steele, a partner at Prime Clerk, disclosed in court filings that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Prime Clerk can be reached at: Benjamin J. Steele Prime Clerk LLC 830 3rd Avenue, 9th Floor New York, NY10022 Tel: (212) 257-5450 Email: bsteele@primeclerk.com About Furie Operating Alaska Headquartered in Anchorage Alaska, Furie Operating Alaska LLC and its affiliates operate as independent energy companies primarily focused on the acquisition, exploration, production, and development of offshore oil and gas properties in the State of Alaska's Cook Inlet region. The Debtors hold a majority working interest in 35 competitive oil and gas leases in the Cook Inlet. Additionally, the Debtors wholly own and operate an offshore production platform in the middle of the Cook Inlet to extract natural gas under the oil and gas leases. Furie Operating Alaska and its affiliates, Cornucopia Oil & Gas Company LLC and Corsair Oil & Gas LLC, each filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 19-11781 to 19-11783) on August 9, 2019. The petitions were signed by Scott M. Pinsonnault, interim chief operating officer. The Debtors estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities. Matthew P. Ward, Esq. at Womble Bond Dickinson (US) LLP and Timothy W. Walsh, Esq., at McDermott Will & Emery LLP, are the Debtors' counsel. The Debtors tapped Seaport Global Securities LLC as investment banker; Ankura Consulting Group as financial advisor; and Prime Clerk LLC as claims and noticing agent. GAMBOA BROTHERS: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Gamboa Brothers Inc., according to court dockets. About Gamboa Brothers Inc. Gamboa Brothers Inc. filed a Chapter 7 voluntary petition on May 29, 2019 (Bankr. N.D. Fla. Case No. 19-40295) on May 29, 2019. The case was converted to one under Chapter 11 on June 24, 2019. The case is assigned to Judge Karen K. Specie. The Debtor is represented by Bruner Wright, P.A. GLOBAL HEALTHCARE: Delays Second Quarter Form 10-Q -------------------------------------------------- Global Healthcare REIT, Inc., filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its quarterly report on Form 10-Q for the period ended June 30, 2019. The Company was unable to file its Quarterly Report on Form 10-Q within the prescribed time period because the Company has not completed the preparation of its unaudited financial statements for the fiscal quarter. About Global Healthcare Greenwood Village, Colorado-based Global Healthcare REIT, Inc., acquires, develops, leases, manages and disposes of healthcare real estate, and provides financing to healthcare providers. The Company's portfolio will be comprised of investments in the following five healthcare segments: (i) senior housing, (ii) life science, (iii) medical office, (iv) post-acute/skilled nursing and (v) hospital. Global Healthcare reported a net loss attributable to common stockholders of $2.02 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders of $3.02 million for the year ended Dec. 31, 2017. As of March 31, 2019, Global Healthcare had $38.48 million in total assets, $37.30 million in total liabilities, and $1.18 million in total equity. The audit opinion included in the Company's Annual Report for the year ended Dec. 31, 2018, contains an explanatory paragraph expressing substantial doubt regarding the Company's ability to continue as a going concern. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2016, stated that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. GREEN NATION: Trustee Taps Rodeo Realty as Real Estate Broker ------------------------------------------------------------- Nancy Zamora, the Chapter 11 trustee for Green Nation Direct, Corporation, seeks authority from the U.S. Bankruptcy Court for the Central District of California to retain Rodeo Realty, Inc. as real estate broker. Trustee requires Rodeo Realty to: a. order, analyze, and prepare all documentation necessary to list and advertise the Real Property for sale; b. list the Real Properties with the most propitious listing services available, inspect the Real Property as necessary to respond to the inquiries of potential purchasers, and solicit reasonable offers from potential purchasers; c. convey all reasonable purchase offers to Trustee and Trustee's counsel, if any, and, subject to Trustee's approval, negotiate and confirm the acceptance of the best offers; d. cause to be prepared and submitted to escrow on behalf of Trustee any and all documents necessary to consummate sale of the Real Property. The assets of the Estate include that certain real property consisting of an undeveloped parcel commonly known as 4551 Lindley Avenue, Tarzan, California 91356 and assigned Los Angeles County Assessor's Parcel No. 2184-011-004. The Trustee's investigation, with the assistance of Broker, reveals that the Real Property has an approximate market value of $450,000.00. The Broker is to be paid, at the time of closing, a commission of 10% of the gross price from the sale of the Real Property. Buddy Gordon, licensed real estate professional employed by Rodeo Realty, Inc., attests that his firm and its agents, representatives, associates, salespersons, and other employees are all disinterested persons as defined in 11 U.S.C. Sec. 101(14). The Broker can be reached through: Howard (Buddy) Gordon Rodeo Realty, Inc. 23901 Calabasas Rd. #1050 Calabasas, CA 91302 Cell: (805) 796-0324 Phone: (818) 222-7707 Email buddygordon@rodeore.com About Green Nation Direct Green Nation Direct, Corporation is a privately-held architectural design company that specializes in various interior design and spatial planning projects. The Debtor is based in Los Angeles, California. Green Nation Direct sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 18-12698) on Nov. 2, 2018. At the time of the filing, the Debtor estimated assets of less than $1 million and liabilities of $1 million to $10 million. The case has been assigned to Judge Maureen Tighe. Orantes Law Firm, P.C. serves as the Debtor's legal counsel. On Dec. 6, 2018, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee is represented by Resnik Hayes Moradi LLP. Nancy Zamora was appointed as Chapter 11 trustee for the Debtor's bankruptcy estate. Levene Neale Bender Yoo & Brill LLP is the Debtor's legal counsel. HEART OF FLORIDA: To Pay Unsecs. $2,500 in Quarterly Distributions ------------------------------------------------------------------ Heart of Florida Cardiovascular Center, LLC, filed a disclosure statement explaining its chapter 11 plan of reorganization. The Debtor's Plan has been proposed in good faith and not by any means forbidden by law. It is based upon the Debtor's belief that a forced liquidation of the Debtor's property will result in a substantially smaller recovery to priority and secured creditors with little or no return to unsecured creditors. The Debtor's proposed Plan provides for the continued ownership of the Debtor's business and the continued leasing of the premises. Class 4 under the plan consists of the general unsecured creditors. The Debtor will fund $50,000 to a plan pool. Creditors in this class will receive a pro rata distribution of their claim, without interest, in 20 equal quarterly distributions of $2,500, with payments commencing on the start of the calendar quarter beginning more than thirty days following the Effective Date of Confirmation and continuing for a total of twenty consecutive quarters. In the event that this quarter starts less than 30 days after the entry of the Confirmation Order, payment shall not commence until the following quarter. Promissory notes will be issued to each creditor in this class with allowed claims to evidence payments, which promissory notes shall be enforceable in any Court of Competent Jurisdiction. The amount of the pro rata distribution will be considered final and binding 30 days after the filing of the Certificate of Substantial Consummation by the Debtor. The Debtor's Plan will be funded by: (1) the current and future income earned by the Debtor through its continued operations; (2) capital contributions by Dr. Claudio Manubens; and (3) future loans from Equipment 2, LLC. A copy of the Disclosure Statement is available at https://tinyurl.com/y2bg7fgm from Pacermonitor.com at no charge. A copy of the Chapter 11 Plan is available at https://tinyurl.com/y62yge99 from Pacermonitor.com at no charge. About Heart of Florida Cardiovascular Center LLC Heart of Florida Cardiovascular Center, LLC operates a medical and diagnostic laboratory in Haines City, Florida. Heart of Florida Cardiovascular Center, LLC filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-00249) on January 11, 2019. In the petition signed by Nancy Kastner, manager, the Debtor disclosed $358,125 in assets and $1,267,014 in liabilities. Buddy D. Ford, P.A., is the Debtor's legal counsel. INVENERGY THERMAL: S&P Affirms 'BB' ICR on Term Loan B Upsize ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB' rating on Invenergy Thermal Operating I LLC (ITOI) on the $425 million term loan B (TLB) ($350 million original issuance plus $75 million proposed add-on). The recovery rating is unchanged at '1', indicating S&P's expectation of very high recovery (90%-100%, rounded estimate: 90%) in a default. The rating agency affirmed its 'BB' rating on ITOI's proposed $75 million upsize. If lenders approve the amendment, ITOI will have an estimated $403.6 million debt outstanding (pro forma TLB is $328.6 million net of amortization and cash sweeps as of June 30, 2019). S&P's recovery rating remains '1', reflecting its expectation of very high recovery (90%-100%, rounded estimate 90%) in the event of default. The outlook is stable. The minimum debt service coverage ratio (DSCR) slightly decreased to 2.17x after adjusting the revised upsized debt amount. However, it does not affect ITOI's 'BB' rating. "The stable outlook reflects our expectation that DSCRs will be a minimum of 2.17x under our revised initial assessment of the DSCR that now considers only holding debt company distributions and debt obligations. In the next few years, we expect that improved financial performance, due to higher capacity factors at Nelson, could be offset by weaker performance at Grays Harbor, which will become merchant power plant next year, absent re-contracting. Stable cash flows from the contracted assets will continue to support debt service," S&P said. "We would lower the ratios if project spark spreads weaken, capacity factors at Nelson decline, or Grays Harbor cannot realize forecast energy margins or any capacity revenue after 2019, causing minimum DSCRs to decline to less than 1.75x on a sustained basis. Persistent weaker operations, especially higher operating expenses at multiple plants, could also contribute to weaker ratios," S&P said. The holding company rating is also constrained by the credit profiles of the four projects (Cannon Falls, Hardee, Spindle Hill and St. Clair) whose bankruptcy filing could cross default and cause a potential acceleration of the holding company debt. Two of the project's credit profiles (at Hardee and St. Clair) currently constrain any ratings uplift. S&P assesses these credit profiles annually, and meaningful deterioration could cause S&P to lower the holding company rating even if there are compensating improvements in other assets in the portfolio. While the current ITOI holding company DSCR coverage could support a higher rating, an upgrade is constrained by operating companies that have debt and could cross default to ITOI. Specifically, the credit quality of the Hardee and St. Clair projects cap the ITOI rating, and both would have to meaningfully improve to elevate the credit profile of ITOI, according to the rating agency. IPIC-GOLD CLASS: U.S. Trustee Forms 5-Member Committee ------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, on Aug. 14 appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of iPic-Gold Class Entertainment, LLC and its affiliates. The committee members are: (1) Mary Ryan, Class Action Representative Attn: KJT Law Group, LLP 230 North Maryland Avenue, Suite 306 Glendale, CA 91206-4281 Phone: 818-507-8525 Fax: 818507-8588 (2) Superl Sequoia Limited Attn: Philippe Hum, Unit 612 6/F Tower 1 833 Cheung Sha Wan Road Kowloon, Hong Kong Phone: 852-3104-3000 (3) SDQ Fee, LLC Attn: Stephen Ifeduba 180 East Broad Street Columbus, OH 43215 Phone: 614-887-5625 Fax: 614-621-8863 (4) Regency Centers, L.P. Attn: Ernst Bell One Independent Drive, Suite 114 Jacksonville, FL 32202 Phone: 904-598-7685 Fax: 904-354-6094 (5) Brookfield Property REIT, Inc. Attn: Julie Minnick Bowden 350 N. Orleans St., Suite 300 Chicago, IL 60654 Phone: 312-960-2707 Fax: 312-442-6374 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 IPic-Gold Class Entertainment IPic-Gold Class Entertainment, LLC and its affiliates including iPic Entertainment Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11739) on Aug. 5, 2019. iPic Entertainment Inc. operates restaurants and theaters in the United States. The company operates casual restaurants, farm-to-glass full-service bars, and theater auditoriums with in-theater dining. It operates restaurants under the City Perch Kitchen + Bar, Tanzy, The Tuck Room, The Tuck Room Tavern, and iPic Express brands. The company was founded in 2010 and is headquartered in Boca Raton, Fla. At the time of the filing, IPic-Gold Class Entertainment disclosed assets of between $100,000,001 and $500 million and liabilities of the same range. IPic-Gold Class Entertainment and its affiliated debtors are represented by Pachulski Stang Ziehl & Jones LLP. JAGUAR HEALTH: Widens Net Loss to $16.7 Million in Second Quarter ----------------------------------------------------------------- Jaguar Health, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $16.72 million on $1.70 million of total revenue for the three months ended June 30, 2019, compared to a net loss of $7.65 million on $883,846 of total revenue for the three months ended June 30, 2018. The second quarter of 2019 includes a $2.7 million loss on extinguishment of debt, increased interest expense of $2.9 million, and $4.0 million impairment loss on indefinite-lived intangible assets, offset by a decrease in loss from operations of $0.5 million and a gain on change in fair value of warrants, derivative liability and conversion of option liability of $0.1 million. For the six months ended June 30, 2019, the Company reported a net loss of $25.02 million on $3.29 million of total revenue compared to a net loss of $13.35 million on $1.68 million of total revenue for the same period a year ago. As of June 30, 2019, the Company had $36.06 million in total assets, $28.71 million in total liabilities, $9 million in series A convertible preferred stock, and a total stockholders' deficit of $1.64 million. The total operating expense for the quarter ended June 30, 2019 was $12.3 million as compared to $8.0 million for the quarter ended June 30, 2018, a 54% increase or a $4.3 million increase quarter over quarter. The 54% increase in total operating expense quarter over quarter is a combination of the $0.7 million increase in cost of product revenue, less than $0.1 million increase in research and development, $0.1 million increase in General and administrative expense, and $4.0 million impairment loss on indefinite-lived intangible assets, offset by a $0.5 million decrease in marketing and sales. The total cost of product revenue for the quarters ended June 30, 2019 and June 30, 2018 was $1.3 million compared to $0.6 million, respectively. The increase of $0.7 million was a direct result of an increase of Mytesi sales, equipment maintenance costs, and non-conforming inventory that was written off. Research and development expense was $1.7 million for the quarter ended June 30, 2019 compared to $1.6 million for the quarter ended June 30, 2018. The increase of $0.1 million in R&D for the second quarter of 2019 was primarily due to a $0.1 million investment in commercial manufacturing, increase of $0.1 million in clinical trial consulting, offset by a decrease of $0.1 million in personnel and related benefits. Sales and marketing expense was $2.2 million for the three months ended June 30, 2019 as compared to $2.7 million for the quarter ended June 30, 2018. The major difference between the two periods is a decrease in marketing programs and advertising costs for Mytesi. Direct marketing and sales expense decreased $0.6 million, other expenses decreased $0.3 million largely due to decrease in advertising costs, offset by a $0.4 million increase in personnel and related benefits due to the expansion of the Company's sales and marketing headcount in support of Mytesi. General and administrative expense for the quarter ended June 30, 2019 totaled $3.2 million compared to $3.1 million for the quarter ended June 30, 2018, a 3% increase quarter over quarter. The G&A spend of $3.2 million for the quarter ended June 30, 2019 consisted of the continued G&A support functions such as audit, legal, compliance, accounting, human resources, IT, public company expense, financing and facilities. The increase in G&A quarter over quarter was primarily due to third-party consulting fees for the support of public company regulatory reporting and financing activities, and an increase in non-cash stock-based compensation expense. For the second quarter of 2019, the net loss from operations was $10.6 million, compared to a net loss of $7.1 million in the second quarter of 2018. This was a 50% increase in operating loss quarter over quarter due to a net increase in total net revenue of $0.8 million offset by a $4.3 million increase in operating expense. The $4.3 million increase in operating expenses includes a $4.0 million impairment loss on indefinite-lived intangible assets and $0.3 million increase in other operating expenses. A full-text copy of the Form 10-Q is available for free at: https://is.gd/vdx6yx 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. JASON INC: S&P Downgrades ICR to 'CCC+' on Refinancing Risk ----------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based industrial products manufacturer Jason Inc. to 'CCC+' from 'B'. At the same time S&P lowered its issue-level ratings on the company's first-lien credit facilities to 'CCC+' from 'B'. The recovery rating remains '3', indicating the rating agency's expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in a payment default. S&P also lowered the issue-level ratings on the second-lien term loan to 'CCC-' from 'CCC+'. The recovery rating remains '6', indicating its expectation for negligible (0%-10%; rounded estimate: 0%) recovery in a payment default. The downgrade reflects S&P's view that Jason's capital structure is currently unsustainable, which stems from its belief that further degradation of the company's profitability, amid difficult market conditions, increases the refinancing risk for its upcoming debt maturities. The company's capital structure includes an undrawn $25.5 million revolving credit facility (RCF) due Dec. 31, 2020, approximately $291 million first-lien term loan due June 30, 2021, and approximately $90 million second-lien term loan due June 30, 2022. S&P had previously expected the company would modestly grow revenue and improve profit margins as a result of operational improvements and cost reduction initiatives. Because of the company's operating weakness in the first half of 2019, along with S&P's expectation that weakness in end market conditions will persist over the next few quarters, the rating agency has revised its base-case forecast. If the company's operating performance continues to decline such that S&P expects the company will be unable to refinance its debt outside of a distressed exchange or restructuring, the rating agency could lower the rating further. The negative outlook reflects S&P's view that challenging end market and economic conditions, coupled with lower sales volume from business divestitures and discontinued product lines, will cause leverage to remain above 6.5x over the next 12 months. S&P believes the company's recent operating trends heighten refinancing risk as the June 2021 maturity date for the first-lien term loan approaches. Additionally the RCF matures on Dec. 31, 2020; however, S&P expects the company will have little to no balance drawn on the revolver between now and its maturity date, and will maintain a reasonable cash balance to fund ongoing operations. "We could lower our rating on Jason if it does not announce a definitive refinancing plan for its capital structure by the end of the year or if the company initiates a distressed exchange or restructuring that we deem would be tantamount to a default," S&P said. "We could revise our outlook to stable or raise our rating if the company uses sale proceeds to pay down debt and addresses its debt maturity profile in a timely manner, whether through a refinancing or extending its term loan maturities, in a way in which we would not consider it a distressed exchange or restructuring," the rating agency said. JOY ENTERPRISES: Seeks to Extend Exclusivity Period Through Sept. 5 ------------------------------------------------------------------- Joy Enterprises, Inc. asked the U.S. Bankruptcy Court for the Middle District of Alabama for an extension of the period during which the company has the exclusive right to file a plan of reorganization for at least 20 days, or until Sept. 5. Although the company's attorney, Collier Espy Jr., Esq. at Espy Metcalf & Espy, P.C., began to formulate a Chapter 11 Plan at the end of July, he said that an extension is necessary due to the complexities of the company's obligations involving related non-debtor entities, the anticipated level of servicing which would need to be supported by cash flow, and other aspects of formulating a plan. Mr. Espy explained that the company's plan will need to address secured balances owed to: (a) US Bank Equipment Finance and/or Western Equipment Finance, Inc., and Syed M. & Ramin Raheel; (b) the disaster loan with U.S. Small Business Administration; and (c) approximately 30 pre-petition vendor accounts totaling $317,000, more or less. In addition, pre-petition tax liabilities will be required to be satisfied within 60 from the Petition Date. About Joy Enterprises Inc. Joy Enterprises Inc., a domestic corporation that operates Subway restaurants in Alabama, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ala. Case No. 19-10092) on January 17, 2019. At the time of the filing, the Debtor disclosed $384,617 in assets and $4,684,019 in liabilities. The case has been assigned to Judge William R. Sawyer. Collier H. Espy, Jr., Esq., at Espy, Metcalf & Espy, P.C., is the Debtor's legal counsel. No official committee of unsecured creditors has been appointed in the Debtor's case. JRND LLC: Unsecureds to be Paid in Full Over 120 Months Under Plan ------------------------------------------------------------------ JRND LLC filed a disclosure statement in connection with its chapter 11 plan of reorganization dated August 2, 2019. Class 9 under the plan consists of the Allowed Unsecured Claims against the Debtor. This Class is Impaired. The Debtor will pay the holders of Class 9 Claims in full, except that the maximum sum to be paid will not be greater than an aggregate sum of $147,081.97, which the Debtor believes is the maximum amount of legitimate Allowed Class 9 Clams. Each holder of an Allowed Unsecured Claim will be paid a Pro Rata share of the Unsecured Pot if not paid in full. Payments will be made over 120 months and will commence on the thirtieth day after a final order determining all remaining Disputed Claims. Payments will continue until the Unsecured Pot or 100% of all Class 9 Claims are paid in full. The Plan contemplates that the Reorganized Debtor will continue to operate the Debtor's business. The Reorganized Debtor believes the cash flow generated from the continued operation of the Debtor's business will be sufficient to meet the operating needs and Plan Payments. A copy of the Disclosure Statement is available at https://tinyurl.com/y33py5kw from Pacermonitor.com at no charge. About JRND LLC JRND LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-00774) on Feb. 4, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $1 million. The case is assigned to Judge Cynthia C. Jackson. Ainsworth and Branson Law, PLLC, is the Debtor's legal counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. JUST ONE MORE: Exclusivity Period Extended Until Sept. 9 -------------------------------------------------------- Bankruptcy Judge Caryl Delano extended the period during which only Just One More Restaurant Corp. and Just One More Holding Corp. can file a Chapter 11 plan to Sept. 9. The companies can solicit acceptances for the plan until Nov. 9, according to the bankruptcy judge's order. About Just One More Just One More Restaurant Corp. holds the Palm Restaurant steakhouse's intellectual property -- a series of trademarks and service marks, design elements of the Palm. JOMR licenses the Palm IP to the Palm Restaurants through individual licensing agreements. There are 24 Palm Restaurants currently operating in the United States and Mexico. The Debtors do not own any of the Palm Restaurants. Just One More Restaurant Corp. and Just One More Holding Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 19-01947) on March 7, 2019. At the time of the filing, Just One More Restaurant estimated assets of between $100 million and $500 million and liabilities of between $10 million to $50 million. Just One More Holding estimated assets and liabilities of between $1 million and $10 million. The Debtors tapped Berger Singerman LLP as their legal counsel, and McHale, P.A. as their restructuring advisor. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Just One More Restaurant Corp., according to court dockets. KADMON HOLDINGS: Posts $9.2 Million Net Income in Second Quarter ---------------------------------------------------------------- Kadmon Holdings, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting net income of $9.16 million on $226,000 of total revenue for the three months ended June 30, 2019, compared to net income of $21.50 million on $359,000 of total revenue for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported net income of $12.75 million on $467,000 of total revenue compared to net income of $1.06 million on $792,000 of total revenue for the same period during the prior year. Loss from operations for the three and six month periods ended June 30, 2019 was $24.8 million and $47.6 million, respectively, compared to $18.8 million and $36.8 million for the same periods in 2018. The increase in loss from operations was primarily related to an increase in research and development expenses. Research and development expenses for the three and six month periods ended June 30, 2019 were $15.1 million and $30.1 million, respectively, compared to $10.2 million and $20.0 million for the same periods in 2018. The increase in research and development expenses was primarily related to the development of KD025, as well as the development of KD033 and KD045. Selling, general and administrative expenses for the three and six month periods ended June 30, 2019 were $9.0 million and $16.9 million, respectively, compared to $8.8 million and $17.1 million for the same periods in 2018. As of June 30, 2019, the Company had $215.95 million in total assets, $74.90 million in total liabilities, and $141.05 million in total stockholders' equity. At June 30, 2019, Kadmon's cash and cash equivalents totaled $86.2 million, compared to $94.7 million at Dec. 31, 2018. In addition, as of June 30, 2019, Kadmon maintained approximately 10.6% ownership of common stock of MeiraGTx, which was valued at $95.0 million at June 30, 2019. "We have made steady progress advancing KD025 for the treatment of cGVHD and expect the second half of 2019 to feature key milestones in this development program," said Harlan W. Waksal, M.D., president and CEO of Kadmon. "We remain on track to have this registration trial fully enrolled in the third quarter of 2019 and expect to provide an interim analysis by year end." Dr. Waksal added, "We continue to make progress across our broader platform, having recently dosed our first patient in a Phase 2 study of KD025 in systemic sclerosis, a disease closely related to cGVHD; we also expect to initiate a clinical trial of KD033, our immuno-oncology fusion protein, by the end of 2019. We continue to carefully manage our financial resources and the capacity of our scientific team and remain focused on driving KD025 closer to regulatory submission." A full-text copy of the Form 10-Q is available for free at: https://is.gd/s2jf3S About Kadmon Holdings Based in New York, Kadmon Holdings, Inc. -- http://www.kadmon.com/ -- is a fully integrated biopharmaceutical company developing innovative product candidates for significant unmet medical needs. The Company's product pipeline is focused on autoimmune, inflammatory and fibrotic diseases as well as immuno-oncology. Kadmon reported a net loss attributable to common stockholders of $56.26 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders of $81.69 million for the year ended Dec. 31, 2017. As of March 31, 2019, Kadmon Holdings had $198.23 million in total assets, $75.02 million in total liabilities, and $123.20 million in total stockholders' equity. BDO USA, LLP, in New York, the Company's auditor since 2010, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has incurred recurring losses from operations and expects such losses to continue in the future. Additionally, the Company's debt agreement is subject to covenants that could accelerate the repayment of that debt if breached. These factors raise substantial doubt about the Company's ability to continue as a going concern. LAKEVIEW TOWERS: To Pay $3M for Fannie Mae Secured Claim -------------------------------------------------------- Lakeview Towers LLC, filed a Chapter 11 plan and accompanying disclosure statement proposing that Class 4 - General Unsecured Claims estimated at approximately $15,000 will paid the Allowed Amount of their Claim on the Anniversary Date. Class 2 consists of the Fannie Mae Claim. This claim is secured by a first lien on Property. In addition, Fannie Mae asserts a first lien on the Insurance Settlement. At this time, the Debtor estimates the Allowed Claims in Class 2 are approximately $6,712,185.17. The holder of the Fannie Mae Secured Claim will be paid as follows: (a) $3,000,000 cash paid within fourteen days of receipt of the Settlement Payment, (b) interest will accrue at the rate of 5.75% on the outstanding principal balance, without regard for any late fees or default interest, (c) any residual remaining from the Mansell Escrow and (d) a payment of all outstanding principal and interest on the Anniversary Date. During the period from the Confirmation Date through the Effective Date of the Plan, the Debtor will continue to operate its business as debtor in possession pursuant to Section 1107 and Section 1108 of the Bankruptcy Code. Price Edwards will be retained to oversee, manage, and secure the Property during the life of the Plan. The hearing on the adequacy of the Disclosure Statement will be held on Sept. 18, 2019 at 09:30 AM. Last day to object to the approval of the Disclosure Statement is Sept. 3. A full-text copy of the Disclosure Statement dated Aug. 6, 2019, is available at https://tinyurl.com/y2czvzsc from PacerMonitor.com at no charge. An Amended Chapter 11 Plan was filed on Aug. 7, 2019, to include the personal or electronic signature of the attorney filing the Plan. A full-text copy of the Amended Plan dated Aug. 7 is available at https://tinyurl.com/y4aoj9ov from PacerMonitor.com at no charge. About Lakeview Towers Based in Framingham, Massachusetts, Lakeview Towers LLC, a privately held company primarily engaged in renting and leasing real estate properties, filed a voluntary Chapter 11 petition (Bankr. W.D. Okla. Case No. 19-11867) on May 8, 2019. The case is assigned to Hon. Sarah A. Hall. The Debtor's counsel is Stephen J. Moriarty, Esq., at Fellers Snider, in Oklahoma City, Oklahoma. At the time of filing, the Debtor estimated assets of $10 million to $50 million and estimated liabilities of $1 million to $10 million. LATEX FOAM: Hires Wiggin and Dana as Special Corporate Counsel -------------------------------------------------------------- Latex Foam International, LLC, and its debtor-affiliates seek authority from the United States Bankruptcy Court for the District of Connecticut to hire Wiggin and Dana as special corporate counsel to represent them in connection with Entrepreneur Growth Capital, LLC's secured claims in the total amount of $9.3 million. The firm will charge the Debtor for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date the services are rendered. Michael Grundei, Esq., a partner at Wiggin and Dana, disclosed in court filings that the firm is a "disinterested" person within the meaning of Section 101(14) of the Bankruptcy Code. The counsel can be reached through: Michael Grundei, Esq. Wiggin and Dana LLP 30 Milbank Avenue Greenwich, CT 06830 Phone: 203 363 7630 Email: mgrundei@wiggin.com About Latex Foam International Latex Foam International, LLC, which conducts business under the name Talalay Global, provides textile furnishing products. It offers house furnishings such as blankets, bedspreads, sheets, table clothes, towels, and shower curtains. Latex Foam International and four affiliates filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Lead Case No. 19-51064) on August 8, 2019. The petitions were signed by Marc Navarre, chief executive officer. At the time of the filing, the Debtors disclosed assets of between $10,000,001 to $50,000,000 and liabilities of the same range. Judge Julie A. Manning presides over the case. James Berman, Esq. at Zeisler & Zeisler, P.C. is the Debtors' counsel. LEA POWER: Fitch Affirms BB+ on $212.4MM Secured Notes Due 2033 --------------------------------------------------------------- Fitch Ratings has affirmed Lea Power Partners, LLC's (LPP) $212.4 million of senior secured notes due 2033 at 'BB+'. The Rating Outlook is Stable. RATING RATIONALE The rating reflects the revenue stability provided by LPP's fixed-price tolling style power purchase agreement (PPA) with Southwestern Public Service (SPS; BBB/Stable), which effectively mitigates natural gas supply risk. The rating further reflects the project's recent historical debt service coverage profile, in which coverage has ranged from 1.26x to 1.41x. Elevated costs associated with unexpected major maintenance will lower coverage close to or below breakeven levels in 2019. Fitch expects debt service obligation will be met, although there is heightened exposure to additional unexpected events. The equipment issues have been resolved and plant operations should return to historical levels. Looking foreward, the debt service coverage ratio (DSCR) averages 1.40x though maturity in the Fitch rating case, with an overall declining coverage profile and a minimum DSCR of 1.20x in 2032. KEY RATING DRIVERS Stable Revenue Profile (Revenue Risk: Midrange): The project is supported by a 25-year tolling agreement with SPS under which SPS purchases capacity, energy and ancillary services through 2033. Capacity payments provide roughly 80%-90% of the total revenues at a fixed price over the term of the PPA. Mitigated Supply Risk (Supply Risk: Stronger): The PPA with SPS is structured as a tolling agreement, largely eliminating price and volume risks associated with natural gas supply. SPS is responsible for providing fuel to the project facility. Stabilized Operating Performance (Operation Risk: Midrange): The project has maintained high availability, supplementing fixed contracted revenues with dispatch-based payments. Despite historical variability during major overhaul years, the long-term service agreement (LTSA) with Mitsubishi Power Systems Americas, Inc. (Mitsubishi) has helped to smooth operating costs over the contract term, which expires in 2031. Typical Debt Structure (Debt Structure: Midrange): Structural features include a six-month debt service reserve, working capital reserve, and a major maintenance reserve based on 100% of the current-year overhaul expenses and 50% of the following year's expenses. Fitch views liquidity as typical for a thermal power project. The overall declining DSCR profile is a weakness, notwithstanding the fixed-rate, fully-amortizing debt structure. Financial Profile: Despite early operational challenges that pushed DSCR ratios near breakeven, historical DSCRs have averaged 1.33x since 2013. However, due to extended major maintenance outages 2019 forecasted DSCR drops to 0.97x. Under Fitch's rating case conditions, including a 10% increase to operations and maintenance expenses as well as lower (95%) availability, DSCRs are projected to average 1.40x through debt maturity with a minimum of 1.20x in 2032. PEER GROUP Lea Power's peers include Kleen Energy Systems, LLC (Kleen; BB/Positive) and Orange Cogen Funding Corporation (OC Funding; A/Stable). All three projects are single-site, gas-fired, combined-cycle facilities with investment-grade off-takers. Previously, Kleen featured both a similar tolling style agreement, in addition to a capacity agreement. Though Kleen's tolling agreement expired in 2017, the capacity agreement remains in place, partially mitigating merchant price exposure. OC Funding is rated higher due to its relatively low leverage and robust average DSCR of approximately 3.4x based on a long history of strong operating performance and resilient cash flow. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- A significant change to the cost profile, operating performance and/or availability that lead to sustained reductions in coverage below 1.30x. Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- Sustained long-term overall cost reductions could result in rating case projections with a coverage profile generally exceeding 1.40x and consistent with a higher rating level. CREDIT UPDATE Performance Update Capacity payments make up the majority of total revenues (81% of revenues in 2018) and are calculated based on a rolling 12-month availability average. Total revenue in 2018 increased 2% to $60.5 million from the prior year. The facility's 2018 average net capacity factor of 78% was higher than the 2017 average of 61%, supporting a DSCR of 1.32x. 2019 revenues through June were 0.5% higher than the prior period, but are expected to be 2% lower by the end of the year. LPP's management expects the DSCR to approach 0.97x by the end of 2019 due to increased O&M costs and lost revenue related to the forced outages experienced at the plant. Management plans to cover any deficits in debt service coverage with cash reserves on hand. In absence of this funding source, the project could draw on its debt service reserve to meet the expected shortfall. The project underwent a scheduled major maintenance outage and inspection in May 2019 that was expected to last through June 9th. However, the inspection revealed cracked and broken building bolts on both gas generators that were in need of repair, and significant work was done to strengthen welds and supports. Prior to the outage, there was no indication from plant performance that the bolts were broken. GT2 and the Steam Turbine were brought on line July 7th. GT1 started running again on July 27th. Management reports that all units are running well post repairs. The gas turbine compressors were upgraded during the scheduled maintenance in spring 2019, and management has advised that the upgrades are likely to add 5% more capacity and additional revenue. However the extended outage has prevented management from thoroughly testing the effects on output. The compressor upgrades are estimated to cost $4 million paid equally over the course of four years, commencing in 2019. Total expenses in 2018 fell 8.1% to $16.5 million, primarily due to a decrease in O&M costs. Expenses are expected to rise 61.1% in 2019 due to higher budgeted costs for the major maintenance outage as well as the O&M costs associated with the unexpected forced outage, and are up 33.1% through June 2019. In addition to plant expenses, LPP must fund a major maintenance reserve through the LTSA, which increased 6% to $5.9 million in 2018. Higher than forecasted revenues in 2018 were offset by higher than expected expenses to drive a DSCR of 1.32x, slightly below Fitch's prior base case expectations of 1.38x. As of July 2019 the plant has experienced unexpected extended major maintenance outages, and management expects DSCR fall to 0.97x by the end of 2019. FINANCIAL ANALYSIS Fitch Cases The base case utilizes the sponsor model for plant performance and cash flows, assuming an average capacity factor of 59.64% and an average availability factor of 98.56%. The average heat rate is held at 7,296 BTUs/Kw. DSCRs average 1.51x with a minimum of 1.29x. The rating case assumes a reduced capacity factor of 56.6%, an availability factor of 95.02%, and an additional 10% increase to O&M expenses. The average DSCR falls to 1.40x with a minimum of 1.20x. SECURITY Asset Description The project consists of a 604 megawatt natural gas-fired, combined-cycle electric generating facility selling energy and capacity under a 25-year PPA with SPS. SPS purchases capacity at a fixed price and obtains full dispatch rights over the facility. LPP is reimbursed for non-fuel variable operating costs through a separate fixed-price energy payment. The PPA is structured as a tolling agreement, and SPS is responsible for providing natural gas fuel. SPS is a fully integrated, investor-owned electric utility serving New Mexico and parts of Texas. The project entered into an LTSA with Mitsubishi in 2011, which is set to expire in 2024 based on projected run hours. LEGACY RESERVES: Plan Outline Hearing Set for Sept. 10 ------------------------------------------------------ According to a notice, Legacy Reserves Inc. filed a motion for an entry of an order approving the adequacy of its proposed disclosure statement describing their joint chapter 11 plan of reorganization. A hearing at which the Court will consider approval of the disclosure statement will commence on Sept. 10, 2019 at 10:00 a.m. prevailing Central Time before the Honorable Marvin Isgur, United States Bankruptcy Judge, in Courtroom 404, Fourth Floor, United States Bankruptcy Court for the Southern District of Texas, 515 Rusk Avenue, Houston, Texas 77002. Objections to the approval of the disclosure statement must be filed on or before Sept. 3, 2019. The Plan reflects the agreement reached among the Debtors, the Supporting RBL Lenders, Supporting Term Loan Lenders, and Supporting Noteholders pursuant to the Global RSA. For the reasons detailed in this Disclosure Statement, the Debtors and the Supporting Creditors believe that the Plan provides for a comprehensive restructuring of the Debtors' capital structure, provides for fair and reasonable treatment of Holders of Claims and Interests, and is in the best interests of the Debtors, their Estates, and their creditors. Accordingly, the Debtors, and the Supporting Creditors recommend that Holders of Claims in the Voting Classes vote to accept the Plan. The Plan contemplates the implementation of a debt-to-equity conversion of a substantial portion of the Debtors' prepetition funded indebtedness, the payment in full of all Allowed General Unsecured Claims, committed equity investment from the Plan Sponsor and certain Holders of Notes Claims, a rights offering, an exit financing facility, and other potential sources of debt or equity capital, which collectively will result in a significantly deleveraged balance sheet and necessary liquidity for the Reorganized Debtors upon emergence. Successful implementation of the Plan will avoid a sale of all or substantially all of the Debtors' assets. The compromises and settlements embodied in the Plan preserve value by enabling the Debtors to avoid costly and time-consuming litigation that would delay the Debtors' emergence from chapter 11. The key element of the Plan is the conversion of a substantial portion of the Debtors' outstanding prepetition debt into equity in the Reorganized Debtors. Specifically, if the Plan is confirmed, (i) the lenders under the Term Loan Credit Agreement will exchange their secured Term Loan Claims for their Pro Rata share of the Term Loan New Common Stock Shares and (ii) the Noteholders will exchange their unsecured Notes Claims in the amount of $464.6 million for their Pro Rata share of Notes Claim Shares. The Plan provides for the full satisfaction or Reinstatement of Administrative Expense Claims, Priority Tax Claims, Other Secured Claims, Other Priority Claims, and General Unsecured Claims. A copy of the Disclosure Statement is available at https://tinyurl.com/y3fkagqv from Pacermonitor.com at no charge. About Legacy Reserves Legacy Reserves Inc. (NASDAQ: LGCY) -- http://www.legacyreserves.com/-- is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States. Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions. Legacy Reserves Inc. and 10 subsidiaries sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-33395) on June 18, 2019. Legacy Reserves Inc. and 10 subsidiaries sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-33395) on June 18, 2019. At the time of the filing, the Debtors had estimated assets of between $500,000,001 and $1 billion and liabilities of between $1,000,000,001 and $10 billion. The Hon. David R. Jones is the case judge. Perella Weinberg Partners and its affiliate, Tudor Pickering Holt & Co., is acting as financial advisor for the Company, Sidley Austin LLP is acting as legal advisor, and Alvarez & Marsal is acting as restructuring advisor. Kurtzman Carson Consultants LLC -- http://www.kccllc.net/legacyreserves-- is the claims agent. PJT Partners LP is acting as financial advisor for the Second Lien Lenders, and Latham & Watkins LLP is acting as legal advisor. Houlihan Lokey is acting as financial advisor for the Ad Hoc Group of Senior Noteholders, and Davis Polk & Wardwell LLP is acting as legal advisor. RPA Advisors, LLC is acting as financial advisor to Wells Fargo Bank, as administrative agent for the RBL Lenders, and Orrick Herrington & Sutcliffe LLP is acting as legal advisor. LF RUNOFF 2: Trustee Taps Marshack Hays as Legal Counsel -------------------------------------------------------- Richard Marshack, the Chapter 11 trustee for LF Runoff 2, LLC, received approval from the U.S. Bankruptcy Court for the Central District of California to hire Marshack Hays LLP as his legal counsel. The firm will provide services to the trustee in connection with the Debtor's Chapter 11 case, which include an evaluation of the Debtor's assets, investigation and prosecution of claims, and analysis of the Debtor's ability to reorganize and confirm a Chapter 11 plan of reorganization. The firm's hourly rates are: Richard Marshack Partner $650 D. Edward Hays Partner $650 Chad Haes Partner $450 David Wood Partner $450 Kristine Thagard Of Counsel $530 Matthew Grimshaw Of Counsel $500 Judith Marshack Associate $410 Laila Masud Associate $350 Tinho Mang Associate $300 Pamela Kraus Paralegal $270 Chanel Mendoza Paralegal $240 Layla Buchanan Paralegal $240 Cynthia Bastida Paralegal $240 Laurie McPherson Paralegal $175 Kathleen Frederick Paralegal $175 D. Edward Hays, Esq., a partner at Marshack Hays, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Marshack Hays can be reached through: D. Edward Hays, Esq. David A. Wood, Esq. Marshack Hays LLP 870 Roosevelt Irvine, CA 92620 Telephone: (949) 333-7777 Facsimile: (949) 333-7778 Email: ehays@marshackhays.com Email: dwood@marshackhays.com About LF Runoff 2 LLC LF Runoff 2, LLC, formerly known as Plutos Sama, LLC, operates a portfolio of companies, which include law firms. LF Runoff 2 filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-10526) on Feb. 14, 2019. In the petition signed by Matthew C. Browndorf, managing member, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. Marc C. Forsythe, Esq., at Goe & Forsythe, LLP, represents the Debtor. Richard A. Marshack was appointed as Chapter 11 trustee for the Debtor. Marshack Hays LLP is the Trustee's legal counsel. LNB-002-2013: Exclusivity Period Extended Until Sept. 27 -------------------------------------------------------- Judge Robert Mark of the U.S. Bankruptcy Court for the Southern District of Florida extended the period during which only LNB-002-2013, LLC can file a Chapter 11 plan to Sept. 27, and the period during which the company can solicit acceptances for the plan to Nov. 27. The extension will give the company more time to negotiate with creditors and its lender on a consensual plan, according to court filings. About LNB-002-2013 LLC LNB-002-2013, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-20502) on Aug. 28, 2018. In the petition signed by Laurent Benzaquen, manager LNB Capital LLC, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The Debtor tapped Joel M. Aresty P.A. as its legal counsel. No official committee of unsecured creditors has been appointed in the case. LSC COMMUNICATIONS: Moody's Cuts CFR to B3 & Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Investors Service downgraded LSC Communications, Inc.'s corporate family rating to B3 from B2, the senior secured revolving bank credit facility rating to Ba3 from Ba2, and the senior secured term loan B and senior secured notes ratings to B3 from B2. The outlook was changed to negative from stable. The downgrade is due to weaker than expected performance in its magazines, catalogs, and logistics division that led debt/EBITDA leverage to increase to 4.5x as of Q2 2019. LSC's attempted merger with Quad/Graphics, Inc. valued at $1.4 billion was terminated in July following opposition from the U.S. Department of Justice. Moody's expects LSC to use the net proceeds of the merger termination fee and cash generated from modest asset sales to reduce debt in addition to the required $44 million annual term loan B amortization payment, but leverage is expected to remain in the 4.5x range over the next twelve months due to projected declines in EBITDA. Summary of Moody's actions: Affirmations: Issuer: LSC Communications, Inc. Speculative Grade Liquidity Rating, Affirmed SGL-3 Downgrades: Issuer: LSC Communications, Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured Term Loan B, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured Revolving Credit Facility, Downgraded to Ba3 (LGD1) from Ba2 (LGD2) Senior Secured Regular Bond/Debenture, Downgraded to B3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: LSC Communications, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE LSC's B3 CFR is driven by declining commercial printing industry revenue coupled with the challenge of reducing cost in line with lower levels of revenue. Moody's expects adjusted debt/EBITDA leverage to remain in the 4.5x range through 2020 (4.5x at Q2 2019), a level which is high given elevated business risks stemming from ongoing negative organic performance in the commercial printing industry. The risks from high leverage and negative secular pressures are elevated by the cyclicality of the print business. LSC's credit profile benefits from good aggregate scale (revenue of $3.7 billion), a diverse business profile including office products, book publishing as well as its magazines, catalogs, and logistics business. LSC is expected to be able to realize cost savings from plant consolidation and other initiatives and generate proceeds from modest sized asset sales. LSC's Speculative Liquidity Grade Rating of SGL-3, indicating an adequate liquidity profile, is based on cash on the balance sheet of $17 million as of Q2 2019, expectations of about $25 million of annual free cash flow, and availability under its $300 million super priority revolving credit facility which matures in September 2021. The revolver was recently downsized to $300 million from $400 million as part of an amendment to its credit agreement which also increased the consolidated leverage covenant to 3.75x with additional step downs going forward. An expected covenant compliance cushion of about 15% to 20% is modest given the inherent volatility in the company's operations. LSC is expected to generate modest amount of proceeds from asset sales that will be used to reduce debt, but larger non-core assets are less likely. The negative outlook is based on expectations of continuing EBITDA declines due to negative secular pressures in the print industry and the challenge of reducing costs in line with revenue declines. Moody's expects the company to reduce debt levels, but leverage is projected to remain in the 4.5x range over the next twelve months. The ratings could be downgraded if leverage was expected to increase above 4.75x or its ability to service debt or remain in compliance with financial covenants was uncertain. Inability to address any debt maturities well in advance of one year before maturity could also result in a downgrade. An upgrade is not expected in the near term given the negative outlook. The outlook could be changed to stable if leverage decreased to the 4x range with positive EBITDA growth. Confidence would also be needed that the company was able to address approaching debt maturities well in advance of one year before maturity. The principal methodology used in these ratings was Media Industry published in June 2017. Headquartered in Chicago, Illinois, LSC Communications, Inc. (LSC), is a retail/advertising-centric print/publishing service and office products company with annual sales of about $3.7 billion as of Q2 2019. M/I HOMES: Egan-Jones Lowers Commercial Paper Ratings to B ---------------------------------------------------------- Egan-Jones Ratings Company, on August 7, 2019, downgraded the foreign commercial paper and local ratings on commercial paper issued by M/I Homes, Incorporated to B from A3. M/I Homes, Incorporated, on November 22, 1991, is a builder of single-family homes. The Company consists of two operations: homebuilding and financial services. It operates through Midwest Homebuilding, Southern Homebuilding, Mid-Atlantic Homebuilding, and financial services operations segments. MAGNUM CONSTRUCTION: Plan Proposes Bridge Collapse Claim Trust -------------------------------------------------------------- Magnum Construction Management, LLC, f/k/a Munilla Construction Management, LLC, filed a redline of the proposed First Amended Disclosure Statement for Second Amended Chapter 11 Plan of Reorganization. The First Amended Disclosure Statement incorporates the Insurance Settlement Agreement and provides, in part, for the creation of the Bridge Collapse Bodily Injury Claim Trust and for distribution of the Applicable Policy Limit of $42 million to the holders of Bridge Collapse Bodily Injury Claims. Confirmation of the Plan is a prerequisite for the funding and distribution of the Applicable Policy Limit. The Applicable Policy Limit shall be distributed by the Trustee in accordance with the Trust Distribution Plan unanimously adopted by the holders of the Bridge Collapse Bodily Injury Claims. The First Amended Disclosure Statement also notes that the total amount of asserted unsecured Claims (whether by Proof of Claim or amounts scheduled by the Debtor where no Proof of Claim was filed) is approximately $198,173,513.29, inclusive of Bond Claims. If pending claim objections are successful, subject to any further Claim objections, the total amount of Claims comprising Class 6 is approximately $76,885,800.79. However, this amount will be further reduced by the amount of Bond Claims. The Debtor estimates that the distribution to Class 6 will be 2% or less. A redlined version of the First Amended Disclosure Statement is available at https://tinyurl.com/y63trbxd from PacerMonitor.com at no charge. About Magnum Construction Management Magnum Construction Management, LLC -- https://www.mcm-us.com/ -- is a construction company specializing in heavy civil construction in the areas of transportation, airport infrastructure, roads, bridges, government buildings and schools. It is headquartered in South Miami, Florida, but also has offices in (i) Broward County, Florida, and (ii) Irving, Texas. As of the Petition Date, MCM employs a total of 292 people. Magnum Construction Management filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code (Bankr S.D. Fla. Case No. 19-12821) on March 1, 2019. In the petition signed by CFO Gilberto Ruizcalderon, the Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities. The Debtor is represented by Paul A. Avron, Esq., at Berger Singerman LLP. MATTEL INC: Fitch Withdraws B+ Rating on New $250MM Notes Due 2027 ------------------------------------------------------------------ Fitch Ratings has withdrawn its 'B+'/'RR2' rating on Mattel, Inc.'s proposed offering of $250 million of 6.0% senior guaranteed notes due 2027. Mattel terminated the offering on Aug. 8, 2019 in order to investigate matters disclosed in an anonymous whistleblower letter the company received on Aug. 6, 2019. Net proceeds from the terminated offering, plus cash on hand, were to be utilized to refinance Mattel's $250 million of 4.350% senior notes due October 2020 prior to maturity. The company still intends to refinance the 4.350% senior notes due October 2020 prior to maturity. Mattel's 'B-' IDR and Negative Outlook reflect execution risk in stabilizing revenue and growing EBITDA from depressed levels. Mattel continues to face revenue pressures at Fisher-Price, Thomas and Friends and American Girl, which collectively generated approximately $1.5 billion or 30% of total gross revenue in 2018. EBITDA at $267 million in 2018, excluding $182 million of charges related to restructuring, integration, asset impairment and the Toys R Us bankruptcy, and $278 million in 2017 are significantly down from the $900 million levels in 2015/2016 and FCF remains materially negative. The company's LTM gross leverage (debt/EBITDA) is elevated at nearly 7x, and there is some refinancing risk with $600 million of aggregate non-guaranteed unsecured debt due in 2020-2021, though the company has the capacity to issue guaranteed debt to refinance this maturity, similar to the 2018 refinancing of $0.5 billion in maturities. Mattel's financial performance and liquidity could be adversely affected by upcoming debt maturities, consisting of $250 million of senior unsecured bonds due on Oct. 1, 2020 and $350 million due on Aug. 15, 2021, execution risk, demand headwinds in the event of incremental U.S. tariffs, and/or deteriorating economic conditions. The ratings were withdrawn with the following reason Forthcoming Debt Issue/Transaction Carrying An Expected Rating Is No Longer Expected to Proceed As Previously Envisaged KEY RATING DRIVERS Challenged Execution: Mattel's net revenue has steadily declined from a peak of $6.5 billion in 2013 to $4.9 billion in 2017 and $4.5 billion in 2018. Fitch believes the company has been unable to effectively evolve its product portfolio commensurate with changes in children's play patterns. Children are increasingly digitally-oriented and marginally less interested in traditional toys. The industry is also challenged by the phenomenon of children, particularly girls, outgrowing traditional toys at a younger age, with greater interest in consumer electronics, beauty, sports and social media. Relative to Mattel, Hasbro has more successfully responded to these changes through brand storytelling and creating digital experiences and revenue streams to support its portfolio's customer relevance and create additional sales opportunities. Fitch estimates Mattel's net revenue declined 7.0% at constant currency in 2018 compared with an 11% decline in 2017, due to ongoing execution issues exacerbated by the Toys R Us bankruptcy. The significant sales disruption caused by the Toys R Us (TRU) bankruptcy filing in September 2017 and ultimate liquidation of its U.S. business in March 2018 is no longer a headwind for Mattel. Mattel's goal of regaining top-line growth in the short-to-medium-term may prove challenging in the absence of improving performance at Fisher-Price, Thomas and Friends and American Girl, which collectively generated approximately $1.5 billion, or 30.1% of total gross revenue in 2018, and declined 16.9% and 12.0% on a constant currency basis in 2018 and 1Q19, respectively. The company previously anticipated Fisher-Price revenue would stabilize in the second half of 2019 due to new product launches, but Fitch believes the recall of the Fisher-Price Rock 'n Play Sleeper in 1Q19, which will reduce Fisher-Price revenue by $35 million-$40 million in 2019, and the negative publicity regarding the recall may make it more difficult to stabilize the brand's revenue in the near term. Adequate Near-Term Liquidity: As of June 30, 2019, Fitch estimates Mattel's liquidity totaled approximately $900 million and consisted of $194 million of cash and equivalents and estimated $650 million to $700 million of availability (defined as borrowing base less outstanding borrowings and letters of credit) under its $1.6 billion senior secured revolving credit facilities due June 1, 2021. The $1.6 billion credit facilities consist of a $1.31 billion asset based lending facility, subject to borrowing base capacity, and a revolving credit facility with $294.0 million in aggregate commitments secured by certain fixed assets and intellectual property of the U.S. borrowers and certain equity interests in various subsidiaries of Mattel, subject to borrowing base capacity. The facilities are secured by the inventory and accounts receivable of its large subsidiaries in developed markets and certain U.S. fixed assets and intellectual property. The net book value of the accounts receivable and inventory currently pledged as collateral under the senior secured revolving credit facilities was approximately $900 million per Mattel's 2018 10-K, which equates to approximately 60% of total working capital assets ($900/total AR of $970 million and Inventory of $543 million) as of Dec. 31, 2018. Fitch assumes 60% of Mattel's total inventory and accounts receivable as a proxy for available collateral going forward and assumes 60% is available from a borrowing base perspective after adjusting for net orderly liquidation value and applicable advance rates against the NOLV. Fitch further assumes the $294 million of the fixed asset and IP facility is well collateralized and fully available at all times. Given FCF expectations of negative $50 million to negative $75 million in 2019 and modestly positive thereafter, Fitch expects excess liquidity after seasonal borrowings and letters of credit to remain in the $600 million-$700 million range in 2019/2020. Inability to access financial markets to refinance upcoming maturities or material shortfall in EBITDA could materially affect liquidity. The company's upcoming debt maturities, consisting of $250 million of senior unsecured bonds due on Oct. 1, 2020, which are expected to be refinanced with proceeds from the proposed notes offering, and $350 million due on Aug. 15, 2021, execution risk, demand headwinds in the event of incremental U.S. tariffs, and/or deteriorating economic conditions could adversely affect Mattel's business, thereby pressuring liquidity. Under its covenants, Mattel currently has the capacity to issue guaranteed debt to refinance these maturities, similar to the 2018 refinancing of $0.5 billion in maturities. Significant Leverage: The company's LTM gross leverage (debt/EBITDA) is elevated at 7x. Fitch projects it will improve to 6.0x by 2020, assuming low single digit top line growth, gross margin expansion and stable selling, general and administrative expenses (SG&A). Structural Simplification Strengthens Profitability: Mattel's structural simplification cost savings program has helped offset the sales and gross profit decline in 2018, yielding EBITDA of $267 million, excluding $182 million of charges related to restructuring, integration, asset impairment and the Toys R Us bankruptcy, essentially flat with EBITDA of $278 million in 2017. Mattel initiated its structural simplification cost savings program in the third quarter of 2017 and expects to exceed $650 million in cost savings by 2020 by reducing manufacturing complexity and organizational headcount as well as optimizing advertising spend. Mattel realized $372 million of cost savings in 2018, on track to exceed $200 million of incremental cost savings in 2019, partially offset by $100 million of strategic investments. Renewed Tariff Risk: Deteriorating U.S. and China trade negotiations reintroduced significant uncertainty regarding tariffs, which would have a material adverse impact on the toy industry, given the significant volume of toy products manufactured in China that likely would be subject to a 25% U.S. tariff. Significant and Increasing Customer Concentration: In 2018, Mattel's two largest customers, Walmart and Target collectively accounted for approximately 34% of net sales following the liquidation of TRU. Walmart and Target represented 23.7% and 10.0% of Mattel's revenue, respectively, in 2018. The company's 10 largest customers accounted for approximately 49% of net sales in 2018 compared with 47% in 2017. MAUSER PACKAGING: Fitch Assigns BB LongTerm IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has assigned Mauser Packaging Solutions Intermediate Company, Inc. a first-time, Long-Term Issuer Default Rating (IDR) of 'B'. In addition, Fitch has assigned a 'BB'/'RR1' rating to the company's senior secured ABL credit facility, 'BB-'/'RR2' rating to the company's senior secured term loan and senior secured notes, and a 'CCC+'/ 'RR6' rating to the company's senior unsecured notes. The Rating Outlook is Stable. MPS's rating reflects its significant size and scale in addition to its leading market positions in a majority of its product lines and broad product offering, which supports long customer relationships. MPS's size benefits raw material purchasing power, and its ability to pass through raw material costs to customers results in relatively stable margins and forecast FCF of around $200 million annually. The rating also reflects elevated financial leverage, above average exposure to cyclical end markets, and management's aggressive M&A growth strategy, which has resulted in a stretched balance sheet for an extended period of time. KEY RATING DRIVERS Elevated Leverage Profile: MPS has added approximately $3.5 billion in debt over the past three years in connection with its acquisitive growth strategy. This has resulted in the company operating with Fitch-calculated total debt/EBITDA consistently above 7.0x for an extended period of time. At March 31, 2019, total debt/EBITDA was 9.1x, down from peak leverage of around 9.9x. Fitch forecasts leverage to decline in 2019 driven by a full year of earnings from the Vulcan Container Services Holdings, Inc. (ICS) acquisition and the realization of cost synergies. Fitch expects total debt/EBITDA to generally remain around 7.0x and FFO fixed-charge coverage to generally remain around 2.0x, through the forecast period as the company is likely to continue to prioritize growth opportunities over gross debt reduction. Aggressive Acquisitive Growth Strategy: On Aug. 16, 2016, Stone Canyon Industries LLC (SCI) acquired MPS and has since made eight acquisitions for aggregate consideration of approximately $3.5 billion. Over the past two years, MPS has made two transformative acquisitions, paying approximately $2.3 billion to acquire CD&R Millennium Holdco 2 B.V. (Mauser) in 2017 and paying approximately $1 billion to acquire ICS in 2018. The Mauser and ICS acquisitions materially increased MPS's size, expanded its geographical presence and product offering and diversified its revenue base. Fitch believes MPS will continue to be an active participant in the consolidation of the highly fragmented rigid packaging industry. Significant Size & Scale: MPS's significant size and scale improves raw material purchasing power, which supports its cost position and is expected to benefit margins. The company's geographic presence and broad product offering also supports long customer relationships. The company has over 180 facilities across 20 countries creating barriers to entry for new competitors as it would require substantial capital to replicate its network of facilities. In 2018, approximately 29% of sales were to customers outside of the U.S., although only around 4% of revenue was generated outside of North America and Europe. Business Profile Moderates Customer, End Market Risks: MPS has meaningful customer concentration and a higher exposure to cyclical end markets compared to peers, introducing above average volume risk. In 2018, MPS's top 10 customer's accounted for approximately 28% of sales, and its top customer represented 7% of sales. On average, MPS has maintained relationships with its top 10 customers for over 20 years, which in Fitch's view, helps moderate customer concentration risk. MPS is also the primary supplier, and in some cases the sole supplier, for the majority of its largest customers. Fitch estimates around 70% of sales are sold to customers in cyclical end markets. Fitch views MPS's size and scale, rigid packaging focus, proximity to customer facilities, and broad and comprehensive product offering favorably and believes it helps moderate volume risk. Raw Material Exposure: MPS's primary raw materials include resin and steel. Historically, MPS has been able to pass through raw material price increases to customers, which supports Fitch's view that EBITDA margins will be relatively stable through the forecast period regardless of steel and resin price volatility. However, given the intense competition in the industry, price increases can potentially introduce opportunities to lose market share. DERIVATION SUMMARY MPS compares similarly in size, in terms of EBITDA, to Silgan Holdings Inc., but is smaller than packaging peers Berry Global Group, Inc., Ball Corporation, Crown Holdings, Inc., Owens-Illinois Group, Inc. (OI) and Reynolds Group Holding Ltd. MPS also has above average exposure to cyclical end markets, since peers tend to generate a substantial majority of sales from consumer non-discretionary food and beverage end markets. MPS's geographic diversification is generally consistent with Silgan's with around 30% of sales generated outside of the U.S. whereas Crown, Ball, OI and Berry are more geographically diverse. MPS has demonstrated a willingness to stretch the balance sheet over an extended time period to execute M&A whereas peers have either moderated M&A activity or have sufficient scale limiting its impact on leverage metrics. MPS has operated with net debt/EBITDA significantly above 7.0x over the past few years, whereas large public equity packaging companies tend to target net leverage generally ranging between 3.0x-4.0x. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- 3% organic sales growth; -- EBITDA margins improve to around 17% on average with the realization of cost synergies and ability to pass through of raw material price increases; -- Capex at 4% of sales; -- All excess cash flow allocated toward debt repayment in 2019; -- $200 million in acquisitions per year in 2020, 2021 and 2022 respectively. The recovery analysis assumed MPS would be considered a going concern in a bankruptcy scenario and that the company would reorganize rather than be liquidated. Assumptions for the going concern (GC) approach include: -- Fitch assumed a GC EBITDA of $675 million. The GC EBITDA estimate is reflective of a full year of earnings from the IBC acquisition, lower realization in synergies in connection with acquisitions and a heightened competitive environment which results in a reduction in volumes and decline in margins. -- Fitch typically applies recovery multiples ranging from 4.5x-6.0x for packaging companies. MPS's 5.5x multiple, at the higher end of the range, is reflective of MPS's significant size and scale in addition to its leading market positions in the majority of its product lines. -- The recovery is based on the assumed enterprise value of approximately $3.7 billion. After the assumed administrative claim of 10%, there is over $3.3 billion available to creditors. The ABL credit facility is assumed to be drawn at 80%. Fitch's recovery assumptions result in a recovery rating for the first lien secured ABL credit facility within the 'RR1' range resulting in a 'BB' rating, while the first lien secured term loan and notes recovery ratings fall within the 'RR2' range leading to a 'BB-' rating. The senior unsecured notes recovery rating is 'RR6' and results in a 'CCC+' rating. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Clear financial policy in place consistent with total debt/EBITDA sustained at or below 6.0x; -- FFO Fixed Charge Coverage ratio sustained at or above 2.5x. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Total debt/EBITDA sustained above 7.5x; -- FFO Fixed Charge Coverage ratio trending toward 1.5x; -- A sizable acquisition and/or distributions resulting in reduced financial flexibility; -- Deterioration in operating profile resulting in sustained negative FCF. LIQUIDITY Sufficient Liquidity: As of March 31, 2019, MPS had cash and cash equivalents of $75.1 million and $232.9 million of availability under its $250 million ABL credit facility due 2020. Other than its ABL credit facility, MPS has no significant maturities until 2024. FULL LIST OF RATING ACTIONS Fitch has assigned the following ratings: Mauser Packaging Solutions Holding Company -- Long-Term IDR 'B'. Mauser Packaging Solutions Intermediate Company, Inc. -- Long-Term IDR 'B'; -- First lien senior secured ABL credit facility 'BB'/'RR1'; -- First lien senior secured term loan and first lien senior secured notes 'BB-'/'RR2'; -- Senior unsecured notes 'CCC+'/'RR6'. The Rating Outlook is Stable. MILLERBERND SYSTEMS: Sale of Assets to Fund Creditor Trust ---------------------------------------------------------- The Official Committee of Unsecured Creditors filed an amended disclosure statement in support of its proposed chapter 11 plan of liquidation for Debtor Millerbernd Systems, Inc. The latest plan discloses that Ron Leaf will be designated as Creditor Trustee. The Creditor Trustee will administer the Creditor Trust Assets pursuant to the Plan and the Creditor Trust Agreement from and after the Effective Date and will have the powers set forth in the Creditor Trust Agreement, which powers, subject to the rights of the Oversight Committee, shall include the right to operate, sell or dispose the Creditor Trust Assets, the right to object to or continue objecting to Claims, pursue Causes of Action and such other powers as are customary for a trustee of a creditor trust of this nature. The Creditor Trust will be initially funded by the funds from the sale of certain of the Debtor's assets as well as those funds remaining in the Debtor's bank accounts. The Creditor Trustee anticipates hiring Jeffrey Klobucar as his attorney to review and, if necessary, object to claims, and handle bankruptcy causes of action. Goldstein & McClintock may be retained for the litigation against TCF, Wells Fargo, and Bluco if a resolution is not reached prior to the Confirmation Date. A copy of the Amended Disclosure Statement is available at https://tinyurl.com/y4o6czm3 from Pacermonitor.com at no charge. About Millerbernd Systems Millerbernd Systems, Inc., is a manufacturer of sanitary stainless steel equipment serving the food & beverage, pharmaceutical, agri-food, industrial, utilites, wind energy and construction industries. It operates out of a 105,000-square-foot manufacturing facility in Winsted, Minnesota. Millerbernd Systems sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Minn. Case No. 18-41286) on April 23, 2018. In the petition signed by CEO Ralph Millerbernd, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Michael E. Ridgway oversees the case. Steven B. Nosek, Esq., and Yvonne R. Doose, Esq., who have an office in St. Anthony, Minnesota, serve as the Debtor's bankruptcy counsel. James L. Snyder, the U.S. Trustee for Region 12 on May 3, 2018, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case. The Committee retained Goldstein & McClintock LLLP, as lead counsel; and Bassford Remele, P.A., as co-counsel. MONGE PROPERTY: Court Issues Tentative Ruling Confirming Plan ------------------------------------------------------------- Judge Ernest Robles of the U.S. Bankruptcy Court for the Central District of California held a hearing on Aug. 14, 2019, on the motion for order confirming the second amended Chapter 11 plan of reorganization of Monge Property Investments, Inc. The judge confirmed the Plan in a tentative ruling and directed the Debtor to lodge a conforming proposed order, incorporating tentative ruling by reference, within seven days of the hearing. Judge Robles ruled on the issue relating to the Navarro Ballot. In support of Confirmation, the Debtor submitted the Declaration of Roksana D. Moradi-Brovia where she stated that she only received a single ballot in connection with confirmation of the Debtor's Plan. The single ballot was filed by Class 4 claimant Jesus Navarro and cast in favor of the Plan. However, the Navarro Ballot is dated March 15, 2019, despite the fact that the front page of the ballot unambiguously states: "If your ballot is not received by the proponent's attorney on or before 9/24/2018, and such deadline is not extended, your vote will not count as either an acceptance or rejection of the Plan." The Court has reviewed the record and has been unable to locate any order extending the voting deadline. Neither the Debtor, nor any other interested party, has raised this issue. However, unless this Court deems the Navarro Ballot timely, the Debtor will have failed to have obtained acceptance of an impaired consenting class and the Court must deny confirmation of the Debtor's Plan, Judge Robles held. In this case, the voting deadline was set for September 24, 2018 and there has been no formal request to allow the late-filed Navarro Ballot. However, since it appears that the only remaining class of claimants is Class 4 general unsecured creditors and the Debtor has proposed a 100% Plan, the Court finds that it is in the best interests of creditors and the Debtor to treat the Debtor's Confirmation Brief as a request to allow the Navarro Ballot. Applying the Dix factors, the Court finds good cause exists to allow the Navarro Ballot. First, the Debtor will not be prejudiced if the Court were to deem the Navarro Ballot timely but would be prejudiced if the Court declines to do so. Additionally, because of unanticipated delays resulting from the Debtor's efforts to sell real property that was necessary to fund the Plan, the confirmation hearing has been continued several times. Therefore, even though the delay does not appear to have been beyond Mr. Navarro's control, such delay has not resulted in any detriment to the administration of this case. The Court also has no reason to find that Mr. Navarro acted in bad faith. Based upon this, the Court finds that sufficient excusable neglect exists to allow the late-filed Navarro Ballot to be counted. A full-text copy of Judge Roble's Tentative Ruling dated Aug. 14, 2019, is available at https://tinyurl.com/y2pc56qd from PacerMonitor.com at no charge. About Monge Property Investments Monge Property Investments, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-29275) on May 31, 2012. In the petition signed by Ruben Monge, Jr., president, the Debtor estimated assets in the range of $1 million to $10 million and up to $500,000 in debt. Judge Thomas B. Donovan is assigned to the case. On April 9, 2018, an order granting a motion to withdraw Valensi Rose, PLC, as counsel was entered. The Debtor filed the substitution of attorney on April 13, 2018. Simon Resnik Hayes LLC, is presently serving as counsel to the Debtor. The Debtor's Second Amended Disclosure Statement Describing Second Amended Chapter 11 Plan of Reorganization was approved by the Court on Aug. 20, 2018. MONITRONICS INTERNATIONAL: Court Confirms Prepackaged Plan ---------------------------------------------------------- Judge David Jones of the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, issued an order approving the disclosure statement and confirming the joint partial prepackaged plan of reorganization of Monitronics International, Inc., and its debtor affiliates. Prior to the Petition Date, the Debtors solicited votes to accept or reject the Plan from Holders of Class 3 Prepetition Term Loan Claims and Eligible Holders of Class 4 Prepetition Notes Claims. As evidenced by the Vote Certifications, Class 3 (Prepetition Term Loan Claims) voted as follows: 208 claims in the aggregate amount of $979,155,578 voted to accept the Plan, and 0 claims in the amount of $0.00 voted to reject the Plan. Accordingly, 100% of the voting Class 3 creditors voted to accept the Plan, and those creditors in the aggregate held 100% of the total dollar amount of the claims held by such voting Class 3 creditors. Therefore, Class 3 has accepted the Plan pursuant to Section 1126(c) of the Bankruptcy Code. As evidenced by the Vote Certifications, Class 4 (Prepetition Notes Claims) voted as follows: 465 claims in the aggregate amount of $478,450,000 voted to accept the Plan, and 64 claims in the aggregate amount of $797,000 voted to reject the Plan. Accordingly, 87.9% of the voting Class 4 creditors voted to accept the Plan, and those creditors, in the aggregate, held 99.83% of the total dollar amount of the claims held by such voting Class 4 creditors. Therefore, Class 4 has accepted the Plan pursuant to Section 1126(c) of the Bankruptcy Code. About Monitronics Headquartered in the Dallas-Fort Worth area, Monitronics International, Inc. provides security alarm monitoring services to approximately 900,000 residential and commercial customers as of March 31, 2019. Ascent Capital Group, Inc. is a holding company that owns Monitronics, doing business as Brinks Home Security. Monitronics reported a net loss of $678.8 million for the year ended Dec. 31, 2018, compared to a net loss of $111.3 million for the year ended Dec. 31, 2017. As of March 31, 2019, Monitronics had $1.33 billion in total assets, $1.95 billion in total liabilities, and a total stockholders' deficit of $623.8 million. Dallas-based KPMG LLP, the company's auditor since 2011, issued a "going concern" qualification in its report dated April 1, 2019, on the company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the company has substantial indebtedness classified within current liabilities that raises substantial doubt about its ability to continue as a going concern. MR. TORTILLA: Aug. 29 Disclosure Statement Hearing -------------------------------------------------- A hearing to consider the adequacy of the first amended disclosure statement explaining the first Amended Chapter 11 Plan will be held on Aug. 29, 2019 at 01:00 PM. The deadline for the Debtor to file its disclosure statement and plan was initially set for January 31, 2019, and the Debtor filed both timely. The Debtor's co-packer, Diana's Mexican Food Products, and Valley Economic Development Council thereafter filed their objections to the adequacy of the Disclosure Statement and the Debtor filed its joint-reply thereto. The Court thereafter entered its order denying the disclosure statement and setting deadlines concerning Amended Chapter 11 Plan and Disclosure Statement. The Debtor and VEDC thereafter engaged in discussions related to the treatment of VEDC's claim within the Debtor's Plan but were unable to conclude their negotiations before the deadline for the Debtor to file its amended Disclosure Statement and Plan. The Debtor expressed to VEDC its belief that it is prudent to exhaust all options in this respect prior to filing its amended Disclosure Statement and Plan as the content of both is based in large part on the treatment of the claim of VEDC (the sole secured creditor of the estate) and the corresponding impact on the other claims. The Parties therefore entered into an agreement to continue the deadline for the Debtor to file its amended Disclosure Statement and related dates; the Court approved the agreement on May 3, 2019. The Debtor and VEDC thereafter agreed upon and memorialized an agreement as to the treatment of VEDC's claim within the Debtor's Plan; however, as the agreement had not yet been executed or filed with the Court -- and as the Debtor intended on attaching the stipulation and order to the Disclosure Statement with reference to the docket numbers -- the parties agreed to another short continuance of the deadline for the Debtor to file its amended Disclosure Statement and Plan and the Chapter 11 Status Conference; the Court approved the agreement on June 26, 2019. The Debtor and VEDC filed their Stipulation for Plan Treatment on July 8, 2019. Under the First Amended Plan, VEDC's claim, classified in Class 1, is Impaired. The Parties agree that upon entry of an order confirming the Plan, VEDC's Claim Nos. 10-1 to 14-1 will be treated as fully secured and VEDC will have a fully secured claim in the amount of $324,497. In treatment of the Secured Claim, Debtor shall pay, and VEDC shall have its Secured Claim in the amount of $324,497.11 payable at $4,000.00 per month for 7 years at 6% per annum with a balloon at the end in the amount of $81,059.77. The monthly payments shall commence within one month of the effective date of the plan and shall continue each month thereafter for 7 years. The outstanding balance of the Secured Claim shall be due in full at the end of the Payment Term. The Parties further agree that upon entry of an order confirming the Plan, VEDC will also have an unsecured claim (Claim No. 16-1) in the amount of $162,512.56. VEDC shall receive, in full and final satisfaction of its Unsecured Claim, its pro rata share of the dividend issued to general unsecured creditors under the Plan. The First Amended Plan further discloses that in the Diana's Mexican Food Products matter, Roger O. Vega, failed to appear at the pre-trial conference and the judge issued a default judgment in favor of Diana's in the amount of $214,329.66. The Debtor has determined to pursue the malpractice claim against Mr. Vega and has expanded its agreement with Resnik Hayes Moradi LLP to cover this litigation. Any proceeds will be shared pro rata amongst the general unsecured creditors. Diana's object to the Disclosure Statement on two general grounds: (i) the Debtor failed to provide adequate information in accordance with the standards of 11 U.S.C. Section 1125; and (ii) the Plan described in the Disclosure Statement is not confirmable as it does not provide for the fair and equitable treatment of DMFP's claim. The Debtor's Disclosure Statement adds additional information not present in its prior disclosure statement (including an asset valuation), but still provides inadequate information. A full-text copy of the First Amended Disclosure Statement is available at https://tinyurl.com/yydb96kt from PacerMonitor.com at no charge. Attorney for the Debtor: Roksana D. Moradi-Brovia, Esq. RESNIK HAYES MORADI LLP 17609 Ventura Blvd., Suite 314 Encino, CA 91316 Telephone: (818) 285-0100 Facsimile: (818) 855-7013 Email: roksana@RHMFirm.com Attorneys for Diana's: Marsha A. Houston, Esq. Christopher O. Rivas, Esq. REED SMITH LLP 355 South Grand Avenue, Suite 2900 Los Angeles, CA 90071-1514 Tel: 213.457.8000 Fax: 213.457.8080 -- and -- Bernard P. Simons, Esq. REED SMITH LLP 1901 Avenue of the Stars, Suite 700 Los Angeles, CA 90067-6009 Tel: 310.734.5200 Fax: 310.734.5299 About Mr. Tortilla Mr. Tortilla, Inc., is a manufacturer of traditional flour tortilla (fresh or refrigerated) in San Fernando, California. Mr. Tortilla filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-12051) on Aug. 14, 2018. In the petition signed by Anthony Alcazar, president, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Victoria S. Kaufman. Jonathan M. Hayes, Esq., at Resnik Hayes Moradi LLP, is the Debtor's counsel. MURPHY USA: S&P Affirms BB+ ICR on Solid Execution; Outlook Stable ------------------------------------------------------------------ S&P Global Ratings affirmed all of its ratings on El Dorado, Ark.-based Murphy USA Inc., including the 'BB+' issuer credit rating. Murphy USA, the fifth-largest fuel retailer and convenience store operator in the U.S. (based on store count), has a track record of delivering solid operating results through competitive challenges and volatile fuel market conditions, according to S&P. The ratings affirmation reflects S&P's view that Murphy USA's strengthened competitive standing enables it to operate with slightly higher financial leverage than the rating agency previously contemplated. S&P expects solid cash flow generation to fund a balanced mix of capital spending on store projects, including larger format sites, and share repurchases, with leverage metrics being maintained in the mid-2x area over the next 12 to 18 months. The stable outlook reflects S&P's expectation that Murphy USA will modestly diversify its sales mix and expand merchandise margins over time while leveraging its scale to maintain its price leadership position and increase market share. The outlook also factors in S&P's expectation that the company will manage its growth plans and financial policies including share buybacks to maintain adjusted leverage in the mid-2x area. "We could lower our rating if operating performance weakens due to supply disruptions, increased competition, damage to its relationship with Walmart, or the inability to weather sustained rising crude oil prices. We could also lower the rating if the company pursues a more aggressive financial policy involving debt-funded share repurchases, or acquisitions that increase leverage above 3x on a sustained basis," S&P said. "Although unlikely over the near term, we could raise our rating on Murphy USA if it expands its store base and earnings while reducing its dependence on fuel contribution, and adopts a more conservative financial policy that targets leverage maintained below 2x," S&P said. NAMR1726 LLC: Seeks to Hire Ure Law Firm as Counsel --------------------------------------------------- NAMR1726 LLC seeks authority from from the U.S. Bankruptcy Court for the Central District of California to hire Ure Law Firm as its legal counsel. NAMR1726 requires Ure Law Firm to: (a) advise the Debtor regarding matters of bankruptcy law and concerning the requirement of the Bankruptcy Code, and Bankruptcy Rules relating to the administration of this case, and the operation of the Debtor's estate as a debtor in possession; (b) represent the Debtor in proceedings and hearings in the court involving matters of bankruptcy law; (c) assist in compliance with the requirements of the Office of the U.S. Trustee; (d) provide the Debtor legal advice and assistance with respect to the Debtor's powers and duties in the continued operation of the Debtor's business and management of property of the estate; (e) assist the Debtor in the administration of the estate's assets and liabilities; (f) prepare necessary applications, answers, motions, orders, reports and other legal documents on behalf of the Debtor; (g) assist in the collection of all accounts receivable and other claims that the Debtor may have and resolve claims against the Debtor's estate; (h) provide advice, as counsel, concerning the claims of secured and unsecured creditors, prosecution and defense of all actions; and (i) prepare, negotiate, prosecute and attain confirmation of a plan of reorganization. Ure Law Firm will be paid at these hourly rates: Attorneys $450 Paralegals $95 Prior to the chapter 11 petition date, Ure Law Firm received $5,717 from the Debtor. As of the Petition Date, $445 of the retainer funds remains unexhausted. Ure Law Firm will receive an additional $1,500 per month from the Debtor to be placed in trust pending approval of fees and costs. Ure Law Firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Thomas B. Ure, a partner of Ure Law Firm, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Ure Law Firm can be reached at: Thomas B. Ure, Esq. URE LAW FIRM 800 West 6 Street, Suite 940 Los Angeles, CA 90017 Tel: (213) 202-6070 Fax: (213) 202-6075 E-mail: tom@urelawfirm.com About NAMR1726 LLC NAMR1726 LLC owns a 10% interest in a real property located at 8527 Hedges Way, Los Angeles, California valued by the Debtor at $9.5 million and a 100% interest in a property located in the San Bernardino County valued by the Debtor at $3.5 million. NAMR1726 LLC filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-18998) on August 1, 2019. In the petition signed by Nazaret Chakrian, president, the Debtor estimated $13,000,500 in assets and $17,896,670 in liabilities. The case is assigned to Judge Neil W. Bason. Thomas B. Ure, Esq. at Ure Law Firm is the Debtor's counsel. NASSAU FINANCIAL: Fitch Assigns BB+ IFS Rating, Outlook Stable -------------------------------------------------------------- Fitch Ratings has assigned ratings to Nassau Financial Group, L.P., including 'BB+' (Moderately Weak) Insurer Financial Strength ratings for its primary life insurance entities, Nassau Life Insurance Company, Nassau Life and Annuity, and Nassau Re Ltd. The Rating Outlook is Stable. KEY RATING DRIVERS Fitch's ratings for NFG reflect the company's less favorable business profile, moderate statutory capitalization, and modest debt service and financial flexibility. Also considered in the ratings is the company's relatively moderate earnings profile and Fitch's moderate view on asset liability management. Fitch ranks NFG's business profile as less favorable relative to other life insurance peers. This view is supported by the company's moderate operating scale, moderate product diversification, which reflects a diversified mix of legacy life, annuity, and accident & health lines of businesses, and a higher business risk profile relative to the industry given higher potential earnings volatility from some of the legacy business lines, including universal life blocks and variable annuities. NFG's business profile also considers the company's limited operating history in its current form following its formation and subsequent acquisition of established operating entities over 2015 and 2016, and the company's less favorable competitive and market positions in the competitive fixed rate annuity markets, which is partially offset by senior management's familiarity with the marketplace from prior roles. Fitch considers NFG's financial flexibility and debt service capabilities as limited when compared to peers. This view is driven by the company's relatively modest levels of fixed-charge coverage that are assessed to provide approximately 2x run rate fixed charge coverage to be weaker than peers. This assessment also considers the company's relatively limited operating performance history and private ownership structure, which has more limited access to capital markets relative to publicly owned peers. Fitch's considers NFG's statutory capitalization as moderate. This assessment is supported by strong capital metrics that are partially offset by relatively weaker cash flow testing results, primarily driven by the legacy universal life block. NFG's consolidated 2018 RBC is strong, exceeding 400% and the company's minimum target of 350%. NFG's Prism capital model score was also 'Strong' in 2018. Fitch believes that NFG's capital is vulnerable to reserve charges tied to the company's exposure to legacy universal life business. Fitch views NFG's operating performance as moderate relative to peers. NFG's operating performance has been and continues to be pressured by underperforming businesses in PHL Variable Insurance Company, primarily driven by unfavorable mortality from the company's universal life block. Fitch views NFG's management reporting framework, which is a blend of statutory and GAAP reporting frameworks among the U.S. and Cayman operating entities as well as the holding companies, as an outlier among peers. Fitch expects NFG to be more closely aligned with peers from a financial reporting perspective over the intermediate term given steps that senior management has taken to resolve legacy reporting issues, including completing audited PGAAP financials for the most recent three year period. Fitch views NFG's asset liability management profile as moderate, which considers favorable consolidated asset liability mismatch that is under one year, and the company's moderate liquid asset ratio, which is driven by its sizeable policy loans. NFG's weaker cash flow testing results as well as the overall sensitivity of the universal life block to mortality is also considered in Fitch's view of asset liability management. RATING SENSITIVITIES Key rating sensitivities that could lead to an upgrade include: -- Actions taken by senior management to improve underlying performance of or to materially de-risk the underperforming legacy businesses, along with continued growth in new business sales; -- Consistent fixed charge coverage above 2x; -- Consistent ROC above 5%. Key rating sensitivities that could lead to a downgrade include: -- Material loss from legacy businesses arising from underlying performance or litigation; -- Deterioration in business profile caused by a material change in the company's risk appetite evidenced by growth in higher risk product lines; -- Deterioration in capitalization evidenced by a Prism score below 'Strong' or RBC ratio below 350%; -- Decline in ROC below 1%. The surplus notes rating of Nassau Life Insurance Company could be downgraded if surplus notes account for significantly more than 15% of NNY's total statutory capital. FULL LIST OF RATING ACTIONS Fitch has assigned the following ratings with a Stable Outlook: Nassau Life Insurance Company -- IFS rating 'BB+'; -- Long-term IDR (IDR) 'BB'; -- Surplus notes rating 'BB-'. Nassau Life and Annuity Company -- IFS rating 'BB+'. Nassau Re (Cayman) Ltd. -- IFS rating 'BB+'. Nassau Financial Group, L.P. -- Long-term IDR 'B+'. The Nassau Companies -- Long-term IDR 'B+'. The Nassau Companies of New York -- Long-term IDR 'B+'; -- Senior unsecured debt rating 'B'/'RR5'. NEONODE INC: Incurs $1.26 Million Net Loss in Second Quarter ------------------------------------------------------------ Neonode Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss attributable to the Company of $1.26 million on $1.71 million of total revenues for the three months ended June 30, 2019, compared to a net loss attributable to the Company of $964,000 on $1.87 million of total revenues for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss attributable to the Company of $1.83 million on $3.72 million of total revenues compared to a net loss attributable to the Company of $1.65 million on $4.25 million of total revenues for the same period during the prior year. Net cash used in operating activities totaled $1.5 million for the six months ended June 30, 2019 compared to $1.4 million for the same period last year. As of June 30, 2019, the Company had $11.34 million in total assets, $3.71 million in total liabilities, and $7.62 million in total stockholders' equity. "We are growing our global sales presence and partner network and have successfully promoted our selected use cases to customers and at numerous trade shows. In addition, we have released updated versions of our product offerings improving our competitive position. These activities have resulted in an increased number of on-going customer discussions and evaluations. I am confident that we have created a foundation that will allow us to achieve future revenue growth and profitability," said Hakan Persson, CEO of Neonode Inc. BUSINESS HIGHLIGHTS DURING THE QUARTER * Signed collaboration agreement with Finetek Co., Ltd who will serve as a system integrator and future electronic manufacturing partner for Neonode zForce technology. For more information, see the Company's press release https://www.neonode.com/neonode-and-finetek-sign- collaboration-agreement/ * Assigned a portfolio of patents not used in the Company's current business to Aequitas Technologies LLC as part of an agreement to share potential proceeds generated from a licensing and monetization program. * Received purchase order for sensor modules of approximately $0.6 million from industry leading medical device OEM who will use the Company's sensor module in a touch display system for an X-Ray machine. Initial delivery began in June 2019. BUSINESS HIGHLIGHTS SINCE THE END OF THE QUARTER * Signed agreement with Serial Microelectronics (HK) Limited to promote and sell Neonode's sensor products in China, Taiwan and Hong Kong. For more information, see the Company's press release https://www.neonode.com/neonode- signs-serial-microelectronics-hk-as-distributor-to-chinese- market/ THE CEO'S COMMENTS "During the first six months of the year we have completed a number of actions required to successfully re-align the company according to our strategic use case focus and business plan. Improved product performance - Launched a performance-optimized zForce Touch Solution (CORE) for basic touch use cases - Released an updated version of zForce sensor modules enabling extended range and 90-degree angle mount of the sensor to obtain the same active detection area with new levels of design freedom Increased market activities - Announced use cases for basic touch, high-image quality display touch, ruggedized display touch and entry systems for automotive systems - Exhibited at several relevant industry trade shows to communicate and promote Neonode's use case strategy - Strenghtend relationships with existing customers, supply chain partners and external sales representatives "Our strong use case focus is providing clarity of the best application fit for our technology and has been received positively by both customers and employees. "Our marketing and sales activities are directed towards our key target markets; the U.S., Japan and China and selected countries in Europe. Participation at SID in San Jose, Computex in Taiwan and Sensor Expo in San Jose have generated a substantial number of concrete leads and interest from potential customers, partners and system suppliers. We continue to see strong market interest for our product offerings, however customer project cycles are long in the embedded market and, why continuous marketing and sales coverage is key. "We are making progress in our discussions with both consumer customers and automotive Tier 1s for IVI solutions ("In Vehicle Infotainment"). A new printer customer in China has entered into a license agreement and pre-paid initial license fees. We have had ongoing discussions with other new potential printer customers in Asia with decisions expected later in the year. For automotive IVI, we are in a number of evaluation projects with Tier 1s and a specific program is identified for one OEM. Our liftgate solution for automotive entry systems is progressing well and we see a strong after market potential, paving the way for an OEM standard product offering. After the quarter ended, we entered into discussions with a major existing customer for a potential monitor solution. "Our collaboration with Finetek is progressing well with several business opportunities unfolding for monitors, liftgate systems and steering wheel touch pads. Our objective is to have Finetek support both our sensor module and licensing business and become a key partner from a design and manufacturing perspective. "In order to increase our sales efforts and to improve our local presence, we have strengthened our sales capability in China and the U.S. Our sales partner network in the U.S., Canada and Mexico is developing well and has become operational with a growing number of opportunities in evaluation phase. In July, we signed an agreement with Serial Microelectronics to promote and sell our sensor modules in mainland China, Taiwan and Hong Kong. In addition, we are in discussions with sales distributors in Japan and expect an agreement to be signed in the near-term. We have identified and are in negotiations with sales distributors to support our markets in the United Kingdom and Central Europe and are evaluating other companies to provide coverage for the remainder of Europe. "We have been active with Digi-Key for 17 months and have shipped more than 840 evaluation kits globally, primarily to industrial accounts in the U.S. and Asia. The leads generated through this channel are continuously being qualified through our local representatives and sales partners. We anticipate that our new version of the zForce sensor module will be introduced for sales in the fourth quarter 2019. "In summary, we continue to execute on our plan and see positive customer response with increasing on-going customer discussions and evaluations. I'm confident we are moving in the right direction and that our current investments in our sales coverage together with strong cost control and cash flow focus will generate future revenue growth and profitability." A full-text copy of the Form 10-Q is available for free at: https://is.gd/BFqBFS About Neonode Neonode Inc. (NASDAQ:NEON) -- http://www.neonode.com/-- develops, manufactures, and sells advanced sensor modules based on the company's proprietary zForce AIR technology. Neonode zForce AIR Sensor Modules enable touch interaction, mid-air interaction and object sensing and are ideal for integration in a wide range of applications within the automotive, consumer electronics, medical, robotics and other markets. The Company also develops and licenses user interfaces and optical interactive touch solutions based on its patented zForce CORE technology. The company is headquartered in Stockholm, Sweden and was established in 2001. Neonode reported a net loss attributable to the Company of $3.06 million for the year ended Dec. 31, 2018, compared to a net loss attributable to the Company of $4.70 million for the year ended Dec. 31, 2017. As of March 31, 2019, Neonode had $12.94 million in total assets, $4.01 million in total liabilities, and $8.93 million in total stockholders' equity. "We have experienced substantial net losses in each fiscal period since our inception. These net losses resulted from a lack of substantial revenues and the significant costs incurred in the development and acceptance of our technology. Our ability to continue as a going concern is dependent on our ability to implement our business plan. If our operations do not become cash flow positive, we may be forced to seek sources of capital to continue operations. No assurances can be given that we will be successful in obtaining such additional financing on reasonable terms, or at all. If adequate funds are not available when needed on acceptable terms, or at all, we may be unable to adequately fund our business plan, which could have a negative effect on our business, results of operations, and financial condition," the Company said in its Annual Report on Form 10-K for the year ended Dec. 31, 2018. NOVABAY PHARMACEUTICALS: Incurs $2.50-Mil. Net Loss in 2nd Quarter ------------------------------------------------------------------ Novabay Pharmaceuticals, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss and comprehensive loss of $2.50 million on $1.78 million of total net sales for the three months ended June 30, 2019, compared to a net loss and comprehensive loss of $1.58 million on $2.79 million of total net sales for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss and comprehensive loss of $6.69 million on $3.28 million of total net sales compared to a net loss and comprehensive loss of $3.73 million on $5.74 million of total net sales for the same period during the prior year. As of June 30, 2019, the Company had $9.87 million in total assets, $8.20 million in total liabilities, and $1.66 million in total stockholders' equity. NovaBay reported cash and cash equivalents of $3.7 million as of June 30, 2019 compared with $3.2 million as of Dec. 31, 2018. The Company raised $1.0 million through a related-party loan in February, $2.0 million through a convertible loan in March, and $0.4 million in May and $2.4 million in June through private placements of common stock. Operating expenses for the second quarter of 2019 were $2.8 million, a 37% decline from $4.4 million in the second quarter of 2018, reflecting the strategic shift in the U.S. commercial organization in March 2019. Sales and marketing expenses for the second quarter of 2019 were $1.5 million, a 48% decrease from $3.0 million for the second quarter of 2018. General and administrative expenses for the second quarter of 2019 were $1.2 million, a 12% decrease from $1.4 million for the second quarter of 2018. Research and development expenses for the second quarter of 2019 were $32,000 compared with $61,000 for the second quarter of 2018. Operating loss for the second quarter of 2019 was $1.4 million, a 34% improvement from the operating loss of $2.1 million for the second quarter of 2018. Non-cash loss on the change of fair value of warrant liability for the second quarter of 2019 was $0.5 million compared with a non-cash gain of $0.5 million for the second quarter of 2018. Non-cash loss on the embedded derivative associated with the convertible note for the second quarter of 2019 was $0.2 million. The Company did not record a comparable loss or gain for the second quarter of 2018. Other expense for the second quarter of 2019 was $0.4 million compared with other income of $5,000 for the second quarter of 2018. The other expense in 2019 was due to interest due on the Promissory Note issued in February 2019 and the amortization of discount and issuance cost related to the Convertible Note issued in March 2019. Liquidity Novabay said, "Based primarily on the funds available at June 30, 2019, the Company believes these resources will be sufficient to fund its operations through the third quarter of 2019. The Company has sustained operating losses for the majority of its corporate history and expects that its 2019 expenses will exceed its 2019 revenues, as the Company continues to re-invest in its Avenova commercialization efforts. The Company expects to continue incurring operating losses and negative cash flows until revenues reach a level sufficient to support ongoing growth and operations. Accordingly, the Company's planned operations raise substantial doubt about its ability to continue as a going concern. The Company's liquidity needs will be largely determined by the success of operations in regard to the commercialization of Avenova. The Company also may consider other plans to fund operations including: (1) out-licensing rights to certain of its products or product candidates, pursuant to which the Company would receive cash milestones or an upfront fee; and (2) raising additional capital through debt and equity financings or from other sources. The Company may issue securities, including common stock and warrants, through private placement transactions or registered public offerings, which would require the filing of a Form S-1 or Form S-3 registration statement with the Securities and Exchange Commission (the "SEC"). In the absence of the Company's completion of one or more of such transactions, there will be substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are issued, and the Company will be required to scale back or terminate operations and/or seek protection under applicable bankruptcy laws." A full-text copy of the Form 10-Q is available for free at: https://is.gd/4p10q2 About NovaBay Pharmaceuticals Based in Emeryville, California, NovaBay Pharmaceuticals -- http://www.novabay.com/-- is a biopharmaceutical company focusing on commercializing and developing its non-antibiotic anti-infective products to address the unmet therapeutic needs of the global, topical anti-infective market with its two distinct product categories: the NEUTROX family of products and the AGANOCIDE compounds. The Neutrox family of products includes AVENOVA for the eye care market, NEUTROPHASE for wound care market, and CELLERX for the aesthetic dermatology market. The Aganocide compounds, still under development, have target applications in the dermatology and urology markets. 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. OLB GROUP: Incurs $473K Net Loss in Second Quarter -------------------------------------------------- The OLB Group, Inc., filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $472,838 on $2.58 million of total revenue for the three months ended June 30, 2019, compared to a net loss of $320,337 on $3.22 million of total revenue for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss of $879,783 on $5.17 million of total revenue compared to a net loss of $446,967 on $3.30 million of total revenue for the same period a year ago. As of June 30, 2019, the Company had $11.62 million in total assets, $14.09 million in total liabilities, and a total stockholders' deficit of $2.46 million. At June 30, 2019, the Company had cash of $55,418 and a working capital deficit of $1,004,312. The Company's cash used in operating activities was $188,957 for the six months ended June 30, 2019. The Company expects to fund future liquidity and capital requirements through cash flow generated from its operating activities resulting from increases in its merchants and revenues generated. Additionally, included in the working capital deficit as of June 30, 2019 was accrued payroll, a note payable and other expenses due to the Company's Chief Executive Officer, Mr. Ronny Yakov, in the amount of approximately $749,632, which he has agreed to defer receiving payment until the Company has sufficient working capital. As a result of the recent amendments to its long-term and related party long-term debt arrangements, coupled with its operations acquired in the business combination and commitment from a related party and significant stockholder that he will provide any additional financial support, if needed, to satisfy the Company's debt or other obligations through November 2020, the Company believes it has sufficient capital to continue operations for a period of at least twelve months from the date these financial statements were issued. The Company's future capital requirements could depend on many factors, including the need to expand its services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement the Company's product and service offerings. The Company said that if it is unable to secure additional capital, it may be required to curtail its future plans and take additional measures to reduce costs in order to conserve cash. A full-text copy of the Form 10-Q is available for free at: https://is.gd/gWUiTu About OLB Group The OLB Group, Inc. -- http://www.olb.com/-- is a fintech company and payment facilitator that focuses on a suite of products in the merchant services and payment facilitator verticals that is focused on providing integrated business solutions to merchants throughout the United States. The Company seeks to accomplish this by providing merchants with a wide range of products and services through its various online platforms, including financial and transaction processing services and support for crowdfunding and other capital raising initiatives. The Company supplements its online platforms with certain hardware solutions that are integrated with its online platforms. Its business functions primarily through three wholly-owned subsidiaries, eVance, Inc., Omnisoft, and CrowdPay. Liggett & Webb P.A., in New York, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 18, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company was in default of its debt covenants. This condition raises substantial doubt about the Company's ability to continue as a going concern. OLB Group reported a net loss of $1.39 million in 2018, following a net loss of $662,297 in 2017. As of March 31, 2019, the Company had $11.77 million in total assets, $13.83 million in total liabilities, and a total stockholders' deficit of $2.06 million. OMNIMAX INT'L: Moody's Lowers CFR to Caa2 & Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded OmniMax International, Inc.'s Corporate Family Rating to Caa2 from Caa1 and the Probability of Default Rating to Caa2-PD from Caa1-PD. The rating on the company's senior secured notes was affirmed at Caa1. The outlook was revised to negative from stable. The downgrades reflect uncertainty about the sustainability of OmniMax's capital structure given weakening profitability and liquidity, increased debt leverage and negative free cash flow. Debt-to-LTM EBITDA increased to 9.7x at June 30, 2019 from 7.7x at year-end 2018 and Moody's expects leverage to remain above 9x through the remainder of the year. The negative outlook reflects uncertainty about OmniMax's ability to refinance its current maturities given the company's limited liquidity, recent weak operating results and very high leverage. OmniMax has $385 million of first lien senior secured notes maturing in August 2020. Further, the company's ABL facility (approx. $46.8 million drawn as of June 30, 2019) matures 90 days prior to the senior secured notes if the notes are not refinanced by that time. Downgrades: Issuer: OmniMax International, Inc. Corporate Family Rating, downgraded to Caa2 from Caa1 Probability of Default Rating, downgraded to Caa2-PD from Caa1-PD Affirmations: Issuer: OmniMax International, Inc. Senior Secured Notes, affirmed at Caa1 (LGD3) Outlook Actions: Issuer: OmniMax International, Inc. Outlook, revised to negative from stable RATINGS RATIONALE The Caa2 CFR reflects OmniMax's high debt leverage, low interest coverage, weak liquidity and risks associated with significant upcoming debt maturities. OmniMax reported a decline of 2.8% in LTM June 30, 2019 revenues from full-year 2018, resulting from a combination of factors including an extended winter that led to construction project delays, reduced OEM demand for recreational vehicle (RV) parts and a rise in the cost of steel and aluminum. Despite more recent declines in metal pricing, which should help offset some of the operating weakness the company remains exposed to volatility in steel and aluminum prices. EBITA-to-interest coverage declined to 0.6x for the twelve month period ended June 30, 2019 from 0.8x as of year-end 2018. Metrics are expected to remain weak (debt-to-EBITDA above 9x and EBITA interest coverage below 1.0x) over the next year given the company's recent poor operating performance and uncertainty regarding long-term demand for its products. Given the negative outlook a ratings upgrade is unlikely at this time. However, over a longer-term horizon ratings could be upgraded if OmniMax were to improve its liquidity position materially, demonstrate stabilization of revenue and profit levels, meaningfully reduce leverage and begin generating free cash flow. An upgrade would also be predicated on the successful refinancing of the company's senior secured notes and ABL. The ratings could be downgraded if the risk of default increases or Moody's recovery estimates deteriorate. The ratings could also be downgraded if liquidity deteriorates for any reason. The principal methodology used in these ratings was Global Manufacturing Companies published in June 2017. Headquartered in Norcross, Georgia, OmniMax is a manufacturer of aluminum, steel, vinyl and copper products sold mainly in North America and Europe. OmniMax's products are sold to the residential repair and remodel, commercial construction and recreational vehicle markets. OmniMax's main sponsors are TPG Opportunities Partners and Highland Capital Management. PARKINSON SEED: G. Rainsdon Appointed Chapter 11 Trustee -------------------------------------------------------- The Bankruptcy Court has approved the appointment of Gary L. Rainsdon as the Chapter 11 trustee in the Chapter 11 case of Parkinson Seed Farm, Inc. The U.S. Trustee has consulted, via conversations at the hearings on June 20 and 21, 2019, emails, and telephone calls, with Randy Peterman for Compeer Financial, Jeremy Vaughn for Diversified Financial, Jason Naess and James Markus for SummitBridge Credit Investments, Stephen Madsen for unsecured creditors Aristocrat Farms, Jeppsen Brothers Ranch, and Walters Osgood Farms, and the Debtor's counsel, Brent Robinson, Esq. About Parkinson Seed Farm Located in Saint Anthony, Idaho, Parkinson Seed Farm Inc. -- http://www.parkinsonseedfarm.com/-- farms 7,200 acres of potatoes. It raises seed potatoes, hard red and hard white wheat, as well as a small amount of alfalfa (mostly to feed horses for recreational purposes). The company raises 11 of what it considers to be more mainstream varieties such as the Russet Burbank, Ranger, three different line selections of Russet Norkotah, white varieties such as Cal Whites and Atlantics, and reds like the Dark Red Norland. The company was founded in 1937. Parkinson Seed Farm sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No. 18-40412) on May 15, 2018. In the petition signed by Dirk Parkinson, president, the Debtor disclosed $6.11 million in assets and $26.92 million in liabilities. Judge Joseph M. Meier oversees the case. The Debtor hired Robinson & Associates as its legal counsel. PBF HOLDING: Fitch Assigns BB LongTerm IDR, Outlook Positive ------------------------------------------------------------ Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating of 'BB' to PBF Holding Company LLC, a wholly owned subsidiary of PBF Energy Inc. Fitch has also assigned a 'BBB-'/'RR1' rating to the company's senior secured credit facility and a 'BB'/'RR4' rating to its senior unsecured notes. The Rating Outlook is Positive. PBF Holding's ratings reflect its geographically-diversified portfolio of refineries, moderate size, the high complexity of its refineries, strategic integration with PBF Logistics LP (NYSE: PBFX), prior success in integrating and organically growing its refineries, and credit metrics commensurate with the 'BB' category. This is offset by the inherent volatility of the refining industry, regulatory overhang, large swings in working capital, potential disruptions from turnarounds, competitive conditions particularly on the East Coast, margins that have historically trailed peers, and an acquisitive business strategy. The Positive Outlook reflect Fitch's view that the pending Martinez Refinery acquisition should increase scale and diversification, generate operating synergies, increase the overall complexity of the company, and further enhance the potential benefit from IMO regulations. The Outlook is expected to be resolved upon the completion of the acquisition and the successful integration of Martinez into the system. KEY RATING DRIVERS Growing Size and Diversification: PBF Holding's strategy is to buy complex refineries at attractive prices. Following the completion of the Martinez acquisition, PBF Holding will own six refineries in four different PADDs and have approximately 1,041 mpd of throughput capacity. Diversification helps reduce the risk of demand-supply imbalances of both the crude input and resulting product in each PADD. Refineries are high fixed cost, low margin businesses that can have huge swings in working capital. Fitch believes scale and diversification helps to reduce these risks and improve credit quality. High utilization is important in offsetting high fixed costs. Pro forma for Martinez, PBF Holding will have the most complex refinery slate of any independent refiner (complexity of 12.8) and will be the most complex refiner in California (complexity of 15.5). The complexity allows PBF Holding to run a wide range of crude slates and take advantage of changes in price spreads among different types of oil. Investment in Refinery Portfolio: Since its formation in 2008, PBF Holding has proven its ability to successfully integrate new refineries into its system. These integrations include the investment in restarting idled equipment that has led to incremental margin when brought on line. For example, in Toledo, PBF Holding increased investment in its existing, profitable petrochemical business. In Chalmette, the company restarted its idled Reformer complex to increase finished gasoline yield and is working to restart the idle Coker #1. Martinez Increases Scale/Diversification: The Martinez acquisition from Shell provides PBF Holding with an expanded geographic diversification, increases throughput capacity to over 1 million barrels per day (bpd), and expands the company's footprint in California. The opportunity cost of downtime in California is high given the tightness of the localized market. Having two California refineries helps to alleviate this risk. The company expects to pay $900 million to $1 billion for the refinery depending on the closing date. In addition, Shell is providing capital expenditure funding for turnaround activity and PBF has agreed to earn-out provisions for earnings above certain levels for the first four years. Martinez has a Nelson Complexity Index of 16.1 that allows it to process a slate of heavy, high sulphur, high total acid number (TAN) crudes to produce a high yield of high-value clean products. PBF Holding plans to manage the Martinez and existing Torrance Refinery as a single refining system in order to enhance synergistic benefits. In addition, the acquisition should create a tax shield as the company can effectively expense 100% of the transaction cost under the Tax Cut and Jobs Act. Impact of IMO: PBF Holding is well positioned to benefit from International Maritime Organization (IMO) 2020 restrictions, which will cut allowed sulphur emissions in marine fuel oil to 0.5% from 3.5%. Given the limited response seen by the shipping industry to date in adding new scrubbers to vessels, Fitch expects the rules, when fully implemented, will provide a material boost to diesel margins, as well as pressure heavy fuel oil prices. PBF Holding is positioned to take advantage of both trends due to its distillate yield (32% in 1Q19) and sizable coking capacity, which can run large amounts of discounted residual fuel oil and heavy crudes. Fitch believes IMO will have a positive impact on operators of complex refineries, although there is uncertainty as to the magnitude of the benefit and how long it takes the market to adjust. Fitch will evaluate the application of proceeds from this additional contribution to measure whether overall credit quality improved. Unfavorable Regulatory Headwinds: U.S. refiners face a number of unfavorable regulatory headwinds that will cap long-term demand for U.S. refined product, including rising renewable requirements under the renewable fuel standard (RFS) program, higher corporate average fuel economy standards and regulation of greenhouse gases on the federal and state levels as a pollutant. These regulations are expected to limit growth in domestic product demand and keep the industry reliant on exports to maintain full utilization. However, the Trump administration has eased several regulations, including small refinery waivers for the RFS programs, which resulted in a sharp drop in renewable identification numbers (RIN) prices that benefitted all refiners (PBF Holding's 2018 RINs costs declined to $143.9 million from $293.7 million in 2017 and $347.5 million in 2016), as well as recent proposals to ease fuel administrative action. Reversals are possible under a different future administration. High-Volatility Sector: Refining remains one of the most cyclical corporate sectors, and is subject to periods of boom and bust, with sharp swings in crack spreads over the cycle. The last major bust period was 2009, when collapsing oil prices and lagging costs led industry margins to collapse. The rebound in market conditions was also relatively quick, however, as the industry tends to adjust rapidly. PBF Logistics Relationship: PBFX is a fee-based Master Limited Partnership (MLP) established by PBF in 2014 to acquire, own and operate crude oil and refined products logistics assets. PBF Energy LLC owns 48% of PBFX and 100% of PBF Holding as of June 30, 2019. PBF Holding and PBFX over time have entered into a series of transactions in which PBF Holding contributed certain assets to PBF Energy LLC, which in turn contributed those assets to PBFX. PBF Energy LLC received consideration that was eventually contributed to PBF Holding. Although Fitch expects there will be other similar transactions in the future, PBFX's current stated strategy is to expand through organic growth and acquisition of third-party assets. Although the operations of PBF Holding and PBFX are intertwined, both companies have separate boards of directors. Conservative Financial Policy: PBF Holding's financial policy is to maintain a target leverage of debt/capitalization below 40%. Fitch anticipates the acquisition of the Martinez Refinery will be financed with 50% debt with the remainder funded through cash on hand, potential asset sales, and an equity issuance as required. Relationship with PBF Energy: PBF Holding is an indirect, wholly owned subsidiary of PBF. PBF is a holding company with its primary subsidiaries being PBF Holding and its 48% ownership in PBFX. PBF Holding typically distributes cash to PBF to fund tax payments and dividends. PBFX also sends its 48% share of distributions to PBF, which can be used to cover a portion of the tax payments and distributions. There is no debt at the parent. DERIVATION SUMMARY PBF Holding ratings reflect its status as an independent refiner although it does not have non-refinery operations such as retail, like Marathon Petroleum (MPC: BBB/Stable), which can reduce cash flow volatility. PBF Holding's crude capacity of 1,041,000 bpd pro forma for the Martinez acquisition is mid-range. It is significantly smaller than Marathon (3,000,000 bpd) and Valero Energy (VLO: BBB/Stable, 2,600,000), but larger than HollyFrontier (HFC: BBB-/Stable, 457,000) and CITGO Petroleum (CITGO: B/Stable, 749,000). PBF Holding is believed to be the most complex independent refiner in the U.S. with a weighted average Nelson Complexity Index of 12.8. This compares to Valero at 11.4. PBF Holding has solid geographic diversification with a refinery in every PADD other than PADD 4. PBF Holding's EBITDA margins are well below MPC, VLO, and HFC and reflects the lack of non-refinery operations as well as the effect of its exposure to different regional crack spreads. PBF Holding's debt/EBITDA of 3.0x at March 31, 2019 is higher than VLO (2.1x) and HollyFrontier (1.7x). KEY ASSUMPTIONS -- WTI oil price of $57.50 in 2019 and 2020 and $55.00 long term; -- Crack spreads are average of last five years; -- Throughput is expected to be constant throughout the forecast period with the exception of the Martinez refinery added in 2020; -- Operating expenses are forecasted to increase 2% annually; -- Capex is expected to be $575 million in 2019, $600 million in 2020, and $675 million in long term reflecting Martinez acquisition. -- FCF is expected to be accumulated as cash as use for potential acquisitions. -- Upon the closing of the Martinez transaction, Fitch expects PBF Holding will attempt to access the high yield debt markets to issue $500 million in notes. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action --Successful completion and integration of the Martinez refinery acquisition, including realization of synergies; --Greater scale and geographic diversification; --Sustained debt/EBITDA at or below 2.0x; --Sustained lease adjusted FFO gross leverage at or below 2.5x. Developments That May, Individually or Collectively, Lead to Negative Rating Action --A change in financial policy that includes greater use of debt in acquisitions or greater contributions to parent to fund share repurchases or higher dividends; --Sustained debt/EBITDA above 3.0x; --Sustained lease adjusted FFO gross leverage at or above 3.5x. LIQUIDITY AND DEBT STRUCTURE Robust Liquidity: As of June 30, 2019, PBF Holding had cash on hand of $157 million and availability under its revolver of $1,876 million with no borrowings on its revolver. The maximum commitment on the revolving credit agreement is $3.4 billion and there is an accordion feature that allows for commitments up to $3.5 billion. The revolver matures in May 2023. The single financial covenant is a consolidated fixed charge coverage ratio of not less than 1.00:1 that is not triggered until liquidity is less than 10% of the borrowing base, or $203 million as of June 30, 2019. PBF Holding has historically exhibited significant working capital swings driven by volatility in crude and refined product prices and M&A activity. The revolver is adequately sized to provide for these draws. PBF Holding's liquidity options are also enhanced by potential dropdowns to PBFX. The maturity schedule is manageable. The next significant maturities are the revolver in May 2023 and then the 7% notes in November 2023. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature of the way in which they are being managed by the entity. PBF Holding has an ESG Relevance Score of 4 for Exposure to Environmental Impacts due to the potential of operational disruptions to extreme weather events, including PBF Holding's exposure to hurricanes on the Gulf Coast through its Chalmette refinery, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. PBF LOGISTICS: Fitch Assigns 'BB' LongTerm Issuer Default Rating ---------------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'BB' to PBF Logistics LP , a 'BB+'/ 'RR1' rating to the partnership's senior secured revolver and a 'BB'/ 'RR4' rating to the 6.875% senior unsecured notes due May 2023. The notes are co-issued by PBF Logistics Finance Corporation. The Rating Outlook is Stable. PBFX's ratings reflect its strong operational ties with PBF Holding Company LLC (PBF Holding), its affiliate and primary counterparty. PBF Holding's activities significantly impact PBFX's economic performance as PBFX derives a substantial portion of its revenues from PBF Holding (92% for FYE2018). Fitch expects this to continue in the near to intermediate term and believes PBF Holding is the primary driver behind PBFX's ability to service its debt obligations. The ratings also reflect modest leverage and conservative financial profile of the partnership supported by long term, fee-based contracts that limit commodity price exposure and provide volume protection through minimum volume commitments. PBFX ratings also take into account its limited size and scale. The partnership is geographically well diversified with assets in four Petroleum Administration for Defense Districts (PADDs), but approximately 55%-60% of EBITDA is generated from assets in the East Coast (associated with PBF Holding's Delaware and Paulsboro refineries). Fitch views this geographic and customer concentration is a concern. Although PBFX's assets are integral to PBF Holding's refining operations, the heavy dependence on PBF Holding could present an outsized event risk should there be an operating, production or financial issue at PBF Holding. Future growth for PBFX is expected to come from organic projects which generally offer strong returns, and potential third party acquisitions, and are expected to come at a higher multiple than drop downs. Drop downs are expected to be less of a focus for PBFX in the near term. KEY RATING DRIVERS Modest Size and Scale: The partnership is geographically diversified, with presence in four PADDs, although much of the assets and operations concentration is limited to the East Coast. Fitch believes this operational concentration and EBITDA below $200 million would make PBFX vulnerable to weak East Coast margins should there be an outsized event or slowdown in the region's refining market. Consistent Cash Flow: PBFX's operations are underpinned by long-term take-or-pay contracts with PBF Holding, with an eight-year weighted average contract life. PBFX provides services at fixed fee (including inflation escalators and certain increases for operating costs) with minimum volume commitments, limiting PBFX's commodity price sensitivity and providing some volumetric downside protection. Counterparty Concentration Risk: PBFX derives approximately 90% of its revenues from its affiliate PBF Holding. PBF Holding is expected to continue to be the partnership's largest customer in the near to intermediate term, as PBFX provides PBF Holding with critical logistical assets that support its operations. Fitch typically views midstream service providers like PBFX with single-counterparty concentration as having exposure to outsized event risk. This would be the case if business or operational issues at PBF Holding caused throughput volumes at PBFX's facilities to be significantly reduced, adversely impacting cash flows and distributions. The likelihood of utilizing any additional capacity as a result of this decreased throughput to service third party customers could require substantial capital expenditure. As such, PBFX is subject to the operational, business and financial risks of PBF Holding. PBF Holding is under no contractual obligation to supply additional volume beyond MVCs. In the absence of expansion of asset portfolio to service more third party customers, volume growth is dependent on PBF Holding, and could limit future growth of the partnership. Supportive Sponsor: PBFX is operationally and strategically integral to PBF Holding as PBFX supports it with critical infrastructure. PBF Holding is the fourth largest independent refiner in the U.S. and its parent, PBF Energy Company LLC holds 100% of the general partners and 48% of the limited partner interests in PBFX. Midstream growth has been a key component of PBF's strategy. As such, PBF has been supporting growth at PBFX with drop-down transactions, completing five since inception. PBFX also retains a 10-year right of first offer to purchase certain logistics assets owned by PBF Holding in the event PBF Holding disposes, sells or transfers those assets. Given that PBF directly benefits from the sustainable growth of PBFX through its ownership, Fitch believes that PBFX will continue to benefit from support from PBF. DERIVATION SUMMARY PBFX's leverage is strong for its rating category. Generally, Fitch targets leverage (Total Debt/Adjusted EBITDA) for 'BB' rated midstream issuers in the 5.0x range. Fitch expects PBFX's leverage to be between 3.5 and 4.0x for the next several years. Scale and the significant exposure to PBF Holding are limiting factors to PBFX's ratings. Leverage is comparable to MPLX, LP (BBB/Stable) in that regard, with Fitch expecting MPLX leverage of roughly 4.0x, however, MPLX is significantly larger and more diverse from a geographic, operating business line, and counterparty exposure perspective, which warrants the difference in IDRs between the entities. PBFX's small size and scale, and significant counterparty exposure are limiting factors to the rating. Compared to other crude and refined product focused partnerships, like 'BB' rated NuStar Energy, LP, PBFX has better leverage but significantly smaller scale of operations. KEY ASSUMPTIONS - Revenues grow at 11% in 2019 and 2020 in line with Revenue growth in 2018. Growth in following years tapers, aligned to throughput growth at PBF Holding, except storage which grows about 50% in 2020 in line with previous year growth rate and then records modest growth in 2021 in line with industry expectation. - In 2019, maintenance capex is forecasted to be roughly $15 million and expansion capex of roughly $20 million. - Beyond 2019, maintenance capex increases slightly in line with increased asset base and expansion capex greater in outer years as the partnership looks to grow. - No acquisitions assumed during forecast period. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Increase in size and scale, indicated by EBITDA (Fitch defined) above $300 million, in so far as any drop downs from PBF Holding are done in a pattern similar to that in the past, while maintaining leverage (total debt/ adjusted EBITDA) at or below 4.0x and Distribution Coverage above 1.0x on a sustained basis. - Favorable rating action at PBF Holding may lead to positive rating action for PBFX, provided the factors driving a rating change at PBF Holding have benefits that accrue to the credit profile of PBFX. - As and when PBFX demonstrates a move towards further insulation from its reliance on PBF Holding, such that third party revenues contribute at least 30% of total revenues with credit metrics remaining within sensitivities, Fitch may consider a separation between the IDR's of PBF Holding and PBFX and/ or a revision of PBFX's Outlook. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Leverage (Total debt/ Adjusted EBITDA) above 5.0X and/ or Distribution Coverage below 1.0x on a sustained basis. - Unfavorable rating action at PBF Holding will negatively impact ratings of PBFX. - Material change to contractual arrangement or operating practices with PBF Holding that negatively impacts PBFX's cash flow or earnings profile. - Increases in capital spending beyond Fitch's expectation that have negative consequences for credit profile (e.g. if not funded with a balance of debt and equity). LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity in Near Term: As of March 31, 2019, PBFX had approximately $352 million in liquidity. Cash on the balance sheet was $16 million, in addition to the $336 million available under the $500 million revolver. The revolver may be increased by up to $250 million, to a total facility size of $750 million, subject to lenders consent. The revolver includes a $75.0 million sublimit for standby letters of credit and a $25.0 million sublimit for swing-line loans. As of March 31, 2019, PBFX had $4.1 million in outstanding letters of credit. PBFX has also issued 6.875% senior unsecured notes (due 2023) for an amount of $525 million. Fitch considers PBFX's near-term liquidity adequate. The bank agreement for the revolver has three financial covenants: minimum consolidated interest coverage ratio of at least 2.5x, consolidated total leverage ratio that cannot exceed 4.5x and consolidated senior secured leverage ratio that cannot exceed 3.5x. As of March 31, 2019, PBFX was in compliance with its covenants, and Fitch expects PBFX to maintain compliance with its covenants in the near to intermediate term. Debt Maturity Profile: PBFX does not have debt maturities until 2023. The revolver matures on July 30, 2023 and may be extended for one year up to two occasions. The 6.875% notes mature on May 15, 2023. PERKINS & MARIE: U.S. Trustee Forms 5-Member Committee ------------------------------------------------------ Andrew Vara, acting U.S. trustee for Region 3, on Aug. 14 appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of Perkins & Marie Callender's LLC and its affiliates. The committee members are: (1) SCF RC Funding L, LLC Attn: AJ Peil, Senior Vice President 902 Carnegie Center, Suite 520 Princeton, NJ 08540 Phone: 609-436-0625 (2) WF PP Realty, LLC Attn: Robert G. Friedman, Owner & Manager 510 East 80th Street New York, NY 10075 Phone: 212-744-9675 Fax: 212-744-2126 (3) Bono Burns Distr. Inc. Attn: J. Gerard Burns, President 3616 S. Big Bend Blvd. St. Louis, MO 63143 Phone: 314-650-5685 (4) Departure Attn: Emily Rex, CEO & Co-Founder 427 C. Street, Suite 406 San Diego, CA 92101 Phone: 619-607-1001 (5) DJ-9, Inc. Attn: David M. D’Onofrio, President 2011 W. Cleveland Street, Suite E Tampa, FL 33606 Phone: 813-220-4488 Proposed counsel to the Committee: Bradford J. Sandler, Esq. Colin R. Robinson, Esq. Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor Wilmington, DE 19801 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 E-mail: bsandler@pszjlaw.com crobinson@pszjlaw.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 Perkins & Marie Callender's Perkins & Marie Callender's, LLC, -- http://www.perkinsrestaurants.com/and http://www.mariecallenders.com/-- are operators and franchisors of family-dining and casual-dining restaurants, under their two highly-recognized brands: (i) their full-service family dining restaurants located primarily in Minnesota, Iowa, Wisconsin, Ohio, Pennsylvania and Florida under the name "Perkins Restaurant and Bakery" and (ii) their mid-priced, full-service casual-dining restaurants, specializing in the sale of pies and other bakery items, located primarily in California and Nevada under the name "Marie Callender's Restaurant and Bakery". The Company was formed in 2006 following the combination of the Perkins Restaurant & Bakery chain with Marie Callender's. As of the Petition Date, the Debtors own 111 Perkins restaurants located in 11 states, and franchise 255 Perkins restaurants located in 30 states and four Canadian provinces. Similarly, as of the Petition Date, the Debtors own and/or operate 28 Marie Callender's restaurants located in three states, and franchise 21 Marie Callender's restaurants located in two states and Mexico. Thus, the Debtors own, operate or franchise over 400 restaurants throughout the United States, Canada and Mexico. On Aug. 5, 2019, Perkins & Marie Callender's, LLC, and 9 affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 19-11743). Perkins & Marie estimated $50 million to $100 million in assets and $100 million to $500 million in liabilities. The Hon. Kevin Gross oversees the jointly administered cases. The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as bankruptcy counsel; Richards, Layton & Finger, P.A. as local counsel; Houlihan Lokey, INnc. as investment banker; and FTI Consulting as financial advisor. Kurtzman Carson Consultants LLC is the claims agent. PLUS THERAPEUTICS: Reports $9.14 Million Net Loss for 2nd Quarter ----------------------------------------------------------------- Plus Therapeutics, Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $9.14 million on $302,000 of development revenues for the three months ended June 30, 2019, compared to a net loss of $3.65 million on $899,000 of development revenues for the three months ended June 30, 2018. For the six months ended June 30, 2019, the Company reported a net loss of $12.29 million on $1.03 million of development revenues compared to a net loss of $8.06 million on $1.81 million of development revenues for the same period last year. As of June 30, 2019, the Company had $8.88 million in total assets, $15.16 million in total liabilities, and a total stokcholders' deficit of $6.27 million. Plus Therapeutics ended Q2 with approximately $4.5 million of cash and cash equivalents. Plus Therapeutics' lead pipeline drug is DocePLUS - a complex, injectable, patented, albumin-stabilized PEGylated liposomal docetaxel – which has the potential to address significant unmet or substantially underserved medical needs and generate global revenues estimated to exceed $250 million annually. Key highlights of the development program include: * Completed and published a U.S. Phase 1 clinical trial. * Received a U.S. FDA orphan drug designation for Small Cell Lung Cancer. * Obtained U.S. FDA feedback that a 505(b)(2) new drug application appears to be an acceptable regulatory approach. In the second half of 2019, Plus Therapeutics intends to submit a Phase 2 clinical trial protocol for DocePLUS in Small Cell Lung Cancer patients with platinum-sensitive disease who progressed at least 60 days after initiation of first-line chemotherapy to the U.S. FDA. Furthermore, Plus Therapeutics is pursuing manufacturing and commercial partners for DocePLUS as well as partners for its DoxoPLUS product - a generic, injectable PEGylated liposomal doxorubicin for multiple cancer types. "Plus Therapeutics is committed to executing its 'PLUS' corporate strategy to marry effective and well described active pharmaceutical agents with novel delivery technology to make better compounds for patients," said Dr. Marc Hedrick, president and chief executive officer of Cytori. "Advancing our DocePLUS product candidate and nanotechnology platform via a virtual development approach combining lean operations and efficient capital deployment are critical to our future success." Liquidity The Company incurred losses from continuing operations of $4.7 million for the six months ended June 30, 2019. The Company has an accumulated deficit of $426.7 million as of June 30, 2019. These factors raise substantial doubt about the Company's ability to continue as a going concern. Plus Therapeutics said, "We continue to seek additional capital through product revenues, strategic transactions and from other financing alternatives. Without additional capital, current working capital and cash generated from sales will not provide adequate funding for research, sales and marketing efforts and product development activities at their current levels. If sufficient capital is not raised, we will at a minimum need to significantly reduce or curtail our research and development and other operations, and this would negatively affect our ability to achieve corporate growth goals." On April 24, 2019 the Company received $3.4 million of net cash proceeds related to the sale of the UK Subsidiary and the Company's Cell Therapy assets (excluding such assets used in Japan or relating to the Company's contract with BARDA), of which $1.7 million was used to pay down principal, interest and fees on the Loan and Security Agreement, and on April 25, 2019 the Company received $2.5 million of net cash proceeds related to the sale of the Japanese Subsidiary, and substantially all of the Company's Cell Therapy assets used in Japan, of which $1.4 million was used to pay down principal, interests and fees on the Loan and Security Agreement. A full-text copy of the Form 10-Q is available for free at: https://is.gd/k1jXiD About Plus Therapeutics Plus Therapeutics, formerly known as Cytori Therapeutics, Inc., is a clinical-stage pharmaceutical company focused on making a positive impact on patients' lives and adding value to the healthcare system. Plus Therapeutics is a Nasdaq-listed company with its company headquarters located in Austin, TX. The Company also has a manufacturing facility in San Antonio, TX and a satellite office in San Diego, CA. Cytori reported a net loss of $12.63 million for the year ended Dec. 31, 2018 compared to a net loss of $22.68 million for the year ended Dec. 31, 2018. As of March 31, 2019, Cytori had $24.61 million in total assets, $20.75 million in total liabilities, and $3.85 million in total stockholders' equity. BDO USA, LLP, in San Diego, California, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 29, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that Cytori has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. PROGRESSIVE SOLUTIONS: Plan Confirmation Hearing Set for Sept. 19 ----------------------------------------------------------------- Bankruptcy Judge Scott C. Clarkson approved Progressive Solutions, Inc.'s first amended disclosure statement as modified. August 30, 2019 is the deadline for filing ballots accepting or rejecting the plan and for filing objections to confirmation of the plan. A Plan confirmation hearing is hereby set for Sept. 19, 2019 at 11:00 a.m. in Courtroom 5C; Judge Clarkson, United States Bankruptcy Court, 411 West Fourth St., 5th Floor, Santa Ana, CA 92701. About Progressive Solutions Founded in 1979, Progressive Solutions, Inc. -- http://www.progressivesolutions.com/-- is a provider of software and support services to governmental entities. The Company is headquartered in Brea, California. Progressive Solutions commenced a Chapter 11 case (Bankr. C.D. Cal. Case No. 18-14277) on Nov. 21, 2018. In the petition signed by Glenn Vodhanel, president, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Lewis R. Landau, Attorney-at-Law, represents the Debtor. Q HOLDING: Moody's Affirms B3 Corp. Family Rating, Outlook Stable ----------------------------------------------------------------- Moody's Investors Service affirmed Q Holding Company's (Q) B3 Corporate Family Rating. It also upgraded the Probability of Default Rating to B3-PD from Caa1-PD. Concurrently, Moody's assigned a B3 rating to the company's proposed first lien credit facilities, consisting of a $25 million revolver and a $275 million term loan. The ratings outlook remains stable. "The transaction gives Q temporary relief to complete the recently implemented operational improvements in the medical device segment, showing enough improvement in topline and profitability to offset the weakness in the automotive sector and the slowdown of the industrial sector," says Moody's analyst Inna Bodeck. "The company's free cash flow remains weak but is expected to improve as the restructuring charges abate, the company begins to better manage the working capital of the medical devices division and the capital investments decline with the completion of the move of the facilities to Mexico." These rating actions follow Q's proposed extension of the maturities of its $25 million revolver to December 2022 and the $275 million term loan to 2023. The affirmation of the CFR and the upgrade of the PDR reflect that the maturity extension provides the company with time to improve its free cash flow following certain operational challenges and investments. It also reflects the potential elimination of the financial maintenance covenant contained in the term loan agreement. Moody's took the following rating actions for Q Holding Company: Corporate Family Rating, affirmed at B3 Probability of Default Rating, upgraded to B3-PD from Caa1-PD $25 million Gtd. senior secured first lien revolver due 2022, assigned at B3 (LGD3) $275.1 million Gtd. senior secured first lien term loan due 2023, assigned at B3 (LGD3) Outlook, remains stable The following ratings will be withdrawn upon closing of the transaction and the concurrent repayment of debt outstanding: $25 million senior secured first lien revolver due 2019, unchanged at B3 (LGD3) $286 million senior secured first lien term loan due 2021, unchanged at B3 (LGD3) RATINGS RATIONALE Q's B3 CFR reflects its high leverage for its size and industry with debt-to-EBITDA of 5.2x for the LTM ended 6/30/2019 and weak, albeit improving, free cash flow. Q's rating is also constrained by its high customer concentration and exposure to cyclical end markets, including automotive. These risks are balanced partially by the mission critical and low-cost nature of Q's products and its long standing customer relationships. While the company has further expanded its medical device business through the acquisition of Degania, it has experienced a number of operational and distribution challenges which created substantial pressure on the company's liquidity. However, in the last quarter the medical device segment demonstrated operational improvement with revenue growing 10.7%. Moody's also expects that the company will start generating higher free cash flow in the third quarter of 2019 and will have approximately $10 million in free cash flow over the next 12 months, aided by the working capital improvements, reduced capital investments and restructuring charges. Moody's believes that Q' debt-to-EBITDA leverage will edge lower as the company's earnings expand, although at much lower rate than sales. The stable rating outlook is supported by Moody's expectations that Q will resolve its working capital issues at Degania and will generate modestly positive free cash flow in the next 12 months. It also incorporates Moody's view that the company will continue to maintain its current level of earnings, despite substantial softness in the automotive markets. The ratings could be downgraded if Q's operating performance weakened, particularly if this was due to the loss of key customers or contracts. Rating pressure could also come from deterioration in the company's liquidity position or if the company pursues a meaningful debt-financed acquisitions or dividends. Positive ratings traction could develop if Q meaningfully increases its scale while expanding margins and if leverage were to approach 4.0x. The company would also need to sustain free cash flow/debt of over 5%. Incremental facility capacity includes the greater of $60 million and 100% of EBITDA plus additional ratio capacity. Collateral leakage is permitted through the transfer of assets to unrestricted subsidiaries. Only wholly-owned subsidiaries must provide guarantees, increasing the risk of future guarantee releases. There are no leverage-based step-downs to the requirement that net asset sale proceeds prepay the loans, helping preserve some lender control over collateral. The proposed terms and the final terms of the credit agreement can be materially different. The principal methodology used in these ratings was Medical Product and Device Industry published in June 2017. Q Holding Company, headquartered in Solon, Ohio, is a global manufacturer of precision-molded rubber and silicone components. The company serves the medical device, automotive and industrial markets. Q was acquired in late 2014 by funds affiliated with 3i Group plc, a global private equity and venture capital company headquartered in London, United Kingdom. The company has less than $330 million in revenue. QUECHAN INDIAN: Fitch Affirms B IDR & Alters Outlook to Positive ---------------------------------------------------------------- Fitch Ratings has affirmed the Quechan Indian Tribe's Issuer Default Rating at 'B' and revised the Rating Outlook to Positive from stable. In addition, Fitch has affirmed Quechan's tribal economic development bonds at 'BB-'/'RR2'. The tribe also has a $67 million term loan that ranks pari passu to the TED bonds, which Fitch does not rate. KEY RATING DRIVERS Outlook to Positive: The Positive Outlook reflects the tribe's continued de-leveraging and improved liquidity, both at the casino and tribal level. Quechan's leverage was 2.0x as of LTM March 31, 2019, down from 2.6x as of March 2018 and 2.8x at year end 2017. Fitch expects leverage to fall below 2.0x by YE2019, as the tribe's manageable debt amortization and post-renovation EBITDA growth drive the steady decline. In addition to continued deleveraging, the tribe's 2017 refinancing of their capital structure increased financial flexibility and resulted in the tribe developing a stronger cash position. Quechan's financial profile is strong for a 'B' IDR. The tribe experienced leadership turnover in December 2018 when a largely new tribal council was elected, although the new council President and Vice President had served as members on the previous tribal council. An upgrade of the IDR to 'B+' hinges mostly on Fitch getting more clarity with respect to the new tribal council's financial policies. A track record of political stability as well as the tribe continuing to adhere to the prior council's prudent fiscal management will also be viewed positively with respect to the potential upgrade. Improved Liquidity: Liquidity has been improving at both the casino level and tribal level. The tribe's reserves as of December 2018 provide for about 12 months of governmental operations excluding per capita payments. The tribe reduced per capita payments to its tribal members in recent years to help boost the liquidity. Fitch will monitor the current council's willingness to continue to grow, or at least maintain, the tribe's liquidity as Fitch contemplates the Positive Outlook. Available liquidity on the casino side has improved over the last two years and is adequate for operating needs. The enterprise generates healthy free cash flow before distributions to the tribe, and the term loan's covenants limit tribal distributions based on cash flow. Limited Geographic Diversification: Quechan has exposure to a single geographic area that is reliant on seasonal tourism, though it operates two assets on the California and Arizona borders. The operating environment in the Yuma, AZ metropolitan statistical area (MSA) is stable, as unemployment continues to slowly decline. The tribe reported mid-single digit growth in 2018, compared to stable performance in 2017 and slight top-line declines in 2015 and 2016. DERIVATION SUMMARY Fitch believes the tribe's current credit metrics provide considerable cushion for a downturn while maintaining a mid-to-high 'B' category IDR. The strong credit metrics are somewhat offset by the geographic concentration of Quechan's casinos, with the two assets operating in close proximity to each other in a market with limited growth catalysts. The tribe's refinancing of their capital structure in 2017 reduced amortization payments and helped to increase fund balances at the tribal level. Debt amortization will continue, albeit at a slower pace, and drive leverage below 2.0x. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Mid-single digit revenue growth in 2019 supported by the renovation of the Paradise Resort Casino. Flat revenues thereafter; -- Stable EBITDA margins; -- No incremental debt and debt balances follow the amortization schedule; -- Distributions to the tribe are expected to gradually increase over the years as casino profits grow. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action -- Gross debt/EBITDA sustained below 2x; -- Tribal cash reserves are maintained at the tribe's stated goal of providing for 25% of annual governmental expenditures; -- Quechan's new tribal council adhering to prudent financial policies; -- Yuma area's economic conditions continue to improve or remain stable. Developments that May, Individually or Collectively, Lead to Negative Rating Action -- Gross debt/EBITDA increasing and remaining above 3x; -- A substantial decrease in tribal reserves or a change of financial policies to maintain lower cash reserves; -- The tribe failing to maintain prudent fiscal management policies (i.e. adjusting governmental spending to match casino distributions and other revenue sources). LIQUIDITY AND DEBT STRUCTURE The tribe's liquidity has improved in the last 24 months, supported by healthy operational performance, a 2017 refinancing that reduced debt service payments and prudent financial policies at the tribal level. The term loan and TED bonds' repayment schedule is manageable and the next maturity is not until 2022 when the term loan comes due. The TED bond amortization payments began in 2017 at $2.5 million - $3.0 million each per year. Fitch expects excess cash to be redistributed to the tribe. Capex is expected to be minimal in the forecast after the tribe recently completed a capital spend project at the Paradise Casino. The tribe's reserves as of December 2018 provide for roughly 12 months of governmental operations excluding per capita payments. RELIABLE ASSOCIATES: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Reliable Associates, Inc., according to court dockets. About Reliable Associates Inc. Reliable Associates, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-06476) on July 10, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of less than $500,000. The case is assigned to Judge Catherine Peek Mcewen. The Debtor is represented by David W. Steen, P.A. RORA LLC: Unsecureds to Recoup Full Payment Plus 2.60% Interest --------------------------------------------------------------- Rora LLC filed a first amended small business Chapter 11 plan of reorganization and accompanying first amended disclosure statement to, among other things, modify the treatment of all general unsecured creditors, classified in Class 3, to include payment in full on the effective date of the Plan plus interest at the rate of 2.60%. The Debtor will fund the Plan by selling its property or refinancing the mortgage. Under the Plan the Debtor will retain a real estate broker and market the Property for sale or will obtain a refinance of the mortgage. The Debtor had been listing the property with Meridian Capital Group, LLC, its pre-petition real estate broker. However, the Debtor has decided to retain a different broker to complete the sale through the Plan. The Debtor shall have through November 30, 2019 to enter into contract for a sale of the Property or refinance of the mortgage at a price sufficient to pay all allowed creditors in full including interest. The Debtor shall have through December 30, 2019 to close such sale or refinance of the mortgage. In the event that the Debtor refinances the mortgage, loan documents shall be filed with the Court no later than 2 weeks before the hearing on confirmation of the Plan. A redlined version of the Amended Disclosure Statement dated Aug. 14, 2019, is available at https://tinyurl.com/yyenhrsb from PacerMonitor.com at no charge. About RORA LLC RORA LLC, a New York limited liability company organized in March 2011, owns and operates a parking garage located at 404 E. 79th Street, Manhattan, New York. RORA LLC, based in Brooklyn, NY, filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 19-40354) on Jan. 21, 2019. In the petition signed by Robert Litwin, manager, the Debtor estimated $1 million to $10 million in both assets and liabilities. Lawrence F. Morrison, Esq., at Morrison Tenenbaum, PLLC, serves as bankruptcy counsel to the Debtor, and Pick & Zabicki LLP, is special transaction counsel. RUDIS HOLDINGS: Case Summary & 19 Unsecured Creditors ----------------------------------------------------- Debtor: Rudis Holdings, LLC 7955 Jonestown Road Harrisburg, PA 17112 Business Description: Rudis Holdings LLC -- http://rudisoutdoors.com/-- is a wholesaler of men and women outdoor accessories including boots, shoes, hip waders, and chest waders. Chapter 11 Petition Date: August 15, 2019 Court: United States Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Case No.: 19-03484 Judge: Hon. Henry W. Van Eck Debtor's Counsel: Lawrence V. Young, Esq. CGA LAW FIRM 135 North George Street York, PA 17401 Tel: 717 848-4900 Fax: 717 843-9039 E-mail: lyoung@cgalaw.com tlocondro@cgalaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Francis X. Brescia, III, owner/manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 19 unsecured creditors is available for free at: http://bankrupt.com/misc/pamb19-03484.pdf SALIENT CRGT: S&P Downgrades ICR to 'B-'; Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Salient CRGT Inc. to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's $35 million revolver and $420 million term loan to 'B' from 'B+'. The '2' recovery rating remains unchanged. The downgrade reflects S&P's expectation that Salient CRGT's debt leverage will be higher than the rating agency's previously forecast in 2019 because the company's earnings have not improved during the year as it expected. This will likely lead the company to violate the leverage covenant test under its credit facility for the quarter ending Sept. 30, 2019, when the covenant steps down to 5.75x unless its lenders waive the covenant or provide other relief. Salient's owners could also infuse cash through an equity cure to help prevent a covenant breach. S&P now expects the company's adjusted debt to EBITDA to be above 7x in 2019. The negative outlook reflects S&P's expectation that Salient CRGT will likely violate its financial covenant if no actions are taken between now and Sept. 30, 2019. "We could lower our rating on Salient CRGT if it violates the leverage covenant and is unable to amend its credit facility or secure a waiver for the covenant such that its liquidity becomes constrained. We could also lower our rating if we believe the company may enter into a distressed exchange to prevent a covenant breach," S&P said. "We could revise our outlook on Salient to stable in the next 12 months if the company increases the cushion under its leverage covenant to at least 15% by amending its credit facility or increasing its earnings at a faster pace than we currently expect," the rating agency said. SANCHEZ ENERGY: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Eleven affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Sanchez Energy Corporation (Lead Case) 19-34508 1000 Main Street, Suite 3000 Houston, TX 77002 SN Palmetto, LLC 19-34509 SN Marquis LLC 19-34510 SN Cotulla Assets, LLC 19-34511 SN Operating, LLC 19-34512 SN TMS, LLC 19-34513 SN Catarina, LLC 19-34514 Rockin L Ranch Company, LLC 19-34515 SN EF Maverick, LLC 19-34516 SN Payables, LLC 19-34517 SN UR Holdings, LLC 19-34518 Business Description: Sanchez Energy Corporation and its debtor and non-debtor affiliates -- https://sanchezenergycorp.com -- are independent exploration and production companies focused on the acquisition and development of U.S. onshore oil and natural gas resources. Sanchez Energy is currently focused on the horizontal development of significant resource potential from the Eagle Ford Shale in South Texas, and it also holds other producing properties and undeveloped acreage, including in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana which offers potential future development opportunities. As of Dec. 31, 2018, the Debtors had approximately 325,000 net acres of oil and natural gas properties with proved reserves of approximately 380 million barrels of oil equivalent and interests in approximately 2,400 gross producing wells. Chapter 11 Petition Date: August 11, 2019 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Debtor's General Bankruptcy Counsel: Marty L. Brimmage, Jr., Esq. Lacy M. Lawrence, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 2300 N. Field Street, Suite 1800 Dallas, Texas 75201 Tel: (214) 969-2800 Fax: (214) 969-4343 Email: mbrimmage@akingump.com llawrence@akingump.com - and - Ira S. Dizengoff, Esq. Jason P. Rubin, Esq. Naomi Moss, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York 10036 Tel: (212) 872-1000 Fax: (212) 872-1002 Email: idizengoff@akingump.com jrubin@akingump.com nmoss@akingump.com Debtors' Co-Bankruptcy Counsel: Matthew D. Cavenaugh, Esq. JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Tel: (713) 752-4284 Fax: (713) 308-4184 Email: mcavenaugh@jw.com Debtors' Financial Advisor: MOELIS & COMPANY LLC Debtors' Restructuring Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC Debtors' Notice & Claims Agent: PRIME CLERK LLC https://cases.primeclerk.com/sanchezenergy Total Assets as of June 30, 2019: $2,159,915,332 Total Debts as of June 30, 2019: $2,854,673,930 The petitions were signed by Gregory Kopel, executive vice president and general counsel. A full-text copy of Sanchez Energy's petition is available for free at: http://bankrupt.com/misc/txsb19-34508.pdf List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- -------------- 1. Delaware Trust Company 6.125% Senior $1,185,218,750 251 Little Falls Drive Notes Due 2023 Wilmington, DE 19808 (Includes Unpaid Gregory Daniels Interest) Trust Administrator Tel: (877) 374-6010 Fax: (302) 636-8666 Email: GREGORY.DANIELS@DELAWARETRUST.COM 2. Delaware Trust Company 7.75% Senior $600,000,000 251 Little Falls Drive Notes Due 2021 Wilmington, DE 19808 Gregory Daniels Trust Administrator Tel: (877) 374-6010 Fax: (302) 636-8666 Email: GREGORY.DANIELS@DELAWARETRUST.COM 3. Marathon Oil EF LLC JIB Payables $8,897,886 5555 San Felipe Street Houston, TX 77056-2723 Lee Tillman President & CEO Tel: (713) 629-6600 Fax: (713) 296-2952 Email: LTILLMAN@MARATHONOIL.COM 4. Gavilan Resources LLC Prepaid Capital $3,781,007 345 Park Avenue, 43rd Floor Expenditures New York, NY 10154 Angelo Acconcia Senior Managing Director Tel: (212) 583-5000 Email: ACCONCIA@BLACKSTONE.COM 5. Legend Energy Services LLC Trade Payable $2,316,296 5801 Broadway Rd, Suite 210 Oklahoma City, OK 73118 Trey Ingram, CEO Tel: (405) 600-1264 Fax: (405) 608-8851 Email: TREY.INGRAM@LEGENDENERGYSERVICES.COM 6. Veolia Water Solutions Trade Payables $1,079,297 23885 Network Place Chicago, IL 60673 Antoine Frerot, President Tel: (412) 809-6000 Fax: (919) 677-0082 Email: AFREROT@VEOLIA.COM 7. Kodiak Gas Services LLC Trade Payables $1,073,589 15320 Highway 105 West Ste 210 Montgomery, TX 77356 David Marrs, CEO Tel: (936) 539-3300 Fax: (936) 539-3301 Email: DAVID.MARRS@KODIAKGAS.COM 8. Pilot Thomas Logistics Trade Payables $943,915 201 North Rupert Street Fort Worth, TX 76107 Dennis Cassidy, CEO Tel: (817) 877-8300 Email: DENNIS.CASSIDY@PILOTTHOMAS.COM 9. Halliburton Energy Trade Payables $904,076 Services Inc. 3000 North Sam Houston Parkway East Houston, Texas 77032 Jeff Miller, CEO Tel: (281) 871-4000 Fax: (281) 876-4455 Email: JEFF.MILLER@HALLIBURTON.COM 10. Nabors Drilling USA Inc. Trade Payables $793,064 515 W Greens Rd, Ste 1200 Houston, TX 77067 Anthony Petrello, CEO Tel: (281) 874-0035 Fax: (432) 550-9993 Email: ANTHONY.PETRELLO@NABORS.COM 11. Tenaris Global SVS USA Corp. Trade Payables $764,565 2200 West Loop South, Suite 800 Houston, TX 77027 Paolo Rocca, CEO Tel: (713) 767-4400 Fax: (713) 167-4444 Email: PROCCA@TENARIS.COM 12. Danos LLC Trade Payables $650,316 3878 West Main Street Gray, LA 70359 Garret "Hank" Danos, Owner Tel: (985) 219-3313 Fax: (985) 219-3986 Email: HDANOS@DANOS.COM 13. Rusco Operating LLC Trade Payables $649,613 98 San Jacinto Blvd Ste 550 Austin, TX 78701 Xuan Yong, Owner Tel: (512) 501-5452 Email: XUAN@RIGUP.COM 14. Eagle Ford TX LP Prepaid Capital $632,617 5555 San Felipe, Suite 1175 Expenditures Houston, TX 77056 Ilrae Park, President Tel: (713) 552-9090 Fax: (713) 552-1898 Email: ILRAE.PARK@KNOC.COM 15. Monarch Silica LLC Trade Payables $564,673 22631 Campbellton Rd. San Antonio, TX 78264 Paul A. Welch, CEO Tel: (281) 889-9279 Email: PWELCH@MONARCHSILICA.COM 16. Knowles Enterprises LLC Trade Payables $555,234 2381 River Road Grand Junction, CO 81505 Mike Knowles, President Tel: (970) 434-1912 Fax: (970) 523-8998 Email: MIKE@KNOWLESTRANSPORTATION.COM 17. Aveda Transportation & Trade Payables $537,500 Energy Serv 333 North Sam Houston Pkwy East, Suite 1200 Houston, TX 77060 Ronnie Witherspoon President & CEO Tel: (403) 264-4950 Fax: (403) 262-9195 18. MS Directional LLC Trade Payables $513,677 3335 Pollock Drive Conroe, TX 77303 Allen R. Neel, CEO Tel: (936) 442-2500 Fax: (936) 442-2599 Email: ALLEN.NEEL@MSENERGY.COM 19. C&J Spec-Rent Services Inc. Trade Payables $502,000 3990 Rogerdale Houston, TX 77042 Don Gawick, President & CEO Tel: (713) 325-6000 Fax: (713) 758-5962 Email: DON.GAWICK@CJES.COM 20. Mitsui E&P Texas LP Prepaid Capital $477,773 1300 Post Oak Blvd, Suite 1800 Expenditures Houston, TX 77056 Kazuhiko Gomi President & CEO Tel: (713) 960-0023 Email: K.GOMI@MITSUI.COM 21. ACTS Oilfield Services LLC Trade Payables $475,811 304 Chetumal Drive Laredo, TX 78045 Victor Garcia, President Tel: (956) 251-8699 Fax: (956) 568-2198 22. Cactus Wellhead LLC Trade Payables $453,117 920 Memorial City Way, Suite 300 Houston, TX 77024 Scott Bender President & CEO Tel: (713) 626-8800 Email: SCOTT.BENDER@CACTUSWELLHEAD.COM 23. Tidal Logistics Inc. Trade Payables $428,691 12319 Business Hwy 287 Fort Worth, TX 76179 Charles Fanguy Jr., President Tel: (817) 839-1480 Email: CFANGUY@TIDALLOGISTICS.COM 24. Archrock Partners Trade Payables $414,234 9807 Katy Freeway, Suite 100 Houston, TX 77024 D Bradley Childers, CEO Tel: (281) 836-8000 Fax: (302) 636-5454 Email: CHILDERSDB@COMCAST.NET 25. Ampro Strategic Alliance Trade Payables $356,177 136 Old San Antonio Road, Suite 303 Boerne, TX 78006 Pratt Doucet, President Tel: (210) 626-2225 Fax: (210) 626-2226 Email: PRATT@AMPROSAFETY.COM 26. Stevens Tanker Division LLC Trade Payables $320,151 9757 Military Parkway Dallas, TX 75227 Steven L. Aaron, CEO Tel: (866) 780-8320 Fax: (800) 434-7068 Email: STEVENAARON@STEVENSTRANSPORT.COM 27. Innovex Downhole Solutions Inc. Trade Payables $312,720 4310 North Sam Houston Parkway East Houston, TX 77032 Adam Anderson, CEO Tel: (281) 602-7815 Fax: (281) 602-7894 Email: AANDERSON@TEAMOILTOOLS.COM 28. GryphonesP LLC Trade Payables $286,142 1210 Antoine Dr. Houston, TX 77055 Michael McCoy, Manager Tel: (844) 363-7723 Email: MICHAEL@ESPSAFETYNET.COM 29. McKinsey and Company Trade Payables Undetermined 55 East 52nd Street, 21st Floor New York, NY 10022 Dominic Barton Managing Partner Tel: (212) 446-7000 Fax: (212) 446-8575 Email: DOMINIC_BARTON@MCKINSEY.COM 30. Crescent Drilling & Trade Payables Undetermined Production Inc. 2400 Veterans Memorial Blvd, Suite 110 Kenner, LA 70062-8711 Scott McDonald President & CEO Tel: (504) 467-5100 Fax: (504) 467-5175 Email: SCOTT.MCDONALD@CRESCENTDRILLING.COM SENIOR CARE: Disclosure Statement Hearing Continued to Aug. 20 -------------------------------------------------------------- A hearing on the adequacy of the Disclosure Statement explaining the first amended Chapter 11 plan of Senior Care Centers, LLC, et al., was held on Aug. 7, 2019. Appearances were made for the Debtors, the Official Unsecured Creditors Committee, CIBC, Granite, the U.S. Trustee, Onsite Dental, Texas MS, Atlas Dental, Annaly and CHI Javelin, the U.S., 3 South Texas landlords, Love Funding, OLP Wyoming, Cedar Park, Cigna, and Harden Healthcare. Telephonic appearances were made for Molina, the Texas AG, Orix, Love Funding, Key Bank, and United Healthcare. There was extensive oral arguments and discussions about various objections and court reactions to same. The Disclosure Statement hearing is continued until Aug. 20, at 9:30 am. The Debtors have committed to making certain changes as discussed orally (primarily: (a) disclosures regarding exit financing; (b) sources and uses of cash/waterfall; (c) adjustment of definitions/provisions to clarify that the Debtors cannot change assumption decision after confirmation with regard to the 22 real property leases that it intends to assume; (d) more definition as to who proposed third-party releases are and mechanics for opting out; (e) more discussion regarding substantive consolidation and intercompany claims being cancelled; (f) discussion about the transition plan for 35 properties that the Debtors are still operating although leases have been rejected). The Court will consider unresolved disclosure objections, if any, on Aug. 20. If the court approves the Disclosure Statement, confirmation hearing will be on Sept. 27. The United States Trustee for Region 6 objected to approval the first amended disclosure and asserted that Court should decline to approve the Disclosure Statement for three reasons: 1. The Debtors' First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and the Amended Disclosure Statement are too vague to support solicitation and voting. 2. By filing material amendments shortly before voting ends and making the creditors ferret out those amendments on the claims agent's website, the Debtors erase both the Court's role in approving disclosure and procedural due process. 3. The Plan cannot be confirmed as a matter of law. The Plan proposes to maintain separate legal entities post-confirmation while simultaneously consolidating bankruptcy liabilities, and the rationale supporting substantive consolidation is undisclosed. The Plan includes release and exculpation provisions in contravention of Bank of N.Y. Trust Co. v. Official Unsecured Creditors' Comm. (In re Pacific Lumber Co.), 584 F.3d 229, 252 (5th Cir. 2009). Additionally, the release provisions are "opt-out" releases and, therefore, nonconsensual for those parties who are not solicited or who otherwise do not vote on the Plan because there is no meeting of the minds with regard to the releases. The United States Trustee also requests that language be added to the Amended Disclosure Statement and Plan that provides that no party shall be released from any causes of action or proceedings brought by any governmental agencies in accordance with their regulatory functions. OLP Wyoming Springs, LLC, a landlord, also filed a limited objection to the adequacy of the disclosure statement only with the inclusion of additional disclosures sufficient to address the deficiencies relating to their lease agreement. The Texas Health and Human Services Commission ("HHSC") filed a Limited Objection to the Disclosure Statement complaining that the Disclosure Statement does not contain "adequate information" under 11 U.S.C. Section 1125 with respect to what the Disclosure Statement refers to as the "Remaining Rejected Facilities." The HHSC asserted that regardless of whether the Debtor believes that the Remaining Rejected Facilities are being operated for the benefit of the applicable landlords, as of the Effective Date the Debtors will remain the owner and operator of such facilities and are responsible for the health and safety of the residents of the Remaining Rejected Facilities. In response to the objections, the Debtors, together with the Committee, have made revisions to the Disclosure Statement such as: (a) adding more information, even where the Debtors believed that additional information was not necessary; (b) incorporating information as to other pleadings in the Chapter 11 Cases; and (c) clarifying certain elements of the proposed restructuring, such as the Exit Facility. The remaining objections, the Debtors asserted, should be overruled as the Amended Disclosure Statement and Amended Plan cure any disclosure deficiencies identified by the objecting parties. Attorneys for OLP Wyoming Springs, LLC: Michael P. Cooley, Esq. Keith M. Aurzada, Esq. Lindsey L. Robin, Esq. REED SMITH LLP 2501 N. Harwood Street, Suite 1700 Dallas, TX 75201 Tel: 469.680.4200 Fax: 469.680.4299 E-mail: mpcooley@reedsmith.com kaurzada@reedsmith.com lrobin@reedsmith.com About Senior Care Centers Senior Care Centers, LLC -- https://senior-care-centers.com/ -- is a Dallas-based, skilled nursing and long-term care industry leader in Texas and Louisiana. Senior Care Centers operates and manages more than 100 skilled nursing and assisted/independent living communities in the states of Texas and Louisiana. On Dec. 4, 2018, Senior Care Centers and 120 of its subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Tex. Lead Case No. 18-33967). The Debtors tapped Polsinelli PC as bankruptcy counsel; Hunton Andrews Kurth LLP as conflicts counsel; Sitrik and Company as communications consultant; and Omni Management Group, Inc. as claims, noticing, and administrative agent. On Dec. 14, 2018, the Office of the United States Trustee appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Greenberg Traurig, LLP, as counsel, and FTI Consulting, Inc., as its financial advisor. SHARING ECONOMY: Delays Filing of Second Quarter Form 10-Q ---------------------------------------------------------- Sharing Economy International Inc. filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its quarterly report on Form 10-Q for the period ended June 30, 2019. The quarterly report of Sharing Economy on Form 10-Q could not be filed within the prescribed time period due to the fact that the Company was unable to finalize its financial results as well as the disclosure requirements of Form 10-Q without unreasonable expense or effort. As a result, the Company could not solicit and obtain the necessary review of the Form 10-Q in a timely fashion prior to the due date of the report. About Sharing Economy Headquartered in Jiangsu Province, China, Sharing Economy International Inc. -- http://www.seii.com/-- is engaged in the manufacture and sales of textile dyeing and finishing machines and sharing economy businesses. Given the headwinds affecting its manufacturing business, Sharing Economy continued to pursue what it believes are high growth opportunities for the Company, particularly its new business divisions focused on the development of sharing economy platforms and related rental businesses within the company. These initiatives are still in an early stage and are dependent in large part on availability of capital to fund their future growth. The Company did not generate significant revenues from its sharing economy business initiatives in 2018. Sharing Economy reported a net loss of $42.08 million for the year ended Dec. 31, 2018, compared to a net loss of $12.92 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Sharing Economy had $46.34 million in total assets, $10.90 million in total liabilities, and $35.43 million in total stockholders' equity. RBSM LLP, New York, the Company's auditor since 2012, issued a "going concern" qualification in its report dated April 16, 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, generated negative cash flows from operating activities, has an accumulated deficit that raise substantial doubt exists about Company's ability to continue as a going concern. STANDLEY ENTERPRISES: Case Summary & 19 Unsecured Creditors ----------------------------------------------------------- Debtor: Standley Enterprises, Inc. 705 East 20th Street Lamar, MO 64759 Business Description: Standley Enterprises Inc. is a privately held company in Lamar, Missouri. Chapter 11 Petition Date: August 15, 2019 Court: United States Bankruptcy Court Western District of Missouri (Joplin) Case No.: 19-30439 Judge: Hon. Brian T. Fenimore Debtor's Counsel: Victor F. Weber, Esq. MERRICK, BAKER & STRAUSS, P.C. 1044 Main St., Ste. 500 Kansas City, MO 64111 Tel: 816-221-8855 Fax: 816-221-7886 E-mail: victor@merrickbakerstrauss.com bruces@merrickbakerstrauss.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Steven Standley, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 19 unsecured creditors is available for free at: http://bankrupt.com/misc/mowb19-30439.pdf STARR PASS: Seeks to Hire DeConcini McDonald Yetwin as Counsel -------------------------------------------------------------- Starr Pass Resort Development LLC and its debtor-affiliates seek authority from the United States Bankruptcy Court for the District of Arizona (Tucson) to hire DeConcini McDonald Yetwin & Lacy, P.C. as counsel for the Debtors. Starr Pass requires DMYL to: a. examine the Debtors' acts, conduct, and property; b. prepare the required records, reports, applications, orders, pleadings, and other legal papers; c. represent the Debtors in contested matters and adversary proceedings; d. identify and prosecute claims and causes of action on behalf of the estates; e. examine proofs of claim and possible objections to such claims; f. prepare a plan and disclosure statement and representation of the Debtors in related confirmation proceedings; and g. assist and advise the Debtors in the performance of their official duties and functions. DMYL's hourly rates are: Jody A. Corrales $325 Steven J. Itkin $350 Tyler Stanton $210 Paraprofessionals $140 DMYL received $3,000 from Starr Pass HOA and $3,000 from Starr Pass Redevelopment as retainer. Jody A. Corrales, shareholder at DeConcini McDonald Yetwin & Lacy, P.C., attests that DMYL represents no interest that is materially adverse to the Jointly Administered Debtors or their bankruptcy estates. The firm can be reached at: Jody A. Corrales, Esq. DECONCINI MCDONALD YETWIN & LACY P.C. 2525 E. Broadway Blvd., Suite 200 Tucson, AZ 85716 Tel: 520-322-5000 Fax: 520-322-5585 E-mail: jcorrales@dmyl.com About Starr Pass Resort Starr Pass Resort Development LLC classifies its business as Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). On July 1, 2019, Starr Pass Resort Developments, LLC filed a petition under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Ariz. Case No. 19-08137). In the petition signed by Christopher F. Ansley, authorized representative, the Debtor estimated $4,590,120 in liabilities. Jody A. Corrales, Esq. at DeConcini McDonald Yetwin & Lacy, P.C. is the Debtor's counsel. The case is assigned to Judge Paul Sala. SUNSHINE WIND DOWN: Court Confirms Chapter 11 Liquidation Plan -------------------------------------------------------------- Judge Peter C. McKittrick of the U.S. Bankruptcy Court for the District of Oregon has issued an order confirming the Chapter 11 plan of liquidation of Sunshine Wind Down, LLC, fka Sunshine Dairy Foods Management, LLC. The Court further finds that the proposed amendments by interlineation to the Debtor's Plan and to Exhibit B (Liquidating Trust Agreement) of the Plan do not adversely change the treatment of the claim of any creditor or the interest of any equity security holder who has not accepted in writing the amendments, and therefore, such amendments shall be deemed accepted by all creditors and equity security holders (if applicable) who have previously accepted the Plan. A full-text copy of the Confirmation Order dated Aug. 15, 2019, is available at https://tinyurl.com/y4ahd7br from PacerMonitor.com at no charge. About Sunshine Dairy Foods Sunshine Dairy Foods is family-owned dairy processor serving local food service customers, local food manufacturer partners, local retailers and co-pack customers in the Pacific Northwest. All Sunshine milk products are packaged in recyclable opaque white jugs and paper cartons to protect the milk from light and prevent oxidation. Sunshine's largest vendor is its milk supplier, Oregon Milk Marketing Federation. OMMF members are almost universally family farmers who manage small to mid-sized farms in the Willamette Valley, Oregon and Yakima Valley and Chehalis, Washington. Sunshine Dairy Foods Management, LLC, and Karamanos Holdings, Inc., filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case Nos. 18-31644 and 18-31646) on May 9, 2018. At the time of filing, Sunshine Dairy Foods estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. Nicholas J. Henderson, Esq., at Motschenbacher & Blattner, LLP, and Douglas R. Ricks, Esq., at Vanden Bos & Chapman, LLP, serve as the Debtors' counsel. Daniel J. Boverman and Boverman & Associates, LLC, serve as business and turnaround consultants. SYMANTEC CORP: Fitch Affirms BB+ IDR & Alters Outlook to Negative ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings for Symantec Corporation at 'BB+'. The Rating Outlook has been revised to Negative from Stable. The affirmation reflects Symantec's announced sale of its Enterprise Security segment to Broadcom for $10.7 billion and is expected to close during calendar year 2019. The affirmation of the ratings affects $5.5 billion of debt, including the $1.0 billion undrawn revolving credit facility (RCF) expiring in 2021. The company plans to use the net proceeds from the sale for shareholder returns. Fitch estimates the transaction would reduce Symantec's EBITDA by 10%-20%. The company intends to maintain its capital structure while it focuses on optimizing its operations around the narrower Consumer Cyber Safety segment. This would result in its gross leverage at the high-end of the sensitivities of 3.5x in the near term for the 'BB+' rating. Fitch forecasts gross leverage to gradually decline to near 3x through fiscal 2023, mainly through EBITDA growth. Fitch's ratings reflect Symantec's focus around its consumer cybersecurity business. With the planned divestiture of its Enterprise Security segment, Symantec would eliminate the underperforming segment and focus on solidifying its market position in the consumer segment, leveraging the brand awareness around its Norton and LifeLock brands. Symantec's Norton remains a clear leader in the consumer IT security market. The Negative Rating Outlook reflects its gross leverage near the negative sensitivity of 3.5x and the less diversified operating profile with the divestiture. Execution risks also exist related to optimizing operations around the narrower Consumer Cyber Safety segment. The ratings also reflect the risks around the upcoming debt maturities as the company faces $1.25 billion of debt maturities in fiscal 2021 and an additional $1.75 billion in fiscal 2022. Symantec Corporation LT IDR Affirmed BB+ Senior Unsecured Affirmed LT BB+ RR4 BB+ Symantec Holdings Limited LT IDR Affirmed BB+ Senior Unsecured Affirmed LTBB+ KEY RATING DRIVERS Near-term Elevated Financial Leverage: Symantec's gross leverage declined from over 5x immediately after the acquisition of LifeLock in 2016 to 2.8x as of March 2019, primarily driven by lower debt. With the planned divestiture of Enterprise Security, Fitch estimates gross leverage to be near 3.5x in the near term and gradually approach 3x, with EBITDA growth by fiscal 2023. While the company has the capacity to delever, Fitch expects a pause in debt repayment while the company focuses on optimizing its operating performance with a more narrowly focused organization. Focus on Core Segments: Since the acquisitions of Blue Coat and LifeLock in 2016, Symantec has refocused around enterprise and consumer cybersecurity segments. It has solidified its leadership position within the consumer cybersecurity segment, while its market position within enterprise security faces intense market competition. To further sharpen its focus and capabilities, Symantec made a number of tuck-in acquisitions since 2017, and divested its non-core Website Security Service (WSS). With the planned divestiture of its Enterprise Security segment, Symantec will refine its focus on the Consumer Cyber Safety segment, where its Norton and LifeLock brands enjoy strong brand value. Narrower Focus With Reduced Diversification and Execution Risks: With the divestiture of its enterprise segment, Symantec would retain the highly profitable consumer segment. The narrower focus should provide Symantec with a platform to regain profit growth. However, the narrower focus also results in less diversification, leaving the company potentially more exposed to consumer markets. In addition, execution risks exist, as Symantec targets to eliminate residual costs associated with the Enterprise Security segment in order to maintain profitability targets for the remaining Consumer Cyber Safety segment. Secular Industry Growth: With the continuing expansion of IT applications, the protection of data and IT networks against threats has been the tailwind supporting secular industry growth for cybersecurity. Fitch anticipates that the global cyber security market will grow at a CAGR of approximately 10% over the next five years. Fitch believes the industry trend will benefit industry leaders including Symantec. IT Security Threats Increasingly Complex: IT security threats have evolved from PC-centric to mobile devices, the internet of things (IoT), networks and user identities, as shown by a number of large-scale attacks. The evolving threats enable a continuous stream of niche solutions to develop, addressing threats beyond the traditional PC-centric security to protect users, data and networks at various levels of the internet. While some of these solutions were developed by legacy cybersecurity providers, many were created by suppliers with narrow expertise. Symantec has realigned its products to better address market needs by creating more user-centric security solutions for consumers. Industry Fragmentation Remains: While the overall IT security market is growing, niche solutions providers continue to be relevant in development of innovative technologies. The combined market share of the top-five IT security providers, including Symantec, represents approximately 35% of global IT security market. Given the cost of addressing market needs, Fitch believes the incumbent platform providers could continue to target niche solutions for acquisitions as they seek to expand their product offerings and maintain competitiveness. Since the acquisition of LifeLock in 2016, Symantec has acquired a number of niche solutions including Fireglass, Skycure, SurfEasy, and Luminate. Fitch believes targeted acquisitions remain an effective approach for incumbents to maintain their leadership. Acquisition Risk: While Fitch expects Symantec to remain an industry leader in IT security, it believes the fragmented industry could consolidate in the near to medium term with Symantec likely to participate as an acquirer of security technologies. Fitch believes the company would maintain its focus around enhancements of capabilities around its solid positions in the consumer segment. Therefore, incremental acquisitions could be small in scale for the purpose of enhancing of Symantec's technologies, consistent with the recent acquisitions. DERIVATION SUMMARY Fitch's ratings are supported by Symantec's industry leadership in cyber security with a series of acquisitions and divestitures including acquisitions of Blue Coat, LifeLock, Fireglass, Skycure, and Luminate. The company also divested Veritas Technologies and its Website Security business. Symantec remains a leader in both consumer and enterprise market segments through acquisitions that were intended to enhance its competitiveness. Despite the planned divestiture, Fitch believes Symantec would retain the cyber security technology platform that has been built. The strong focus of the company has been weighed down by its inability to maintain consistent growth in its enterprise segment. With the planned divestiture of its Enterprise Security segment, Symantec would focus its operations around its highly profitable Consumer Cyber Safety segment. Fitch believes the narrower focus around the company's strength would enable the Symantec to maintain steady profit growth. The Negative Rating Outlook reflects the elevated gross leverage resulting from reduced EBITDA. In addition, the planned cost reduction to eliminate residual costs from the divestiture and reduced market diversification pose incremental risks to the company's operating profile. Fitch views Citrix Systems (BBB/Stable) as similar to Symantec as they both operate within the IT security industry; however, Citrix Systems is primarily in the enterprise segment where demand and profitability could be more resilient through the cycle. Post the divestiture, Symantec's gross leverage of 3.5x would be higher than Citrix Systems'; however, Symantec's EBITDA margin of approximately 50% would be higher than that of Citrix. Fitch also compared the company against Constellation Software, Inc. (BBB/Stable), which has gross leverage below 1x. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Revenue growth in mid-single-digits after the divesture of Enterprise Security segment through the forecast period. Fiscal 2020 includes nine months of Enterprise Security, as the transaction closes in calendar 2019; -- EBITDA margins remaining stable at 50% after the divestiture of Enterprise Security segment; -- Tuck-in acquisitions averaging $200 million annually financed with internally generated cash; -- Common dividends of $300 million annually through the forecast period; -- Share buyback of $300 million annually through the forecast period; -- $1 billion of restructuring costs spread across FY2020-21 to optimize operations for standalone consumer segment; -- Net proceeds from sale of Enterprise Security segment returned to shareholders as a special dividend; -- Debt maturities are refinanced through the forecast period resulting in total outstanding debt unchanged. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Fitch's expectation of gross leverage sustaining below 2.5x and FFO adjusted leverage sustaining below 3.0x; -- Revenue growth above high single-digits implying stable market position; -- EBITDA and FCF margins remain stable; -- Public capital allocation policy that prioritizes debt reduction to below 2.5x. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Fitch's expectation of gross leverage sustaining above 3.5x and FFO adjusted leverage sustaining above 4.0x; -- Negative organic revenue growth implying weakening market position; -- Sustained erosion of EBITDA and FCF margins; -- Significant debt-financed acquisitions that significantly alter the company's credit profile. LIQUIDITY AND DEBT STRUCTURE Liquidity was solid at fiscal 1Q20, supported by $1.7 billion of readily available cash and $1.0 billion available under its revolver. Fitch expects liquidity to be supported by Symantec's approximately $800 million-$900 million normalized annual FCF through the forecast period. Fitch assumes the net proceeds from the divestiture of the Enterprise Security segment would be returned to shareholders through special dividends. In conjunction with readily available cash and its revolver, Fitch believes Symantec has sufficient financial flexibility to execute on its more focused strategy. Maturity Profile: Symantec's $2.25 billion senior unsecured notes mature in fiscal years 2021-2026, with $750 million maturing in fiscal 2021. Its $500 million senior unsecured term loan A matures in fiscal 2022. The company's existing undrawn $1.0 billion senior unsecured revolver matures in fiscal 2022 and $1.75 billion in senior unsecured convertibles mature in fiscal 2021-2022. Debt Structure: Symantec Corp. holds $4 billion in debt, while Symantec Holdings Limited holds an additional $500 million in senior unsecured term loan. The debt held at Symantec Corp. is guaranteed by material domestic subsidiaries that, either individually or collectively, have total tangible assets exceeding the greater of $100 million and 0.75% of consolidated total assets. The debt at Symantec Holdings Limited is guaranteed by both material domestic subsidiaries and material foreign subsidiaries. TENET HEALTHCARE: Fitch Rates $4.2BB 1st Lien Notes 'BB-' --------------------------------------------------------- Fitch Ratings has assigned a 'BB-'/'RR2' rating to Tenet Healthcare Corporation's $4.2 billion senior secured first-lien notes. Proceeds will be used to refinance existing first-lien notes and to pay related fees and expenses. The Rating Outlook is Positive. The ratings apply to $15.1 billion of debt outstanding at June 30, 2019. KEY RATING DRIVERS Hospital Segment Drives Operating Outlook: Tenet is one of the largest for-profit operators of acute care hospitals in the U.S. and is also a leading operator of ambulatory surgery centers (ASCs) through its ownership of United Surgical Partners International (USPI). USPI provides a favorable offset to Fitch's expectation for flat to declining inpatient hospital volumes, but Tenet's hospital operations segment contributes about 80% and 60% of consolidated revenues and EBITDA, respectively, making the segment the main driver of the company's results. In addition to industry-wide secular headwinds to volumes of lower acuity hospital patients, Tenet has also been hampered by some company specific issues in its hospital segment in recent years. Following changes in senior management, these issues are now being addressed and have led to improved operating margins. Sustainably Lower Leverage: At June 30, 2019, Fitch calculates leverage (total debt/EBITDA after associate and minority dividends) of 6.7x. This is up from a year ago, when leverage stood at 6.3x, but is improved from the same period in 2017 when leverage stood at 7.5x. The decline in leverage was driven by growth in EBITDA and the open market repurchase of a small amount of outstanding debt. Fitch expects leverage could decline to about 6.0x by YE 2020 due to growth in EBITDA. Profitability Green-Shoots: Growth in Tenet's EBITDA margin is being supported by the combined effects of better organic volume growth in the hospital segment, a cost restructuring program and the divestiture of lower margin hospitals. Tenet's operating EBITDA margin expanded by 120 bps in the LTM period ended June 30, 2019 to 13.3% versus 12.1% in 2017. This is partly due to an operational restructuring program that removed a layer of management at the regional hospital level and is expected to result in annual run rate savings of $450 million upon full implementation. Even after this recent improvement, Tenet's profitability continues to lag its closet industry peers, HCA Healthcare Inc. and Universal Health Services Inc., which supports Fitch's view that sustainably higher margins for Tenet are achievable. Better Patient Volume Trends in 2019: Tenet's same hospital volume performance had been spotty for several years, but improved during H1'19. The company posted 5.7% organic growth in same hospital revenue, with volume and pricing contributing 2.2% and 3.4%, respectively, in the most recent quarter. In 2014-2015, the company outperformed the broader for-profit hospital industry on some volume measures before performance took a step back in 2016-2018. In addition to company specific issues in some of its hospital markets, Tenet's results reflect the headwinds to volumes of lower acuity hospital patients that are facing the entire industry. Patients and health insurers are pushing to move into lower cost and more convenient outpatient settings, and technology is increasingly enabling this shift. Outpatient Investment Strategy Sound: These headwinds to lower acuity hospital patient volumes are ongoing and unlikely to abate, and Tenet and other hospital companies have responded by investing in outpatient settings. In addition to operating a large number of ASCs through USPI, Tenet's hospital segment includes other outpatient facilities like imaging centers, satellite emergency departments (EDs) and freestanding urgent care centers. Exposure to outpatient segments may increase the economic cyclicality of Tenet's and other hospital company's operating results over the long term, but on balance these investments provide a beneficial offset to Fitch's expectation for flat to declining inpatient hospital volumes. Strategic Review Spurs Action: Tenet's profitability and FCF generation have also been hampered by company specific issues, including a bloated cost structure, a highly leveraged balance sheet, as well as operational issues in some hospital markets and service lines that have pressured volumes and margins. In addition to the cost restructuring initiative, a recent strategic review partly spurred by pressure from shareholders resulted in Tenet announcing a series of divestitures in the hospital operations segment, targeted service line closures, and a spin-off of the Conifer Health Solutions business planned for 2021. The cost cutting and portfolio pruning initiatives have positive implications for the credit profile. As one example, Tenet divested its remaining hospitals in Chicago, a market where the company struggled with poor operating performance in recent years. The influence of the spin-off of Conifer is less clear since it will depend upon the terms of the transaction and the use of proceeds, which the company has not yet determined. However, the deleveraging underpinning the Positive Outlook does not assume a divestment of Conifer as a catalyst for a meaningful change in leverage, and Fitch does not believe the loss of business diversification will be a headwind to the credit profile in and of itself. DERIVATION SUMMARY Tenet's 'B' Issuer Default Rating (IDR) reflects the company's highly leveraged balance sheet, largely as a result of debt funded acquisitions. Tenet's leverage is higher than that of the closest hospital industry peers: HCA Healthcare Inc. (HCA; BB/Stable) and Universal Health Services Inc. (UHS; BB+/Stable). Tenet's operating and FCF margins also lag these industry peers, but Tenet has recently made some progress in closing the gap through cost cutting measures and the divestiture of lower margin hospitals. Tenet has a stronger operating profile than lower rated peers Community Health Systems (CHS; CCC) and Quorum Healthcare Corp.; like HCA and UHS, Tenet's operations are primarily located in urban or large suburban markets that have relatively favorable organic growth prospects. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for The Issuer Include: -- Flat top-line growth in 2019 and about 3.5% growth in 2020 reflects recent divestitures and low single digit organic growth in the hospital operations and Conifer Health Solutions segments and mid-single digit organic growth in the ambulatory care segment; -- Operating EBITDA margin (Fitch's EBITDA calculation excludes income from affiliates) of 13.9% in 2019 and expanding slightly through the forecast period due to the divestiture of the lower margin hospitals, growth of the higher margin ambulatory segment's share of EBITDA and the effects of the cost restructuring program; -- Fitch forecasts capital expenditures of $680 million in 2019, and capital intensity of 3.7% through 2021; -- FCF (CFO less capital expenditures and dividends to associates and minorities) of about $250 million in 2019, and 2020-2021 FCF margin of 2%-3%; -- Total debt/EBITDA after dividends to associates and minorities declines to 6.0x by YE 2020 due to EBITDA growth. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- An expectation of gross debt/EBITDA after associate and minority dividends sustained below 5.5x; -- FCF margin sustained above 2%. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Gross debt/EBITDA after associate and minority dividends sustained above 7.0x; -- Consistently break-even to negative FCF margin. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity Profile: At June 30, 2019, liquidity was provided by $249 million of cash on hand and $808 million of availability on the $1 billion capacity asset-based lending (ABL) revolver. Tenet's debt agreements do not include financial maintenance covenants aside from a 1.5x fixed-charge coverage ratio test in the bank agreement that is only in effect during a liquidity event, defined as whenever available ABL facility capacity is less than $100 million. LTM June 30, 2019 EBITDA/interest paid equaled 2.4x. Pro forma for the refinancing transaction, the next maturities are $2.8 billion of unsecured notes maturing in April 2022 and $1.9 billion of unsecured notes maturing in June 2023. Opportunities to Reduce Debt: Historically, opportunities to reduce leverage through debt repayment have been limited by expensive make whole provisions on Tenet's debt. The company has recently been buying back small amounts of bonds on the open market as cash generation has improved. Debt Notching Considerations: The 'BB'/'RR1' and 'BB-'/'RR2' ratings for Tenet's ABL facility and the senior secured first-lien notes reflect Fitch's expectation of recovery for the ABL facility in the 91% to 100% range and recovery for the first-lien secured notes in the 71% to 90% range under a bankruptcy scenario. The 'B'/'RR4' rating on the $2.2 billion senior secured second-lien notes and $6.4 billion senior unsecured notes reflect Fitch's expectations of recovery of outstanding principal in the 31% to 50% range. Fitch estimates an enterprise value (EV) on a going concern basis of $8.8 billion for Tenet, after a deduction of 10% for administrative claims. The EV assumption is based on post reorganization EBITDA after dividends to associates and minorities of $1.4 billion and a 7x multiple. The post-reorganization EBITDA estimate is approximately 40% lower than Fitch's 2019 forecasted EBITDA for Tenet and considers the attributes of the acute care hospital sector including a high proportion of revenue (30%-40%) generated by government payors, exposing hospital companies to unforeseen regulatory changes; the legal obligation of hospital providers to treat uninsured patients, resulting in a high financial burden for uncompensated care, and the highly regulated nature of the hospital industry. During the early part of the past decade, Tenet's EBITDA dropped by more than half as a result of an operational restructuring to correct business practices in violation of Medicare standards. There is a dearth of bankruptcy history in the acute care hospital segment. In lieu of data on bankruptcy emergence multiples in the sector, the 7x multiple employed for Tenet reflects a history of acquisition multiples for large acute care hospital companies with similar business profiles as Tenet in the range of 7x-10x since 2006 and trading multiples (EV/EBITDA) of Tenet's peer group (HCA, UHS, LifePoint Health and CHS), which have fluctuated between approximately 6.5x and 9.5x since 2011. Based on the definitions of Tenet's secured debt agreements, Fitch believes that the group of operating subsidiaries that guarantee the secured debt excludes any non-wholly owned and non-domestic subsidiaries, and therefore, does not encompass part of the value of the Conifer and ambulatory care segments. While the collateral for the secured debt does include the equity owned by the parent in these subsidiaries, Tenet's financial disclosures do not provide supplemental financial statements breaking down the guarantor versus non-guarantor value. Therefore, while some of the value of the non-guarantor subsidiaries could be captured by the secured lenders ahead of the unsecured lenders in bankruptcy, it is difficult to estimate that amount. Fitch believes that only the value of the hospital operations segment would be captured by the secured lenders ahead of the unsecured lenders. The hospital operations segment contributes about 60% of consolidated EBITDA, and Fitch uses this value as a proxy to determine the rough value of the secured debt collateral of $5.3 billion. Fitch assumes this amount is completely consumed by the ABL facility and the first-lien lenders, leaving $3.5 billion of residual value to be distributed on a pro rata basis to the remaining $1.8 billion of first-lien claims and the second-lien secured and unsecured claims. The ABL facility is assumed to be fully recovered before the other secured debt in the capital structure. The ABL facility is secured by a first-priority lien on the patient accounts receivable of all the borrower's wholly owned hospital subsidiaries, while the first- and second-lien secured notes are secured by the capital stock of the operating subsidiaries, making the notes structurally subordinate to the ABL facility with respect to the accounts receivable collateral. Fitch assumes that Tenet would draw the full amount available on the $1 billion ABL facility in a bankruptcy scenario, and includes that amount in the claims waterfall. TODAY'S KIDS: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Today's Kids, Inc., according to court dockets. About Today's Kids Inc. Today's Kids, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-04473) on July 7, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of less than $50,000. The case is assigned to Judge Cynthia C. Jackson. The Debtor is represented by Bransonlaw, PLLC. TRES GENERACIONES: Seeks to Hire Eric A. Liepins as Legal Counsel ----------------------------------------------------------------- Tres Generaciones Luna, Inc., seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Eric A. Liepins, P.C. as its legal counsel. The firm will advise the Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm's hourly rates are: Eric Liepins, Esq. $275 Paralegals/Legal Assistants $30 - $50 Eric Liepins, Esq., disclosed in court filings that his firm does not represent any interest adverse to the Debtor's bankruptcy estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Telecopier: (972) 991-5788 Email: eric@ealpc.com About Tres Generaciones Luna Tres Generaciones Luna, Inc., is a privately held company in the Mexican restaurant business. It filed for protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-32638) on Aug. 5, 2019. In the petition signed by Fernando Luna, president, the Debtor estimated assets not exceeding $50,000, and liabilities ranging between $1 million and $10 million. The Debtor's case is assigned to Judge Stacey G. Jernigan. Eric A. Liepins, Esq., is the Debtor's legal counsel. TRESHA-MOB LLC: Plan Outline OK'd; Plan Hearing Set for Aug. 28 --------------------------------------------------------------- Bankrupcy Judge Ronald B. King approved Tresha-MOB, LLC's disclosure statement for its first amended plan as modified. August 23rd, 2019 at 5:00 P.M. (CST) is the deadline to file ballots accepting or rejecting the plan and the deadline for filing and serving written objections to the confirmation of the Plan. The hearing on the confirmation of the Debtor's Plan shall be held before the Honorable Ronald B. King at the U.S. Bankruptcy Court, Courtroom No. 1, 3rd Floor, 615 E. Houston St., San Antonio, Texas 78205, on August 28th, 2019 at 2:00 p.m. About Tresha-Mob Tresha-MOB, LLC, is a lessor of real estate based in Chicago, Illinois, whose principal assets are located at 9618 Huebner Road San Antonio, TX 78240. Tresha-MOB filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 18-52420) on Oct. 10, 2018. In the petition signed by Michael Horrell, Voltaire Asset Managers II, LLC, manager of Tresha-MOB LLC, the Debtor estimated assets and liabilities of $10 million to $50 million. Eric Terry Law, PLLC, is the Debtor's counsel. US STEEL: Moody's Reviews B1 CFR for Downgrade on Market Conditions ------------------------------------------------------------------- Moody's Investors Service placed United States Steel Corporation's B1 Corporate Family Rating, B1-PD probability of default rating, B2 senior unsecured ratings and B2 revenue bond ratings under review for downgrade. The Speculative Grade Liquidity rating was downgraded to SGL-2 from SGL-1. The review reflects tightened market conditions in the US and Europe, including softening in demand and steel price compression, in concert with higher costs and increasing capital expenditure requirements which will pressure earnings and cash flow and contribute to a releveraging of the company, said Carol Cowan, Senior Vice President and lead analyst for U. S. Steel. Downgrades: Issuer: United States Steel Corporation Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 On Review for Downgrade: Issuer: United States Steel Corporation Probability of Default Rating, Placed on Review for Downgrade, currently B1-PD Corporate Family Rating, Placed on Review for Downgrade, currently B1 Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently B2 (LGD4) Issuer: Allegheny County Industrial Dev. Auth., PA Senior Unsecured Revenue Bonds, Placed on Review for Downgrade, currently B2 (LGD4) Issuer: Bucks County Industrial Development Auth., PA Senior Unsecured Revenue Bonds, Placed on Review for Downgrade, currently B2 (LGD4) Issuer: Indiana Finance Authority Senior Unsecured Revenue Bonds, Placed on Review for Downgrade, currently B2 (LGD4) Issuer: OHIO WATER DEVELOPMENT AUTHORITY Senior Unsecured Revenue Bonds, Placed on Review for Downgrade, currently B2 (LGD4) Issuer: Southwestern Illinois Development Authority Senior Unsecured Revenue Bonds, Placed on Review for Downgrade, currently B2 (LGD4) Outlook Actions: Issuer: United States Steel Corporation Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The review will focus on expected earnings performance and cash flow generation over the investment time horizon identified for major strategic projects (through 2022). An important element will be the level to which cash flow is negative and the funding (indicated at $1.6 billion) of the stated investments and degree to which this releveraging impacts debt protection metrics. Based upon the company's current run rate, expectations for weaker quarters over the next several quarters, and the anticipated increases in debt, leverage, as measured by the debt/EBITDA ratio (including Moody's standard adjustments) could approach 5x. Moody's has a negative outlook for the steel industry in Europe and expect worsening conditions over the next 12 -15 months, which will impact U. S. Steel Europe, which moved to a slightly negative operating profit in the quarter ended June 30, 2019. Similarly, in the US, expectations are for a modest contraction in light vehicle sales in 2019 and 2020, an important market for U. S. Steel. At the same time, despite a recent easing in iron ore and coking coal prices, prices for these raw materials are expected to remain elevated. The lowering of the SGL rating to SGL-2 considers the reduction in the company's cash position and expectations for negative cash flow over the next several quarters. An additional consideration is the potential for drawings under the asset backed revolver. However, the SGL-2 considers the favorable maturity profile following refinancing and debt repayments over the last several years. Headquartered in Pittsburgh, Pennsylvania, United States Steel Corporation is the second largest flat-rolled steel producer in the US in terms of production capacity. The company manufactures and sells a wide variety of steel sheet, tubular and tin products across a broad array of industries, including service centers, transportation, appliance, construction, containers and oil, gas and petrochemicals. Revenues for the twelve months ended June 30, 2019 were $14.5 billion. The principal methodology used in these ratings was Steel Industry published in September 2017. VMW INVESTMENTS: Seeks to Hire SVN Dunn as Real Estate Broker ------------------------------------------------------------- VMW Investments, LLC, and VMW Bedford, LLC, seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire SVN Dunn Commercial Management, Inc. as the Debtors' exclusive real estate broker. The Debtors collectively own and operate three pieces of commercial real property located in Fort Worth, Grapevine, and Bedford, Texas. VMW Investments, LLC owns the tracts of real property located at 4200–4304 Airport Freeway, Fort Worth, Texas 76117 (Airport Freeway Property) and 3600 William D. Tate Avenue, Grapevine, Texas 76051 (Grapevine Property). VMW Bedford, LLC owns the tract of real property located at 221 Bedford Road, Bedford, TX 76022 (Bedford Property). The Debtors lease the office spaces to approximately sixteen (16) different tenants. SVN Dunn will act as the Debtors' agent with the exclusive right to market the Properties for sale. SVN Dunn will be paid a commission of 4% of the gross sales proceeds on a sale of the Properties executed during the term of the Listing Agreement. In addition, SVN Dunn shall also be paid 4.5% of the aggregate rental amount provided in any lease that SVN is responsible for obtaining or a fee of 6.75% if the Properties are leased to a prospect procured by one of SVN Dunn's cooperating brokers. Dan Morris, Senior Advisor with SVN Dunn Commercial Management, Inc., attests that SVN Dunn is a "disinterested person" within the meaning of Sec. 101(14) of the Bankruptcy Code, as modified by Sec. 1107(b) of the Bankruptcy Code. The broker can be reached through: Dan Morris SVN Dunn Commercial Management, Inc. 1202 Corporate Drive West Arlington, TX 76006 Phone: 817-640-9964 About VMW Investments and VMW Bedford VMW Investments, LLC and VMW Bedford, LLC are engaged in renting and leasing real estate properties. On June 30, 2019, VMW Investments and VMW Bedford sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Lead Case No. 19-42644). At the time of the filing, each Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The cases are assigned to Judge Mark X. Mullin. Bonds Ellis Eppich Schafer Jones LLP is the Debtors' legal counsel. WALL TO WALL: Committee Hires Pachulski Stang as Lead Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Wall to Wall Tile & Stone, LLC and its debtor-affiliates seeks authority from the United States Bankruptcy Court for the District of Oregon (Portland) to retain Pachulski Stang Ziehl & Jones LLP as its lead restructuring counsel. The Committee requires PSZJ to: a. assist, advise, and represent the Committee in its consultations with the Debtors and other creditor constituencies or parties in interest regarding the administration of this case; b. assist, advise, and represent the Committee in analyzing the Debtor's assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, other asset dispositions, financing arrangements, and cash collateral stipulations or proceedings; c. assist, advise, and represent the Committee in any manner relevant to reviewing and determining the Debtor's rights and obligations under unexpired leases and executory contracts; d. assist, advise, and represent the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of any portion of the business, and any other matters relevant to these cases or to the formulation of a plan; e. assist, advise, and represent the Committee in its participation in the negotiation, formulation, and drafting of a plan of reorganization or liquidation; f. provide advice to the Committee on the issues concerning the appointment of a trustee or examiner under section 1104 of the Bankruptcy Code; g. assist, advise, and represent the Committee in the performance of all of its duties and powers under the Bankruptcy Code and the Bankruptcy Rules and in the performance of such other services as are in the interests of those represented by the Committee; and h. assist, advise, and represent the Committee in the evaluation of claims and any litigation matters. PSZJ has agreed in this case to charge $680 per hour for all attorney timekeepers. The hourly rate of the Firm's paralegal assigned to these cases is $395.00. Jason H. Rosell, Esq., a partner at Pachulski, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The counsel can be reached through: Jason H. Rosell, Esq. Jeffrey N. Pomerantz, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Boulevard, 13th Floor Los Angeles, CA 90067-4100 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 About Wall to Wall Wall to Wall -- http://walltowallcountertops.com-- is a granite and quartz stones supplier in Vancouver, Washington. Wall to Wall Tile & Stone, LLC and its debtor affiliates filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (Bankr. D. Or. Lead Case No. 19-32600) on July 16, 2019. In the petitions signed by Tyler Kruckenberg, managing member, Wall to Wall Tile & Stone estimated $10 million to $50 million in both assets and liabilities, while Wall to Wall Tile & Stone-Oregon estimated $100,000 to $500,000 in assets and $10 million to $50 million in liabilities. The cases are assigned to Judge David W. Hercher. Timothy J. Conway, Esq. at TONKON TORP LLP represents the Debtors as counsel. WALL TO WALL: Committee Taps Leonard Law Group as Legal Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Wall to Wall Tile & Stone, LLC and its debtor-affiliates seeks authority from the United States Bankruptcy Court for the District of Oregon (Portland) to retain Leonard Law Group LLC as local counsel for the Committee effective July 31, 2019. The Committee requires LLG to: a. advise the Committee with regard to its rights, powers, and duties as an official committee; b. assist the Committee in the analysis of the Joint Debtors' schedules of assets and liabilities, statement of financial affairs, monthly financial reports and projections, financial condition, and conduct; c. review the propriety of liens and claims of creditors and to review the potential avoidability of liens and other transfers that could be recovered for the benefit of the unsecured creditors; d. review and analyze all applications, motions, orders, statements of operations, schedules and other pleadings or papers filed with the Court and advise the Committee as to the effect of such filings and the propriety of any response or position to be taken; e. represent the Committee at hearings and in other proceedings; f. assist the Committee with respect to its communications with the general creditor body regarding significant matters; g. assist the Committee in reviewing any proposed sale, and any plan of reorganization and disclosure statement; and h. perform such other services in the interests of the Committee as may be necessary. LLG's current and ordinary hourly rates: Justin Leonard $390 Timothy Solomon $380 Holly Hayman $310 Timothy Solomon, Esq., at Leonard, disclosed in a court filing that his firm does not hold any interest adverse to the interest of the Debtor's estate, creditors or equity security holders. The firm can be reached through: Timothy A. Solomon, Esq. Leonard Law Group LLC 1 SW Columbia, Ste. 1010 Portland, OR 97258 Direct: 971.634.0194 Email: tsolomon@LLG-LLC.com Email: leonard-law.com About Wall to Wall Wall to Wall -- http://walltowallcountertops.com-- is a granite and quartz stones supplier in Vancouver, Washington. Wall to Wall Tile & Stone, LLC and its debtor affiliates filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (Bankr. D. Or. Lead Case No. 19-32600) on July 16, 2019. In the petitions signed by Tyler Kruckenberg, managing member, Wall to Wall Tile & Stone estimated $10 million to $50 million in both assets and liabilities, while Wall to Wall Tile & Stone-Oregon estimated $100,000 to $500,000 in assets and $10 million to $50 million in liabilities. The cases are assigned to Judge David W. Hercher. Timothy J. Conway, Esq. at TONKON TORP LLP represents the Debtors as counsel. WEATHERFORD INT'L: Hires PricewaterhouseCoopers as Consultant ------------------------------------------------------------- Weatherford International plc and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to hire PricewaterhouseCoopers LLP as consultant. The services PwC will render are: A. Fixed Fee Engagements i. perform benchmarking studies and a global industry analysis for the financial years ending December 31, 2018, 2019, and 2020; B. Hourly Fee Engagements i. perform tax consulting services in connection with the determination of whether the Weatherford U.S. consolidated group has experienced an ownership change as defined in Internal Revenue Code section 382, during the six year period March 31, 2019; ii. perform tax consulting services in connection with the determination of each member's allocable share of the Weatherford U.S. consolidated group's historical net operating loss pursuant to Treas. Reg. § 1.1502-21; iii. review a substance outline prepared for each of the following non-U.S. jurisdictions: the British Virgin Islands, the Cayman Islands, the Bahamas, Barbados and Bermuda; iv. provide assistance and advice with certain mutually agreed upon aspects of the Debtors' bankruptcy and debt restructuring; v. provide global compliance services; vi. assist in providing tax depreciation services implementation services for fixed assets TDS Compliance and Reporting Services for the tax years ending December 31, 2017, December 31, 2018, and December 31, 2019; C. Contingency Fee Engagements i. assist with identifying, quantifying, documenting, and collecting Company-owned abandoned and unclaimed property held by a variety of holders; D. Per-Unit Fee Engagements i. assist in the preparation of compliant local transfer pricing documentation for the jurisdictions and legal entities for the financial years ended December 31, 2018 and December 31, 2019; E. Mixed Fee Engagements i. assist in compliance services related to abandoned and unclaimed property; and ii. assist in the preparation of individual income tax returns and consulting on matters of international assignees who are authorized employees of the Company and tax and other consulting related to the Company's mobility programs. The Debtors and PwC have agreed to fixed-fee $160,000, of which $53,333 has been paid to PwC by the Debtors as of the Petition Date. PwC's applicable hourly rates are: Partners $499 to $909 Managing Directors $757 to $898 Managers $329 to $585 Senior Staffs $267 to $464 Associates $172 to $360 Administrative Staffs $125 to $260 PricewaterhouseCoopers will also be reimbursed for reasonable out-of-pocket expenses incurred. Keith Considine, a partner at PricewaterhouseCoopers, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. PricewaterhouseCoopers can be reached at: Keith Considine PricewaterhouseCoopers LLP 1000 Louisiana Street, Suite 5800 Houston TX 77002-5021 Tel: (713) 356-4000 Fax: (713) 356-4717 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 March 31, 2019, Weatherford had $6.51 billion in total assets, $10.62 billion in total liabilities, and a total shareholders' deficiency of $4.10 billion. On July 1, 2019, Weatherford International plc, Weatherford International, LLC, and Weatherford International Ltd. sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-33694). Thbe Hon. David R. Jones is the case judge. The Debtors tapped Hunton Andrews Kurth LLP and Latham & Watkins LLP as counsel; Alvarez & Marsal North America LLC as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk LLC as claims agent. Henry Hobbs Jr., acting U.S. trustee for Region 7, on July 17, 2019, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases. WEWORK COMPANIES: Fitch Lowers LT IDR to B, Outlook Stable ---------------------------------------------------------- Fitch Ratings has downgraded WeWork Companies LLC's Long-Term Issuer Default Rating to 'B' from 'BB-'. Fitch has also downgraded the senior unsecured notes to 'B-'/'RR5' from 'BB-'/'RR4'. Additionally, Fitch has assigned a 'BB'/'RR1' issue rating to the company's senior secured delayed draw term facility and assigned a LT IDR of 'B' to the We Company. In July 2019 The We Company became the holding company of all the direct and indirect subsidiaries that were held by WeWork Companies Inc. The Rating Outlook is Stable. WeWork has publically disclosed its plans to conduct an IPO and in conjunction raise $6 billion in senior secured credit facilities, diversifying its sources of financing and marking an important milestone in the company's evolution. However, WeWork has underperformed relative to Fitch's expectations at the time of the initial rating particularly as it relates to progress towards a normalized margin, and by extension, cash flow profile and credit protection metrics, which materially increase its credit risk over the rating horizon. WeWork indicates profitability is a managed outcome, and by nearly all measures, it is clear the company is making a choice afforded to it through its capital raised subsequent to its bond offering and pro forma to the IPO and senior secured transactions to defer its inflection point several years out from where Fitch thought it would be initially. Adjusted EBITDA margin for 2018 was approximately 20 points more negative than originally anticipated. While meeting its ambitious growth target (increasing revenue 105%) WeWork exceeded its combined overhead and pre-opening expense expectation by more than 60%. Ostensibly, the company has invested ahead of planned future growth, predicated on its planned financing, largely in the form of headcount, which expanded by 3,000 employees in the first two quarters of 2019 to 12,500 the end of 2Q'19, and by 8,500 since the beginning of 2018. Enterprise memberships have increased to 40% of total at 2Q'19, which should provide operating leverage in selling to and developing for companies with 500 or more employees versus smaller, more entrepreneurial and less stable organizations. Given this trajectory enterprise memberships may soon comprise 50% or more of its overall membership base, providing increased stability during a downturn. Additionally, the company has accelerated its geographic expansion. This should diversify its exposure to localized real estate market slowdowns, although expansion from WeWork's stronghold in mainly developed market gateway cities has put expected downward pressure on average revenue per physical member (ARPPM), which has declined more than 6% since its initial rating. Relative to its expectations at the time of the initial rating, Fitch has changed its assumptions around several key operating factors. ARPPM is now projected to decline further, rather than normalize, reflecting an increasing mix of tertiary cities, and growth in China and LatAm in particular, which over the long term could represent a sizable portion of WeWork's business. Fitch expects revenue growth to be weaker over the near term given lower ARPPM, although this could be offset to a degree by lower location operating rents in geographies where ARPPM is lower. Desk growth is now expected to decelerate less rapidly, likely to make up for declining ARPPM, although this is warranted by company's returns based framework with a membership population that has a longer duration given an increased proportion of enterprise clients. Overhead and pre-opening expense as a percentage of revenue is expected to be about double that assumed in 2018, reflecting increased investment in sales and technology as well as more aggressive desk expansion. While Fitch believes WeWork assumes an even greater proportion of gross capex being funded by landlords, Fitch has tempered this expectation in its model, although the company has demonstrated success in increasing the co-investment of its landlord partners and successfully introduced the concept to foreign locales as landlords have become acclimated to WeWork's model. KEY RATING DRIVERS Financial Structure Deterioration: WeWork's margin underperformed its base expectation by more than 20 points. This is as a result of growth and overhead investment that was 60% higher than expected. WeWork's employee headcount has swelled as the company has bolstered itself for even more aggressive expansion, invested heavily in its salesforce and reorganized regionally. The company had approximately 1.25 million workstations in some stage of development as of June 30, 2019, more than twice its existing fleet, and it expects to launch in up to 175 additional cities (from 111 cities as of June 1, 2019). As a result, Fitch now expects WeWork's margin and FCF profile normalization to take longer and be weaker than previously anticipated. While Fitch believes WeWork can modulate its growth in the face of a downturn or challenges in its expansion, the margin for safety has been reduced materially given a slower path to profitability in conjunction with the prospective raising of $4 billion of secured delayed draw debt. IPO and Secured Debt Raise: WeWork's shift away from an unsecured capital structure and issuance of up to $4 billion in a delayed draw term loan, in addition to the corresponding IPO, diversifies the company's sources of financing, which is a long-term positive. The terms of the senior secured debt offering do not provide complete gating to further increased investment in growth and overhead that could delay profitability given the linking of maintenance covenants to contribution margin (f/k/a community adjusted EBITDA). Incurrence of any and all tranches does require meeting a net cash flow covenant but provides a $1 billion cushion to WeWork's model. Additionally, WeWork must maintain $2.5 billion in minimum liquidity with any draw, with step-ups to $3.0 billion and $3.5 billion on Setpember 30th and year-end 2021, respectively. Management and Governance: WeWork is largely controlled by its co-founder and CEO Adam Neumann who has successfully turned WeWork into a global brand. Unsurprisingly, the company is seeking to maintain the CEO's control through a dual-class voting structure such that the CEO has greater than 50% voting control and as a result will not be bound to certain corporate governance requirements such as having a majority independent board, although it may choose to do so. In Fitch's view this enshrines the key man risk inherent in WeWork's current framework, although this has not necessarily impeded other more highly rated entities. With regards to related-party issues Adam Neumann appointed WeWork's real estate investment arm, ARK, as manager of certain buildings controlled by Neumann, with the authority to make investment management decisions affecting these buildings. Separately, the company has increased its overall complexity through various ventures to purchase and develop properties outright. These and other capital allocation decisions, including acquisitions, which have been numerous, will likely face less independent scrutiny under a controlled company structure. Strategy and Diminished Margin of Safety: WeWork has seen its strategy largely executed to plan, namely taking its flexible workspace offering which is has been met by strong demand and expanding it both in its current markets and internationally. At the time of the initial rating, WeWork's credit quality most closely aligned with Fitch's "speculative" definition given a sizable liquidity buffer of cash and capital commitments relative to a $702 million unsecured bond offering and its prior belief that the company intended to achieve normalized profitability within two years, and positive FCF within three. This presented a robust margin of safety in the event of adverse changes in business or economic conditions over time, underscored by the belief that the company could quickly suspend growth and harvest the profit generation of its developed locations. However, the company's clear shift to a more aggressive expansion (its 1.25 million workstations in some form of development well above its combined 2019 and 2020 desk add expectation of a year ago) in conjunction with a significant increase in overhead, reduces the company's margin of safety to the point that its susceptibility to a macroeconomic shock or faltering in its expansion plan is materially worsened relative to its view at the time of the initial rating, more consistent with the "highly speculative" 'B' rating category. To the extent WeWork were to dampen its expansion plans and shift to normalized financial profile sooner, a positive rating action could be warranted. Leasing Liability, Recovery and Notching: WeWork had $47.2 billion in future minimum rental payments under its leases signed as of June 30, 2019. Fitch capitalizes the company's rent at an 8x multiple and computed its lease-equivalent debt to be $9.5 billion at the end of 2018, a figure which is expected to grow significantly over time. Fitch's recovery analysis assumes that WeWork would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch assumes guarantor subsidiaries' leases are proportional to their percentage of assets and assumes operating lease claims would be pari passu with the senior unsecured in addition to corporate guarantees and surety bonds. Fitch further assumes WeWork's standby letters of credit, assumed fully utilized adjusted for locations expected to remain open in reorganization less cash collateral, are equal in rank to senior secured claims, but assumes only the first $1 billion tranche of the credit facility is drawn since further tranches are contingent on amending the terms of the senior unsecured bonds and that WeWork meets performance objectives that are not likely in a distressed scenario. To the extent WeWork draws on subsequent tranches, Fitch will reevaluate recovery prospects. As described in further details, Fitch assumes WeWork's going concern EV assuming guarantor's portion of pre-growth EBITDA at June 30, 2019, reduced by an estimate of normalized, restructured overhead expense, and uses a 6x multiple in reflection of WeWork's market position and brand in addition to trading and acquisition multiples for similar business services companies. Additionally, Fitch assumes a proportion of value from mature non-guarantor locations is available. After assumption of a 10% administrative claim, the distribution of value yields a recovery ranked in the 'RR1' band for the senior secured and in the 'RR5' for the senior unsecured. DERIVATION SUMMARY Fitch considers WeWork's profile to be most aligned with business services companies, given the nature of its value proposition as essentially a services platform targeted at businesses of all sizes. This is augmented by a meaningful technology component, which sits on top of traditional commercial real estate leasing. WeWork's rating reflects a combined consideration of business and financial profile rating factors (consistent with the factors associated with Fitch's Business Services Ratings Navigator), both on a current and prospective basis given its relatively early stage of development as a company. On the business profile side, Fitch sees WeWork's market position and scale, diversification, execution and expertise as consistent with 'BBB' to 'BB' ratings category rated business services peers. WeWork compares favorably on several dimensions within these factors including its global brand associated with high service quality standards, leading market position among shared workspace providers, size that affords economies of scale and meaningful bargaining power with its suppliers, and moderately diversified range of services with the opportunity to expand along with a diverse spectrum of end-markets both from business size, industry vertical and increasingly geography basis. Fitch sees WeWork's contracted income and renewal risk as consistent with the 'BB' rating category due to its membership agreements being short-term, albeit bolstered by greater than 40% of memberships being held by entities with 500 or more employees. WeWork is exposed to meaningful in-sourcing risk due to the economic environment, particularly among its enterprise clients, although enterprise clients may seek additional flexibility for their real estate needs during an economic downturn. With regards to WeWork's financial profile, Fitch sees WeWork's near-term profitability and financial structure as consistent with 'B' rating category peers, although this has worsened over time and Fitch now expects WeWork's specific metrics to improve more gradually over the ratings horizon, subjecting the company to greater risk in the event of a macro shock or expansion difficulty. Moreover, while WeWork's profitability of its existing business and by extension financial structure are correlated with more highly rated peers, the weight of WeWork's aggressive expansion strategy, particularly investment in SG&A has materially weakened the company's credit protection metrics. On the financial flexibility category, Fitch sees WeWork's profile as consistent with 'BB' ratings category peers particularly bolstered by its liquidity position and now more diversified sources of funding. Fitch considers factors for highly speculative issuers in a relative fashion. WeWork's business model is robust and its strategy faces limited execution risk, however FCF has remained consistently negative. Negative FCF worsened over the past year and WeWork has indicated it expects to expand aggressively, suggesting while FCF should improve over time, the improvement will be slower and subject to greater uncertainty than previously expected. Fitch believes WeWork has deleveraging capacity. However, management appears committed to growth over improvement in its traditional credit protection metrics over the intermediate term. This is reinforced by the proposed maintenance covenants for the new secured debt that emphasize contribution margin over traditional adjusted EBITDA. Additionally, according to WeWork's initial public offering the CEO and co-founder will maintain more than 50% control of the company, giving it the right to avoid traditional corporate governance mechanisms including a majority of independent directors, although it may choose otherwise. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue growth in excess of 2018 rate in 2019, decelerating to high- to mid-double digits over the rating horizon reflecting robust but decelerating desk and membership growth coinciding with declining average revenue per member. - Attainment of break-even to positive operating EBITDA in 2022 at the earliest, reflecting realization of operating leverage of overhead that while expected to remain elevated should benefit revenue scale and associated operating leverage. - Full draw of DDTL over horizon (requiring amendment to incurrence limits of the existing senior unsecured notes) and successful execution of IPO and all convertible preferred equity, with proceeds used to fund expected growth. The recovery analysis assumes that WeWork would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern Approach - WeWork's going concern EBITDA is based on LTM June 30, 2019 adjusted EBITDA of -$683 million, representing the estimated 75% share of consolidated EBITDA that guarantor subsidiaries represent. - The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of the company. - The going-concern EBITDA is $379 million, above LTM EBITDA, to reflect the contribution margin of $454 million from existing guarantor locations less 30% of an assumed $250 million of normalized SG&A, adjusted for assumed restructuring to reflect closing of unprofitable locations and a ceasing of expansion in reorganization. - Offsetting factors include in process locations that will come into service and generate positive EBITDA balanced by a degree of overhead that will need to be maintained. - Additionally, WeWork's value proposition could diminish to some global enterprises with a smaller network. EV Multiple Approach - An EV multiple of 6x is used to calculate a post-reorganization valuation. The estimate considered the following factors: - The historical bankruptcy exit multiple for companies WeWork's sector ranged from 4x-7x, with a median reorganization multiple of 6.0x. - Current EV multiples of public companies in the Business Services sector trade well above the historical reorganization range. The median forward EV multiple for this sector is 9.7x. Historical multiples ranged from 6x-12x. - WeWork does have unique characteristics that would allow for a higher multiple in its unique brand and stake in JVs. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Lease adjusted FFO gross leverage sustained below 5x. - EBIT margin sustained above 5%. - Management and corporate governance practices associated with a more mature entity. - Increased scale as measured by EBITDAR sustained in excess of $500 million annually. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Lease adjusted FFO gross leverage sustained above 7x. - EBIT margin approaching break-even. - FCF margin sustained approaching neutral to negative. - Deterioration in management and corporate governance practices. LIQUIDITY AND DEBT STRUCTURE Adequate Near-Term Liquidity: WeWork's had cash and cash equivalents of $2.5 billion at June 30, 2019. The company had $479 million in restricted cash consisting primarily of amounts provided to banks to secure letters of credit issued under its credit agreement. WeWork's VIEs held $536 million of cash and cash equivalents and $97 million of restricted cash, which is only available for the VIEs. The company has $1.9 billion in remaining investor commitments ($400 million to the VIEs) through 2020. WeWork can draw $1 billion under its delayed draw term loan facility assuming it completes the IPO and receives $3 billion in gross proceeds. Pro forma to these transactions, unrestricted cash at June 30, 2019 was approximately $7 billion. Shift to Secured Funding Sources: On Nov. 12, 2015, WeWork entered into a $650 million revolving credit facility and $500 million letter of credit reimbursement facility, both of which mature on Nov. 12, 2020. Due to the consolidated leverage ratio requirement of 4.5x, WeWork would not have been able to borrow under its credit facility and keep those amounts outstanding or have unreimbursed letters of credit under the Senior Credit Facility past the end of a fiscal quarter (other than certain foreign subsidiary borrowings up to $50.0 million). Fitch continues to believe WeWork's needs under the facility relate only to issued letters of credit related to leases. The company intends to increase the letter of credit reimbursement facility to $2 billion. Additionally, WeWork plans to offer a new $4 billion delayed draw term loan with a maturity date being the later of three years from the completion of a Qualified IPO and Dec. 31, 2022. Fitch assumes WeWork draws $1 billion in conjunction with the completion of its IPO. $1.5 billion would be available subsequent to the receipt of June 30, 2020 financials and pro forma compliance with covenants, and $1 billion upon receipt of Dec. 31, 2020 financials. Additionally, WeWork's senior unsecured $702 million notes which mature May 1, 2025 presently limit secured debt incurrence beyond the $1 billion DDTL IPO tranche. WEYERBACHER BREWING: Unsecureds to Recoup $186K Under Plan ---------------------------------------------------------- Weyerbacher Brewing Company, Inc., filed a Chapter 11 plan of reorganization and accompanying disclosure statement proposing that Class 1 - Unsecured Claims, which are impaired and estimated at $1,931,709, less payments made to Critical Vendors, will be paid a total of $186,000 to the holders of allowed general unsecured claims. The Debtor will make eight monthly payments of $2,000 followed by 12 monthly payments of $6,667, and, finally, 12 monthly payments of $7,500,000. The Disbursing Agent will make a pro rata distribution to Unsecured Creditors on the 12th, 24th, and 32nd month anniversary of the Effective Date. To the extent Committee Professionals exceed the $50,000 cap, all distributions to Class 1 Unsecured Creditors will instead be paid to the Committee Professionals, on account of their Administrative Claims, until the time as the claims are paid in full and, after this point, distributed pro rata to Class 1 Unsecured Creditors. The Plan will be funded by ongoing operations of the Debtor, carried out by existing management, and the continued efforts of the Debtor and its management to maximize the Debtor's presence in its marketplace while striving to keep overhead low as well as a cash infusion of $50,000 from certain individuals and entities in exchange for an aggregate 100% of the newly issued membership interests in the Debtor. A full-text copy of the Disclosure Statement dated Aug. 6, 2019, is available at https://tinyurl.com/y3tjjlr3 from PacerMonitor.com at no charge. About Weyerbacher Brewing Co. Weyerbacher Brewing Company, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 19-12558) on April 22, 2019. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Richard E. Fehling. Ciardi Ciardi & Astin, P.C., is the Debtor's counsel. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on May 8, 2019. The Committee retained Elliot Greenleaf, P.C., and Loeb & Loeb LLP, as co-counsel. WINDSTREAM HOLDINGS: Shearman Updates Midwest Noteholders --------------------------------------------------------- In the Chapter 11 cases of Windstream Holdings, Inc., et al., the law firm Shearman & Sterling LLP filed an amended report under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of Ad Hoc Group of Midwest Noteholders that it is representing. On or about August 8, 2018, the Ad Hoc Group of Midwest Noteholders retained S&S to represent their common interests in connection with restructuring discussions related to the Notes. From time to time thereafter, certain holders of Notes have joined the Ad Hoc Group of Midwest Noteholders. S&S also separately represents Engineering Associates, LLC, Globe Communications, LLC, Nichols Construction, LLC, Niels Fugal Sons Company, LLC, Star Construction, LLC, TelCom Construction, Inc., Tesinc, LLC, Trawick Construction Company, LLC, Triple-D Communications, LLC and UtiliQuest, LLC in connection with the above- captioned cases. See ECF No. 137. Other than as disclosed herein, S&S does not represent or purport to represent any other entities with respect to the Chapter 11 cases. In addition, no member of the Ad Hoc Group of Midwest Noteholders purports to act, represent, or speak on behalf of any other entities in connection with the Chapter 11 cases. As of Aug. 9, 2019, current members of the Ad Hoc Group of Midwest Noteholders and their disclosable economic interests are: (1) The Lincoln National Life Insurance Company c/o Macquarie Investment Management Advisers 2005 Market Street Philadelphia, PA 19103-7094 * 6.75% Notes: $9,985,000.00 (2) Continental Casualty Company 151 N. Franklin Street Chicago, IL 60606-1821 * 6.75% Notes: $8,766,000.00 (3) Whitebox Advisors LLC 3033 Excelsior Boulevard, Suite 300 Minneapolis, MN 55416 * 6.75% Notes: $18,845,000.00 * Windstream Equity (in shares): 432,833 (4) AIG Asset Management (U.S.), LLC 80 Pine Street New York, NY 10005 * 6.75% Notes: $10,000,000.00 (5) Diameter Capital Partners LP 24 W 40th Street, 5th Fl. New York, NY 10018 * 6.75% Notes: $10,082,000.00 * First Lien Revolving Credit Facility: $25,000,000.00 * Senior Secured Credit Facility, Tranche B6: $33,000,000.00 (6) Barclays Bank PLC 745 7th Avenue New York, NY 10019 * 6.75% Notes: $12,000,000.00 * First Lien Revolving Credit Facility: $35,921,426.55 * Senior Secured Credit Facility, Tranche B6: $3,259,789.12 Counsel to the Ad Hoc Group of Midwest Noteholders can be reached at: SHEARMAN & STERLING LLP Joel Moss, Esq. Jordan A. Wishnew, Esq. 599 Lexington Avenue New York, NY 10022 Telephone: (212) 848-4000 Facsimile: (212) 848-7179 A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at http://bankrupt.com/misc/Windstream_Holdings_913_Rule2019.pdf About Windstream Holdings Windstream Holdings, Inc. and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP as its financial advisor, and Perella Weinberg Partners LP as investment banker. WING PALACE: Unsecureds to Get $7,500 via Quarterly Payments ------------------------------------------------------------ The hearing to consider confirmation of Wing Palace LLC's second amended Chapter 11 plan of reorganization is scheduled for Sept. 4, 2019 at 11:30 AM. The holders of Class 5 unsecured claims will receive $7,500.00 on a pro-rata basis via quarterly payments over 60 months starting from the Effective Date of this Plan. To fund the Plan, the Debtor will retain all property of the estate and confirmation of the Plan vests all property of the estate in the Debtor, and (ii) after confirmation of the Plan, the property dealt with by the Plan, including the cash collateral and receivables of the Debtor, will be free and clear of any and all liens, claims, and interests of any creditors, specifically including the cash collateral replacement liens created in paragraph 3 of the Court's Final Order Authorizing Use of Cash Collateral dated March 4, 2019. A full-text copy of the Second Amended Plan is available at https://tinyurl.com/y6rqtqep from PacerMonitor.com at no charge. About Wing Palace Wing Palace LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-04041) on Nov. 16, 2018. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The case is assigned to Judge Paul M. Glenn. The Debtor tapped Adam Law Group, P.A. as its legal counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. WMC MORTGAGE: Sept. 13 Approval Hearing on Disclosures Set ---------------------------------------------------------- According to a notice, a hearing will be held before the Honorable Christopher S. Sontchi on Sept. 13, 2019 at 10:00 a.m. (Eastern Time) to consider approval of WMC Mortgage, LLC's disclosure statement in connection with its proposed chapter 11 plan. Written objections to the disclosure statement must be filed on or before Sept. 3, 2019 at 4:00 p.m. (Eastern Time). The Plan encompasses a comprehensive resolution of the largest outstanding Claims against the Debtor, and maximizes the value of the Debtor's remaining assets for the benefit of all creditors. This is the product of good faith, arms-length negotiations and an agreement between the Debtor and its corporate parent and its affiliates. Class 4 under the plan consists of the general unsecured claims. Each holder of an Allowed General Unsecured Claim will receive payment in Cash in an amount equal to such Claim’s Pro Rata share of the amount of the Class 4 Distribution available for distribution, or such less favorable treatment as may be agreed upon by such Class 4 claimant and the Liquidating Trustee. From time to time thereafter, each holder of an Allowed General Unsecured Claim will receive on any Subsequent Distribution Date, its Pro Rata share of the amount of the Class 4 Distribution available for distribution, as determined by the Liquidating Trustee in accordance with the terms of the Liquidating Trust Agreement. The Sponsor Settlement contemplates that General Electric Capital will pay, or cause to be paid, to WMC on the Effective Date the Sponsor Settlement Amount, which is $192,600,000 in Cash plus the total outstanding amount due under the DIP Financing as of the Effective Date. In addition, on the Effective Date, GECUSH will provide the Exit Financing of $39,500,000. Further, as of the Effective Date, GEC and GECUSH will release (and cause their affiliates to release) any and all prepetition Claims against the Debtor, including approximately $93,500,000 owed to GE under various intercompany financing agreements. GE also will vote or cause to be voted its Claims and Equity Interests to accept the Plan and not object to, delay, impede, or take any other action to interfere with acceptance or implementation of the Plan. A copy of the Disclosure Statement is available at https://tinyurl.com/yyqa88em from dm.epiq11.com at no charge. About WMC Mortgage WMC Mortgage, LLC, directly and through various predecessors, was in the business of originating residential mortgage loans for more than 60 years. The collapse of the housing and financial markets presaging the Great Recession decimated WMC's loan origination business. By the second quarter of 2007, WMC had essentially stopped originating new loans and focused on winding down its operations and resolving substantial liabilities associated with its mortgage business. Over the past decade, WMC has been able to settle the gravamen of the litigation commenced against it, which primarily consisted of contract actions for breaches of representations and warranties WMC made in mortgage loan sale agreements relative to the attributes of the loans sold. WMC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-10879) on April 23, 2019. At the time of the filing, WMC estimated assets of between $1 million and $10 million and liabilities of between $100 million and $500 million. The case has been assigned to Judge Christopher S. Sontchi. WMC tapped Richards, Layton & Finger, P.A., as its bankruptcy counsel; Jenner & Block LLP as special litigation counsel; Alvarez & Marsal Disputes and Investigations, LLC, as financial advisor; and Epiq Corporate Restructuring, LLC as claims and noticing agent. WOW WEE: New Note Balance Owed to CFR Provided in Latest Plan ------------------------------------------------------------- Wow Wee, LLC filed its first amended disclosure statement in support of its proposed chapter 11 plan of reorganization. This latest filing reflects the new balance of the Note owed to Cash Flow Resources, LLC. The balance due on the Note is approximately $29,679.93 as of Feb. 2, 2019, and the Debtor will pay the balance due under the Note in monthly installments of $1,500 each until the balance due thereon is paid in full. The balance provided in the previous plan was $27,385.74. A copy of the First Amended Disclosure Statement is available at https://tinyurl.com/y4dtx5fn from Pacermonitor.com at no charge. About Wow Wee The business of Wow Wee, LLC, consists of the wholesale and retail sale of various "dipping sauces" that it produces at its facility in Cut Off, Louisiana. Wow Wee, LLC, filed a voluntary petition for relief under Chapter 11 of Title 11, United States Code (Bankr. E.D. La. Case No. 18-12729) on Oct. 12, 2018, estimating under $1 million in assets and liabilities. Darryl T. Landwehr, Esq., at Landwehr Law Firm, is the Debtor's counsel. XPEERANT INC: Cuts Unsecured Creditors' Recovery to 20% in New Plan ------------------------------------------------------------------- A hearing regarding the adequacy of the Amended Disclosure Statement explaining the Amended Chapter 11 Plan filed by Xpeerant Incorporated and Gary Don Petty and Barbara Ann Petty and the objection thereto filed by the U.S. Trustee was held on Aug. 13. Oral findings and conclusions were made of record. The Bankruptcy Court ordered that the Debtor must file a Third Amended Joint Disclosure Statement and a Third Amended Joint Chapter 11 Plan of Reorganization on or before August 14, 2019. The Bankruptcy Court said it will issue a separate order approving the Third Amended Joint Disclosure Statement and setting a confirmation hearing for September 26, 2019, at 1:30 p.m. Accordingly, at the Court's order, the Debtors filed a Third Amended Plan and accompanying Disclosure Statement modifying the treatment of allowed claims held by unsecured creditors. General unsecured creditors, classified in Class 3, are impaired. Allowed Class 3 claimants will receive payment of at least 20% of their claims. Class 3 claimants will additionally be entitled to receive proceeds, net of fees and costs, obtained from any action undertaken by Xpeerant to collect Avoidance Actions and net of any unpaid Unclassified Priority Claims. A full-text copy of the Amended Disclosure Statement is available at https://tinyurl.com/y353rz2v from PacerMonitor.com at no charge. About Xpeerant Inc. Headquartered in Fort Collins, Colorado, Xpeerant Incorporated is a recruitment agency that supplies employees to companies within the semi-conductor and technical industry. Xpeerant Inc. filed its voluntary petition pursuant to Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case no. 18-17700) on Aug. 31, 2018. The petition was signed by Gary Petty, authorized representative. At the time of filing, the Debtor disclosed $48,215 in total assets and $1,469,565 in total liabilities. Kutner Brinen PC, led by Lee M. Kutner, serves as counsel to the Debtor. YORAVI INVESTMENT: To Pay Treasury's Claim in Full in 60 Months --------------------------------------------------------------- Yoravi Investments, Inc., filed supplements to their Third Amended Chapter 11 Plan. On February 22, 2019, the Debtor filed its Third Amended Plan of Reorganization. The Plan contemplated the objection to the Proof of Claim filed by the Puerto Rico Treasury Department. The Treasury's claim was in the amount of $13,838.03. The Debtor objected to POC #6 on February 7, 2019. The Treasury flied an amended claim in the amount of $10,727.67 on June 12, 2019. Although the Debtor does not recognize that this is a valid claim, it will no longer contest the same since it is not cost effective to do so. On August 9, 2019, the Debtor supplemented its Third Amended Plan to include the payment amount to Treasury Department. A copy of that Supplement is available at https://tinyurl.com/yyyghoxu from PacerMonitor.com at no charge. There was an error in the calculation of the monthly payment which the Debtor corrected by filing an Amended Supplement, a copy of which is available at https://tinyurl.com/y6stxxag from PacerMonitor.com at no charge. Consequently, the Debtor supplemented its Third Plan of Reorganization as follows: The Debtor will pay Treasury's claim at POC #6-2 in full in sixty (60) monthly installments of $178.79. About Yoravi Investment Yoravi Investments, Inc., owns a real estate property at Centro Comercial Turabo Gardens valued at $1.10 million. Yoravi Investments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-05446) on Aug. 1, 2017. In the petition signed by Rafael E. Acosta Santiago, vice-president and treasurer, the Debtor disclosed $1.15 million in assets and $714,000 in liabilities. Judge Edward A. Godoy presides over the case. The Debtor tapped Godreau & Gonzalez Law, LLC, as its bankruptcy counsel, and Enrique Peral Soler, Esq., as special counsel. [^] BOND PRICING: For the Week from August 12 to 16, 2019 --------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- Acosta Inc ACOSTA 7.750 13.694 10/1/2022 Acosta Inc ACOSTA 7.750 14.379 10/1/2022 Alta Mesa Holdings LP / Alta Mesa Finance Services Corp ALTMES 7.875 24.389 12/15/2024 Approach Resources Inc AREX 7.000 24.870 6/15/2021 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 BPZ Resources Inc BPZR 6.500 3.017 3/1/2015 Bank of America Corp BAC 3.773 99.407 8/22/2019 Bon-Ton Department Stores Inc/The BONT 8.000 10.625 6/15/2021 Bristow Group Inc BRS 6.250 19.500 10/15/2022 Bristow Group Inc BRS 4.500 19.500 6/1/2023 California Resources Corp CRC 5.500 53.890 9/15/2021 Cenveo Corp CVO 8.500 1.346 9/15/2022 Cenveo Corp CVO 8.500 1.346 9/15/2022 Cenveo Corp CVO 6.000 0.894 5/15/2024 Chukchansi Economic Development Authority CHUKCH 9.750 60.000 5/30/2020 Chukchansi Economic Development Authority CHUKCH 10.250 60.000 5/30/2020 Cloud Peak Energy Resources LLC / Cloud Peak Energy Finance Corp CLD 12.000 15.250 11/1/2021 Cloud Peak Energy Resources LLC / Cloud Peak Energy Finance Corp CLD 6.375 0.313 3/15/2024 Continental Airlines 2004-ERJ1 Pass Through Trust UAL 9.558 98.841 9/1/2019 DFC Finance Corp DLLR 10.500 67.125 6/15/2020 DFC Finance Corp DLLR 10.500 67.125 6/15/2020 Denbury Resources Inc DNR 6.375 57.729 8/15/2021 Denbury Resources Inc DNR 5.500 40.054 5/1/2022 Ditech Holding Corp DHCP 9.000 0.250 12/31/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 9.073 2/15/2025 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 9.375 20.741 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 6.375 0.843 6/15/2023 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 1.698 9/1/2022 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 9.375 20.673 5/1/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 11.019 2/15/2025 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 1.265 9/1/2022 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 1.265 9/1/2022 Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 FedEx Corp FDX 2.300 100.023 2/1/2020 Federal Farm Credit Banks FFCB 2.490 99.610 5/17/2023 Federal Farm Credit Banks FFCB 2.650 99.548 9/5/2025 Federal Farm Credit Banks FFCB 2.440 99.670 6/27/2022 Federal Farm Credit Banks FFCB 2.740 99.463 9/5/2025 Federal Farm Credit Banks FFCB 2.800 99.615 7/24/2025 Federal Farm Credit Banks FFCB 2.750 99.503 8/14/2025 Federal Farm Credit Banks FFCB 2.250 99.327 3/14/2022 Federal Farm Credit Banks FFCB 2.270 99.648 3/23/2022 Federal Farm Credit Banks FFCB 2.470 99.682 1/3/2023 Federal Farm Credit Banks FFCB 2.280 99.554 3/23/2022 Federal Farm Credit Banks FFCB 2.200 99.632 1/22/2021 Federal Home Loan Banks FHLB 3.500 99.465 6/19/2037 Federal Home Loan Banks FHLB 2.770 99.406 2/23/2026 Ferrellgas Partners LP / Ferrellgas Partners Finance Corp FGP 8.625 74.484 6/15/2020 Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011 Foresight Energy LLC / Foresight Energy Finance Corp FELP 11.500 38.173 4/1/2023 Foresight Energy LLC / Foresight Energy Finance Corp FELP 11.500 38.235 4/1/2023 Frontier Communications Corp FTR 10.500 51.137 9/15/2022 Frontier Communications Corp FTR 8.500 59.291 4/15/2020 Frontier Communications Corp FTR 6.250 49.589 9/15/2021 Frontier Communications Corp FTR 8.750 49.330 4/15/2022 Frontier Communications Corp FTR 9.250 52.045 7/1/2021 Frontier Communications Corp FTR 8.875 53.356 9/15/2020 Frontier Communications Corp FTR 10.500 51.701 9/15/2022 Frontier Communications Corp FTR 10.500 51.701 9/15/2022 Grizzly Energy LLC VNR 9.000 6.000 2/15/2024 Grizzly Energy LLC VNR 9.000 6.000 2/15/2024 Halcon Resources Corp HKUS 6.750 14.000 2/15/2025 Halcon Resources Corp HKUS 6.750 14.390 2/15/2025 Halcon Resources Corp HKUS 6.750 14.375 2/15/2025 Halcon Resources Corp HKUS 6.750 11.500 2/15/2025 Halcon Resources Corp HKUS 6.750 14.375 2/15/2025 High Ridge Brands Co HIRIDG 8.875 8.005 3/15/2025 High Ridge Brands Co HIRIDG 8.875 8.005 3/15/2025 Hornbeck Offshore Services Inc HOS 5.875 57.627 4/1/2020 Hornbeck Offshore Services Inc HOS 5.000 47.441 3/1/2021 Hornbeck Offshore Services Inc HOS 1.500 95.500 9/1/2019 Legacy Reserves LP / Legacy Reserves Finance Corp LGCY 8.000 3.690 12/1/2020 Legacy Reserves LP / Legacy Reserves Finance Corp LGCY 6.625 6.000 12/1/2021 Legacy Reserves LP / Legacy Reserves Finance Corp LGCY 8.000 3.500 9/20/2023 Lehman Brothers Inc LEH 7.500 1.847 8/1/2026 MF Global Holdings Ltd MF 9.000 14.750 6/20/2038 MF Global Holdings Ltd MF 6.750 14.750 8/8/2016 MModal Inc MODL 10.750 6.125 8/15/2020 Mashantucket Western Pequot Tribe MASHTU 7.350 16.250 7/1/2026 Motorola Solutions Inc MSI 3.500 102.094 9/1/2021 Murray Energy Corp MURREN 11.250 23.654 4/15/2021 Murray Energy Corp MURREN 11.250 23.578 4/15/2021 Murray Energy Corp MURREN 9.500 19.250 12/5/2020 Murray Energy Corp MURREN 9.500 19.250 12/5/2020 NWH Escrow Corp HARDWD 7.500 60.000 8/1/2021 NWH Escrow Corp HARDWD 7.500 57.405 8/1/2021 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 35.526 10/25/2024 New Gulf Resources LLC/ NGR Finance Corp NGREFN 12.250 3.963 5/15/2019 New WEI Inc WLTG 8.500 0.834 4/15/2021 Northwest Hardwoods Inc HARDWD 7.500 58.538 8/1/2021 Northwest Hardwoods Inc HARDWD 7.500 58.538 8/1/2021 Pernix Therapeutics Holdings Inc PTX 4.250 2.250 4/1/2021 Pernix Therapeutics Holdings Inc PTX 4.250 2.250 4/1/2021 Pioneer Energy Services Corp PESX 6.125 37.746 3/15/2022 Powerwave Technologies Inc PWAV 3.875 0.153 10/1/2027 Powerwave Technologies Inc PWAV 1.875 0.153 11/15/2024 Powerwave Technologies Inc PWAV 1.875 0.153 11/15/2024 Powerwave Technologies Inc PWAV 3.875 0.153 10/1/2027 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rolta LLC RLTAIN 10.750 8.010 5/16/2018 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 8.000 43.500 6/15/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.125 17.250 11/1/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.375 9.447 11/1/2021 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 8.000 40.962 6/15/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.125 9.773 11/1/2020 Sable Permian Resources Land LLC / AEPB Finance Corp AMEPER 7.375 9.447 11/1/2021 Sanchez Energy Corp SNEC 6.125 4.250 1/15/2023 Sanchez Energy Corp SNEC 7.750 4.540 6/15/2021 SandRidge Energy Inc SD 7.500 0.534 2/15/2023 Sears Holdings Corp SHLD 6.625 7.000 10/15/2018 Sears Holdings Corp SHLD 6.625 6.930 10/15/2018 Sears Roebuck Acceptance Corp SHLD 7.500 1.000 10/15/2027 Sears Roebuck Acceptance Corp SHLD 6.500 1.000 12/1/2028 Sears Roebuck Acceptance Corp SHLD 6.750 1.000 1/15/2028 Sears Roebuck Acceptance Corp SHLD 7.000 1.000 6/1/2032 Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014 Sempra Texas Holdings Corp TXU 9.750 93.750 10/15/2019 Stearns Holdings LLC STELND 9.375 50.004 8/15/2020 Stearns Holdings LLC STELND 9.375 50.004 8/15/2020 Tapstone Energy LLC / Tapstone Energy Finance Corp TAPENE 9.750 66.250 6/1/2022 Tapstone Energy LLC / Tapstone Energy Finance Corp TAPENE 9.750 45.000 6/1/2022 TerraVia Holdings Inc TVIA 6.000 4.644 2/1/2018 Transworld Systems Inc TSIACQ 9.500 26.000 8/15/2021 Transworld Systems Inc TSIACQ 9.500 26.000 8/15/2021 UCI International LLC UCII 8.625 4.780 2/15/2019 Ultra Resources Inc UPL 7.125 8.005 4/15/2025 Ultra Resources Inc UPL 6.875 7.901 4/15/2022 Ultra Resources Inc UPL 6.875 8.487 4/15/2022 Ultra Resources Inc UPL 7.125 7.948 4/15/2025 Windstream Services LLC / Windstream Finance Corp WIN 7.500 29.500 6/1/2022 Windstream Services LLC / Windstream Finance Corp WIN 6.375 28.563 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.750 26.621 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 6.375 25.609 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.750 29.500 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 7.750 25.161 10/15/2020 Windstream Services LLC / Windstream Finance Corp WIN 7.750 24.511 10/1/2021 rue21 inc RUE 9.000 1.428 10/15/2021 ********* 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 ***