/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/191108.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 8, 2019, Vol. 23, No. 311 Headlines 1230 SOUTH ASSOCIATES: Case Summary & 2 Unsecured Creditors ADVANCE SPECIALTY: Dec. 11 Plan Confirmation Hearing Set ALPHABET HOLDING: S&P Alters Outlook to Stable, Affirms B- ICR APC AUTOMOTIVE: Moody's Affirms Caa2 CFR, Outlook Negative ASC INSULATION: Case Summary & 20 Largest Unsecured Creditors AUTORAMA ENTERPRISES: Interest Holders to Contribute $210K for Plan BED BATH: S&P Lowers ICR to 'BB' on Weak Operating Performance BRETOUS ENTERPRISE: U.S. Trustee Unable to Appoint Committee C&M PLASTICS: Interest Holders to Contribute $5,000 to Fund Plan CAMBIUM LEARNING: Fitch Affirms B LT IDR, Outlook Stable CAMBIUM LEARNING: Moody's Affirms B3 CFR, Outlook Stable CAMBREX CORP: Moody's Assigns B3 CFR, Outlook Stable CANNON & CANNON: Unsecureds to Get $100,000 Under Plan CJ AUTO USED PARTS: Plan & Disclosures Due Jan. 13, 2020 COCOA EXPO: Involuntary Chapter 11 Case Summary COSTA HOLLYWOOD: U.S. Trustee Unable to Appoint Committee CPI CARD: Incurs $684,000 Net Loss in Third Quarter EPIC Y-GRADE: Moody's Affirms B3 CFR & Alters Outlook to Positive EQUINIX INC: Moody's Rates Proposed Sr. Unsec. Notes Ba1 FCH MCKINNEY: Plan Payments to be Funded by Property Sale Proceeds FIRST CLASS PRINTING: Case Summary & 20 Top Unsecured Creditors GRACE GARDEN: U.S. Trustee Unable to Appoint Committee GUE LIQUIDATION: Opposes 3-Month Delay of Plan Process H & S TRUCK: U.S. Trustee Unable to Appoint Committee JCV GROUP: Case Summary & 20 Largest Unsecured Creditors KINKY CAB: Medallion Bank Says Plan Cannot Be Confirmed LACKNER RODRIGUEZ: Case Summary & 20 Largest Unsecured Creditors LASV INC: SCB Objects to Plan & Disclosure Statement LEGACY TRADITIONAL: Moody's Rates 2019 Education Bonds Ba2 MAXAR TECHNOLOGIES: S&P Affirms 'B' ICR; Outlook Negative MEDIAOCEAN LLC: Moody's Rates New First Lien Bank Loans B2 MONKEY TOES: Case Summary & 10 Unsecured Creditors MSCI INC: S&P Rates New $500MM Senior Unsecured Notes 'BB+' MY2011 GRAND: Case Summary & 5 Unsecured Creditors NRC US: Moody's Withdraws B2 CFR After Acquisition by US Ecology ONE CALL: S&P Raises ICR to 'B-' on Distressed Debt Exchange PAYLESS HOLDINGS: Unsecureds to Recover 3.6% to 4.8% Under Plan PGN DESIGN: Voluntary Chapter 11 Case Summary PHOENIX HOLDINGS: Seeks to Hire Rosen & Kantrow as Legal Counsel PUERTO RICO HOSPITAL: B. Braun Objects to Disclosure Statement PUERTO RICO HOSPITAL: Becton Objects to Disclosure Statement PWR INVEST: Wants Disclosure Statement Hearing be Set on Nov. 26 SADDY FAMILY: SCB Objects to Plan & Disclosure Statement SIENNA BIOPHARMA: Taps Cowen and Company as Investment Banker SIENNA BIOPHARMA: Taps Epiq Corporate as Administrative Advisor SIENNA BIOPHARMA: Taps Force Ten Partners as Financial Advisor SIENNA BIOPHARMA: Taps Latham & Watkins as Legal Counsel SIENNA BIOPHARMA: Taps Young Conaway as Co-Counsel SILGAN HOLDINGS: S&P Rates New $300MM Senior Unsecured Notes 'BB-' SJV INC: SCB Objects to Plan & Disclosure Statement STO-ROX SCHOOL: Moody's Reviews B2 GOULT Bonds Rating for Downgrade SUMMITSOFT CORPORATION: Case Summary & 20 Top Unsecured Creditors SYMANTEC CORP: S&P Lowers ICR to 'BB' on Higher Leverage SYNCHRONY FINANCIAL: Fitch to Rate Series A Preferred Stock B(EXP) TARRANT COUNTY SENIOR: Case Summary & 23 Top Unsecured Creditors TERRA BIDCO: S&P Assigns 'B' Issuer Credit Rating; Outlook Stable UNIT CORP: Fitch Lowers LT Issuer Default Rating to CCC+ VERNON PARK: Court Confirms Plan of Reorganization WALKER MACHINE: Case Summary & 3 Unsecured Creditors WASH MULTIFAMILY: S&P Lowers ICR to 'B-' on Weak Liquidity YUETING JIA: Wants Plan & Disclosure Hearing be Set for Dec. 16 [^] BOOK REVIEW: Bendix-Martin Marietta Takeover War ********* 1230 SOUTH ASSOCIATES: Case Summary & 2 Unsecured Creditors ----------------------------------------------------------- Debtor: 1230 South Associates LLC 2 Murray Drive Parkersburg, WV 26101 Business Description: 1230 South Associates LLC is a privately held company in Parkersburg, West Virginia. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court Southern District of West Virginia (Parkersburg) Case No.: 19-60158 Debtor's Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE 3818 MacCorkle Ave. S.E. Suite 101 P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@frontier.com & chuckriffee@frontier.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Romine, member manager. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at: http://bankrupt.com/misc/wvsb19-60158.pdf ADVANCE SPECIALTY: Dec. 11 Plan Confirmation Hearing Set -------------------------------------------------------- On Sept. 9, 2019, Advance Specialty Care, LLC, filed with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, a Third Amended Disclosure Statement and Third Amended Chapter 11 Plan. On Oct. 22, 2019, Judge Robert N. Kwan approved the disclosure statement and established the following dates and deadlines: * Nov. 22, 2019, is the deadline for the submission of ballots. * Nov. 22, 2019, is fixed as the last day of filing any objections to confirmation of the Plan. * Dec. 11, 2019, at 11:00 a.m., is a fixed date for the plan confirmation hearing. A full-text copy of the order dated Oct. 22, 2019, is available at https://tinyurl.com/y6nwspgj from PacerMonitor.com at no charge. About Advance Specialty Care Based in Los Angeles, California, Advance Specialty Care, LLC, is a home-health care provider offering nursing, physical therapy, occupational therapy, speech pathology, medical social, and home health aide services. The company previously sought bankruptcy protection on March 19, 2016 (Bankr. C.D. Cal. Case No. 16-13521) and Oct. 24, 2017 (Bankr. C.D. Cal. Case No. 17-23070). Advance Specialty Care, LLC, a/k/a ASC, LLC filed a Chapter 11 protection (Bankr. C.D. Cal. Case No. 17-24737) on Nov. 30, 2017. In the petition signed by CFO Moises L. Simbulan, the Debtor was estimated to have $500,000 to $1 million in assets and $10 million to $50 million in liabilities. The case is assigned to Judge Robert N. Kwan. ALPHABET HOLDING: S&P Alters Outlook to Stable, Affirms B- ICR -------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on U.S.-based Alphabet Holding Company Inc., parent company of The Nature's Bounty Co. and revised the outlook to stable. S&P is concurrently affirming its 'B+' issue-level rating on Alphabet's senior secured asset-based revolver (ABL), 'B-' issue-level rating on the company's senior secured first-lien term loan, and 'CCC' issue-level rating on the company's senior secured second-lien term loan. The outlook revision reflects S&P's expectation for good profit growth, solid free cash flow generation, and improved credit metrics, well ahead of the rating agency's prior forecast. S&P estimates leverage will finish in the high-7x area at fiscal year-end 2019 and expect it will improve to the mid-7x area at fiscal year-end 2020, versus the mid-9x area at fiscal year-end 2018. Improved credit metrics stem primarily from cost savings from restructuring activities, including the closure of several manufacturing and distribution facilities. S&P believes the company will still achieve incremental cost savings over the next year, but they will be largely reinvested into innovation and marketing, such that margin improvement will be modest. The stable outlook reflects S&P's expectation for modest profit growth, free cash flow in excess of $40 million, and steady credit metric improvement, including leverage below 8x over the next 12 months. S&P expects management will reinvest cost savings from existing restructuring initiatives into innovation and marketing and help reinvigorate stale brands, though the rating agency expects sales growth will only be modest as the company remains challenged in a highly competitive environment with many branded players and a strong private-label presence. "We could lower the rating if operating performance deteriorates and leverage approaches the 10x area, EBITDA interest coverage declines to around 1.5x, or free cash flow weakens to a point where the capital structure's sustainability is in question," S&P said. This could occur if the promotional intensity from Alphabet's branded and private label competitors unexpectedly accelerates, loses business with key customers, or if the company implements additional restructuring initiatives and experiences operational missteps, according to the rating agency. S&P estimates EBITDA would need to decline about 15% for EBITDA interest coverage to weaken to 1.5x. "We could raise the rating if the company is able to deliver organic revenue and profit growth and we forecast leverage to be sustained at or below 7x. This would be predicated on our view that the company will not transact a large debt-financed acquisition or initiate a new restructuring program that will create a significant drag on free cash flow and profitability," S&P said. APC AUTOMOTIVE: Moody's Affirms Caa2 CFR, Outlook Negative ---------------------------------------------------------- Moody's Investors Service views the proposed amendment to APC Automotive Technologies, LLC's senior secured first lien credit agreement and conversion of second lien debt to equity as a distressed exchange default. Moody's downgraded APC's Probability of Default Rating to Caa3-PD from Caa2-PD and the company's senior secured first lien term loan rating to Caa3 from Caa1. The downgrade of the first lien term loan rating to Caa3 reflects Moody's estimated recovery on the debt instrument as a result of the transaction and the high likelihood of a near term default. Moody's affirmed the Caa2 Corporate Family Rating (CFR) and the outlook remains negative. Upon closing of the transaction, Moody's expects to upgrade the PDR to Caa2-PDR/LD to reflect the limited default event. The "/LD" designation will be subsequently removed approximately three business days later. "The transaction alleviates some liquidity pressure over the next year and reduces leverage on a pro forma basis through the full equitization of the second lien term loan," says Mike Cavanagh, Moody's lead analyst for APC. "However, we still expect leverage to remain very high at above 12x debt/EBITDA (Moody's adjusted) and liquidity to remain tight with negative free cash flow expected in 2020 despite the elimination of the second lien interest and partial pay-in-kind interest on a portion of the new term loans." Moody's affirmed the Caa2 CFR because the high leverage and negative free cash flow following the transaction will continue to create elevated risk of another restructuring absent a significant operational turnaround. The PDR downgrade to Caa3-PD reflects the high likelihood of the proposed distressed exchange transactions occurring within the next few weeks. The amendment to APC's first lien credit agreement provides the company with $50 million in new money investment and a conversion of the existing first lien term loan into various tranches of new debt. A portion of the existing first lien term loan along with the new $50 million cash injection will be allocated to three tranches of new A term loans (A1 -A3), which will have a 1.5 lien on the ABL priority collateral, first lien first out position on the remaining collateral, and include varying PIK options within the first 12 to 18 months. Lenders have an option to convert the balance of the existing first lien term loan to a new term loan B that pays cash interest, has a second lien on the ABL priority collateral and a first lien second out position on the remaining collateral. Lenders that agree to convert to the new term loan B would receive a pro-rata share of a $10 million paydown at par. Any remaining first lien term loan would have a third lien on the ABL priority collateral and a first lien third out position on the remaining collateral. Approximately 61% of existing first lien lenders have agreed to participate in the exchange into new A term loans and to backstop $25 million of the new cash contribution. The existing equity sponsors have agreed to contribute the other $25 million cash investment. APC will utilize the $50 million cash investment to fund the $10 million first lien term loan payment, and add cash to the balance sheet some of which could be used to pay down the ABL revolver. Moody's took the following rating actions for APC Automotive Technologies, LLC: Downgrades: Issuer: APC Automotive Technologies, LLC Probability of Default Rating, Downgraded to Caa3-PD from Caa2-PD Senior Secured First Lien Term Loan, Downgraded to Caa3 (LGD3) from Caa1 (LGD3) Affirmations: Issuer: APC Automotive Technologies, LLC Corporate Family Rating, Affirmed at Caa2 Outlook Actions: Issuer: APC Automotive Technologies, LLC Outlook, Remains Negative RATINGS RATIONALE The Caa2 CFR reflects APC's very high debt/EBITDA leverage (16x as of LTM 6/30/19 incorporating Moody's standard adjustments), deteriorating EBITDA margin and weak liquidity with continually negative free cash flow. Moody's believes the risk of another restructuring is high even with the expected improvement in EBITDA in 2020 and the reduction in leverage and cash interest from the proposed transactions. The recapitalization will provide additional liquidity cushion over the next 12 months with $50 million in new money investment and cash savings on interest expense because of the PIK feature of the new A term loans. This liquidity reprieve allows the company additional runway over the next 12 months to realize cost savings from shifting production to Mexico. However, liquidity will remain tight in 2020 based on Moody's expectation for negative free cash flow and continued high usage on the company's $90 million asset-based revolving credit facility. Moody's anticipates APC's EBITA margin to trough by the end of 2019 and moderately improve in 2020 as the company realizes some cost savings from its restructuring initiatives. The company's earnings still remain highly vulnerable, though, to competitor actions and raw material price volatility. Moody's expects leverage to continue to strain the credit profile with debt/EBITDA likely to remain very high at above 12x despite moderate improvement in profitability in 2020. The negative outlook reflects Moody's view that the company will be challenged to meaningfully improve its operating performance, leverage and liquidity in the next 12 months, leading to elevated risk of another restructuring and potential weakening of recovery prospects. The ratings could be downgraded if the company is unable to improve EBITDA and free cash flow generation due to challenges in the operating environment, increases in material, labor or freight costs, or an inability to translate anticipated cost savings into higher earnings. A deterioration in liquidity, increased potential for another balance sheet restructuring, or reduction in debt recovery expectations could also result in a downgrade. The ratings could be upgraded if the company improves its operating performance and realizes sufficient sustained improvements in earnings, including the achievement of planned synergies, to meaningfully reduce leverage. An upgrade would also require positive free cash flow generation and the maintenance of at least adequate overall liquidity. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. APC is a domestically focused emissions manufacturer and brake and chassis distributor in the automotive aftermarket. The company's products include drums and rotors, catalytic converters, friction, chassis, calipers and other products. Revenue for the 12 months ended June 30, 2019 was approximately $462 million. The business is currently co-owned by Harvest Partners, LP and Audax Group. ASC INSULATION: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: ASC Insulation Fireproofing and Supplies, Inc. 607 Church Rd Elgin, IL 60123 Business Description: ASC Insulation Fireproofing -- http://www.ascfireproofing.com-- is a family-owned company specializing in commercial spray-applied fireproofing coatings, industrial coatings, intumescent coatings, and thermal and acoustical coatings. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court Northern District of Illinois (Eastern Division) Case No.: 19-31687 Judge: Hon. Timothy A. Barnes Debtor's Counsel: James A. Young, Esq. & Richard Larsen, Esq. JAMES YOUNG LAW 85 Market Street Elgin, IL 60123 Tel:8477931031 Fax: 8478413672 E-mail: jyoung@jamesyounglaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Castro, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb19-31687.pdf AUTORAMA ENTERPRISES: Interest Holders to Contribute $210K for Plan ------------------------------------------------------------------- Debtor Autorama Enterprises Inc., f/k/a Autorama Enterprises of Bronx Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York an Amended Disclosure Statement and Plan of Reorganization. Each Holder of a Class 2 Unsecured Claim will receive cash in the amount of 25% of its allowed Unsecured Claim in three equal payments, with the first payment to be made three months after the Effective Date, and the remaining two payments to be made on the anniversary of the initial payment. Holders of Class 3 Interest Holders shall receive no distribution, but shall retain their Interests in the Debtor in consideration for their new value contribution, which consists of $210,000 to be contributed by Interest Holders towards funding the Plan. Payments and distributions to be made under the Plan to the Holders of Administrative Claims, Priority Tax Claims, the NYS Tax Claim, the IRS Tax Claim, Bankruptcy Fees and Unsecured Claims shall be distributed to Creditors as set forth herein from either cash assets of the Debtor existing on the Effective Date; cash generated from operations following the Effective date; and an equity contribution from Interest Holders in the amount of $210,000. A full-text copy of the Amended Disclosure Statement dated Oct. 22, 2019, is available at https://tinyurl.com/y39vg3e9 from PacerMonitor.com at no charge. The Debtor is represented by: ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK PC A. Mitchell Greene 875 Third Avenue New York, New York 10022 Tel: (212) 603-6329 Fax: (212) 956-2164 E-mail: amg@robinsonbrog.com About Autorama Enterprises Autorama Enterprises Inc. is a dealer of used car automobiles headquartered in Bronx, New York. The Company also provides towing and auto repair services. Autorama previously sought bankruptcy protection on Jan. 11, 2017 (Bankr. S.D.N.Y. Case No. 17-40009). The prior case was dismissed on March 8, 2017. Autorama Enterprises filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 18-13837) on Nov. 28, 2018. In the petition signed by Daniel Powers, president, the Debtor had $1 million to $10 million in estimated assets and $500,000 to $1 million in estimated liabilities. The case has been assigned to Judge Stuart M. Bernstein. The Debtor is represented by Robinson Brog Leinwand Greene Genovese & Gluck, P.C. BED BATH: S&P Lowers ICR to 'BB' on Weak Operating Performance -------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Bed Bath & Beyond Inc. to 'BB' from 'BB+'. The outlook is negative. At the same time, S&P lowered the issue-level rating on the company's unsecured notes to 'BB' from 'BB+'. The downgrade reflects Bed Bath & Beyond's recent underperformance relative to S&P's previous expectations. S&P now forecasts adjusted leverage in the mid- to high-2x area at fiscal year-end 2019, up from its previous forecast of 2.1x, primarily reflecting the negative sales trends and a recent inventory write-down. Although S&P believes that fleet optimization and omni-channel initiatives will result in modest top-line and EBITDA margin recovery in 2020, the rating agency believes substantial operating performance improvement is uncertain. The negative outlook reflects S&P's expectation that intense competition from online and traditional retailers will continue to pressure operating profits at BBBY, and that uncertainty remains around whether the company can successfully execute its strategy to improve operating trends over the next 12 months. S&P expects increased competition, elevated promotional activities, and rising costs related to the omni-channel platform, compounded with the recent inventory write-down to result in EBITDA margin erosion to the mid-9% area over the next 12 months. S&P also expects credit metrics to weaken, with debt to EBITDA in the mid- to high-2x area by fiscal year-end 2019. "We could lower the ratings if we expect debt to EBITDA of 3x or above on a sustained basis. This could happen if the company's EBITDA margin further contracted 200 bps compared to our base case. We could also lower the ratings if BBBY fails to gain traction on its strategic initiatives or industry competition further intensifies, leading us to view the company's competitive standing and profitability profile less favorably," S&P said. "We could revise the outlook to stable if the company successfully executes on key initiatives related to omni-channel, inventory, loyalty, and fleet optimization, resulting in a more compelling and differentiated shopping experience for consumers," S&P said, adding that this would lead to improved sales trends and stabilized profitability measures including EBITDA and EBITDA margin. Under this scenario, the rating agency would also expect the company to maintain leverage of below 3x. BRETOUS ENTERPRISE: 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 Bretous Enterprise LLC, according to court dockets. About Bretous Enterprise Bretous Enterprise LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-22339) on Sept. 16, 2019. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. The case is assigned to Judge Robert A. Mark. The Debtor is represented by Marilyn L. Maloy, Esq., at Maloy Law Group, LLC. C&M PLASTICS: Interest Holders to Contribute $5,000 to Fund Plan ---------------------------------------------------------------- Debtors C&M Plastics, LLC, and Sandra Craven filed with the U.S. Bankruptcy Court for the District of Arizona a First Amended Joint Disclosure Statement. C&M anticipates the total amount of Allowed Unsecured Claims will be approximately $1,398,337.22 owed for business-related debt. Allowed unsecured claims of creditors (Class 1-F) will be paid on a pro-rata share from the Debtors' excess cash flow, on a quarterly basis, in an amount sufficient to fund the value of the Debtors' Liquidation Equity, after all senior allowed claims have been paid in accordance with the terms of the Plan. Interest holders will contribute to C&M the sum of $5,000 coupled with an interest free loan in the amount of $75,000 to be repaid back to Interest Holders over four years beginning in 2021. The Interet Holders shall retain their Allowed Interest in C&M and until all senior Allowed Claims are paid in full in accordance with the terms of the Plan, the Interest Holders shall receive no distribution on account of their Allowed Interests. The Projected Excess Income of Ms. Craven is sufficient over the term of the Plan for Ms. Cravent to pay her Allowed Administrative Claims, Allowed Priority Unsecured Claims, and the distribution to general unsecured creditors in the amount of $200,000. A full-text copy of the Disclosure Statement dated Oct. 22, 2019, is available at https://tinyurl.com/y59nf27o from PacerMonitor.com at no charge. About C&M Plastics LLC C&M Plastics -- http://www.cm-plastics.com/-- is an (EBM) Extrusion Blow molding company with over 25 years of experience in manufacturing and packaging for the nutraceutical, pharmaceutical, food, beverage, and cosmetic industries. C&M Plastics offers a wide range of services such as custom EMB molds, bottle design, custom packaging and filling, manufacturing, inventory management and stocking programs. The Company is headquartered in Phoenix, Arizona. C&M Plastics filed a Chapter 11 petition (Bankr. D. Ariz. Case No.19-01871), on Feb. 21, 2019. The petition was signed by Sandra Craven, manager/member. The case is assigned to Judge Madeleine C. Wanslee. The Debtor is represented by Patrick F. Keery, Esq., at Keery McCue, PLLC. At the time of filing, the Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. No official committee of unsecured creditors has been appointed in the Chapter 11 case. CAMBIUM LEARNING: Fitch Affirms B LT IDR, Outlook Stable -------------------------------------------------------- Fitch Ratings affirmed the Long-Term Issuer Default Rating of Cambium Learning Group, Inc. at 'B'. Fitch has assigned a 'BB'/'RR1' rating to the incremental first lien term loan and a 'CCC+'/'RR6' rating to the second lien term loan. Fitch assigned 'B' IDRs to co-borrowers, VKidz Holding, Corp. and Cambium Assessment, Inc. Cambium, VKidz Holding Corp. and Cambium Assessment are co-borrowers under the incremental first lien and second lien facilities. The Rating Outlook is Stable. The ratings are prompted by Cambium's proposed issuance of $388 million in incremental debt to fund the company's acquisition of AIR Assessment (AST), a leading provider of digital summative assessments. The new debt consists of a $295 million incremental first lien term loan and a $93 million incremental second lien term loan. While the acquisition is neutral to the company's leverage metrics, Fitch recognizes the increased execution risk given that the AST acquisition is transformative. Fitch believes that Cambium is more weakly positioned in the 'B' rating category given the company's still relatively smaller scale, high leverage and Fitch's expectations that the company is likely to remain acquisitive as it looks to expand its product portfolio and increase its share of the K-12 digital assessment and supplemental education market. Fitch believes that there is limited cushion at the current rating level, and incremental debt-financed acquisitions or operational weakness could result in a downgrade. Fitch estimates pro forma total leverage, as measured as total debt with equity credit to operating EBITDA, will approximate 7.0x based on combined EBITDA of roughly $122 million for the last twelve months (LTM) period ending Sept. 30, 2019. This includes the operating performance of Cambium and pro forma adjustments for the inclusion of VKidz and AST and the $6.3 million in anticipated cost savings associated with the AST acquisition. Fitch does not include changes in deferred revenue in estimating total leverage. Fitch believes that the transaction has positive strategic merits including greatly improving Cambium's scale (2x in terms of revenues and EBITDA) and diversification and adding to the stability of cash flow generation. Fitch expects Cambium will benefit from the addition of AST's testing products as student summative assessments are federally mandated by the Every Student Succeeds Act (ESSA) for grades three and over in Math and English Language Arts. Cambium will also have a more comprehensive platform and digital offering which spans assessment to supplemental instruction solutions for the K-12 segment. Notably, AST's contract lengths span multiple years (about 7 years), which provides a greater degree of visibility into operating performance. Fitch also anticipates that Cambium will employ its extensive sales forces to help expand AST's penetration with states over the medium to longer term. Cambium pursued this strategy with the acquisition of VKidz and has generally exceeded Fitch's expectations with VKidz' total bookings up nearly 13.9% year-over-year for the first nine months ended Sept. 30, 2019. The ratings are supported by Cambium's expanding scale and FCF generation, its exposure to the digital K-12 assessment and supplemental learning market, which will continue to benefit from sector tailwinds, the company's high customer retention rates, and well-regarded products. The ratings also incorporate that the digital supplemental learning market is highly fragmented and will remain competitive. However, Fitch believes that Cambium's established sales and marketing team will remain a competitive advantage in retaining and growing share in the digital supplemental space. KEY RATING DRIVERS AST Acquisition: The ratings incorporate the announced acquisition of AST, a leading provider of student summative assessments for a purchase price of $383 million, which represents a roughly 7.5x multiple of cash adjusted EBITDA per Fitch estimates. Fitch views the acquisition positively as it expands the company's platform into the student assessment market. The acquisition will roughly double the company's revenues and EBITDA and provide for additional cash flow stability. Student assessments are federally mandated and adopted on a state-by-state basis and contract lengths typically span multiple years. AST also has a very high customer retention rate and there are no recompetes until 2021. AST has a 20% market share of the summative assessment market (estimated total addressable market of approximately $1.2 billion). The company competes with Pearson and DRC but has 2x the number of state contracts for grades three through eight Math and English Language Assessments (ELA) than the next largest peer. Elevated Leverage: Fitch estimates that pro forma total leverage will approximate 7.0x, excluding changes in deferred revenue. Management has outlined $6.3 million in potential cost synergies related to shuttering of certain offices, front office headcount reductions and rackspace savings. Fitch believes these targeted cost reductions are largely achievable. While the transaction is leverage neutral, Fitch believes that management is focused on its strategy to expand the business both organically (by leveraging Cambium's established sales team) and through acquisitions to expand capabilities and penetration in the K-12 education segment. Fitch believes that incremental acquisitions could slow deleveraging capacity, despite the company's expanding FCF. Strong Sector Tailwinds: With the general raising of K-12 educational standards and the adoption of Common Core or some variant, there is an increased need for supplemental and more personalized learning to improve assessment results and student outcomes. Fitch expects a growing amount of school, district and state funding to be allocated towards digital. Cambium, with its presence in the digital supplemental instructional market, is poised to benefit from the transition to digital in the K-12 education market. Fitch notes that the digital assessment market provides for a less significant growth opportunity (total digital assessment market will grow at a 4% CAGR for 2017A through 2020E), but does recognize the opportunity to improve penetration of AST's products over the longer term. Improving Liquidity: Cambium has good liquidity supported by roughly $44 million in pro forma balance sheet cash and a $50 million revolving credit facility. Cambium's business is subject to seasonality owing to the buying cycle for education products, which historically resulted in cash generation occurring in the second half of the fiscal year. The AST acquisition will help smooth seasonality as the most of its revenues are earned during the school spring testing cycle (Q1 and Q2) and as such reduce the company's reliance on its revolver to fund seasonal fluctuations in cash flow. Fitch estimates that Cambium's FCF generation will exceed of $50 million over the rating horizon. Recession Resistant: Fitch believes that the digital assessment and supplemental instructional market is somewhat insulated from fluctuations in the general economy. K-12 spending is supported by diversified funding sources (federal 10%, state 45% and local 45%). Student summative assessments are federally mandated for grades three and above in Math and English Language Arts under the 2015 Every Student Succeeds Act (ESSA). Notably, Cambium on a stand-alone basis experienced robust growth through the last recessionary period and digital bookings have grown at a CAGR of roughly 20% from $25 million in 2008 to $178 million for the LTM period ending Sept. 30, 2019. Fitch believes that even during a period of state and local budget pressure, schools and districts will allocate a growing proportion of funding to digital learning solutions. DERIVATION SUMMARY Cambium is highly levered and is smaller than the larger and more diversified education peers, such as McGraw-Hill Global Education Holdings, LLC (B+/Stable Outlook), Houghton Mifflin Harcourt and Cengage Learning. Cambium is more narrowly focused on providing K-12 digital supplemental education materials. However, Cambium will benefit from rising K-12 education standards and the increasing use of digital supplemental instructional products outside of the classroom. Cambium has higher margins than peers owing to its concentration to digital (83% of total bookings). Fitch views the AST acquisition positively as it increases the company's scale and diversification and the digital assessment business provides better visibility into cash flows owing to the longer contract lengths (state level funding). Cambium is similarly levered to the core curriculum publishers on an FFO-adjusted leverage basis. KEY ASSUMPTIONS - Results reflect the VKidz acquisition and the buyout and recapitalization completed in December 2018 and the AST acquisition in late 2019; - Thereafter, total revenues grow in the low to mid-single digit range reflecting growth in assessment and digital supplemental products (offset somewhat by continued declines in the Voyager Sopris legacy print product). AST (assessment) growth supported by contract wins and no upcoming recompetes until 2021; - EBITDA margins decline from historical levels reflecting mix shift due to AST's lower profitability. Thereafter, modest EBITDA expansion reflects growth in digital products and realization of cost synergies offset somewhat by increased marketing and research and development investments; - Capital expenditures in a range of $20 million-$25 million annually to support integration and continued investments, but declines as a percentage of revenues (roughly 4%-5%) due to AST's lower capital intensity; - Minimal cash taxes; - FCF in excess of $50 million annually; - No near-term incremental acquisition activity; - Total leverage (excluding change in deferred revenues) declining to below 6.0x by 2022E; - The recovery analysis assumes that Cambium 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; - Fitch estimates an adjusted distressed enterprise valuation of $702 million using a 6.0x multiple and roughly $117 million in going-concern EBITDA. Cambium's going-concern EBITDA assumes that increased competition in the assessment and digital supplemental K-12 instructional market and recessionary pressure on state and local budget funding results in customer losses and slowing digital product growth. Additionally, margins are depressed by the company's need to reinvigorate its product sales and marketing. Fitch's estimate of going-concern EBITDA of $117 million, represents a 15% decline from pro forma cash adjusted EBITDA (including deferred revenues and anticipated cost savings following the vKidz and AST acquisition). - Fitch assumes that Cambium will receive a going-concern recovery multiple of 6.0x. The estimate considers several factors including the company's relatively smaller scale and product focus in the assessment and digital supplemental K-12 segment. The estimate also considers that HMH and Pearson have traded at a median EV/EBITDA of 12.2x and 10.9x, respectively. During the last financial recession, Pearson traded at about 8.0x EV/EBITDA, while neither McGraw-Hill nor HMH were public at the time. In 2014, Cengage emerged from bankruptcy with a $3.6 billion valuation, equating to an emergence multiple of 7.7x. The most recent textbook publishing transaction occurred in February 2019 with Pearson's announced sale of its K-12 business for $250 million or 9.5x operating profit (EBITDA was not disclosed). In March 2013, Apollo Global Management LLC acquired McGraw-Hill from S&P Global, Inc. for $2.5 billion, or a multiple of estimated EBITDA of approximately 7x. Notably, the 6x going-concern recovery multiple is below the recent transactions, including Cambium's acquisition of vKidz for $98 million representing an 11x multiple of cash adjusted EBITDA and acquisition of AST for roughly 7.5x. - Fitch assumes a fully drawn revolver in its recovery analysis since credit revolvers are tapped as companies are under distress. Fitch assumes a full draw on Cambium's $50 million revolver. - Fitch estimates strong recovery prospects for the first lien credit facilities and rates them 'BB'/'RR1', or three notches above Cambium's 'B' IDR. Fitch estimates limited recovery prospects for the second lien term loan and rates it 'CCC+'/'RR6', two notches below Cambium's IDR. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Total leverage below 5.5x on a sustained basis and further reduces business segment and product concentration. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Total leverage exceeds 7.0x on a sustained basis driven by operational issues or additional debt-funded M&A; -- FCF margin remains below 5%. LIQUIDITY AND DEBT STRUCTURE Improving Liquidity: Cambium has good liquidity supported by roughly $40 million in balance sheet cash and a $50 million revolving credit facility which was fully available as of Sept. 30, 2019. Cambium's business is subject to seasonality owing to the buying cycle for education products, which historically resulted in cash generation occurring in the second half of the fiscal year. The AST acquisition will help smooth seasonality as the most of its revenues are earned during the school spring testing cycle (Q1 and Q2) and as such reduce the company's reliance on its revolver to fund seasonal fluctuations in cash flow. The majority of Cambium's standalone capex consist of content and software investments. Fitch expects capital expenditures in a range of $20 million-$25 million over the rating horizon to support an elevated level of investment as well as integration activities. Notably, capital expenditures as a percentage of revenues will decline to 4%-5% due to the lower capital intensity of the AST assessment business. Higher capex and cash interest will pressure FCF. However, Fitch expects pro forma FCF generation to exceed $50 million over the rating horizon. Cambium's debt amortization is modest at just 1% of the first lien term loan ($6 million annually). ESG CONSIDERATIONS 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 or the way in which they are being managed by the entity. CAMBIUM LEARNING: Moody's Affirms B3 CFR, Outlook Stable -------------------------------------------------------- Moody's Investors Service affirmed Cambium Learning Group, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating following the company's proposed acquisition of AIR Assessment. Moody's also affirmed the B2 rating for the company's first lien senior credit facilities and Caa2 rating for the second lien term loan. The outlook remains stable. The AST acquisition along with related fees and expenses will be financed with a $295 million first lien term loan add-on, $93 million second line term loan add-on along with an equity contribution from its sponsor Veritas Capital. AST develops and administers student performance assessment tests and is a carve-out of the K-12 assessment division of the American Institute for Research, a not-for-profit company based on Washington DC. "Pro forma for the AST acquisition, Moody's adjusted debt-to-EBITDA declines to 8.5x (after expensing software development costs) from 9.5x for the trailing twelve months ended September 30, 2019. Cambium will have good liquidity with $44 million cash on balance sheet following the transaction and free cash flow as a percentage of debt is estimated to remain above 3%, which supports the affirmation of the B3 CFR," said Joanna Zeng O'Brien, Moody's lead analyst for Cambium. Moody's took the following ratings actions: Issuer: Cambium Learning Group, Inc. Corporate Family Rating, affirmed B3 Probability of Default Rating, affirmed B3-PD Gtd Senior Secured First Lien Revolving Credit Facility, affirmed B2 (LGD3) Gtd Senior Secured First Lien Term Loan, affirmed B2 (LGD3) Gtd Senior Secured Second Lien Term Loan, affirmed Caa2 (LGD5) Outlook Actions: Outlook, Remains Stable Ratings Rationale Cambium's B3 CFR broadly reflects its very high leverage with pro forma Moody's adjusted debt-to-EBITDA of 8.5x (after expensing software development costs) and the expectation that leverage will remain high given its private equity ownership and a growth strategy that incorporates strategic debt funded acquisitions. The rating is also constrained by the company's modest scale and intense competition from bigger and better capitalized market participants, as well as a number of smaller players given the highly fragmented market for digital based learning and assessment technology. However, the rating is supported by Cambium's well-recognized brand name, its established niche position in the sector and with core customers, and solid growth prospects driven by favorable industry fundamentals. The rating also benefits from Cambium's stable cash generating capability due to a high level of recurring revenue, solid margins and low capital expenditure requirements. The stable outlook reflects Moody's expectation that barring any additional borrowings, leverage will decline to the low to mid-7.0x over the next 12 to 18 months. The stable outlook also reflects Moody's expectation that the company will maintain good liquidity with positive free cash flow generation. The ratings could be downgraded if there is deterioration in operating performance, EBITA-to-interest expense less than 1.0x, or a material weakening of liquidity with free cash flow turning negative. The ratings could be upgraded if the company delivers sustained revenue and earnings growth, with Moody's adjusted debt-to-EBITDA maintained well below 6.5x and free cash flow as a percentage of debt sustained above 5%. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Dallas, Texas, Cambium is a provider of predominantly subscription-based digital online educational curriculum content and assessments to the pre-K to 12 grade school market. Pro forma for its pending AST acquisition, LTM (as of September 30, 2019) bookings approximated $467 million. The company is owned by the private equity firm Veritas Capital. CAMBREX CORP: Moody's Assigns B3 CFR, Outlook Stable ---------------------------------------------------- Moody's Investors Service assigned ratings to Cambrex Corporation, including a B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also assigned a B2 rating to the $875 million 1st lien secured term loan and $135 million secured revolver and a Caa2 rating to the $250 million 2nd lien secured term loan. The outlook is stable. Cambrex is being acquired in a leveraged buyout transaction by an affiliate of Permira funds for $2.4 billion. Proceeds from the debt raise will be used, in connection with equity from the sponsor, to fund the acquisition, repay existing debt as well as pay fees and expenses. Ratings assigned: Cambrex Corporation Corporate Family Rating at B3 Probability of Default Rating at B3-PD First lien secured credit facilities at B2 (LGD3) Second lien secured term loan at Caa2 (LGD5) Outlook action: The outlook is stable. RATINGS RATIONALE The B3 Corporate Family Rating reflects Cambrex's high financial leverage, with pro forma adjusted debt to EBITDA approximating 7.0x pro forma (including anticipated cost savings). Deleveraging will be slow, as revenue and earnings will be pressured in 2020. This is because sales and earnings from its largest customer, Gilead Sciences, Inc., will continue to significantly decline through 2020 as Gilead's own sales of Hepatitis C drugs decline. Cambrex has identified cost savings that, if achieved, will partially mitigate this headwind. Moody's forecasts deleveraging in 2021, but this is somewhat reliant on customers' new product launches, which are subject to FDA approval. Further, it is solely focused on producing and developing small molecules. Moody's believes that, over time, the company will seek to enter into the large molecule market, potentially through acquisition. The rating is supported by Cambrex's capabilities as a fully integrated CDMO for small molecules. There are significant switching costs to other suppliers for customers, which adds some durability to supplier relationships. Through recent acquisitions, Cambrex has diversified beyond active pharmaceutical ingredient (API) manufacturing and into small molecule finished dosage manufacturing and early stage development services. Moody's believes that these two newer businesses (together representing around 30% of revenue) have good revenue growth potential, albeit at lower margins than the API business. Further, Moody's believes that there will be solid opportunities for additional cross selling of services with its recently diversified platform. Cambrex has a long track record of regulatory compliance, long-term customer relationships and high quality manufacturing capabilities. Cambrex has moderate environmental, social and governance risk. These risks mostly to pertain to quality production and waste management related to its production sites. Many of Cambrex's competitors producing API or finished pharmaceutical dosage forms have experienced significant challenges related to regulatory inspections and product recalls. Challenges in the industry have thus far been a competitive advantage for Cambrex which maintains a favorable track record of production quality and regulatory compliance. Cambrex's liquidity is good, primarily driven by access to a $135 million revolver that will expire in 2024 as well as Moody's expectations for good free cash flow in 2021. Moody's expects around $20 million of cash once the LBO transaction closes at the end of 2019. Free cash flow in 2020 will be burdened by a one-time payment to Gilead of $39 million that Moody's believes will occur mid-year as well as other one-time cash costs to achieve cost savings. Depending on timing of these costs, Cambrex may need to temporarily draw on its revolver. Moody's expects that it would be repaid with cash flow over time. Working capital will be a benefit in 2020 as Cambrex winds down the remaining inventory related to Gilead's sofosbuvir API. The revolver will have a springing maximum 1st lien net leverage financial covenant that is tested once borrowings exceed 35%. Moody's does not expect the company to test the covenant based on modest borrowing expectations. The stable outlook reflects Moody's view that Cambrex will begin to see increasing benefit from cross-selling as a new fully-integrated CDMO with low single digit revenue growth over the next 12-18 months. The outlook also reflects Moody's expectations of debt/EBITDA remaining high at around 7x before declining in 2021. The ratings could be downgraded if liquidity deteriorates or if debt/EBITDA increases above 7.5x. Material operating challenges, such as FDA warning letters, could also result in a downgrade. The ratings could be upgraded if Cambrex can sustain debt/EBITDA around 6.0x, while generating good free cash flow. Acceleration of revenue growth which demonstrates the strategic benefits of being a fully integrated CDMO would also support an upgrade. Cambrex Corporation is a contract development and manufacturing organization, with a focus primarily in small molecules. Most of its revenue is generated from developing and manufacturing active pharmaceutical ingredients used in clinical-stage, and commercial stage drugs (both branded and generic). Cambrex also provides finished dosage form contract manufacturing, and early stage development services. Cambrex will be owned by private equity sponsor Permira Funds. Reported revenues for the twelve months ended September 30, 2019 were approximately $616 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CANNON & CANNON: Unsecureds to Get $100,000 Under Plan ------------------------------------------------------ Debtor Cannon & Cannon Law, P.C., filed with the U.S. Bankruptcy Court for the District of Utah, Central Division, an amended disclosure statement related to the plan of reorganization. Class 2- Nonpriority Unsecured Claims. Class 2 contains the nonpriority unsecured claims listed in the Debtor's Schedule F as modified by proofs of claims that have been filed. The Debtor disputes the claims as filed by Pitney Bowes Global Financial Services, LLC and Revco Leasing. The Plan provides that the reorganized Debtor shall pay the claims of these creditors through the prorata distribution of a single lump sum payment in the amount of $100,000, to be paid within 30 days after the Effective Date of the Plan. Estimated claims in Class 2 total approximately $147,878.70. Class 3 - Unsecured Claims of Insiders. Class 3 contains the nonpriority unsecured claims of insiders, namely BWC in the amount of $80,661.12 and Fair Dinkum in the amount of $73,432.l 7. Due to their status as insiders, these creditors will receive no distribution under the Plan on account of their claims. BWC will remain the shareholder of the reorganized Debtor. Under the absolute priority rule, all classes of creditors must either vote in favor of the Plan or receive payment of their claims in full. BWC may not receive distributions, however, on account of his ownership interest, until nonpriority unsecured claims in Class 2 have been paid as provided in the Plan. Nothing contained in this provision of the Plan restricts BWC's ability to receive his ongoing salary as an employee of the reorganized Debtor. The Plan provides for the continued operation of the Debtor after confirmation by the reorganized Debtor. Repayment of claims will be made from funds generated from the reorganized Debtor's operations. Expenses of administration, consisting of quarterly fees due to the USTO and attorneys' fees of the D&L will be paid on the effective date of the Plan. A full-text copy of the Amended Disclosure Statement dated Oct. 22, 2019, is available at https://tinyurl.com/y3wylh83 from PacerMonitor.com at no charge. The Debtor is represented by: Andres Diaz Timothy J. Larsen DIAZ & LARSEN 307 West 200 South, Suite 3003 Salt Lake City, UT 84101 Tel: (801) 596-1661 Fax: (801) 359-6803 E-mail: courtmail@adexpresslaw.com About Cannon & Cannon Cannon & Cannon Law, PC, filed a Chapter 11 Petition (Bankr. D. Utah Case No. 19-21589) on March 15, 2019, and is represented by Andres Diaz, Esq., at Diaz & Larsen, in Salt Lake City, Utah. CJ AUTO USED PARTS: Plan & Disclosures Due Jan. 13, 2020 -------------------------------------------------------- CJ Auto Used Parts, LLC, filed a petition for relief under Chapter 11 of the Bankruptcy Code on Oct. 14, 2019. Judge Stephani W. Humrickhouse ordered that the Debtor must file a plan and disclosure statement on or before Jan. 13, 2020. A status conference will be held on Tuesday, Nov. 5, 2019, at 10:00 a.m. by conference telephone call. At the status conference, counsel for the debtor must be prepared to describe the nature of the debtor business, describe the reasons for filing the petition, describe the debtor strategy for reorganization, and give an estimate of the attorney's fees and other professional fees. CJ Auto Used Parts, LLC, sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 19-04737) on Oct. 14, 2019, estimating less than $1 million in assets and liabilities. John G. Rhyne, Esq. JOHN G. RHYNE is the Debtor's counsel. COCOA EXPO: Involuntary Chapter 11 Case Summary ----------------------------------------------- Alleged Debtor: Cocoa Expo Sports Center, LLC 500 Friday Road Cocoa, FL 32926 Case Number: 19-07295 Business Description: Cocoa Expo Sports Center, LLC -- http://www.cocoaexpo.com-- is a Florida limited liability company formed in 2011. The Debtor owns a sports complex located at 500 Friday Road, Cocoa, FL 32926 known as Coastal Florida Sports Park. The Sports Complex consists of more than 50 acres. The Sports Complex serves as a venue for youth atheletic games, high school events, college sporting events, and college and professional recruiting. The Debtor previously sought bankruptcy protection on Jan. 23, 2017 (Bankr. M.D. Fla. Case No. 17-00441). Involuntary Chapter 11 Petition Date: November 5, 2019 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Petitioners' Counsel: Jules S. Cohen, Esq. AKERMAN LLP 420 South Orange Avenue, Suite 1200 Orlando, FL 32802 Tel: (407) 419-8512 (407) 423-4000 Fax: (407) 843-6610 E-mail: jules.cohen@akerman.com List of Petitioners: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ UDF XIV SPE B, LLC Loan $7,500 c/o Jules S. Cohen, Esq. Akerman LLP P.O. Box 231 Orlando, FL 32802-0231 Urban Development Fund Loan $7,500 XXIII, LLC c/o Jules S. Cohen, Esq. Akerman LLP P.O. Box 231 Orlando, FL 32802-0231 Deego Productions, Inc. Services $2,142 c/o Jules S. Cohen, Esq. Akerman LLP P.O. Box 231 Orlando, FL 32802-0231 A full-text copy of the petition is available for free at: http://bankrupt.com/misc/flmb19-07295.pdf COSTA HOLLYWOOD: 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 Costa Hollywood Property Owner LLC according to court dockets. About Costa Hollywood Costa Hollywood Property Owner, LLC -- https://www.costahollywoodresort.com/ -- is a privately held company in the traveler accommodation industry. It owns and operates Costa Hollywood Beach Resort, a resort hotel in Hollywood Beach, Florida. Costa Hollywood Beach Resort offers rooms and suites featuring an elevated design aesthetic and luxe decor. Costa Hollywood sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-22483) on Sept. 19,2019. In the petition signed by Moses Bensusan, manager and sole member, the Debtor was estimated to have assets ranging from $50 million to $100 million and liabilities of the same range. The Hon. Raymond B. Ray is the case judge. Peter D. Russin, Esq., at Meland Russin & Budwick, P.A. serves as the Debtor's bankruptcy counsel. CPI CARD: Incurs $684,000 Net Loss in Third Quarter --------------------------------------------------- CPI Card Group Inc. filed with the Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $684,000 on $71.68 million of total net sales for the three months ended Sept. 30, 2019, compared to a net loss of $6.11 million on $70.98 million of total net sales for the three months ended Sept. 30, 2018. For the nine months ended Sept. 30, 2019, the Company reported a net loss of $2.21 million on $205.44 million of total net sales compared to a net loss of $30.11 million on $187.29 million of total net sales for the same period in 2018. As of Sept. 30, 2019, the Company had $213.74 million in total assets, $363.88 million in total liabilities, and a total stockholders' deficit of $150.14 million. "We delivered solid results once again this quarter as we continue to execute on our customer-centric strategy," said Scott Scheirman, president and chief executive officer of CPI. "During the third quarter, our U.S. Debit and Credit segment performed well, delivering 7% net sales growth, expanding operating margins and securing a meaningful new business win with the launch of Second Wave financial payment cards made with recovered ocean-bound plastic. This solid performance, along with our strong U.S. Prepaid segment results, further propelled our business to improve our bottom-line results and significantly increase Adjusted EBITDA in the quarter and year to date. Through commitment to our key strategies, we continue to execute towards achieving our vision of being the partner of choice for our customers by providing market-leading quality products and customer service with a market-competitive business model." During the third quarter of 2019, cash used in operating activities was $2.0 million and included continued investments in inventory to support the growth of the business. Third quarter capital expenditures were $0.6 million. This resulted in negative adjusted free cash flow during the third quarter of $2.7 million. Year to date, cash used in operating activities was $3.0 million, inclusive of the $6.0 million cash litigation settlement gain recorded in the second quarter. Year to date, and consistent with seasonal patterns, adjusted free cash flow was negative $12.3 million, and was impacted by year-to-date inventory investments of $12.3 million. As of Sept. 30, 2019, cash and cash equivalents was $14.3 million and no borrowings were outstanding on the Company's revolving credit facility. The revolving credit facility had available borrowings of $20.0 million and matures Aug. 17, 2020. Total debt principal outstanding, comprised of the Company's First Lien Term Loan, was $312.5 million at Sept. 30, 2019, unchanged from Dec. 31, 2018. Net of debt issuance costs and discount, total debt was $307.3 million as of Sept. 30, 2019. The Company's First Lien Term Loan matures in August 2022. John Lowe, chief financial officer, stated, "We are encouraged by the progress we have made driving top-line and profit growth by executing on our key strategies, which enhanced our operating leverage as we continue to focus on the long-term growth of the business. As we continue to build upon this success, we believe we have adequate cash and operating cash flows to support our business plan." A full-text copy of the Form 10-Q is available for free at: https://is.gd/jdvGGH About CPI Card CPI Card Group -- http://www.cpicardgroup.com/-- is a payment technology company and 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 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. * * * 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 June 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit rating on CPI Card. "The affirmation reflects our view that despite improving trends, CPI's operating performance will remain weak and the capital structure unsustainable," S&P said. " EPIC Y-GRADE: Moody's Affirms B3 CFR & Alters Outlook to Positive ----------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating and B3-PD Probability of Default rating of EPIC Y-Grade Services LP. The rating agency also affirmed the B3 rating assigned to EPIC Y-Grade's senior secured notes and the Ba3 rating on its secured revolving credit facility. The outlook is changed to positive from stable. Outlook Actions: Issuer: EPIC Y-Grade Services, LP Outlook is Changed to Positive from Stable Affirmations: Issuer: EPIC Y-Grade Services, LP Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Senior Secured Term Loan, Affirmed B3 (LGD4) Senior Secured Revolving Credit Facility, Affirmed Ba3 (LGD1) RATINGS RATIONALE The change of the outlook to positive reflects Moody's expectation of timely construction delivery and robust commercial execution on the project, allowing the completed NGL pipeline to ramp up service in the first half of 2020 and enabling EPIC to start organic deleveraging. The upgrade of the CFR will require a timely completion of the residual infrastructure and strong operating delivery, establishing a deleveraging trend with debt/EBITDA declining below 7x and EBITDA/Interest above 2x. While unlikely, delayed execution or significant cost overrun, leading to weaker liquidity would put negative pressure on the CFR and could lead to a downgrade. Small size and asset concentration will likely limit EPIC Y-Grade's rating to the single-B category. The affirmation of the B3 CFR reflects strong execution of the green field project to build a new natural gas liquids (NGL) pipeline and two fractionation facilities in Texas in 2018-2020, as well as an additional third fractionation facility expected to come on line in 2021. The pipeline was completed on time in July 2019 and EPIC Y-Grade is working to complete second fractionation facility expected to come on stream in Q2 2020 to be able to ramp up services on the pipeline. Pending completion of these residual projects and ramping up volumes on the pipeline, EPIC's leverage will peak close to 10x in 2020, factoring in about 6 months of normal operations and additional borrowings at the end of 2019 to fund follow up construction of the additional fractionation facility. Upon completion of the project, the leverage should start to decline rapidly in the second half of 2020 on a run rate basis and into 2021. The credit profile further benefits from low commodity price and reduced volume risks, backed by minimum volume commitments (MVC) with an investment-grade rated counterparty and additional dedications from NGL producers, with several producers invested in the pipeline. The existing contractual commitments back the majority of the capacity that will be completed in Q2 2020, well in excess of MVC commitments, with further contractual arrangements under consideration. Pending ramping up of the service on the pipeline, EPIC Y-Grade's financial profile and ability to service debt are largely underpinned by the existing debt and equity commitments, as well as structural credit enhancements, capital spending and debt service reserve accounts. EPIC Y-Grade's credit profile also benefits from sustained financial support from its private equity sponsor, Ares Management LP (NYSE:ARES), that continues to co-fund all additional projects. Following the completion of the project, EPIC Y-Grade has communicated a conservative financial policy stance, while terms of the agreement, such as an excess cash flow sweep, will add to the deleveraging momentum. Moody's expects EPIC Y-Grade to maintain adequate liquidity. During the building phase of the project, EPIC Y-Grade's liquidity position is underpinned by the substantial committed equity contributions and by the funding raised under the recently increased $950 million senior secured term loan facilities maturing in 2024 and a $40 million senior secured revolving facility maturing in 2023. The terms of bank financing include a number of financial covenants, expected to commence in Q1 2021. The financial covenants for the senior secured bank credit facility include a maximum super priority debt to adjusted EBITDA of 1.00:1.00, a minimum Debt Service Coverage Ratio of 1.10:1.00, and a maximum funded debt/equity ratio of 1.00:1.00. The terms of the bank financing also include a mandatory cash flow sweep provision on the term loan. The pace of repayments under this provision is highly variable depending on utilization rate and timing of capacity coming on line from 2020. The $950 million senior secured first lien term loan is rated B3, at the CFR level reflecting its dominant position in the capital structure. The Ba3 rating on the $40 million senior secured revolving credit facility reflects its contractually superior position relative to the term loan and its relatively small size. EPIC Y - Grade Services, LP is a subsidiary of EPIC Y-Grade Holdings LP, a group established by private equity group Ares Management LP in 2017 to acquire, construct and operate midstream assets. In July, 2019, EPIC completed the construction of a 700-mile natural gas liquids (NGL) and aims to ramp up its operations in 2020 after completing construction of additional fractionation capacity and purity line connections. The principal methodology used in these ratings was Midstream Energy published in December 2018. EQUINIX INC: Moody's Rates Proposed Sr. Unsec. Notes Ba1 -------------------------------------------------------- Moody's Investors Service assigned a Ba1 to Equinix, Inc.'s proposed senior unsecured notes. The proceeds will be used to repay the company's existing USD senior unsecured notes maturing in 2022, 2023 and 2025. The Ba1 rating is in line with the existing rating for Equinix's unsecured debt class. The company's bank facilities (unrated) are unsecured obligations and rank pari passu with the unsecured notes. The upgrade of Equinix's corporate family rating on March 25 to Ba2 from Ba3 released the guarantor entities under the terms of the credit agreement governing the company's credit facility; the company's CFR was later upgraded to Ba1 from Ba2 on October 14. All other ratings including the company's Ba1 CFR and positive outlook are unchanged. Assignments: Issuer: Equinix, Inc. Senior Unsecured Notes, Assigned Ba1 (LGD4) RATINGS RATIONALE Equinix's Ba1 CFR reflects its position as the leading global independent data center operator offering carrier-neutral data center and interconnection services to large enterprises, content distributors and global internet companies. The rating also incorporates still favorable near-term growth trends for data center services across the world, the company's stable base of contracted recurring revenue, scale and strategic real estate holdings in key communications hubs, solid and increasing asset coverage and a more consistent financial policy which balances debt and equity issuances to fund annual cash flow deficits. Equinix's qualitative strengths are supportive of higher leverage tolerance for its rating. Equinix's recent formation of a joint venture with a sovereign wealth fund to develop and operate data centers supporting the needs of large hyperscale companies, as well as its plans to pursue additional and similar joint ventures with other investors, will support balance sheet improvement and further strengthen the company's growth and cash flow generation. These positive factors are offset by significant industry risks as data center business models continue to evolve, intense competition from strategic and financial operators, relatively high capital intensity and a history of opportunistic M&A which could delay deleveraging if primarily debt funded. Equinix's recently announced purchase of three data centers in Mexico affords the company access to a new growth market and will be funded with balance sheet cash. The rating also reflects the company's negative free cash flow due to the high dividend associated with its real estate investment trust (REIT) tax status. Equinix's commitment to an even funding distribution between equity and debt, as evidenced by its recent equity raise and its ongoing ATM equity issuance program, establishes a more conservative and consistent capital sourcing policy going forward which will contribute to steadier reductions in debt leverage. The ratings for debt instruments reflect both the probability of default of Equinix, reflected in the Ba1-PD probability of default rating, and individual loss given default (LGD) assessments based on the priority of claims of the debt instruments in the capital structure. The senior unsecured notes are rated Ba1 (LGD4), in line with the Ba1 CFR. The company's bank facilities (unrated) are unsecured obligations and rank pari passu with the unsecured notes. Moody's maintains an SGL-2 speculative grade liquidity rating on Equinix, indicating good liquidity for the next 12-18 months. As of September 30, 2019, the company had $1.4 billion of cash on hand and approximately $1.9 billion available under its $2 billion revolver. Moody's estimates that Equinix will pay around $800 million in cash dividends in 2019, growing in future periods. Moody's estimates that dividends will exceed internally generated cash and capital spending for at least the next two years, and that the company will rely upon a mix of debt and equity capital to finance these annual deficits. Equinix also has the option of sale leasebacks of its facilities to generate additional liquidity. The positive outlook reflects Moody's belief that the company will steadily drive leverage lower and through 4.75x (Moody's adjusted) on a sustained basis by year-end 2020. Moody's expects Equinix will continue to fund growth with a prudent and balanced mix of debt and equity capital. Moody's could upgrade Equinix's ratings if leverage is expected to be sustained below 4.75x (Moody's adjusted) and the company continues to use a meaningful amount of equity to fund its annual cash deficits. The ratings could be downgraded if leverage is sustained above 5.25x (Moody's adjusted) for an extended time frame or if liquidity deteriorates. The principal methodology used in these ratings was Communications Infrastructure Industry published in September 2017. Headquartered in Redwood City, CA, Equinix, Inc. is the largest publicly traded carrier-neutral data center hosting provider in the world with operations in 44 markets across the Americas, EMEA and Asia-Pacific. FCH MCKINNEY: Plan Payments to be Funded by Property Sale Proceeds ------------------------------------------------------------------ Debtor FCH McKinney Senior Homes, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, a Second Amended Plan and Disclosure Statement. Under the Plan, administrative claims (unclassified) and secured claims (Class 1) will be paid from the proceeds from cash and the sale of the Debtor's real property. Except as to the claim of insider Fireside Village Addition, unsecured claims (Class 2) will be paid pro rata with any remaining sale proceeds. Equity holders -- Fireside Village (50%) and Star Creek Co. Inc. (50%) won't receive any distributions unless the claims are paid in full. The Plan will be funded by Debtor-in-Possession Loan of $400,000 from Star Creek Co., Inc. that was approved by the Court on July 2, 2019. The Plan will also be funded from the Debtor’s sale of its real estate of the last home it owns at 3720 Creek View Drive and its 36 lots. The first five lots to be closed on October 24, 2019, in the amount of $450,000, within 24 months, or the refinancing of Debtor’s real estate within that time. A full-text copy of the Debtor's 2nd Amended Disclosure Statement dated Oct. 22, 2019, is available at https://tinyurl.com/y4ztzcqa from PacerMonitor.com at no charge. The Debtor is represented by: Larry K. Hercules, Esq. 1400 Preston Road, Suite 400 Plano, Texas 75093 Telephone: (972) 964-9757 Facsimile: (972) 964-0120 E-mail: lkhercules@yahoo.com About FCH McKinney Senior Homes FCH McKinney Senior Homes, LLC, operates an assisted living facility in Dallas, Texas. FCH McKinney filed as a Domestic Limited Liability Company in the State of Texas on April 10, 2013, according to public records filed with Texas Secretary of State. FCH McKinney filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 18-42734) on Dec. 3, 2018. In the petition signed by Kent C. Conine, manager, the Debtor disclosed less than $50,000 in assets and less than $10 million in estimated liabilities. The Debtor is represented by Larry Kent Hercules, Esq., at Larry K. Hercules, Attorney At Law. FIRST CLASS PRINTING: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: First Class Printing, Inc. PO Box 877 Fayetteville, TN 37334 Business Description: First Class Printing, Inc. is a privately held company in the commercial printing and the lithographic process business. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court Eastern District of Tennessee (Winchester) Case No.: 19-14730 Judge: Hon. Shelley D. Rucker Debtor's Counsel: Steven L. Lefkovitz, Esq. LEFKOVITZ & LEFKOVITZ 618 Church Street, Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: sllbkecf@gmail.com slefkovitz@lefkovitz.com Total Assets: $392,470 Total Liabilities: $1,187,031 The petition was signed by Calvin Bruce Tanner, owner. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/tneb19-14730_creditors.pdf A full-text copy of the petition is available for free at: http://bankrupt.com/misc/tneb19-14730.pdf GRACE GARDEN: 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 Grace Garden Enterprises, LLC, according to court dockets. About Grace Garden Enterprises Grace Garden Enterprises, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 19-40534) on Oct. 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 Debtor is represented by India Footman, Esq., at Footman Law Firm, P.A. GUE LIQUIDATION: Opposes 3-Month Delay of Plan Process ------------------------------------------------------ GUE Liquidation, Inc., and its domestic subsidiaries filed a reply in support of its motion for entry of an order approving Disclosure Satement and in response to the filed objection of the Official Committee of Unsecured Creditors. The Creditors' Committee requests that the Court not hold a hearing on the Disclosure Statement until the Dec. 2, 2019 bar date for the prepetition claims of governmental units has passed and "the full scope of priority tax," among other claims, "are established". According to the Debtor, continuing the administrative phase of the Chapter 11 cases for at least three extra months may ensure that the Debtors do not have enough funds to consummate a plan and that the wind-down phase of the chapter 11 cases will fail. In addition to the additional professional and other costs of these cases, currently running at close to $1.0 million per month, pushing the solicitation and confirmation process into 2020 will cause the Debtors to incur other administrative costs. The settlement that the UCC is seeking runs contrary to the claim priorities of the Bankruptcy Code and the Debtors believe, will not be approved by the Court. Consider that the settlement involves the UCC's efforts to control potential Challenges that the Debtors' estates might have to the Lenders' prepetition liens and claims. The Challenges are estate causes of action. The general unsecured creditors will receive the proceeds of Challenge actions, whether by settlement or litigation, to the extent not necessary to fund the claims of 100% Creditors. The estates are entitled to the proceeds of Challenges and general unsecured creditors are entitled to such proceeds to the extent not necessary to pay 100% claims. As such, the fact that the Challenge actions have not been resolved need not delay confirmation of the Plan and the Debtors’ exit from chapter 11. The UCC's objectionalso implicitly and mistakenly suggests that general unsecured creditors likely would be the party both entitled to bring any such actions, as well as the financial beneficiary of such actions. All proceeds of general intangibles in these cases are the collateral of the Lenders. A full-text copy of the Debtor's reply is available at https://tinyurl.com/y4f7z5y3 from PacerMonitor.com at no charge. About FTD Companies FTD Companies, Inc. -- http://www.ftdcompanies.com/-- is a premier floral and gifting company. Through its diversified family of brands, it provides floral, specialty foods, gifts, and related products to consumers primarily in North America. It also provides floral products and services to retail florists and other retail locations throughout these same geographies. FTD has been delivering flowers since 1910, and the highly-recognized FTD brand is supported by the iconic Mercury Man logo, which is displayed in over 30,000 floral shops in more than 125 countries. In addition to FTD, its diversified portfolio of brands includes these trademarks: ProFlowers, Shari's Berries, Personal Creations, Gifts.com, and ProPlants. FTD Companies is headquartered in Downers Grove, Ill. On June 3, 2019, FTD Companies and 14 domestic subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11240). The Debtors disclosed $312.7 million in assets and $374.9 million in liabilities. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Jones Day and Richards, Layton & Finger, P.A., as legal counsel; Moelis & Company LLC as financial advisor; and Piper Jaffray & Co. as investment banker. AP Services, LLC, an affiliate of AlixPartners, provides restructuring services. Omni Management Group is the claims agent and has put up the site http://www.FTDrestructuring.com/ H & S TRUCK: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The Office of the U.S. Trustee on Nov. 5, 2019, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of H & S Truck Stop Travel Plaza LLC. About H & S Truck Stop Travel Plaza H & S Truck Stop Travel Plaza LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 19-12076) on Oct. 7, 2019. At the time of the filing, the Debtor disclosed assets of between $100,001 and $500,000 and liabilities of the same range. The case is assigned to Judge Carl L. Bucki. JCV GROUP: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: JCV Group LLC dba JCV Brands 65 West 37th Street, Suite 300 New York, NY 10018 Business Description: JCV Group LLC -- http://jcvbrands.com-- is a wholesale domestic, baby and pet company established and based in New York. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Case No.: 19-13563 Judge: Hon. Martin Glenn Debtor's Counsel: Eric S. Medina, Esq. MEDINA LAW FIRM LLC 641 Lexington Avenue Thirteenth Floor New York, NY 10022 Tel: (212) 404-1742 Fax: (888) 833-9534 Email: emedina@medinafirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by David Maleh, chief executive officer. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/nysb19-13563.pdf KINKY CAB: Medallion Bank Says Plan Cannot Be Confirmed -------------------------------------------------------- Medallion Bank submitted objection to the disclosure statement filed by debtor Kinky Cab Corp. According to Medallion, the disclosure statement should not be approved because it describes a plan of reorganization that is not capable of confirmation and it would be a waste of estate resources to allow the plan to be solicited. Medallion will not accept the plan and its claim represents 100% of the Class 1 and Class 2 claims. The Plan is also incapable of confirmation because Class 1 will not receive property of a value that is not less than the amount that would be received in a chapter 7 liquidation. The Debtor did not provide a liquidation analysis in connection with the disclosure statement and plan. Since Class 1 is only receiving a surrender of the collateral, it will not be receiving property of a value that is not less than the amount which would be received in a chapter 7 liquidation. Medallion also points out that the disclosure statement is lacking critical information. The funding for payments under the plan will purpotedly be coming from non-debtor third parties. The disclosure statement lacks information on how these funds are being paid, whether court approval is needed for the payment and whether the third-parties have the necessary funds to make the payment. Medallion avers that the disclosure statement should not be approved as it describes a plan that is patently incapable of confirmation and otherwise lacks adequate information. A full-text copy of the objection dated October 22, 2019, is available at https://tinyurl.com/y5pjvbk6 from PacerMonitor.com at no charge. Medallion Bank is represented by Christopher D. Palmieri of Jaspan Schlesinger LLP. About Kinky Cab, Corp. Based in New York, New York, Kinky Cab, Corp. filed a voluntary petition under Chapter 11 of the Bankruptcy (Bankr. E.D.N.Y. Case No. 18-45956) on October 17, 2018, listing under $1 million in both assets and liabilities. Alla Kachan, Esq., at the Law Offices Of Alla Kachan, P.C., represents the Debtor as counsel. LACKNER RODRIGUEZ: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Lackner Rodriguez Enterprises, LLC 3747 Magali Circle Brownsville, TX 78521 Business Description: Lackner Rodriguez Enterprises, LLC is a general freight trucking company in Brownsville, Texas. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court Southern District of Texas (Brownsville) Case No.: 19-10430 Judge: Hon. Eduardo V. Rodriguez Debtor's Counsel: Enrique J. Solana, Esq. LAW OFFICE OF ENRIQUE J SOLANA, PLLC 914 E. Van Buren St Brownsville, TX 78520 Tel: 956-544-2345 Fax: 956-550-0641 Email: enrique@solanapllc.com Debtor's Co-Counsel: Jana Smith Whitworth, Esq. JS WHITWORTH LAW FIRM, PLLC Total Assets: $5,244,022 Total Liabilities: $5,898,567 The petition was signed by Ulises O. Lackner, managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txsb19-10430.pdf LASV INC: SCB Objects to Plan & Disclosure Statement ---------------------------------------------------- Secured Creditor Shore Community Bank (SCB) objects both to the proposed chapter 11 plan and the proposed disclosure statement of Debtor LASV, Inc. The grounds for the objections are as follows: * SCB has a fully secured and perfected claim against the Debtor in the approximate principal amount of $1,713,961.30 as of the Petition Date. * SCB has first, paramount and priority liens and security interests over any liens held by any other secured creditors. However, notwithstanding these facts, the offending Plans and Disclosure Statements incorrectly and erroneously seek to pay the claims held by NJEDA ahead of the prior perfected claims held by SCB and to subordinate the secured claims of SCB. * Despite the fact that the claims of SCB are based upon liens which are clearly filed prior to and superior to the UCC-1 filed by NJEDA, SCB is listed as subordinate and partially crammed down to $625,000. These attempts to improperly classify claims which are clearly superior and paramount to the NJEDA's claims, and to arbitrarily subordinate such claims is a clear violation of the absolute priority rule and not fair and equitable. * Turning to the Liquidation Analysis of the debtor, SCB would be paid in full at a Chapter 7 liquidation as the collateral value for the subject personal property collateral exceeds the amount of SCB’s liens. Upon review of the Plan in detail, it is clear that the Plan is neither feasible nor fair and equitable. * The proposed Disclosure Statement is defective pursuant to 11 U.S.C.A. § 1125(a)(1) insofar as the information set forth by the debtor is inadequate, inaccurate and misleading. For the same reasons, the subject Plan is objectionable in the many respects. A full-text copy of the objection dated Oct. 22, 2019, is available at https://tinyurl.com/y3xdma4y from PacerMonitor.com at no charge. The Secured Creditor is represented: Alan R. Ostrowitz, AO7173 OSTROWITZ & OSTROWITZ, ESQS. 225 Gordons Corner Road Suite 1-J Manalapan, New Jersey 07726 Tel: (732) 446-2800 About LASV Inc. LASV Inc., a privately held company in Seaside Heights, New Jersey, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 19-14218) on Feb. 28, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of $1 million to $10 million. The case is assigned to Judge Kathryn C. Ferguson. The Law Office of Eugene D. Roth is the Debtor's counsel. LEGACY TRADITIONAL: Moody's Rates 2019 Education Bonds Ba2 ---------------------------------------------------------- Moody's Investors Service assigns an underlying Ba2 rating to the Industrial Development Authority of the County of Maricopa's $36.3 million Education Revenue Bonds Series 2019A and $100.6 million Series 2019B. The Bonds will be loaned to Legacy Traditional Schools under a Loan Agreement with the Authority. At the same time, Moody's affirms the Ba2 on Legacy Traditional Schools outstanding revenue bonds. The outlook on all ratings is stable. RATINGS RATIONALE The underlying Ba2 rating will reflect Legacy Traditional Schools' (LTS) brand strength in the Arizona and Nevada markets, positive demographic growth trends and significant scale compared to peers. The Ba2 will also reflect LTS's stated intent for more moderate growth following the upcoming construction of two new campuses as well as no plans for incremental debt given its already high financial leverage. The Ba2 will also reflect the planned movement of all LTS schools into the obligated group and the presence of a lock-box (Arizona) and intercept mechanism (Nevada) that further provides bondholder security. These attributes will be offset by LTS's thin liquidity relative to daily operations and debt and narrowing maximum annual debt service coverage and history of missing budgets and projections, the latter of which will take on greater importance as financial leverage increases. Likewise, interschool borrowing within the overall network increased during the past year, contrary to its expectation that the loans would be paid off, signaling cash flow weakness. LTS has grown rapidly given its start-up nature. Finally, governance risk will remain high given that two of the five board members serving on the LTS Board of Directors in Arizona are family members of Vertex's founder. LTS has two governing boards, one for its Arizona schools and a second for its Nevada schools. Each board has adopted conflict of interest policies and reportedly have ultimate strategic control over its member schools, including contract renewals with the service provider. Notably, it is an event of default under the indenture if any member school loses its individual charter. Charter renewal risks are low. RATING OUTLOOK The stable outlook reflects its expectation that Legacy's sufficient enrollment will translate into higher annual debt service coverage and liquidity will show modest growth. FACTORS THAT COULD LEAD TO AN UPGRADE - Significant and sustained growth in liquidity - Stronger and sustained MADS coverage - Durable improvement in the Nevada schools' academic performance FACTORS THAT COULD LEAD TO A DOWNGRADE - Additional leverage without material growth in financial performance - Failure to meet enrollment expectations that would not provide sufficient debt service coverage - Declines in liquidity or continued inter-school borrowing that limits financial flexibility across the obligated group - Rapid expansion plans into new markets without incremental cash flow LEGAL SECURITY The 2019A&B Bonds, along with the outstanding revenue bonds, will be secured by the combined pledged revenues of the obligated group, all 20 schools of the LTS system. Pledged revenues are almost entirely state aid revenues. The 2019A&B Bonds will be parity obligation of the current outstanding revenue debt. Additionally, all bonds are secured with a first priority lien on and security interest in all of the facilities of the obligated group. The 2019A Bonds will be guaranteed by the Arizona Public School Credit Enhancement Program, unrated by Moody's. Under this program, in the event the Trustee has insufficient funds to pay debt service on the 2019A bonds, the principal and interest will be paid from the Arizona Public School Credit Enhancement Fund. The schools that are a part of this program are LTS-Phoenix, LTS-West Surprise, and LTS-Goodyear. Debt service will be segregated on a monthly basis through a lock box mechanism, for the Arizona schools, under which state aid payments are sent directly to the trustee on a monthly basis are directed to debt service and required reserve deposits before release to each of the schools. Scheduled debt service will first be taken from each school based upon the individual project amounts financed, but if these amounts are insufficient, the trustee will take debt service on a pro rata basis from each of the other obligated group members to make payment. The LTS-Nevada schools will enter into a Nevada Control Agreement with the Trustee and Nevada Depository Bank, in which the depository bank will transfer state payments to the Trustee for deposit into the pledged revenue funds. In both Arizona and Nevada, state equalization payments are made monthly in roughly equal amounts. Covenants are weak for the sector, with sum sufficient coverage of debt service required if days' cash equals a minimum of 90 days. Debt service coverage must be maintained at 1.1x should cash fall below 90 days. Should debt service fall below sum sufficient coverage, the majority of bondholders can declare an event of default. The obligated group has also covenanted to maintain a minimum of 45 days cash on hand. Should cash fall below this level, the obligated group can be required to hire a management consultant if directed to do so by the majority of bondholders. The issuance of additional bonds, exclusive of refundings and financings necessary to complete a project, requires both sum sufficient (1.0x) coverage of MADS based upon the most recently completed audited year and 1.25x coverage of MADS based upon projections for each successive year. Additionally, if a member school loses its charter, it would constitute an event of default. USE OF PROCEEDS Proceeds of the bonds will finance the following: the construction of West Surprise, expected to open in the fall 2020, purchasing and renovating the Goodyear school, refinancing an existing short term construction loan and an expansion at the Phoenix school, and refinance short term construction loans for the Cadence, East Mesa, and Southwest Las Vegas locations. PROFILE Legacy Traditional Schools is a K-8 charter school network across Arizona with 15 schools, and Nevada with 3 schools. Current fall 2019 enrollment across all schools is 21,600 students which translated into $151 million in total revenues. LTS opened one additional school in Arizona and Nevada this current academic year. MAXAR TECHNOLOGIES: S&P Affirms 'B' ICR; Outlook Negative --------------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit rating on Maxar Technologies Inc. and its 'B' issue-level rating on the company's revolver (which it is reducing to $500 million from $1.25 billion) and $2 billion term loan B. S&P is also revising its recovery rating on the revolver and term loan to '3' from '4'. At the same time, S&P is assigning its 'B' issue-level rating and '3' recovery rating to the company's new $1.25 billion senior secured notes. Maxar plans to use the proceeds from $1.25 billion of new secured notes due 2023 to refinance its $250 million term loan A-1 due 2020 and $250 million term loan A-2 due 2021 and pay down outstanding borrowings under its revolver, which will eliminate an upcoming maturity. Although the transaction increases Maxar's debt, it also alleviates any near-term liquidity concerns by extending the company's maturities. By reducing the size of its revolver and issuing new notes that exceed the value of its previous term loan A-1 and A-2, Maxar is adding about $50 million of debt to its balance sheet while its access to capital remains essentially the same. Although the smaller revolver (expected to be undrawn as of Sept. 30, 2019) limits the company's liquidity somewhat, the facility should still provide it with sufficient funds to meet all of its near-term liquidity needs. In fact, the transaction relieved some of Maxar's liquidity needs by extending its debt maturities (with the new notes and amended revolver due in 2023 compared with the previous term loan A-1 and A-2, which were due in 2020 and 2021, respectively). The negative outlook on Maxar reflects S&P's expectation that the company's debt leverage will remain high (albeit with some improvement) while it restructures its business to reflect the smaller GEO communications satellite market. However, it is still uncertain how successful this strategy will be, especially during a period of high capital investment. The rating agency expects Maxar's S&P-adjusted debt to EBITDA to be in the 6.7x-7.1x range in 2019 before dropping to the 6.2x-6.6x range in 2020. "We could lower our rating on Maxar if its debt to EBITDA remains above 7x in 2020 and we don't expect it to improve. This could occur if the company continues to lose money on its GEO business, fails to win new contract awards, or requires a higher-than-expected level of investment for the Legion constellation, leading to weaker earnings or cash flow," S&P said. "We could revise our outlook on Maxar to stable in the next 12 months if we believe its debt to EBITDA will likely remain below 6.5x on a sustained basis. This could occur if the company reduces the costs associated with its GEO business, wins new business, and returns the segment to profitability while the rest of its operations continue to perform well," the rating agency said. MEDIAOCEAN LLC: Moody's Rates New First Lien Bank Loans B2 ---------------------------------------------------------- Moody's Investors Service assigned B2 instrument ratings to Mediaocean LLC's proposed senior secured first lien bank credit facilities. There is no change to the company's existing B2 Corporate Family Rating, B2-PD Probability of Default Rating and stable outlook. The proceeds from the new $275 million first lien term loan along with $23.3 million of cash from the balance sheet will be used to refinance the company's existing $293.3 million bank debt. The ratings of the existing first lien term loan and revolver will be withdrawn upon completion of the refinancing. "The planned debt repayment and refinancing will reduce leverage and extend Mediaocean's debt maturity profile. The ratings remain unchanged, however, as we believe the risk of future dividend distributions is very high, as illustrated by recently attempted dividend recap, and it largely offsets the company's currently strong credit metrics", said Mariya Moore, Moody's Analyst. Assignments: Issuer: Mediaocean LLC Gtd Senior Secured First Lien Term Loan, Assigned B2 (LGD3) Gtd Senior Secured First Lien Revolving Credit Facility, Assigned B2 (LGD3) RATING RATIONALE Mediaocean's B2 CFR reflects a relatively small revenue base, narrow focus on software solutions for the advertising industry and private equity ownership. Mediaocean's customer base consists predominantly of top-tier advertising agencies and accordingly is subject to considerable customer concentration and exposure to the growing, but cyclical advertising market which remains susceptible to economic downturns. Additionally, an aggressive financial policy under private equity ownership and the high risk of future debt-funded acquisitions and dividend distributions are key constrains to the rating. The rating is supported by the company's modest leverage of 3.1x pro forma debt-to-EBITDA at June 30, 2019 (as adjusted by Moody's), leading presence within its targeted market and a subscription centric sales model which provides a high degree of predictability given the company's multiyear contracts and longstanding relationships with top advertising agencies. Additionally, Mediaocean is well positioned to benefit from the ongoing secular shift towards digital advertising solutions among marketers from more mature, traditional channels. The stable outlook reflects Moody's expectation that Mediaocean is highly likely to increase its debt levels and corresponding leverage as a result of its private equity ownership. It also reflects Moody's forecast for mid-single digit organic revenue and EBITDA growth over the next 12-18 months, driven by an ongoing transition toward digital advertising solutions. The ratings could be upgraded if Mediocean's scale is increased substantially by generating consistent organic revenue and EBITDA growth such that adjusted leverage is expected to be sustained below 4x while demonstrating conservative financial policies. The ratings could be downgraded if revenue declines and leverage were expected to be maintained above 6.5x on other than a temporary basis, or if free cash flow to debt were to fall below 5%. The proposed first lien credit facility is expected to contain incremental facility capacity up to the greater of $132 million or 100% consolidated EBITDA, plus an additional amount subject to either a 4x pro forma First Lien Leverage Ratio, 4.5x Senior Secured Leverage Ratio or 5x Total Leverage Ratio. There are no leverage-based step-downs to the requirement that 100% of net asset sale proceeds be used to prepay the loans with the right to reinvest or commit to reinvest within 18 months. In addition, Mediaocean will have the ability to release a guarantee when a subsidiary is not wholly-owned. The proposed document includes "blocker" provisions which provide additional restrictions on top of the covenant carve-outs limiting the ability to transfer intellectual property to unrestricted subsidiaries. The principal methodology used in these ratings was Software Industry published in August 2018. Headquartered in New York, New York, Mediaocean is a global, market-leading provider of financial and operational software solutions for the advertising industry, enabling agencies and brands to manage and coordinate the entire advertising workflow. The company is owned by funds affiliated with Vista Equity Partners and generated revenues of about $224 million as of the LTM period ended June 30, 2019. MONKEY TOES: Case Summary & 10 Unsecured Creditors -------------------------------------------------- Debtor: Monkey Toes, LLC d/b/a Sanctuary Gentlemen's Club 3926 N Delsea Drive Vineland, NJ 08360 Business Description: Monkey Toes, LLC Sanctuary Gentlemen's Club owns and operates an adult entertainment club in Vineland, New Jersey. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court District of New Jersey (Camden) Case No.: 19-31018 Judge: Hon. Jerrold N. Poslusny Jr. Debtor's Counsel: Carrie J. Boyle, Esq. BOYLE & VALENTI LAW P.C. 10 Grove Street Haddonfield, NJ 08033 Tel: 856-499-3335 Fax: 856-499-3304 E-mail: cboyle@b-vlaw.com Total Assets: $14,879 Total Liabilities: $1,022,443 The petition was signed by David Glassman, managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at: http://bankrupt.com/misc/njb19-31018.pdf MSCI INC: S&P Rates New $500MM Senior Unsecured Notes 'BB+' ----------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating and '3' recovery rating to New York City-based index and analytics provider MSCI Inc.'s proposed $500 million senior unsecured notes. Similar to its other senior notes, MSCI Inc. will be the borrower on this issue. MSCI expects to use proceeds from the transaction for general corporate purposes, which may include share repurchases. The '3' recovery rating on the debt indicates S&P's expectation of meaningful (50%-70%; rounded estimate: 55%) in the event of default. The 'BB+' issuer credit rating on the company is unaffected by the issuance. S&P Global Ratings' stable outlook reflects the view that MSCI Inc.'s leadership position, with its core markets and large recurring revenue base, will result in consistent operating performance over the next 12 months. S&P expects the company will manage financial risk in line with its 3.0x-3.5x gross leverage target. MY2011 GRAND: Case Summary & 5 Unsecured Creditors -------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- MY2011 Grand LLC 19-23957 929 East 5th Street Brooklyn, NY 11211 S & B Monsey LLC 19-23959 160 Rutledge Street Brooklyn, NY 11211 Business Description: MY2011 Grand has an equitable interest in Grand Living LLC II, the Mezz owner of Grand Living LLC, the owner of the property located at 227 Grand Street Brooklyn, NY 11211. The current value of the Debtor's interest is $12.80 million. S & B Monsey has an equitable interest in Grand Living LLC II, the Mezz owner of Grand Living LLC, the owner of the property located at 227 Grand Street Brooklyn, NY 11211. The current value of the Debtor's interest is $13.2 million. Chapter 11 Petition Date: November 6, 2019 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Hon. Robert D. Drain Debtors' Counsel: Mark A. Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 800 Third Avenue, 11th Floor New York, NY 10022 Tel: (212) 593-1100 Fax: (212) 644-0544 E-mail: mfrankel@bfklaw.com MY2011 Grand's Estimated Assets: $10 million to $50 million MY2011 Grand's Estimated Liabilities: $1 million to $10 million S & B Monsey's Estimated Assets: $10 million to $50 million S & B Monsey's Estimated Liabilities: $1 million to $10 million The petitions were signed by David Goldwasser, authorized signatory of GC Realty Advisors. Full-text copies of the petitions are available for free at: http://bankrupt.com/misc/nysb19-23957.pdf http://bankrupt.com/misc/nysb19-23959.pdf A. List of MY2011 Grand's Five Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Akerman LLP $10,000 666 Fifth Avenue, 20th Floor New York, NY 10103 2. B In Power Inc. $30,000 199 Lee Ave, Box 114 Brooklyn, NY 11211 3. Elyon Systems Inc. $5,000 412 Sterling Street Brooklyn, NY 11225 4. Karl Fisher, Architect $50,000 242 West 30th Street, Suite 1102 New York, NY 10001 5. NBE Plumbing $8,050 2906 Shell Road Brooklyn, NY 11224 B. List of S & B Monsey's Two Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Cohen & Gresser LLP $75,000 Attn: Nicholas Kaiser, Esq. 800 Third Avenue, 21st Floor New York, NY 10022 2. Emett Controls $1,179 1577 Carroll Street #1D Brooklyn, NY 11213 3. KJ Tiles $75,000 105 Sanford Street, Suite 101 Brooklyn, NY 11205 4. Velocity Framers $97,675 5014 16th Ave, Suite 468 Brooklyn, NY 11204 NRC US: Moody's Withdraws B2 CFR After Acquisition by US Ecology ---------------------------------------------------------------- Moody's Investors Service withdrawn all debt ratings of NRC US Holding Company, LLC after the company was acquired by US Ecology, Inc. (Ba3 stable), a provider of treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a wide range of complementary field and industrial services. RATINGS RATIONALE Pursuant to the terms of the transaction, all rated debt at NRC has been prepaid at closing. Moody's took the following rating actions on NRC US Holding Company, LLC: Corporate Family Rating - B2 withdrawn Probability of Default Rating - B2-PD withdrawn Senior Secured First Lien Revolving Credit Facility - B2 (LGD-3) withdrawn Senior Secured First Lien Term Loan - B2 (LGD-3) withdrawn Outlook - Stable withdrawn NRC US Holding Company, LLC provides recurring environmental and compliance services, remediation, cleaning, decontamination, maintenance and inspection to the marine and rail transportation, general industrial and energy markets. The Sprint Energy Services segment provides waste management services to the upstream and midstream energy markets. ONE CALL: S&P Raises ICR to 'B-' on Distressed Debt Exchange ------------------------------------------------------------ S&P Global Ratings raised its long-term issuer credit rating on One Call Corp. to 'B-' from 'SD'. At the same time, S&P raised its debt rating on One Call's first-lien revolver due 2022 to 'B-' from 'CCC', and raised its debt ratings on the company's first-lien term loan due 2022 and first-lien notes due 2024 to 'B-' from 'D'. The recovery ratings on these debt issues are '4', indicating S&P's expectation for average recovery (30%-50%, rounded estimate: 30%) in the event of a payment default. S&P raised its debt rating on One Call's senior unsecured notes due 2021 to 'CCC' from 'C', and raised its debt rating on the company's second-lien notes due 2024 to 'CCC' from 'D'. The recovery rating on these debt issue are '6', indicating S&P's expectation for negligible recovery (0%) in the event of a payment default. S&P does not have debt ratings on One Call's first-lien paid-in-kind toggle notes due 2024. The upgrade follows One Call's announcement on Oct. 25, 2019, that it had completed a recapitalization that will significantly lessen its debt load and enhance its financial flexibility. Certain lenders led by KKR and GSO Capital Partners agreed to exchange large portions of their first- and second-lien debt for preferred and common equity—giving them majority control of the company. S&P views the transaction as an overall positive credit event. The transaction reduces total debt to $1.0 billion from $2.0 billion and leaves no major debt maturities in 2020-2021. S&P expects adjusted leverage to decrease to 11x-12x (7.5x-8.5x excluding preferred equity that the rating agency considers debt) by year-end 2019 from 15x as of June 30, 2019 . It also expects 2020 EBITDA interest coverage of 1x-2x and EBITDA cash interest coverage of 2x-3x. Following the recapitalization, One Call will have close to full availability of its $56.6 million first-lien revolver due August 2022, with good cushion under its revolver's springing net leverage ratio covenant of 7.0x (6.75x by year-end 2020). The stable outlook reflects S&P's expectation for revenue to be flat to slightly down (about negative 2%) in 2019-2020, and for EBITDA margins to remain 9%-11%. S&P expects adjusted leverage of 11x-12x in 2019-2020 (7.5x-8.5x excluding preferred equity, which the rating agency considers debt), as well as EBITDA interest coverage of 1x-2x and EBITDA cash interest coverage of 2x-3x. "We could lower our ratings in 2020 if One Call's revenue and EBITDA fall below our expectations, indicating continued weakening in its competitive position. This could lead us to view its capital structure as unsustainable beyond the next 12 months, resulting in a downgrade to the 'CCC' category," S&P said. S&P said it could raise its ratings in 2020 if One Call significantly exceeds the rating agency's revenue and EBITDA expectations and shows further likely improvements; and the company maintains significantly lower and sustainable leverage (below 7x excluding preferred equity) with higher EBITDA interest coverage (above 2x) and EBITDA cash interest coverage (above 3x). PAYLESS HOLDINGS: Unsecureds to Recover 3.6% to 4.8% Under Plan --------------------------------------------------------------- Payless Holdings LLC and its debtor affiliates filed with the U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, a brief in support of the Second amended Joint Plan of Reorganization. The Global Settlement provides for unsecured creditors to receive their pro rata share of $15,000,000 in cash consideration to be funded into the Liquidating Trust; Holders of Claims under the Debtors' Prepetition Term Loan Facility to waive recovery on account of their deficiency claims and any superpriority administrative expense claims for diminution in value of their collateral; and the expenses of the Liquidating Trust to be funded by the Reorganized Debtors. Certain members of the Lender Groups have made additional contributions or concessions to facilitate the Plan. These contributions, along with an additional contribution from the Debtors, will result in recoveries to unsecured creditors under the Plan of approximately 3.6% to 4.8%. The Court should approve these critical protections and confirm the Plan, which embodies the hard-fought consensus that the Debtors and their stakeholders have worked diligently and collaboratively to achieve For these reasons and others set forth more fully herein, the Plan satisfies each of the requirements for confirmation and should be confirmed. A full-text copy of the Debtors' brief dated October 22, 2019, is available at https://tinyurl.com/y66haypk from PacerMonitor.com at no charge. About Payless Holdings Payless -- http://www.payless.com/-- was founded in 1956 as an everyday footwear retailer. It has more than 4,000 stores in more than 30 countries, and employs approximately 22,000 people. It is headquartered in Topeka, Kansas, but its operations span across Asia, the Middle East, Latin America, Europe, and the United States. Payless first traded publicly in 1962, and was taken private in May 2012. Payless Holdings, LLC currently owns, directly or indirectly, each of its 91 subsidiaries. Payless Holdings LLC (Bankr. E.D. Mo. Case No. 17-42267) and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code on April 4, 2017. The petitions were signed by Paul J. Jones, chief executive officer. At the time of the filing, the Debtors estimated their assets at $500 million to $1 billion and liabilities at $1 billion to $10 billion. The Debtors hired Guggenheim Securities LLC as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; Prime Clerk LLC as claims, balloting and administrative agent; and Osler, Hoskin & Harcourt LLP as CCAA counsel. Cassels Brock & Blackwell LLP serves as counsel in the CCAA proceedings while Seward & Kissel LLP serves as counsel for the Debtors' independent managers. The Office of the U.S. Trustee on March 1 appointed seven creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of Payless Holdings LLC and its affiliates. The Committee retained Pachulski Stang Ziehl & Jones LLP as lead counsel, Province, Inc., as financial advisor, and Back Bay Management Corporation and its division, The Michel-Shaked Group, as expert consultant and Dr. Israel Shaked as expert witness. PGN DESIGN: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: PGN Design Group, LLC 11424 Victoria Ave Los Angeles, CA 90066 Business Description: PGN Design Group, LLC is a privately held company headquartered in Los Angeles, California. Chapter 11 Petition Date: November 5, 2019 Court: United States Bankruptcy Court Central District of California (Los Angeles) Case No.: 19-23073 Judge: Hon. Barry Russell Debtor's Counsel: Vahe Khojayan, Esq. KG LAW, APC 1010 N Central Ave Ste 450 Glendale, CA 91202 Tel: 818-245-1340 Fax: 818-245-1341 E-mail: vahe@kglawapc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert Williams, managing member. The Debtor stated it has no unsecured creditors. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/cacb19-23073.pdf PHOENIX HOLDINGS: Seeks to Hire Rosen & Kantrow as Legal Counsel ---------------------------------------------------------------- Phoenix Holdings and Investments LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Rosen & Kantrow, PLLC 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: Associates $275 - $450 Partners $525 - $575 Rosen & Kantrow received a $15,000 retainer and requires an additional payment of $10,000 for its services. Rosen & Kantrow is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Avrum J. Rosen, Esq. Rosen & Kantrow, PLLC 38 New Street Huntington, NY 11743 Phone: 631 423 8527 Fax: 631 423 4536 About Phoenix Holdings and Investments Phoenix Holdings and Investments LLC filed a voluntary Chapter 7 petition (Bankr. E.D. N.Y. Case No. 19-43420) on June 3, 2019. On July 21, 2019, the Debtor moved to convert the case to one under Chapter 11, which was granted by the court on Sept. 18, 2019. The case is assigned to Judge Elizabeth S. Stong. PUERTO RICO HOSPITAL: B. Braun Objects to Disclosure Statement -------------------------------------------------------------- B. Braun Medical Inc. filed a response and reservation of rights to the proposed Joint Disclosure Statement of Puerto Rico Hospital Supply, Inc., and Customed, Inc. Pursuant to the Plan, the Debtors propose to treat B. Braun as the holder of an Allowed Cure Claim entitled to treatment in accordance with Class 8 of the Plan. Pursuant to the Plan, the Debtors intend to pay B. Braun 100% of its Allowed Cure Claim. Nevertheless, because objections to the form and content of the Disclosure Statement are due on the date hereof, B. Braun hereby files a response out of an abundance of caution. Although B. Braun believes that the current form of Disclosure Statement should not be approved as providing adequate information with respect to treatment of (i) Class 8 claimants in general and (ii) B. Braun in particular, B. Braun anticipates that the issues will be resolved and the Disclosure Statement amended to provided additional information as the result of its ongoing discussions with the Debtors. A full-text copy of the response dated Oct. 22, 2019, is available at https://tinyurl.com/yxr7cmrm from PacerMonitor.com at no charge. B. Braun is represented by: JAVIER VILARINO VILARINO & ASSOCIATES LLC PO BOX 9022515 San Juan, PR 00902-2515 Tel: (787) 565-9894 - and - Francis J. Lawall PEPPER HAMILTON LLP 3000 Two Logan Square 18th and Arch Streets Philadelphia, PA 19103-2799 Telephone: (215) 981-4481 Fax: (215) 981-4750 E-mail: jvilarino@vilarinolaw.com lawallf@pepperlaw.com - and - John H. Schanne, II Hercules Plaza, Suite 5100 1313 N. Market Street, P.O. Box 1709 Wilmington, Delaware 19801-1709 Tel: (302) 777-6500 Fax: (302) 421-8390 E-mail: schannej@pepperlaw.com About Puerto Rico Hospital Supply Puerto Rico Hospital Supply, Inc., distributes medical supplies in Puerto Rico. Customed Inc., founded in 1991, manufactures surgical appliances and supplies. Puerto Rico Hospital Supply, Inc., and Customed, Inc., filed voluntary Chapter 11 petitions (Bankr. D.P.R. Case Nos. 19-01022 and 19-01023) on Feb. 26, 2019. The cases are assigned to Judge Enrique S. Lamoutte Inclan. In the petitions signed by Felix B. Santos, president, Puerto Rico Hospital was estimated to have $50 million to $100 million in assets and $10 million to $100 million in liabilities while Customed, Inc. estimated $10 million to $50 million in both assets and liabilities. Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, represents the Debtors. PUERTO RICO HOSPITAL: Becton Objects to Disclosure Statement ------------------------------------------------------------ Creditor Becton, Dickinson and Company filed its objection to the proposed disclosure statement and plan of reorganization of Debtor Puerto Rico Hospital Supply, Inc. (PRHS). Becton Dickinson's objection is limited to the incorrect cure amount listed by PRHS in relation to the executory contract with Becton Dickinson to be assumed by the Debtor. In support of its allegations, Becton Dickinson states and prays as follows: * The Debtor lists the cure amount owed to Becton Dickinson as $1,854,610.53. However, after discussing the issue PRHS and Becton Dickinson were able to reconcile the cure amount in the sum of $1,904,583.69, to wit, a difference of $49,973.16 in favor of Becton Dickinson. * Becton Dickinson objects to the approval of the Disclosure Statement and confirmation of the Plan of Reorganization until the same are properly amended to reflect the correct cure amount of $1,904,583.69 owed by PRHS to Becton Dickinson. * Becton Dickinson prays that the Court grant this motion, and that the Court deny approval of the Disclosure Statement and confirmation of the Plan of Reorganization until the same are properly amended to reflect the correct cure amount of $1,904,583.69 owed by PRHS to Becton Dickinson. Becton Dickinson is represented by: REICHARD & ESCALERA, LLC Fernando Van Derdys E-mail: fvander@reichardescalera.com MCS Plaza, Suite 1000 255 Ponce de Leon, Ave. San Juan P.R. 00917 Tel: 787.777.8808 About Puerto Rico Hospital Supply Puerto Rico Hospital Supply, Inc. distributes medical supplies in Puerto Rico. Customed Inc., founded in 1991, manufactures surgical appliances and supplies. Puerto Rico Hospital Supply, Inc. and Customed, Inc., filed voluntary Chapter 11 petitions (Bankr. D.P.R. Case Nos. 19-01022 and 19-01023) on Feb. 26, 2019. In the petitions signed by Felix B. Santos, president, Puerto Rico Hospital was estimated to have $50 million to $100 million in assets and $10 million to $100 million in liabilities while Customed, Inc. was estimated to have $10 million to $50 million in both assets and liabilities. The cases are assigned to Judge Enrique S. Lamoutte Inclan. Alexis Fuentes Hernandez, Esq. at Fuentes Law Offices, represents the Debtors. PWR INVEST: Wants Disclosure Statement Hearing be Set on Nov. 26 ---------------------------------------------------------------- PWR Invest, L.P. and debtor affiliates moved the bankruptcy court for entry of an order approving their Joint Plan of Reorganization and Disclosure Statement. The Debtors request the Court that the Disclosure Statement hearing be set on Nov. 26, 2019, at 11:00 a.m. The Debtors also request that the deadline for Debtors to file claim objections for voting purposes be set on Dec. 10, 2019, while Dec. 24, 2019, as the deadline to file F.R.B.P. Rule 3018(a) motions to estimate claims for voting purposes. The Debtors submit that the proposed schedule and procedures are in the best interests of holders of Claims and Interests and other parties in interest as they provide due and sufficient notice of the Debtors' anticipated timeline for winding down these Cases and allow an adequate opportunity for affected parties to object and be heard. A full-text copy of the motion dated Oct. 20, 2019, is available at https://tinyurl.com/y5s97evn from PacerMonitor.com at no charge. The Debtors are represented by: BARNES & THORNBURG LLP David M. Powlen Kevin G. Collins 1000 N. West Street, Suite 1500 Wilmington, DE 19801 Telephone: (302) 300-3434 Facsimile: (302) 300-3456 E-mail: david.powlen@btlaw.com kevin.collins@btlaw.com - and - PRONSKE & KATHMAN, P.C. Gerrit M. Pronske Jason P. Kathman Brandon J. Tittle 2701 Dallas Parkway, Suite 590 Plano, TX 75093 Telephone: (214) 658-6500 Facsimile: (214) 658-6509 E-mail: gpronske@pronskepc.com jkathman@pronskepc.com btittle@pronskepc.com About PWR Invest PWR Invest, LP, and debtor affiliates Oklahoma Merge, LP; Oklahoma Merge Midstream, LP; Oklahoma River Basin, LP; and PWR Oil & Gas General Partners, Inc., operate and develop oil and gas properties predominantly in Oklahoma. On May 22, 2019, PWR Oil & Gas General Partners, Inc., filed a Chapter 11 petition (Bankr. D. Del.). On May 23, 2019, PWR Invest, LP, also sought for Chapter 11 protection. On Aug. 12, 2019, Oklahoma Merge, LP, Oklahoma River Basin, LP, and Oklahoma Merge Midstream, LP, each filed Chapter 11 petitions. The Debtors' Chapter 11 cases are jointly administered under Case No. 19-11164, with that of PWR Invest, LP, as the lead case. As of its Petition Date, PWR Invest was estimated to have assets at $50 million to $100 million, and liabilities at $50 million to $100 million. PRONSKE & KATHMAN, P.C., and BARNES & THORNBURG LLP serve as the Debtors' counsel. FTI Consulting, Inc., is the Debtors' financial advisor. SADDY FAMILY: SCB Objects to Plan & Disclosure Statement -------------------------------------------------------- Secured Creditor Shore Community Bank (SCB) objects both to the proposed chapter 11 plan and the proposed disclosure statement of Debtor Saddy Family, LLC. SCB has a fully secured and perfected claim against the Debtor in the approximate principal amount of $1,713,961.30 as of the Petition Date. SCB has first, paramount and priority liens and security interests over any liens held by any other secured creditors. According to Shore Community Bank: * The offending Plans and Disclosure Statements incorrectly and erroneously seek to pay the claims held by NJEDA ahead of the prior perfected claims held by SCB and to subordinate the secured claims of SCB. * Despite the fact that the claims of SCB are based upon liens which are clearly filed prior to and superior to the UCC-1 filed by NJEDA, SCB is listed as subordinate and partially crammed down to $625,000. These attempts to improperly classify claims which are clearly superior and paramount to the NJEDA's claims, and to arbitrarily subordinate such claims is a clear violation of the absolute priority rule and not fair and equitable. * Turning to the Liquidation Analysis of the debtor, SCB would be paid in full at a Chapter 7 liquidation as the collateral value for the subject personal property collateral exceeds the amount of SCB’s liens. Upon review of the Plan in detail, it is clear that the Plan is neither feasible nor fair and equitable. * The proposed Disclosure Statement is defective pursuant to 11 U.S.C.A. Sec. 1125(a)(1) insofar as the information set forth by the debtor is inadequate, inaccurate and misleading. For the same reasons, the subject Plan is objectionable in the many respects. A full-text copy of the objection dated Oct. 22, 2019, is available at https://tinyurl.com/y32dymyb from PacerMonitor.com at no charge. The Secured Creditor is represented: Alan R. Ostrowitz, AO7173 OSTROWITZ & OSTROWITZ, ESQS. 225 Gordons Corner Road Suite 1-J Manalapan, New Jersey 07726 Fax: (732) 446-2800 About Saddy Family Saddy Family, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 19-14223) on Feb. 28, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. The case is assigned to Judge Christine M. Gravelle. The Law Office of Eugene D. Roth is the Debtor's counsel. The Debtor is related to, and associated with, debtors LASV Inc. under Case No. 19-14218 and SJV, Inc. under Case No. 19-14220-KCF. In 1995, SJV, Inc. was formed for the purposes of operating Karma, a nightclub in Seaside Heights, NJ. In 1997, LASV, Inc. was formed for the purposes of operating, Bamboo, another associated nightclub in Seaside Heights, NJ. Saddy Family was formed as a real estate holding company for the properties used by SJV and LASV. SIENNA BIOPHARMA: Taps Cowen and Company as Investment Banker ------------------------------------------------------------- Sienna Biopharmaceuticals, Inc., received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Cowen and Company, LLC as investment banker. The firm will provide these services in connection with the Debtor's Chapter 11 case: (1) assist the Debtor in analyzing its business, operations, properties, financial condition and prospects; (2) assist the Debtor in its analysis and consideration of financing alternatives available to it; (3) assist the Debtor in identifying and evaluating parties that may be interested in a financing or sale; (4) advise the Debtor on tactics and strategies for negotiating with potential investors, potential parties to a sale, and stakeholders, and if requested by the Debtor, participate in such negotiations; (5) prepare materials describing the Debtor for distribution and presentation to parties that might be interested in a financing or sale; (6) advise the Debtor on the timing, nature and terms of new securities, other consideration or other inducements to be offered pursuant to any restructuring; (7) render financial advice to the Debtor and participate in meetings or negotiations with stakeholders, rating agencies or other appropriate parties in connection with a restructuring; (8) attend meetings of the Debtor's Board of Directors (or similar governing entity) and its committees with respect to matters on which Cowen has been engaged to advise the Debtor; (9) provide oral and written testimony, as necessary, with respect to matters on which Cowen has been engaged to advise the Debtor in any proceeding before the court. Cowen will be compensated pursuant to this fee structure: a. Monthly Fee: The firm will receive a monthly fee of $100,000. If the monthly fees paid are greater than $300,000 in the aggregate, then any amount paid over $300,000 will be credited to the financing fee, restructuring fee or sale fee. b. Financing Transaction Fee: A fee payable at each closing of a financing equal to the greater of (i) the applicable percentage of the gross proceeds or aggregate principal amount of any financing irrevocably committed or funded in connection with such trnsaction (whether or not actually drawn) and (ii) $1.75 million, provided that the minimum fee shall not apply to a single financing completed in more than one tranche: * 6 percent for equity or equity-linked securities except in the case of Pacific Diagnostic Laboratories in which case the fee shall be 4 percent; * 3 percent for debt. The financing fee will be credited to the restructuring fee. c. Restructuring Fee: A fee equal to $1.75 million payable upon the consummation of a restructuring. d. Sale Fee: A fee payable upon consummation of any sale equal to the greater of $1.75 million and 2 percent of the "aggregate consideration" of such sale. The sale fee will be credited to the restructuring fee. Cowen received a retainer fee of $150,000 from the Debtor. Lorie Beers, managing director of Cowen, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Cowen can be reached through: Lorie R. Beers Cowen and Company, LLC 599 Lexington Avenue, 20th Floor New York, NY 10022 Tel: 646 562 1010 / 646 562 1250 Email: lorie.beers@cowen.com About Sienna Biopharmaceuticals Sienna Biopharmaceuticals, Inc. -- http://www.SiennaBio.com/-- is a clinical-stage biopharmaceutical company focused on bringing unconventional scientific innovations to patients whose lives remain burdened by their disease. Sienna Biopharmaceuticals sought Chapter 11 protection (Bankr. D. Del. Case No. 19-12051) on Sept. 16, 2019. The Debtor disclosed $107,625,000 in assets and $80,642,000 in liabilities as of June 30, 2019. The Hon. Mary F. Walrath is the case judge. The Debtor tapped Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor LLP as co-counsel; Cowen and Company LLC as investment banker; and Force 10 Partners as financial advisor. Epiq Corporate Restructuring LLC is the claims agent. SIENNA BIOPHARMA: Taps Epiq Corporate as Administrative Advisor --------------------------------------------------------------- Sienna Biopharmaceuticals, Inc. received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Epiq Corporate Restructuring, LLC as its administrative advisor. The firm will provide bankruptcy administrative services, which include the solicitation, balloting and tabulation of votes; the preparation of reports in support of confirmation of a Chapter 11 plan; and managing distributions under the plan. Epiq will charge these hourly fees for claim administration services: Clerical/Administrative Support $25 – $45 IT/Programming $65 – $85 Case Managers $70 – $165 Consultants/Directors/VPs $160 – $190 Solicitation Consultant $190 Executive VP, Solicitation $215 Executives No Charge Before the petition date, the Debtor provided Epiq a retainer in the amount of $25,000. Kate Mailloux, a senior director at Epiq, disclosed in court filings that the firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. Epiq can be reached through: Kate Mailloux Epiq Bankruptcy Solutions, LLC 777 Third Avenue, 12th Floor New York, NY 10017 Phone: (646) 282-2523 About Sienna Biopharmaceuticals Sienna Biopharmaceuticals, Inc. -- http://www.SiennaBio.com/-- is a clinical-stage biopharmaceutical company focused on bringing unconventional scientific innovations to patients whose lives remain burdened by their disease. Sienna Biopharmaceuticals sought Chapter 11 protection (Bankr. D. Del. Case No. 19-12051) on Sept. 16, 2019. The Debtor disclosed $107,625,000 in assets and $80,642,000 in liabilities as of June 30, 2019. The Hon. Mary F. Walrath is the case judge. The Debtor tapped Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor LLP as co-counsel; Cowen and Company LLC as investment banker; and Force 10 Partners as financial advisor. Epiq Corporate Restructuring LLC is the claims agent. SIENNA BIOPHARMA: Taps Force Ten Partners as Financial Advisor -------------------------------------------------------------- Sienna Biopharmaceuticals, Inc., received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Force Ten Partners LLC as its financial advisor. The firm will provide these services in connection with the Debtor's Chapter 11 case: a. evaluating the Debtor's financial condition; b. providing strategic restructuring advice; c. preparing projections and other forward-looking statements; and d. assisting the Debtor and its counsel in negotiations with creditors. The firm's hourly rates are: Partners $550 - $750 Directors $350 - $550 Analysts $225 - $350 Staff $100 - $225 Force Ten received a retainer of $100,000 from the Debtor. Jeremy Rosenthal, a partner at Force Ten, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeremy Rosenthal Force Ten Partners LLC 10100 Venice Blvd. Culver City CA 90232 Office: (310) 870-3205 Email: jrosenthal@force10partners.com About Sienna Biopharmaceuticals Sienna Biopharmaceuticals, Inc. -- http://www.SiennaBio.com/-- is a clinical-stage biopharmaceutical company focused on bringing unconventional scientific innovations to patients whose lives remain burdened by their disease. Sienna Biopharmaceuticals sought Chapter 11 protection (Bankr. D. Del. Case No. 19-12051) on Sept. 16, 2019. The Debtor disclosed $107,625,000 in assets and $80,642,000 in liabilities as of June 30, 2019. The Hon. Mary F. Walrath is the case judge. The Debtor tapped Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor LLP as co-counsel; Cowen and Company LLC as investment banker; and Force 10 Partners as financial advisor. Epiq Corporate Restructuring LLC is the claims agent. SIENNA BIOPHARMA: Taps Latham & Watkins as Legal Counsel -------------------------------------------------------- Sienna Biopharmaceuticals, Inc., received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Latham & Watkins LLP as its legal counsel. The firm will provide these services in connection with the Debtor's Chapter 11 case: a. advise the Debtor of its powers and duties in the continued management and operation of its business and properties; b. advise the Debtor on the conduct of the case, including the legal and administrative requirements of operating in Chapter 11; c. take all necessary actions to protect and preserve the Debtor's estate, including prosecuting actions on its behalf, defending any action commenced against it, and representing its interests in negotiations concerning litigation in which it is involved; d. analyze proofs of claim filed against the Debtor and object to such claims as necessary; e. represent the Debtor in connection with obtaining authority to continue using cash collateral and post-petition financing; f. attend meetings and negotiate with representatives of creditors, interest holders, and other parties in interest; g. analyze the potential assumption, assignment or rejection of the Debtor's executory contracts and unexpired leases; h. prepare pleadings including motions, reports and other court papers necessary to the administration of the Debtor's estate; i. advise the Debtor in connection with any potential sale of assets; j. take necessary action to obtain approval of a disclosure statement and confirmation of a plan; k. appear before the bankruptcy court or any appellate courts; and l. advise on corporate, litigation, finance, tax, employee benefits and other legal matters. The firm's hourly rates are: Partners $1,070 - $1,565 Counsel $1,040 - $1,455 Associates $565 - $1,085 Paraprofessionals $105 - $780 The attorneys with primary responsibility for providing the services are: Peter Gilhuly $1,495 Ted Dillman $1,130 Shawn Hansen $860 Nicholas Messana $785 Nina Grandin $565 During the 90-day period prior to the Debtor's bankruptcy filing, Latham received payments and advances in the aggregate amount of $1,381,548. Ted Dillman, Esq., a partner at Latham, disclosed in court filings that the firm is "disinterested" within the meaning of 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, Latham disclosed that it has not agreed to a variation of its standard billing arrangements for its employment with the Debtor, and that no professional at the firm has varied his rate based on the geographic location of the Debtor's bankruptcy case. During the prior calendar year, Latham used these rates: $1,030 to $1,450 for partners; $990 to $1,395 for counsel; $535 to $1,045 for associates; and $180 to $750 for paraprofessionals. Between January and August 2019, the firm applied a 10 percent discount to its rates for routine non-restructuring work and excluded non-routine matters such as litigation or transactional matters. Since Latham began providing restructuring services in August 2019, no discount has been applied. All material financial terms have remained unchanged since the pre-bankruptcy period. The Debtor has already approved the firm's prospective budget and staffing plan for the period Sept. 16 to Dec. 31, 2019. Latham can be reached through: Peter M. Gilhuly, Esq. Ted A. Dillman, Esq. Latham & Watkins LLP 355 South Grand Avenue, Suite 100 Los Angeles, CA 90071 Tel: (213) 485-1234 Fax: (213) 891-8763 Email: peter.gilhuly@lw.com ted.dillman@lw.com About Sienna Biopharmaceuticals Sienna Biopharmaceuticals, Inc. -- http://www.SiennaBio.com/-- is a clinical-stage biopharmaceutical company focused on bringing unconventional scientific innovations to patients whose lives remain burdened by their disease. Sienna Biopharmaceuticals sought Chapter 11 protection (Bankr. D. Del. Case No. 19-12051) on Sept. 16, 2019. The Debtor disclosed $107,625,000 in assets and $80,642,000 in liabilities as of June 30, 2019. The Hon. Mary F. Walrath is the case judge. The Debtor tapped Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor LLP as co-counsel; Cowen and Company LLC as investment banker; and Force 10 Partners as financial advisor. Epiq Corporate Restructuring LLC is the claims agent. SIENNA BIOPHARMA: Taps Young Conaway as Co-Counsel -------------------------------------------------- Sienna Biopharmaceuticals, Inc., received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Young Conaway Stargatt & Taylor, LLP. Young Conaway will serve as co-counsel with Latham & Watkins LLP, the other firm tapped by the Debtor to handle its Chapter 11 case. The principal attorneys and paralegal designated to represent the Debtor and their standard hourly rates are: Michael Nestor $940 Kara Hammond Coyle $655 Jaclyn Weissgerber $460 Debbie Laskin (paralegal) $295 Young Conaway received retainer fees in the total amount of $115,000. Kara Hammond Coyle, Esq., a partner at Young Conaway, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Ms. Coyle disclosed that the firm has not agreed to a variation of its standard or customary billing arrangements for its employment with the Debtor, and that no professional at the firm has varied his rate based on the geographic location of the Debtor's bankruptcy case. The attorney also disclosed that Young Conaway was retained by the Debtor pursuant to an August 16 engagement agreement and that the billing rates and material terms of the pre-bankruptcy engagement are the same as the rates and terms governing the firm's current employment with the Debtor. The Debtor has approved or will be approving a prospective budget and staffing plan for Young Conaway's engagement for the post-petition period, and that the budget may be amended as necessary to reflect changed or unanticipated developments in accordance with the U.S. Trustee Guidelines, according to Ms. Coyle. Young Conaway can be reached through: Michael R. Nestor, Esq. Kara Hammond Coyle, Esq. Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: mnestor@ycst.com kcoyle@ycst.com About Sienna Biopharmaceuticals Sienna Biopharmaceuticals, Inc. -- http://www.SiennaBio.com/-- is a clinical-stage biopharmaceutical company focused on bringing unconventional scientific innovations to patients whose lives remain burdened by their disease. Sienna Biopharmaceuticals sought Chapter 11 protection (Bankr. D. Del. Case No. 19-12051) on Sept. 16, 2019. The Debtor disclosed $107,625,000 in assets and $80,642,000 in liabilities as of June 30, 2019. The Hon. Mary F. Walrath is the case judge. The Debtor tapped Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor LLP as co-counsel; Cowen and Company LLC as investment banker; and Force 10 Partners as financial advisor. Epiq Corporate Restructuring LLC is the claims agent. SILGAN HOLDINGS: S&P Rates New $300MM Senior Unsecured Notes 'BB-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '6' recovery rating to Stamford, Conn.-based metal and plastic container producer Silgan Holdings Inc.'s proposed $300 million senior unsecured notes due 2028. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%; rounded estimate: 5%) recovery in the event of a payment default. The company will use the proceeds from these notes to pay down outstanding borrowings under its revolving credit facility. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P assigned its 'BB-' issue-level rating and '6' recovery rating (0%-10%; rounded estimate: 5%) to the company's proposed $300 million senior unsecured notes. -- S&P's simulated default scenario assumes a default occurring in 2024 stemming from a significant drop in customer demand and heightened competition that compress the company's margins. The rating agency assumes these conditions impair Silgan's ability to meet its ongoing obligations, eventually straining its liquidity and triggering a bankruptcy filing. -- S&P believes the company's underlying business would continue to have considerable value and expect that Silgan would emerge from bankruptcy rather than be liquidated. -- S&P assumes the $1.19 billion revolver is 85% drawn at default because availability would likely be limited by financial covenant restrictions. Simulated default assumptions -- Year of default: 2024 -- Emergence EBITDA: $304 million -- EBITDA multiple: 6.0x Simplified waterfall -- Net enterprise value (after 5% administrative costs): $1,732 million -- Valuation split (obligors/nonobligors): 87%/13% -- Value available to secured debt claims: $1,732 million -- Secured debt claims: $1,603 billion -- Recovery expectations: (90%-100%; rounded estimate: 95%) -- Value available to unsecured claims: $128 million -- Total unsecured claims: $1,365 million -- Recovery expectations: (0%-10%; rounded estimate: 5%) Note: Debt amounts include six months of accrued interest that S&P assumes will be owed at default. SJV INC: SCB Objects to Plan & Disclosure Statement --------------------------------------------------- Secured creditor Shore Community Bank (SCB) objects both to the proposed chapter 11 plan and the proposed disclosure statement of Debtor SJV, Inc. SCB has a fully secured and perfected claim against the Debtor in the approximate principal amount of $1,713,961.30 as of the Petition Date. SCB has first, paramount and priority liens and security interests over any liens held by any other secured creditors. SCB claims that: * The Plans and Disclosure Statements incorrectly and erroneously seek to pay the claims held by NJEDA ahead of the prior perfected claims held by SCB and to subordinate the secured claims of SCB. * Despite the fact that the claims of SCB are based upon liens which are clearly filed prior to and superior to the UCC-1 filed by NJEDA, SCB is listed as subordinate and partially crammed down to $625,000.00. These attempts to improperly classify claims which are clearly superior and paramount to the NJEDA’s claims, and to arbitrarily subordinate such claims is a clear violation of the absolute priority rule and not fair and equitable. * Turning to the Liquidation Analysis of the debtor, SCB would be paid in full at a Chapter 7 liquidation as the collateral value for the subject personal property collateral exceeds the amount of SCB's liens. Upon review of the Plan in detail, it is clear that the Plan is neither feasible nor fair and equitable. * The proposed Disclosure Statement is defective pursuant to 11 U.S.C.A. Sec. 1125(a)(1) insofar as the information set forth by the debtor is inadequate, inaccurate and misleading. For the same reasons, the subject Plan is objectionable in the many respects. A full-text copy of the objection dated Oct. 22, 2019, is available at https://tinyurl.com/y4jlpx97 from PacerMonitor.com at no charge. The Secured Creditor is represented: Alan R. Ostrowitz OSTROWITZ & OSTROWITZ, ESQS. 225 Gordons Corner Road, Suite 1-J Manalapan, New Jersey 07726 Tel: (732) 446-2800 About SJV Inc. In 1995, SJV, Inc., was formed for the purposes of operating Karma, a nightclub in Seaside Heights, NJ. In 1997, LASV, Inc., was formed for the purposes of operating, Bamboo, another associated nightclub in Seaside Heights, NJ. Saddy Family, LLC was formed as a real estate holding company for the properties used by SJV and LASV. SJV Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 19-14220) on Feb. 28, 2019. 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 is assigned to Judge Christine M. Gravelle. The Law Office of Eugene D. Roth is the Debtor's counsel. SJV Inc. is related to and associated with debtors Saddy Family, LLC under Case No. 19-14223-KCF and LASV, Inc. under Case No. 19-14218-KCF (the "Associated Debtors"). STO-ROX SCHOOL: Moody's Reviews B2 GOULT Bonds Rating for Downgrade ------------------------------------------------------------------- Moody's Investors Service placed Sto-Rox School District, PA's B2 General Obligation Unlimited Tax Bonds rating under review for possible downgrade. The review will impact approximately $14.0 million of rated parity debt outstanding. RATINGS RATIONALE The review for downgrade is largely driven by the district's continued weak financial position. Moody's expects that the district's already narrow cash position and negative fund balance has further deteriorated during fiscal 2019. Additionally, the district is challenged by growing charter school tuition payments, pension contributions and special education costs, all factors which have contributed to seven years of structurally imbalanced operations. Moody's expects these material pressures to persist in the near term. The district's small and limited tax base presents a further challenge to structural balance given a curtailed ability to raise tax revenue. Moody's expects to complete the review over the next 60 days. FACTORS THAT COULD LEAD TO AN UPGRADE - Consistent, structurally balanced operations - Material improvement in cash and reserves - Significant growth in the tax base and improved resident wealth and incomes FACTORS THAT COULD LEAD TO A DOWNGRADE - Further deterioration of the financial position - Material declines in the tax base or resident wealth and incomes - Material increase in the debt burden LEGAL SECURITY The district's Series of 2017 bonds are considered GOULT as they are secured by the districts full faith and credit pledge and its unlimited ad valorem taxing power as they are not subject to the limitations on property tax increases imposed by Pennsylvania Act 1, "Taxpayer Relief Act." PROFILE Sto-Rox School District, PA covers approximately 2.9 square miles, serving both Stowe Township and the Borough of McKees Rocks. Located in Allegheny County (Aa3 stable), the district is approximately six miles northwest of the City of Pittsburgh (A1 stable). The district operates one primary elementary school, one upper elementary school and one junior/senior high school. METHODOLOGY The principal methodology used in this rating was US Local Government General Obligation Debt published in September 2019. SUMMITSOFT CORPORATION: Case Summary & 20 Top Unsecured Creditors ----------------------------------------------------------------- Debtor: Summitsoft Corporation 11105 Mockingbird Drive Omaha, NE 68137 Business Description: Summitsoft Corporation is a publisher of productivity software, including logo design software for PC and Mac computers, website creator software, creative fonts, graphic design software, clip art, graphics, photo editing software and more. Chapter 11 Petition Date: November 5, 2019 Court: United States Bankruptcy Court District of Nebraska (Omaha Office) Case No.: 19-81638 Judge: Hon. Thomas L. Saladino Debtor's Counsel: Trev Peterson, Esq. KNUDSEN, BERKHEIMER, RICHARDSON & ENDACOTT, LLP 3800 VerMass Place, Suite 200 Lincoln, NE 68502 Tel: (402) 475-7011 Fax: (402) 475-8912 E-mail: tpeterson@knudsenlaw.com Total Assets: $1,973,279 Total Liabilities: $801,785 The petition was signed by Bruce H. Lowry, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/neb19-81638.pdf SYMANTEC CORP: S&P Lowers ICR to 'BB' on Higher Leverage -------------------------------------------------------- S&P Global Ratings downgrades Mountain View, Calif.-based security software and services provider Symantec Corp. by one notch to 'BB' from 'BB+'. Symantec is selling its enterprise security business to Broadcom Inc. for $10.7 billion cash, or $8.2 billion net of taxes, returning all proceeds to shareholders in the form of a special dividend. The company has also announced a 67% increase to its regular quarterly dividend and is increasing its share repurchase program to $1.6 billion. S&P assigned a '2' recovery rating and 'BB+' issue-level rating to the firm's new senior secured credit facilities and lowered the rating on the company's senior unsecured debt to 'BB-' from 'BB', reflecting the company's subordination to the new facilities, and revising the recovery rating to '5' from '4'. The downgrade is based on S&P's expectation that the loss of EBITDA from the sale of the enterprise security business, combined with lower cash balances and greater shareholder returns will raise Symantec's financial leverage to the mid-3x area, up from 2.1x in fiscal 2019. Although this divestiture will reduce the firm's scale and business line diversity, the remaining business benefits from extremely strong EBITDA margins of nearly 50%, leading market share in core consumer security and identity protection products, and may be able to retake share lost in recent years through more focused marketing spending. Key risks include fierce competition from smaller competitors offering often cheaper "fremium" based antivirus offerings and weakness in consumer PC sales. The stable outlook on Symantec reflects S&P's view that the firm will maintain leverage in the mid-3x area for at least the next 24 months. S&P's leverage forecast is based on both modest post-transaction margin expansion as well as increasingly shareholder friendly financial policies that the rating agency believes will limit deleveraging over the near term. "We would consider downgrading Symantec further if the firm is unable to stabilize revenues in its core consumer endpoint protection franchise, leading to EBITDA declines such that leverage were likely to remain over 4x. Leveraged acquisitions intended to grow share or move into adjacent markets could also lead to a downgrade if acquired EBITDA were insufficient to maintain leverage under 4x," S&P said. "Although unlikely over the next 12 months due to the firm's stated shareholder return goals and reduced business scale, we would consider an upgrade over the longer term if the company were to repay its new term loans sufficiently to maintain leverage under 3.0x while returning its core franchise to growth without significantly impairing margins," the rating agency said. SYNCHRONY FINANCIAL: Fitch to Rate Series A Preferred Stock B(EXP) ------------------------------------------------------------------ Fitch Ratings expects to rate Synchrony Financial Corporation's (SYF) $500 million Series A preferred stock issuance 'B(EXP)'. The preferred shares will rank subordinate to existing unsecured debt but senior to common shares. Distributions, when and if declared by the board of directors, will be payable quarterly at a fixed annual rate. Distributions on the preferred shares are non-cumulative. The preferred shares are perpetual in nature, but may be redeemed at SYF's option on or after Nov. 15, 2024. Any redemption of the preferred shares are subject to approval by the Federal Reserve. Proceeds from the issuance are expected to be used for general corporate purposes, which may include share repurchases. KEY RATING DRIVERS SYF's preferred stock issuance is expected to be rated 'B', which is five notches lower than SYF's Viability Rating (VR) of 'bbb-', in accordance with Fitch's 'Global Bank Rating Criteria' dated Oct. 12, 2018. The preferred stock rating includes two notches for loss severity given the securities' deep subordination in the capital structure, and three notches for non-performance given that the coupon of the securities is non-cumulative and fully discretionary. To the extent the proceeds are used to repurchase common shares it would likely pressure SYF's Tier 1 Common Equity ratio. However, Fitch still expects SYF's CET1 to approximate 14% prior to any impacts from the implementation of the Current Expected Credit Loss accounting standard that will be adopted by SYF next year. RATING SENSITIVITIES SYF's preferred stock rating is sensitive to changes in SYF's VR, and would be expected to move in tandem with any changes to the VR. SYF's VR could be downgraded if the company experiences a material decline in profitability resulting from weaker economic terms on recent contract renewals and/or the inability to achieve cost savings following the sale of the WMT portfolio. A downgrade could also be driven by a meaningful decline in SYF's capital ratios in relation to its peers (absent a commensurate increase in loan loss reserves resulting from CECL adoption), substantial credit quality deterioration relative to peers, a meaningful reduction in liquidity, an inability to access the capital markets on reasonable terms for funding and/or potential new and more onerous rules and regulations. Negative rating action could also be driven by unforeseen losses or bankruptcies of retail partners, which are not offset by material new retail partner relationships. Positive ratings momentum is likely outside of the Rating Outlook horizon given the need to assess the terms of recent contract renewals. Thereafter, positive ratings momentum would be predicated on further diversification and credit quality improvement of retail partner relationships, a meaningful decline in the percentage of the loan portfolio comprised of nonprime borrowers, limited deterioration in credit performance through a market cycle, and demonstrated ability to sustain above-average profitability through credit and interest rate cycles. Fitch believes the continued durability of SYB's internet-based deposit platform through interest rate cycles will be a key consideration in evaluating the strength of the company's funding profile. Positive ratings momentum could also develop from the company's ability to diversify its business model as a general purpose card issuer over time while maintaining strong underwriting standards and profit margins. TARRANT COUNTY SENIOR: Case Summary & 23 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Tarrant County Senior Living Center, Inc. d/b/a The Stayton at Museum Way 15601 Dallas Parkway, Suite 200 Addison, TX 75001 Business Description: Incorporated in 2006, Stayton -- https://www.thestayton.com/ --is a not-for- profit corporation that has built a senior living retirement community in Fort Worth, Texas. Stayton operates a continuing care retirement community that offers its senior residents a continuum of care in a campus- style setting, providing living accommodations and related health care and support services to a target market of individuals aged 62 and older. Chapter 11 Petition Date: November 5, 2019 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Case No.: 19-33756 Judge: Hon. Stacey G. Jernigan Debtor's Bankruptcy Counsel: Andrew Ball Zollinger, Esq. DLA PIPER LLP (US) 1900 North Pearl Street, Suite 2200 Dallas, TX 75201 Tel: (214) 743-4509 (214) 743-4500 Fax: (972) 813-6246 (214) 743-4545 E-mail: andrew.zollinger@dlapiper.com andrew.zollinger@us.dlapiper.com - and - Thomas R. Califano, Esq. (pro hac vice admission pending) DLA PIPER LLP (US) 1251 Avenue of the Americas New York, New York 10020-1104 Tel: (212) 335-4500 Fax: (212) 335-4501 E-mail: thomas.califano@dlapiper.com - and - Rachel Nanes, Esq. DLA PIPER LLP (US) 200 South Biscayne Boulevard, Suite 2500 Miami, Florida 33131 Tel: (305) 423-8563 Fax: (305) 675-8206 E-mail: rachel.nanes@dlapiper.com Debtor's Bond Counsel: Gilmore Bell, Esq. Debtor's Chief Restructuring Officer: Louis E. Robichaux IV ANKURA CONSULTING GROUP, LLC Debtor's Claims & Solicitation Agent: EPIQ CORPORATE RESTRUCTURING, LLC https://dm.epiq11.com/case/TSR/info Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petition was signed by Louis E. Robichaux IV, chief restructuring officer. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/txnb19-33756.pdf List of Debtor's 23 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Resident 314 Contingent $1,244,731 Address Redacted Resident Refund 2. Resident 157 Contingent $1,109,069 Address Redacted Resident Refund 3. Resident 315 Contingent $1,012,500 Address Redacted Resident Refund 4. Resident 131 Contingent $992,591 Address Redacted Resident Refund 5. Resident 193 Contingent $980,000 Address Redacted Resident Refund 6. Resident 202 Contingent $975,000 Address Redacted Resident Refund 7. Resident 72 Contingent $957,053 Address Redacted Resident Refund 8. Resident 194 Contingent $921,798 Address Redacted Resident Refund 9. Resident 81 Contingent $891,987 Address Redacted Resident Refund 10. Resident 170 Contingent $854,900 Address Redacted Resident Refund 11. Resident 190 Contingent $854,900 Address Redacted Resident Refund 12. Resident 25 Contingent $850,500 Address Redacted Resident Refund 13. Resident 7 Contingent $837,000 Address Redacted Resident Refund 14. Resident 146 Contingent $828,130 Address Redacted Resident Refund 15. Resident 100 Contingent $819,130 Address Redacted Resident Refund 16. Resident 172 Contingent $807,594 Address Redacted Resident Refund 17. Resident 154 Contingent $796,500 Address Redacted Resident Refund 18. Resident 199 Contingent $784,071 Address Redacted Resident Refund 19. Resident 101 Contingent $779,900 Address Redacted Resident Refund 20. Resident 153 Contingent $779,900 Address Redacted Resident Refund 21. Resident 45 Contingent $779,900 Address Redacted Resident Refund 22. Resident 108 Contingent $779,900 Address Redacted Resident Refund 23. Resident 123 Contingent $779,900 Address Redacted Resident Refund TERRA BIDCO: S&P Assigns 'B' Issuer Credit Rating; Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Terra Bidco B.C. Ltd., a new entity formed to facilitate the acquisition of Ontario-based environmental services provider Terrapure Environmental Ltd. and its subsidiaries by private equity firm Pamploma Capital Management. In addition, S&P assigned its 'B' issue-level rating and '3' recovery rating to the company's proposed first-lien term loan and revolving credit facility of about US$440 million and US$45 million, respectively. S&P's ICR on Terra Bidco primarily reflects Terrapure's leading market positions in most of the key industrial waste management services the company provides, good revenue visibility from multiyear service contracts, and high renewal rates across a diversified customer base. S&P also incorporates its view that Terrapure has limited geographic diversification, with almost all of its operating assets located in Canada and approximately two-thirds of its revenue generated in the provinces of Ontario and Quebec." Terrapure's business is split almost equally between the company's environmental solutions (ES) segment (field and facility services) and resource recovery (RR) segment (mostly the recycling of lead batteries). The company's ES segment operates in a highly fragmented market with competitors that have significantly greater scale and landfill capacity. S&P views this as a competitive disadvantage, particularly in an environment of rising landfill tipping fees. A material share of its customers also operate in the manufacturing, mining, construction, and oil and gas industries, which the rating agency views as a potential source of volatility for waste volumes. The company's RR business has a strong share of the market for recycled spent batteries, specifically lead batteries from motor vehicles. The rating also reflects the company's private equity ownership, and S&P's expectation that it will generate an adjusted debt-to-EBITDA ratio of 5x-6x and positive FOCF over the next few years." The stable outlook reflects S&P's expectation that the company should maintain adjusted debt-to-EBITDA at 5x-6x and generate positive FOCF over the next few years. S&P's view is supported by organic revenue growth, modest improvement in profitability, and relatively low capital expenditures. "We could lower our ratings over the next 12 months if we expect adjusted debt-to-EBITDA to be well over 6x with annual FOCF generation about in line with scheduled debt amortization. We believe this could occur if operating performance were to deteriorate, contributing to lower earnings and operating cash flow than we expect. This could also occur if Terra Bidco pursues a more aggressive acquisition strategy contributing to higher debt levels and integration risks with poor prospects of deleveraging," S&P said. "Given the company's private equity ownership and limited scale, we believe an upgrade is unlikely within the next 12 months. That said, we could raise our ratings on Terra Bidco within this period if we expect the company to sustain adjusted debt-to-EBITDA below 5x and adjusted FOCF-to-debt above 5%," S&P said, adding that this could occur if earnings growth exceeds its expectations, potentially from higher-than-anticipated profitability. In this scenario, S&P would also need to believe there is a low likelihood that a material acquisition or shareholder distributions could return leverage back above 5x. UNIT CORP: Fitch Lowers LT Issuer Default Rating to CCC+ -------------------------------------------------------- Fitch Ratings downgraded the Long-Term Issuer Default Rating of Unit Corporation to 'CCC+' from 'B', the senior secured revolver to 'B+'/'RR1' from 'BB'/'RR1' and the senior subordinated notes to 'CCC+'/'RR4' from 'B'/'RR4'. Fitch maintained the Rating Watch Negative on the IDR and instrument ratings. On Nov. 5, 2019, Unit announced its plan to launch an offer to exchange any and all of its existing 6.625% senior subordinated notes due 2021 for new second lien secured notes. The proposed new notes will be secured by a second-priority lien on the current and future assets of Unit that secure the first lien credit facility. The exchange offer will be conditioned upon either (i) the consummation of the amendment to the company's credit agreement or (ii) a refinancing or replacement of the company's credit agreement. The downgrade reflects Unit Corporation's loss of operational momentum and reduced financial flexibility associated with the company's heightened refinancing and liquidity risks. Fitch believes the company's lack of economic inventory at current commodity prices increases near-term liquidity risks and requires longer-term production profile recalibration to optimize FCF generation, absent supportive commodity price movements. On Aug. 1, 2019, Fitch stated its plan to downgrade Unit within the next three months if management is unable to refinance the 2021 notes and extend access to its revolver, given the credit agreement's springing maturity date to Nov. 16, 2020. The Rating Watch Negative reflects the heightened refinancing and liquidity risks and the company's proposed debt exchange. Fitch believes unsuccessful execution of the exchange would signal further pressure on the company's ability to refinance the 2021 notes and extend revolver access. Fitch will review the announced terms, when available, to determine if the exchange warrants consideration as a distressed debt exchange (DDE). KEY RATING DRIVERS No E&P Drilling Activity: In August 2019, Unit announced its decision to suspend all oil and gas exploration and development activity for the remainder of 2019 due to the company's outlook for commodity prices. Fitch believes the decision prioritizes the company's FCF profile and should facilitate a relatively neutral FCF profile for YE19 following the company's $120 million FCF outspend for first-half 2019. Prioritizing FCF supports liquidity preservation and helps partially offset refinancing risk, but the decision is evidence of further operational momentum erosion. Fitch believes continued commodity price headwinds into 2020, particularly structurally lower natural gas prices, could potentially result in a reduced capital program and production declines in order to support a FCF neutral-to-positive profile. Fitch believes Unit could recalibrate the longer-term production profile downward to balance the asset's relatively weaker unit economics and limited inventory, while helping improve the FCF profile to preserve liquidity. Credit Metrics at Risk: Unit's near-term balance sheet is relatively conservative, with forecast 2019 debt/EBITDA of 2.1x and debt/flowing barrel around $15,000/bbl. However, Fitch believes a FCF-prioritized operational strategy may result in a material, longer-term deterioration in the company's credit metrics due to a lower production profile. Additionally, Fitch estimates a $0.25/mcf decrease in natural gas prices (base case price deck is $2.75/mcf flat) will result in an increase in leverage by about half a turn in the outer years, under base case assumptions. Proposed Debt Exchange: On Nov. 5, 2019, Unit announced its plan to launch an offer to exchange any and all of its existing 6.625% senior subordinated notes due 2021 for new second lien secured notes. Upon the announcement of terms, Fitch will re-visit the proposed exchange to determine if the exchange should be considered a DDE. DERIVATION SUMMARY Unit Corporation's unique asset profile means it has no direct publicly rated peers. In terms of the upstream business, as of second-quarter 2019 (2Q19), Unit's production profile, 45.6 mboepd (47% liquids) is smaller than Ultra Petroleum Corp (CCC; 114.5 mboepd [4% liquids]) and American Energy - Permian Basin's (CCC+) forecast YE19 production of 53.5 mboepd. Fitch expects Ultra's production profile to decline over the next three years and American Energy's production profile to decline after 2020 as both companies prioritize FCF generation. Given the company's gas oriented production profile, the company's unhedged netbacks of $7.7/boe (40% margin) were in line with Ultra's $6.0/boe (41% margin), while American Energy's cost structure of $18.3/boe is significantly higher than the Permian peer average and would result in lower overall netbacks. In terms of 'B' category peers, as of 2Q19, Unit's production profile is smaller than Extraction Oil & Gas ( B+/Stable; 82.8 mboepd [67% liquids]), Magnolia Oil & Gas (B/Positive; 65.1 mboepd [72% liquids]) and Great Western Petroleum (B-/Positive; 47.4 mboepd [70% liquids]) but larger than Lonestar Resources (B-/Stable; 13.6 mboepd [78% liquids]), while the company's unit economics are worse than the peer group. In terms of leverage profile, Unit's debt/flowing barrel of $16,726/bbl and forecast 2019 debt/EBITDA of 2.1x is slightly better than peers, except for Magnolia. Unit's debt/1P of $4.8/boe is consistent with 'B' and 'CCC' category peers. Unit has added diversification with its other two businesses although both segments are relatively small. The company has fewer top-tier drilling rigs (57 total rigs; 13 BOSS rigs) than pure drilling companies Nabors Industries (BB-/Stable) and Precision Drilling (B+/Stable; 233 drilling rigs). The midstream business is conducted through a 50/50 JV and has 22 active gathering systems, 12 gas processing plants, three natural gas treatment plants for approximately 323 mmcfpd total processing capacity and about 1,500 miles of pipe. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - WTI Oil Price of $57.50/bbl in 2019 and 2020 and $55.00/bbl in 2021 and the long term; - Henry Hub natural gas price of $2.75/mcf in 2019, 2020, 2021 and the long term; - Mid single digit production declines in 2020; - BOSS rigs fully utilized, including the 14th under construction; - 2019 capex in line with management guidance, decreasing in 2020; - Proposed debt exchange closes in 2019. KEY RECOVERY RATING ASSUMPTIONS Fitch's recovery analysis for Unit Corporation used both an asset value based approach on observed transactions of like assets and a going-concern approach. The recovery analysis assumes that Unit Corp. would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated the following assumptions: Going-Concern Approach Unit's going concern EBITDA of $205 million in line with Fitch's forecast 2020 stress case assumes a prolonged commodity price downturn (Natural gas prices of $2.25/mcf in 2019 and $2.00/mcf in 2020; Oil prices of $50.00/bbl in and $42.50/bbl in 2020) causing a loss of operational momentum at the upstream and drilling rig segment and a negative FCF profile with 2021 maturities. An EV multiple of 4.0x is used to calculate a post-reorganization valuation and reflects a mid-cycle multiple. The estimate considered a weighted average for the three segments: -- Fitch assumed a 4.0x multiple for the exploration & production business and reflects the company's limited oil-weighted drilling inventory, which will result in a lower margin, gas-oriented production profile as the company exits bankruptcy. -- Fitch assumed a 3.5 multiple for the drilling rig business. The multiple reflects the fleet's small size (57 total rigs) and limited value outside of the 13 BOSS rigs. -- Fitch assumed a 5.0x multiple on the midstream business, lower than Fitch's typical multiple of 6.0x to reflect the limited size and scale and a 34% exposure to Unit, as of YE 18. Liquidation Approach The liquidation value reflects Fitch's view of the value of inventory and other assets that can be realized in a reorganization and distributed to creditors. -- Fitch assumed an advance rate of 50% for accounts receivables. Fitch used a lower percentage to reflect a decreasing "order book" as price erodes and demand for the drilling services lowers. -- Fitch assumed a liquidation value of $98 million for the drilling rigs, or $7 million for each drilling rig, inclusive of the 14th BOSS rig currently being constructed, lower than the newbuild price which Fitch estimates to be $15 million-$20 million. -- Fitch assumed an oil & gas valuation of $525 million, lower than the PDP PV-10 of $831 million to reflect the impact of lower commodity prices and a loss of drilling inventory in the assumed bankruptcy scenario. These assumptions lead to a liquidation value of $795 million, less than the going-concern approach. Waterfall The recovery is based on the assumed enterprise value of $820 million. After the assumed administrative claim of 10%, there is $738 million available to creditors. The revolving credit facility is assumed to be drawn at 100%. Fitch notes that structurally lower prices or continued operational erosion could lower Fitch's estimated enterprise value over the long term. Fitch's recovery assumptions result in a recovery rating for the senior secured revolver within the 'RR1' range and result in a 'B+' rating and the senior subordinated notes recovery rating falls within the 'RR4' range and results in a 'CCC+' rating. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Successful refinancing of the 2021 notes that helps mitigate liquidity risks; - Increased size and scale of Unit's E&P business with increase production and significant economic drilling inventory; - Demonstrated ability to balance the company's production and FCF profile leading to improved operational momentum. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Terms of the debt exchange consistent with Fitch's two-pronged DDE criteria; - Unsuccessful execution of the proposed debt exchange, signaling increased refinancing and liquidity risks; - Deteriorating liquidity profile outlook; - Interest Coverage below 1.5x-2.0x. LIQUIDITY AND DEBT STRUCTURE Limited Liquidity: As of 2Q19, Unit had $1 million in cash on hand and $322 million of availability under the revolver credit facility. Expected second-half 2019 positive FCF helps alleviate near-term liquidity risks, but long-term liquidity is dependent on the proposed debt exchange, which will require consents from the existing note holders and will be conditioned on either (i) the consummation of the amendment to the company's credit agreement or (ii) a refinancing or replacement of the company's credit agreement. ESG CONSIDERATIONS 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 or the way in which they are being managed by the entity. VERNON PARK: Court Confirms Plan of Reorganization -------------------------------------------------- Vernon Park Church of God filed a Modified Plan of Reorganization dated July 15, 2019, and a Fourth Amended Disclosure Statement dated Aug. 14, 2019. There were no objections to the adequacy of the Disclosure Statement and to the confirmation of the Plan. On October 22, 2019, Judge Donald R. Cassling of the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, ordered that the Fourth Amended Disclosure Statement filed by the Debtor is approved. He entered a separate order confirming the Plan. About Vernon Park Church of God Based in Lynwood, Illinois, Vernon Park Church of God --http://www.vpcog.org/-- is a religious organization. The Church's Sunday service is at 10:00 a.m., and Children's Church is held during Sunday service. Vernon Park Church of God filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 17-35316) on Nov. 28, 2017. In the petition signed by Jerald January Sr., pastor, the Debtor estimated assets and liabilities between $1 million and $10 million. The case is assigned to Judge Donald R. Cassling. The Debtor is represented by Karen J. Porter, Esq., at Porter Law Network. WALKER MACHINE: Case Summary & 3 Unsecured Creditors ---------------------------------------------------- Debtor: Walker Machine Tool Solutions, Inc. P.O. Box 339 Trinity, AL 35673 Business Description: Walker Machine Tool Solutions Inc. is in the machine shops business. Chapter 11 Petition Date: November 5, 2019 Court: United States Bankruptcy Court Northern District of Alabama (Birmingham) Case No.: 19-04553 Debtor's Counsel: Stuart M. Maples, Esq. MAPLES LAW FIRM, PC 200 Clinton Avenue W., Suite 1000 Huntsville, AL 35801 Tel: 256 489-9779 Fax: 256-489-9720 E-mail: smaples@mapleslawfirmpc.com Total Assets: $1,750,361 Total Liabilities: $582,993 The petition was signed by Ron Walker or Linda Walker, president and secretary. A copy of the Debtor's list of three unsecured creditors is available for free at: http://bankrupt.com/misc/alnb19-04553_creditors.pdf A full-text copy of the petition is available for free at: http://bankrupt.com/misc/alnb19-04553.pdf WASH MULTIFAMILY: S&P Lowers ICR to 'B-' on Weak Liquidity ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on El Segundo, Calif.-based laundry service provider WASH Multifamily Acquisition Inc. to 'B-' from 'B' and revised its liquidity assessment to weak from adequate. At the same time, S&P lowered its issue-level ratings on the company's first-lien credit facility to 'B-' from 'B' and the company's second-lien credit facility to 'CCC+' from 'B-'. This is in conjunction with the lowering of the issuer credit rating. The '3' recovery rating on the first lien debt and '5' recovery rating on the second lien debt remain unchanged. The downgrade reflects S&P's view that WASH will generate weak credit metrics over the next 12 to 24 months, potentially improving at times as EBITDA grows, but cash flow will be used to support fixed asset and working capital investments. As a result, S&P expects FOCF to debt to be sustained below 3%, in line with the rating agency's 'B-' rated peers. In addition, the company's revolving credit facility which matures in May 2020 is current, and the company does not have sufficient internal sources of cash to repay its obligation ($60 million, with $52 million drawn) which is reflected in S&P's revised liquidity assessment. "We understand the company is in preliminary discussions with its lenders and that the revolving credit facility will likely be refinanced by year end. We expect the refinancing to provide for, among other things, improved borrowing availability," S&P said. The stable outlook reflects S&P's expectation that WASH will refinance and expand available borrowings under its revolving credit facility by year-end and continue to demonstrate good operating performance while maintaining its EBITDA margins in the low-to-mid-20% area over the next 12 months. "We could lower our rating on WASH if the company did not make significant progress in addressing the May 14, 2020 revolver maturity and increasing its liquidity position or if we become aware of a going-concern audit opinion," S&P said, adding that other factors that could lead to a downgrade include weaker-than expected operating performance that results in FOCF deficits that could cause the rating agency to conclude the company's capital structure is unsustainable "We view an upgrade as unlikely over the next 12 months given the company's growth strategy and financial policy, coupled with our expectation of FOCF remaining in the low-single-digit area. However, we would consider an upgrade if the company generated significant EBITDA growth and achieved FOCF to debt in the mid-single-digit area while maintaining leverage below 6.5x," the rating agency said. YUETING JIA: Wants Plan & Disclosure Hearing be Set for Dec. 16 --------------------------------------------------------------- Debtor Yueting Jia seeks a combined hearing to consider approval of the Disclosure Statement, the Prepackaged Plan, and the Solicitation Procedures. The Debtor requests that the Combined Hearing be set for December 16, 2019. At the Combined Hearing, the Debtor will seek approval of the Disclosure Statement. Under Bankruptcy Code section 1125, a plan proponent must provide holders of impaired claims with adequate information regarding a Debtor's Plan of Reorganization. The Debtor requests that the Court set Dec. 3, 2019, at 5:00 pm (prevailing Eastern Time), as the deadline to file objections to the adequacy of the Disclosure Statement or confirmation of the Prepackaged Plan. The proposed Objection Deadline will provide creditors with sufficient notice of the deadline for filing objections to the Disclosure Statement and Prepackaged Plan, while still affording the Debtor and any parties in interest time to file a responsive brief and resolve consensually as many of those objections as possible. If objections or responses to confirmation of the Prepackaged Plan are filed and received by the Objection Deadline, the Debtor requests that he be authorized to file a single consolidated reply by Dec. 11, 2019. A full-text copy of the motion dated Oct. 20, 2019, is available at https://tinyurl.com/y28mkxna from PacerMonitor.com at no charge. About Yueting Jia Yueting Jia is the founder of Leshi Holding Group and the CEO of Faraday Future. Yueting Jia sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 19-12220) on Oct. 14, 2019. The Debtor is represented by James E. O'Neill, Esq., at Pachulski, Stang, Ziehl & Jones LLP. [^] BOOK REVIEW: Bendix-Martin Marietta Takeover War ---------------------------------------------------- MERGER: The Exclusive Inside Story of the Bendix-Martin Marietta Takeover War Author: Peter F. Hartz Publisher: Beard Books Soft cover: 418 pages List Price: $34.95 Review by Gail Owens Hoelscher William Agee, the youngest man ever to head one of the top 100 American corporations, seemed unstoppable. In 1977, at the age of 39, he took over Bendix Corporation, an aerospace, automotive, and industrial firm, determined to diversify the company out of the automotive industry. In his words, "Automobile brakes are in the winter of their life and so is the entire automobile industry." He sold off a few Bendix units, got some cash together, and began to look for acquisitions. Then Agee's relationship with Mary Cunningham burst into the news. Agee had promoted Cunningham from his executive assistant to vice president, to the outrage of other Bendix employees. Their affair, replete with power, brains, youth, good looks, charm, denial, and deceit, fascinated the American public. Cunningham was forced to leave Bendix to work for Seagrams, with the entire country wondering just how well she would do. The two divorced their respective spouses and married soon thereafter. To the chagrin of many, Cunningham continued to play a pivotal role in Bendix affairs. Eager to regain his standing, Agee turned to acquisition as soon as the gossip died down. A failed attempt to acquire RCA left him more determined than ever. He then set his sights on Martin-Marietta, an undervalued gem in the 1982 stock market slump. Thus began an all-out war of tenders and countertenders, egoism and conceit, half-truths and dissimulation, and sudden alliances and last-minute court decisions. This is a very exciting account of the war's scuffles, skirmishes, and battles. The author, son of a long-time Bendix director, was able to interview some of the major participants who most likely would have refused the requests of other authors. Some gave him access to personal notes from the various proceedings. The author thoroughly researched the documents involved in the takeover war, as well as news reports and press releases. He explains the complicated legal maneuverings very clearly, all the while keeping the reader entertained with the personal lives and thoughts of the players. People love this book. The New York Times Book Review said "Aggression and treachery, hairbreadth escapes and last-minute reversals, "white knights" and "shark repellants" - all of these and more can be found in the true-life adventure of the Bendix-Martin Marietta merger war." The Wall Street Journal said "Merger brims with tension, authentic-sounding dialogue and insider detail." Peter F. Hartz was born in Toronto, Canada, in 1953, and moved to the U.S. as a child. He holds degrees from Colgate University and Brown University. He lives in Toluca Lake, California. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. 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. 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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 ***