/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200706.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 6, 2020, Vol. 24, No. 187 Headlines 3E EIGHT: Seeks to Hire D&S Law Group as Counsel 60 91ST STREET: Trustee Hires Held Kranzler as Accountant 78 AVENUE GLENDALE: Hires Douglas Elliman as Real Estate Broker AIG ROVER: DBRS Assigns Prov. BB(low) Rating on Class B-2 Loans AIR CANADA: Fitch Lowers LT Issuer Default Rating to BB- AKORN INC: Says Substantial Going Concern Doubt Exists ALDRICH PUMP: Appointment of Asbestos Claimants Sought ALLIED ESPORTS: March 31 Quarter Results Cast Going Concern Doubt AQUARIUS BUILDING: Hire Gilbert Law as Construction Law Counsel ARCHDIOCESE OF NEW ORLEANS: Moody's Cuts $38MM Debt Rating to Caa1 ASI CAPITAL: Seeks to Hire Lewis Brisbois as Bankruptcy Counsel AVINGER INC: Needs Additional Capital to Remain as Going Concern AVIS BUDGET: Moody's Confirms B2 CFR, Outlook Negative BILLINGS LODGE: Files for Chapter 11 Bankruptcy Protection BODY RENEW: Seeks to Hire Bush Kornfeld as Special Counsel BP PRUDHOE: Needs More Royalty Payments to Remain as Going Concern C.B. HONEYCUTT: Voluntary Chapter 11 Case Summary CALIFORNIA RESOURCES: Lenders Extend Forbearance Period to July 7 CALIFORNIA RESOURCES: Lenders' Forbearance Expires July 7 CAMBER ENERGY: Closer to Finalizing Planned Merger with Viking CAMBER ENERGY: Reports $3.9M Net Loss for FY Ended March 31 CANFIELD MEDICAL: Needs More Capital to Remain as Going Concern CARBO CERAMICS: Committee Hires Alvarez & Marsal as Tax Expert CBAK ENERGY: Incurs $2.35 Million Net Loss in First Quarter CCC LOT: Seeks to Hire Colliers International as Leasing Agent CEC DEVELOPMENT: Case Summary & 2 Unsecured Creditors CHESAPEAKE ENERGY: Files for Chapter 11 With Plan CHICAGO BOARD: Fitch Affirms 'BB' IDR, Outlook Stable CJ AUTO: Seeks to Hire Anthony & Tabb Accountant CUSTOMED INC: Taps Charles A. Cuprill as Legal Counsel DEFOOR CENTRE: Hires Sam Maguire Jr. PC as Title Agent DIAMONDROCK HOSPITALITY: Needs Covenant Waivers for Going Concern DINKEL FAMILY: Hires Northwest Financial as Consultant DIOCESE OF SYRACUSE: Hires Stretto as Administrative Advisor DIOCESE OF SYRACUSE: Hires Stretto as Claims Agent DURA AUTOMOTIVE: Unsecureds Denied Standing on Suit vs. Tilton ELITE INFRASTRUCTURE: Hires Furuseth Olson as Special Counsel ENERGY FOCUS: Has $541,000 Net Loss for the Quarter Ended March 31 EVO TRANSPORTATION: Says Substantial Going Concern Doubt Exists EVOKE PHARMA: Has $1.8-Mil. Net Loss for Quarter Ended March 31 EXIDE TECHNOLOGIES: EPA Approves Clean-Up Settlement Plans EXTRACTECH LLC: Committee Hires William D. Cope as Legal Counsel EXTRACTION OIL: Mgt. Says Substantial Going Concern Doubt Exists EXTRACTION OIL: U.S. Trustee Appoints Creditors' Committee FARR BUILDERS: Seeks Approval to Hire Real Estate Broker FARWEST PUMP: Seeks Approval to Hire Special Counsel in Secura Suit FARWEST PUMP: Seeks to Hire Talwar Law as Special Counsel FLUX POWER: Reports $3.97M Net Loss for Quarter Ended March 31 FOURTH QUARTER PROPERTIES: US Trustee Unable to Appoint Committee FRICTIONLESS WORLD: Hires Steptoe & Johnson as Special Counsel FRONTIER COMMUNICATIONS: Cullen, Russell Represent Utility Co. G-STAR RAW: Case Summary & 20 Largest Unsecured Creditors GGI HOLDINGS: Committee Taps Dundon as Financial Advisor GI DYNAMICS: Further Extends 2017 Notes Maturity Date to July 31 GNC HOLDINGS: Mgt. Says Substantial Going Concern Doubt Exists HDR FARMS: Seeks to Hire Hublar Enterprises as Business Consultant HDR FARMS: Seeks to Hire Rodefer Moss & Co as Accountant HYTERA COMMUNICATIONS: Hires Imperial Capital as Investment Banker HYTERA COMMUNICATIONS: Hires Omni Agent Solutions as Consultant HYTERA COMMUNICATIONS: Hires Pachulski Stang as Bankruptcy Counsel HYTERA COMMUNICATIONS: Hires Steptoe & Johnson as Special Counsel ICONIX BRAND: Incurs $20.7M Net Loss for Quarter Ended March 31 IGLESIA TABERNACULO: Seeks Approval to Hire Accountant IMAGEWARE SYSTEMS: Appoints Chris Dickson as VP of Sales IMAGEWARE SYSTEMS: Names New VP of Engineering INFINITE GROUP: Working Capital Deficit Casts Going Concern Doubt INTELSAT S.A.: Hires Deloitte to Provide Tax Services ISE PROFESSIONAL: Seeks to Hire Chalker Flores as Special Counsel J.C. PENNEY: Closes Orlando Fashion Square Mall Branch J.C. PENNEY: Shareholders Granted Budget to Hire Counsel JASON INDUSTRIES: Weil Gothshal Represents First Lien Group JO-ANN STORES: S&P Upgrades ICR to 'CCC' on Distressed Exchange JONES SODA: Discloses Recurring Losses Cast Going Concern Doubt LATAM AIRLINES: Hires LarrainVial to Find DIP Funding LCI GROUP: Seeks to Hire Palm Realty Boutique as Real Estate Agent LE PAIN QUOTIDIEN: Obtains Additional $1.4M Ch. 11 Loan LIMENOS CORPORATION: Seeks to Hire Francisco J Ramos as Counsel LONESTAR RESOURCES: Moody's Lowers CFR to Ca, Outlook Negative LSC COMMUNICATIONS: Hires E&Y to Provide Tax Consulting Services LSC COMMUNICATIONS: Taps CBRE as Real Estate Advisor LSC COMMUNICATIONS: Taps Grant Thornton to Provide Tax Services LUCKY BRAND: Case Summary & 30 Largest Unsecured Creditors LUXURY DINING: Case Summary & 20 Largest Unsecured Creditors MAINES PAPER: Files Ch. 11 Bankruptcy Protection MAINES PAPER: U.S. Trustee Appoints Creditors' Committee MALINKI SLONIK: Seeks to Hire Hasbani & Light as Counsel MARTIN MIDSTREAM: Needs Refinancing to Remain as a Going Concern MCCLATCHY CO: Seven News Outlets Working Remotely to Cut Costs MICROVISION INC: Says Substantial Going Concern Doubt Exists MOBILE MINI: Moody's Withdraws Ba3 CFR Following Debt Repayment MOBILESMITH INC: Has $3.3M Net Loss for Quarter Ended March 31 MURRAY ENERGY: Sent About 350 Layoff Notices to Employees NANO MAGIC: UHY LLP Raises Substantial Going Concern Doubt NATIONAL MEDICAL: Seeks to Hire Kaufman Coren as Special Counsel NEIMAN MARCUS: Hudson Yards Location Likely to Become Office Spaces NEW WOODRIDGE: U.S. Trustee Unable to Appoint Committee NN INC: Needs to Amend Financial Covenant to Remain Going Concern NORTHERN OIL: Soliciting Consents to Amend Notes Indenture OLB GROUP: eVance Signs 4,277 Square Feet Georgia Office Lease OUTDOOR BY DESIGN: U.S. Trustee Unable to Appoint Committee PG&E CORP: Bankruptcy Plan Near Approval PG&E CORP: Selects Members of New Board of Directors PPG INDUSTRIES: Aims $170M Annual Savings in Restructuring PQ NEW YORK: Law Firm of Russell Represents Utility Companies PRESSURE BIOSCIENCE: Posts $4.3 Million Net Loss in First Quarter Preventing Becoming an Unwary Creditor in the Bankruptcy Proceeding PROFESSIONAL SALES: Seeks to Hire Carter Arnett as Special Counsel PROFESSIONAL SALES: Seeks to Hire Forshey & Prostok as Counsel PROGENICS PHARMA: Needs More Capital to Remain as a Going Concern PROTEUS DIGITAL: U.S. Trustee Appoints Creditors' Committee PUERTO RICO HOSPITAL: Taps Charles A. Cuprill as Legal Counsel QAMM PROPERTIES: Seeks to Hire Brundage Law as Counsel QUEST PATENT: Discloses Substantial Doubt on Staying Going Concern RAY'S SUBWAY: Seeks to Hire PCI Auctions as Auctioneer REGIONAL HEALTH: Receives $228,700 Proceeds Under PPP Loan RENTPATH HOLDINGS: Obtains Court Clearance for the Sale of Assets RM BAKERY: Seeks Approval to Hire Epiq as Claims Agent ROCKSTAR REMODELING: Hires Plunkett Griesenbeck as Special Counsel ROCKSTAR REMODELING: U.S. Trustee Unable to Appoint Committee RYFIELD PROPERTIES: Seeks to Hire McClain Crouse as Accountant SANDRIDGE PERMIAN: Says Substantial Going Concern Doubt Exists SCHROEDER BROTHERS: Trustee Taps Tibble & Wesler as Accountant SIGNET JEWELERS: Closing 400 of 3,200 Jewelry Stores Permanently SOGIO INVESTMENTS: Seeks to Hire Hilco Real Estate as Consultant SOLENO THERAPEUTICS: Says Substantial Going Concern Doubt Exists SOLID BIOSCIENCES: Says Substantial Going Concern Doubt Exists SUN BIOPHARMA: Says that Substantial Going Concern Doubt Exists SUNDIAL GROWERS: Reduces Debt Service to $10.1 Million SUNTECH DRIVE: Files for Chapter 11 Bankruptcy Protection SW GOLF: Seeks to Hire Lexington Law as Counsel TAILORED BRANDS: Taps Kirkland, PJT for Potential Chapter 11 TUESDAY MORNING: Appointment of Equity Committee Sought TUESDAY MORNING: Seeks to Hire Ordinary Course Professionals TUESDAY MORNING: Starts Closing Sales of Over 130 Locations ULTA BEAUTY: All Stores Under Review UNIT CORPORATION: Hires Opportune LLP as Restructuring Advisor UNIT CORPORATION: Seeks to Hire Vinson & Elkins as Counsel UNITED CANNABIS: UST Says Bankr. Court Can’t OK Patent Termination UNITED METHODIST: Seeks Approval to Hire Waggoner Land Surveying UNIVERSAL TOWERS: Case Summary & 20 Largest Unsecured Creditors VALARIS PLC: Mulls Filing for Bankruptcy Protection VISTA PROPPANTS AND LOGISTICS LLC: Files Chapter 11 and Reorganizes VYCOR MEDICAL: Incurs $175,000 Net Loss for Quarter Ended March 31 WASHINGTON PRIME: Needs Financial Waivers to Remain Going Concern WESTWATER RESOURCES: Says Substantial Going Concern Doubt Exists WHITING PETROLEUM: Jones Walker Represents Mineral Lien Claimants WHITING PETROLEUM: Paul, Porter Update on Noteholder Group WILLIAMS SCOTSMAN: Moody's Raises CFR to B1, Outlook Stable WINDERMERE CLUB: Case Summary & 20 Largest Unsecured Creditors WINDSTREAM HOLDINGS: Paul Weiss 5th Update on First Lien Group WORLDS INC: Incurs $321,000 Net Loss for Quarter Ended March 31 YRC WORLDWIDE: Needs to Fund Operations to Remain as Going Concern ZPOWER TEXAS: Hires Local Liquidators as Auctioneer [*] 2020 Paycheck Protection Program Flexibility Act [*] COVID-19 Pandemic Affects North American Trade [*] Employers Can Defer Payroll Taxes After PPP Loan Forgiveness [*] Expanded SBRA Can Assist Distressed Businesses [*] FAQs on CARES Act SBA Loan Programs (Updated) [*] Hospitals Will Lose $200B Revenue in June Due to Pandemic [*] Husch Blackwell's FAQs on PPP Forgiveness for Borrowers [*] Issues on Overpayment on CARES Act Provider Relief Fund [*] King & Spalding: Newly Enacted PPP Flexibilities [*] Moratorium on Involuntary Bankruptcies in Russia Set [*] Restaurants That Declared Bankruptcy Due to Pandemic [*] SBA and U.S. Treasury Changes on PPP Flexibility Act Enactment [*] Sherman & Howard's PPP Flexibility Act Summary [*] Shutts: Commercial Landlords Pre-Bankruptcy Considerations [*] Up to 25,000 Stores Could Shutter in 2020 due to COVID-19 [^] BOND PRICING: For the Week from June 29 to July 3, 2020 ********* 3E EIGHT: Seeks to Hire D&S Law Group as Counsel ------------------------------------------------ 3E Eight, LLC, seeks authority from the US Bankruptcy Court for the Southern District of Florida to employ D&S Law Group, P.A., as its counsel. Services the counsel will render are: (a) give advice to the Debtor with respect to its powers and duties as a Debtor in Possession and the continued management of its business operations; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; (d) protect the interest of the Debtor in all matters pending before the court; (e) represent the Debtor in negotiation with its creditors in the preparation of a plan. Elias Leonard Dsouza, Esq., of D&S Law, assures the court that his firm is disinterested as required by 11 U.S.C. Sec. 327(a) and a verified statement as required under Bankruptcy Rule 2014. The counsel can be reached through: Elias Leonard Dsouza, Esq. D&S Law Group, P.A. 8751 W Broward Blvd Suite 301 Plantation, FL 33324 Phone: +1 954-358-5911 Email: Dtdlaw@aol.com About 3E Eight, LLC 3E Eight, LLC is a privately held company with its principal assets located at 244 NE 85th St El Portal, FL 33138-3065. The Company previously sought bankruptcy protection on April 22, 2020 (Bankr. S.D. Fla. Case No. 20-14586). 3E Eight, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-16260) on June 9, 2020. The petition was signed by Thuc Mai Kathy Elo, mgrm. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Elias Leonard. Dsouza, Esq. at ELIAS LEONARD DSOUZA, PA, represents the Debtor as counsel. 60 91ST STREET: Trustee Hires Held Kranzler as Accountant --------------------------------------------------------- Heidi J. Sorvino, Chapter 11 Trustee for 60 91st Street Corp., seeks authority from the US Bankruptcy Court for the Southern District of New York to retain Held, Kranzler, McCosker & Pulice, LLP, as her accountants. The Trustee requires the accountant to: a. represent and assist the Chapter 11 Trustee in the discharge of her duties and responsibilities under Section 1106 of the Bankruptcy Code, the orders of this Court, and applicable law; b. prepare monthly operating reports for the Debtor; c. assist in the preparation of all tax returns, forms and reports required by various taxing authorities; d. potentially perform a forensic examination of the Debtor's books and records to determine if any preferential payments or fraudulent conveyances occurred; e. potentially analyze and investigate any insider transactions; f. analyze and advise the Chapter 11 Trustee regarding any accounting issues that arise in connection with the discharge of her duties; g. perform all other necessary accounting services on behalf of the Chapter 11 Trustee in connection with the Chapter 11 case. Held's standard hourly rates are: Partners $525 Managers $425 Staff Accountants $325 Paraprofessionals $200 Russell Kranzler, a certified public accountant, disclosed in a court filing that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Russell Kranzler Held, Kranzler, McCosker & Pulice LLP 104 West 40th Street, 12th Floor New York, NY 10018 Tel: (212) 533-2727 Fax: (212) 533-5787 Email: info@hkmp.com About 60 91st Street Corp. 60 91st Street Corp. sought protection under chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-10338) on Feb. 4, 2020, listing under $1 million in both assets and liabilities. Tenille Lewis, Esq. represents the Debtor as counsel. 78 AVENUE GLENDALE: Hires Douglas Elliman as Real Estate Broker --------------------------------------------------------------- 78 Avenue Glendale LLC seeks approval from the US Bankruptcy Court for the Southern District of Florida to hire Douglas Elliman Real Estate as real estate broker. The Debtor owns a real estate at 58-41 78th Avenue, Ridgewood, NY 11385 Tax ID Block 3569 Lot 55 County: Queens City: New York, attached house, 2 units, 1690 sq ft, 2 story, built 1940, brick, built in garage. The professional services the broker will perform is to advertise and market and show the property located at to attract the highest and best bidder either as a stalking horse for auction or for a private sale. The broker will receive a commission in the amount of 5 percent of the selling price. The broker is disinterested as required by 11 U.S.C. Sec. 327(a) and a verified statement as required under Bankruptcy Rule 2014, according to court filings. The broker can be reached at: Douglas Elliman Douglas Elliman Real Estate 1772 E. Jericho Turnpike Huntington, NY 11743 Phone: +1 631-499-9191 About 78 Avenue Glendale 78 Avenue Glendale LLC (DE) is a privately held company whose principal assets are located at 58-41 78th Ave., Ridgewood, N.Y. 78 Avenue Glendale sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-15329) on May 14, 2020. At the time of the filing, Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Laurel M. Isicoff oversees the case. Joel M. Aresty, P.A., is Debtor's legal counsel. AIG ROVER: DBRS Assigns Prov. BB(low) Rating on Class B-2 Loans --------------------------------------------------------------- DBRS, Inc. assigned provisional ratings of BBB (low) (sf) to the Funded Class B-1 Loans and BB (low) (sf) to the Funded Class B-2 Loans (together, the Class B Loans) to be issued by AIG Rover LLC, pursuant to the Revolving Loan Agreement, dated as of June 26, 2020, by and among AIG Credit Management, LLC as the Collateral Manager; AIG Rover, LLC as the Borrower; each Collateralized Loan Obligation (CLO) Subsidiary from time to time; the Lenders from time to time; Royal Bank of Canada (rated AA (high) with a Stable trend by DBRS Morningstar) as the Administrative Agent; and Wells Fargo Bank, N.A. (rated AA with a Negative trend by DBRS Morningstar) as the Collateral Custodian. The provisional ratings on the Class B Loans address the ultimate payment of interest and the ultimate payment of principal on or before the Facility Maturity Date (as defined in the Revolving Loan Agreement referenced above). The Class B Loans will be collateralized primarily by a portfolio of U.S. broadly syndicated corporate loans. AIG Credit Management, LLC will be the Collateral Manager for this transaction. The provisional ratings reflect the following primary considerations: -- The Revolving Loan Agreement, dated as of June 26, 2020. -- The integrity of the transaction structure. -- DBRS Morningstar's assessment of the portfolio quality. -- Adequate credit enhancement to withstand DBRS Morningstar's projected collateral loss rates under various cash flow- stress scenarios. -- DBRS Morningstar's assessment of the origination, servicing, and CLO management capabilities of AIG Credit Management, LLC. As of the date of the provisional ratings, DBRS Morningstar performed a telephone operational risk review of AIG Credit Management, LLC. DBRS Morningstar did not perform an on-site operational risk review of AIG Credit Management, LLC at their offices because of the current Coronavirus Disease (COVID-19) pandemic. DBRS Morningstar found AIG Credit Management, LLC to be an acceptable collateral manager. A provisional rating is not a final rating with respect to the above-mentioned Class B Loans and may change or be different than the final rating assigned or may be discontinued. The assignment of final ratings on the above-mentioned Class B Loans is subject to receipt by DBRS Morningstar of all data and/or information and final documentation that DBRS Morningstar deems necessary to finalize the ratings for these instruments, including satisfaction of the DBRS Morningstar Effective Date Condition (as defined in the Revolving Loan Agreement). Failure by the Borrower to complete the above conditions, as described in the Revolving Loan Agreement, may result in the provisional ratings not being finalized or being finalized at different ratings than the provisional ratings assigned. As the coronavirus spread around the world, certain countries imposed quarantines and lockdowns, including the United States, which accounts for more than one-quarter of confirmed cases worldwide. The coronavirus pandemic has adversely affected not only the economies of the nations most afflicted, but also the overall global economy with diminished demand for goods and services as well as disrupted supply chains. The effects of the pandemic may result in deteriorated financial conditions for many companies and obligors, some of which will experience the effects of such negative economic trends more than others. At the same time, governments and central banks in multiple regions, including the United States and Europe, have taken significant measures to mitigate the economic fallout from the coronavirus pandemic. In conjunction with DBRS Morningstar's commentary, "Global Macroeconomic Scenarios: Implications for Credit Ratings," published on April 16, 2020, and updated on June 1, 2020, DBRS Morningstar further considers additional adjustments to assumptions for the CLO asset class that consider the moderate economic scenario outlined in the commentary. The adjustments include a higher default assumption for the weighted-average (WA) credit quality of the current collateral obligation portfolio. To derive the higher default assumption, DBRS Morningstar notches ratings for obligors in certain industries and obligors at various rating levels based on their perceived exposure to the adverse disruptions caused by the coronavirus. Considering a higher default assumption would result in losses that exceed the original default expectations for the affected classes of notes. DBRS Morningstar may adjust the default expectations further if there are changes in the duration or severity of the adverse disruptions. For CLOs with minimally ramped assets at closing, DBRS Morningstar considers whether that the Revolving Loan Agreement contains a Collateral Quality Matrix with sufficient rows and columns that would allow for higher stressed DBRS Morningstar Risk Scores and therefore a higher default probability on the collateral pool, while still remaining in compliance with the other Collateral Quality Tests, such as the WA Spread and Diversity Score. The results of this analysis indicate that the instrument can withstand an additional higher default probability commensurate with a moderate-scenario impact of the coronavirus. Notes: All figures are in U.S. dollars unless otherwise noted. AIR CANADA: Fitch Lowers LT Issuer Default Rating to BB- -------------------------------------------------------- Fitch Ratings has taken rating actions on various Air Canada's EETC transactions. The rating actions are driven by Fitch's June 15 downgrade of Air Canada's Long-Term Issuer Default Rating (IDR) to 'BB-' from 'BB' and by qualitative considerations for the 2013-1 transaction. KEY RATING DRIVERS Senior Tranche Ratings: The downgrade of Air Canada's 2013-1 class A certificates is driven by qualitative concerns around the underlying collateral. AC 2013-1 is secured by five 777-300ERs. Fitch views the aircraft as vulnerable to future value declines given the COVID-19 pandemic and its impact on long-haul international travel, which come on top of existing pressures on the aircraft created by expiration of existing 777 leases causing aircraft to come on to the secondary market and the upcoming entrance of Boeing's 777X program. The 'A-' rating for the transaction remains supported by relatively low base loan-to-values (LTVs) compared to similar EETC transactions, and by the 777-300ERs continued importance to Air Canada's fleet strategy. The 2013-1 class A certificates continue to pass Fitch's 'A' level stress scenario with a maximum stressed LTV in the mid 80% range. Fitch's affirmation of the 2015-1 class A certificates is driven by solid levels of overcollateralization and by the young, tier 1 aircraft that secure the transaction. The 2015-1 transaction is backed by 2015 and 2016 vintage 787-8s and 787-9s. The 2015-1 class A certificates continue to pass Fitch's 'A' level stress test with a maximum LTV in the upper 70% range. The 2017-1 class AA and class A certificates remain on Rating Watch Negative due to the transaction's exposure to the Boeing 737 MAX which remains grounded. Fitch's view is that the 737 MAX remains a tier 1 piece of collateral despite its near-term uncertainty. However, Fitch has increased the stresses applied in its model from 40% to 50% in the 'AA' scenario and from 20% to 30% in the 'A' scenario to reflect impacts of the grounding. Fitch may lower the stress rate in future reviews after the MAX has re-entered commercial service and Fitch collects more data points on the aircraft's value performance. The Rating Watch Negative reflects the potential that tail risks have increased as the grounding has dragged on, along with the impact on airlines of the coronavirus. The 2017-1 class AA and A certificates continue to pass Fitch's 'AA' and 'A' stress scenarios respectively with maximum LTVs in the upper 80% range. Class B Ratings: Fitch has downgraded Air Canada's 2013-1, 2015-1 and 2017-1 class B certificates by one notch reflecting the firm's recent downgrade of Air Canada's Long-IDR. Class B certificate ratings are derived through a bottom-up approach, notching up from Air Canada's IDR for three variables; 1) affirmation factor, 2) benefit of a liquidity facility (LF), and 3) recovery prospects. The 2017-1 and 2015-1 transactions receive a total uplift of four notches reflecting a high affirmation factor (+2), the benefit of the LF (+1), and good recovery prospects (+1). The 2013-1 transaction receives a total uplift of three notches reflecting a high affirmation factor (+2), and the benefit of the LF (+1), with no adjustment for recovery. DERIVATION SUMMARY The 2017-1 certificates rated 'AA' are in line with Fitch's ratings on senior classes of EETCs issued by United, Spirit and American. Fitch believes that these transactions compare well with recent precedents. Stress scenario LTVs for 2017-1 are in line with other transactions rated at 'AA'. Fitch considers the collateral quality to be consistent with other transactions rated at 'AA'. The 'A' rated class A certificates are in line with similar transactions issued by American, United and Spirit that are also rated at 'A'. The ratings are supported by good quality collateral and high affirmation factors. The 'A-' rating on the 2013-1 class A certificates is one notch below many similar EETC's reflecting the transactions' exposure to the 777-300ER. Air Canada's class B certificates receive either three or four notches of uplift from Air Canada's 'BB-' IDR. This is consistent with class B certificates issued by United Airlines (also rated BB-). KEY ASSUMPTIONS Key assumptions within the rating case for the issuer include a harsh downside scenario in which Air Canada declares bankruptcy, chooses to reject the collateral aircraft, and where the aircraft are remarketed in the midst of a severe slump in aircraft values. Fitch's models also incorporate a full draw on liquidity facilities and include assumptions for repossession and remarketing costs. Value stresses applied to key aircraft types in Fitch's models include: 777-300ER - 30% 'A' level stress; 787-9 - 40% 'AA' level stress, 20% A level stress; 787-8 - 25% A level stress; 737 MAX 8 -50% AA level stress, 30% A level stress. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Positive rating actions are unlikely in the near term for all certificates due to pressure on both airline credit quality and aircraft asset values presented by COVID-19. -- The rating watch negative on the 2017 certificates may be removed once the MAX successfully returns to service. Factors that could, individually or collectively, lead to negative rating action/downgrade: Class AA and A certificates: -- Senior certificates are primarily based on a top-down analysis based on the value of the collateral. Therefore, a negative rating action could be driven by an unexpected decline in collateral values. -- For the 2017-1 transaction negative rating actions could be driven by further material problems with the MAX either through declining asset values or sustained customer aversion to the plane. Class B certificates; -- Class B certificates are notched up from the underlying airline IDR. However, Fitch's criteria allow for wider affirmation factor notching when the issuer rating moves from the 'BB' to the 'B' category. Therefore, a downgrade of Air Canada's rating to 'B+' would not necessarily drive a commensurate downgrade of the class B certificates. -- Downgrades could also be driven by negative reassessments of the affirmation factor for individual transactions or by declining recovery prospects driven by unexpected declines in asset values. LIQUIDITY AND DEBT STRUCTURE Liquidity Facility: The 2017-1, 2015-1 and 2013-1 class AA, A and B certificates benefit from dedicated 18-month liquidity facilities. The liquidity facility provider is Natixis (A+/F1/RWN). ESG CONSIDERATIONS ESG considerations for EETCs are tied to the issuing airline. The highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). Criteria Variation Fitch's EETC criteria do not contemplate a scenario where the collateral aircraft are grounded by governmental authorities and are unable to fly. Continued inclusion of the MAXs in this portfolio constitutes a variation from Fitch's criteria. AKORN INC: Says Substantial Going Concern Doubt Exists ------------------------------------------------------ Akorn, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $256,727,000 on $204,693,000 of net revenues for the three months ended March 31, 2020, compared to a net loss of $82,181,000 on $165,871,000 of net revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $1,032,275,000, total liabilities of $1,051,769,000, and $19,494,000 in total stockholders' deficit. The Company said, "As of March 31, 2020, the Company had cash and cash equivalents of $72.2 million, working capital deficit of $(494.7) million and accumulated deficit of $(590.7) million. The Company had a loss from operations of $(246.9) million and a net loss of $(256.7) million for the three month period ended March 31, 2020. On February 12, 2020, Akorn, Inc., certain of its subsidiaries and the Standstill Lenders entered into the Second Amendment to Standstill Agreement and Third Amendment to Credit Agreement and, as of April 1, 2020, the alternative milestones for the Sale Process set forth in the Second Amended Standstill Agreement apply. We evaluated the impact of the Second Amended Standstill Agreement, including the alternative milestones detailed in the therein, on the Company's ability to continue as a going concern. Accordingly, the impact of toggling to the alternative milestones and the recurring losses from operations and net working capital deficiency create substantial doubt about our ability to continue as a going concern within one year after the date the accompanying financial statements are filed." A copy of the Form 10-Q is available at: https://is.gd/9pRZHS Akorn, Inc., a specialty generic pharmaceutical company, develops, manufactures, and markets generic and branded prescription pharmaceuticals, over-the-counter (OTC) consumer health products, and animal health pharmaceuticals in the United States and internationally. The company operates in two segments, Prescription Pharmaceuticals and Consumer Health. Akorn, Inc., was founded in 1971 and is headquartered in Lake Forest, Illinois. ALDRICH PUMP: Appointment of Asbestos Claimants Sought ------------------------------------------------------ Shelley Abel, bankruptcy administrator, asked the U.S. Bankruptcy Court for the Western District of North Carolina to approve the formation of an official committee of asbestos claimants in the Chapter 11 cases of Aldrich Pump, LLC and its affiliates. The bankruptcy administrator also recommended the appointment of the following asbestos claimants to the committee: 1. Jerry Lynn Fowles Bryn Letsch c/o Brayton Purcell, LLP 222 Rush Landing Road Novato, CA 94948 BLetsch@braytonlaw.com 2. Pete Panagiotopoulos John D. Cooney Kathy Byrne c/o Cooney & Conway 120 N. LaSalle Street, Suite 3000 Chicago, IL 60602 jcooney@cooneyconway.com 3. Ray Hager J. Bradley Smith c/o Dean Omar Branham Shirley, LLP 302 N. Market Street, Suite 300 Dallas, TX 75202 bsmith@dobslegal.com 4. Richard J. Shiel, Sr. Bruce E. Mattock Leif Ocheltree c/o Goldberg Persky White, P.C. 11 Stanwix Street, Suite 1800 Pittsburgh, PA 15222 bmattock@gpwlaw.com 5. Richard and Calvena Sisk Steven Kazan c/o Kazan, McClain, Satterley & Greenwood 55 Harrison Street, Suite 400 Oakland, CA 94607 skazan@kazanlaw.com 6. Joseph Hamlin Marcus Raichle Chris McKean c/o Maune Raichle Hartley French & Mudd, LLC 1015 Locust Street, Suite 1200 St. Louis, MO 63101 mraichle@mrhfmlaw.com 7. John Talmage Gambill John E. Herrick John Baden c/o Motley Rice LLC 28 Bridgeside Boulevard Mount Pleasant, SC 29464 jherrick@motleyrice.com 8. Robert Overton Michael Shepard Erika O'Donnell c/o Shepard Law 160 Federal Street Boston, MA 02110 mshepard@shepardlawfirm.com 9. Richard R. Villanueva Perry J. Browder Chris Guinn c/o Simmons Hanley Conroy LLC One Court Street Alton, IL 62002 pbrowder@simmonsfirm.com 10. Barbara Korte o.b.o. Donald Korte Ben Schmickle Lauren Williams c/o SWMW Law, LLC 701 Market Street, Suite 1000 St. Louis, MO 63101 ben@swmwlaw.com 11. Steven W. Bomzer Perry Weitz Lisa Busch c/o Weitz & Luxenberg, P.C. 700 Broadway New York, NY 10003 pweitz@weitzlux.com About Aldrich Pump Aldrich Pump LLC and Murray Boiler LLC are subsidiaries of Trane Technologies, a publicly traded company. Trane Technologies is a global climate innovator that brings efficient and sustainable climate solutions to buildings, homes, and transportation. The North American headquarters of Trane Technologies, as well as the Debtors, are located in Davidson, North Carolina. Aldrich Pump and Murray Boiler sought Chapter 11 protection (Bankr. W.D.N.C. Lead Case No. 20-30608) on June 18, 2020. The Hon. Craig J. Whitley oversees the case. In the petition signed by Allan Tananbaum, chief legal officer, the Debtor was estimated to have $100 million to $500 million in both assets and liabilities. Debtors have tapped Rayburn Cooper & Durham, P.A. and Jones Day as legal counsel; Bates White, LLC, Evert Weathersby Houff, and K&L Gates, LLP as special counsel; Alixpartners, LLP as financial advisor; and Kurtzman Carson Consultants, LLC as claims and noticing agent. ALLIED ESPORTS: March 31 Quarter Results Cast Going Concern Doubt ----------------------------------------------------------------- Allied Esports Entertainment Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $8,776,469 on $6,045,053 of total revenues for the three months ended March 31, 2020, compared to a net loss of $3,854,152 on $6,235,048 of total revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $68,712,148, total liabilities of $27,913,956, and $40,798,192 in total stockholders' equity. Allied Esports said, "As of March 31, 2020, we had cash and a working capital deficit of approximately $4.4 million (not including approximately $5.0 million of restricted cash) and $10.1 million, respectively. Current liabilities include $12.0 million principal amount of convertible notes which mature on August 23, 2020. For the three months ended March 31, 2020 and 2019, we incurred net losses of approximately $8.8 million and $3.9 million, respectively, and used cash in operations of approximately $3.1 million and $2.9 million, respectively. The aforementioned factors raise substantial doubt about our ability to continue as a going concern within one year after the issuance date of our condensed consolidated financial statements. "The Company's continuation is dependent upon attaining and maintaining profitable operations and the ability to generate positive cash flow from the various revenue sources it is pursuing. Until that time, we will need to raise additional capital to fund the operation at adequate levels to achieve our objectives. There can be no assurance that we will be able to close on sufficient financing to meet our needs. Prior to the Merger, in addition to our revenues, our operations relied heavily on investment from Ourgame by means of operational support and through the issuance of debt. "We continue to pursue sources of additional capital through various financing transactions or arrangements, including joint venturing of projects, debt financing or other means, including equity financing in the capital markets now available to us. We may also seek to leverage our strategic partnerships to alter capital requirements or expand our available financing network. However, we may not be successful in identifying suitable or reasonably priced funding and/or alternative funding options in a sufficient time period or at all. If we are unable to obtain the requisite amount of financing needed to fund our planned operations, it would have a material adverse effect on our business and ability to continue as a going concern, and we may have to curtail, divest, or even cease, certain operations." A copy of the Form 10-Q is available at: https://is.gd/5zljCj Allied Esports Entertainment Inc., an esports entertainment company, provides infrastructure, transformative live experiences, and multiplatform content and interactive services worldwide. The company was incorporated in 2017 and is headquartered in Irvine, California. Allied Esports Entertainment Inc. is a subsidiary of Ourgame International Holdings Limited. AQUARIUS BUILDING: Hire Gilbert Law as Construction Law Counsel --------------------------------------------------------------- Aquarius Building, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Gilbert Law Group, P.A., as its construction law counsel. Gilbert Law will advise and represent the Debtor in the collection of delinquent accounts; disputes with vendors, customers and other contractors; state court litigation cases not subject ot the automatic stay; grievances filed against the Debtor with the State of Florida Department of Business Regulation; and general legal issues which arise in day-to-day operations. Gilbert Law's hourly rates are: Bryce Gilbert, Esq. $350 Other Attorneys $175 to $300 Bryce Gilbert, Esq., partner at Gilbert Law, attests that his firm does not hold nor represent any interest adverse to the Debtor and is disinterested within the meaning of 11 U.S.C. 101(14). The firm can be reached through: Bryce Gilbert, Esq. Gilbert Law Group, P.A. 1720 Harrison Street 19th Floor - Penthouse B Hollywood, FL 33020 Office: (954) 620-5000 Fax: (954) 620-5105 Email: BGilbert@TheConstructionLawyers.com About Aquarius Building Aquarius Building, Inc., a swimming pool contractor based in Hialeah, Fla., sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-15108) on May 7, 2020, listing under $1 million in both assets and liabilities. Judge Robert A. Mark oversees the case. Debtor is represented by Hoffman, Larin & Agnetti, P.A. ARCHDIOCESE OF NEW ORLEANS: Moody's Cuts $38MM Debt Rating to Caa1 ------------------------------------------------------------------ Moody's Investors Service has downgraded the rating of the Archdiocese of New Orleans (LA) to Caa1 from B1. The action removes the rating from watchlist for potential downgrade that was initiated on May 1, 2020 and impacts approximately $38 million of rated debt issued through the Louisiana Public Facilities Authority. The outlook is negative. RATINGS RATIONALE The downgrade to Caa1 reflects the Archdiocese's failure to pay its July 1, 2020, scheduled debt service [1] for rated debt, as determined through the Chapter 11 bankruptcy process, as well as high degree of uncertainty regarding ultimate recovery. Depending on how various assets and liabilities are treated throughout the bankruptcy proceedings, bondholders could receive either near full recovery or suffer a substantial loss. The magnitude of pending and future sexual misconduct claims adds uncertainty to the process. Further, the impact of the coronavirus pandemic will further strain financial performance, which was already pressured with a low 7% operating cash flow margin for fiscal 2019. Additionally, the Archdiocese manages self-insurance programs, which will potentially negatively impact expenses in fiscal 2020 and 2021. Positive considerations include significant financial reserves, with spendable cash and investments of over $160 million as of fiscal 2019 inclusive of deposit and loan funds, and the longer term good strategic position as Louisiana's only archdiocese. The coronavirus (COVID-19) pandemic has created dislocation across industries and geographies and triggered urgent challenges for many businesses and organizations to address. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. The pandemic has additional implications for the Archdiocese given its location in an outbreak epicenter and its widespread operations, including affiliated schools, churches and nursing homes. The Archdiocese cited coronavirus implications in its bankruptcy filing and continues to experience negative financial impacts, including increased debt at some affiliates for which the Archdiocese holds reserves through the Payroll Protection Program. RATING OUTLOOK The negative outlook incorporates the potential for further credit deterioration due to potential new sexual abuse claims and ongoing pressure on financial performance as the global coronavirus impact continues. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING - Demonstrated ability to fulfill financial obligations without material impairment of financial reserves FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING - Evidenced weaker prospects for recovery as bankruptcy proceeds advance - Increased pressure on financial performance due to the ongoing impact of the coronavirus impact as well as damage to the Archdiocese's reputation due to bankruptcy filing and ongoing sexual abuse claims LEGAL SECURITY Bonds are a general unsecured obligation of the archdiocese, payable from gross revenues, the Archdiocese's general fund and other legally available funds. A debt service reserve fund is required if the liquidity covenant falls below 1.0x. The bonds have three financial covenants. For the debt calculations, the Archdiocese is required to include 20% of debt of St. Anthony's Gardens, a senior living facility with fiscal 2019 $48 million of debt guaranteed by the Archdiocese. There is a 1.1 x liquidity covenant; for fiscal 2019, the Archdiocese reported 3.13x. The Net Worth covenant is at least 1.0x and the Archdiocese reported 3.66x, declining to 1.9x with 100% SAG debt. The Debt Service Coverage Ratio is at least 1.0x and the Archdiocese reported 2.77x in fiscal 2019. Moody's rating incorporates the Archdiocese's guarantee of SAG debt to be 100% of debt service. The guarantee drops to 35% when: 1) the project is completed; 2) reaches a 1.25x debt service coverage for the immediately preceding year; and 3) has over 120 days cash on hand. The guarantee is eliminated when debt service coverage of 1.4x or better is achieved. Once the guarantee is reduced or eliminated, it cannot be restored. PROFILE The Archdiocese of New Orleans, the second oldest archdiocese in the country, currently operates in the eight civil parishes in the metropolitan New Orleans area. With almost 520,000 parishioners, the archdiocese consists of 112 parishes and supports and administers approximately 75 schools with over 34,000 students. It also provides administrative support for affiliated, separately incorporated nursing homes, affordable senior living facilities and other community service facilities consistent with the mission of the Archdiocese. METHODOLOGY The principal methodology used in this rating was Nonprofit Organizations (Other Than Healthcare and Higher Education) published in May 2019. ASI CAPITAL: Seeks to Hire Lewis Brisbois as Bankruptcy Counsel --------------------------------------------------------------- ASI Capital, LLC, and ASI Capital Income Fund, LLC seeks authority from the United States Bankruptcy Court for the District of Colorado to hire Lewis, Brisbois, Bisgaard & Smith LLP as their bankruptcy counsel, nunc pro tunc to June 14, 2020. ASI Capital requires the counsel to: a. provide legal advice to ASI Capital with respect to its powers and duties as debtor-in-possession; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications, complaints, and other legal documents necessary in the administration of the case; d. protecting the interests of ASI Capital in all matters pending before the Court; and e. representing ASI Capital in negotiating with its creditors to prepare a plan of reorganization or other exit plan. Lewis Brisbois' current hourly rates are: Partners $550 Associates $375 Paralegals $170 Law Clerks $170 On June 8, 2020, Lewis Brisbois received a retainer in the amount of $25,000. John Cardinal Parks, Esq. disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: John Cardinal Parks, Esq. LEWIS BRISBOIS BISGAARD & SMITH, LLP 1700 Lincoln Street, Suite 4000 Denver, CO 80203 Tel: (303) 861-7760 720-292-2016 Fax: (303) 861-7767 E-mail: john.parks@lewisbrisbois.com About ASI Capital Income Fund ASI Capital Income Fund is an investment company as defined in 15 U.S.C. Section 80a-3. ASICIF holds interests in a number of investments, including interests in hotels. ASI Capital Income Fund, LLC and ASI Capital LLC concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Col. Lead Case No. 20-14066) on June 15, 2020. The petitions were signed by Ryan C. Dunham, CEO, Convergence Group. At the time of filing, the each Debtor estimated $10 million to $50 million in both assets and liabilities. John Cardinal Parks, Esq. at LEWIS BRISBOIS BISGAARD & SMITH, LLP, represents the Debtors as counsel. AVINGER INC: Needs Additional Capital to Remain as Going Concern ---------------------------------------------------------------- Avinger, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss (attributable to common stockholders) of $6,818,000 on $2,261,000 of revenues for the three months ended March 31, 2020, compared to a net loss (attributable to common stockholders) of $5,950,000 on $1,840,000 of revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $22,800,000, total liabilities of $18,392,000, and $4,408,000 in total stockholders' equity. Avinger said, "In the course of its activities, the Company has incurred losses and negative cash flows from operations since its inception. As of March 31, 2020, the Company had an accumulated deficit of $354.2 million. The Company expects to incur losses for the foreseeable future. The Company believes that its cash and cash equivalents of $9.9 million at March 31, 2020 and expected revenues and funds from operations will be sufficient to allow the Company to fund its current operations through at least the third quarter of 2020. Even though we received net proceeds of approximately $3.1 million from the sale of our common stock in April and May 2020, $2.3 million of loan proceeds pursuant to the Paycheck Protection Program ("PPP") under the Coronavirus Aid, Relief and Economic Security ("CARES") Act, $3.9 million from the sale of our common stock in our January 2020 offering, net proceeds of $3.8 million from the sales of our common stock in our August 2019 offering, and proceeds of $8 million from the issuance of common stock upon the exercise of warrants during April and May of 2019, the Company will need to raise additional funds through future equity or debt financings within the next twelve months to meet its operational needs and capital requirements for product development, clinical trials and commercialization and may subsequently require additional fundraising. "The Company can provide no assurance that it will be successful in raising funds pursuant to additional equity or debt financings or that such funds will be raised at prices that do not create substantial dilution for our existing stockholders. Given the recent decline in the Company's stock price, any financing that we undertake in the next twelve months could cause substantial dilution to our existing stockholders, there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations. In addition, the COVID-19 pandemic and responses thereto have resulted in reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, and reduced business and consumer spending, which could increase the cost of capital and/or limit the availability of capital to the Company. While we have taken certain actions to manage our available cash and other resources to mitigate the effects of COVID-19 on our business, including reducing discretionary costs, reducing base salaries for all of our non-manufacturing employees by 20%, and reducing hours worked by our manufacturing workers, there can be no assurance that such strategies will be successful in mitigating the negative impacts of the COVID-19 pandemic on our business. These conditions raise substantial doubt about the Company's ability to continue as a going concern. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to it, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development of one or more of its products. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's ultimate success will largely depend on its continued development of innovative medical technologies, its ability to successfully commercialize its products and its ability to raise significant additional funding. "Additionally, due to the substantial doubt about the Company's ability to continue operating as a going concern and the material adverse change clause in the Loan Agreement with CRG Partners III L.P. and certain of its affiliated funds (collectively "CRG"), the entire amount of borrowings at March 31, 2020 and December 31, 2019 has been classified as current in these financial statements. CRG has not invoked the material adverse change clause." A copy of the Form 10-Q is available at: https://is.gd/bFZDnQ Avinger, Inc., a commercial-stage medical device company, designs, manufactures, and sells image-guided and catheter-based systems used by physicians to treat patients with peripheral arterial disease (PAD) in the United States and Europe. Avinger, Inc. was founded in 2007 and is headquartered in Redwood City, California. AVIS BUDGET: Moody's Confirms B2 CFR, Outlook Negative ------------------------------------------------------ Moody's Investors Service confirmed the ratings of Avis Budget Car Rental, LLC and its guaranteed subsidiaries. The confirmations include: Avis Budget Car Rental, LLC -- Corporate Family Rating at B2; Probability of Default Rating at B2-PD; secured bank facility at Ba2; senior secured notes at Ba2; senior unsecured notes at B3; and, Avis Budget Finance PLC -- senior unsecured at B3. The Speculative Grade Liquidity rating is raised to SGL-3 from SGL-4. The outlook is negative. This rating action concludes the review for downgrade that was initiated on April 24, 2020. The rating confirmation reflects the better-than-expected pricing and volume environment in the US used car market over the May/June time period, the related progress Avis is making in reducing the size of its rental fleet in response to the coronavirus outbreak, and a liquidity position that is adequate in advance of the severe downturn that Moody's anticipates in air travel during 2020 and 2021. The car rental sector has been one of the sectors most significantly affected by the coronavirus-driven credit shock given its heavy dependence on air travel and on the sale of used vehicles. While conditions in the used car market are presently constructive, air travel has fallen precipitously. RATINGS RATIONALE The ratings reflect Moody's view that although Avis is one of the three leading players in the US car rental sector, it faces considerable competitive challenges within the current environment. The largest competitor, Enterprise Holdings, Inc, has considerably greater size, as well as much healthier return measures and free cash generation. The third competitor, Hertz Corporation (The) is operating in bankruptcy, and its fleet disposition strategy could be disruptive to the pricing in the used car segments served by car rental industry. In addition to these competitive challenges, Avis also faces the broader risk that: a) there could be a second wave of the coronavirus outbreak and related shut down; or b) high unemployment levels and depressed consumer sentiment could further weaken the economy. A significant portion of Avis's rentals depend on travel, both business and leisure. Moody's expects that air travel will contract by approximately 70% during 2020, and that 2021 travel rates will be 35% to 55% below those of 2019. This will contribute to a sizable cash outflow as Avis contends with the unprecedentedly sharp fall in demand, and the need to rapidly reduce the size of its car rental fleet. The company has funded much of the near-term cash outflow by raising $500 million in senior notes during May, and thereby maintaining much-needed liquidity. While 2021 rental volume is likely to improve, the activity will still be at very low levels and Avis will have challenges to properly match the size and characteristics of its car fleet to the ultimate demand. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial credit implications of public health and safety. Avis has minimal environmental risk associated with the ownership and operation of its vehicle fleet. The company also maintains adequate relationships with its employees, regulatory bodies and the communities in which it operates. Proceeds from a May 2020 sale of $500 million of first-lien notes provided Avis with additional liquidity to help fund the large cash outflow that occurred during the April/May period in which significant restructuring and defleeting actions were undertaken. Moody's expects that Avis' total liquidity position, including cash and availability under its credit facility, will exceed $1 billion going into the third quarter, and will adequately cover the company's cash requirements during the coming twelve months. The negative outlook reflects the continuing risk of a more challenging operating environment as a result of: the scope of the air travel downturn; the possibility of spreading consumer economic weakness; and, the potential disruption in the used car market pricing structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be lowered in the event of further erosion in the economic environment. This erosion could result from a second coronavirus wave or broader weakness in the consumer economy. A downgrade could also result from any disruption in the used car market's pricing of volume structure, or in Avis's defleeting progress. Maintaining a liquidity position that comfortably covers all twelve-month cash requirements will be essential in maintaining the current rating. An upgrade of Avis' rating during the next two years is unlikely. Factors that would contribute to an upgrade include: a successful realignment of Avis' rental fleet with sustainable demand levels; a recovery in air travel; and, financial performance that includes an EBITA margin approximating 4% and EBITA/interest exceeding 2.5x. The following rating actions were taken: Confirmations: Issuer: Avis Budget Car Rental, LLC Corporate Family Rating, Confirmed at B2 Probability of Default Rating, Confirmed at B2-PD Senior Secured Bank Credit Facility, Confirmed at Ba2 (LGD2) Senior Secured Regular Bond/Debenture, Confirmed at Ba2 (LGD2) Senior Unsecured Regular Bond/Debenture, Confirmed at B3 (LGD5) Issuer: Avis Budget Finance PLC Senior Unsecured Regular Bond/Debenture, Confirmed at B3 (LGD5) Upgrades: Issuer: Avis Budget Car Rental, LLC Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Outlook Actions: Issuer: Avis Budget Car Rental, LLC Outlook, Changed to Negative from Rating Under Review Issuer: Avis Budget Finance PLC Outlook, Changed to Negative from Rating Under Review Avis Budget Group, Inc. is one of the world's leading car rental companies through its Avis and Budget brands. The company's Zipcar brand, is the world's leading car sharing network. The company's 2019 revenues were $9.2 billion. The principal methodology used in these ratings was Equipment and Transportation Rental Industry published in April 2017. BILLINGS LODGE: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Cornelia Nicholson, writing for KULR8, reports that Elk Lodge has filed Chapter 11 bankruptcy protection. According to documents filed with the U.S. Bankruptcy Court for the District of Montana, the Billings Lodge #394 Benevolent and Protective Order of Elks of United States of America has filed a case under Chapter 11 of the Bankruptcy code and an order for relief has been entered on June 4th. If the bankruptcy is approved, many local contributors would be out thousands of dollars. The documents do not list the actual amount of debt, but we have spoken with one of the creditors to Elk Lodge who has asked to remain anonymous and they tell us it could be about $2.4 million plus interest. According to the filed documents the largest claim from a creditor is 535 thousand dollars followed by $150 thousand, $70 thousand and $50 thousand. The list of the 20 largest claims from creditors continues with the lowest being $10 thousand. Documents state the Elk Lodge has between 100 to 199 creditors. A telephonic meeting of creditors is scheduled for July 15, 2020 at 2pm. About Billings Lodge, No. 394 Billings Lodge, No. 394, Benevolent and Protective Order of Elks of United States of America is a tax-exempt civic and social organization. Elk Lodge is a Billings, Montana-based fraternal organization that hosts various civic events and social gatherings like wedding receptions, meetings, and other functions. Billings Lodge filed a voluntary Chapter 11 bankruptcy petition (Bankr. D. Mon. Case No. 20-10110) on June 5, 2020. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor is represented by Felt Martin PC. BODY RENEW: Seeks to Hire Bush Kornfeld as Special Counsel ---------------------------------------------------------- Body Renew Alaska, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Alaska to hire Bush Kornfeld LLP as its special counsel. Bush Kornfeld is being employed to pursue an action against the United States Small Business Administration due to the SBA's revocation of a loan to the Debtor under the "PPP Loan" program. The rates for attorneys and support personnel of the firm range from $75 per hour to $565 per hour. Bush Kornfeld has no connections with the Debtors, does not hold nor represent any interest adverse to the estate, and is a disinterested person as defined by Bankruptcy Code Sec. 101(14) as disclosed in the court filing. The firm can be reached through: Thomas A. Buford, Esq. Bush Kornfeld LLP 601 Union St., Suite 5000 Seattle, WA 98101 Tel: 206-292-2110 About Body Renew Alaska Body Renew Alaska, LLC -- https://bodyrenewalaska.com/ -- is a physical fitness company offering personal training, group fitness classes, weight loss programs, and nutritional counseling. Body Renew Alaska, LLC, filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr D. Alaska Case No. 20-00075) on March 6, 2020. In the petition signed by Brian Horschel, owner and manager, Debtor was estimated to have $1 million to $10 million inboth assets and liabilities. Judge Gary Spraker oversees the case. Debtor tapped David H. Bundy, P.C. as its legal counsel, and Rulien & Associates, LLC as its accountant. BP PRUDHOE: Needs More Royalty Payments to Remain as Going Concern ------------------------------------------------------------------ BP Prudhoe Bay Royalty Trust filed its quarterly report on Form 10-Q, disclosing a cash earnings of $9,091,000 on $9,337,000 of royalty revenues for the three months ended March 31, 2020, compared to a cash earnings of $21,442,000 on $21,759,000 of royalty revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $1,164,000, total liabilities of $689,000, and $475,000 in trust corpus. BP Prudhoe Bay Royalty Trust said, "In order to ensure that the Trust has the ability to pay future expenses, the Trust established a cash reserve account, which is intended to be sufficient to pay approximately one year's current and expected liabilities and expenses of the Trust. If the Trust does not receive additional royalty payments during the remainder of 2020 or in the first quarter of 2021, the Trust's ability to meet its obligations would be adversely affected, which raises substantial doubt about its ability to continue as a going concern. As a general matter, the Trust is expected to terminate at such time the net revenues from the Royalty Interest for two successive years are less than $1,000,000 per year." A copy of the Form 10-Q is available at: https://is.gd/UiiGGo BP Prudhoe Bay Royalty Trust is based in Houston, Texas. C.B. HONEYCUTT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: C.B. Honeycutt Grading, Inc. d/b/a HGI d/b/a Honeycutt Grading 3420 US Hwy 6015, Suite 140 Concord, NC 28025 Case No.: 20-30658 Business Description: C.B. Honeycutt Grading, Inc. -- https://hgisiteworks.com -- specializes in turn key site development for subdivisions, retail stores, appartments, and schools. Chapter 11 Petition Date: July 3, 2020 Court: United States Bankruptcy Court Western District of North Carolina Judge: Hon. Laura T. Beyer Debtor's Counsel: John C. Woodman, Esq. ESSEX RICHARDS, P.A. 1701 South Blvd. Charlotte, NC 28203 Tel: (704) 877-4300 Fax: (704) 372-1357 Email: jwoodman@essexrichards.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Chris Honeycutt, president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/oDKs5i CALIFORNIA RESOURCES: Lenders Extend Forbearance Period to July 7 ----------------------------------------------------------------- California Resources Corporation and certain of its subsidiaries entered into further amendments with respect to those certain forbearance agreements, dated June 2, 2020 and subsequently amended on June 12, 2020, with: * certain lenders representing a majority of the outstanding principal amount of the loans under its Credit Agreement, dated as of Sept. 24, 2014, by and among the Company, as the Borrower, the subsidiary guarantors party thereto, the various Lenders identified therein, JPMorgan Chase Bank, N.A., as Administrative Agent, a Lender and a Letter of Credit Issuer, and Bank of America, N.A., as a Lender and a Letter of Credit Issuer; * certain lenders representing a majority of the outstanding principal amount of the term loans under its Credit Agreement, dated Aug. 12, 2016, by and among the Company, as the Borrower, the various Lenders identified therein and The Bank of New York Mellon Trust Company, N.A., as Administrative Agent; and * certain lenders representing a majority of the outstanding principal amount of the term loans under its Credit Agreement, dated as of Nov. 17, 2017, by and among the Company, as the Borrower, the subsidiary guarantors party thereto, the various Lenders identified therein and The Bank of New York Mellon Trust, N.A., as Administrative Agent. Pursuant to the Amendments, the Forbearing Parties agreed to extend the period in which they will forbear from exercising any remedies under the Credit Agreements with respect to certain specified events of default until the earlier of (a) 11:59 p.m. (New York time) on July 7, 2020 and (b) the date the Forbearance Agreements otherwise terminate in accordance with their terms. The Forbearance Agreements include certain covenants with which the Company must comply during the forbearance period. The failure to comply with such covenants, among other things, would result in the early termination of the forbearance period. About California Resources California Resources Corporation -- http://www.crc.com-- is an oil and natural gas exploration and production company headquartered in Los Angeles, California. CRC operates its resource base exclusively within the State of California, applying complementary and integrated infrastructure to gather, process and market its production. California Resources reported a net loss attributable to common stock of $28 million for the year ended Dec. 31, 2019, compared to net income attributable to common stock of $328 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $4.97 billion in total assets, $543 million in total current liabilities, $4.86 billion in long-term debt, $135 million in deferred gain and issuance costs, $715 million in other long-term liabilities, $816 million in mezzanine equity, and a total deficit of $2.09 billion. * * * As reported by the TCR on July 3, 2020, S&P Global Ratings lowered its long-term issuer credit rating on U.S.-based oil and gas exploration and production company California Resources Corp. (CRC) to 'D' (default) from 'CC'. "The downgrade reflects our view that CRC will not make the aggregate interest payments on its 1.5-lien term loan due 2021, its first-lien term loan due 2022, or its 8% second-lien notes due 2022 within the 30-day grace period. The company continues discussions with its debtholders, and we believe these will result in a comprehensive debt restructuring or a bankruptcy filing," S&P said. As reported by the TCR on April 6, 2020, Moody's Investors Service downgraded California Resources Corp.'s Corporate Family Rating to Caa3 from Caa1. The rating actions reflect CRC's elevated restructuring risk, including the potential for a bankruptcy filing or distressed exchange, following its failed attempt to execute a debt for debt exchange in March. CALIFORNIA RESOURCES: Lenders' Forbearance Expires July 7 --------------------------------------------------------- On June 30 and July 2, 2020, California Resources Corporation and certain of its subsidiaries entered into further amendments (collectively, the "Amendments") with respect to those certain forbearance agreements, dated June 2, 2020 and subsequently amended on June 12, 2020 (collectively, as amended, the "Forbearance Agreements"), with: * certain lenders (collectively, the "2014 Lenders") representing a majority of the outstanding principal amount of the loans under its Credit Agreement, dated as of September 24, 2014 (as amended, the "2014 Credit Agreement"), by and among the Company, as the Borrower, the subsidiary guarantors party thereto, the various Lenders identified therein, JPMorgan Chase Bank, N.A., as Administrative Agent, a Lender and a Letter of Credit Issuer, and Bank of America, N.A., as a Lender and a Letter of Credit Issuer; * certain lenders (collectively, the "2016 Lenders") representing a majority of the outstanding principal amount of the term loans under its Credit Agreement, dated August 12, 2016 (the "2016 Credit Agreement"), by and among the Company, as the Borrower, the various Lenders identified therein and The Bank of New York Mellon Trust Company, N.A., as Administrative Agent; and * certain lenders (collectively, the "2017 Lenders", and together with the 2014 Lenders and the 2016 Lenders, the "Forbearing Parties") representing a majority of the outstanding principal amount of the term loans under its Credit Agreement, dated as of November 17, 2017 (as amended, the "2017 Credit Agreement", and together with the 2014 Credit Agreement and the 2016 Credit Agreement, the "Credit Agreements"), by and among the Company, as the Borrower, the subsidiary guarantors party thereto, the various Lenders identified therein and The Bank of New York Mellon Trust, N.A., as Administrative Agent. Pursuant to the Amendments, the Forbearing Parties agreed to extend the period in which they will forbear from exercising any remedies under the Credit Agreements with respect to certain specified events of default until the earlier of (a) 11:59 p.m. (New York time) on July 7, 2020 and (b) the date the Forbearance Agreements otherwise terminate in accordance with their terms. The Forbearance Agreements include certain covenants with which the Company must comply during the forbearance period. The failure to comply with such covenants, among other things, would result in the early termination of the forbearance period. * * * The Wall Street Journal reported in early June that California Resources Corp. failed make interest payments to lenders and could file for Chapter 11 bankruptcy protection. According to the report, the company will file for bankruptcy if it fails to obtain another extension of its forbearance agreement with lenders. About California Resources California Resources Corporation -- http://www.crc.com/-- is an oil and natural gas exploration and production company headquartered in Los Angeles, California. CRC operates its resource base exclusively within the State of California, applying complementary and integrated infrastructure to gather, process and market its production. California Resources reported a net loss attributable to common stock of $28 million for the year ended Dec. 31, 2019, compared to net income attributable to common stock of $328 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $6.96 billion in total assets, $709 million in total current liabilities, $4.87 billion in long-term debt, $146 million in deferred gain and issuance costs, $720 million in other long-term liabilities, $802 million in redeemable non-controlling interests, and total deficit of $296 million. * * * In March 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit rating on California Resources Corp. The affirmation reflects S&P's expectation that CRC will continue to support its liquidity by balancing its spending with its cash flow, selling non-core assets, and potential for joint ventures in 2019 as mentioned in the Company's fourth quarter conference call. As reported by the TCR on April 6, 2020, Moody's Investors Service downgraded California Resources Corp.'s Corporate Family Rating to Caa3 from Caa1. The rating actions reflect CRC's elevated restructuring risk, including the potential for a bankruptcy filing or distressed exchange, following its failed attempt to execute a debt for debt exchange in March. CAMBER ENERGY: Closer to Finalizing Planned Merger with Viking -------------------------------------------------------------- Camber Energy, Inc. and Viking Energy Group, Inc. are completing additional steps necessary to closing their planned merger. On June 29, 2020, Camber filed with the Securities and Exchange Commission its Annual Report on Form 10-K for Camber's March 31, 2020 fiscal year end. Camber's Form 10-K highlighted net income of $0.96 million related to its 25% ownership interest in Elysium Energy Holdings, LLC, which the Company acquired from Viking on Feb. 3, 2020. Additionally, on June 26, 2020, Camber provided Viking financing of $4.2 million to assist with extinguishing, certain obligations of Viking related primarily to advances made to assist with Viking's, through its majority-owned subsidiary, Elysium Energy, LLC, acquisition of oil and gas assets on Feb. 3, 2020, which if not satisfied prior to June 30, 2020 would have resulted in significantly increased costs. The advance by Camber will be forgiven upon closing of the planned merger involving the two companies, as previously disclosed, if such merger transaction is completed. Third Amendment to Merger Agreement/Financing Documents In connection with such financing, on June 25, 2020, Viking and Camber entered into: (i) a Third Amendment to Agreement and Plan of Merger; (ii) a Securities Purchase Agreement; (iii) a Secured Promissory Note; (iv) two Security and Pledge Agreements; and (v) an Assignment Agreement. Pursuant to the Third Amendment & Financing Documents, and in connection with the $4.2M advance, the principal amount of the advances made by Camber to Viking increased to $9.2M and Viking assigned to Camber an additional 5% interest in its subsidiary, Elysium thereby increasing Camber's interest in Elysium to 30%. Upon closing of the Merger, the loans by Camber to Viking will be forgiven and the merged entity will own 100% of Elysium. If the Merger does not close, the loans must be repaid in accordance with the terms of the Merger Agreement, as amended. All or a portion of the Elysium interests assigned to Camber will be retained by Camber and/or returned to Viking under different circumstances relating to the termination of the Merger Agreement, as amended, and the repayment obligations associated with the Secured Promissory Note. Viking also agreed to pay an additional amount to Camber upon termination of the Merger Agreement sufficient, together with the amounts repaid under the loan, for Camber to redeem certain shares of Series C Preferred Stock sold by Camber and to pay other amounts to Camber as a break-up fee in the event the Merger is terminated under certain circumstances. The funds advanced by Camber to Viking were obtained by Camber through the sale on June 22, 2020 of 630 shares of its Series C Redeemable Convertible Preferred Stock to an institutional investor, as previously disclosed. Terms of Proposed Merger As disclosed previously, the Merger contemplates Camber issuing newly-issued shares of common stock to the equity holders of Viking in exchange for 100% of the outstanding equity securities of Viking by means of a reverse triangular merger in which a newly formed wholly-owned subsidiary of Camber will merge with and into Viking, with Viking continuing as the surviving corporation and as a wholly-owned subsidiary of Camber after the Merger. If the closing of the Merger occurs, the Viking equity holders prior to the Merger will own approximately 80% of Camber's issued and outstanding common stock immediately after the Merger, and the Camber equity holders prior to the Merger shall own approximately 20% of Camber's issued and outstanding common stock immediately after the Merger, subject to adjustment mechanisms set out in the Merger Agreement, as amended, and in each case on a fully-diluted, as-converted basis as of immediately prior to the Closing (including options, warrants and other rights to acquire equity securities of Viking or Camber), but without taking into account any shares of common stock issuable to the holder of Camber's Series C Preferred Stock upon conversion of the Series C Preferred Stock. Completion of the Merger is subject to a number of closing conditions and required consents, as set out in the Merger Agreement, and there is no assurance that such Merger will close on a timely basis, if at all. Completion of Key Step/Status of Outstanding Items The parties are also pleased to announce the completion of these key steps toward completing the Merger. An updated, estimated timeline of the closing of the Merger is disclosed below: Projected Event Timeline ----- --------- Viking to file its Annual Report on Form Completed 10-K for Viking's December 31, 2019 fiscal year end Viking to file Current Report on Form 8-K/A Completed including financial statements related to its February 3, 2020 acquisition Camber to file initial Registration Completed Statement Completed on Form S-4 with preliminary joint proxy statement with the Securities and Exchange Commission Camber and Viking to receive Fairness Camber: Received Opinions regarding the planned Merger in April 2020 Viking: Expects to Receive Opinion the First Half of July 2020 Camber to file its Annual Report on Completed Form 10-K for Camber's March 31, 2020 fiscal year end Camber to file an Amended Registration Planned to be Statement on Form S-4 with preliminary Filed in the joint proxy statement with the Securities First Half of and Exchange Commission 2020 Camber and Viking to receive Late Summer 2020 Shareholder Approval Camber to receive Stock Exchange Late Summer 2020 Approval for the Merger Closing of the Merger Late Summer 2020 James Doris, president & CEO of Viking, stated, "With Camber's Annual Report filing we move one step closer to completing the Merger, and with Camber's additional $4.2 million advance we were able to satisfy important obligations to position the company for the planned Merger." Louis G. Schott, interim CEO of Camber, stated, "We and Viking continue to make progress towards the closing of the planned Merger and we are planning to file an amended joint proxy/prospectus (Form S-4) by mid-July 2020, which should position us to close the planned Merger by late summer." NYSE American Section 610(b) disclosure Camber's audited financial statements for the year ended March 31, 2020, which were filed as part of the Form 10-K, contained an audit opinion from Camber's independent registered public accounting firm that includes an explanatory paragraph related to Camber's ability to continue as a going concern. This announcement is made pursuant to NYSE American LLC Company Guide Section 610(b), which requires public announcement of the receipt of an audit opinion containing a going concern paragraph. This announcement does not represent any change or amendment to Camber's audited consolidated financial statements for the year ended March 31, 2020. Since March 31, 2020, the date of the financial statements included in the Form 10-K, Camber has transferred $5 million of temporary equity to equity, increasing Camber's total stockholders' equity and has raised $6 million in additional funding, through the sale of Series C Preferred Stock, of which $1.8 million remains after the $4.2 million loan to Viking as discussed above; all of which Camber believes reduces the risk that it would be unable to continue as a going concern moving forward. About Camber Energy Based in Houston, Texas, Camber Energy -- http://www.camber.energy -- is primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including from the Hunton formation in Lincoln, Logan, Payne and Okfuskee Counties, in central Oklahoma; the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas, in connection with its Panhandle acquisition which closed in March 2018. Camber Energy reported a net loss of $3.86 million for the year ended March 31, 2020, compared to net income of $16.64 million for the year ended March 31, 2019. As of March 31, 2020, the Company had $9.69 million in total assets, $2.07 million in total liabilities, $5 million in temporary equity, and $2.62 million in total stockholders' equity. Marcum LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated June 29, 2020, citing that the Company has incurred significant losses from operations and had an accumulated deficit as of March 31, 2020 and 2019. These factors raise substantial doubt about its ability to continue as a going concern. CAMBER ENERGY: Reports $3.9M Net Loss for FY Ended March 31 ----------------------------------------------------------- Camber Energy reported a net loss of $3.86 million on $397,118 of total operating revenues for the year ended March 31, 2020, compared to net income of $16.64 million on $2.74 million of total operating revenues for the year ended March 31, 2019. As of March 31, 2020, the Company had $9.69 million in total assets, $2.07 million in total liabilities, $5 million in temporary equity, and $2.62 million in total stockholders' equity. Marcum LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated June 29, 2020, citing that the Company has incurred significant losses from operations and had an accumulated deficit as of March 31, 2020 and 2019. These factors raise substantial doubt about its ability to continue as a going concern. At March 31, 2020, the Company's total current assets of $1.1 million were less than its total current liabilities of approximately $2.0 million, resulting in a working capital deficit of $0.9 million, while at March 31, 2019, the Company's total current assets of $8.2 million exceeded its total current liabilities of approximately $2.1 million, resulting in working capital of $6.1 million. The reduction from working capital of $6.1 million to a working capital deficit of $0.9 million is due to losses from continuing operations, costs incurred with the Lineal merger and ultimate divestiture with Lineal and $7.3 million of advances on long-term notes receivable relating to amounts loaned to Lineal and advanced to Viking. Additionally, recent oil and gas price volatility as a result of geopolitical conditions and the global COVID-19 pandemic have already had, and are expected to continue to have a negative impact on the Company's financial position and results of operations. Negative impacts could include, but are not limited to, the Company's ability to sell its oil and gas production, reduction in the selling price of the Company's oil and gas, failure of a counterparty to make required payments, possible disruption of production as a result of worker illness or mandated production shutdowns or 'stay-at-home' orders, and access to new capital and financing. The Company believes that it may not have sufficient liquidity to meet its operating costs unless it can raise new funding, which may be through the sale of debt or equity or unless it closes the Viking Merger, which is the Company's current plan, which Merger is anticipated to close in the third calendar quarter of 2020, and which required closing date is currently Sept. 30, 2020, but can be extended until up to Dec. 31, 2020, pursuant to certain conditions in the Merger Agreement. There is no guarantee though that the Viking merger will be completed or other sources of funding be available. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company had no secured debt outstanding as of March 31, 2020. A full-text copy of the Annual Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/K7u2A1 About Camber Energy Based in Houston, Texas, Camber Energy -- http://www.camber.energy/ -- is primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including from the Hunton formation in Lincoln, Logan, Payne and Okfuskee Counties, in central Oklahoma; the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas, in connection with its Panhandle acquisition which closed in March 2018. CANFIELD MEDICAL: Needs More Capital to Remain as Going Concern --------------------------------------------------------------- Canfield Medical Supply, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3,446,630 on $112,003 of net revenues for the three months ended March 31, 2020, compared to a net loss of $703,624 on $2,665 of net revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $11,474,592, total liabilities of $3,852,037, and $1,626,166 in total stockholders' deficiency. The Company said, "Our business operations have not yet generated significant revenues, and we have sustained net losses of approximately $3.4 million during the three months ended March 31, 2020 and have an accumulated deficit of approximately $40.2 million at March 31, 2020. In addition, we have current liabilities in excess of current assets of approximately $2.3 million at March 31, 2020. Further, we are in default on approximately $0.6 million of indebtedness, including accrued interest. "Our ability to continue as a going concern in the foreseeable future is dependent upon our ability to generate revenues and obtain sufficient long-term financing to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to raise capital as needed and to generate revenues to satisfy our capital needs. No assurance can be given that we will be successful in these efforts. "These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time." A copy of the Form 10-Q is available at: https://is.gd/0udtsc Canfield Medical Supply, Inc. produces and distributes non-alcoholic drinks under the brand name TapouT, Amazoo, and Bruce Tea. The company was founded in 2011 and is based in Fort Lauderdale, Florida. CARBO CERAMICS: Committee Hires Alvarez & Marsal as Tax Expert -------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 cases of CARBO Ceramics Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to retain Alvarez & Marsal Taxand, LLC, as tax attribute expert. The committee requires Alvarez & Marsal to: (a) analyze the net present value of tax attributes of CARBO available post emergence from bankruptcy; (b) provide expert testimony regarding such analysis; and (c) render other activities as are approved by the Committee and agreed to by Alvarez & Marsal. Christopher Howe, managing director of Alvarez & Marsal, attests that the firm does not represent an interest adverse to the Committee, the Debtors, their estates or any other party in interest in the matters upon which it is to be engaged. Alvarez & Marsal's customary hourly billing rates are: Managing Director $1,100 Senior Director $900 Director $750 Senior Associate $600 Associate $500 The firm can be reached through: Christopher Howe Alvarez & Marsal Taxand, LLC 600 Madison Avenue, 8th Floor New York, NY 10022 Tel: +1 212 759 4433 Fax: +1 212 759 5532 About CARBO Ceramics CARBO Ceramics Inc. -- https://carboceramics.com/ -- is a global technology company providing products and services to the oil and gas, industrial, and environmental markets. CARBO offers oilfield ceramic technology products, base ceramic proppant, and frac sand proppant for use in the hydraulic fracturing of oil and natural gas wells. Asset Guard Products Inc., a subsidiary of CARBO, offers products intended to protect operators' assets, minimize environmental risks, and lower lease operating expenses through spill prevention, containment, and countermeasure systems for the oil and gas industry. StrataGen, Inc., another subsidiary, offers fracture consulting and data services and provides a suite of stimulation software solutions used for designing fracture treatments and for on-site real-time analysis to assist E&P companies in the efficient completion of wells and enhancement of oil and natural gas production. CARBO Ceramics Inc. and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-31973) on March 29, 2020. At the time of the filing, the Debtors were estimated to have assets of between $100 million and $500 million and liabilities of the same range. Judge Marvin Isgur oversees the cases. Debtors tapped Vinson & Elkins LLP as bankruptcy counsel; Okin Adams LLP as special counsel; Perella Weinberg Partners L.P. and Tudor Pickering, Holt & Co. as investment banker; FTI Consulting, Inc. as financial advisor; Ernst & Young LLP, KPMG LLP, and Weaver and Tidwell L.L.P. as accountants and tax advisors. Prime Clerk, the claims agent, maintains this website https://dm.epiq11.com/case/crc/info The Office of the U.S. Trustee appointed a committee of unsecured creditors on April 14, 2020. The committee is represented by Foley & Lardner LLP. GlassRatner Advisory & Capital Group, LLC is the committee's financial advisor. CBAK ENERGY: Incurs $2.35 Million Net Loss in First Quarter ----------------------------------------------------------- CBAK Energy Technology, Inc., reported a net loss of $2.35 million on $6.90 million of net revenues for the three months ended March 31, 2020, compared to a net loss of $2.81 million on $5.17 million of net revenues for the three months ended March 31, 2019. The Company has financed its liquidity requirements from short-term bank loans, other short-term loans and bills payable under bank credit agreements, advances from its related and unrelated parties, investment from investors and issuance of capital stock. As of March 31, 2020, the Company had $94.20 million in total assets, $82.70 million in total liabilities, and $11.50 million in total equity. As of March 31, 2020, the Company had cash and cash equivalents of $0.2 million. Its total current assets were $28.3 million and its total current liabilities were $60.2 million, resulting in a net working capital deficiency of $31.9 million. These factors raise substantial doubts about the Company's ability to continue as a going concern. Cost of revenues increased to $6.7 million for the three months ended March 31, 2020, as compared to $5.4 million for the same period in 2019, an increase of $1.3 million, or 24%. Included in cost of revenues were write down of obsolete inventories of $0.4 million for three months ended March 31, 2020, while it was $62,772 for the same period in 2019. The Company writes down the inventory value whenever there is an indication that it is impaired. However, further write-down may be necessary if market conditions continue to deteriorate. Gross profit for the three months ended March 31, 2020 was $0.2 million, or 3.0% of net revenues as compared to gross loss of $0.2 million, or 4.4% of net revenues, for the same period in 2019. The Company's Dalian facilities commenced manufacturing activities in July 2015. With the Company's sustained effort, the quality passing rate of its product has improved due to cost control and enhancement construction on production line. As a result, the Company recorded a gross profit for the three months ended March 31, 2020. Research and development expenses decreased to approximately $0.3 million for the three months ended March 31, 2020, as compared to approximately $0.4 million for the same period in 2019, a decrease of $0.1 million, or 31%. The decrease was primarily resulted from the decrease of salaries and social insurance expenses by approximately $0.1 million due to the suspension of the Company's operations in the first quarter of 2020 caused by COVID-19. Sales and marketing expenses decreased to approximately $0.1 million for the three months ended March 31, 2020, as compared to approximately $0.4 million for the same period in 2019, a decrease of approximately $0.3 million, or 74%. As a percentage of revenues, sales and marketing expenses were 1.4% and 7.0% for the three months ended March 31, 2020 and 2019, respectively. The decrease was primarily resulted from the decrease of salaries and social insurance expenses by approximately $0.1 million due to the suspension of the Company's operations in the first quarter of 2020 caused by COVID-19. General and administrative expenses decreased to $1.1 million, or 16.2% of revenues, for the three months ended March 31, 2020, as compared to $1.4 million, or 27.9% of revenues, for the same period in 2019, representing a decrease of $0.3 million, or 23%. The decrease was primarily resulted from the decrease of salaries and social insurance expenses by approximately $0.3 million due to the suspension of the Company's operations in the first quarter of 2020 caused by COVID-19. Provision for doubtful accounts increased to $0.7 million for the three months ended March 31, 2020, as compared to $0.1 million for the same period in 2019. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. As a result of the above, the Company's operating loss totaled $2.0 million for the three months ended March 31, 2020, as compared to $2.5 million for the same period in 2019, representing a decrease of $0.5 million, or 22%. Finance expense, net was $0.4 million for the three months ended March 31, 2020, as compared to $0.3 million for the same period in 2019, representing an increase of $0.1 million. Interest expenses increased as a result of our higher average loan balances. Income tax was nil for the three months ended March 31, 2020 and 2019. A full-text copy of the Form 10-Q is available for free at the Securities and Exchange Commission's website at: https://is.gd/iVNoFQ About CBAK Energy Dalian, China-based CBAK Energy Technology, Inc., formerly China BAK Battery, Inc. -- http://www.cbak.com.cn/-- is engaged in the business of developing, manufacturing and selling new energy high power lithium batteries, which are mainly used in the following applications: electric vehicles; light electric vehicles; and electric tools, energy storage, uninterruptible power supply, and other high power applications. CBAK Energy reported a net loss of $10.85 million for the year ended Dec. 31, 2019, compared to a net loss of $1.96 million for the year ended Dec. 31, 2018. Centurion ZD CPA & Co., in Hong Kong, China, the Company's auditor since 2016, issued a "going concern" qualification in its report dated May 14, 2020, citing that the Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of Dec. 31, 2019. All these factors raise substantial doubt about its ability to continue as a going concern. CCC LOT: Seeks to Hire Colliers International as Leasing Agent -------------------------------------------------------------- CCC Lot 2, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Wisconsin to employ Colliers International to market for lease a commercial property located at 150 Commerce Drive, Columbus, Wisc. Debtor believes a lease will increase the value of the property from $4.7 million to $6.9 million. Colliers will get a 4 percent commission on the total net rent for the term of the lease, with 50 percent of the commission earned upon execution of a lease and the 50 percent upon the tenant opening its operations at the property. Colliers has no connection with any other "parties-in-interest" in Debtor's Chapter 11 proceedings, according to court filings. The firm can be reached through: Russel Sagmoen Colliers International 833 E Michigan, Suite 500 Milwaukee, WI 53202 Telephone: (414) 278-6810 Email: Russ.Sagmoen@colliers.com About CCC Lot 2 CCC Lot 2, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). CCC Lot 2 filed a Chapter 11 petition (Bankr. E.D. Wis. Case No. 20-21035) on Feb. 11, 2020. On Feb. 13, 2020, the case was transferred to the U.S. Bankruptcy Court for the Western District of Wisconsin and was assigned a new case number (Case No. 20-10422). At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Catherine J. Furay oversees the case. Debtor tapped Kerkman & Dunn as its legal counsel and Joseph David Zaks CPA, LLC as its accountant. CEC DEVELOPMENT: Case Summary & 2 Unsecured Creditors ----------------------------------------------------- Three affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- CEC Development Borrower, LLC 20-14573 363 Centennial Parkway, #300 Louisville, CO 80027 CEC Renewable Assets, LLC 20-14574 363 Centennial Parkway, #300 Louisville, CO 80027 CEC Renewable Assets Development, LLC 20-14575 363 Centennial Parkway, #300 Louisville, CO 80027 Chapter 11 Petition Date: July 2, 2020 Court: United States Bankruptcy Court District of Colorado Judges: Hon. Michael E. Romero (20-14573) Hon. Joseph G. Rosania Jr. (20-14574) Hon. Thomas B. Mcnamara (20-14575) Debtors' Counsel: David V. Wadsworth, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 Email: dwadsworth@wgwc-law.com CEC Development Borrower's Total Assets: $11,153,338 CEC Development Borrower's Total Liabilities: $39,138,763 CEC Renewable Assets, LLC's Total Assets: $11,153,338 CEC Renewable Assets, LLC's Total Liabilities: $38,772,783 CEC Renewable Assets Development's Total Assets: $11,153,338 CEC Renewable Assets Development's Total Liabilities: $38,772,783 The petitions were signed by Thomas Sweeney, CEO of CEC Renewable Assets Development, LLC (Parent). Copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/vT4h1N https://is.gd/RA6WZi https://is.gd/kklfPo A. List of CEC Development Borrower's Two Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Black Coral Capital, LLC Lien on Project Unknown 110 West 7th Street, Revenues Suite 2000 Attn: Scott Rowland Tulsa, OK 74119 2. First Solar Lien on Project Unknown Distributed Generation, LLC Revenues 350 West Washington Street, Suite 600 Attn: Richard Romero Tempe, AZ 85281 B. List of CEC Renewable Assets, LLC's Two Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Black Coral Capital,LLC Unknown 110 West 7th Street, Suite 2000 Attn: Scott Rowland Tulsa, OK 74119 2. First Solar Distributed Unknown Generation, LLC 350 West Washington Street, Suite 600 Attn: Richard Romero Tempe, AZ 85281 C. List of CEC Renewable Assets Development's Two Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Black Coral Capital, LLC Unknown 110 West 7th Street, Suite 2000 Attn: Scott Rowland Tulsa, OK 74119 2. First Solar Distributed Unknown Generation, LLC 350 West Washington Street Suite 600 Attn: Richard Romero Tempe, AZ 85281 CHESAPEAKE ENERGY: Files for Chapter 11 With Plan ------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) has voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas to facilitate a comprehensive balance sheet restructuring. Chesapeake intends to use the proceedings to strengthen its balance sheet and restructure its legacy contractual obligations to achieve a more sustainable capital structure. Chesapeake will operate in the ordinary course during the Chapter 11 process. Chesapeake entered into a Restructuring Support Agreement ("RSA") with 100% of the lenders under its revolving credit facility, holders of approximately 87% of the obligations under its Term Loan Agreement, approximately 60% of its senior secured second lien notes due 2025, and approximately 27% of its senior unsecured notes, pursuant to which Chesapeake will implement a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. As part of the RSA, the Company has secured $925 million in debtor-in-possession ("DIP") financing from certain lenders under Chesapeake's revolving credit facility, which will be available upon Court approval. The financing package will provide Chesapeake the capital necessary to fund its operations during the Court-supervised Chapter 11 reorganization proceedings. The Company and certain lenders under Chesapeake's revolving credit facility have also agreed to the principal terms of a $2.5 billion exit financing, consisting of a new $1.75 billion revolving credit facility and a new $750 million term loan. Additionally, the Company has the support of its term loan lenders and secured note holders to backstop a $600 million rights offering upon exit. Doug Lawler, Chesapeake's President and Chief Executive Officer, stated, "We are fundamentally resetting Chesapeake's capital structure and business to address our legacy financial weaknesses and capitalize on our substantial operational strengths. By eliminating approximately $7 billion of debt and addressing the legacy contractual obligations that have hindered our performance, we are positioning Chesapeake to capitalize on our diverse operating platform and proven track record of improving capital and operating efficiencies and technical excellence. With these demonstrated strengths, and the benefit of an appropriately sized capital structure, Chesapeake will be uniquely positioned to emerge from the Chapter 11 process as a stronger and more competitive enterprise." Lawler added, "In addition to securing financing to fund our ongoing operations and facilitate our exit from this process, we are pleased to have the support of our term loan lenders and secured note holders to backstop a $600 million rights offering, demonstrating their confidence in Chesapeake's operating platform and future. We deeply appreciate the hard work and commitment of our employees, who remain focused on safely and efficiently executing our business. We look forward to working productively with our suppliers, business partners and all stakeholders throughout this process." Lawler concluded, "Over the last several years, our dedicated employees have transformed Chesapeake's business — improving capital efficiency and operational performance, eliminating costs, reducing debt and diversifying our portfolio. Despite having removed over $20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business." Chesapeake has filed customary motions with the Court seeking a variety of "first-day" relief, including authority to pay owner royalties, employee wages and benefits, and certain vendors and suppliers in the ordinary course for goods and services provided. The entities included in the filing are: Chesapeake Energy Corporation; Brazos Valley Longhorn Finance Corp.; Brazos Valley Longhorn, LLC; Burleson Sand LLC; Burleson Water Resources, LLC; Chesapeake AEZ Exploration, L.L.C.; Chesapeake Appalachia, L.L.C.; Chesapeake E&P Holding, L.L.C.; Chesapeake Energy Louisiana, LLC; Chesapeake Energy Marketing, L.L.C.; Chesapeake Exploration, L.L.C.; Chesapeake Land Development Company, L.L.C.; Chesapeake Louisiana, L.P.; Chesapeake Midstream Development, L.L.C.; Chesapeake NG Ventures Corporation; Chesapeake Operating, L.L.C.; Chesapeake Plains, LLC; Chesapeake Royalty, L.L.C.; Chesapeake VRT, L.L.C.; Chesapeake-Clements Acquisition, L.L.C.; CHK Energy Holdings, Inc.; CHK NGV Leasing Company, L.L.C.; CHK Utica, L.L.C.; Compass Manufacturing, L.L.C.; EMLP, L.L.C.; Empress Louisiana Properties, L.P.; Empress, L.L.C.; Esquisto Resources II, LLC; GSF, L.L.C.; MC Louisiana Minerals, L.L.C.; MC Mineral Company, L.L.C.; MidCon Compression, L.L.C.; Nomac Services, L.L.C.; Northern Michigan Exploratory Company, L.L.C.; Petromax E&P Burleson, LLC; Sparks Drive SWD, Inc.; WHE AcqCo., LLC; WHR Eagle Ford LLC; WildHorse Resources II, LLC; WildHorse Resources Management Company, LLC; and Winter Moon Energy Corporation. About Chesapeake Energy Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States. Chesapeake reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the Company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity. Chesapeake Energy Corporation and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt. Kirkland & Ellis LLP is serving as legal counsel, Alvarez & Marsal is serving as restructuring advisor, Rothschild & Co and Intrepid Financial Partners are serving as financial advisors, and Reevemark is serving as communications advisor to the Company. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information. Wachtell, Lipton, Rosen & Katz is serving as legal counsel to the Company's Board of Directors. Sidley Austin LLP is serving as legal counsel, RPA Advisors, LLC is serving as financial advisor, and Houlihan Lokey Capital, Inc. is serving as investment banker to MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent. Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. are serving as co-legal counsel and Perella Weinberg Partners and Tudor, Pickering, Holt & Co. are serving as investment bankers to an ad hoc group of the Company's first lien last out term loan lenders. Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel, FTI Consulting, Inc. is serving as financial advisor, and Moelis & Company LLC is serving as investment banker to Franklin Advisers, Inc. CHICAGO BOARD: Fitch Affirms 'BB' IDR, Outlook Stable ----------------------------------------------------- Fitch Ratings has taken the following rating action on the Chicago Board of Education, IL (CBOE): 123456789012345678901234567890123456789012345678901234567890123456 -- Issuer Default Rating (IDR) affirmed at 'BB'; -- Approximately $7 billion outstanding unlimited tax general obligation (ULTGO) bonds affirmed at 'BB'; -- Approximately $880 million outstanding dedicated capital improvement tax (CIT) bonds downgraded to 'A-' from 'A'. The CIT bonds are removed from Rating Watch Negative. The Rating Outlook is Stable for all bonds. SECURITY The CIT bonds are secured by a first priority lien on CIT revenues, which constitute a property tax levied by the CBOE pursuant to the Illinois School Code on all taxable property within the district, which is coterminous with the city of Chicago. State law restricts use of the CIT revenues to the construction, acquisition and equipping of school and administrative buildings, and site improvements. CBOE has identified specific capital projects in the bond resolution that may be funded either by bond proceeds or by residual CIT revenues. CIT revenues legally cannot be used for general operations of the board. The multi-year levy supporting debt service on the bonds required and received approval by the Chicago City Council; however, no further approvals are necessary for the levy to be extended and collected for the life of the bonds. The ULTGO bonds are unlimited tax general obligations of the CBOE payable from dedicated CBOE revenues in the first instance and also payable from unlimited ad valorem taxes levied against all taxable property in the city of Chicago. ANALYTICAL CONCLUSION The downgrade of the rating on the CIT bonds is based on a change in Fitch's "U.S. Public Finance Tax Supported Rating Criteria" and Fitch's assessment that CIT structural elements and security interests are sufficiently strong to warrant a maximum 5-notch rating distinction between the CIT rating and the district's IDR. The 'A-' rating on the CIT bonds also reflects the dedicated tax bond structure 'a' resilience assessment based on a 9.1% cushion between the statutory levy cap and debt service on the bonds (a 1.10x coverage ratio) and the inflation-based statutory limitation on annual CIT levy increases. The 'BB' IDR and ULTGO rating reflect the district's improved but still weak financial resilience. The district's recent history was characterized by structurally imbalanced financial operations, driven by a strained revenue environment and growing pension pressures that resulted in a large accumulated general fund deficit. A new state funding framework enacted in 2018 greatly improved the district's credit profile, with significantly more state aid for both operations and pension needs leading to consecutive surpluses in fiscal years 2018 and 2019 and improving the unrestricted general fund balance to $441 million, or 7.5% of spending, entering fiscal 2020. State funding levels remain a key credit risk in light of the fiscal pressures faced by the State of Illinois (BBB-/Negative). The 'BB' rating also incorporates the district's elevated long-term liability burden and its limited overall expenditure flexibility and independent revenue raising authority. ECONOMIC RESOURCE BASE Chicago acts as the economic engine for the Midwestern region of the U.S. The city's residents are afforded abundant employment opportunities within this deep and diverse regional economy. The city also benefits from an extensive infrastructure network, including a vast rail system and the third largest airport in the U.S., which supports continued growth. The employment base is represented by all major sectors with concentrations in the wholesale trade, professional and business services and financial sectors. Socioeconomic indicators are mixed as is typical for an urbanized area, with above-average educational attainment levels, above-average per capita income and elevated individual poverty rates. Population trends are flat, and district enrollment is declining. KEY RATING DRIVERS Revenue Framework: 'bbb' Fitch expects natural revenue growth, absent new revenue action, to keep pace with inflation, given expectations for property tax growth and relatively flat state aid growth following the increases associated with the new funding formula. CBOE has no independent legal ability to raise revenues. Expenditure Framework: 'bbb' Fitch expects the natural pace of expenditure growth to exceed that of revenues, necessitating ongoing budget management. After significant cuts in recent years, some services have been restored, adding a measure of expenditure flexibility. The state's commitment to funding the normal cost of pensions and some health care costs reduces pressure somewhat on fixed carrying costs (estimated at 24% of governmental spending in fiscal 2019) but overall flexibility remains limited. ESG - Social: CBOE has an ESG score of '4' for labor relations and practices, which reflect a history of labor-related spending pressures and, in Fitch's opinion, a contentious relationship with its teaching professionals, which staged an 11-day strike in 2019. Long-Term Liability Burden: 'a' Fitch estimates the district's long-term liability burden at an elevated 23% of personal income. Fitch expects long-term liabilities to remain within the 'a' category taking into account the district's moderate future borrowing needs and the slow amortization of direct debt and pensions (which have a 44% ratio of assets to liabilities on a Fitch-adjusted basis). Operating Performance: 'bb' A more favorable state funding environment has allowed for the restoration of reserves ahead of schedule. General fund reserves remain low in relation to historical levels of revenue volatility and the district's minimal inherent budget flexibility. However, a multi-year trend of a more stable revenue environment resulting from revisions to the state funding framework enacted in 2018 could change Fitch's expectations for revenue volatility. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- For the IDR/ULTGO bonds, sustained, better reserve levels that improve the district's financial resilience to cyclical economic and budgetary risks. -- Sustained general fund revenue stability. -- For the CIT bonds, an upgrade of the IDR/ULTGO bond rating in conjunction with sustained low CIT delinquency rates through the current and future economic cycles. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- For the IDR/ULTGO bonds, a weakening of recently improved liquidity or increased risk to capital market access for necessary cash flow borrowing. -- For the IDR/ULTGO bonds, a reversal of recent improvement in the state funding environment. -- For the CIT bonds, a downgrade of the district's IDR and/or decline in property tax collection rates of a scale that would materially erode the protection inherent in the expected 1.10x coverage ratio of CIT revenues to annual debt service. CURRENT DEVELOPMENTS The recent outbreak of coronavirus and related government containment measures worldwide create an uncertain global environment for U.S. state and local governments and related entities in the near term. While CBOE's most recently available fiscal and economic data may not fully reflect impairment, material changes in revenues and expenditures are occurring across the country and likely to worsen in the near future as economic activity suffers and public health spending increases. Fitch's ratings are forward-looking in nature, and Fitch will monitor developments in state and local governments as a result of the virus outbreak as it relates to severity and duration and incorporate revised expectations for future performance and assessment of key risks. Chicago, like much of the nation, experienced severe limitation on economic activity beginning in mid-March. In its baseline scenario, Fitch assumes sharp economic contractions to hit major economies in 1H20 at a speed and depth unprecedented since World War II. Sequential recovery begins from 3Q20 onward as the health crisis subsides after a short but severe global recession. GDP remains below its 4Q19 level until mid-2022. CBOE Credit Update CBOE (or the district) entered fiscal 2020 following two consecutive years of operating surpluses that improved its unrestricted general fund balance position to $441 million, or 7.5% of total spending. The district had achieved structural balance and the restoration of reserves earlier than previously expected, as a new state funding framework enacted in 2018 greatly improved its revenues and cash flow. The district reported an accumulated $355 million deficit (-6.7%) in fiscal 2017. The district has not publicly released preliminary general fund results for fiscal 2020. Recent favorable operating results have materially reduced the need for cash flow borrowing but Fitch expects liquidity to remain narrow at the close of fiscal 2020, inclusive of undrawn bank facilities ($400 million at year end). The district issued $830 million of tax anticipation notes (TANs) that were completely repaid from the first installment of property taxes (property taxes account for $2.9 billion, or roughly 50% of estimated fiscal 2020 revenues). Notably, CBOE has demonstrated consistent access to external sources of liquidity, even during periods of fiscal stress. The district remains sensitive to the level of state aid enacted by the State of Illinois (IDR BBB-/Negative). The state budget for fiscal 2021 holds K-12 education funding flat, which will leave the district to manage inflationary spending pressures on the budget. However, the state's financial position and revenue outlook remain weak; as such, Fitch views risk to K-12 education funding cuts as a key credit concern for the district. District funding is now determined as part of the overall funding decision for schools statewide, rather than being considered separately, as had been the case under the prior funding framework. In Fitch's opinion, this makes the recent gains more durable despite the financial challenges faced by the state. Furthermore, a hold-harmless provision protects the district from demographic-related cuts in state aid, which should be particularly beneficial given the trend of declining enrollment. The district released its fiscal 2021 individual school budgets, which increase spending by a modest $125 million, largely due to additional spending for special education. The district has reported that it does not anticipate making modifications to the budget plan based on its current financial outlook but will continue to monitor the impact of the coronavirus and the economic downturn. The entire district budget will be released in August. Financial resilience has improved, but gap-closing capacity remains limited and constrains the operating performance assessment at 'bb'. CBOE lacks a reserve cushion sufficient to offset the revenue stress under Fitch's baseline scenario via the Fitch Analytical Stress Test (FAST) model (a year one revenue decline of almost 16%). FAST relates historical revenue volatility to GDP to support the assessment of operating performance under Fitch's criteria; FAST has now been adjusted to reflect GDP parameters consistent with Fitch's global coronavirus forecast assumptions. FAST provides a relative sense of revenue risk exposure, but it is not a forecast and actual revenue declines will vary from FAST results. The district's historical revenue volatility is attributable to state funding cuts. Should the revenue environment prove to be more stable under the new state funding framework, Fitch may reevaluate the potential for future revenue volatility as well as the resulting assessment of the adequacy of reserves. CIT Dedicated Tax Analysis The CBOE is authorized under the Illinois School Code to levy the CIT on all taxable property within the district, which is coterminous with the city of Chicago. The CIT revenues are subject to a multi-year levy established by bond resolution at the time of bond issuance. No policy action is required to adjust the tax rate to offset changes in assessed value. The minimum amount of the levy is knowable in advance and the debt service schedule is sized to that amount, allowing for a minimum of 1.1x coverage as required under the bond resolution, which serves as the basis for Fitch's dedicated tax analysis. This leaves only the risk of diminishing collection rates, which historically have been well within the norm for U.S. municipalities supporting an expectation for strong resilience against the current and future economic downturns. The district reports that sufficient CIT revenues have been collected and set aside for the upcoming Oct. 1 debt service payment. To evaluate the sensitivity of the dedicated revenue stream to cyclical decline, Fitch considers the revenue sensitivity results via the FAST model (a 1.3% decline) and the largest actual delinquency rate (4.3%) during the period covered by the revenue sensitivity analysis. Since the CIT revenue history is insufficient to conduct this analysis, Fitch uses a proxy of CBOE's overall property tax collection rates, which it believes approximates future risk to CIT revenue sufficiency. Fitch's sensitivity analysis is based on the 1.1x coverage requirement under the bond resolution and factors in additional liquidity within the CIT structure via a debt service reserve fund (DSRF), which has been funded from prior bond proceeds equal to 14% of the maximum annual debt service requirement. The DSRF provides additional protection against risk to delinquency rates outside of historical norms, as does an allowance for uncollectible amounts at 3.5% added to the gross levy. Given Fitch's 1.1x coverage assumption, pledged revenues could withstand a 9.1% decline before coverage of annual debt service is less than 1.0x. The 9.1% revenue cushion is equivalent to 6.9x the FAST result, or 2.1x the largest actual delinquency rate. Fitch believes the revenue cushion inherent in the dedicated tax structure and history of collection rates support a resilience assessment of 'a'. Current year debt service coverage from the CIT levy was reported by the district at 1.23x. CIT Viewed as Special Revenues The CIT bonds are secured by a first priority lien on CIT revenues. The specific features of the CIT bonds meet Fitch's criteria for rating special revenue obligation debt above the district's IDR. Fitch sets a high bar for recognizing special revenue status under Section 902(2)(e) of the U.S. Bankruptcy Code, as it is ambiguous as to both the source and the use of the revenue and could be interpreted as covering many tax-supported bonds. Fitch has identified a number of elements considered sufficient to reduce the incentive to challenge the special revenue status given the definitions outlined in the Bankruptcy Code, which allows for the CIT bonds to be rated up to a maximum of 5-notches above the district's IDR. These factors include a limitation under state law with respect to the permitted uses of CIT revenues to fund construction, acquisition and equipping of school and administrative buildings, and site improvements. CBOE has identified specific capital projects in the bond resolution that may be funded either by bond proceeds or by residual CIT revenues. Any amendments to the project list must be passed by board resolution. The revenues legally cannot be used for general operations of the board and bondholders do not have a claim on the general revenues of the district. Lastly, CBOE has directed the county collectors of Cook and DuPage Counties to transmit the CIT revenues directly to an escrow agent. The escrow agent transfers revenues needed for payment of debt service to the bond trustee daily. Revenues in excess of those required to meet annual debt service may be available to reimburse the district for authorized capital expenditures. The board covenants not to revoke the direction to the county collectors as long as the bonds are outstanding. Based upon review of bond counsel opinions, Fitch believes that any future attempt to revoke the direction to the county collectors would be contrary to state statute. CREDIT PROFILE The Chicago Board of Education provides pre-K-12 education to over 360,000 students within the city of Chicago. Its taxing jurisdiction is coterminous with the city of Chicago. Chicago Public Schools (CPS) manages the school system, which includes 514 districts that run elementary and high schools. CRITERIA VARIATION None In addition to the sources of information identified in Fitch's applicable criteria specified, this action was informed by information from Lumesis. ESG CONSIDERATIONS Chicago Board of Education (IL): Labor Relations & Practices: 4 CBOE has an ESG score of '4' for labor relations and practices, which reflect a history of labor-related spending pressures and, in Fitch's opinion, a contentious relationship with its teaching professionals, which staged an 11-day strike in 2019. Except for the matters discussed, the highest level of ESG credit relevance, if present, 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. CJ AUTO: Seeks to Hire Anthony & Tabb Accountant ------------------------------------------------ CJ Auto Used Parts, LLC, seeks authority from the US Bankruptcy Court for the Eastern District of North Carolina to hire Anthony & Tabb, P.A., as its accountant. The Debtor wishes to employ the Anthony and Tabb, PA as accountant to file appropriate reports with the various taxing authorities and file annual tax return. The hourly rates of the primary persons involved are: Douglas C. "Rusty" Tabb, Jr., CPA, $200 Support staff and staff accountants $100 to $150 Anthony & Tabb holds no interest materially adverse to the interest of the estate or of any class of creditors, according to court filings. The firm can be reached through: Douglas C. "Rusty" Tabb, Jr., CPA Anthony & Tabb, P.A. 2536 Ward Blvd Wilson, NC 27893 Phone: +1 252-237-0784 About CJ Auto Used Parts 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. The case has been assigned to Judge Stephani W. Humrickhouse. John G. Rhyne, Esq., is the Debtor's legal counsel. CUSTOMED INC: Taps Charles A. Cuprill as Legal Counsel ------------------------------------------------------ Customed Inc. seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ to hire Charles A. Cuprill, P.S.C. Law Office as its legal counsel. Alexis Fuentes Hernandez, Esq., appointed counsel for this Chapter 11 case, tendered his resignation on June 10, 2020. The Debtor selected Charles A Cuprill PSC to substitute Mr. Fuentes as counsel in this case to represent and provide legal services to the Debtor in the Chapter 11 bankruptcy proceedings. The firm will charge these hourly rates: Charles Cuprill-Hernandez, Esq. $350 Senior Associates $250 Junior Associates $150 Paralegals $85 Cuprill will be paid a retainer in the sum of $20,000. Mr. Cuprill-Hernandez disclosed in a court filing that the members of his firm are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Charles Alfred Cuprill Hernandez, Esq. Charles A. Cuprill, P.S.C. Law Office 356 Calle Fortaleza, Second Floor San Juan, PR 00901 Tel: 787 977-0515 Fax: 787 977-0518 Email: cacuprill@cuprill.com Email: ccuprill@cuprill.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 petitions were signed by Felix B. Santos, president. The cases are assigned to Judge Enrique S.Lamoutte Inclan. At the time of the filing, Puerto Rico Hospital estimated $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. DEFOOR CENTRE: Hires Sam Maguire Jr. PC as Title Agent ------------------------------------------------------ Defoor Centre, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Sam Maguire, Jr. and The Law Offices of Sam Maguire, Jr., P.C. as the closing, escrow and title agent for the sale of its real property located at 1710 Defoor Avenue NW, Atlanta, Georgia 30318. Sam Maguire, Jr. will charge $300 an hour and Robin Stankiewicz, his paralegal, $195 an hour. Maguire does not have a connection with any parties in interest or their attorneys or accountants other than Maguire may represent Deborah and/or Ben Eason on personal matters, according to court filings. The firm can be reached through: Sam Maguire, Jr. The Law Offices of Sam Maguire, Jr., P.C. SynerG Law Complex 6075 Barfield Rd Suite 119 Sandy Springs, GA 30328 Phone: +1 404-257-8885 About Defoor Centre Defoor Centre, LLC owns a real property located at 1710 Defoor Ave. NW, Atlanta, known as The Defoor Center (www.defoorcentre.com). The property is an events venue ideal for private weddings, mitzvahs, corporate meetings and parties. Defoor Centre sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-04273) on June 1, 2020. At the time of the filing, Debtor disclosed total assets of $3,588,000 and total liabilities of $3,349,560. Debtor is represented by Jennis Law Firm. DIAMONDROCK HOSPITALITY: Needs Covenant Waivers for Going Concern ----------------------------------------------------------------- DiamondRock Hospitality Company filed its quarterly report on Form 10-Q, disclosing a net loss (attributable to common stockholders) of $34,559,000 on $169,995,000 of total revenues for the three months ended March 31, 2020, compared to a net income (attributable to common stockholders) of $8,945,000 on $202,375,000 of total revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $3,671,041,000, total liabilities of $1,794,444,000, and $1,876,597,000 in total equity. The Company said, "Although we are in compliance with the financial covenants of our debt as of March 31, 2020, we have determined that it is probable the continuing effect of the COVID-19 pandemic on our hotel operating results will lead to our inability to satisfy certain financial covenants under the credit agreements for our senior unsecured credit facility and unsecured term loans beginning with the quarter ending June 30, 2020. If we were to violate a covenant, the lenders have the right to declare us in default and require repayment of the outstanding amounts under the credit agreements. We are in negotiations with our lenders to obtain a waiver of the financial covenants prior to any violation. However, because any required waiver would be granted at the sole discretion of the lenders, and such waivers may not be granted, there is substantial doubt about the Company's ability to continue as a going concern, within one year from the date of these financial statements, without additional equity or debt financing or property sales. As of May 11, 2020, we have a term sheet for an amendment to our credit agreements that provides for covenant waivers for the subsequent four quarters through March 31, 2021 and certain other modifications to the covenants thereafter. We expect the amendment to be approved by a majority of our lenders and executed prior to any covenant violation, although we can provide no assurances that such amendment will be executed. If we are successful in obtaining the waivers, the substantial doubt about the Company's ability to continue as a going concern without additional equity or debt financing or property sales will be removed." A copy of the Form 10-Q is available at: https://is.gd/BNrVFw DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 31 premium quality hotels with over 10,000 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families as well as unique boutique hotels in the lifestyle segment. The Company is based in Bethesda, Maryland. DINKEL FAMILY: Hires Northwest Financial as Consultant ------------------------------------------------------ Dinkel Family Farms, LLC seeks approval from the U.S. Bankruptcy Court for the District of Oregon to employ Northwest Financial Consulting as consultant. The firm will provide the following services: (a) conduct a survey of Debtor's books of account to accurately determine its financial condition; (b) prepare financial statements for inclusion in Debtor's Chapter 11 plan; (c) assist in the preparation of cash flow projections, analysis of operations and analysis of feasibility of the plan; (d) negotiate with creditors and consult with Debtor on plan feasibility and financial issues relating to settlements and plan confirmation; (e) provide testimony as an expert witness; and (f) provide testimony in adversary proceedings involving Debtor. Northwest Financial will charge $200 per hour. The retainer fee is $2,500. J.T. Korkow, owner of Northwest Financial, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: J.T. Korkow Northwest Financial Consulting 131 North Highway 59 Volborg, MT 59351 About Dinkel Family Farms Dinkel Family Farms, LLC, a Culver, Ore.-based company engaged in the crop farming business, sought Chapter 11 protection (Bankr. D. Ore. Case No. 20-31938) on June 18, 2020. The petition was signed by Barry Dinkel, Debtor's manager. At the time of the filing, Debtor disclosed assets of $10 million to $50 million and estimated liabilities of the same range. Judge Trish M. Brown oversees the case. Debtor has tapped Vanden Bos & Chapman, LLP as its legal counsel and Northwest Financial Consulting as its financial advisor. DIOCESE OF SYRACUSE: Hires Stretto as Administrative Advisor ------------------------------------------------------------ The Roman Catholic Diocese of Syracuse, New York, seeks authority from the United States Bankruptcy Court for the Northern District of New York to hire Stretto as its administrative advisor. The Debtor requires Stretto to: a. assist with, among other things, claims management and reconciliation, plan solicitation, balloting, disbursements, and tabulation of votes, and prepare any related reports, as required in support of confirmation of a chapter 11 plan, and in connection with such services, process requests for documents from parties in interest, including, if applicable, brokerage firms, bank back-offices and institutional holders; b. prepare an official ballot certification and, if necessary, testify in support of the ballot tabulation results; c. assist with the preparation of any amendments to the Dioceses' schedules of assets and liabilities and statements of financial affairs and gather data in conjunction therewith; d. provide a confidential data room, if requested; e. manage and coordinate any distributions pursuant to a chapter 11 plan; f. provide such other processing, solicitation, balloting and other administrative services described in the Engagement Agreement, but not included in the Section 156(c) Application, as may be requested from time to time by the Diocese, the Court or the Office of the Clerk of the United States Bankruptcy Court for the Northern District of New York; and g. perform any other duty or task that falls within the normal responsibilities of an Administrative Advisor at the direction of the Diocese. Stretto will be paid based upon its normal and usual hourly billing rates and will be reimbursed for work-related expenses incurred. Travis Vandell, managing director of Stretto, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Stretto can be reached at: Travis Vandell STRETTO 7 Times Square, 16th Floor New York, NY 10036 Phone: 310-710-6554 About The Roman Catholic Diocese of Syracuse, New York The Roman Catholic Diocese of Syracuse, New York, through its administrative offices (a) provides operational support to the Catholic parishes, schools and certain other Catholic entities that operate within the territory of the Diocese in support of their shared charitable, humanitarian and religious missions; (b) conducts school operations by managing tuition and scholarship payments, employee payroll, and other school related operating expenses for separately incorporated Diocesan schools, as well as providing parish schools with financial, operational and educational support; and (c) provides comprehensive risk management services to the OCEs through the Diocese's insurance program. For more information, visit www.syracusediocese.org. The Roman Catholic Diocese of Syracuse, New York, filed its voluntary petition for relief unde Chapter 11 of the Bankruptcy Code (Banrk. N.D.N.Y. Case No. 20-30663) on June 19, 2020. The petition was signed by Stephen A. Breen, chief financial officer. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in liabilities. Stephen A. Donato, Esq. at BOND, SCHOENECK & KING, PLLC, represents the Debtor as counsel. DIOCESE OF SYRACUSE: Hires Stretto as Claims Agent -------------------------------------------------- The Roman Catholic Diocese of Syracuse, New York, seeks authority from the United States Bankruptcy Court for the Northern District of New York to hire Stretto as its claims and noticing agent. Stretto will oversee the distribution of notices and will assist in the maintenance, processing and docketing of proofs of claim filed in Debtors' Chapter 11 cases. Prior to its bankruptcy filing, Debtors provided the firm a retainer in the amount of $20,000. Travis Vandell, managing director of Stretto, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Stretto can be reached at: Travis Vandell STRETTO 7 Times Square, 16th Floor New York, NY 10036 Phone: 310-710-6554 About The Roman Catholic Diocese of Syracuse, New York The Roman Catholic Diocese of Syracuse, New York, through its administrative offices (a) provides operational support to the Catholic parishes, schools and certain other Catholic entities that operate within the territory of the Diocese in support of their shared charitable, humanitarian and religious missions; (b) conducts school operations by managing tuition and scholarship payments, employee payroll, and other school related operating expenses for separately incorporated Diocesan schools, as well as providing parish schools with financial, operational and educational support; and (c) provides comprehensive risk management services to the OCEs through the Diocese's insurance program. For more information, visit www.syracusediocese.org. The Roman Catholic Diocese of Syracuse, New York, filed its voluntary petition for relief unde Chapter 11 of the Bankruptcy Code (Banrk. N.D.N.Y. Case No. 20-30663) on June 19, 2020. The petition was signed by Stephen A. Breen, chief financial officer. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in liabilities. Stephen A. Donato, Esq. at BOND, SCHOENECK & KING, PLLC, represents the Debtor as counsel. DURA AUTOMOTIVE: Unsecureds Denied Standing on Suit vs. Tilton -------------------------------------------------------------- Law360 reports that the unsecured creditors of bankrupt Dura Automotive Systems LLC were denied standing on June 10, 2020 on a bid to salvage derivative claims against distressed debt investor Lynn Tilton and other prepetition lenders, with a Delaware bankruptcy judge finding that state limited liability company law bars the move. U.S. Bankruptcy Judge Karen B. Owens, ruling at the end of teleconference arguments, said she agreed with current and past Delaware bankruptcy judges. A copy of the full-report is available at https://www.law360.com/delaware/articles/1281175/dura-creditors-denied-standing-for-suit-against-lynn-tilton About Dura Automotive Systems Dura Automotive Systems, LLC, together with its affiliates, is an independent designer and manufacturer of automotive systems,including mechatronic systems, exterior systems, and lightweight structural systems, among others. It is nationally certified in the United States by the Women's Business Enterprise Council, and operates 25 facilities in 13 countries throughout North America, South America, Europe and Asia. Headquartered in Auburn Hills, Mich., the company -- https://www.duraauto.com/ -- employs approximately 7,400 individuals. Dura Automotive Systems sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Lead Case No. 19-06741) on Oct. 17, 2019. At the time of the filing, the Debtors had estimated assets of between $100 million and $500 million and liabilities of between $100 million and $500 million. The cases have been assigned to Judge Randal S. Mashburn. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as bankruptcy counsel; Bradley Arant Boult Cummings LLP as local counsel; Portage Point Partners, LLC as restructuring advisor; Jefferies LLC as financial advisor and Investment banker; and Prime Clerk LLC as claims agent. ELITE INFRASTRUCTURE: Hires Furuseth Olson as Special Counsel ------------------------------------------------------------- Elite Infrastructure, LLC, seeks authority from the US Bankruptcy Court for the Northern District of Texas to hire Furuseth, Olson & Evert, P.C. as its special counsel. Furuseth will represent the Debtor in oil & gas related legal matters including foreclosure on lien claims. Peter Furuseth, Esq. will charge $275 per hour for his services. The firm has requested a retainer of $1,500. Mr. Furuseth, member of Furuseth, assures the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. The firm can be reached through: Peter H. Furuseth, Esq. Furuseth, Olson & Evert, P.C. 107 Main St. P.O. Box 417 Williston, ND 58802-0417 Phone: 701-774-0005 Email: pete@furusethlaw.com About Elite Infrastructure, LLC Elite Infrastructure, LLC provides engineering, design, and construction of water treatment plants, midstream infrastructure and oil and gas facilities, offering comprehensive turnkey solutions and project management services. Based in Pacific Richardson, Texas, Elite Infrastructure, LLC, filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-31384) on May 8, 2020. In the petition signed by Eric Benavides, sole member, the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. The Debtor is represented by Eric A. Liepins, Esq., at Eric A. Liepins, P.C. ENERGY FOCUS: Has $541,000 Net Loss for the Quarter Ended March 31 ------------------------------------------------------------------ Energy Focus, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $541,000 on $3,783,000 of net sales for the three months ended March 31, 2020, compared to a net loss of $2,865,000 on $3,177,000 of net sales for the same period in 2019. At March 31, 2020, the Company had total assets of $12,423,000, total liabilities of $6,539,000, and $5,884,000 in total stockholders' equity. The Company said, "Despite continuing progress in the last four quarters in reducing our operating losses significantly from first quarter of 2019, the Company's results reflect the challenges due to long and unpredictable sales cycles, unexpected delays in customer retrofit budgets and project starts, continuing aggressive price competition and an intensely competitive lighting industry going through constant change. We continued to incur losses and the fact we have a substantial accumulated deficit, which continue to raise substantial doubt about our ability to continue as a going concern at March 31, 2020." A copy of the Form 10-Q is available at: https://is.gd/K2KNVZ Energy Focus, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and sells energy-efficient lighting systems in the United States and internationally. It offers military maritime light-emitting diode (LED) lighting products, such as Military Intellitube, globe lights, berth lights, fixtures, and LED retrofit kits, as well as Invisitube ultra-low EMI tubular LED (TLED) and EnFocus lighting platform to serve the United States navy and allied foreign navies. The company also provides commercial products comprising direct-wire ended and double-ended TLED replacements for linear fluorescent lamps; LED fixtures for fluorescent replacement or high-intensity discharge replacement in low-bay, high-bay, and office applications; LED down-lights; LED dock lights and wall-packs; LED vapor tight lighting fixtures; LED retrofit kits; RedCap emergency battery backup TLEDs; and EnFocus lighting platform. It sells its products to military maritime, industrial, healthcare, education, and commercial markets through direct sales employees, lighting agents, independent sales representatives, and distributors. The company was formerly known as Fiberstars, Inc. and changed its name to Energy Focus, Inc. in May 2007. Energy Focus, Inc. was founded in 1985 and is headquartered in Solon, Ohio. EVO TRANSPORTATION: Says Substantial Going Concern Doubt Exists --------------------------------------------------------------- EVO Transportation & Energy Services, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $7,009,571 on $36,450,793 of total revenue for the three months ended June 30, 2019, compared to a net loss of $2,648,537 on $2,353,156 of total revenue for the same period in 2018. At June 30, 2019, the Company had total assets of $70,545,283, total liabilities of $79,973,853, and $9,689,029 in total stockholders' deficit. The Company also disclosed that there are conditions that raise substantial doubt about the Company's ability to continue as a going concern. The Company said, "As of June 30, 2019, the Company has a working capital deficit of approximately $34.5 million, stockholders' deficit of approximately $9.7 million, and negative operating cash flows of $14.6 million for the six months ended June 30, 2019. Management anticipates rectifying these deficits with additional public and private offerings. Also, the Company is evaluating certain cash flow improvement measures including, consolidating costs with the acquired entities, the purchase of vehicles to reduce purchased transportation, and repricing contracts with USPS. However, there can be no assurance that the Company will be successful in these efforts. Further, for the six months ended June 30, 2019, USPS accounted for substantially all of the Company's total consolidated revenues. The loss of USPS as a customer or a significant reduction in the Company's relationship with USPS would have a material adverse effect on the Company's business." A copy of the Form 10-Q is available at: https://is.gd/j4BlDA EVO Transportation & Energy Services, Inc., is a holding company based in Phoenix, Arizona, that owns eight operating subsidiaries: W.E. Graham Inc. ("Graham"), EVO Equipment Leasing, LLC ("Leasing"), Titan CNG, LLC ("Titan"), Thunder Ridge Transport, Inc. ("Thunder Ridge"), Ursa Major Corporation ("Ursa"), J.B. Lease Corporation ("JB Lease"), Sheehy Mail Contractors, Inc. ("Sheehy"), and Environmental Alternative Fuels, LLC ("EAF"), which are in the businesses of fulfilling United States Postal Service ("USPS") and corporate contracts for freight trucking services and compressed natural gas ("CNG") service stations. EVOKE PHARMA: Has $1.8-Mil. Net Loss for Quarter Ended March 31 --------------------------------------------------------------- Evoke Pharma, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1,790,309 on $0 of revenue for the three months ended March 31, 2020, compared to a net loss of $1,965,266 on $0 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $4,637,894, total liabilities of $1,716,246, and $2,921,648 in total stockholders' equity. The Company has incurred recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of Gimoti. Although the Company had approximately $4.1 million in cash and cash equivalents at March 31, 2020, the Company anticipates that it will continue to incur losses from operations due to pre-approval and pre-commercialization activities, including interactions with FDA on the Company's NDA resubmission for Gimoti, potentially manufacturing commercial batches of Gimoti, and general and administrative costs to support operations. As a result, the Company believes that there is substantial doubt about its ability to continue as a going concern for one year after the date these financial statements are issued. The determination as to whether the Company can continue as a going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In its report on the Company's financial statements for the year ended December 31, 2019, the Company's independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: https://is.gd/MWSRlR Evoke Pharma, Inc., a specialty pharmaceutical company, primarily focuses on the development of drugs for the treatment of gastroenterological disorders and diseases. It is developing Gimoti, a metoclopramide nasal spray, which is in Phase 2b clinical trials for the relief of symptoms associated with acute and recurrent diabetic gastroparesis in women. The Company was founded in 2007 and is headquartered in Solana Beach, California. EXIDE TECHNOLOGIES: EPA Approves Clean-Up Settlement Plans ---------------------------------------------------------- Law360 reports that battery manufacturer Exide Technologies obtained approval from the Delaware bankruptcy court on June 9, 2020 of its clean-up settlement plan. The court approved the framework of Exide that requires environmental regulators to participate in negotiations with the debtor about the cleanup of its non-operating properties. During a hearing conducted over the phone and videoconference, debtor attorney Sunny Singh of Weil Gotshal & Manges LLP said Exide's proposal had the support of the U.S. Department of Environmental Protection as well as state agencies, and it would allow for negotiations to commence as early as June 15. A copy of the full-report is available at https://www.law360.com/delaware/articles/1281328/exide-clean-up-settlement-plans-approved-in-ch-11-case About Exide Technologies Exide Technologies LLC was founded in 1888 and headquartered in Milton, Georgia, Exide. It is a stored electrical energy solutions company and a producer and recycler of lead-acid batteries. Across the globe, Exide batteries power cars, boats, heavy duty vehicles, golf carts, powersports, and lawn and garden applications. Its network power solutions deliver energy to vast telecommunication networks in need of uninterrupted power supply. Exide Technologies first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002, and exited bankruptcy two years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, represented the Debtors in their successful restructuring. Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013 and emerged from bankruptcy in 2015. In the 2013 case, Exide tapped Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick and Company Inc. as public relations consultant. The official creditors committee retained Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as co-counsel, and Zolfo Cooper, LLC served as its bankruptcy consultants and financial advisors. Exide Holdings, Inc., and its affiliates, including Exide Technologies LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11157) on May 19, 2020. Exide Holdings was estimated to have $500 million to $1 billion in assets and $1 billion to $10 billion in liabilities. In the newest Chapter 11 case, Weil, Gotshal & Manges LLP is serving as legal counsel to Exide, Houlihan Lokey is serving as investment banker, and Ankura is serving as financial advisor. Richards, Layton & Finger, P.A., is the local counsel. Prime Clerk LLC is the claims agent, maintaining the page https://cases.primeclerk.com/Exide2020/ EXTRACTECH LLC: Committee Hires William D. Cope as Legal Counsel ---------------------------------------------------------------- The official committee of unsecured creditors of Extractech, LLC, seeks authority from the United States Bankruptcy Court for the District of Nevada to retain a counsel. The Committee wishes to retain William D. Cope, Esq. as its counsel, to: a. advise the Committee with respect to its powers and duties in this case; b. assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, and other matters relevant to the case, including the formulation of a plan of reorganization; c. participate with the Committee in the formulation and confirmation of a plan of reorganization; and d. perform such other legal services as may be required and are in the interest of the unsecured creditors. William Cope, Esq., the firm's attorney who will be providing the services, will charge an hourly fee of $450. Paraprofessionals will charge $175 per hour. Mr. Cope disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: William D. Cope, Esq. The Law Offices of William D. Cope, LLP 505 Ridge Street Reno, NV 89501 Phone: (775) 333-0838 Fax: (775) 333-6694 Email: william@copebklaw.com About Extractech LLC Extractech, LLC, a biotechnology company in Yerington, Nev., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 20-50496) on May 12, 2020. At the time of the filing, the Debtor had estimated assets of between $10 million and $50 million and liabilities of $1 million and $10 million. Debtor is represented by the Law Offices of Alan R. Smith. EXTRACTION OIL: Mgt. Says Substantial Going Concern Doubt Exists ---------------------------------------------------------------- Extraction Oil & Gas, Inc., filed its quarterly report on Form 10-Q, disclosing a net income of $9,037,000 on $165,187,000 of total revenues for the three months ended March 31, 2020, compared to a net loss of $94,032,000 on $221,917,000 of total revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $2,703,388,000, total liabilities of $2,280,534,000, and $240,697,000 in total stockholders' equity. The Company said, "We may seek covenant relief from the lenders under the revolving credit facility, and if we do not obtain a waiver of financial covenants for the three months ended June 30, 2020, the lenders under the revolving credit facility will be able to declare all outstanding principal and interest to be due and payable, and the lenders under the credit agreement could terminate their commitments to loan money and could foreclose against the assets collateralizing their borrowings. Any acceleration of the obligations under the revolving credit facility would result in a cross-default and potential acceleration of the maturity of our other outstanding long-term debt. These potential defaults create uncertainty associated with our ability to repay outstanding long-term debt obligations as they become due and creates a substantial doubt over our ability to continue as a going concern. "As a result of the impacts to our financial position resulting from declining commodity price conditions and in consideration of the substantial amount of long-term debt and preferred stock outstanding, we have engaged advisors to assist with the evaluation of strategic alternatives, which may include, but not be limited to, seeking a restructuring, amendment or refinancing of existing debt through a private restructuring or reorganization under Chapter 11 of the Bankruptcy Code. However, there can be no assurances that we will be able to successfully restructure our indebtedness, improve our financial position or complete any strategic transactions. As a result of these uncertainties and the likelihood of a restructuring or reorganization, management has concluded that there is substantial doubt regarding our ability to continue as a going concern." A copy of the Form 10-Q is available at: https://is.gd/aWFz2S Extraction Oil & Gas, Inc., is headquartered in Denver, Colorado. EXTRACTION OIL: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 on June 30, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Extraction Oil & Gas, Inc. and its affiliates. The committee members are: 1. Raisa Energy, LLC 1560 Broadway, Suite 2050 Denver, CO 80202 Attn: Babak Fadaiepour Tel: (303) 854-9141. 2. Platte River Midstream, LLC c/o ARB Midstream, LLC 1600 Broadway, Suite 2400 Denver, Colorado 80202 Attn: Ryan Newburn Tel: (720) 202-7297. 3. Wilmington Savings Fund Society, FSB WSFS Bank Center 500 Delaware Avenue Wilmington, DE 19801 Attn: Patrick Healy Tel: (302) 888-7420 4. REP Processing LLC 1675 Broadway, Suite 2075 Denver, CO 80202 Attn: Bryan Clinton Tel: (720) 943-6134 5. Rocky Mountain Midstream, LLC c/o The Williams Companies, Inc. One Williams Center Tulsa, OK 74103 Attn: Tim Neuman Tel: (918) 594-4880 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Extraction Oil & Gas Denver-based Extraction Oil & Gas, Inc. is an independent energy exploration and development company focused on exploring, developing and producing crude oil, natural gas and NGLs primarily in the Wattenberg Field in the Denver-Julesburg Basin of Colorado. Visit www.extractionog.com for more information. Extraction Oil & Gas and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11548) on June 14, 2020. At the time of the filing, Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge Christopher S. Sontchi oversees the cases. Debtors have tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Whireford, Taylor & Preston, LLC as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; and Moelis & Company and Petrie Partners Securities, LLC as investment banker and financial advisor. Kurtzman Carson Consultants, LLC is the claims and balloting agent and administrative advisor. FARR BUILDERS: Seeks Approval to Hire Real Estate Broker -------------------------------------------------------- Farr Builders, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Daryl Zipp, a real estate broker at Texas Realtors, to assist in the sale of its property located at 2423 S.E. Loop 410, San Antonio, Texas. The broker will receive a 3 percent commission from the sale. This commission may be split with another broker, however, in no event will Debtor pay more than 3 percent to any broker. The broker does not represent any interest adverse to Debtor and its bankruptcy estate, according to court filings. The professional can be reached at: Daryl Zipp Texas Realtors 3834 Deerfield Drive San Antonio, TX 78218 Mobile: 210-844-8683 About Farr Builders Farr Builders, LLC, a general contractor based in San Antonio, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50324) on Feb. 7, 2020. At the time of the filing, Debtor disclosed $3,792,881 in assets and $2,345,269 in liabilities. Judge Ronald B. King oversees the case. Heidi McLeod Law Office is Debtor's bankruptcy counsel. FARWEST PUMP: Seeks Approval to Hire Special Counsel in Secura Suit ------------------------------------------------------------------- Farwest Pump Company seeks approval from the U.S. Bankruptcy Court for the District of Arizona to employ David Leonard, Esq., as its special counsel. Debtor requires the services of special counsel to pursue legal action against Secura for alleged breach of contract. The attorney will be paid on a contingent fee basis as follows: (a) Forty percent (40%) of the gross amount recovered by Debtor by means of settlement or judgment. (b) Fifty percent (50%) of the gross amount recovered after a notice of appeal is filed either by Debtor or Secura. Mr. Leonard will serve as co-counsel with Rohit Talwar, Esq., at Talwar Law, P.L.L.C., the other attorney tapped by Debtor to handle the Secura case. Mr. Leonard has agreed to pay the other attorney between 33 1/3% and 50% of any fee recovered for Debtor. If a fee cannot be agreed upon between the attorneys, it will be subject to arbitration in Pima County or in the bankruptcy court. The attorney has no connection with creditors or any other party-in-interest in Debtor's Chapter 11 case, according to court filings. Mr. Leonard holds office at: David J. Leonard, Esq. 7440 N Oracle Rd. #2 Tucson, AZ 85704 Telephone: (520) 742-0440 Facsimile: (520) 622-7337 Email: davidleonardlaw@gmail.com About Farwest Pump Company Based in Tucson, Ariz., Farwest Pump Company is a small organization that provides well drilling services throughout the southwest United States. It also offers a wide variety of related services including sonar jet, municipal water systems, electrical control systems, complete machine shop, and environmental and geothermal services. Founded in 1982, Farwest is a licensed, bonded, and insured company with locations in Tucson, Willcox and Las Cruces. It is owned and operated by Clark and Channa Vaught. Visit http://farwestwell.comfor more information. Farwest sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 17-11112) on September 20, 2017. Farwest President Channa Vaught signed the petition. At the time of the filing, Farwest disclosed $2.51 million in assets and $1.85 million in liabilities. Judge Brenda Moody Whinery oversees the case. Debtor has tapped Waterfall Economidis Caldwell Hanshaw & Villamana, P.C. as bankruptcy counsel, and Talwar Law, PLLC and David J. Leonard, PLC as special counsel. FARWEST PUMP: Seeks to Hire Talwar Law as Special Counsel --------------------------------------------------------- Farwest Pump Company seeks approval from the U.S. Bankruptcy Court for the District of Arizona to employ Rohit Talwar, Esq., and his firm Talwar Law, PLLC as its special counsel. Mr. Talwar will serve as co-counsel with David Leonard, Esq., the other attorney tapped by Debtor to pursue legal action against Secura for alleged breach of contract. His firm will be paid between 33 1/3% and 50% of any fee recovered for Debtor. Mr. Talwar disclosed in court filings that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Rohit Talwar, Esq. Talwar Law, PLLC 1790 E. River Rd., Ste. 300 Tucson, AZ 85718 Telephone: (520) 260-2007 Email: rohit@talwarlaw.com About Farwest Pump Company Based in Tucson, Ariz., Farwest Pump Company is a small organization that provides well drilling services throughout the southwest United States. It also offers a wide variety of related services including sonar jet, municipal water systems, electrical control systems, complete machine shop, and environmental and geothermal services. Founded in 1982, Farwest is a licensed, bonded, and insured company with locations in Tucson, Willcox and Las Cruces. It is owned and operated by Clark and Channa Vaught. Visit http://farwestwell.comfor more information. Farwest sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 17-11112) on September 20, 2017. Farwest President Channa Vaught signed the petition. At the time of the filing, Farwest disclosed $2.51 million in assets and $1.85 million in liabilities. Judge Brenda Moody Whinery oversees the case. Debtor has tapped Waterfall Economidis Caldwell Hanshaw & Villamana, P.C. as bankruptcy counsel, and Talwar Law, PLLC and David J. Leonard, PLC as special counsel. FLUX POWER: Reports $3.97M Net Loss for Quarter Ended March 31 -------------------------------------------------------------- Flux Power Holdings, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3,965,000 on $5,051,000 of net revenue for the three months ended March 31, 2020, compared to a net loss of $3,814,000 on $1,751,000 of net revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $11,766,000, total liabilities of $24,526,000, and $12,760,000 in total stockholders' deficit. Flux Power said, "The Company has incurred an accumulated deficit of $50,162,000 through March 31, 2020 and a net loss of $3,965,000 and $11,086,000 for the three and nine months ended March 31, 2020, respectively. To date, the Company's revenues and operating cash flows have not been sufficient to sustain its operations and the Company has relied on debt and equity financing to fund its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern for the twelve months following the filing date of this Quarterly Report on Form 10-Q, May 12, 2020. As of March 31, 2020, the Company had a cash balance of $106,000 and will need to raise additional capital in the near future. The Company's ability to continue as a going concern is dependent upon its ability to raise additional capital on a timely basis until such time as revenues and related cash flows are sufficient to fund its operations. The ongoing COVID-19 pandemic may adversely impact our ability to raise capital under reasonable terms or at all." A copy of the Form 10-Q is available at: https://is.gd/7G2Y31 Headquartered in Vista, Calif., Flux Power Holdings, Inc., designs, develops and sells rechargeable advanced lithium-ion batteries for industrial uses, including UL 2771 Listed lithium-ion LiFT Pack forklift batteries. The Company offers a high power battery cell management system (BMS). FOURTH QUARTER PROPERTIES: US Trustee Unable to Appoint Committee ----------------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Fourth Quarter Properties XXXVIII, LLC. About Fourth Quarter Properties XXXVIII Fourth Quarter Properties XXXVIII, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)), whose principal assets are located at 45, 47 and 49 Ansley DriveNewnan, Ga. Fourth Quarter Properties filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 20-10883) on June 1, 2020. The Debtor previously sought bankruptcy protection (Bankr. N.D. Ga. Case No. 13-10585) on March 5, 2013. Judge W. Homer Drake oversees the case. In the petition signed by Stanley E. Thomas, manager, the Debtor was estimated $10 million to $50 million in both assets and liabilities. David L. Bury, Jr., Esq., at Stone & Baxter, LLP, is the Debtor's bankruptcy counsel. FRICTIONLESS WORLD: Hires Steptoe & Johnson as Special Counsel -------------------------------------------------------------- Frictionless World, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Colorado to employ Steptoe & Johnson LLP as its special counsel. The Debtor is party to (a) an arbitration proceeding (the “Arbitration”) against Changzhou Inter Universal Machine & Equipment CO., LTD (CIU), Frictionless, LLC, Changzhou Zhong Lian Investment Co. Ltd. (ZL Investments), and Li Zhixiang (Li and, together with CIU, Frictionless, LLC and ZL Investments, the Li Parties); and (b) an adversary proceeding (the Li Adversary) against the Li Parties, Frank Li and Serena Li. The Debtor previously sought and obtained authorization to employ the law firm of Thomas P. Howard, LLC as special counsel to represent the Debtor in connection with the Arbitration and the Li Adversary. Steptoe has agreed to assist the Debtor on three fronts: (1) represent the Debtor in connection with its efforts to obtain personal service on Frank and Serena Li in the Li Adversary; (2) represent the Debtor in connection with its efforts to obtain litigation funding for the Arbitration; and (3) act as co-counsel with Thomas P. Howard, LLC, in connection with the Arbitration. With respect to the personal service component, Steptoe brings international experience to the process, and Steptoe has agreed to cap its fees at $25,000 with respect to this component. With respect to the litigation funding component, Steptoe has substantial experience in procuring and negotiating litigation funding agreements. Steptoe has agreed to a soft fee cap of $25,000 with respect to this component, subject to seeking Court approval to exceed the amount if deemed necessary. With respect to the Arbitration, Steptoe has agreed to a fee cap of $220,000. The attorney at Steptoe with primary responsibility for the engagement is Teddy Baldwin, Esq. Mr. Baldwin regularly acts as lead counsel in significant international arbitrations and in arbitration enforcement proceedings. Mr. Baldwin's discounted professional litigation rate is $890 per hour. Other attorneys at Steptoe who may perform services on behalf of the Debtor bill at rates between $390 and $770 per hour. Legal assistance provided by paralegals is billed at the rate of $150 per hour. Mr. Baldwin assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. The firm can be reached through: Teddy Baldwin, Esq. Steptoe & Johnson PLLC 600 17th Street, Suite 2300 South Denver, CO 80202 Phone: (303) 389-4300 Fax: (303) 389-4301 About Frictionless World Frictionless World, LLC -- https://www.frictionlessworld.com/ -- is a provider of professional grade outdoor power equipment, replacement parts for tractors, hitches and agricultural implements, gate and fence equipment, lithium ion powered tools, and ice fishing equipment. The Company offers brands such as Dirty Hand Tools, RanchEx, Redback, Trophy Strike and Vinsetta Tools. Frictionless World sought Chapter 11 protection (Banks. D. Col. Case No. 19-18459) on Sept. 30, 2019. The Hon. Michael E. Romero is the case judge. In the petition signed by CEO Daniel Banjo, the Debtor disclosed total assets of $14,600,503 and total liabilities of $17,364,542. WADSWORTH GARBER WARNER CONRARDY, P.C., is serving as the Debtor's counsel. Thomas P. Howard, LLC, is special counsel. r2 Advisors, LLC, is the financial advisor. FRONTIER COMMUNICATIONS: Cullen, Russell Represent Utility Co. -------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Cullen and Dykman LLP and Law Firm of Russell R. Johnson III, PLC submitted a verified statement that they are representing the utility companies in the Chapter 11 cases of Frontier Communications Corporation, et al. The names and addresses of the Utilities represented by the Firm are: a. American Electric Power operating companies: Appalachian Power Company AEP-Texas Central Company Indiana Michigan Power Company Ohio Power Company Southwestern Electric Power Company and Wheeling Power Company Attn: Marilyn McConnell, Esq. 1 Riverside Plaza Columbus, Ohio 43215 b. Arizona Public Service Company Attn: Sandra Rosales 2043 W. Chery Dr., Bldg. M Mail Station 3209 Phoenix, Arizona 85021-1015 c. CenterPoint Energy Resources Corp. CenterPoint Energy Houston Electric, LLC Attn: Timothy Muller, Esq. Senior Counsel CenterPoint Energy, Inc. 1111 Louisiana St. Houston, TX 77002 d. Commonwealth Edison Company Attn: Erin Buechler Claims & Collection Counsel 3 Lincoln Centre Oakbrook Terrace, IL 60181 e. DTE Electric Company DTE Gas Company Attn: Leland Prince, Esq. DTE Energy One Energy Plaza Detroit, Michigan 48226 f. Eversource companies: The Connecticut Light & Power Company and Yankee Gas Services Company Attn: Honor S. Heath, Esq. Eversource Energy 107 Seldon Street Berlin, CT 06037 g. Florida Power & Light Company Attn: Gloria Lopez Revenue Recovery Department RRD/LFO 4200 W. Flagler St. Coral Gables, Florida 33134 h. Orange and Rockland Utilities, Inc. Attn: Jennifer Woehrle 390 W. Route 59 Spring Valley, New York 10977 i. Ohio Edison Company West Penn Power Company Monongahela Power Company d/b/a Mon Power Toledo Edison Company Potomac Edison Company Metropolitan Edison Company Pennsylvania Electric Company d/b/a Penelec Attn: Kathy M. Hofacre FirstEnergy Corp. 76 S. Main St., A-GO-15 Akron, OH 44308 j. Niagara Mohawk Power Corporation d/b/a National Grid Attn: Christopher S. Aronson Senior Counsel National Grid 40 Sylvan Road Waltham, MA 02451 k. New York State Electric and Gas Corporation Attn: Kelly Potter James A. Carigg Center Bankruptcy Department 18 Link Drive Binghamton, NY 13904 l. Rochester Gas and Electric Corporation Attn: Patricia Cotton 89 East Avenue Rochester, NY 14649 m. PECO Energy Company Assistant General Counsel Exelon Corporation 2301 Market Street, S23-1 Philadelphia, PA 19103 n. San Diego Gas & Electric Company Attn: A.J. Moreno, Bankruptcy Specialist 8326 Century Park Court San Diego, CA 92123 o. Southern California Gas Company Attn: Cranston J. Williams, Esq. Office of the General Counsel 555 W. Fifth Street, GT14G1 P.O. Box 30337 Los Angeles, CA 90013-1034 p. Southern Connecticut Gas Company United Illuminating Company Attn: John R. Forbush, Esq. Avangid Networks, Inc. 89 East Avenue, 9th Floor Rochester, New York 14649 q. Southern California Edison Company Attn: Margarita Gevondyan, Esq. Senior Attorney Southern California Edison Law Department 2244 Walnut Grove Avenue Rosemead CA 91770 r. Sacramento Municipal Utilities District Attn: Randall J. Hakes, Esq. 6301 S Street, Mailstop A311 Sacramento, California 95817 s. UNS Electric, Inc. UNS Gas, Inc. Attn: Adam D. Melton, Esq. Senior Attorney – Litigation 88 E. Broadway Blvd. Tucson, AZ 85701 t. Southern Indiana Gas and Electric Company, Inc. d/b/a Veteran Energy Delivery of Indiana, Inc. Indiana Gas Company, Inc. d/b/a Vectren Energy Delivery of Indiana, Inc. Vectren Energy Delivery of Ohio Attn: Justin Forshey, Supervisor, Credit & Collections Vectren Energy Delivery One Vectren Square Evansville, Indiana 47708 u. NextEra Energy Services Pennsylvania, LLC Attn: John Gray, Esq. Senior Attorney NextEra Energy Resources 20455 SH 249, Suite 200 Houston, Texas 77070 The nature and the amount of claims (interests) of the Utilities, and the times of acquisition thereof are as follows: a. The following Utilities have unsecured claims against the above-referenced Debtors arising from prepetition utility usage, and/or pursuant to pole attachment and/or joint use agreements with the Debtors, among other contracts: Appalachian Power Company, AEP-Texas Central Company, Indiana Michigan Power Company, Ohio Power Company, Southwestern Electric Power Company and Wheeling Power Company, Arizona Public Service Company, CenterPoint Energy Resources Corp., Commonwealth Edison Company, DTE Electric Company, DTE Gas Company, Eversource companies: The Connecticut Light & Power Company and Yankee Gas Services Company, Florida Power and Light Company, Monongahela Power Company d/b/a Mon Power, West Penn Power Company, Potomac Edison Company, Toledo Edison Company, Metropolitan Edison Company, Pennsylvania Electric Company d/b/a Penelec, Ohio Edison Company, Niagara Mohawk Power Corporation, d/b/a National Grid, New York State Electric and Gas Corporation, Rochester Gas and Electric Corporation, Orange and Rockland Utilities, PECO Energy Company, San Diego Gas & Electric Company, Southern California Gas Company, Southern Connecticut Gas Company, Southern California Edison Company, SMUD, UNS Electric, Inc., Southern Indiana Gas and Electric Company, Inc. d/b/a Vectren Energy Delivery of Indiana, Inc., Indiana Gas Company, Inc. d/b/a Vectren Energy Delivery of Indiana, Inc., Vectren Energy Delivery of Ohio, United Illuminating Company, NextEra Energy Services Pennsylvania, LLC, CenterPoint Energy Houston Electric, LLC and AEP-Texas Central Company. b. Florida Power & Light Company and Southern California Edison Company hold surety bonds that they will make claims upon for payment of the prepetition debt that the Debtors owe to those Utilities. c. New York State Electric & Gas Corporation, Rochester Gas and Electric Company, UNS Electric, Inc. and UNS Gas, Inc. held prepetition deposits that it recouped against prepetition debt pursuant to Section 366(c)(4) of the Bankruptcy Code. The Law Firm of Russell R. Johnson III, PLC was retained to represent the foregoing Utilities in April and May 2020. The circumstances and terms and conditions of employment of the Firm by the Companies is protected by the attorney-client privilege and attorney work product doctrine. Co-Counsel for American Electric Power, et al. can be reached at: Thomas R. Slome, Esq. Michael Kwiatkowski, Esq. CULLEN AND DYKMAN LLP 100 Quentin Roosevelt Boulevard Garden City, New York 11530 Tel: (516) 296-9165 Fax: (516) 357-3792 Email: tslome@cullenanddykman.com mkwiatkowski@cullenanddykman.com - and - Russell R. Johnson III, Esq. John M. Craig, Esq. LAW FIRM OF RUSSELL R. JOHNSON III, PLC 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Tel: (804) 749-8861 Fax: (804) 749-8862 Email: russell@russelljohnsonlawfirm.com john@russelljohnsonlawfirm.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/wcUZua About Frontier Communications Frontier Communications Corporation (NASDAQ: FTR) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 29 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020, to seek approval of a plan that would cut debt by $10 billion. Frontier announced it had entered into a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of its $11 billion outstanding unsecured bonds. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. G-STAR RAW: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- G-Star Raw Retail Inc. 20-16040 421 North Rodeo Drive Premises S-13 and AE-3 Beverly Hills, CA 90210 G-Star Inc. 20-16041 599 Broadway, Unit A 11th FL New York, NY 10012 Business Description: G-Star is a men's & women's denim retailer. Chapter 11 Petition Date: July 3, 2020 Court: United States Bankruptcy Court Central District of California Judge: Hon. Julia W. Brand (20-16040) Hon. Barry Russell (20-16041) Debtors' Counsel: M. Douglas Flahaut, Esq. ARENT FOX LLP 555 West Fifth Street, 48th Floor Los Angeles, CA 90013-1065 Tel: 213-629-7400 Email: Douglas.Flahaut@arentfox.com G-Star Raw Retail's Estimated Assets: $1 million to $10 million G-Star Raw Retail's Estimated Liabilities: $10 million to $50 million G-Star Inc.'s Estimated Assets: $10 million to $50 million G-Star Inc.'s Estimated Liabilities: $10 million to $50 million The petitions were signed by Nicole Clayton, general manager and chief executive officer. Copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/fbuqyd https://is.gd/9c8Xin A. List of G-Star Raw Retail's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. 441 Broadway LLC Landlord $161,549 73 Spring Street, 6th Floor New York, NY 10012 2. 475 Fifth Ave Landlord $426,006 P.O. Box 417420 Boston, MA 02241 3. Clarksburg Premium Outlets Landlord $133,108 P.O. Box 772986 Chicago, IL 60677-0286 4. Fashion Centre Mall, LLC Landlord $255,868 P.O. Box 402792 Atlanta, GA 30384 5. Fashion Show Mall, LLC Landlord $61,907 P.O. Box 86 Minneapolis, MN 55486-2773 6. Geary-Grant LLC Landlord $113,595 P.O. Box 748750 Los Angeles, CA 90074-8750 7. Green Hills Mall Landlord $331,157 TRG LLC P.O. Box 674523 Detroit, MI 48267 8. Hampton Management Co., LLC Landlord $199,830 135 East 57th, 22nd Floor New York, NY 10022 9. HG Galleria, LLC Landlord $97,260 2088 Paysphere Circle Chicago, IL 60674 10. Las Vegas North Landlord $85,124 Premium Outlets 875 South Grand Central Las Vegas, NV 89106 11. Macerich Associates, L.P. Landlord $212,063 401 Wilshire Blvd., Suite 700 Santa Monica, CA 90401 12. Newport Centre LLC Landlord $87,094 867545 Reliable Parkway Chicago, IL 60686-0075 13. Penn Ross Joint Venture Landlord $188,687 1326 Ross Park Mall Chicago, IL 60674 14. Rodeo Collections Ltd. Landlord $179,684 9629 Brighton Way Beverly Hills, CA 90210 15. Santa Monica Place Landlord $109,740 P.O. Box 849436 Los Angeles, CA 90084-9436 16. Simon Property Group- Landlord $217,552 CPG Partners P.O. Box 822884 Philadelphia, PA 19182-2884 17. Taubman La Cienega Partners LP Landlord $348,884 P.O. Box 67000 Detroit, MI 48267 18. Valley Fair Mall, LLC Landlord $157,842 P.O. Box 55702 Santa Clara, CA 95050 19. Westland Garden Landlord $80,793 State Plaza LP P.O. Box 56816 Los Angeles, CA 90074-6816 20. Wilson Canal Place II LLC Landlord $160,253 230 Royal Palm Way Palm Beach, FL 33480 B. List of G-Star Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Aventura Mall Venture Landlord $246,467 414 Seneca Avenue Ridgewood, NY 11385 2. Avesta Holdings LLC Trade Debt Unknown 3393 Peachtree Rd. Atlanta, GA 30326 3. Better Pak Container Corp. Trade Debt $4,896 675 Dell Road Carlstadt, NJ 07072 4. City of Los Angeles Trade Debt $3,427 P.O. Box 30879 Los Angeles, CA 90030 5. Empire State Properties Trade Debt $2,301 414 Seneca Avenue Ridgewood, NY 11385 6. Fox Horan & Camerini LLP Trade Debt $6,706 885 Third Avenue New York, NY 10022 7. Glory Manufactory Limited Trade Debt $4,340 2696 Solution Center Chicago, IL 60677-2006 8. King of Prussia Landlord $176,212 Associates 2088 Paysphere Circle Chicago, IL 60674 9. Kingsbridge Cleaners & Tailors Trade Debt $1,174 P.O. Box 1920 New York, NY 10101 10. L.A. Models Trade debt $2,070 P.O. Box 1920 New York, NY 10101 11. Logicalis Trade Debt $7,264 25 Senate Place Jersey City, NJ 07306 12. Marcum LLP Trade Debt $104,317 1550 S. Gene Autry Trail Palm Springs, CA 92264 13. Port Logistic Group Trade Debt $225,466 P.O. Box 14106 New Brunswick, NJ 08906 14. Shaherison 599 Co, LLC Landlord $134,399 P.O Box 822884 Philadelphia, PA 19182-2884 15. SLG Systems, Inc. Trade Debt $18,187 P.O. Box 14106 New Brunswick, NJ 08906 16. SPS Commerce Inc Trade Debt $1,909 P.O. Box 1480 Riverside, CA 92502 17. Total Benefit Solutions Trade Debt $157,039 2088 Paysphere Circle Chicago, IL 60674 18. ULINE Shipping Supply Trade Debt $2,020 Specialists 120 Wooster Street New York, NY 10012 19. UPS United Parcel Service Trade Debt $49,066 P.O. Box 7247-0244 Philadelphia, PA 19170 20. YRC Trade Debt $2,275 P.O. Box 13573 Newark, NJ 07188 GGI HOLDINGS: Committee Taps Dundon as Financial Advisor -------------------------------------------------------- The official committee of unsecured creditors of GGI Holdings, LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Texas to retain Dundon Advisers LLC, as its financial adviser, effective as of May 29, 2020. The committee requires Dundon Advisers to: a. assist in the review of financial-related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs, and Monthly Operating Reports; b. assist in the preparation of analyses required to assess compliance with orders pertaining to Debtor-In-Possession financing and use cash collateral, and advise the Committee with regard to any proposed modifications to such orders; c. assist with the assessment and monitoring of the Debtors' short term cash flow, liquidity, and operating results; d. assist with the review of the Debtors' analysis of core business assets and the potential disposition or liquidation of non-core assets; e. assist with the review of the Debtors' cost/benefit analysis with respect to the affirmation or rejection of various executory contracts and leases to the extent occurring after its date of engagement; f. assist in the review and monitoring of any asset sale process, including, but not limited to an assessment of the adequacy of the marketing process, completeness of any buyer lists, review, and quantifications of any bids; g. assist with review of any tax issues associated with, but not limited to, claims/stock trading, preservation of net operating losses, refunds due to the Debtors, plans of reorganization, and asset sales; h. assist in the review of the claims reconciliation and estimation process; i. assist in the review of other financial information prepared by the Debtors, including, but not limited to, cash flow projections and budgets, business plans, cash receipts and disbursement analysis, asset and liability analysis, and the economic analysis of proposed transactions for which Court approval is sought; j. attend at meetings and assistance in discussions with the Debtors, potential investors, banks, other secured lenders, the Committee and any other official committees organized in these chapter 11 proceedings, the U.S. Trustee, other parties-in-interest and professionals hired by the same, as requested; k. assist in the review of insider compensation and management fee arrangements and payments made thereunder, related party transactions, and other management conduct from which causes of action may arise; l. assist in the review and/or preparation of information and analysis necessary for the confirmation of a plan and related disclosure statement in these chapter 11 proceedings; m. assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; n. assist in the prosecution of Committee responses/objections to the Debtors' motions, including attendance at depositions and provision of expert reports/testimony on case issues as required by the Committee; o. render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial adviser and not duplicative of services provided by other professionals in this proceeding; and p. provide reports and testimony regarding the foregoing to the extent necessary. Dundon Advisers' standard hourly rates are: Principals $675 to $700 Managing Directors $625 to $675 Directors $475 to $575 Associates $400 Matthew Dundon, principal of Dundon Advisers, attests that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached through: Matthew Dundon Dundon Advisers LLC P.O. Box 259H Scarsdale, NY 10583 Phone: 917-838-1930 Email: md@dundon.com About GGI Holdings Founded in 1965, Gold's Gym operates a network of company-owned and franchised fitness centers. It owns and operates approximately 95 gyms domestically, and holds franchise agreements for more than 600 gyms domestically and internationally. Its majority owner is TRT Holdings, Inc. -- acquired the business in 2004. GGI Holdings, LLC, Gold's Gym International, Inc. and other related entities sought Chapter 11 protection (Bankr. 20-31318) on May 4, 2020. GGI Holdings was estimated to have assets and debt of $50 million to $100 million. The Hon. Harlin Dewayne Hale is the case judge. The Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC Group Inc. is the claims agent. GI DYNAMICS: Further Extends 2017 Notes Maturity Date to July 31 ---------------------------------------------------------------- GI Dynamics Inc. provides the following update regarding the extension of the maturity date of the Senior Secured Convertible Promissory Note issued to Crystal Amber Fund Limited, a related Party for Australian Securities Exchange purposes, on June 15, 2017 and associated matters. Ongoing funding Crystal Amber has informed the Company that direct negotiations which they had been having with the Potential Investors referred to in the Notice of Special Meeting and Proxy Statement announced on May 27, 2020 regarding a potential joint financing of the Company have now ceased. Crystal Amber has, however, informed the Company that, notwithstanding this development, it still has an ongoing interest in potentially participating in a financing of the Company, either as a standalone investor or together with other investors. The details of such a potential financing are still under discussion and no agreement has yet been reached and an agreement may never be reached. If a financing can be agreed with Crystal Amber or any other parties, the relevant details will be released to the market via an ASX announcement and United States Securities and Exchange Commission announcement on Form 8-K. There is no guarantee, however, that the Company will be able to secure any form of debt or equity funding, and as a result may be required to cease business operations and be wound up. Further Extension of 2017 Note In addition, Crystal Amber has agreed to extend the maturity date of the June 2017 Note from June 29, 2020 to July 31, 2020. This further extension follows the recent extensions announced by the Company on June 17, 2020 and May 15, 2020. Delisting from the Official List of ASX As also announced by the Company on June 22, 2020, the Company obtained the necessary shareholder votes to approve the Board of Directors' recommendation to request ASX to remove the Company from the Official List of ASX. Having sought in-principle advice from ASX regarding the conditions ASX would require to be met in order for the Company to be Delisted and having fulfilled such requirements, the Company will cease trading on ASX as of 22 July 2020 and ASX will subsequently remove the Company from the Official List. The Company is not in a position to operate a share buy-back or similar facility in connection with the Company's removal from the Official List of ASX. Stockholders that wish to sell their CDIs on ASX will therefore need to do so before the time at which the Company's CDIs are suspended from trading on the Official List, being July 21, 2020 (AEST). If CDI holders do not sell their CDIs prior to the Trading Suspension Date, their CDIs will need to be converted to shares of common stock in the Company. Further details on this process will be provided in the lead up to the Delisting Date (being July 22, 2020 (AEST)). About GI Dynamics Founded in 2003 and headquartered in Boston, Massachusetts, GI Dynamics, Inc. (ASX:GID) is a developer of EndoBarrier, an endoscopically-delivered medical device for the treatment of type 2 diabetes and the reduction of obesity. EndoBarrier is not approved for sale and is limited by federal law to investigational use only. EndoBarrier is subject to an Investigational Device Exemption by the FDA in the United States and is entering concurrent pivotal trials in the United States and India. GI Dynamics reported a net loss of $17.33 million for the year ended Dec. 31, 2019, compared to a net loss of $8.04 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $5.65 million in total assets, $8.71 million in total liabilities, and a total stockholders' deficit of $3.06 million. Wolf and Company, P.C., in Boston, Massachusetts, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 26, 2020 citing that the Company has suffered losses from operations since inception and has an accumulated deficit and working capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. GNC HOLDINGS: Mgt. Says Substantial Going Concern Doubt Exists -------------------------------------------------------------- GNC Holdings, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $200,086,000 on $472,581,000 of revenue for the three months ended March 31, 2020, compared to a net loss of $15,262,000 on $564,764,000 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $1,415,957,000, total liabilities of $1,606,952,000, and $402,390,000 in total stockholders' deficit. GNC Holdings said, "The Company has an accelerated maturity payment due on May 16, 2020 (the "Springing Maturity Date") that it does not have the ability to pay. Since the Company has not refinanced the US$738.7 million of Tranche B-2 Term Loan (the "Tranche B-2 Term Loan), FILO Term Loan (the "FILO Term Loan") and Revolving Credit Facility (the "Revolving Credit Facility") that will become due on the Springing Maturity Date, management has concluded there is substantial doubt regarding the Company's ability to continue as a going concern within one year from the issuance date of the Company's Consolidated Financial Statements. Failure to complete a refinancing or other restructuring, obtain an extension of the Springing Maturity Date as defined in the Credit Agreements, reach an agreement with required lender groups under the Credit Agreements prior to May 16, 2020 or to reach an agreement with the Company's stakeholders on the terms of an out-of-court restructuring would have a material adverse effect on the Company's liquidity, financial condition and results of operations and may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan. As of March 31, 2020, the Company's outstanding indebtedness has been classified as current on the Company's Consolidated Balance Sheets. In addition, the Company accelerated the amortization of original issuance discount and deferred financing fees for the Tranche B-2 Term Loan, FILO Term Loan and the Revolving Credit Facility of US$12.4 million to the Springing Maturity Date." A copy of the Form 10-Q is available at: https://is.gd/wMcOxL GNC Holdings, Inc., is based in Pittsburgh, Pennsylvania. HDR FARMS: Seeks to Hire Hublar Enterprises as Business Consultant ------------------------------------------------------------------ HDR Farms Incorporated seeks authority from the US Bankruptcy Court for the Eastern District of Kentucky to employ Hublar Enterprises, Inc. d/b/a Comprehensive Business Solutions as business consultant. HDR Farms requires Hublar Enterprises to: a. assist the Debtor with maintenance of the Debtor's business records to convey meaningful and accurate information concerning the Debtor's operations; b. advise the Debtor in its preparation of monthly operating reports and other necessary compliance activities; and c. support the Debtor’s assessment of its business opportunities and development of a chapter 11 plan or other strategies to maximize the value of the bankruptcy estate. The Debtor desires to retain Hublar Enterprises at a flat monthly rate of $7,500. Hublar Enterprises is a "disinterested person" as defined by section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Michael Hublar Hublar Enterprises, Inc. d/b/a Comprehensive Business Solutions 12 N Hill Dr Floyds Knobs, IN 47119 About HDR Farms Incorporated HDR Farms Incorporated sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No. 20-50888) on June 9, 2020. At the time of filing, the Debtor estimted $50,000 in assets and $1,000,001 to $10 million in liabilities. Tyler R. Yeager at Kaplan Johnson Abate & Bird, LLP, represents the Debtor as counsel. HDR FARMS: Seeks to Hire Rodefer Moss & Co as Accountant -------------------------------------------------------- HDR Farms Incorporated seeks authority from the US Bankruptcy Court for the Eastern District of Kentucky to employ Rodefer Moss & Co, PLLC as its accountant. HDR Farms requires Rodefer Moss to: a. assist the Debtor in its financial planning; b. advise the Debtor with respect to its financial reporting obligations; and c. prepare required tax returns for filing with appropriate governmental authorities. Rodefer Moss will be compensated for services rendered on an hourly basis, at the rates of $125-$170 for professional staff to $260 for partners, subject to allowance and adjustment by subsequent order of the Court. Rodefer Moss is a "disinterested person" as defined by section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Marc McCormick Rodefer Moss & Co, PLLC 301 E. Elm Street New Albany, IN 47150 Phone: (812) 945-5236 Fax: (812) 949-4095 About HDR Farms Incorporated HDR Farms Incorporated sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No. 20-50888) on June 9, 2020. At the time of filing, the Debtor estimted $50,000 in assets and $1,000,001 to $10 million in liabilities. Tyler R. Yeager at Kaplan Johnson Abate & Bird, LLP, represents the Debtor as counsel. HYTERA COMMUNICATIONS: Hires Imperial Capital as Investment Banker ------------------------------------------------------------------ Hytera Communications America (West), Inc. and its debtor-affiliates seek authority from the US Bankruptcy Court for the Central District of California to hire Imperial Capital, LLC as their investment banker. Investment Banking Services. Imperial Capital may perform the following services: (i) analysis of the Debtors' business, operations, properties, financial condition, competition, forecast, prospects and management; (ii) providing financial valuation of the ongoing operations of the Debtors; (iii) advising the Debtors on a proposed purchase price and form of consideration for the Transaction; (iv) assisting the Debtors in developing, evaluating, structuring and negotiating the terms and conditions of a potential Transaction; (v) assisting the Debtors in the preparation of solicitation materials with respect to the Transaction and the Debtors (Transaction Offering Materials); (vi) identification of and contacting selected qualified buyers for the Transaction and furnishing them, on behalf of the Debtors, with copies of Offering Materials; and (vii) assisting the Debtors in arranging for potential Buyers to conduct due diligence investigations. Financial Advisor Services. In addition to the Investment Banking Services and as reasonably requested by the Debtors, Imperial Capital may provide other financial advisory services with respect to the Debtors' financial issues as may from time to time be agreed upon between the Debtors and Imperial Capital. These Additional Services may include, but are not limited to: (i) assistance in preparation of first day motions, (ii) 13-week cash flow projection preparation and/or analysis, and (iii) any other advisory services outside of the scope of the Investment Banking Services. Imperial Capital's hourly rates are: Managing Director $1,050 Senior Vice President $900 Vice President $750 Associate (Senior) $650 Associate (Junior) $550 Analyst (Senior) $475 Analyst (Junior) $400 Imperial Capital received a retainer of $50,000 for services to be rendered in these cases. Eric Groman, managing director of Imperial Capital, disclosed in a court filing that his firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Imperial Capital can be reached through: Eric Groman Imperial Capital, LLC 10100 Santa Monica Avenue, Suite 2400 Los Angeles, CA 90067 Office: (310) 246-3700 Toll Free: (800) 929-2299 Fax: (310) 777-3000 About Hytera Communications America Hytera communications America (West), Inc. is a global company in the two-way radio communications industry. It has 10 international R&D Innovation Centers and more than 90 regional organizations around the world. Forty percent of Hytera employees are engaged in engineering, research, and product design. Hytera has three manufacturing centers in China and Spain. For more information, visit https://www.hytera.us On May 26, 2020, Hytera sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 20-11507). At the time of the filing, Debtor had estimated assets of between $10 million and $50 million and liabilities of between $500 million and $1 billion. Judge Erithe A. Smith oversees the cases. Debtors tapped Pachulski Stang Ziehl & Jones, LLP as bankruptcy counsel; Steptoe & Johnson, LLP as corporate and special counsel; and Imperial Capital, LLC as financial advisor. HYTERA COMMUNICATIONS: Hires Omni Agent Solutions as Consultant --------------------------------------------------------------- Hytera communications America (West), Inc. and its debtor-affiliates seek authority from the US Bankruptcy Court for the Central District of California to hire Omni Agent Solutions as case administration consultant. Omni, at the request of the Debtors, will provide case administration matters services in these chapter 11 cases, including: trustee compliance, preparation of schedules of assets and liabilities and statement of financial affairs, plan solicitation, balloting, and any other services as may be requested by the Debtors or otherwise required by applicable law governmental regulations or court rules or orders. Omni shall be compensated on a monthly basis for services it performs on behalf of the Debtors during the preceding calendar month. Brian Osborne, CEO of Omni Agent, attests that his firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian Osborne Omni Agent Solutions 5955 De Soto Ave., Suite 100 Woodland Hills, CA 91367 Tel. 818-906-8300 Fax. 818-783-2737 About Hytera Communications America Hytera communications America (West), Inc. is a global company in the two-way radio communications industry. It has 10 international R&D Innovation Centers and more than 90 regional organizations around the world. Forty percent of Hytera employees are engaged in engineering, research, and product design. Hytera has three manufacturing centers in China and Spain. For more information, visit https://www.hytera.us On May 26, 2020, Hytera sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 20-11507). At the time of the filing, Debtor had estimated assets of between $10 million and $50 million and liabilities of between $500 million and $1 billion. Judge Erithe A. Smith oversees the cases. Debtors tapped Pachulski Stang Ziehl & Jones, LLP as bankruptcy counsel; Steptoe & Johnson, LLP as corporate and special counsel; and Imperial Capital, LLC as financial advisor. HYTERA COMMUNICATIONS: Hires Pachulski Stang as Bankruptcy Counsel ------------------------------------------------------------------ Hytera Communications America (West), Inc. and its debtor-affiliates seek authority from the US Bankruptcy Court for the Central District of California to hire Pachulski Stang Ziehl & Jones LLP as their counsel. Hytera requires Pachulski Stang to: a. take necessary or appropriate actions to protect and preserve the Debtors' estate, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtor', the negotiation of disputes in which the Debtor’ is involved, and the preparation of objections to claims filed against the Debtors’ estates; b. provide legal advice with respect to the Debtors' powers and duties as a debtor in possession in the continued operation of its business and management of its property; c. prepare on behalf of the Debtors any necessary applications, motions, answers, orders, reports, and other legal papers; d. appear in Court on behalf of the Debtors; e. prepare and pursue a sale of assets, confirmation of a plan and approval of a disclosure statement, and such further actions as may be required in connection with the administration of the Debtors’ estates; and f. act as general bankruptcy counsel for the Debtors and performing all other necessary or appropriate legal services in connection with this chapter 11 cases. The principal attorneys presently designated to represent the Debtor and their current standard hourly rates are: Ira D. Kharasch $1,145 Victoria A. Newmark $925 John W. Lucas $825 Jason H. Rosell $725 John W. Lucas, Esq., a partner at Pachulski Stang, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Pachulski Stang may be reached through: John W. Lucas, Esq. Ira D. Kharasch, Esq. Victoria A. Newmark, Esq. Jason H. Rosell, Esq. Pachulski Stang Ziehl & Jones LLP 650 Town Center Drive, Suite 1500 Santa Ana, CA 92626 Telephone: (714) 384-4740 Facsimile: (714) 384-4741 E-mail: ikharasch@pszjlaw.com jlucas@pszjlaw.com vnewmark@pszjlaw.com jrosell@pszjlaw.com About Hytera Communications America Hytera communications America (West), Inc. is a global company in the two-way radio communications industry. It has 10 international R&D Innovation Centers and more than 90 regional organizations around the world. Forty percent of Hytera employees are engaged in engineering, research, and product design. Hytera has three manufacturing centers in China and Spain. For more information, visit https://www.hytera.us On May 26, 2020, Hytera sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 20-11507). At the time of the filing, Debtor had estimated assets of between $10 million and $50 million and liabilities of between $500 million and $1 billion. Judge Erithe A. Smith oversees the cases. Debtors tapped Pachulski Stang Ziehl & Jones, LLP as bankruptcy counsel; Steptoe & Johnson, LLP as corporate and special counsel; and Imperial Capital, LLC as financial advisor. HYTERA COMMUNICATIONS: Hires Steptoe & Johnson as Special Counsel ----------------------------------------------------------------- Hytera Communications America (West), Inc. and its debtor-affiliates seek authority from the US Bankruptcy Court for the Central District of California to hire Steptoe & Johnson LLP as their corporate and special counsel. Steptoe will advise the Debtors with respect to tax, corporate, regulatory, intellectual property, and litigation (including appellate) matters. The principal attorneys presently designated to represent the Debtors and their current standard hourly rates are: Filiberto Agusti $888 Joshua Taylor $796 Caroline H. B. Gaudet $780 Brian Egan $835 Evan T. Abrams $530 Amartya Bagchi $475 Steptoe received a retainer of $200,000 for services to be rendered in these cases. Filiberto Agusti, Esq., a partner at Steptoe & Johnson, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Steptoe & Johnson can be reached at: Filiberto Agusti, Esq. STEPTOE & JOHNSON PLLC 1330 Connecticut Ave., NW Washington DC 20036 About Hytera Communications America Hytera communications America (West), Inc. is a global company in the two-way radio communications industry. It has 10 international R&D Innovation Centers and more than 90 regional organizations around the world. Forty percent of Hytera employees are engaged in engineering, research, and product design. Hytera has three manufacturing centers in China and Spain. For more information, visit https://www.hytera.us On May 26, 2020, Hytera sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 20-11507). At the time of the filing, Debtor had estimated assets of between $10 million and $50 million and liabilities of between $500 million and $1 billion. Judge Erithe A. Smith oversees the cases. Debtors tapped Pachulski Stang Ziehl & Jones, LLP as bankruptcy counsel; Steptoe & Johnson, LLP as corporate and special counsel; and Imperial Capital, LLC as financial advisor. ICONIX BRAND: Incurs $20.7M Net Loss for Quarter Ended March 31 --------------------------------------------------------------- Iconix Brand Group, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $20,658,000 on $27,951,000 of licensing revenue for the three months ended March 31, 2020, compared to a net income of $21,306,000 on $35,942,000 of licensing revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $465,251,000, total liabilities of $712,256,000, and $278,348,000 in total stockholders' deficit. The Company has experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $450.6 million as of March 31, 2020. Net losses incurred for the years ended December 31, 2019 and 2018 amounted to approximately $101.9 million and $89.7 million, respectively. While the Company had positive cash flows from operations in recent periods, the potential adverse impact of the COVID-19 pandemic on its operating results, liquidity and financial condition raises substantial doubt the Company can continue as an ongoing business for the next twelve months. A copy of the Form 10-Q is available at: https://is.gd/cdHNCd Iconix Brand Group, Inc., a brand management company, owns, licenses, and markets a portfolio of consumer brands across the women's, men's, and home industries in the United States and internationally. Iconix Brand Group, Inc. was founded in 1978 and is based in New York, New York. IGLESIA TABERNACULO: Seeks Approval to Hire Accountant ------------------------------------------------------ Iglesia Tabernaculo De Adoracion Y Alabanza, Inc. seeks authority from the United States Bankruptcy Court for the District of Puerto Rico to hire an accountant. Bethali Bega Vera as accountant will assist the Debtor in general accounting, financial consulting services, filing of monthly operating reports and accounting analysis. Ms. Vera will charge $35 per hour, plus reimbursement of actual out of pocket expenses. Ms. Vera is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14). Ms. Vera can be reached at: Bethali Bega Vera Hacienda Miraflores Calle Jazmin #35 Coamo, PR 00769 Phone: (787) 215-6906 About Iglesia Tabernaculo De Adoracion Y Alabanza, Inc. Iglesia Tabernaculo De Adoracion Y Alabanza, Inc. is a nonprofit religious organization that operates an evangilical church. The Company owns in fee simple a real property, where the church is located, at PR Road 132, Km. 22.6, Canas Ward, Ponce, PR, having an appraised value of $915,000. Iglesia Tabernaculo De Adoracion Y Alabanza, Inc., filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. P.R. Case No. 20-01752) on May 5, 2020. In the petition signed by Jesus F. Perez Gutierrez, president, the Debtor estimated $938,025 in assets and $1,274,467 in liabilities. Noemi Landrau Rivera, Esq. at LANDRAU RIVERA & ASSOCIATES, represents the Debtor as counsel. IMAGEWARE SYSTEMS: Appoints Chris Dickson as VP of Sales -------------------------------------------------------- ImageWare Systems, Inc., has appointed Christopher (Chris) D. Dickson, as vice president of Sales, effective June 30, 2020. Dickson joins ImageWare with over 25 years of sales and business development experience in Security, Blockchain, Cloud and Enterprise software. His career includes eighteen years with Computer Associates, where he held key sales leadership positions in various parts of the world including Australia, New York, California and Switzerland. Before coming to the Company, Dickson worked within technology for nearly two decades in sales. Most recently, he was responsible for sales at The Bitfury Group (a Forbes 50 blockchain company) and was pivotal in launching one of the first Enterprise based Blockchain SaaS solutions into the market, delivering quarter over quarter growth, ending the first 12 months, with a 600% increase in sales. While at Panaya (an Enterprise SaaS company), he delivered quarter over quarter double-digit (50%) growth, with significant new client focus. While at Verizon Enterprise, he led the partner and system integrator businesses for EMEA, growing sales by 350% within eighteen months through country-specific go to market strategies, partner specialization, enhanced operating discipline, and deliberate expansion of cross-sell and up-sell. Kristin A. Taylor, president and CEO of ImageWare, said, "Chris brings a welcomed sense of urgency and focus to our Company and a network of key relationships in the tech sector. He applies his deep technical background to his role which gives us a vital sales edge as he guides us to achieve our revenue goals. His passion for building teams, collaborating closely with engineering, and product management are Chris's strong suites." Dickson said, "With an organized focus, and new go-to-market strategies, I am certain we have the technology and team to help customers solve their identity management challenges leveraging ImageWare's deep experience with biometrics. Multi-factor authentication that leverages Cloud-based biometric matching is fast becoming the new standard for ensuring and protecting access to data for both consumers, enterprises, and governments alike." Originally from Wellington, New Zealand, Mr. Dickson studied Computer Studies at the Central Institute of Technology, now Victoria University. He is a trained programmer and began his career performing object- oriented coding. About ImageWare Systems Headquartered in San Diego, CA, ImageWare Systems, Inc. -- http://www.iwsinc.com/-- is a developer of mobile and cloud-based identity management solutions, providing two-factor, biometric and multi-factor cloud-based authentication solutions for the enterprise. The company delivers next-generation biometrics as an interactive and scalable cloud-based solution. ImageWare brings together cloud and mobile technology to offer two-factor, biometric, and multi-factor authentication for smartphone users, for the enterprise, and across industries. The Company's products are used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials. ImageWare recorded a net loss available to common shareholders of $17.25 million for the year ended Dec. 31, 2019, compared to a net loss available to common shareholders of $16.46 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $7.96 million in total assets, $10.54 million in total liabilities, $9.06 million in mezzanine equity, and $11.64 million in total shareholders' deficit. Mayer Hoffman McCann P.C., in San Diego, California, the Company's auditor since 2011, issued a "going concern" qualification in its report dated May 15, 2020 citing that the Company does not generate sufficient cash flows from operations to maintain operations and, therefore, is dependent on additional financing to fund operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. IMAGEWARE SYSTEMS: Names New VP of Engineering ---------------------------------------------- ImageWare Systems, Inc., has appointed Sudheer Koganti as vice president of engineering effective June 22, 2020. Koganti has led, built and managed a wide variety of successful products across embedded, mobile and cloud. With nearly two decades of leadership positions held at Qualcomm, his career includes: pioneering Eudora email products, core OS design and system architecture for the next generation of BREW, a security and privacy focused Android browser, and more recently Qualcomm Wireless Edge Services. He later co-founded a SaaS startup in the IoT sector. When asked about building future innovative technologies with ImageWare, Koganti stated "I am super excited to join ImageWare and ready for the challenge to take industry-leading Identity Platform and GoVerifyID suite to the next level of security, scalability and ease of use." Koganti has been awarded more than eight patents, with a core patent around the basic algorithm to sync data between a device and a server. Furthermore, he has contributed to numerous patents over his tenure at Qualcomm. Koganti holds a Master of Science in Computer Science from the University of Missouri-Columbia. "Sudheer has a knack for developing products that resonate with the marketplace and he continues to be an avid developer," said Kristin A. Taylor, CEO of ImageWare. "He is keenly focused on finetuning existing products and creating new platforms. He enjoys system optimization, operational efficiency and loves to teach others how to solve complicated problems. We welcome him as a valued member of our technical team to drive ImageWare forward." About ImageWare Systems Headquartered in San Diego, CA, ImageWare Systems, Inc. -- http://www.iwsinc.com/-- is a developer of mobile and cloud-based identity management solutions, providing two-factor, biometric and multi-factor cloud-based authentication solutions for the enterprise. The company delivers next-generation biometrics as an interactive and scalable cloud-based solution. ImageWare brings together cloud and mobile technology to offer two-factor, biometric, and multi-factor authentication for smartphone users, for the enterprise, and across industries. The Company's products are used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials. ImageWare recorded a net loss available to common shareholders of $17.25 million for the year ended Dec. 31, 2019, compared to a net loss available to common shareholders of $16.46 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $7.96 million in total assets, $10.54 million in total liabilities, $9.06 million in mezzanine equity, and $11.64 million in total shareholders' deficit. Mayer Hoffman McCann P.C., in San Diego, California, the Company's auditor since 2011, issued a "going concern" qualification in its report dated May 15, 2020 citing that the Company does not generate sufficient cash flows from operations to maintain operations and, therefore, is dependent on additional financing to fund operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. INFINITE GROUP: Working Capital Deficit Casts Going Concern Doubt ----------------------------------------------------------------- Infinite Group, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $6,062 on $1,899,595 of sales for the three months ended March 31, 2020, compared to a net income of $35,036 on $1,687,794 of sales for the same period in 2019. At March 31, 2020, the Company had total assets of $1,019,913, total liabilities of $4,931,155, and $3,911,242 in total stockholders' deficiency. Infinite Group said, "The Company reported net loss of $6,062 and a net income of $35,036 for the three months ended March 31, 2020 and 2019, respectively, and stockholders' deficiencies of $3,911,242 and $3,907,310 at March 31, 2020 and December 31, 2019, respectively. Accordingly and due to current working capital deficit of approximately $3.4 million, there is substantial doubt about the Company's ability to continue as a going concern within one year of issuance of the financial statements. The Company's goal is to increase sales and generate cash flow from operations on a consistent basis. The Company uses a formal financial review and budgeting process as a tool for improvement that has aided expense reduction and internal performance. The Company's business plans require improving the results of its operations in future periods." A copy of the Form 10-Q is available at: https://is.gd/YgdTSS Infinite Group, Inc., provides managed information technology (IT) and virtualization services, and develops and provides cybersecurity tools and solutions to private businesses and government agencies in the United States. It offers Nodeware, an automated network vulnerability management system that assesses vulnerabilities in a computer network using scanning technology. The company also provides cloud computing services, including public and private cloud architecture, hybrid cloud hosting, server virtualization, and desktop virtualization solutions; and level 2 Microsoft and Hewlett Packard server, and software-based managed services through its partnership with Perspecta Inc. In addition, it sells third party software licenses, as well as offers virtualization support services. Futher, it distributes Webroot, a cloud-based endpoint security platform solution. The company was formerly known as Infinite Machines Corp. and changed its name to Infinite Group, Inc. in January 1998. Infinite Group, Inc. was founded in 1986 and is headquartered in Pittsford, New York. INTELSAT S.A.: Hires Deloitte to Provide Tax Services ----------------------------------------------------- Intelsat S.A., and its-debtor affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Deloitte Tax LLP, as their tax service provider. Tax advisory services Deloitte Tax will provide are: a. 2020 Tax Advisory Engagement Letter. Pursuant to the terms of the Tax Advisory Engagement Letter, Deloitte Tax will provide tax advisory services for the Debtors on federal, foreign, state and local tax matters during the period through Dec. 31, 2021. b. ASC 740 Work Order. Pursuant to the terms of the ASC 740 Work Order, Deloitte Tax will provide tax advisory services in connection with the calculation of the Debtors' income tax provisions under the provisions of ASC 740, Income Taxes, for the year ended Dec. 31, 2019, which may include, but are not limited to, the tax consulting services related to such provisions described in Exhibit A to the ASC 740 Work Order. c. Restructuring Work Order. Pursuant to the terms of the Restructuring Work Order, Deloitte Tax will provide tax advisory services with respect to the Debtors' potential global financing and tax restructuring activities (referred to as "Project Velocity"), as follows: (i) Advising the Debtors as they consult with their counsel and financial advisors on the cash tax effects of restructuring and bankruptcy and the post-restructuring tax profile, including the plan of reorganization tax costs. This will include obtaining an understanding of the Debtors' financial advisors' valuation model and disclosure model to consider the tax assumptions contained therein; (ii) Assisting the Debtors with the analysis of potential tax issues related to the structuring and financing transactions, including analysis pertaining to income tax, indirect tax and VAT in relevant countries that include but are not limited to the United Kingdom, Luxembourg, Brazil and the U.S.; (iii) Assisting the Debtors with developing the strawman structure and tax step plan outlining structuring steps with tax considerations; (iv) Assisting the Debtors with calculations under various scenarios requested by them; (v) Assisting the Debtors with the analysis and review of the tax considerations for the proposed Project Velocity transactions on the recently implemented and executed transactions, including analysis of the impact of acceleration payments received as part of Project Velocity on the effectively-connected income and transfer pricing arrangements; (vi) Assisting the Debtors with United Kingdom diverted profits tax; (vii) Assisting the Debtors with the analysis of the tax sharing agreement and the impact on Luxembourg net operating losses and fiscal unity; (viii) Assisting the Debtors with tax analysis related to the transfer of certain assets to newly set up limited liability companies; (ix) Assisting the Debtors with reviewing legal agreements for tax considerations; (x) Assisting the Debtors with analysis of Luxembourg Offshore Receipts in Respect of Intangible Property rules; (xi) Assisting the Debtors with their U.S., state, local and foreign tax questions related to restructuring; (xii) Assisting the Debtors with analysis related to termination of Luxembourg fiscal unity; (xiii) Advising the Debtors regarding the restructuring and bankruptcy emergence process from a tax perspective, including the tax work plan; (xiv) Advising the Debtors on the cancellation of debt income for tax purposes under Internal Revenue Code section 108; (xv) Advising the Debtors on post-restructuring or post-bankruptcy tax attributes available under the applicable tax regulations and the reduction of such attributes based on the Debtors' operating projections; (xvi) Advising the Debtors in determining whether or when an "ownership change" (as defined under IRC section 382) has occurred, as well as on net built-in gain or net built-in loss position at the time of, including limitations on use of tax losses generated from post-restructuring or post-bankruptcy asset or stock sales including the potential application of section 382 l(5) and/or 382 l(6); (xvii) Advising the Debtors as to the state and federal income tax treatment of prepetition and post-petition reorganization costs, including restructuring related professional fees and other costs, the categorization and analysis of such costs, and the technical positions related thereto; (xviii) Advising the Debtors with their evaluation and modeling of the tax effects of liquidating, disposing of assets, merging or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment and other tax planning; (xix) Advising the Debtors on income tax return reporting of restructuring and/or bankruptcy issues and related matters; (xx) Assisting the Debtors with tax research, coordination of services and analysis as requested; (xxi) Assisting the Debtors in documenting as appropriate, the tax analysis, development of the Debtors' opinions, recommendation, observations, and correspondence for any proposed restructuring alternative tax issue or other tax matter described above; (xxii) Assisting the Debtors with other federal, international, and state tax analysis as requested; and (xxiii) Assisting the Debtors with the implementation of Project Velocity. d. Intelsat Genesis Work Order. Pursuant to the terms of the Intelsat Genesis Work Order, Deloitte Tax will assist the Debtors with amending the Debtor Intelsat Genesis Inc. 2018 Form 1120 to reflect changes in the base erosion and anti-avoidance tax ("BEAT") as a result of the adoption of the final regulations under IRC Section 59A, and to request relief for failure to fully comply with the procedural and reporting requirements of the gain deferral method prescribed by Sec. 1.721(c)-3T(b)(3) and relief for the penalties imposed by Sec. 6038B, as follows: (i) Assisting the Debtors with preparing and filing Form 1120X (Amended U.S. Corporation Income Tax Return), based on information and calculations provided by the Debtors and the updated BEAT computation; (ii) Assisting the Debtors with preparing and reviewing Form 8082 (Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR)), which should be filed with the 1120X; (iii) Assisting the Debtors with preparing an amended form 8865, based on information and calculations provided by the Debtors; and (iv) Assisting the Debtors with drafting and reviewing the written statement explaining reasons for failure to comply with the requirements outlined in the temporary regulations. e. Tax Preparation Engagement Letter. Pursuant to the terms of the Tax Preparation Engagement Letter, Deloitte Tax will prepare the 2018 and 2019 U.S. federal, state and local income tax returns identified in Exhibit A attached thereto for the Debtors. In addition, Deloitte Tax will prepare federal and state extensions and estimated payment vouchers, the 2018 and 2019 U.S. foreign entity information returns related to the Debtors' international operations as listed in Exhibit B attached thereto, as well as international quarterly estimates. f. 2019 Tax Advisory Engagement Letter. Pursuant to the terms of the 2019 Tax Engagement Letter, Deloitte Tax will provide tax advisory services for the Debtors on federal, foreign, state and local tax matters during the period through Dec. 31, 2019. g. UAE VAT Work Order. Pursuant to the terms of the UAE VAT Work Order, Deloitte Tax: (i) will provide ongoing compliance services in connection with the Debtors' United Arab Emirates VAT registration; (ii) will assist in setting up a VAT return process; and (iii) will review VAT accounting data and assist in general compliance-related matters, as well as assist with VAT technical queries in the United Arab Emirates and/or other VAT jurisdictions. h. Transfer Pricing Work Order. Pursuant to the terms of the Transfer Pricing Work Order, Deloitte Tax will provide the Debtors with certain transfer pricing services, including the preparation of a set of transfer pricing benchmarking memos ("Memos"), transfer pricing documentation reports ("Reports") and a Transfer Pricing Master File ("MF") for the periods of Jan. 1, 2019 through fiscal year ended Dec. 31, 2019 ("FY2019"), Jan. 1, 2020 through fiscal year ending Dec. 31, 2020 ("FY2020"), and Jan. 1, 2021 through fiscal year ended Dec. 31, 2021 ("FY2021"). Deloitte Tax will provide services in two phases: the first phase will consist of the preparation of a set of Memos aimed at supporting the subsequent transfer pricing analyses of the applicable transactions and the second phase will be a transfer pricing analysis of such transactions and the preparation of: (i) a set of Reports for FY2019, FY2020 and FY2021, and (ii) a MF for FY2019, FY2020 and FY2021. Deloitte Tax's hourly rates are; Partner / Principal / Managing Director $732 Senior Manager $654 Manager $552 Senior Consultant / Senior Staff $459 Consultant / Staff $372 Analyst / Associate $348 Jeffrey E. Clegg,, partner of Deloitte Tax LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Deloitte Tax can be reached at: Jeffrey E. Clegg DELOITTE TAX LLP 7900 Tysons One Place, Suite 800 McLean, VA 22102 Phone: +1 703 251 1000 Fax: +1 703 251 3400 About Intelsat S.A. Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held operator of satellite services businesses, which provides a diverse array of communications services to a wide variety of clients, including media companies, telecommunication operators, internet service providers, and data networking service providers. The Company is also a provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The Company's administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat S.A., based in L-1246 Luxembourg, and its debtor-affiliates, filed a Chapter 11 petition (Bankr. E.D. Va. Lead Case No. 20-32299) on May 14, 2020. The petition was signed by David Tolley, executive vice president, chief financial officer, and co-chief restructuring officer. In its petition, the Debtor disclosed $11,651,558,000 in assets and $16,805,844,000 in liabilities. KIRKLAND & ELLIS LLP, and KUTAK ROCK LLP, as counsels; ALVAREZ & MARSAL NORTH AMERICA, LLC as restructuring advisor; PJT PARTNERS LP as investment banker; STRETTO as claims and noticing agent. ISE PROFESSIONAL: Seeks to Hire Chalker Flores as Special Counsel ----------------------------------------------------------------- ISE Professional Testing & Consulting Services, Inc., seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Chalker Flores, LLP as its special counsel to assist with intellectual property transactions and the prosecution of intellectual property patents, effective as of May 4, 2020. Chalker Flores' fees are: Attorneys $225 - $500 per hour Paralegals $125 - $145 per hour Chalker Flores is a disinterested party and does not hold or represent any interest adverse to the Debtor's estate with respect to the matters upon which it is to be employed by the Debtor, according to court filings. The counsel can be reached through: Edwin Flores, Esq. Chalker Flores, LLP 14951 Dallas Pkwy Dallas, TX 75254 Phone: +1 214-866-0001 About ISE Professional Testing & Consulting Services ISE Professional Testing & Consulting Services, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02538) on May 4, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Buss Ross, P.A. is the Debtor's legal counsel. J.C. PENNEY: Closes Orlando Fashion Square Mall Branch ------------------------------------------------------ Brendan O'Connor, writing for Bungalower, reports that J.C. Penney, which filed for Chapter 11 bankruptcy protection in May 2020, has just announced that it will be closing its store at Orlando Fashion Square Mall. The store closure is one of over 150 that were announced across the country with liquidation sales planned to begin mid-month. Other J.C. Penney locations in Central Florida, including Florida Mall, Altamonte Mall, and Seminole Towne Center will continue to operate. At least for the time being. A recent report by Austin Fuller of Orlando Sentinel provided an update from the property’s new owners that the plan to open a new open-air development there is still moving forward and is expected to happen by the end of 2022. About J.C. Penney J.C. Penney Corporation, Inc., is an American retail company, founded in 1902 by James Cash Penney and today engaged in marketing apparel, home furnishings, jewelry, cosmetics, and cookware. The company was called J.C. Penney Stores Company from 1913 to 1924, when it was reincorporated as J.C. Penney Co. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of J.C. Penney's first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the Plan, the Company and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). Kirkland & Ellis LLP is serving as legal advisor, Lazard is serving as financial advisor, and AlixPartners LLP is serving as restructuring advisor to the Company. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney J.C. PENNEY: Shareholders Granted Budget to Hire Counsel -------------------------------------------------------- Maria Halkias of Dallas News reports that U.S. Bankruptcy Judge David Jones granted J.C. Penney's shareholders ad hoc committee the status and budget worth $250,000 to hire independent counsel, with bankruptcy experience, who can look on the company's case and provide advice. Jones also warned them and said, "It's not a war chest to go to war with," Jones said. "This is a good-faith commitment to hire someone to come and look and provide you advice." U.S. Bankruptcy Court Judge David Jones has been attentive to Penney shareholders who are angry that their turnaround bet was dashed by the coronavirus. J.C. Penney's stockholders, who have gained more attention than most do in a Chapter 11 bankruptcy case, backed down on a motion requesting to reverse the bankruptcy and received some court support to hire a lawyer to research their concerns. After a full morning with 130 people participating on the phone-accessible hearing, the judge said he didn't want to see their soon-to-be hired adviser "run back in with 2,000 document requests." Longtime Penney shareholder Rahul Shekatkar of New Jersey filed the shareholder motion to dismiss the bankruptcy and to form an official equity committee on behalf of owners of 15 million Penney shares. He was joined at the hearing by Niko Celentano of New York, a longtime shareholder who is helping to spearhead the Penney shareholder group. Shekatkar and Celentano focused on Penney's financials. Other shareholders who spoke at the hearing said Penney should have borrowed money the way Macy's did this week to help it get through the coronavirus. Another shareholder said Penney should have waited, as the stock market has improved. Plus, the shareholder said, the federal government's stimulus money hasn't had time to work, and more is on the way. Unsecured creditors filed a motion Monday opposing shareholder efforts and said their request for "extraordinary relief is unwarranted." Creditors also said they're already trying to maximize the estate's value so another official committee's efforts would be "duplicative." There's little precedent for shareholders of public companies to come out with anything from a court-led reorganization. Assets are disbursed in an established pecking order, with government taxes, lenders, other creditors including utilities and merchandise suppliers, bondholders and preferred shareholders all paid ahead of common shareholders. Jones said he reviewed shareholder letters and noticed "there was a lot of misinformation" in them, adding that he understood that their equity was wiped out, but the bankruptcy is about more than that. About J.C. Penney J.C. Penney Corporation, Inc., is an American retail company, founded in 1902 by James Cash Penney and today engaged in marketing apparel, home furnishings, jewelry, cosmetics, and cookware. The company was called J.C. Penney Stores Company from 1913 to 1924, when it was reincorporated as J.C. Penney Co. On May 15, 2020, J.C. Penney announced that it has entered into a restructuring support agreement with lenders holding 70% of J.C. Penney's first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the Plan, the Company and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). Kirkland & Ellis LLP is serving as legal advisor, Lazard is serving as financial advisor, and AlixPartners LLP is serving as restructuring advisor to the Company. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney JASON INDUSTRIES: Weil Gothshal Represents First Lien Group ----------------------------------------------------------- In the Chapter 11 cases of Jason Industries, Inc., et al., the law firm of Weil, Gotshal & Manges LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the Ad Hoc First Lien Group. Prior to the filing of the chapter 11 cases of Jason and its debtor affiliates, certain members of the Ad Hoc First Lien Group retained Weil to represent them in connection with potential restructuring discussions involving the Debtors. From time to time thereafter, certain additional First Lien Noteholders have joined or departed the Ad Hoc First Lien Group. Weil represents only the Ad Hoc First Lien Group, and does not represent or purport to represent any other entities with respect to the Debtors' chapter 11 cases. In addition, each member of the Ad Hoc First Lien Group does not purport to act, represent, or speak on behalf of any other entities in connection with the Debtors' chapter 11 cases. As of June 25, 2020, members of the Ad Hoc First Lien Group and their disclosable economic interests are: Credit Suisse Asset Management, LLC Eleven Madison Avenue New York, New York 10010 * $99,879,581.94 First Lien TL Voya CLO Ltd. 7337 E. Doubletree Ranch Road Suite 100 Scottsdale, Arizona 85258 * $15,788,124 First Lien TL American Money Management Corporation 301 E. Fourth St., 27Th Floor Cincinnati, Ohio 45202 * $11,166,544 First Lien TL First Eagle Alternative Credit, LLC 100 Federal Street 31st Floor Boston, Massachusetts 02110 * $17,292,040.52 First Lien TL Monomoy Capital Partners, L.P. 600 3rd Ave New York, New York 10016 * $36,238,573.15 First Lien TL * $5,293,026.98 Second Lien * 1,076,838 shares common equity Z Capital Partners, LLC 1330 Ave. of the Americas 16th Floor New York, New York 10019 * $6,043,449.30 First Lien TL Angel Island Capital Services, LLC One Embarcadero Center, Suite 2150 San Francisco, California 94111 * $39,024,485.11 First Lien TL Deutsche Bank AG New York Branch 60 Wall Street, 3rd Floor New York, New York 10005 * $5,055,018.31 First Lien TL Ares Management Corporation 245 Park Ave 44th floor New York, New York 10167 * $2,767,316.74 First Lien TL Counsel to Ad Hoc First Lien Group can be reached at: WEIL, GOTSHAL & MANGES LLP Matthew S. Barr, Esq. Ryan Preston Dahl, Esq. Alexander W. Welch, Esq. 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/ezXkye About Jason Industries Jason Industries, Inc., headquartered in Milwaukee, Wisconsin, is a diversified manufacturing company serving the finishing, seating, acoustics and components end markets. Jason Industries, Inc., and 7 affiliates sought Chapter 11 protection (S.D.N.Y. Lead Case No. 20-22766) after reaching a deal with lenders on terms of a plan that will cut debt by $250 million. As of June 24, 2020, the Company reported total assets of $204,886,939 and total debt of $428,374,343. The Hon. Robert D. Drain is the case judge. Moelis & Company LLC, is acting as financial advisor, Kirkland & Ellis LLP is acting as legal counsel, and AlixPartners, LLP is acting as restructuring advisor to the Company in connection with the Restructuring. Houlihan Lokey Capital, Inc., is acting as financial and restructuring advisor and Weil, Gotshal & Manges LLP is acting as legal counsel to the Consenting Creditors. Epiq Corporate Restructuring, LLC, is the claims agent. JO-ANN STORES: S&P Upgrades ICR to 'CCC' on Distressed Exchange --------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Jo-Ann Stores LLC to 'CCC' from 'SD' to reflect the ongoing risk of a conventional default. Jo-Ann Stores' issuer credit rating was lowered to 'SD' on June 18, 2020, following disclosure that it repurchased or agreed to repurchase more than $200 million of the aggregate principal of its outstanding 2023 first-lien term loan and 2024 second-lien term loan at approximately 50% below par. The ratings on the 2023 first-lien term loan and 2024 second-lien term loan remain 'D', as S&P believes the company will likely execute additional below-par debt repurchases. A conventional default or broad-based restructuring of Jo-Ann's capital structure remains likely over the next 12 months, in S&P's view. Despite relatively favorable first quarter results, with same store sales down only 2% as of May 2, 2020 amid the COVID-19 pandemic, S&P believes the business is in a state of secular decline and its debt levels remain unsustainable even after recent repurchases. Jo-Ann has been unable to maintain healthy profit margins as competitive pressures and tariff related costs weighed on its business over the past several quarters. As retailers reopen their stores and look to right-size inventory levels, S&P anticipates heavy promotion activity will exacerbate Jo-Ann's profit margins. Jo-Ann's limited level of liquidity leaves it at risk of a shortfall over the next 12 months. Along with improved sales compared with S&P's forecast, Jo-Ann's efforts to preserve liquidity resulted in better-than-expected cash generation during the first quarter, with about flat free operating cash flow. While this would help the company navigate through a volatile period, Jo-Ann has instead utilized much of its liquidity to repurchase term debt below par. "In our view, the repurchases constrain the company's near-term liquidity and leave little cushion to absorb further adversities. The company ended the first quarter with cash and revolver availability of about $230 million and subsequently committed approximately $101 million toward debt repurchases. We believe a liquidity shortfall could occur within the next 12 months. We also think it will be difficult for Jo-Ann to extend its asset-based loan (ABL) revolver that matures October 2021 absent sustained performance improvement," S&P said. The pandemic has triggered a recession in the U.S., which will likely limit consumer discretionary spending. "We anticipate a difficult operating environment over the next 12 months as consumers limit discretionary spending in an increasingly uncertain economic environment. We also expect residual social distancing and crowd avoidance practices to continue, which could limit customer traffic at Jo-Ann's stores. In our view, its omni-channel presence has been weak at less than 10% of sales (as of fiscal year ended Feb. 1 2020), leaving Jo-Ann vulnerable to competitive pressures from online retailers who will benefit from consumer preferences shifting faster toward online shopping. Furthermore, we believe shoppers will be swayed toward the low price points and convenience of one-stop shopping offered by big-box retailers," S&P said. S&P acknowledges a high degree of uncertainty about the evolution of the COVID-19 pandemic. The consensus among health experts is that the pandemic may now be at, or near, its peak in some regions, but will remain a threat until a vaccine or effective treatment is widely available, which may not occur until the second half of 2021. "We are using this assumption in assessing the economic and credit implications associated with the pandemic. As the situation evolves, we will update our assumptions and estimates accordingly," S&P said. Environmental, social, and governance (ESG) factors relevant to the rating action: -- Health and Safety The negative outlook on Jo-Ann reflects S&P's view that the company could pursue a restructuring in the next 12 months. The outlook considers the rating agency's expectation for competitive pressures driving lower profitability and the possibility of adversities resulting in a liquidity shortfall. "We could lower our ratings on Jo-Ann if we believe it will not meet its financial obligations in full over the next six months. We could also lower our rating if the company proactively announces a debt restructuring," S&P said. "We could raise the rating if we believe there is no clear path to default with sustained performance improvement and Jo-Ann successfully extends its ABL revolver," the rating agency said. JONES SODA: Discloses Recurring Losses Cast Going Concern Doubt --------------------------------------------------------------- Jones Soda Co. filed its quarterly report on Form 10-Q, disclosing a net loss of $891,000 on $2,792,000 of revenue for the three months ended March 31, 2020, compared to a net loss of $796,000 on $2,824,000 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $10,123,000, total liabilities of $3,936,000, and $6,187,000 in total shareholders' equity. The Company said, "We have experienced recurring losses from operations and negative cash flows from operating activities. This situation creates uncertainties about our ability to execute our business plan, finance operations, and indicates substantial doubt about our ability to continue as a going concern. "We continue to experience negative cash flows from operations, as well as an ongoing requirement for additional capital to support working capital needs. Therefore, currently, based upon our near-term anticipated level of operations and expenditures, management believes that cash on hand is not sufficient to enable us to fund operations for twelve months from the date the consolidated financial statements included in this Report are issued. These conditions raise substantial doubt as to our ability to continue as a going concern. Our ability to continue operations is dependent upon achieving a profitable level of operations and on our ability to obtain necessary financing to fund ongoing operations. The continued spread of COVID-19 and uncertain market conditions may limit our ability to access capital, may reduce demand for our products, and may negatively impact our supply chain. Subsequent to March 31, 2020, our Board approved a restructuring plan that included the termination of nine employees and the furloughing of four employees to be effective on April 17, 2020. This will reduce our operating expenses but does cause further uncertainty as it relates to growing the business through previously planned sales initiatives. The condensed consolidated financial statements included in this Report do not give effect to any adjustments which will be necessary should we be unable to continue as a going concern and therefore be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements." A copy of the Form 10-Q is available at: https://is.gd/o3aGIE Jones Soda Co. develops, produces, markets and distributes premium beverages which it sells and distributes primarily in the United States and Canada through its network of independent distributors and directly to its national and regional retail accounts. The Company is based in Seattle, Washington. LATAM AIRLINES: Hires LarrainVial to Find DIP Funding ----------------------------------------------------- Eduardo Thomson of Bloomberg News reports that Latam Airlines has hired the Santiago, Chile-based LarrainVial to help PJT Partners in finding debtor-in-possession financing in Peru, Colombia and Chile as part of its filing for Chapter 11 bankruptcy protection in the U.S., the company said via text message. Hiring LarrainVial requires approval from New York court and Latam has hired Cleary Gottlieb Steen & Hamilton LLP and Claro & Cia. as legal advisers, along with FTI Consulting and PJT Partners as financial advisers. A copy of the full-report is available at https://news.bloomberglaw.com/bankruptcy-law/latam-airlines-hires-larrainvial-to-assist-in-dip-funding-search About Latam Airlines LATAM is an international commercial air carrier that operates under the brand name "LATAM Airlines."[BN] LATAM Airlines Group S.A. is the largest passenger airline in South America. The Company is also one of the largest airline groups in the world in terms of network connections, providing passenger transport services to approximately 143 destinations in 26 countries and cargo services to approximately 150 destinations in 29 countries, with an operating fleet of 312 aircraft and a set of bilateral alliances. LATAM Airlines Group and its affiliates currently provide domestic services in Brazil, Chile, Peru, Argentina, Colombia and Ecuador; the Company also provides intra-regional and long-haul operations. The cargo affiliate carriers of LATAM in Chile, Brazil, and Colombia carry out cargo operations through the use of belly spaces on the passenger flights and dedicated cargo operations using freight aircraft. LCI GROUP: Seeks to Hire Palm Realty Boutique as Real Estate Agent ------------------------------------------------------------------ LCI Group Limited LLC seeks authority from the United States Bankruptcy Court for the Central District of California to hire Palm Realty Boutique as its real estate agent. The primary asset of the Debtor's bankruptcy estate is the single-family residence located at 15 Upper Blackwater Canyon Road, Rolling Hills, California 90274. The Debtor seeks authorization to employ Keith Kelley with Palm Realty Boutique as its real estate brokerage firms to sell the property on behalf of the estate. Mr. Kelley will receive, upon sale of the Property, a commission in an amount equal to 2 percent of the sale price and buyers' broker/agent will receive a commission in the amount equal to 2.5 percent of the sale price of the property. Mr. Kelley assures the court that he is a disinterested person within the meaning of 11 U.S.C. Sec. 10 1(14). The firm can be reached through: Keith Kelley Palm Realty Boutique 401 Manhattan Beach Blvd b Manhattan Beach, CA 90266 Phone: +1 310-545-2490 About LCI Group Limited LLC LCI Group Limited LLC owns a real property located at 15 Upper Blackwater Canyon Road, Rolling Hills, California having a current value of $7.95 million. LCI Group Limited LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-24805) on Dec. 19, 2019. In the petition signed by Lawrence Underwood, managing member, the Debtor estimated $7,950,243 in assets and $4,404,691 in liabilities. Michael Jay Berger, Esq. at LAW OFFICES OF MICHAEL JAY BERGER represents the Debtor as counsel. LE PAIN QUOTIDIEN: Obtains Additional $1.4M Ch. 11 Loan ------------------------------------------------------- Law360 reports that bankrupt bakery chain Le Pain Quotidien obtains additional $1.4 million worth of Chapter 11 loan to pay leases. Pressed by landlords wary of unfunded rent payment assurances, bankrupt bakery chain Le Pain Quotidien secured Delaware bankruptcy court approval for a $1.4 million boost in its Chapter 11 loan to pay property owners waiting to learn if a buyer will pick up their leases. During a videoconference hearing, U.S. Bankruptcy Judge John T. Dorsey approved the change. A copy of the full-report is available at https://www.law360.com/articles/1280856/le-pain-quotidien-adds-1-4m-to-ch-11-loan-for-rent-tab About PQ New York Based in New York, PQ New York, Inc. is a wholly-owned subsidiary of PQ Licensing SA, a Belgian company, and operated 98 restaurants in the United States under the trade name Le Pain Quotidien. On May 27, 2020, PQ New York and its U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11266). PQ New York was estimated to have $100 million to $500 million in assets and liabilities at the time of the filing. The Debtors tapped Richards, Layton & Finger, P.A. as its legal counsel, and SSG Advisors, LLC as its investment banker. PricewaterhouseCoopers LLP is the interim management services provider. Donlin, Recano & Company, Inc., is the claims agent. LIMENOS CORPORATION: Seeks to Hire Francisco J Ramos as Counsel --------------------------------------------------------------- Limenos Corporation seeks authority from the US Bankruptcy Court for the District of Puerto Rico to employ Francisco J Ramos & Asoc CSP as its counsel. Francisco J Ramos will assist the Debtor for general counseling services in connection with this bankruptcy petition. The firm will charge $200 per hour of service for Francisco J Ramos Gonzales, Esq., $100 per hour attorney advisor and $60 per hour for paralegal assistant, plus out-of-pocket expenses. A retainer of $7,500 has been paid prior to filing of the petition. Mr. Ramos Gonzales assures the court that his firm is "disinterested" within the meaning of 11 U.S.C. 101(14). The firm can be reached through: Francisco J Ramos Gonzales, Esq. FRANCISCO J. RAMOS & ASOCIADOS; C.S.P. PO BOX 191903 San Juan, PR 001919-1993 Phone: 787-632-5454 About Limenos Corporation Limenos Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-02169) on June 5, 2020, listing under $1 million in both assets and liabilities. Francisco J. Ramos Gonzalez, Esq. at FRANCISCO J RAMOS & ASOCIADOS CSP, represents the Debtor as counsel. LONESTAR RESOURCES: Moody's Lowers CFR to Ca, Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded Lonestar Resources America Inc.'s (Lonestar) Probability of Default Rating (PDR) to Ca-PD from Caa3-PD, Corporate Family Rating (CFR) to Ca from Caa3 and senior unsecured notes to C from Ca. The Speculative Grade Liquidity (SGL) rating is unchanged at SGL-4. The outlook is negative. "The downgrade of Lonestar Resources' ratings reflects the high probability the company will default on its debt obligations after it elected not to make an interest payment due on July 1st with respect to its senior notes due 2023," stated James Wilkins, Moody's Vice President. Downgrades: Issuer: Lonestar Resources America Inc. Probability of Default Rating, Downgraded to Ca-PD from Caa3-PD Corporate Family Rating, Downgraded to Ca from Caa3 Senior Unsecured Notes, Downgraded to C (LGD5) from Ca (LGD5) Outlook Actions: Issuer: Lonestar Resources America Inc. Outlook, Remains Negative RATINGS RATIONALE The downgrade of Lonestar's CFR to Ca and PDR to Ca-PD following the missed interest payment of approximately $14 million due on July 1st reflects Moody's expectation the company will default on its debt obligations and for a low overall recovery rate for creditors. Lonestar has weak liquidity as reflected in its SGL-4 rating, high leverage and a heavy interest expense burden. Its revolver is nearly fully drawn and the company requires external capital at current low oil and gas commodity prices to maintain flat production. The company borrowed an additional $20 million under its revolver in the first half, bringing outstanding borrowings to $267 million and leaving limited unused availability (~$19 million). Low commodity prices, potential difficulty in selling assets, a PV-10 value of reserves at current oil and gas prices below the par value of debt and low bond trading prices suggest a low recovery rate for note holders. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The action also reflects the impact on Lonestar of the deterioration in credit quality it has triggered, given Lonestar's exposure to oil demand and prices, which has left Lonestar vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions. Lonestar's senior notes are rated C, one notch below the Ca CFR, reflecting the unsecured nature of the notes and the first lien revolving credit facility's more senior priority claim to the company's assets. The C rating on the unsecured notes also reflects Moody's view regarding the low prospects for recovery on the notes. The negative outlook reflects the likelihood the company will default on its debt obligations as it restructures its debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The CFR could be downgraded if Moody's assessment of overall expected recovery worsens. The PDR would be downgraded to D-PD if the company files for bankruptcy. Although unlikely in the near-term, an upgrade would be considered if Lonestar improves its liquidity and maintains interest coverage of at least 1.5x as well as stable production. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Lonestar Resources America Inc., a wholly-owned subsidiary of Lonestar Resources US Inc. (NASDAQ: LONE) headquartered in Fort Worth, Texas, is an independent exploration and production company with operations focused on the Eagle Ford Shale. LSC COMMUNICATIONS: Hires E&Y to Provide Tax Consulting Services ---------------------------------------------------------------- LSC Communications, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Ernst & Young LLP to provide tax consulting services. The firm's services will include: A. Bankruptcy Tax Services (a) Analyzing the tax implications and the indirect operating tax implications of reorganization or restructuring alternatives that Debtors are evaluating that may result in a change in the equity, capitalization or ownership of the shares of Debtors or their assets; (b) Analyzing the U.S. federal and state income tax consequences of cancellation of indebtedness income and the tax impact of the bankruptcy on future cash taxes; (c) Advising in connection with Debtors' understanding of the tax implications of their bankruptcy restructuring alternatives and post-bankruptcy operations; (d) Assisting with determining the validity and amount of bankruptcy tax claims or assessments, and with the potential for seeking cash tax refunds; (e) Analyzing regarding Debtors' ability to qualify for section 382(l)(5); (f) Advising in connection with the bankruptcy tax process and procedure lifecycle, the typical tax issues, options and opportunities related to a chapter 11 filing, the typical impact of a chapter 11 filing on a corporate tax department's operations, and leading practices for addressing such impact areas while operating in bankruptcy and the post-emergence period; (g) Advising with respect to availability, limitations, and preservation of tax attributes and providing analysis with respect to the consequences of making other related elections; (h) Analyzing legal and other professional fees incurred during the bankruptcy period for purposes of determining the future deductibility of such costs for U.S. federal, state and local tax purposes; and (i) Documenting tax analysis, opinions, recommendations, conclusions and correspondence. B. Tax Reform Consulting Services (a) Analyzing the tax impact to global treasury, transitional tax charges, state and local tax conformity, the anticipated tax impact on future earnings and other interpretations of the legislation impacting Debtors. C. Project Tree Services (a) Preparing a strawman step plan setting forth a proposed sale structure of the Office Products Business (Project Tree) based on the business objectives of the transaction, including an analysis of the U.S. and non-U.S. tax considerations of the sale including pre- and post-sale considerations; (b) Analyzing potential demerger transactions, pre-sale structuring and distribution transactions, or alternative structures to achieve buyers' objectives; (c) Preparing a high-level computation of the after-tax proceeds of the Project Tree transactions; and (d) Discussing and documenting the repatriation of any non-US proceeds of Project Tree back to the U.S. D. On-Call Tax Services (a) Tax advisory services, including participating in meetings and telephone calls with Debtors, participating in meetings and telephone calls with taxing authorities and other third parties where Ernst & Young is not representing Debtors in an examination or an appeal before the taxing authority, reviewing transaction-related documentation, researching technical issues, and preparing technical memoranda, letters, e-mails, and other written documentation; and (b) Tax compliance services, including preparing estimated tax computations and related vouchers and requests for extensions of tax return due dates, and the one-off preparation of sales, use, excise, and property tax returns. E. Tax Accounting Services (a) Assisting with the preparation of the fresh-start accounting required tax work steps, including project management support and resource needs; (b) Assisting with preparation of an overall fresh-start accounting tax project timeline including required memorandum; (c) Assisting with the technical fresh-start accounting and reporting requirements, including the identification of income tax accounts impacted by fresh-start accounting and the fresh start reporting date; (d) Providing examples of fresh-start accounting disclosures, publication or examples of the application of fresh-start accounting, or other information that may assist management with the application of fresh-start accounting; (e) Based on the valuation studies and appraisals, assisting with the fresh-start accounting adjustments including system needs and recording of entries to the ledgers and sub-ledgers; (f) Assisting Debtors with the income tax accounting effects of the Plan of Reorganization; and (g) Assisting Debtors with the subsequent accounting for the fresh-start accounting tax adjustments. The firm will be paid at hourly rates for such services as follows: Partner/Principal/Managing Director $975 Senior Manager $850 Managers $725 Seniors $500 Staff $300 Ernst & Young will also provide employment tax-related services, which include reviewing, identifying and securing Social Security, federal unemployment, and state unemployment insurance tax refunds. The firm will be paid based on a percentage of the "gross savings" that it is able to identify and file. Ernst & Young received a retainer of $75,000 from Debtors. As of April 13, the balance of the retainer was $75,000. Molly Ericson, a managing director at Ernst & Young, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Molly Ericson Ernst & Young, LLP 55 Ivan Allen Jr. Blvd., Suite 1000 Atlanta, GA 30308 Telephone: (404) 874-8300 About LSC Communications LSC Communications, Inc. is a Delaware corporation established in 2016 with its headquarters located in Chicago. It offers a broad range of traditional and digital print products, print-related services and office products. It has offices, plants and other facilities in 28 states as well as operations in Mexico, Canada and the United Kingdom. Visit http://www.lsccom.comfor more information. LSC Communications and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 20-10950) on April 13, 2020. As of Dec. 31, 2019, Debtors disclosed $1.649 billion in assets and $1.721 billion in liabilities. The petitions were signed by Andrew B. Coxhead, chief financial officer. Judge Sean H. Lane oversees the cases. Debtors have tapped Sullivan & Cromwell, LLP and Young Conaway Stargatt & Taylor, LLP, as bankruptcy counsel; Evercore Group, L.L.C. as investment banker; AlixPartners, LLP as restructuring advisor; CBRE, Inc. as real estate broker; and Prime Clerk, LLC as notice, claims and balloting agent. Ernst & Young, LLP provides tax services. LSC COMMUNICATIONS: Taps CBRE as Real Estate Advisor ---------------------------------------------------- LSC Communications, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to employ CBRE, Inc. as their real estate broker and advisor. The firm's services will include: A. Project Management Services (a) conduct site tours or site visits to provide feedback on potential project impacts, coordinate test fits and approvals, and assist the Debtors on finalizing the terms of leases or work letters; (b) assist the Debtors to develop clear Project goals for time, cost, and scope of the achievement of the Projects. Together with the Debtors, develop realistic milestones and a budget for total Project costs including fees related to construction, equipment, furniture and design. (c) recommend professional firms for selection by the Debtors, including consultants, architects, designers, and engineers and contractors and key sub-contractors and for Design Teams and Construction Teams, prepare RFP documentation, qualify the professional firms, and conduct interviews, evaluations, and recommendations for selections of the appropriate team; (d) direct and coordinate the Design Team throughout the Project to prepare the Project program and design from schematic through working drawing stages, develop Project time schedules and coordinate activities of the Debtors, the Project manager, and the Design Team, provide a summary construction schedule, analyze proposals submitted by construction professionals and negotiate and prepare construction contracts at the Debtors' direction; (f) prepare front end documents including General and Special Conditions, contract formats, temporary specifications, guidelines for affirmative action programs, site specific safety plans, and special contractor supplements, developing a cost value for each activity to occur during the construction phase based upon the construction schedule; (g) coordinate with the Construction Team to implement construction information systems, Project time control schedules, and resources analysis as related to materials, manpower, and costs, and provide construction review status updates and other reports on a monthly basis; (h) establish with the Construction Team on-site organization and lines of authority to carry out the Debtors' overall plans in all phases of the Project; (i) receive, review, and recommend approval or further action with respect to payments submitted from the Debtors' vendors and change order requests submitted by the Design Team, the Construction Team, or the Debtors; (j) in preparation for the Debtors' move into the new facility, CBRE shall review the Debtors' established move criteria, recommend professional Move Management consulting firms and coordinate engagement and contract negotiations, coordinate the physical move and any related installation of furniture and equipment with the Construction Team, assist the client in conducting a thorough damage assessment review after the move, and close out any related contracts; (k) when construction has concluded, CBRE shall coordinate the preparation of punch lists indicating items of work remaining to be accomplished and require the completion of such items in an expeditious manner, assemble all guarantees, warranties and any other documents required by the contracts, receive, process, and forward all releases of claims to the Debtors prior to the issuance of a final certificate of completion and final payment to the Construction Team, expedite the preparation of as-built drawings of the entire Project, and monitor any expeditious follow-up required; and (l) in conjunction with the foregoing, CBRE shall also review any Project documents and require such changes as are necessary to ensure that such documents are in the name of the Debtors and any warranties run in favor of the Debtors. B. Transaction Management and Brokerage Services i. Transaction Management Services (a) supervise and manage third party brokers, CBRE brokers, and any broker or agent, which may include an affiliate of CBRE, that is retained by CBRE to provide or assist CBRE in the provision of the Transaction Management and Brokerage Services providing Brokerage Services to the Debtors; (b) supervise and coordinate any transactions the Debtors elect to enter into and advise or make recommendations to the Debtors with respect thereto; (c) coordinate transaction strategy, resource allocation, and process consistency on such transactions; and (d) advise the Debtors in the formulation of a marketing plan for the advertisement of available space in the Debtor's Properties and submit a budget of all marketing and advertising expenses to the Debtors. ii. Acquisition Services (a) with respect to purchases and leases of real property, (A) obtain input from the Debtors regarding operating units and any type, utilization, location, size, budget, schedule, and related requirements for a future acquisition of real property, (B) provide input on the cost, schedule constraints, fees, and budget related to the Debtor's requirements for future acquisition of real property, and (C) perform a market survey, document and present alternative solutions, assess costs, transaction terms, conditions, approval requirements, schedule, fees and related issues; (b) with respect to lease extensions, renegotiations, or renewals, (A) evaluate the renewal or extension terms contained in existing leases, if any, and provide input on renegotiation potential with respect to cost, terms, business points, alternatives and any related items, and (B) engage in negotiations on the Debtors' behalf; (c) with respect to all Acquisition Services, (A) coordinate negotiations and upon Debtors' request provide input on transaction documents. iii. Disposition Services (a) use commercially reasonable efforts to find qualified, willing and able counter parties regarding the Properties. Such efforts shall include analyses of comparable transactions, market value, highest and best use, monthly status reports, marketing and advertising, and all other services normally provided by brokers and leasing agents within the commercial real estate services industry in which the relevant property is located; (b) research the Debtors' lease and sublease provisions, ownership documents (deed, title, insurance report, appraisals, environmental reports, annual operating costs, book value and related items); (c) inspect the property to be subleased or sold; (d) prepare market value analysis and formulate pricing strategies to maximize revenues to the Debtors; (e) upon Debtors' request, to coordinate obtaining appraisal value for any property to be sold; (f) prepare a marketing plan and budget; (g) coordinate negotiations, and, if requested by the Debtors, provide input on transaction documents in conjunction with advice thereon provided by legal counsel to the Debtors; (h) provide the Debtors with a summary of the transaction for their final review and approval; (i) coordinate resolution of transaction contingencies and problems (if any); and (j) issue a final report on the transaction. The transaction management and brokerage services shall be applied to the disposition of 11 properties below pursuant to the terms of the engagement agreements between Debtors and CBRE: (a) 14100 Lear Boulevard, Reno, Nev.; (b) 4201 Murray Place, Lynchburg, Va.; (c) 11311 Roosevelt Boulevard, Philadelphia, Pa.; (d) 6821 E County Road, 1100 North, Mattoon, Ill.; (e) 120 Donnelley Drive, Glasgow, Ky.; (f) 377 Industrial Road, Mount Jackson, Va.; (g) 2347 Kratzer Road, Harrisonburg, Va.; (h) 530 Turnpike Street, Canton, Mass.; (i) 258 Prospect Plains Road, Cranbury Twp., N.J.; (j) 11, 20, 31 & 76 East Second Street, Mineola, N.Y.; and (k) 195 Harry Walker Parkway, Newmarket, Ontario. CBRE will be compensated for the transaction management and brokerage services as follows: (a) fees shall be earned by CBRE on a per-transaction basis, in accordance with the provisions of the applicable Engagement Letters. All fees with respect to sales, leases, purchases, or subleases of Facilities shall be earned if the Debtors enter into an agreement for the sale, purchase, lease, or sublease of a Facility with a purchaser procured by CBRE, the Debtors, or anyone else, and the Brokerage Fees shall be payable to CBRE at the closing of such sale, lease, purchase, or sublease (whether the closing occurs during or after the Term of the applicable Engagement Letter) and receipt by the Debtors of the full sale, lease, sublease, or purchase price (which may include receipt of a purchase money note). All fees with respect to leases or subleases involving the Debtors as lessor or sublessor of the Facility shall be earned if the Debtors execute an agreement to lease or sublease a Facility with a tenant or subtenant procured by CBRE, the Debtors, or anyone else, and payable to CBRE fifty percent (50%) upon execution of such leases or subleases and fifty percent (50%) upon the commencement thereof (or otherwise upon a termination of the MSA resulting from the Debtors' default thereunder), except as otherwise set forth in an Engagement Letter; (b) a standard brokerage commission applicable in the local geographic area where the relevant Facility is located for similar transactions involving like properties shall be earned by CBRE, provided, however, that if CBRE does not have standard brokerage commission terms in such geographic area, then, with respect to such transaction, the Market Commission shall mean the commission determined on the basis of the then prevailing local market commission terms in such geographic area, as mutually agreed by CBRE and the Debtors. If a Cooperating Broker is involved, the Market Commission shall be increased in accordance with local market standards to reflect the compensation required to be paid to such Cooperating Broker; (c) in connection with any purchases, sales, leases, subleases, or other disposition transactions the Debtors shall pay Market Commissions to CBRE and to Cooperating Brokers; (d) where CBRE is requested to renew or extend any existing lease or sublease, CBRE shall earn a Market Commission if the Debtors enter into an agreement to renew or extend such existing lease or sublease based on either the aggregate gross rental rate for the renewal or extension term; (e) where CBRE is requested to renegotiate any existing lease or sublease, CBRE shall be paid a cash-out Market Commission based on the aggregate gross rental reduction over the term of such lease by the Debtors. Such Market Commission shall be earned if the Debtors are relieved of all or any portion of their rental liability and shall be payable by the Debtors upon receipt of an invoice from CBRE; (f) where CBRE is requested to provide lease termination services for the Debtors, CBRE shall be paid a fee to be calculated as eight percent (8.0%) of the net present value of the Debtors' remaining lease obligations that are avoided through such termination, whether such obligations are terminated as a result of the cancellation of the Facility lease or an assignment to any party other than an affiliate of the Debtors and a complete release of the Debtors from any further liability. CBRE shall earn a Buy Out Fee if the Debtors enter into any agreement to terminate or buyout their lease obligations. The discount rate used to calculate net present value shall be agreed upon prior to the commencement of such lease termination services. For the avoidance of doubt, the Buy Out Fee shall be paid in addition to any other fees which may be earned by CBRE pursuant to any related transaction. (g) subject to compliance with applicable real estate laws and licensing requirements, the Debtors shall be entitled to receive a portion of the commission or fee earned and received by CBRE for representing the Debtors and paid to CBRE by a third party other than the Debtors (with respect to Acquisition Services) and paid to CBRE by the Debtors (with respect to Disposition Services), net of any amounts that may be due to any Cooperating Brokers to be calculated on an incremental percentage basis of the net fee or commission as set forth in the MSA. If such transaction occurs in a jurisdiction where CBRE's sharing of its commission is not permitted by applicable law, such transaction shall not be considered a transaction eligible for rebate and in each such instance CBRE shall be entitled to retain 100% of the commission paid to it and the amount of any such commission shall not be considered when determining any rebate to be paid to the Debtors thereunder; (h) the Debtors shall reimburse CBRE for all salaries, wages, overtime and bonuses, and pay to each CBRE Employee an associated burden charge, with respect to all fully or partially dedicated CBRE Employees employed in providing the Transaction Manager Services. The Transaction Management and Brokerage Services Burden Charge shall be set at a rate of twenty-five percent (25%) of the sum of the salary, wages, overtime, and potential bonus of any CBRE Employee and shall be deemed to include and cover all employee related benefits, any claims that may arise under the employee health and worker's compensation insurance programs. The Transaction Management and Brokerage Services Burden Charge is determined based on a fixed rate and will not be reconciled to any cost amounts. Salaries, wages, overtime, accrued bonuses, and the Transaction Management and Brokerage Services Burden Charge shall be reimbursed and paid by the Debtors every two (2) weeks or as otherwise paid by CBRE. (i) the cost of the Transaction Manager shall be paid directly by the Debtors upon receipt of a written invoice from CBRE in accordance with the formula set forth in greater detail in Appendix A-4 to the MSA and any amendments thereto; (j) within thirty (30) days after the expiration or termination of the MSA or any particular Engagement Letter, CBRE shall provide the Debtors with a list of all parties with whom CBRE was engaged in active negotiations with respect to purchases, sales, leases, or subleases or other transactions for which fees could be earned under the MSA. If within one hundred and eighty (180) days after such expiration or termination date, the Debtors enter into any agreement of sale, lease, sublease or other written agreement with a party on such list for which a fee would have been earned hereunder, CBRE shall earn the fee provided for under the MSA to the same extent as if the services thereunder had not expired or terminated. Upon the expiration of the Fee Protection Period, CBRE may present to the Debtors for their consideration an extension of the Fee Protection Period for any existing transactions that remain active and imminent. The Debtors shall not be obligated to extend such period, but CBRE and the Debtors shall negotiate in good faith a fair compensation arrangement for the work performed by CBRE (or its subagents) prior to termination; (k) any approved expenses incurred in connection with the performance of the services contemplated by the MSA or any Engagement Letter shall be reimbursed to CBRE by the Debtors; and (l) invoices shall be prepared and presented by CBRE to the Debtors for compensation, reimbursement, and any other charges due from the Debtors to CBRE. All sums due to CBRE from the Debtors hereunder shall be paid on the date where such sums are due and payable under the terms of the MSA, or, in the absence of any provision specifying a due date, within thirty (30) days following receipt of an invoice therefor from CBRE, and unless otherwise directed by CBRE in writing, shall be paid by a federal funds wire transfer through the ACH system to the account designated in writing by CBRE in the invoice or from time to time so that CBRE is not required to advance any of CBRE's funds for payments due under the MSA. CBRE shall be compensated for the project management services as follows: (a) the Debtors shall reimburse CBRE for all salaries, wages, overtime, and bonuses and pay to all fully or partially dedicated persons employed directly or indirectly by CBRE for the period in which CBRE is engaged to provide services to the Debtors under the MSA, including, without limitation, contract laborers, leased employees and workers furnished to CBRE by a staff leasing agency or company, an associated burden charge set at the rate of thirty-five percent (35%) of the sum of the salary, wages, overtime, and potential bonus of each CBRE Employee. The Project Management Services Burden Charge shall include and cover all employee-related benefits, any claims that may rise under employee health and workers' compensation insurance programs. The Project Management Services Burden Charge is determined based on a fixed rate and will not be reconciled to any cost amounts. Salaries, wages, overtime, accrued bonuses, and the Project Management Services Burden Charge shall be reimbursed and paid by the Debtors every two (2) weeks or as otherwise paid by CBRE; (b) if the Debtors shall require additional staffing for Project Management Services beyond those fully or partially dedicated CBRE Employees as set forth in any agreement between the Debtors and CBRE, CBRE and the Debtors shall further mutually agree upon the reimbursement for such variable staff providing Project Management Services in accordance with one of the variable staff reimbursement models set forth in Appendix B-3 to the MSA and as modified by any amendments thereto. To the extent that the Debtors elect to compensate CBRE based on actual hours spent by CBRE employees performing Project Management Services, such employees shall be compensated according to the following schedule: Managing Director $300 Senior Director $275 Director $250 Senior Project Manager $200 Project Manager $175 Associate Project Manager $150 Senior Project Coordinator $125 Project Coordinator $100 (c) the Debtors shall reimburse CBRE for any approved expenses incurred in connection with the performance of the Project Management Services; (d) invoices for compensation, reimbursement, and any other charges due from the Debtors to CBRE shall be prepared by CBRE. All sums due to CBRE from the Debtors shall be paid on the date where such sums are due and payable under the terms of the MSA or, in the absence of any provision specifying a due date, within thirty (30) days following the receipt of an invoice therefor from CBRE, and unless otherwise directed by CBRE in writing, shall be paid by a federal funds wire transfer through the automated clearinghouse (ACH) system to the account designated in writing by CBRE in the invoice or from time to time so that CBRE is not required to advance any of CBRE's funds for payments due under the MSA; (e) the Debtors shall pay any Sales and Use Taxes applicable to the Project Management Services. The Debtors shall retain the right to contest any Sales and Use Taxes assessed on the Project Management Services; and (f) subject to the condition that sufficient funds have been made available by the Debtors, CBRE shall promptly pay (or cause to be paid) all fees, costs, and expenses incurred by or on behalf of CBRE or any of its affiliates, agents, subcontractors, or vendors in performing the Project Management Services, other than those which the Debtors are required to pay directly. All payments to CBRE under the MSA shall be made in the amounts then due and payable without offset, abatement, or deduction of any kind whatsoever. Tricia Shay, a senior managing director at CBRE, Inc., disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tricia Shay CBRE, Inc. 58 S Service Rd. Melville, NY 11747 Telephone: (212) 984-7199 Email: tricia.shay@cbre.com About LSC Communications LSC Communications, Inc. is a Delaware corporation established in 2016 with its headquarters located in Chicago. It offers a broad range of traditional and digital print products, print-related services and office products. It has offices, plants and other facilities in 28 states as well as operations in Mexico, Canada and the United Kingdom. Visit http://www.lsccom.comfor more information. LSC Communications and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 20-10950) on April 13, 2020. As of Dec. 31, 2019, Debtors disclosed $1.649 billion in assets and $1.721 billion in liabilities. The petitions were signed by Andrew B. Coxhead, chief financial officer. Judge Sean H. Lane oversees the cases. Debtors have tapped Sullivan & Cromwell, LLP and Young Conaway Stargatt & Taylor, LLP, as bankruptcy counsel; Evercore Group, L.L.C. as investment banker; AlixPartners, LLP as restructuring advisor; CBRE, Inc. as real estate broker; and Prime Clerk, LLC as notice, claims and balloting agent. Ernst & Young, LLP provides tax services. LSC COMMUNICATIONS: Taps Grant Thornton to Provide Tax Services --------------------------------------------------------------- LSC Communications, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Grant Thornton, LLP to provide tax compliance and tax refund services. The firm's services will include: A. State and Local Tax Refund Services (a) Assisting Debtors to identify, quantify, and document opportunities, if any, to claim refunds or use taxes erroneously paid to the following state jurisdictions: California, Connecticut, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Maine, Minnesota, Missouri, Mississippi, Nevada, New Jersey, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Utah, and Virginia and identify any overpayments of sales or use taxes to suppliers of Debtors for purchases for their facilities located within the Identified Jurisdictions during all open periods by the Identified Jurisdictions' statute of limitations ending June 2020; (b) Preparing refund claims and amended returns to specific Identified Jurisdictions or vendors upon Debtors' written consent, which returns and claims shall only be filed upon Debtors' review, approval, and signature; (c) Assisting Debtors in responding to questions raised in the Identified Jurisdictions regarding the refund claims or amended returns prepared by Grant Thornton; and (d) Advising Debtors' management regarding examination matters through the administrative appeal level within each Identified Jurisdiction's Department(s) of Revenue, provided, however, that Debtors' management will be responsible for making any decisions on taking further course(s) of action with respect to advice provided by Grant Thornton. B. Personal Property Tax Assessment Reduction Services (a) Assisting Debtors to identify opportunities to request personal property assessment reductions from the jurisdictions listed in the SOW for assessment years ending on or before December 31, 2020, December 31, 2021, and December 31, 2022; (b) Providing Debtors with a summary of opportunities identified as possible personal property assessment reductions in the Listed Jurisdictions; (c) Preparing appeals or requests for assessment reductions for Debtors' review, signature, and filing, upon receipt of their written authorization; and (d) Assisting Debtors to respond to questions or requests for additional information about requests received by the taxing authorities in the Listed Jurisdictions, and with respect to any contested components of the refund claims, assisting and advising Debtors' management regarding examination matters through the audit and administrative appeal level within the respective Department(s) of Revenue in the Listed Jurisdictions, provided, that Debtors' management will be solely responsible for making any decision to take further course(s) of action with respect to advice provided by Grant Thornton. C. Real Property Tax Assessment Reduction Services (a) Assisting Debtors to identify opportunities to request real property assessment reduction from the jurisdictions listed in the SOW for assessment years ending on or before December 31, 2020, December 31, 2021, and December 31, 2022; (b) Providing Debtors with a summary of opportunities identified in the Real Property Listed Jurisdictions for the Debtor's review; (c) Preparing appeals or requests for assessment reductions for Debtors' review, signature, and filing, upon receipt of their written authorization; and (d) Assisting Debtors to respond to questions or requests for additional information about requests received by the taxing authorities in the Listed Jurisdictions, and with respect to any contested components of the refund claims, assisting and advising Debtors' management regarding examination matters through the audit and administrative appeal level within the respective Department(s) of Revenue in the Real Property Listed Jurisdictions, provided, that Debtors' management will be solely responsible for making any decision to take further course(s) of action with respect to advice provided by Grant Thornton. D. 2021-2022 Personal Property Tax Compliance Services (a) Preparing applicable personal property tax returns prior to the filing date, provided, however, that Debtors furnish the applicable data to Grant Thornton at least 30 days prior to the filing date, and where permitted and upon the receipt of Debtors' consent the signing and filing of the relevant personal property tax returns on their behalf; (b) Upon Debtors' request, communicating, with assessors and other assessment officials as required in order to achieve fair and equitable values of their personal property; (c) In the event that Grant Thornton's analysis indicates a reduction in assessed valuation appears feasible, filing any necessary petitions and appearing on Debtors' behalf before assessing authorities to obtain correction in assessed violations and as Debtors' representative in any administrative appeals procedures, provided, however, that if Grant Thornton determines that an appeal beyond the administrative level is recommended, the firm shall review the situation with Debtors and the latter may retain counsel in their sole discretion; (d) Participating in audits of personal property tax returns filed by Grant Thornton; (e) Participating in audits of personal property filed prior to Debtors' engagement of Grant Thornton for a fee as outlined in greater detail in the 2021-2022 Personal Property Tax Compliance SOW; (f) Processing, upon Debtors' authorization, property tax bills for payment from a bank and bank account deemed acceptable to Grant Thornton which Grant Thornton shall open solely for this limited purpose, provided, that Debtors shall initially deposit an amount of $3,500 into the Property Tax Account and shall maintain that amount in the Property Tax Account until such time as Grant Thornton's services pursuant to the 2021-2022 Personal Property Tax Compliance SOW are terminated and all outstanding items in the Property Tax Account clear, and provided, further that any fees or charges associated with the Property Tax Account remain the sole responsibility of Debtors; (g) Providing a detailed funding report to Debtors prior to the due date for payment of taxes so that they may fund the Property Tax Account by utilizing either FedWire or ACH Credit; (h) Preparing checks to accompany tax bills for payment to the respective jurisdiction(s), provided, however, that Grant Thornton will not be responsible for any late payment fees or penalties or the handling of late payment notices resulting from the late funding of the Property Tax Account; and (i) Maintaining all books and records related to the above and making the same available to Debtors upon request. E. 2020 Personal Property Tax Compliance Services (a) Preparing applicable personal property tax returns prior to the filing date, provided, however, that Debtors furnish the applicable data to Grant Thornton at least 30 days prior to the filing date, and where permitted and upon the receipt of Debtors' consent the signing and filing of the relevant personal property tax returns on their behalf; (b) Upon Debtors' request, communicating, with assessors and other assessment officials as required in order to achieve fair and equitable values of their personal property; (c) In the event that Grant Thornton's analysis indicates a reduction in assessed valuation appears feasible, filing any necessary petitions and appearing on Debtors' behalf before assessing authorities to obtain correction in assessed violations and as Debtors' representative in any administrative appeals procedures, provided, however, that if Grant Thornton determines that an appeal beyond the administrative level is recommended, the firm shall review the situation with Debtors and the latter may retain counsel in their sole discretion; (d) Participating in audits of personal property tax returns filed by Grant Thornton; (e) Participating in audits of personal property filed prior to Debtors' engagement of Grant Thornton for a fee as outlined in greater detail in the 2021-2022 Personal Property Tax Compliance SOW; (f) Processing, upon Debtors' authorization, property tax bills for payment from a bank and bank account deemed acceptable to Grant Thornton which the firm shall open solely for this limited purpose, provided, that Debtors shall initially deposit an amount of $3,500 into the Property Tax Account and shall maintain that amount in the Property Tax Account until such time as Grant Thornton's services pursuant to the 2021-2022 Personal Property Tax Compliance SOW are terminated and all outstanding items in the Property Tax Account clear, and provided, further that any fees or charges associated with the Property Tax Account remain the sole responsibility of Debtors; (g) Providing a detailed funding report to Debtors prior to the due date for payment of taxes so that they may fund the Property Tax Account by utilizing either FedWire or ACH Credit; (h) Preparing checks to accompany tax bills for payment to the respective jurisdiction(s), provided, however, that Grant Thornton will not be responsible for any late payment fees or penalties or the handling of late payment notices resulting from the late funding of the Property Tax Account; and (i) Maintaining all books and records related to the above and making the same available to Debtors upon request. F. Sales and Use Tax Compliance Services (a) Assisting Debtors to generate sales, use, and other transactional tax returns which include business licenses, unsupported tax returns, and miscellaneous tax returns; (b) Providing tax return compliance services to Debtors for the filing periods beginning March 2020 and ending March 2023, provided, however, that Debtors remain responsible for their own calculations, positions, and the data transmitted to Grant Thornton; (c) Preparing for Debtors' review, approval, and signature or signature authorization, the Sales and Use Tax Returns for all jurisdictions where they are currently registered, including any necessary transfer of information for unsupported returns requiring jurisdiction-provided forms; (d) Receiving the specified monthly tax data files through Grant Thornton's web portal, Grant Thornton Online (GTO) and notifying Debtors of any data issues identified in the Specified Monthly Tax Data Files; (e) Preparing a state-by-state reconciliation report comparing taxes included in the original data sent from Debtors, taxes remitted by tax type, discounts earned, and any differences between taxes collected or accrued and remitted; (f) Reviewing the Reconciliation Report and Debtors' Sales and Use Tax Returns and notifying Debtors of any discrepancies; (g) Preparing a single monthly journal entry report or Excel table for all payments broken out by tax/payment type, legal entity; (h) Preparing up to two (2) monthly funding requests to fund Debtors' escrow account for tax purposes which funding requests shall show all Sales and Use Tax Returns and amounts being paid by each legal entity; (i) Providing account setup and management services with PNC Bank to issue payments for taxes due on each of Debtors' Sales and Use Tax Returns; (j) Preparing and submitting any EFT or automatic clearinghouse (ACH) transactions as required by certain jurisdictions for the payment of taxes on submitted Sales and Use Tax Returns; (k) Reconciling and comparing check and EFT payments with items that have cleared Debtors' bank account; (l) Preparing all limited Powers of Attorney or Authorization forms for Debtors; review and signature; (m) Publishing copies of all Sales and Use Tax Returns and reports prepared monthly through the GTO web portal, which publications shall contain copies of all Sales and Use Tax Returns reviewed and approved by Debtors, proof of mailing, electronic filing confirmations, and all summary reports used in the monthly Reconciliation Reports; (n) Maintaining a filing calendar and providing for up to twelve (12) payment method changes by Debtors per year; (o) Assisting Debtors to resolve notices pertaining to the Sales and Use Taxes which initial jurisdictional correspondence may be received directly by Grant Thornton at the Debtor's request or uploaded by Debtors to the GTO web portal; (p) Providing sources related to outsourcing which shall specifically include: (1) maintaining location and jurisdictional data for tax processing purposes with up to eight (8) changes permitted per year; and (2) registering updates for location openings, moves, and closings relative to outlet-based reporting, with up to three (3) closings permitted per year; and (q) Assisting Debtors to finalize filings related to their business licenses. Grant Thornton will be compensated for its tax compliance and tax refund services as follows: A. State and Local Tax Refund Services (i) Grant Thornton will be compensated under a contingent fee arrangement subject to Debtors' agreement to pay an agreed time/material based or fixed fee upon their decision to terminate the engagement of Grant Thornton or any part thereof prematurely or upon the occurrence of an Independence Triggering Event (as defined therein); (ii) Grant Thornton's fee will be determined based on a tiered/hybrid contingency structure that decreases as the amount of tax, interest, and penalty offsets, whether received by check, deposit, overpayment applied, credit, audit offset, or any other means recovered in any of the Identified Jurisdictions increases, such that Grant Thornton will receive a 30% percentage based fee for refunds of the first $600,000 of Economic Value recovered, a 20% percentage based fee for refunds of the next $600,000 of Economic Value recovered and a 15% percentage based fee for refunds on all remaining Economic Value Recovered from the Identified Jurisdictions, provided, that if the Economic Value identified by Grant Thornton is partially reduced or wholly withdrawn in exchange of other assessment issues, the Economic Value received will include the value received from this reduction, and provided, further, that the Economic Value will not be reduced by the amount of any unrelated audit assessments or exposure items uncovered; (iii) In the event that a contingent fee is not permissible in a jurisdiction(s) for any opportunity identified, Grant Thornton's fee will be based on actual time spent at standard hourly rates plus out-of-pocket costs and administrative expenses or an agreed fixed fee. (iv) In the event that Debtors terminate the contingent fee engagement (i) prior to the resolution of the substantive issue administratively, through the conclusion of any administrative appeal, or (ii) prior to resolution of the substantive issue in a matter involving litigation, Debtors shall pay Grant Thornton 40% of the standard rates for the services under this SOW without regard to the amount of Economic Value received, if any; and (v) If, subsequent to the execution of the State and Local Tax Refund Services SOW, due solely to a change of control of Debtors, Grant Thornton is required to apply the SEC/PCAOB independence rules to Debtors and their affiliates, the contingent fee arrangement will terminate and Debtors shall pay Grant Thornton the Alternative Fee without regard to the amount of Economic Value received, if any. B. Personal Property Tax Assessment Reduction Services (i) Grant Thornton will be compensated under a contingent fee arrangement subject to Debtors' agreement to pay an agreed time/material based or fixed fee upon their decision to terminate the engagement of Grant Thornton or any part thereof prematurely or upon the occurrence of an Independence Triggering Event (as defined therein); (ii) Grant Thornton's fee will be determined based on a tiered/hybrid contingency structure that decreases as the amount of Economic Value recovered increases, such that Grant Thornton will receive a 25% percentage based fee for refunds recovered, provided, that if the Economic Value identified by Grant Thornton is partially reduced or wholly withdrawn in exchange of other assessment issues, the Economic Value received will include the value received from this reduction, and provided, further, that the Economic Value will not be reduced by the amount of any unrelated audit assessments or exposure items uncovered; (iii) In the event that a contingent fee is not permissible in a jurisdiction(s) for any opportunity identified, Grant Thornton's fee will be based on actual time spent at standard hourly rates plus out-of-pocket costs and administrative expenses or an agreed fixed fee. (iv) In the event that Debtors terminate the contingent fee engagement (i) prior to the resolution of the substantive issue administratively, through the conclusion of any administrative appeal, or (ii) prior to resolution of the substantive issue in a matter involving litigation, Debtors shall pay Grant Thornton 80% of the standard rates for the services under this SOW without regard to the amount of Economic Value received, if any; (v) If, subsequent to the execution of the State and Local Tax Refund Services SOW, due solely to a change of control of Debtors, Grant Thornton is required to apply the SEC/PCAOB independence rules to Debtors and their affiliates, the contingent fee arrangement will terminate and Debtors shall pay Grant Thornton the Personal Property Tax Assessment Reduction Alternative Fee without regard to the amount of Economic Value received, if any. (vi) Billing will be rendered when Debtors have received any Economic Value from the jurisdictions described in the Personal Property Tax Assessment Reduction SOW; (vii) Grant Thornton will also bill Debtors for their expenses, which bills shall include 6% of fees to cover items such as copies, postage, supplies, computer and technology usage, software licensing, research and library databases and similar expense items, with such billings payable upon receipt; and (viii) If Grant Thornton receives certain incentives in the form of bonuses and rewards from its corporate card and other vendors, such incentives to the extent received will be retained by Grant Thornton and used to cover its expenses. C. Real Property Tax Assessment Reduction Services (i) Grant Thornton will be compensated under a contingent fee arrangement subject to Debtors' agreement to pay an agreed time/material based or fixed fee upon their decision to terminate the engagement of Grant Thornton or any part thereof prematurely or upon the occurrence of an Independence Triggering Event (as defined therein); (ii) Grant Thornton's fee will be determined based on a tiered/hybrid contingency structure that decreases as the amount of Economic Value recovered increases, such that Grant Thornton will receive a 25% percentage based fee for refunds recovered, provided, that if the Economic Value identified by Grant Thornton is partially reduced or wholly withdrawn in exchange of other assessment issues, the Economic Value received will include the value received from this reduction, and provided, further, that the Economic Value will not be reduced by the amount of any unrelated audit assessments or exposure items uncovered; (iii) In the event that a contingent fee is not permissible in a jurisdiction(s) for any opportunity identified, Grant Thornton's fee will be based on actual time spent at standard hourly rates plus out-of-pocket costs and administrative expenses or an agreed fixed fee. (iv) In the event that Debtors terminate the contingent fee engagement (i) prior to the resolution of the substantive issue administratively, through the conclusion of any administrative appeal, or (ii) prior to resolution of the substantive issue in a matter involving litigation, Debtors shall pay Grant Thornton 80% of the standard rates for the services under this SOW without regard to the amount of Economic Value received, if any; (v) If, subsequent to the execution of the State and Local Tax Refund Services SOW, due solely to a change of control of Debtors, Grant Thornton is required to apply the SEC/PCAOB independence rules to Debtors and their affiliates, the contingent fee arrangement will terminate and Debtors shall pay Grant Thornton the Real Property Tax Assessment Reduction Alternative Fee without regard to the amount of Economic Value received, if any. (vi) Billing will be rendered when Debtors have received any Economic Value from the jurisdictions described in the Personal Property Tax Assessment Reduction SOW; (vii) If Grant Thornton receives certain incentives in the form of bonuses and rewards from its corporate card and other vendors, such incentives to the extent received will be retained by Grant Thornton and used to cover its expenses. D. 2021-2022 Personal Property Tax Compliance Services (i) Annual fees will be charged according to return/rendition count and the total fee; (ii) Grant Thornton will invoice Debtors at the beginning of calendar-year 2021 for an advance fee totaling 50% of the 2021-2022 Total Personal Property Tax Compliance Engagement Fee. For subsequent years of this multi-year engagement, a similar 50% advance fee will be billed at the time continuation of services is confirmed with Debtors in writing. On or around April 15, 2021, Grant Thornton will bill Debtors for the first progress billing equal to 25% of the 2021-2022 Total Personal Property Tax Compliance Engagement Fee and on or around June 15, 2021, Grant Thornton will bill Debtors for the final progress billing equal to the remainder of the 2021-2022 Total Personal Property Tax Compliance Engagement Fee; (iii) Fees for additional services falling outside of the normal scope of this engagement will be billed at discounted hourly rates of 80%, provided, that such fees are subject to change over the course of the engagement; (iv) Grant Thornton will bill Debtors for its expenses with such billings payable upon receipt; and (v) If Grant Thornton receives certain incentives in the form of bonuses and rewards from its corporate card and other vendors, such incentives will be retained by Grant Thornton to cover firm expenses. E. 2020 Personal Property Tax Compliance Services (i) Annual fees will be charged according to return/rendition count and the total fee; (ii) Upon execution of the 2020 Personal Property Tax Compliance SOW, Grant Thornton will invoice Debtors for an advance fee totaling 50% of the 2020 Personal Property Tax Compliance Total Engagement Fee. On or around July 15, 2020, Grant Thornton will invoice Debtors for the remainder. (iii) Fees for additional services falling outside of the normal scope of this engagement will be billed at the Grant Thornton Discounted Hourly Rates, provided that such fees are subject to change over the course of the engagement; (iv) Grant Thornton will bill Debtors for its expenses with such billings payable upon receipt; and (v) If Grant Thornton receives certain incentives in the form of bonuses and rewards from its corporate card and other vendors, such incentives will be retained by Grant Thornton to cover firm expenses. F. Sales and Use Tax Compliance Services (i) The base monthly fee structure for the Sales and Use Tax Compliance Services is based on the assumption that Debtors will require assistance with: (1) 14 filing entities per filing calendar, (2) uploading up to 8 data files per month in different formats and up to 18 data files per month in similar formats, (3) filing on average 5 business license returns per month, and (4) filing on average 153 Sales and Use Tax Returns per month; (ii) As part of the Base Monthly Fee Structure any additional items or services will be invoiced; (iii) The Base Monthly Fee Structure Extra Charges are valid for an average of one hundred fifty-three (153) filings per month and include up to fourteen (14) filing entities, up to eight (8) unique data files and eighteen (18) similar format data files and up to five (5) business license returns. To the extent that Debtors require the processing of an additional data file beyond the twenty-six (26) envisioned Excel files, Grant Thornton will charge a standard $250 monthly fee per additional data file format, and a $50 monthly fee per additional data file on an existing format where a format shall be understood to include the layout of the data table within the file and not merely the specification of a text or Excel file type; (iv) The Base Monthly Fee Structure and Base Monthly Fee Structure Extra Charges hold valid for a variance of up to plus or minus five percent (5%) of the average of returns per month. If Debtors' average varies by greater than this threshold, Grant Thornton will notify them of the new monthly amount which shall provide for the same Permitted Variance. For an additional significant filing entity not included in Addendum A to the Sales and Use Tax Compliance SOW. Grant Thornton shall invoice Debtors for an additional $100 per month charge. The fee for filing business licenses, unsupported returns, or miscellaneous returns shall be $150 per such return. As indicated above, the fees shall increase by 2.5 percent (2.5%) in the second and third years of the engagement which change shall become effective on April 1 of each year; (v) Grant Thornton will provide Company a reduction to its monthly fees for eliminations of filing entities, data files, sales, use & gross receipts returns or business license filings. The monthly reductions are $100 per entity, $50 per data file same format and $200 per data file unique format, $22.50 per sales, use and gross receipts returns and $150 per business license filings. (vi) Grant Thornton shall invoice Debtors for certain other fees and rates separate from and beyond the Base Monthly Fee Structure which shall include: (1) registration for additional taxes, entities, locations (that require their own registration) or jurisdictions at the rate of $250 per form required, (2) adding or updating Selling Location registrations (outlet ID's) including moves and closings in those jurisdictions that require outlet-based reporting at the rate of $150 per additional outlet, (3) any unusual or avoidable charges such as NSF or wire transfer fees incurred in connection with the Base Monthly Fee Structure and monthly charges for any banking which occurs in currencies other than USD, and (4) a one-time set-up charge to configure each additional data feet of a format not already processed of approximately $1,500, provided, that the Data File Setup Fees may vary based on the amount of data conversion that needs to be configured, and provided, further, for the avoidance of doubt that such Data File Setup Fees shall not include the configuration of Debtors' initial data file which is included in their initial setup charge; (vii) Any additional services including responses to notices for which Grant Thornton is not responsible, general ledger account reconciliations, reconciliations between computer systems, including, but not limited to, MDTS, WCSS and SAP, manual adjustments beyond the allowance permitted in the Base Monthly Fee Structure (including handling credit adjustments and keeping track of credit carry-forwards), guidance with technology issues for improved efficiencies, cleanup of location or tax registrations (both internally and with the relevant jurisdictions) nexus or taxability analysis, situsing transactions, and other tax or technology consulting shall be provided by Grant Thornton at the hourly rates listed below, which rates are subject to change effective April 1 of each year: Resource Level Year 1 Rate Year 2 Rate Year 3 Rate Partner/Principal $550 $575 $600 Managing Director $550 $575 $600 Director/Senior Manager $450 $475 $500 Manager $350 $375 $400 Senior Staff $275 $285 $300 Staff/Paraprofessional $165 $175 $185 Intern $110 $115 $120 (viii) Grant Thornton will bill Debtors for services rendered in connection with the provision of the Sales and Use Tax Compliance Services on a monthly basis in advance. Each Funding Request will include the Base Monthly Fee due in advance and any billings for Base Monthly Fee Structure Extra Charges, Other Fees and Rates, and Miscellaneous Services shall be due, in arrears, for inclusion in the funded amount. Upon submitting a Funding Request to Debtors, Grant Thornton shall deduct the fees due from the funding amount before tax payments are made unless Debtors shall notify Grant Thornton in writing (email is acceptable) that they are rejecting any Specific Services Billing. Grant Thornton's billings are payable upon receipt and shall be paid within 30 days of receipt by Debtors; (ix) Grant Thornton will bill Debtors for expenses incurred in connection with travel and other expenses in the same manner as the Specific Services Billing, provided, that such Incurred Expenses shall only be incurred with prior written approval from Debtors; and (x) If Grant Thornton receives certain incentives in the form of bonuses and rewards from its corporate card and other vendors, such incentives will be retained by Grant Thornton to cover firm expenses. Alexander J. Laskowski, a partner of Grant Thornton LLP, disclosed in court filings that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Alexander J. Laskowski Grant Thornton, LLP 171 N. Clark Street, Suite 200 Chicago, IL 60601 Telephone: (312) 602-9004 Email: alex.laskowski@us.gt.com About LSC Communications LSC Communications, Inc. is a Delaware corporation established in 2016 with its headquarters located in Chicago. It offers a broad range of traditional and digital print products, print-related services and office products. It has offices, plants and other facilities in 28 states as well as operations in Mexico, Canada and the United Kingdom. Visit http://www.lsccom.comfor more information. LSC Communications and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 20-10950) on April 13, 2020. As of Dec. 31, 2019, Debtors disclosed $1.649 billion in assets and $1.721 billion in liabilities. The petitions were signed by Andrew B. Coxhead, chief financial officer. Judge Sean H. Lane oversees the cases. Debtors have tapped Sullivan & Cromwell, LLP and Young Conaway Stargatt & Taylor, LLP, as bankruptcy counsel; Evercore Group, L.L.C. as investment banker; AlixPartners, LLP as restructuring advisor; CBRE, Inc. as real estate broker; and Prime Clerk, LLC as notice, claims and balloting agent. Ernst & Young, LLP provides tax services. LUCKY BRAND: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Five affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Lucky Brand Dungarees, LLC (Lead Debtor) 20-11768 540 S Santa Fe Ave Los Angeles, CA 90013 LBD Parent Holdings, LLC 20-11769 LBD Intermediate Holdings, LLC 20-11770 Lucky Brand Dungarees Stores, LLC 20-11771 Lucky PR, LLC 20-11772 Business Description: Founded in Los Angeles, California in 1990, Lucky Brand -- https://www.luckybrand.com -- is an apparel lifestyle brand that designs, markets, sells, distributes, and licenses a collection of contemporary premium fashion apparel under the "Lucky Brand" name. The Company's products, designed for women, men, and children, include denim jeans, pants, woven and knit tops, outerwear, and accessories. As of May 2020, the Debtors operated 112 specialty retail stores and 98 outlet stores in North America. Chapter 11 Petition Date: July 3, 2020 Court: United States Bankruptcy Court District of Delaware Judge: Hon. Christopher S. Sontch Debtors' Counsel: Michael R. Nestor, Esq. Kara Hammond Coyle, Esq. Andrew L. Magaziner, Esq. Joseph M. Mulvihill, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: mnestor@ycst.com kcoyle@ycst.com amagaziner@ycst.com jmulvihill@ycst.com - and - George A. Davis, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York, New York 10022 Tel: (212) 906-1200 Fax: (212) 751-4864 Email: george.davis@lw.com - and - Ted A. Dillman, Esq. Lisa K. Lansio, Esq. 355 South Grand Avenue, Suite 100 Los Angeles, California 90071 Tel: (213) 485-1234 Fax: (213) 891-8763 Email: ted.dillman@lw.com lisa.lansio@lw.com Debtors' Restructuring Advisor: BERKELEY RESEARCH GROUP, LLC Debtors' Investment Banker: HOULIHAN LOKEY CAPITAL, INC. Debtors' Claims, Noticing, Soliciting & Balloting Agent: EPIQ CORPORATE RESTRUCTURING, LLC https://dm.epiq11.com/case/luckybrand Estimated Assets (on a consolidated basis): $100 million to $500 million Estimated Liabilities (on a consolidated basis): $100 million to $500 million The petitions were signed by Christopher Cansiani, chief financial officer. A copy of Lucky Brand Dungarees' petition is available for free at PacerMonitor.com at: https://is.gd/V13gta Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Red & Blue International Ltd. Merchandise $13,355,201 The Hallmark Building Vendor Suite 227 The Valley Anguilla Contact: Chief Financial Officer Tel: 852-2305-2219 Fax: 852-374-12633 Email: eddie@red-blueltd.com 2. Hirdaramani International Merchandise $5,940,653 Exports (PVT) LT Vendor No.23, West Tower, World Trade Eachlon Square Colombo, Sri Lanka Contact: Chief Financial Officer Tel: 94-11-479-7000 Fax: 94-11-244-6135 Email: aroon@hirdaramani.com 3. ORIT Trading Lanka (PVT) Ltd. Merchandise $5,820,349 7th Floor, WTC, Echelon Square Vendor Colombo 1 0100 Sri Lanka Contact: Chief Financial Officer Email: moditha@oritsl.com 4. INT, S.A. Merchandise $5,780,905 Edif. Tikal Futura Nivel Vendor 17 Torre Luna Guatemala, Guatemala 01011 Guatemala Contact: Chief Financial Officer Email: betty@inttrading.com 5. SAHU Exports Merchandise $4,703,139 A-114, Sector 65 Vendor Noida 201 301 India Contact: Chief Financial Officer Tel: 91-120-2424-147 Fax: 91-120-2424-148 Email: manojsahu@sahuexport.com 6. Simon Rent $4,625,242 225 W. Washington St. Indianapolis, IN 43204 Contact: Chief Financial Officer Tel: 317-263-7646317.617-9169 Email:dseabaugh@simon.com 7. Shree Bharat International Merchandise $3,545,209 PVT. Ltd. Vendor W-41, Sector 11 Noida 201301 India Contact: Chief Financial Officer Tel: 91-120-4302-900 Fax: 91-120-4333-310 Email: raviraina@sbil.biz 8. Shahi Exports Private Limited Merchandise $2,931,363 Industrial Plot 1, Sector -28 Vendor Faridabad Haryana India Contact: Chief Financial Officer Tel: 91-129-227-3970 Fax: 91-129-227-3485 Email: rajiv.pande@shahi.co.in 9. Busana Apparel PTE Ltd. Merchandise $2,814,958 Grand Building Vendor 17 Philip St 05-01 Singapore 048695 Singapore Contact: Chief Financial Officer Email: christine_mona@busanagroup.com 10. Gaurav International Merchandise $2,771,453 Plot 236, Udyog Vihar-1 Vendor Gurgaon, Haryana 122016 India Contact: Chief Financial Officer Tel: (971) 769-6790 Fax: 91-124-4001549 Email: poonam@richagroup.com 11. SPL Industries Ltd. Merchandise $2,693,964 Plot No. 21-22, Huda Vendor Sector-06 Faridabad- Haryana 121006 India Contact: Chief Financial Officer Email: vinaygoyal@spllimited.com 12. Ubase International, Inc. Merchandise $2,537,167 345 Ttukseom - Ro Vendor Seongdong - Gu Seoul 04780 Korea, Rupublic of Contact: Chief Financial Officer Email: joykim@ubaseinternational.com 13. Asia Premium Sourcing Pte Ltd Merchandise $2,474,862 6 Raffles Quay 14-04/05 Vendor Singapore, Singapore 048580 Singapore Contact: Chief Financial Officer Email: susanty@trinuggal.com 14. Costuras Y Manufacturas de Merchandise $1,868,389 Tlaxcala S.De Vendor Reforma Sur 27, Interior B Panzacola Tlaxcala, Tlax 90796 Mexico Contact: Chief Financial Officer Tel: 52-222-141-6500 Email: john.fernandez@cmtmail.com.mx 15. Radial, Inc. Non-Merchandise $1,636,180 PO Box 204113 Vendor Dallas, TX 75320-4114 Contact: Chief Financial Officer Tel: (610) 491-7760 Email: dl-ebayent-billing@ebay.com 16. SAE-A Trading, Ltd. Merchandise $1,625,482 SAE-A Blug 429 Vendor Yeongdong-Daero, Kangham-Ku Seoul, Korea, Republic Of Contact: Chief Financial Officer Email: miguel_jung@sae-a.com 17. E.V. Exports Merchandise $1,599,203 Sector-65 Vendor Noida, Uttar Pradesh 201301 India Contact: Chief Financial Officer Email: sanjeev@evexports.co.in 18. R.K. Industries IV Merchandise $1,511,779 A7 & 8 T.V.K. Vendor Industrial Estate Chennai, Tamil Nadu 600 032 India Contact: Chief Financial Officer Email: ajay@rk-india.com 19. Radnik Exports Merchandise $1,481,282 412, Osian Building 12 Vendor Nehru PL. Delhi, New Delhi 110019 India Contact: Chief Financial Officer Email: amit@radnik.net 20. Qingdao Runtong Art Crafts Merchandise $1,473,240 Co., Ltd. Vendor Wali Community Liuting Subdistrict Qingdao 266108 China Contact: Chief Financial Officer Tel: 0086 1527521196 Email: adam@qingdaoruntong.com 21. Shinwon Corporation Merchandise $1,335,106 328 Dongmak-Ro, Mapo-Gu Vendor Seoul, Republic Korea - KR 04157 Korea, Republic Of Contact: Chief Financial Officer Tel: 82-2-3274-5000 Fax: 82-2-3274-6173 Email: salee2@sw.co.kr; logistics.sw.co.kr 22. Super Overseas PVT. Ltd. Merchandise $1,268,076 C-151, Hosiery Complex Vendor Hosiery Complex Phase-II Noida, U.P. 201305 India Contact: Chief Financial Officer Tel: 91-120-2462-640 Fax: 91-120-2462-648 Email: james@superoverseas.com 23. Hi Jewel Co., Ltd. Merchandise $1,240,828 Room 202, 16-11, ILSIN-RO Vendor 39BEON-GIL, Bupyeong-Gu Incheon City Korea, Republic Of Contact: Chief Financial Officer Tel: 822-400-8210 Fax: 822-400-3321 Email: kayla@hujewel.co.kr 24. UKNIT, Inc. Merchandise $1,174,130 R1506 Mario Tower, 28 Vendor Seoul 08389 Korea, Republic Of Contact: Chief Financial Officer Email: kimjy@u-knit.com 25. Qingdao Dream Classic Fashion Merchandise $1,137,962 Jewelry Co Vendor North 200 Meter of Lijianvgu D Liuting St, Chengyang District Qingdao 266108 China Contact: Chief Financial Officer Email: team2@dreamclassicjewelry.com 26. Macerich Rent $1,107,308 401 Wilshire Blvd, Suite 700 Santa Monica, CA 90407 Contact: Chief Financial Officer Tel: 585-249-4421 Email: bill.palmer@macerich.com 27. PG USA, LLC Merchandise $869,363 2309 S. Santa Fe Ave Vendor Los Angeles, CA 90058 Contact: Chief Financial Officer Tel: 323-312-3508 Email: buzzcohen@msn.com 28. Brookfield Rent $835,455 350 N. Orleans St., Suite 300 Chicago, IL 60654-1607 Contact: Chief Financial Officer Tel: 401-537-6232 Email: joseph.hope@brookfieldpropertiesretail.com 29. Federal Express Corporation Non-Merchandise $781,413 942 South Shady Grove Road Vendor Memphis, TN 38120 Contact: Chief Financial Officer Tel: 901-818-7500 Email: bankruptcy@fedex.com 30. Jiing Sheng Knitting Co Ltd. Merchandise $712,990 60 Market Square Vendor P.O. Box 364 Belize Belize Contact: Chief Financial Officer Tel: 86-512-6528170 Fax: 86-512-65258174 Email: kingho@mail.jmknit.com LUXURY DINING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Eleven affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- F&O Scarsdale LLC 20-22808 696 White Plains Road Scarsdale, NY 10583 Luxury Dining Group LLC 20-22809 254 West 31st Street, 7th Floor New York, NY 10001 Fig & Olive Holding 20-22810 254 West 31st Street, 7th Floor New York, NY 10001 Fig & Olive USA Inc. 20-22811 254 West 31st Street, 7th Floor New York, NY 10001 F&O Lexington LLC 20-22812 808 Lexington Avenue New York, NY 10065 Fig & Olive Thirteen Street LLC 20-22813 420 West 13th Street 1st Floor New York, NY 10014 Fig & Olive Fifth Avenue LLC 20-22814 10 E. 52nd Street New York, NY 10022 F&O Houston LLC 20-22815 5115 Westheimer Rd. Suite C2500 Houston, TX 77056 F&O Newport Beach LLC 20-22816 151 Newport Center Drive Newport Beach, CA 92660 F&O Melrose Place Inc. 20-22817 8490 Melrose Place West Hollywood, CA 90069 F&O Los Angeles Inc. 20-22818 650 N. LA Cienega Blvd. West Hollywood, CA 90069 Business Description: The Debtors operate a chain of Fig & Olive restaurants with locations in New York, Texas, and California. Chapter 11 Petition Date: July 3, 2020 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. Sean H. Lane Debtors' Counsel: Robert L. Rattet, Esq. DAVIDOFF HUTCHER & CITRON LLP 605 Third Avenue 34th Floor New York, NY 10158 Tel: 212-557-7200 Email: rlr@dhclegal.com Estimated Estimated Assets Liabilities ----------- ----------- F&O Scarsdale LLC $100,000 to $500,000 to $500,000 $1 million Luxury Dining Group LLC $10 million to $1 million to $50 million $10 million Fig & Olive Holding $1 million to $1 million to $10 million $10 million Fig & Olive USA Inc. $1 million to $1 million to $10 million $10 million F&O Lexington LLC $100,000 to $500,000 to $500,000 $1 million Fig & Olive Thirteen Street LLC $500,000 to $500,000 to $1 million $1 million Fig & Olive Fifth Avenue LLC $500,000 to $500,000 to $1 million $1 million F&O Houston LLC $1 million to $1 million to $10 million $10 million F&O Newport Beach LLC $1 million to $1 million to $10 million $10 million F&O Melrose Place Inc. $1 million to $1 million to $10 million $10 million F&O Los Angeles Inc. $0 to $50,000 $500,000 to $1 million The petitions were signed by Alexis Blair, CEO. Copies of the petitions containing, among other items, lists of the Debtors' 20 largest unsecured ceditors are available for free at PacerMonitor.com at: https://is.gd/avZzHF https://is.gd/VOvlc2 https://is.gd/TQR99G https://is.gd/zM8qca https://is.gd/8VUTIP https://is.gd/uwclx4 https://is.gd/EXcgp3 https://is.gd/uDbUDC https://is.gd/KeE6lL https://is.gd/82rQys https://is.gd/nldfYw MAINES PAPER: Files Ch. 11 Bankruptcy Protection ------------------------------------------------ Steve Altieri, writing for WBNG, reports that Maines Paper & Services filed for Chapter 11 bankruptcy in June 2020. According to court documents, the company says it is in the best interest of creditors, employees, stockholders and other stakeholders. In May 2020, some employees of the company were told they were being let go. A Maines internal memo in May said that Linear Logistics would be acquiring assets from the company. About Maines Paper & Food About Maines Paper & Food Service, Inc. -- http://www.maines.net/ -- is an independent foodservice distributor. The Company distributes meat, fruits, vegetables, dairies, beverages, and seafood. The company's customers include restaurants, convenience stores, delis, bars, pizzerias, educational institutions, healthcare facilities, cruise lines, concessionaires, and camps. Maines Paper & Food Service, Inc., based in Conklin, NY, and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11502) on June 10, 2020. In the petition signed by CRO John C. DiDonato, the Debtor was estimated to have $1 million to $10 million in assets and $100 million to $500 million in liabilities. The Debtors tapped PACHULSKI STANG ZIEHL & JONES LLP, KLEHR HARRISON HARVEY BRANZBURG LLP, as counsel; HURON CONSULTING SERVICES LLC, as restructuring advisor; and GETZLER HENRICH & ASSOCIATES LLC, as financial advisor. STRETTO is the claims and noticing agent. MAINES PAPER: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Region 3 on June 30, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Maines Paper & Food Service, Inc. and its affiliates. The committee members are: 1. The Coca-Cola Company Attn: S. Curtis Marshall R. Kenny Werner 1 Coca-Cola Plaza, NAT 11 Atlanta, GA 30313 Phone: 404-304-1550 Email: cumarshall@coca-cola.com, Email: rwerner@coca-cola.com 2. Darden Direct Distribution, Inc. Attn: Jill Easton 1000 Darden Center Drive Orlando, FL 32837 Email: JEaston@darden.com 3. Trident Seafoods Corporation Attn: Lydia Fox Joshua Luna Erik Anderson 5303 Shilshole Ave NW Seattle WA 98107 Phone: 206-612-7794 Fax: 206-297-5795 Email: lfox@tridentseafoods.com Email: jluna@tridentseafoods.com Email: eanderson@tridentseafoods.com 4. Class Action Claimants Attn: Michael McCuen c/o David J. Cohen Stephan Zouras LLP 604 Spruce St. Philadelphia, PA 19106 Phone: 215-873-4836 Fax: 312-233-1560 Email: dcohen@stephanzouras.com 5. Ryder Transportation Services Attn: Mike Mandell 11690 NW 105th St. Miami, FL 33178 Phone: 305-500-4417 Email: Mike_Mandell@Ryder.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Maines Paper & Food Maines Paper & Food Service, Inc. is an independent foodservice distributor based in Conklin, N.Y. It distributes meat, fruits, vegetables, dairies, beverages and seafood. The company's customers include restaurants, convenience stores, delis, bars, pizzerias, educational institutions, healthcare facilities, cruise lines, concessionaires and camps. Visit http://www.maines.netfor more information. Maines Paper & Food Service and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11502) on June 10, 2020. In the petition signed by CRO John C. DiDonato, Debtors were estimated to have $1 million to $10 million in assets and $100 million to $500 million in liabilities. Debtors have tapped Pachulsi Stang Ziehl & Jones, and Klehr Harrison Harvey Branzburg, LLP as legal counsel; Huron Consulting Services, LLC as restructuring advisor; and Getzler Henrich & Associates, LLC as financial advisor. Stretto is the claims and noticing agent. MALINKI SLONIK: Seeks to Hire Hasbani & Light as Counsel -------------------------------------------------------- Malinki Slonik LLC seeks authority from the US Bankruptcy Court for the Eastern District of New York to employ Hasbani & Light, P.C. as its legal counsel. Malinki Slonik requires Hasbani & Light to: (a) provide the Debtor with advice and preparing all necessary documents regarding debt restructuring, bankruptcy and asset dispositions; (b) take all necessary actions to protect and preserve the Debtor's estate during the pendency of this Chapter 11 Case; (c) prepare on behalf of the Debtor, as debtor-in-possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of this Chapter 11 Case; (d) counsel the Debtor with regard to its rights and obligations as debtor in-possession; (e) appear in Court to protect the interests of the Debtor; and (f) perform all other legal services for the Debtor which may be necessary and proper in these proceedings and in furtherance of the Debtor's operations. Hasbani & Light will be compensated at an hourly rate of $210 plus costs and expenses. A retainer fee of $3,500 was paid to the Firm by Yonel Devico. Rafi Hasbani, Esq., a partner at Hasbani & Light, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Hasbani & Light can be reached at: Rafi Hasbani, Esq. ASBANI & LIGHT, P.C. 450 Seventh Avenue New York, NY 10123 Tel: (646) 490-6677 Fax: (347) 491-4048 E-mail: rhasbani@hasbanilight.com About Malinki Slonik LLC Malinki Slonik LLC filed a voluntary petition for relief under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-72239) on June 15, 2020, listing under $1 million in both assets and liabilities. Rafi Hasbani, Esq. at HASBANI & LIGHT, P.C. represents the Debtor as counsel. MARTIN MIDSTREAM: Needs Refinancing to Remain as a Going Concern ---------------------------------------------------------------- Martin Midstream Partners L.P. filed its quarterly report on Form 10-Q, disclosing a net income of $8,815,000 on $198,883,000 of total revenues for the three months ended March 31, 2020, compared to a net loss of $3,656,000 on $240,033,000 of total revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $612,199,000, total liabilities of $641,700,000, and $29,501,000 in total partners' deficit. Martin Midstream said, "As of March 31, 2020, the Partnership's 7.25% senior unsecured notes due 2021 (the "2021 Notes") were due within twelve months and have therefore been presented as a current liability on the Consolidated and Condensed Balance Sheets at March 31, 2020. The Partnership's amended revolving credit facility includes a provision which accelerates the maturity date to August 19, 2020 if the 2021 Notes are not refinanced in a manner not prohibited by the facility. If the Partnership is unable to refinance the 2021 Notes and is unable to repay the outstanding borrowings under its revolving credit facility on August 19, 2020, the Partnership's ability to meet its obligations would be adversely affected. Failure to comply with this provision, if not waived, would result in an event of default under the Partnership's revolving credit facility, the potential acceleration of outstanding debt thereunder, and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under other agreements, which could also result in the acceleration of those obligations by the counterparties to those agreements. The Partnership, with support from the Board of Directors, is actively pursuing a variety of strategic alternatives to strengthen the balance sheet and address near term maturities and accordingly, announced on April 6, 2020, the hiring of Stephens Inc. as a financial advisor to assist in the process. Pending the successful implementation of the refinancing, the conditions have raised substantial doubt about the Partnership's ability to continue as a going concern. The Partnership's management is engaged in ongoing communication with credit providers and presently believes the measures being taken will enable the Partnership to successfully refinance the 2021 Notes and comply with covenants under its revolving credit facility, although no assurance can be given." A copy of the Form 10-Q is available at: https://is.gd/84k9wq Martin Midstream Partners L.P. engages in the terminalling, processing, storage, and packaging of petroleum products and by-products in the United States Gulf Coast region. The company's Terminalling and Storage segment owns or operates 19 marine shore-based terminal facilities and 12 specialty terminal facilities that provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products. This segment also offers land rental services to oil and gas companies, as well as storage and handling services for lubricants and fuels. Its Transportation segment operates a fleet of 540 tank trucks and 1,275 trailers; and 33 inland marine tank barges, 19 inland push boats, and 1 articulated offshore tug and barge unit to transport petroleum products and by-products, petrochemicals, and chemicals. The company's Sulfur Services segment processes molten sulfur into prilled or pelletized sulfur, which is used in the production of fertilizers and industrial chemicals. This segment also owns 23 railcars and leases 41 railcars to transport molten sulfur; and leases 132 railcars to transport fertilizer products. Its Natural Gas Liquids segment stores, distributes, and transports natural gas liquids for wholesale deliveries to refineries, industrial NGL users, and propane retailers, as well as owns approximately 2.1 million barrels of underground storage capacity for NGLs. Martin Midstream GP LLC serves as a general partner of the company. Martin Midstream Partners L.P. was founded in 2002 and is based in Kilgore, Texas. MCCLATCHY CO: Seven News Outlets Working Remotely to Cut Costs -------------------------------------------------------------- Tom Jones, writing for Poynter, reports that publishing company McClatchy Co. relocated seven of its news outlets to save costs and because of COVID-19 pandemic. Seven news outlets in the McClatchy chain will work entirely by remote for the rest of the year. McClatchy is moving out of its newsrooms in Miami, Charlotte, Washington, D.C., Columbia (South Carolina) and in three California markets: Modesto, Merced and San Luis Obispo. The moves are expected by August 2020. The goal: to save costs and prioritize jobs over cubicles. That could be key for the 30-paper McClatchy chain, which is going through Chapter 11 bankruptcy reorganization and is expected to be sold. In a statement to Poynter, McClatchy said, "The pandemic has accelerated our organization's need and ability to work remotely. This has led us to look at new ways to find cost savings, including the exit of real estate leases, which our Chapter 11 reorganization allows. We will exit leases in seven locations and focus our resources where it matters: on saving jobs and delivering on our mission of producing strong, independent local journalism for the communities that we serve." Disposing of big, iconic headquarter buildings has happened before, as we've seen with The Philadelphia Inquirer and Chicago Tribune. But this move means eliminating newsrooms altogether, at least for the time being. The goal, for now, is for the outlets to find new newsrooms next year. But those newsrooms could be much smaller if it becomes apparent that journalists can work from home and news outlets can continue to publish remotely. An internal note to McClatchy employees said, "And when we do get back into an office, it will be different. When it is safe again to get back to working as a team in one physical space, we envision an office environment that is more up-to-date and flexible — where we can host visitors, gather and work together in a workspace that complements remote work." If the rest of the year goes well, will newspapers even need to find those new homes? And might other papers follow McClatchy's lead? In a note to readers, Aminda Marques Gonzalez -- president, publisher and executive editor of the Miami Herald and the Nuevo Herald and regional director of McClatchy's Florida news operations -- said, "Since mid-March, most of us have been working from home. From pandemic to protests, we haven't skipped a beat thanks to technology, communication tools that connect us instantaneously and the hard work of our dedicated staff." That's very similar to what Charlotte Observer executive editor Sherry Chisenhall said about that paper moving out of its uptown offices. "Since mid-March 2020, our team has worked effectively from home while providing vital local news coverage in our community," she wrote, "Our journalists have covered two ongoing major news stories, reporting on the pandemic and massive protests of racial inequity nearly around the clock, seven days a week." But, Chisenhall added, "The pandemic has deeply impacted our business, as it has many others. Revenue has fallen, and a timeline of recovery is uncertain. The move from uptown offices helps ensure that we can keep local journalists on the job, giving our community the daily reporting and accountability journalism you expect from us. Our commitment is as strong as ever to informing the community with essential journalism that helps us all take on the challenges ahead." It's an experiment that news outlets across the country will be keeping a close eye on and it could change the business model of newspapers as we now know them. About McClatchy Company The McClatchy Co. (OTC-MNIQQ) -- https://www.mcclatchy.com/ -- operates 30 media companies in 14 states, providing each of its communities local journalism in the public interest and advertising services in a wide array of digital and print formats. McClatchy publishes iconic local brands including the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange American under the symbol MNI. On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with a Plan of Reorganization that will cut $700 million of funded debt in half. McClatchy was estimated to have $500 million to $1 billion in assets and debt of at least $1 billion as of the bankruptcy filing. Judge Michael E. Wiles oversees the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as general bankruptcy counsel; Togut, Segal & Segal LLP as co-bankruptcy counsel with Skadden; Groom Law Group as special counsel; FTI Consulting, Inc. as financial advisor; Evercore Inc. as investment banker; and Ernst & Young LLP as tax services provider. Kurtzman Carson Consultants LLC is the claims agent. MICROVISION INC: Says Substantial Going Concern Doubt Exists ------------------------------------------------------------ MicroVision, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $4,934,000 on $1,469,000 of total revenue for the three months ended March 31, 2020, compared to a net loss of $8,068,000 on $1,851,000 of total revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $6,904,000, total liabilities of $14,178,000, and $7,274,000 in total stockholders' deficit. The Company said that there are factors that raise substantial doubt regarding its ability to continue as a going concern. The Company stated, "Based on our current operating plan that includes anticipated future proceeds from the sale of shares under our existing Purchase Agreement with Lincoln Park and the funds received in April 2020 pursuant to the loan under the Paycheck Protection Program of the 2020 CARES Act, we anticipate that we have sufficient cash and cash equivalents to fund our operations through the fourth quarter of 2020. We will require additional capital to fund our operating plan past that time. We plan to seek to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures." A copy of the Form 10-Q is available at: https://is.gd/bCiDjG MicroVision, Inc. develops PicoP scanning technology that provides high-resolution miniature projection, and three-dimensional sensing and image capture solutions in the United States. It was founded in 1993 and is headquartered in Redmond, Washington. MOBILE MINI: Moody's Withdraws Ba3 CFR Following Debt Repayment --------------------------------------------------------------- Moody's Investors Service has withdrawn its ratings for Mobile Mini, Inc., including the company's Ba3 corporate family rating and the B2 senior unsecured rating, following the announced redemption of all 5.875% Senior Unsecured Notes due 2024, concluding the review for downgrade initiated on 3 March 2020. Withdrawals: Issuer: Mobile Mini, Inc. Corporate Family Rating, Withdrawn, previously rated Ba3 Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated B2 Outlook Actions: Issuer: Mobile Mini, Inc. Outlook, Changed to Rating Withdrawn from Ratings Under Review RATINGS RATIONALE The redemption of the senior unsecured notes will occur as part of the closing of the merger between Mobile Mini and WillScot Corp. on July 1. MOBILESMITH INC: Has $3.3M Net Loss for Quarter Ended March 31 -------------------------------------------------------------- MobileSmith, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3,299,000 on $624,572 of total revenue for the three months ended March 31, 2020, compared to a net loss of $2,176,493 on $740,719 of total revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $1,532,058, total liabilities of $53,358,462, and $51,826,404 in total stockholders' deficit. Chief Executive Officer Jerry Lepore and Chief Financial Officer Gleb Mikhailov said, "As of March 31, 2020, the Company had $43,010,000 of combined face value outstanding under the 2007 and 2014 NPAs. The Company is entitled to request additional notes in an amount not exceeding $15,945,000, subject to the terms and conditions specified in these facilities. The Notes under 2007 and 2014 NPA and subordinated promissory notes to related parties mature in November of 2020 and the Comerica LSA matures in June of 2020. The Company management is actively negotiating an extension of maturity on the 2007 and 2014 NPAs and subordinated promissory notes with related parties by at least two years and refinancing of Comerica LSA by extending its maturity. However, there can be no assurance that the Company will in fact be able to raise additional capital through these facilities or even from other sources on commercially accepted terms, if at all. As such, there is substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at: https://is.gd/0apqvu MobileSmith, Inc., provides procedure management assistance and operational improvement patient/member-facing mobile application services to the healthcare industry in the United States. The company's suite of e-health mobile solutions provides a catalog of ready to deploy mobile app solutions and support services. It operates Peri, a cloud-based surgical and clinical procedure application. The company was formerly known as Smart Online, Inc. and changed its name to MobileSmith, Inc. in July 2013. MobileSmith, Inc. was incorporated in 1993 and is headquartered in Raleigh, North Carolina. MURRAY ENERGY: Sent About 350 Layoff Notices to Employees --------------------------------------------------------- Mike Jones, writing for the Intelligencer, reports that Murray Energy Holdings sent layoff notices to around 350 workers to six subsidiaries in Eastern Ohio as part of the company's bankruptcy restructuring. The federal Worker Adjustment and Retraining Notification filing originally was sent April 1, 2020 and updated it on June 8, 2020 announcing the possible termination of 347 workers on June 17, 2020. The possible layoffs in Belmont County include 64 workers at The Ohio Valley Coal Co.; 23 workers at Murray American Energy Inc.; nine employees at American Natural Gas Inc.; and four workers at The Ohio Valley Transloading Co. In Monroe County, the notices were sent to 210 employees at American Energy Corp. and 37 workers at American Mine Services Inc. Murray Energy also announced in May that about 2,500 of its workers in West Virginia could be laid off. An official with the United Mine Workers of America said the union does not expect any of its 1,800 union miners in West Virginia to be terminated and that the WARN notice was most likely due to Murray undergoing bankruptcy proceedings that began in October 2019. However, the miners at American Energy mine at Beallsville are not unionized, raising questions about whether they or workers at the other Ohio facilities could face termination. Only the four workers at The Ohio Valley Transloading Co. are listed as being represented by the UMWA. Jason Witt, a spokesman for Murray Energy, said he could not comment on the matter Wednesday. Citing billions in debt and a declining demand for its primary product of steam coal, Murray Energy filed for Chapter 11 reorganization in late October after failing to make payments to creditors. The company announced in court filings it planned to change the bankruptcy filing to Chapter 7, which remains in federal court in the Western District of Ohio. About Murray Energy Headquartered in St. Clairsville, Ohio, Murray Energy -- http://murrayenergycorp.com/-- is the largest privately owned coal company in the United States, producing approximately 76 million tons of high quality bituminous coal each year, and employing nearly 7,000 people in the United States, Colombia and South America. Murray Energy now operates 15 active mines in five regions in the United States, plus two mines in Colombia, South America. It operates 12 underground longwall mining systems, 42 continuous mining units, 10 transloading facilities, and five mining equipment factory and fabrication facilities. Murray Energy and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Lead Case No. 19-56885) on Oct. 29, 2019. At the time of the filing, the Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. The cases have been assigned to Judge John E. Hoffman Jr. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as general bankruptcy counsel; Dinsmore & Shohl LLP as local counsel; Evercore Group L.L.C. as investment banker; Alvarez and Marsal L.L.C. as financial advisor; and Prime Clerk LLC as notice and claims agent. The U.S. Trustee for Region 9 appointed creditors to serve on the official committee of unsecured creditors on Nov. 7, 2019. NANO MAGIC: UHY LLP Raises Substantial Going Concern Doubt ---------------------------------------------------------- Nano Magic Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $964,987 on $2,436,010 of total revenues for the year ended Dec. 31, 2019, compared to a net income of $22,072 on $4,500,755 of total revenues for the year ended in 2018. The audit report of UHY LLP states that the Company has recurring losses from operations, limited cash flows from operations, and an accumulated deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2019, showed total assets of $1,320,087, total liabilities of $1,766,943, and a total stockholders' deficit of $446,856. A copy of the Form 10-K is available at: https://is.gd/jNh1Mb Nano Magic Inc. develops and commercializes advanced-performance products enabled by nanotechnology. The Company unites staff and resources in nanotechnology research and development and product commercialization. The Company is based in Bloomfield Hills, Michigan. NATIONAL MEDICAL: Seeks to Hire Kaufman Coren as Special Counsel ---------------------------------------------------------------- National Medical Imaging, LLC and National Medical Imaging Holding Company, LLC seek authority from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Kaufman, Coren & Ress, P.C. as special counsel. The firm will represent Debtors in their case against U.S. Bank N.A. and several others in the U.S. District Court for the Eastern District of Pennsylvania. Kaufman will be compensated on a contingent fee basis. The firm will get 30 percent of the amount recovered from the litigation, plus attorneys' fees awarded by a court against those who will be found liable in connection with the litigation. Kaufman Coren does not hold any interest adverse to Debtors and their bankruptcy estates, according to court filings. The firm can be reached at: Steven M. Coren, Esq. Kaufman Coren & Ress PC 2001 Market St Philadelphia, PA 19103 Phone: +1 215-735-8700 About National Medical National Medical Imaging, LLC and National Medical Imaging Holding Company, LLC provide medical and diagnostic laboratory services with principal place of business located at 1425 Brickell Ave., Apt. 57E, Miami. On June 12, 2020, National Medical Imaging and National Medical Imaging Holding Company filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Penn. Lead Case No. 20-12618). At the time of the filings, each Debtor disclosed assets of $10 million to $50 million and liabilities of the same range. Debtors have tapped Dilworth Paxson LLP as their bankruptcy counsel, and Kaufman, Coren & Ress, P.C. and Karalis P.C. as their special counsel. Prior to Debtors' voluntary Chapter 11 filing, DVI Receivables Trusts and other creditors filed involuntary Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 05-12714 and 05-12719) against Debtors on March 3, 2005. In 2014, National Medical Imaging hit U.S. Bank N.A. and eight others with a $50 million lawsuit in Pennsylvania federal court alleging the bank ruined its business by forcing it into involuntary bankruptcy proceedings just as it was beginning to implement a turnaround plan. National Medical Imaging claims that the involuntary bankruptcy petitions ultimately destroyed its business even though the cases were ultimately tossed. NEIMAN MARCUS: Hudson Yards Location Likely to Become Office Spaces ------------------------------------------------------------------- Jeff Yeung, writing for Hypebeast, reports that the Hudson Yards, New York location once leased by American department store company Neiman Marcus is likely to be converted and offered for lease as office spaces. Earlier in May 2020, Neiman Marcus filed for Chapter 11 bankruptcy protection. Reports now suggest that the retailer will be closing its Hudson Yards branch, leaving the retail space open, which according to The New York Post is likely to convert into office spaces. In particular, the landlord for the three-story, 188,000-square-foot area is now offering the lot to various office tenants. Hudson Yards' developers Related Companies and Oxford Properties are both also marketing space at the establishment, offering a total of 380,000 square-feet to potential office tenants. The move marks a massive reversal by the duo, which originally spent $80 million USD to build out the mall now known as Shops at Hudson Yards. At the same time, Neiman Marcus is opening to keep its existing stores open, and gradually reopen more as social distancing and lockdown rules begin to relax. "Currently, we have 13 stores open and intend to open 7 more this week, and more in the coming weeks as local and state mandates allow and as we feel it is safe to do so." It also insists that the "restructuring plan is focused on alleviating our debt load, not mass store closures." About Neiman Marcus Group Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is a luxury omni-channel retailer conducting store and online operations principally under the Neiman Marcus, Bergdorf Goodman, and Last Call brand names. It also operates the Horchow e-commerce website offering luxury home furnishings and accessories. Since opening in 1907 with just one store in Dallas, Neiman Marcus and its affiliates have strategically grown to 67 stores across the United States. Weeks after being forced to temporarily shutter stores due to the coronavirus pandemic, Neiman Marcus Group and 23 affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32519) on May 7, 2020, after reaching an agreement with a significant majority of our creditors to undergo a financial restructuring that will substantially reduce the Company's debt load, and provide access to considerable financing to ensure business continuity. Kirkland & Ellis LLP is serving as legal counsel to the Company, Lazard Ltd. is serving as the Company's investment banker, and Berkeley Research Group is serving as the Company's financial advisor. Stretto is the claims agent, maintaining the page https://cases.stretto.com/NMG Judge David R. Jones oversees the cases. The Extended Term Loan Lenders are represented by Wachtell, Lipton, Rosen & Katz as legal counsel, and Ducera Partners LLC as investment banker. The Noteholders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel and Houlihan Lokey as investment banker. NEW WOODRIDGE: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The Office of the U.S. Trustee on June 30 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of New Woodridge, LLC. About New Woodridge New Woodridge, LLC, owns in fee simple an 18-hole golf course and building located at 301 Woodridge Drive, Mineral Wells, W.Va. having a current value of $850,000. New Woodridge sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 20-60026) on March 10, 2020. At the time of the filing, Debtor disclosed $1,096,000 in assets and $1,004,451 in liabilities. Judge Frank W. Volk Usdj oversees the case. Caldwell & Riffee is the Debtor's legal counsel. NN INC: Needs to Amend Financial Covenant to Remain Going Concern ----------------------------------------------------------------- NN, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $248,191,000 on $199,745,000 of net sales for the three months ended March 31, 2020, compared to a net loss of $19,518,000 on $213,256,000 of net sales for the same period in 2019. At March 31, 2020, the Company had total assets of $1,325,153,000, total liabilities of $1,150,587,000, and $78,902,000 in total stockholders' equity. The Company said, "We are in negotiations with our lenders to amend the financial leverage ratio covenant; however, there can be no assurance that we will be successful in such efforts. Accordingly, we believe there is substantial doubt about our ability to continue as a going concern for the twelve-month period following the date of this report." A copy of the Form 10-Q is available at: https://is.gd/V5wDF5 NN, Inc., is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies for the medical, aerospace and defense, electrical, automotive, and general industrial markets. NORTHERN OIL: Soliciting Consents to Amend Notes Indenture ---------------------------------------------------------- Northern Oil and Gas, Inc., commenced a consent solicitation to solicit the consent of holders of its outstanding Senior Secured Second Lien Notes due 2023 for amendments to the indenture governing the Senior Secured Notes. "We have already significantly reduced our total debt outstanding in 2020," commented Chad Allen, Northern's chief financial officer. "Our proposed amendments to the Senior Secured Notes would improve our flexibility to work with noteholders to continue to further reduce debt levels and interest expense." The Proposed Amendments would amend the Indenture to remove in its entirety the "no partial inducements" covenant and allow the Company to offer consideration to any holder or group of holders of Notes as an inducement to any consent to amend the Indenture without offering to pay such consideration to all holders of the Notes. The Consent Solicitation will expire at 5:00 p.m., New York City time, on July 15, 2020, or such later time and date to which the solicitation is extended or earlier terminated. Consents with respect to the Senior Secured Notes may not be revoked after the Expiration Time. The Consent Solicitation is contingent upon the satisfaction of certain conditions, including, without limitation, the receipt of consents of holders of at least a majority of the aggregate principal amount of the Senior Secured Notes outstanding (excluding any Senior Secured Notes held by the Company or its affiliates) to the Proposed Amendments by the Expiration Time. If any of the conditions to the Consent Solicitation is not satisfied, the Company is not obligated to accept any consent in the Consent Solicitation and may, in its sole discretion, terminate, extend or amend the Consent Solicitation. Subject to the terms and conditions of the Consent Solicitation, upon receipt of consents of holders of more than 50% of the aggregate principal amount of outstanding Senior Secured Notes (excluding any Senior Secured Notes held by the Company or its affiliates) to the Proposed Amendments, holders of Senior Secured Notes who validly deliver (and do not validly revoke) their consents prior to the Expiration Time will receive consent consideration equal to $1.00 per $1,000 in principal amount of Senior Secured Notes held by such Consenting Holder. The payment of the Consent Fee is subject to the terms and conditions of the Consent Solicitation. The complete terms and conditions of the Consent Solicitation are set forth in the Consent Solicitation Statement that is being sent to the holders of the Senior Secured Notes. Ipreo LLC is acting as the information agent and tabulation agent for the Consent Solicitation. Questions regarding the Consent Solicitation and requests for copies of the Consent Solicitation Statements may be directed to Ipreo LLC at (888) 593-9546 (toll free) or by email to ipreo-consentSolicitation@ihsmarkit.com. About Northern Oil Northern Oil and Gas, Inc. -- http://www.northernoil.com/-- is an exploration and production company with a core area of focus in the Williston Basin Bakken and Three Forks play in North Dakota and Montana. Northern Oil recorded a net loss of $76.32 million for the year ended Dec. 31, 2019. As of March 31, 2020, the Company had $2.23 billion in total assets, $1.22 billion in total liabilities, and $1.01 billion in total stockholders' equity. * * * As reported by the TCR on April 14, 2020, S&P Global Ratings lowered its issuer credit rating on Northern Oil and Gas Resources to 'CCC+' from 'B-'. The outlook is negative. "Our downgrade reflects the company's tight liquidity and history of distressed exchanges. The recent collapse in oil prices increases the risk that the company's reserve-based lending (RBL) facility size could be reduced at its next bank redetermination, which could further strain its limited capacity," S&P said. OLB GROUP: eVance Signs 4,277 Square Feet Georgia Office Lease -------------------------------------------------------------- eVance, Inc., an indirect, wholly owned subsidiary of The OLB Group, Inc., entered into a Lease Agreement dated June 24, 2020 with Pergament Lodi, LLC relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for 39 months commencing Sept. 1, 2020. The monthly base rent is $8,019.38 for the first 12 months increasing thereafter to $8,767.85. The total rent for the entire lease term is $315,043.90 and $8,767.85 is payable as a security deposit. The first three months of rent will be abated so long as eVance is not in default of any portion of the Lease. The agreed use of the property is for general administrative office use. About OLB Group Headquartered in New York, The OLB Group, Inc. -- http://www.olb.com/-- is a commerce service provider that delivers fully outsourced private label shopping solutions to highly trafficked websites and retail locations. The Company provides end-to-end e-commerce, mobile and retail solutions to customers. These services include electronic payment processing, cloud-based multi-channel commerce platform solutions for small to medium-sized businesses and crowdfunding services. The Company is focused on providing these integrated business solutions to merchants throughout the United States through three wholly-owned subsidiaries, eVance, Inc., Omnisoft.io, Inc., and CrowdPay.us, Inc. OLB Group reported a net loss of $1.34 million for the year ended Dec. 31, 2019, compared to a net loss of $1.39 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $11.50 million in total assets, $14.76 million in total liabilities, and a total stockholders' deficit of $3.27 million. OUTDOOR BY DESIGN: 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 Outdoor By Design, LLC, according to court dockets. About Outdoor By Design Outdoor By Design, LLC, a manufacturer of outdoor furnishings, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-04253) on June 1, 2020. At the time of the filing, the Debtor disclosed $3,090,093 in assets and $10,543,170 in liabilities. Debtor has tapped Law Offices of Benjamin Martin as its legal counsel. PG&E CORP: Bankruptcy Plan Near Approval ---------------------------------------- Brian Guiney of Patterson Belknap Webb & Tyler LLP wrote on JDSupra on PG&E Corp.'s $58B bankruptcy plan moving closer to approval: In January 2019, Pacific Gas and Electric filed for bankruptcy, which was primarily the result of potential liability stemming from catastrophic California wildfires. Since then, PG&E has proposed an approximately $58 billion-dollar reorganization plan that includes settlements exceeding $25 billion to resolve claims by wildfire victims and regulatory agencies.[1] The plan anticipates relying in part on "critical protections" and support from Assembly Bill 1054 ("AB 1054"), which established a fund to help compensate covered wildfire victims. However, in order to participate in the state wildfire fund, PG&E must resolve its insolvency proceedings by June 30, 2020, obtain approval of the reorganization plan from the bankruptcy court -- in particular that "the plan of reorganization fairly satisfies prepetition wildfire claims", and obtain approval from the California Public Utilities Commission by demonstrating that PG&E meets certain criteria.[2] Since our last update, PG&E has continued to make progress towards eligibility for AB 1054 and an eventual exit from bankruptcy. On May 22, 2020, the wildfire victims to whom PG&E would owe $13.5 billion under the plan voted to approve the proposed plan.[3] More than 88% of wildfire victims were in favor of the proposed plan,[4] which calls for $6.75 billion of the $13.5 billion to paid in cash and approximately $6.75 billion in stock.[5] After receiving approval from the wildfire victims, PG&E's plan was also unanimously approved by the California Public Utilities Commission after PG&E.[6] To move forward with the plan and participate in the state wildfire fund created by AB 1054, PG&E now requires approval from the Bankruptcy Judge. The Bankruptcy Court confirmation hearings started on May 27, 2020, and closing arguments will likely run through June 5, 2020.[7] PG&E, through counsel, noted that the plan has received support from major stakeholders, that it is financially prepared for contingencies, and that a denial of the plan would mean that PG&E misses the important June 30, 2020 deadline to participate in AB 1054's wildfire victim fund, which would result in further delays in payments to wildfire victims.[8] [1] Mark Chediak, PG&E Wins California Approval of Bankruptcy Plan, Bloomberg Business, May 28, 2020, updated May 29, 2020 (accessed June 3, 2020). News [2] Gavin Newsome, Re: Draft Amended Plan of Reorganization for PG&E Corporation and Pacific Gas and Electric Company dated as of Dec. 6, 2019, Office of the Governor, December 13, 2019. [3] Nicholas Iovino, Fire Victims Vote in Favor of PG&E Bankruptcy Plan, Courthouse News Service, May 22, 2020 (accessed June 3, 2020). [4] Nicholas Iovino, Fire Victims Vote in Favor of PG&E Bankruptcy Plan, Courthouse News Service, May 22, 2020 (accessed June 3, [5] Nicholas Iovino, PG&E Predicts Doom If Bankruptcy Plan is Rejected, Courthouse News Service, June 3, 2020 (accessed June 4, 2020). Some wildfire victims expressed reservations about being paid in stock, given the potential volatility of the value of PG&E stock, but this issue is not expected to be a bar to confirmation. [6] Business Wire, CPUC Approves PG&E's Chapter 11 Plan of Reorganization, May 28, 2020 (accessed June 4, 2020). [7] Nicholas Iovino, PG&E Predicts Doom If Bankruptcy Plan is Rejected, Courthouse News Service, June 3, 2020 (accessed June 4, 2020). [8] Mark Chediak, PG&E Lawyer Asks for Bankruptcy Confirmation in Closing Argument, Bloomberg News, June 3, 2020 (accessed June 4, 2020). About PG&E Corporation PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, is special regulatory counsel. Munger Tolles & Olson LLP, is special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PG&E CORP: Selects Members of New Board of Directors ---------------------------------------------------- In connection with its expected emergence from Chapter 11, PG&E Corporation ("PG&E") announced on June 10, 2020 the selection of a new Board of Directors upon emergence to help guide the company post-bankruptcy. The new Board will consist of 14 members, 11 of whom are new and will be officially appointed to join the Board at or prior to emergence from bankruptcy and following required bankruptcy court submissions. It is expected that the Board of Directors of utility subsidiary Pacific Gas and Electric Company will largely be the same as PG&E. The changeover of the Board is part of PG&E's efforts to transform into a stronger company in order to improve operations and safety and better serve its customers and communities. The 11 new Board members offer substantial expertise in key areas critical to the company's work. These include utility operations and management, safety and environment, risk management, customer engagement, innovation and technology, regulatory affairs (state and federal), audit and finance, corporate governance, nuclear operations and decommissioning, and human capital and executive compensation. In addition, six of the 11 new directors are from California and have made their careers in the state, gaining extensive knowledge of the communities PG&E serves and the political, social, and physical environment in which the company operates. Nora Mead Brownell, the current Chair of the PG&E Board, said: "Putting in place a new Board is a critical component of PG&E's plan to emerge from bankruptcy as a reimagined utility—one that is in touch with its customers and communities and is safe, reliable, financially stable, and capable of helping California meet its energy goals. I want to thank all of the retiring directors—as well as all of the employees—who together have worked so hard to navigate the very difficult issues this company has faced. This is the right time for a changeover given that the company will soon emerge from bankruptcy and start a new chapter. I am confident that our newly appointed Interim CEO, Bill Smith, and the rest of our senior management team will work collaboratively with the new Board to help PG&E continue to make fundamental changes and move forward." The new Board will be comprised of the following (remaining Board members indicated with an asterisk): Rajat Bahri – Currently CFO of Wish, a mobile eCommerce platform (2016-present); previously CFO of Jasper Technologies (2013-2016), CFO of Trimble Navigation (2005-2013), and CFO of Kraft Canada (2001-2004). Beyond his financial expertise, Bahri brings decades of experience in executive compensation, enterprise risk management, and corporate governance and the operation of audit committees. * Cheryl Campbell – Currently consultant, providing safety and leadership consulting and has 35 years of energy experience in interstate pipelines and utilities; previously 13 years at Xcel Energy (2004-2018), member of the U.S. Department of Transportation's Gas Pipeline Advisory Committee (2013-2018), and member of the independent panel assessing the safety of 11 gas utilities in Massachusetts following the September 2018 explosions and fires in Merrimack Valley (2018-2020). Campbell has extensive experience with risk management, employee and public safety, and regulatory, environmental, and operating plans in the gas industry. * Kerry Cooper – Most recently President and COO of Rothy's (2017-2020); previously CEO of Choose Energy (2013-2016), COO and CMO of ModCloth (2010-2013), VP, Global eCommerce of Walmart (2010), and CMO and VP, Marketing and Strategy of Walmart (2008-2010). Cooper has extensive experience in the consumer space, leveraging customer insights to create a better customer experience through a multi-channel approach, including mobile and online strategies. * Jessica Denecour – Most recently Senior VP and CIO of Varian Medical Systems; previously numerous roles at Agilent Technologies, including VP of Global IT Applications and Solution Services (2005), VP of Global Infrastructure and Operations Services (2000-2004), and Senior Director and CIO of Test and Measurement Group (1999-2000), and 16 years at Hewlett Packard. Denecour joins the Board with decades of experience in information technology and cybersecurity, having led IT transformations that encompassed customer, voice and data networks, data center operations, security, and technical computing. * Admiral Mark Ferguson – Currently Senior Advisor to private consultancies and the Institute for Defense Analysis and NATO Allied Command Transformation; previously 38-year career in the U.S. Navy, retiring in 2016 after having served as Commander of the U.S. Naval Forces in Europe and Africa and NATO Allied Joint Force Command (2014-2016) and Vice Chief of Naval Operations (2011-2014). Through Ferguson's leadership positions in the U.S. Navy, he brings the PG&E Board decades of experience in nuclear reactor operations, risk and change management, cyber preparedness, legislative initiatives, personnel operations, and the efficient management of transportation and equipment assets. * Bob Flexon - Most recently CEO of Dynegy (2011-2018); previously CFO of UGI (2001-2011). Flexon's expertise is in finance and accounting in the chemicals and oil and gas sectors. He brings experience in safety, workforce organization, and turnarounds having led both Dynegy's 2011 bankruptcy and its culture transformation and M&A growth post-emergence. * Craig Fugate – Currently Chief Emergency Management Officer of One Concern (2017-present); previously Administrator of the Federal Emergency Management Agency (FEMA) (2009-2017), and Director of the Florida Division of Emergency Management (2001-2009). Fugate joins the Board with decades of experience at the local, state, and federal levels in disaster preparedness and management. He has overseen preparation and response efforts for disasters such as wildfires and hurricanes, health crises, and national security threats. Arno Harris – Currently Managing Partner of AHC (2015-present); previously Executive Chair and CEO of Alta Motors (2017-2018), Founder, CEO and Board Chair of Recurrent Energy (2006-2015), CEO and General Manager of EI Solutions (2005-2006), and Founder and CEO of Prevalent Power, Inc. (2001-2004). Harris has dedicated his career to solving climate change through the intersection of technology, business, and public policy. He has extensive experience in the clean energy and electric mobility sectors with a focus on innovation, change, and advocacy. * Mike Niggli – Most recently 13 years at Sempra Energy, including President and COO of San Diego Gas & Electric (2010-2013), COO of San Diego Gas & Electric (2007-2010), COO of Southern California Gas (2006-2007), and President of Sempra Generation (2000-2006); previously Chairman, CEO and President of Sierra Pacific Resources/Nevada Power Company (1998-2000). Niggli brings long-time leadership experience in regulated utilities. He has strong relationships across the industry with significant accomplishments in areas of reliability, customer satisfaction, supplier diversity, and climate-oriented management. * Dean Seavers – Most recently President and Executive Director of National Grid (2015-2020); previously Founder, CEO and Board Member of Red Hawk Fire & Security (2012-2018), President of Global Services of United Technologies Fire and Security (2010-2011), and President and CEO of GE Security (2007-2010). Following a long career in managing operations in commercial and residential security companies, Seavers led National Grid's business transformation, which included a focus on safety culture and performance. He is experienced in customer-centric initiatives and led the division of National Grid's utilities into jurisdictions with jurisdictional presidents. * Bill Smith – Currently Interim CEO of PG&E Corporation; previously 37 years with AT&T Technology Operations at AT&T Services, Inc. Smith brings to PG&E decades of operational and transformation experience in large and heavily regulated, consumer-facing organizations with expertise in data center and information technology operations, field operations, planning, engineering, construction, provisioning, and maintenance. * Dara Treseder – Currently CMO of Carbon (2018-present); previously CMO of GE Business Innovations and GE Ventures (2017-2018), and Global Head of Demand Generation of Apple's FileMaker Division (2015-2017). Treseder is experienced in leading marketing and communications in highly regulated industries and driving customer engagement to increase growth. She brings expertise and focus to digital transformations. * Ben Wilson – Currently Chairman of national law firm Beveridge & Diamond PC (2017-present), where he has spent his career since 1986. Through his work litigating and advising clients on environmental issues as well as his service as Monitor for the Duke Energy coal ash spill remediation project and as Deputy Monitor in the Volkswagen emissions proceedings, Wilson brings extensive experience in workplace safety, relevant environmental and wildlife protection legislation, and the need for communication, accountability, and transparency in dealing with customers and regulators. * John Woolard – Currently CEO of Meridian Energy and Senior Partner at Activate Capital; previously President and CEO of BrightSource Energy (2006-2013), CEO of Silicon Energy Corp. (1998-2003), and VP of Energy at Google (2014-2016). Woolard has more than 20 years of leadership experience in the energy technology sector, developing world-class clean energy projects, and has extensive expertise in software and grid modernization solutions as well as California's regulatory and policy goals in the energy sector. About PG&E Corp. PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. PG&E Corp. and Pacific Gas employ approximately 24,000 regular employees, approximately 20 of whom are employed by PG&E Corp. of Pacific Gas' regular employees, approximately 15,000 are covered by collective bargaining agreements with local chapters of three labor unions: (i) the International Brotherhood of Electrical Workers; (ii) the Engineers and Scientists of California; and (iii) the Service Employees International Union. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, said they are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility said it faces an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are serving as PG&E's legal counsel, Lazard is serving as its investment banker and AlixPartners, LLP is serving as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities. Morrison & Foerster LLP, is special regulatory counsel. Munger Tolles & Olson LLP, is special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. PPG INDUSTRIES: Aims $170M Annual Savings in Restructuring ---------------------------------------------------------- Carl Surran of Seeking Alpha reports that PPG Industries Inc. is targeting to obtain annual savings of $170 million in its corporate restructuring efforts. PPG says it has initiated restructuring actions including a "voluntary separation program" to reduce its global cost structure by $160 million to $170 million in annual pretax cost savings. The company says it will record a restructuring charge of $160 million to $180 million pre-tax, with nearly all of it related to employee severance. "Given the broad economic impact relating to the COVID-19 pandemic and the recovery timeline in a few end-use markets, we are taking decisive action to further adjust our cost base," CEO Michael McGarry says. PPG also says May sales volumes fell less than 30% vs. the prior-year month after April's 35% decline, which it says were "modestly" better than originally expected. About PPG Industries PPG Industries, Inc., manufactures and distributes paints, coatings, and specialty materials worldwide. The company was founded in 1883 and is headquartered in Pittsburgh, Pennsylvania. PQ NEW YORK: Law Firm of Russell Represents Utility Companies ------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the Law Firm of Russell R. Johnson III, PLC submitted a verified statement that it is representing the utility companies in the Chapter 11 cases of PQ New York, Inc. et al. The names and addresses of the Utilities represented by the Firm are: a. Consolidated Edison Company of New York, Inc. Attn: Rosalie Zuckerman, Esq. 4 Irving Place – Room 1875S New York, NY 1003 b. PECO Energy Company The Potomac Electric Power Company Attn: Lyn R. Zack, Esq. Assistant General Counsel Exelon Corporation 2301 Market Street, S23-1 Philadelphia, PA 19103 c. Southern California Gas Company Attn: Cranston J. Williams, Esq. Office of the General Counsel 555 W. Fifth Street, GT14G1 P.O. Box 30337 Los Angeles, CA 90013-1034 The nature and the amount of claims (interests) of the Utilities, and the times of acquisition thereof are as follows: a. The following Utilities have unsecured claims against the above-referenced Debtors arising from prepetition utility usage: Consolidated Edison Company of New York, Inc., PECO Energy Company and Southern California Gas Company. b. The Potomac Electric Power Company held prepetition deposits that secured all prepetition debt. c. For more information regarding the claims and interests of the Utilities in these jointly-administered cases, refer to the Objection of Certain utility Companies To the Motion of Debtors For Entry of Interim and Final Orders (I) Prohibiting Utility Companies From Altering or Discontinuing Service on Account of Prepetition Invoices, (II) Deeming Utility Companies Adequately Assured of Future Performance and (III) Establishing Procedures For Resolving Requests For Additional Adequate Assurance (Docket No. 331) filed in the above-captioned, jointly-administered, bankruptcy cases. The Law Firm of Russell R. Johnson III, PLC was retained to represent the foregoing Utilities in June 2020. The circumstances and terms and conditions of employment of the Firm by the Companies is protected by the attorney-client privilege and attorney work product doctrine. The Firm can be reached at: Russell R. Johnson III, Esq. LAW FIRM OF RUSSELL R. JOHNSON III, PLC 2258 Wheatlands Drive Manakin-Sabot, VA 23103 Tel: (804) 749-8861 Fax: (804) 749-8862 Email: russell@russelljohnsonlawfirm.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/3npaWj About PQ New York Based in New York, PQ New York, Inc. is a wholly-owned subsidiary of PQ Licensing SA, a Belgian company, and operated 98 restaurants in the United States under the trade name Le Pain Quotidien. On May 27, 2020, PQ New York and its U.S. affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11266). PQ New York was estimated to have $100 million to $500 million in assets and liabilities at the time of the filing. The Debtors tapped Richards, Layton & Finger, P.A. as its legal counsel, and SSG Advisors, LLC as its investment banker. PricewaterhouseCoopers LLP is the interim management services provider. Donlin, Recano & Company, Inc., is the claims agent. PRESSURE BIOSCIENCE: Posts $4.3 Million Net Loss in First Quarter ----------------------------------------------------------------- Pressure Biosciences, Inc. reported a net loss attributable to common shareholders of $4.28 million on $253,873 of total revenue for the three months ended March 31, 2020, compared to a net loss attributable to common shareholders of $3.47 million on $510,240 of total revenue for the three months ended March 31, 2019. As of March 31, 2020, the Company had $1.83 million in total assets, $15.48 million in total liabilities, and a total stockholders' deficit of $13.66 million. Pressure Biosciences said, "We have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of March 31, 2020, we did not have adequate working capital resources to satisfy our current liabilities and as a result, we have substantial doubt regarding our ability to continue as a going concern. We have been successful in raising cash through debt and equity offerings in the past and ... we received $2.3 million in net proceeds from loans in the first three months of 2020. We have efforts in place to continue to raise cash through debt and equity offerings. "We will need substantial additional capital to fund our operations in future periods. If we are unable to obtain financing on acceptable terms, or at all, we will likely be required to cease our operations, pursue a plan to sell our operating assets, or otherwise modify our business strategy, which could materially harm our future business prospects." Net cash used in operations for the three months ended March 31, 2020 was $1,364,639 as compared to $1,617,924 for the three months ended March 31, 2019. Net cash used in investing activities for the three months ended March 31, 2020 was $0 as compared to $12,615 for the three months ended March 31, 2019. Net cash provided by financing activities for the three months ended March 31, 2020 was $1,366,833 as compared to $1,797,135 for the same period in the prior year. The cash flow from financing activities of the three months ended March 31, 2019 included $1,260,000 of proceeds from the sale of preferred stock which did not recur in 2020. This decrease was offset by a increase in net convertible debt borrowings. A full-text copy of the Quarterly Report is available for free at the Securities and Exchange Commission's website at: https://is.gd/3V2b84 About Pressure Biosciences Headquartered in South Easton, Massachusetts, Pressure Biosciences, Inc. -- http://www.pressurebiosciences.com/-- develops and sells innovative, broadly enabling, pressure-based platform solutions for the worldwide life sciences industry. Its solutions are based on the unique properties of both constant (i.e., static) and alternating (i.e., pressure cycling technology, or "PCT") hydrostatic pressure. PCT is a patented enabling technology platform that uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels to safely and reproducibly control bio-molecular interactions (e.g., cell lysis, biomolecule extraction). Pressure Biosciences recorded a net loss of $11.66 million for the year ended Dec. 31, 2019, compared to a net loss of $9.70 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $1.82 million in total assets, $13.87 million in total liabilities, and a total stockholders' deficit of $12.05 million. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 14, 2020 citing that the Company has a working capital deficit, has incurred recurring net losses and negative cash flows from operations. These conditions raise substantial doubt about its ability to continue as a going concern. Preventing Becoming an Unwary Creditor in the Bankruptcy Proceeding ------------------------------------------------------------------- Michael Kelley and James Timko of Shutts & Bowen LLP wrote on JDSupra an article titled "Avoid Becoming an Unwary Creditor in your Business Partner's Bankruptcy Proceeding": The COVID-19 pandemic has created not just a health crisis, but a financial crisis as well. Several companies, that you may be doing business with currently, are treading water trying to avoid drowning in a sea of unfulfilled obligations. As the current disruption to the business market continues to create financial distress for a number of companies, businesses may be days away from initiating bankruptcy proceedings – actions that may blindside partners who rely on them. Proactive parties who want to avoid becoming unwary creditors in their business partner's bankruptcy proceedings, can take action now in order to salvage worthy business relationships, secure peace of mind and (perhaps) preemptively rescue the business/project. * First - learn to identify the tell-tale signs of Financial Distress * Second - take proactive steps to mitigate your risk * Finally - strategize cooperatively to see the project thru to successful completion Warnings of Financial Distress Although there are several indicators which may point to imminent financial distress, the following signs are some of the most commonly identified warnings: 1. Termination or Resignation of Key Management/Leadership/Board Members - If your business partner is letting go of high-performance/high-salary personnel, you might need to do some additional investigation into the partner's financial well-being. While turnover is not always a critical sign, it is possible that your partner is trying to conserve cash, avoid accountability or worse. 2. Look for Liens - Different types of public record liens can mean different things - if there is a mortgage, a second mortgage, a new UCC financing statement on existing inventory or equipment, or a construction lien claiming non-payment - all of these could be advance warning of your business partner experiencing financial distress. 3. Search the News and Internet for Information Specific to your Business Partner – Look for evidence of significant financial problems that your partner's industry might be facing – for example, certain sectors of the real estate market are underdoing severe compression. Similarly in the construction industry, if current are projects being shut down via Stop Work Orders, if certain projects have even been abandoned, or if it appears that planned future projects might not be moving forward – these may be signs of disruption in future business. If your business partner is in a segment that is experiencing disproportionate impact due to COVID-19 and resulting government and community shutdowns, it is very likely that they will be financially impacted by these problems. Bad news about an industry doesn’t necessarily mean your business partner is going to experience financial distress as a certainty, but it might be enough to look a little deeper, stay alert, or to even pick up the phone. 4. Relationship/Business Changes – Are there changes in your business partner's behavior and performance? Have payment terms changed? Are they servicing customers they may not normally service? Did they suddenly expand or retract? Are other people in the industry expressing concerns or talking? Is your service representative the same person, are they happy, over worked, do they have any complaints? Subtle cues that happen over time will often tell you more than you may realize and it does not need to be actions of executives, the people on the frontline often reveal the most. 5. Social Media and Client Comments or Reviews - Today, nothing escapes social media - whether good or bad - and people are constantly sharing their opinions about everything. While most take social media comments and reviews with a grain of salt, multiple comments about unresponsiveness, lack of follow-thru or decreased quality of work may be a sign that your business partner is experiencing some sort of financial distress. Mitigating Your Risk When facing a business partner's financial distress, you should take immediate preventative action to mitigate your own risk by contacting a competent business attorney who can capably assess your level of risk and advise on work-out solutions. Business attorneys at Shutts & Bowen have substantial experience in proactively and practically handling the challenges and potential pitfalls related to industry challenges and financial distress. We can provide the due diligence and the strategies to hedge unnecessary losses and to prevent unnecessary exposure if your business partner files for bankruptcy, including securing debts, utilizing third-party obligors, and changing billing practices. Our attorneys can help avoid possible disruption to existing business and long-term relationships, while keeping cost-efficiencies top of mind. The attorneys at Shutts & Bowen continue to closely monitor the rapid developments taking place in connection to the current crisis and offer guidance to clients in these uncertain times on all areas impacted by the COVID-19 global pandemic, from construction and development related issues, such as force majeure, to nuanced issues involving creditors' rights and bankruptcy, government, government contracting and loan programs; federal and state tax-related questions; significant labor and employment questions and concerns; all aspects of financial services and real estate matters; and health care. Additionally, if you have a strong relationship with your business partner, providing them the space to openly discuss the current economic climate, mutual challenges that everyone is facing, or particular concerns that you might have - may open up excellent opportunities for dialogue, to find workable paths forward (and might expose you to some great insight you did not already possess). Effective Strategies for Dealing with Financial Distress Solid legal counsel can be a huge help in the strategic management of financial distress - particularly if you are in the real estate investment, construction and development space. The most effective strategies involve a thorough understanding of business relationships and dynamics of the assets at stake. Experience and skill in discovery, work-outs and bankruptcy proceedings, and alternative dispute resolution strategies can also prove to be invaluable. Proactive measures taken by you (the relationship counterpart) in tandem with solid legal counsel can help you avoid becoming an unwary creditor in your business partner’s bankruptcy proceeding. PROFESSIONAL SALES: Seeks to Hire Carter Arnett as Special Counsel ------------------------------------------------------------------ Professional Sales, L.P. seeks authority from the U.S. Bankruptcy Court for the Northern District of Texas to hire Carter Arnett PLLC as its special litigation counsel. Pre-petition, the Debtor engaged Carter Arnett to represent the Debtor in state court litigation against its former employee, Darcy Mochel, and her daughter, Kaela Mochel Joseph, for, inter alia, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, theft, and civil conspiracy that stemmed from the embezzlement. The Debtor also engaged Carter Arnett to represent it against Frost for, inter alia, its breach of the duty of ordinary Carter Arnett that allowed Darcy Mochel to obtain the Fraudulent Loan and advances on the phantom units. The Debtor is continuing to pursue all legal and criminal remedies against its former employee. Carter Arnett, on behalf of the Debtor, filed an adversary proceeding (the Adversary Proceeding) against Frost on the June 1, 2020 for, inter alia, its breach of the duty of ordinary Carter Arnett that allowed Darcy Mochel to obtain the Fraudulent Loan and advances on the phantom units. The Debtor seeks to employ Carter Arnett as special litigation counsel to assist Forshey & Prostok, LLP, the Debtor's proposed bankruptcy counsel in this Carter Arnett. The current hourly rates charged by Carter Arnett are: J. Robert Arnett, II $500 Michael L. Gaubert $500 Other Firm Attorneys $300 to $400 Paralegals / Legal Assistants $140 Carter Arnett was paid a pre-petition retainer in the amount of $25,000 by the Debtor. J. Robert Arnett, II, Esq., attorney at Carter Arnett, assured the court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: J. Robert Arnett, II, Esq. Carter Arnett PLLC Campbell Centre II 8150 N. Central Expressway, Suite 500 Dallas, TX 75206 Phone: (214) 550-8188 Fax: (214) 550-8185 About Professional Sales, L.P. Professional Sales, L.P. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-41922) on May 31, 2020. At the time of filing, the Debtor estimated $1,000,001 to $10 million in both assets and liabilities. Jeff P. Prostok at Forshey & Prostok, LLP represents the Debtor as counsel. PROFESSIONAL SALES: Seeks to Hire Forshey & Prostok as Counsel -------------------------------------------------------------- Professional Sales, L.P. seeks authority from the U.S. Bankruptcy Court for the Northern District of Texas to hire Forshey & Prostok, 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 rights, powers and duties as a debtor and debtor-in-possession continuing to operate and manage its business and assets; (b) advise the Debtor concerning, and assisting in the negotiation and documentation of, agreements, debt restructurings, and related transactions; (c) review the nature and validity of liens asserted against the property of the Debtor and advise the Debtor concerning the enforceability of such liens; (d) advise the Debtor concerning the actions that it might take to collect and to recover property for the benefit of the Debtor's estate; (e) prepare on behalf of the Debtor all necessary and appropriate applications, motions, pleadings, proposed orders, notices, and other documents, and review all financial and other reports to be filed in this chapter 11 case; (f) advise the Debtor concerning, and preparing responses to, applications, motions, pleadings, notices and other papers that may be filed and served in this chapter 11 case; (g) counsel the Debtor in connection with the formulation, negotiation and promulgation of one or more plans of reorganization and related documents; (h) perform all other legal services for and on behalf of the Debtor that may be necessary or appropriate in the administration of this chapter 11 case or in the conduct of the bankruptcy case and the Debtor's business, including advise and assisting the Debtor with respect to debt restructurings, asset dispositions, and general business, tax, finance, real estate and litigation matters; and (i) provide all such other legal services as may be necessary or appropriate in connection with the bankruptcy case. Forshey & Prostok will be paid at these hourly rates: Jeff P. Prostok $675 Dylan T.F. Ross $275 Other Firm Attorneys $275 to $625 Paralegals / Legal Assistants $175 to $255 Forshey & Prostok will also be reimbursed for work-related expenses incurred. Jeff Prostok, Esq., a partner at Forshey & Prostok, assured the court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Forshey & Prostok can be reached at: Jeff P. Prostok, Esq. Forshey & Prostok, LLP 777 Main St., Suite 1290 Fort Worth, TX 76102 Tel: (817) 877-8855 Fax: (817) 877-4151 Email: jprostok@forsheyprostok.com About Professional Sales, L.P. Professional Sales, L.P. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-41922) on May 31, 2020. At the time of filing, the Debtor estimated $1,000,001 to $10 million in both assets and liabilities. Jeff P. Prostok at Forshey & Prostok, LLP represents the Debtor as counsel. PROGENICS PHARMA: Needs More Capital to Remain as a Going Concern ----------------------------------------------------------------- Progenics Pharmaceuticals, Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $16,801,000 on $6,248,000 of total revenue for the three months ended March 31, 2020, compared to a net loss of $18,735,000 on $4,281,000 of total revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $98,344,000, total liabilities of $67,731,000, and $30,613,000 in total stockholders' equity. The Company said, "Consistent with regular practice for a growth-stage pharmaceutical or biotechnology company, and as we have done in the past, we anticipate the need, and are exploring options for, additional financing in order to meet our cash requirements if the proposed merger with Lantheus Holdings is not ultimately consummated. However, there can be no assurances that we will be able to obtain additional capital on acceptable terms and in the amounts necessary to fully fund our current operating expenses or reduced operating expenses reflecting delays or reductions in the scope of our product development programs beyond one year from the date this annual report is issued. As such, we believe there is substantial doubt regarding our ability to continue as a going concern within one year after the date this Quarterly Report on Form 10-Q is filed with the SEC. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should we be unable to continue as a going concern." A copy of the Form 10-Q is available at: https://is.gd/M26sos Progenics Pharmaceuticals, Inc., develops innovative medicines for targeting and treating cancer, with a pipeline that includes several product candidates in later-stage clinical development. These products in development include therapeutic agents designed to precisely target cancer (AZEDRA(R) and 1095), and imaging agents (1404 and PyLTM) intended to enable clinicians and patients to accurately visualize and manage their disease. PROTEUS DIGITAL: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------------- The Office of the U.S. Trustee for Regions 3 and 9 appointed a committee to represent unsecured creditors in the Chapter 11 case of Proteus Digital Health, Inc. The committee members are: 1. Romaco North America, Inc. Attn: Michelle Silvestri 8 Commerce Way, Suite 115 Hamilton, NJ 08691 Phone: (609) 807-2437 Email: Michelle.Silvestri@romaco.com 2. Workday, Inc. Attn: Ann Sandor 6110 Stoneridge Mall Road Pleasanton, CA 94588 Phone: (925) 951-9000 Fax: (925) 951-9001 Email: ann.sandor@workday.com 3. DeWinter Group Attn: Shane Oberg 101 2nd Street San Francisco, CA 94105 Phone: (408) 297-7500 Email: soberg@dewintergroup.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Proteus Digital Health Proteus Digital Health, Inc. was founded in 2002 to research and develop Digital Medicines. It has developed and commercialized a service offering called Proteus Discover, a Digital Medicines solution. Proteus Digital Health sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-11580) on June 15, 2020. At the time of the filing, Debtor had estimated assets of between $100 million and $500 million and liabilities of between $50 million and $100 million. Debtor has tapped Goodwin Procter, LLP as bankruptcy counsel; Potter Anderson & Corroon, LLP as Delaware and conflicts counsel; SierraConstellation Partners, LLC as financial advisor; and Kurtzman Carson Consultants, LLC as notice and claims agent and administrative advisor. PUERTO RICO HOSPITAL: Taps Charles A. Cuprill as Legal Counsel -------------------------------------------------------------- Puerto Rico Hospital Supply, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Puerto Rico to employ to hire Charles A. Cuprill, P.S.C. Law Office as its legal counsel. Alexis Fuentes Hernandez, Esq., appointed counsel for this Chapter 11 case, tendered his resignation on June 10, 2020. The Debtor selected Charles A Cuprill PSC to substitute Mr. Fuentes as counsel in this case to represent and provide legal services to the Debtor in the Chapter 11 bankruptcy proceedings. The firm will charge these hourly rates: Charles Cuprill-Hernandez, Esq. $350 Senior Associates $250 Junior Associates $150 Paralegals $85 Cuprill will be paid a retainer in the sum of $20,000. Mr. Cuprill-Hernandez disclosed in a court filing that the members of his firm are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Charles Alfred Cuprill Hernandez, Esq. Charles A. Cuprill, P.S.C. Law Office 356 Calle Fortaleza, Second Floor San Juan, PR 00901 Tel: 787 977-0515 Fax: 787 977-0518 Email: cacuprill@cuprill.com Email: ccuprill@cuprill.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 petitions were signed by Felix B. Santos, president. The cases are assigned to Judge Enrique S.Lamoutte Inclan. At the time of the filing, Puerto Rico Hospital estimated $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. QAMM PROPERTIES: Seeks to Hire Brundage Law as Counsel ------------------------------------------------------ Qamm Properties Inc. seeks authority from the United States Bankruptcy Court for the Middle District of Florida to hire Brundage Law, P.A. as its counsel. Qamm Properties requires the Brundage Law to: (a) provide legal advice with respect to the powers, rights, and duties of the Debtor in the continued management and operation of its business; (b) provide legal advice and consultation related to the legal and administrative requirements of operating this Chapter 11 bankruptcy case, including to assist the Debtor in complying with the procedural requirements of the Office of the United States Trustee; (c) take all necessary actions to protect and preserve the Debtor's Estate, including prosecuting actions on the Debtor's behalf, defending any action commenced against the Debtor, and representing the Debtor's interests in any negotiations or litigation in which the Debtor may be involved, including objections to the claims filed against the Debtor's Estate; (d) prepare on behalf of the Debtor any necessary pleadings or papers including Applications, Motions, Answers, Orders, Complaints, Reports, or other documents necessary or otherwise beneficial to the administration of the Debtor's Estate; (e) represent the Debtor's interests at the Meeting of Creditors, pursuant to Sec. 341 of the Bankruptcy Code, and at any other hearing scheduled before this Court related to the Debtor; (f) assist and advise the Debtor in the formulation, negotiation, and implementation of a Chapter 11 Plan and all documents related thereto; (g) assist and advise the Debtor with respect to negotiation, documentation, implementation, consummation, and closing of corporate transactions, including sales of assets, in this Chapter 11 bankruptcy case; (h) assist and advise the Debtor with respect to the use of cash collateral and obtaining Debtor-in-Possession or exit financing and negotiating, drafting, and seeking approval of any documents related thereto; (i) review and analyze all claims filed against the Debtor's Bankruptcy Estate and to advise and represent the Debtor in connection with the possible prosecution of objections to claims; (j) assist and advise the Debtor concerning any executory contract and unexpired leases, including assumptions, assignments, rejections, and renegotiations; (k) coordinate with other professionals employed in the case to rehabilitate the Debtor's affairs; and (l) perform all other bankruptcy related legal services for the Debtor that may be or become necessary during the administration of this case. On Nov. 29, 2019, the counsel received a retainer in the amount of $20,000. Brundage Law's hourly rates are: Michael P. Brundage, attorney $350 Nicolaos Soulellis, paralegal $125 Michael P. Brundage, Esq. of Brundage Law attests that the firm does not hold or represent any interest adverse to the Estate and members of the firm are disinterested persons within the meaning of Secs. 327 (a) and 101(14). The firm can be reached through: Michael P. Brundage, Esq. BRUNDAGE LAW, P.A. 100 Main Street, Suite 204 Safety Harbor, FL 34695 Phone: (727) 250-2488 About Qamm Properties Inc. Qamm Properties Inc. is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101 (51B)). The company is the fee simple owner of a building located at 2930 Gulf to Bay Blvd, Clearwater, FL 33759, having an appraised value of $2 million. Qamm Properties Inc. filed its voluntary petition for relief under CHapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. 20-04514) on June 11, 2020. The petition was signed by Vincent Addonisio, president. At the time of filing, the Debtor estimated $2,219,201 in assets and $1,383,433 in liabilities. Michael P. Brundage, Esq. at BRUNDAGE LAW, P.A. represents the Debtor as counsel. QUEST PATENT: Discloses Substantial Doubt on Staying Going Concern ------------------------------------------------------------------ Quest Patent Research Corporation filed its quarterly report on Form 10-Q, disclosing a net loss of $682,798 on $870,103 of revenues for the three months ended March 31, 2020, compared to a net loss of $540,068 on $374,865 of revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $3,182,515, total liabilities of $9,714,469, and $6,531,954 in total stockholders' deficit. Chief Executive Officer and Acting Chief Financial Officer Jon C. Scahill stated, "The Company has an accumulated deficit of approximately $20,651,000 and negative working capital of approximately $8,219,000 as of March 31, 2020. Because of the Company's continuing losses, its working capital deficiency, the uncertainty of future revenue, the Company's obligations to Intellectual Ventures and Intelligent Partners, as transferee of United Wireless, the Company's low stock price and the absence of a trading market in its common stock, the ability of the Company to raise funds in equity market or from lenders is severely impaired. These conditions, together with the effects of the COVID-19 pandemic and the steps taken by the states to slow the spread of the virus and its effect on its business raise substantial doubt as to the Company's ability to continue as a going concern. Although the Company may seek to raise funds and to obtain third party funding for litigation to enforce its intellectual property rights, the availability of such funds, particularly in view of the COVID-19 pandemic, is uncertain." A copy of the Form 10-Q is available at: https://is.gd/tlSrq3 Quest Patent Research Corporation is an intellectual property asset management company. The Company's principal operations include the development, acquisition, licensing and enforcement of intellectual property rights that are either owned or controlled by the Company or one of its wholly owned subsidiaries. The Company currently owns, controls or manages eleven intellectual property portfolios, which principally consist of patent rights. The Company is based in Rye, New York. RAY'S SUBWAY: Seeks to Hire PCI Auctions as Auctioneer ------------------------------------------------------ Ray's Subway, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Maryland to employ PCI Auctions East Coast, LLC, as its auctioneer. Ray's Subway owns and operates seven franchise Subway sandwich retail businesses at various locations in Maryland and Delaware. One of those business operations is at store #28186 at 222 Delaware Avenue, Wilmington, DE 19801. Mr. Raymond H. Burrows, III, is president and 50 percent stockholder of Ray's Subway. Mr. Burrows is personally obligated on the debt to Atlantic Union Bank which holds a perfected security interest in the equipment and other assets used in the Wilmington operation. The Bank consents to the sale of the equipment at public auction free and clear of the Bank's lien with that lien attaching to the net proceeds of sale after payment of auctioneer fees and expenses including relocation and storage expenses. The debtor proposes to engage the professional services of PCI, to remove the equipment from the Wilmington premises – in order to avoid its disposal by the landlord of the Wilmington premises; to store the equipment, and to sell it at public auction off the site of the Wilmington business premises. PCI would receive a commission of 30 percent of the proceeds of sale. In addition, a buyer's premium will be charged. Further, PCI will charge a cost not to exceed $3,000 to remove the equipment, load and unload a truck to relocate the equipment, and to store the equipment until it would be sold through an online auction. The auctioneer represents no interest adverse to the debtor and its bankruptcy estate and that its employment is in the best interest of its creditors, according to court filings. The auctioneer can be reached through: Jared Mizrahi PCI Auctions East Coast, LLC 141 West End Dr Manheim, PA 17545, Phone: +1 717-450-7241 About APG Subs, Inc. APG Subs, Inc., based in Edgewood, MD, and its debtor-affiliates sought Chapter 11 protection (Bankr. M.D. Lead Case No. 19-18315) on June 19, 2019. In the petition signed by Raymond Burrows, III, president, the Debtor APG Subs. disclosed total assets of $28,177, and estimated total liabilities of $1,268,112 in both assets and liabilities. The Hon. David E. Rice oversees the case. Marc R. Kivitz, Esq., at the Law Office of Marc R. Kivitz, serves as bankruptcy counsel to the Debtor. REGIONAL HEALTH: Receives $228,700 Proceeds Under PPP Loan ---------------------------------------------------------- Regional Health Properties, Inc., received the proceeds of a promissory note dated April 16, 2020, entered into between Adcare Administrative Services, LLC ("Borrower"), a wholly owned subsidiary of Regional Health Properties, Inc., and Greater Nevada Credit Union, as lender. The Lender made this loan pursuant to the Paycheck Protection Program, created by Section 1102 of the Coronavirus Aid, Relief, and Economic Security Act and governed by the CARES Act, Section 7(a)(36) of the Small Business Act, any rules or guidance that has been issued by the Small Business Administration implementing the PPP and acting as guarantor, or any other applicable loan program requirements, as defined in 13 CFR Section 120.10, as amended from time to time. Pursuant to the PPP Loan Agreement, the Lender made a loan to the Borrower with an aggregate principal amount of $228,700. The maturity date of the PPP Loan is June 29, 2022, which is two years from the date of the disbursement of the PPP Loan. The PPP Loan bears interest at a fixed rate equal to one percent per annum and interest accrues from the Effective Date. PPP Loan payments will be deferred for the first six months from the Effective Date. Subject to any PPP Loan forgiveness granted by the CARES Act, the Borrower will subsequently pay 18 fully amortized monthly consecutive principal and interest payments for all principal and all accrued interest not yet paid, with the first PPP Loan payment due on the date that is seven months after the Effective Date. The proceeds of the PPP Loan will be used for the following purposes only: (i) payroll costs as defined by the CARES Act, (ii) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; (iii) mortgage interest payments, (iv) rent payments, (v) utility payments, (vi) interest payments on any other debt obligations incurred before Feb. 15, 2020, and/or (vii) refinancing a SBA Economic Injury Disaster Loan made between Jan. 31, 2020 and April 3, 2020. The Loans and the related documentation contain customary events of default, including: (i) any representation or warranty made, or financial or other information provided, by the Borrower under the PPP Loan Agreement being false or misleading in any material respect; (ii) the failure by any Borrower to make required payments; (iii) the failure by the Borrower to perform or comply with certain agreements; and (iv) the dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Upon default, the Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. The Lender may hire or pay someone else to help collect this Note if Borrower does not pay. The Borrower will pay the Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. The Borrower also will pay any court costs, in addition to all other sums provided by law. Should Borrower default on the Loan, SBA may be required to pay the Lender under the SBA guarantee. SBA may then seek recovery of these funds from the Borrower and the Borrower may not claim or assert against SBA any immunities or defenses available under local law to defeat, modify or otherwise limit the Borrower's obligation to repay to SBA any funds advanced by Lender to Borrower. If the Borrower defaults on the SBA-guaranteed loan and SBA suffers a loss, the names of the small business will be referred for listing in the Credit Alert Verification Reporting System (CAIVRS) database, which may affect their edibility for further assistance. Pursuant to the CARES Act, the loan may be forgiven by the SBA. The amount of loan forgiveness is determined by and is subject to the sole approval of the SBA. The amount of loan forgiveness may be reduced if loan proceeds are spent inappropriately. To receive loan forgiveness, the Borrower must apply for loan forgiveness and provide documentation as requested by the SBA. There will be no loan forgiveness without the Borrower's submission of the proper application and documentation to the Lender to include all SBA requirements. Not more than 25% of the amount forgiven can be attributable to non-payroll costs. About Regional Health Regional Health Properties, Inc. (NYSE American: RHE) (NYSE American: RHEpA) -- http://www.regionalhealthproperties.com/-- is a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term healthcare through facility lease and sub-lease transactions. Regional Health reported a net loss attributable to the company's common stockholders of $3.50 million for the year ended Dec. 31, 2019 compared to a net loss attributable to the company's common stockholders of $19.88 million for the year ended Dec. 31, 2018. As of March 31, 2020, the Company had $112.4 million in total assets, $100.6 million in total liabilities, and $11.74 million in total stockholders' equity. RENTPATH HOLDINGS: Obtains Court Clearance for the Sale of Assets ----------------------------------------------------------------- Law 360 reports that bankrupt online rental property marketing company RentPath Holdings Inc. has obtained the permission of the Delaware bankruptcy court for the sale of its assets worth $588 million and the proposed Chapter 11 plan that will make distributions to creditors from the proceeds of the sale. During a combined hearing conducted via phone and videoconferencing, debtor attorney Andriana Georgallas of Weil Gotshal & Manges LLP said RentPath was appearing for just its second proceeding since filing for bankruptcy in February and that it had reached consensus on both the sale and the Chapter 11 plan. A copy of the full-report is available at https://www.law360.com/retail/articles/1281197/rentpath-cleared-for-588m-ch-11-sale-and-reorg-plan About RentPath Holdings Inc. RentPath is a digital marketing solutions company that empowers millions nationwide to find apartments and houses for rent. RentPath Holdings, Inc., and 11 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10312) on Feb. 12, 2020. RentPath Holdings was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities as of the bankruptcy filing. Weil, Gotshal & Manges LLP and Richards Layton & Finger are serving as legal counsel, Moelis & Company LLC is serving as financial advisor, and Berkeley Research Group, LLC is serving as restructuring advisor to RentPath. Prime Clerk LLC is the claims agent. RM BAKERY: Seeks Approval to Hire Epiq as Claims Agent ------------------------------------------------------ RM Bakery, LLC and BKD Group, LLC seek approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Epiq Corporate Restructuring, LLC as claims and noticing agent. The firm will oversee the distribution of notices and will assist in the maintenance, processing and docketing of proofs of claim filed in Debtors' Chapter 11 cases. Epiq's hourly rates for claim administration services are as follows: Clerical/Administrative Support $25 – $45 IT/Programming $65 – $85 Case Managers $70 – $165 Consultants/Directors/Vice Presidents $160 – $190 Solicitation Consultant $190 Executive Vice President, Solicitation $215 Executives No Charge The firm received a $5,000 retainer from Debtors. Kate Mailloux, a senior director at Epiq, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Kate Mailloux Epiq Corporate Restructuring, LLC 777 Third Avenue, 12th Floor New York, NY 10017 Telephone: (646) 282-2532 Email: kmailloux@epiqglobal.com About RM Bakery and BKD Group RM Bakery, LLC, owner of a bakery business, and BKD Group, LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11422) on June 15, 2020. At the time of the filing, RM Bakery disclosed assets of between $1 million and $10 million and liabilities of the same range. Meanwhile, BKD Group had estimated assets of less than $50,000 and estimated liabilities of between $1 million and $10 million. Debtors have tapped Mayerson & Hartheimer, PLLC as their legal counsel and Epiq Corporate Restructuring, LLC as their claims and noticing agent. ROCKSTAR REMODELING: Hires Plunkett Griesenbeck as Special Counsel ------------------------------------------------------------------ Rockstar Remodeling and Diamond Decks, LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Plunkett Griesenbeck & Mimari, Inc., as its special counsel. The professional services Charlie J. Cilfone, Esq., member Plunkett Griesenbeck, is to render is assistance to James S. Wilkins, lead counsel in this bankruptcy case in regards to Adversary Case No. 20-5041-CAG. Plunkett Griesenbeck will be paid at these hourly rates: Mr. Cilfone $300 Associate $250 Paraprofessionals $175 The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Cilfone of Plunkett Griesenbeck assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Plunkett Griesenbeck can be reached at: Charlie J. Cilfone, Esq. PLUNKETT GRIESENBECK & MIMARI, INC. 1635 Northeast Loop 410, Suite 900 San Antonio, TX 78209 Tel: (210) 734-7092 About Rockstar Remodeling and Diamond Decks Rockstar Remodeling and Diamond Decks, LLC, a provider of construction services based in San Antonio, Texas, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50997) on May 27, 2020. The petition was signed by Donald Ferguson, managing member of Rockstar Remodeling Trust. At the time of the filing, Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Craig A. Gargotta oversees the case. Debtor is represented by James S. Wilkins, P.C. ROCKSTAR REMODELING: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The Office of the U.S. Trustee on July 1, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Rockstar Remodeling and Diamond Decks, LLC. About Rockstar Remodeling and Diamond Decks Rockstar Remodeling and Diamond Decks, LLC, a provider of construction services based in San Antonio, Texas, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-50997) on May 27, 2020. The petition was signed by Donald Ferguson, managing member of Rockstar Remodeling Trust. At the time of the filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Craig A. Gargotta oversees the case. The Debtor is represented by James S. Wilkins, P.C. RYFIELD PROPERTIES: Seeks to Hire McClain Crouse as Accountant -------------------------------------------------------------- Ryfield Properties, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to employ McClain, Crouse & CO, PS, as its accountant. McClain Crouse will assist the Debtor with monthly operating reports, financial statements, payroll, bookkeeping, tax returns, and any other reasonable duties assigned by the Debtor. McClain Crouse's hourly rates currently range from 35 per hour to $115 per hour, depending on the experience and expertise of the individual performing the work. McClain Crouse is disinterested within the meaning of 11 U.S.C. Secs. 327(a) and 101(14), according to court filings. McClain Crouse can be reached through: Karen Crouse McClain, Crouse & CO, PS 227 W 8th St Port Angeles, WA 98362 Phone: +1 360-457-3303 About Ryfield Properties Ryfield Properties, Inc. is a privately held company in the quarrying business based in Quilcene, Wash. On May 7, 2020, Ryfield Properties filed a Chapter 11 bankruptcy petition (Bankr. W.D. Wash. Case No. 20-11360). The petition was signed by Katy Rygaard, Debtor's principal. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor tapped Faye C. Rasch, Esq., as its counsel. SANDRIDGE PERMIAN: Says Substantial Going Concern Doubt Exists -------------------------------------------------------------- SandRidge Permian Trust filed its quarterly report on Form 10-Q, disclosing a distributable income available to unitholders of $4,210,000 on $5,289,000 of total revenues for the three months ended March 31, 2020, compared to a distributable income available to unitholders of $4,981,000 on $6,257,000 of total revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $26,233,000, total liabilities of $0,000, and $26,233,000 in Trust corpus, 52,500,000 units issued and outstanding at March 31, 2020. SandRidge Permian Trust said, "During April 2020, as a result of increased production costs necessary to operate the Underlying Properties, coupled with the sharp decline in oil and gas prices since the beginning of 2020, Avalon informed the Trustee that Avalon is unable to pay on a timely basis the quarterly distribution amount it owes to the Trust for the three-month period ended March 31, 2020 and believes it will be unable to generate sufficient cash for quarterly payments to the Trust for the foreseeable future. Assuming that Avalon is unable to make the quarterly payment to the Trust for the three-month period ended March 31, 2020 or future quarterly payments, cash available for distribution for the four consecutive quarters ending September 30, 2020, on a cumulative basis, may fall below $5.0 million, which would require the Trust to commence termination shortly after the quarterly cash distribution would be required to be made in November 2020. If that early termination event occurs, the Trustee will be required to sell all of the Trust's remaining assets and liquidate the Trust. Due to this uncertainty, there is substantial doubt regarding the Trust's ability to continue as a going concern within one year after the date that the financial statements are issued. The Trust's financial statements do not include any adjustments that might result from the outcome of this uncertainty." A copy of the Form 10-Q is available at: https://is.gd/TkKvFO SandRidge Permian Trust is headquartered in Houston, Texas. SCHROEDER BROTHERS: Trustee Taps Tibble & Wesler as Accountant -------------------------------------------------------------- The Chapter 11 liquidating trustee for Schroeder Brothers Farms of Camp Douglas LLP received approval from the U.S. Bankruptcy Court for the Western District of Wisconsin to retain Tibble & Wesler, CPA PC as its accountant. Cheryl Wesler of Tibble & Wesler will prepare income tax returns for the Bankruptcy Estate. The firm's hourly rates are: Cheryl Wesler, CPA $275 Thomas Tibble, CPa $275 Support Staff $125 The accountant represents no adverse interest to the Trustee or the Estate, according to court filings. The accountant can be reached through: Cheryl Wesler Tibble & Wesler, CPA PC 2813 West Main Kalamazoo, MI 49006 Phone: 269-342-9482 About Schroeder Brothers Schroeder Brothers Farm of Camp Douglas LLP sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 16-13719) on Nov. 2, 2016. The petition was signed by Rocky Schroeder, authorized representative. At the time of the filing, the Debtor estimated its assets at $500 million to $1 billion and debt at $1 million to $10 million. The case is assigned to Judge Catherine J. Furay. The Debtor is represented by Pittman & Pittman Law Offices, LLC. On Dec. 7, 2016, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee retained DeWitt Ross & Stevens S.C. as its bankruptcy counsel. Jane F. Zimmerman was appointed as Chapter 11 liquidating trustee for the Debtor's bankruptcy estate. She is represented by Murphy Desmond S.C. SIGNET JEWELERS: Closing 400 of 3,200 Jewelry Stores Permanently ---------------------------------------------------------------- Dallas News Reports that the biggest jewelry retailer in the U.S. announced its intent to close down about 400 jewelry stores, including Jared and Zales, due to COVID-19 shutdowns. The largest jewelry retailer with 3,200 stores said sales through May 2, 2020 fell 40.5% during the coronavirus shutdowns. Like many U.S. retailers, Signet, the parent company of the largest mall-based jewelry stores, said the year started out great with a strong Valentine's Day. But then the pandemic's forced closings led to a first-quarter loss of $291 million and a 40.5% sales decline to $852.1 million. Now the company says it will permanently close almost 400 stores. The chain of 3,200 stores said about 150 stores in the U.S. and Canada and 80 in the UK that were temporarily closed during the pandemic won't reopen. An additional 150 stores will close as leases are reviewed and negotiations with landlords continue. Spokesman David Bouffard declined to say where the first stores are closing but confirmed that they are across the company’s brands. The chain had closed more than 200 stores last year and 150 more in 2018. The jewelry retailer, parent to Kay, Zales, Jared, H. Samuel, Peoples and Piercing Pagoda, pivoted to its e-commerce business when stores were forced to close due to the coronavirus, Signet chief executive officer Gina Drosos said. But the distribution center for its main online brand, James Allen, was closed in New York during the stay-at-home orders. That slowed its e-commerce sales, which only increased 6.7% in the first three months of the year. "We are gathering valuable insights on customer behaviors and plan to use these leanings to enhance our competitive advantage and emerge stronger from the crisis," Drosos said. Signet acquired Irving-based Zale Corp. in 2014 and put the fiercely competitive Zales and Kay Jewelers brands under the same corporate ownership. Some operations remained in Texas. A year ago, Signet moved its repair and manufacturing operation to Akron, Ohio, resulting in the elimination of 180 jobs at its Las Colinas office. About Signet Jewelers Ltd. Signet Jewelers Limited engages in the retail sale of diamond jewelry, watches, and other products. Signet Jewelers Limited was founded in 1950 and is based in Hamilton, Bermuda. SOGIO INVESTMENTS: Seeks to Hire Hilco Real Estate as Consultant ---------------------------------------------------------------- Sogio Investments, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Hilco Real Estate, LLC as its real estate consultants and advisors. The Debtor is the owner and possessor of personal property and real commercial property located at 5751 Kroger Drive in Fort Worth, Texas, and the Debtor desires to engage Hilco Real Estate, LLC as its exclusive agent to sell such real property. Services Hilco will render are: a. meet with Debtor to ascertain Debtor's goals, objectives and financial parameters in marketing its Property; b. provide market analysis for the sale of the property; c. solicit interested parties for the sale of the property and marketing the same for sale through an accelerated sales process with potential auction; and d. at Debtor's direction and on Debtor's behalf, negotiating the terms of the sale of the property. Hilco will advance a marketing investment budget of up to $20,000 (the Marketing Expenses) to market the property; and Hilco will be paid a buyer's premium of 5 percent of the purchase price for the property. Hilco is a disinterested person within the meaning of 11 U.S.C. Sec. 101(14), according to court filings. The firm can be reached through: Sarah Baker Hilco Global 5 Revere Drive, Suite 206 Northbrook, IL 60062 Tel. (847) 504-2462 Fax (847) 897-0874 Email: sbaker@hilcoglobal.com About Sogio Investments Sogio Investments, LLC -- https://www.thesogiobuilding.com -- owns and operates The SoGio Building, a 70,000 sq.ft. state of the art office building located in Keller, Texas. Sogio Investments, LLC filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 20-41918) on May 29, 2020. At the time of the filing, the Debtor disclosed total assets of $13,761,268 and total liabilities of $11,294,174. The petition was signed by Fernando Sotelo, its member. Judge Edward L. Morris oversees the case. Holder Law is the Debtor's counsel. SOLENO THERAPEUTICS: Says Substantial Going Concern Doubt Exists ---------------------------------------------------------------- Soleno Therapeutics, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $5,858,000 on $0 of revenue for the three months ended March 31, 2020, compared to a net loss of $7,030,000 on $0 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $32,113,000, total liabilities of $22,632,000, and $9,481,000 in total stockholders' equity. Soleno Therapeutics said, "Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company's expectation to incur significant losses for the foreseeable future it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company's access to such resources is not assured. Accordingly, management believes that there is substantial doubt regarding the Company's ability to continue operating as a going concern within one year from the date of filing these financial statements." A copy of the Form 10-Q is available at: https://is.gd/lTY7Yu Soleno Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. Its lead candidate is Diazoxide Choline Controlled Release (DCCR), a once-daily oral tablet for the treatment of Prader-Willi Syndrome (PWS), is being evaluated in a Phase III clinical development program. The company was formerly known as Capnia, Inc. and changed its name to Soleno Therapeutics, Inc. in May 2017. Soleno Therapeutics was incorporated in 1999 and is headquartered in Redwood City, California. SOLID BIOSCIENCES: Says Substantial Going Concern Doubt Exists -------------------------------------------------------------- Solid Biosciences Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $26,694,000 on $0 of revenue for the three months ended March 31, 2020, compared to a net loss of $29,582,000 on $0 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $73,960,000, total liabilities of $17,504,000, and $56,456,000 in total stockholders' equity. The Company said, "In accordance with the requirements of ASC 205-40, the Company determined that there is substantial doubt about the Company's ability to continue as a going concern within twelve months of the issuance date of these financial statements. "As of March 31, 2020, the Company had an accumulated deficit of $342,973. During the three months ended March 31, 2020, the Company incurred a net loss of $26,694 and used $29,274 of cash in operations. The Company expects to continue to generate operating losses in the foreseeable future. Based upon its current operating plan, the Company expects that its cash, cash equivalents and available-for-sale securities of $53,587 as of March 31, 2020 will be sufficient to fund its operating expenses and capital requirements into 2021." A copy of the Form 10-Q is available at: https://is.gd/9CHlUI Solid Biosciences Inc., a life science company, engages in identifying and developing therapies for duchenne muscular dystrophy (DMD) in the United States. The company's lead product candidate is SGT-001, an adeno-associated viral vector-mediated gene transfer, which is in a Phase I/II clinical trial to restore functional dystrophin protein expression in patients' muscles. Its portfolio also comprises Anti-LTBP4, a monoclonal antibody that is in preclinical trials to reduce fibrosis and inflammation. In addition, the company engages in developing biomarkers and sensors; and Solid Suit program that includes the development of wearable assistive devices that focus on providing functional and therapeutic benefits to DMD patients. Solid Biosciences Inc. was founded in 2013 and is headquartered in Cambridge, Massachusetts. SUN BIOPHARMA: Says that Substantial Going Concern Doubt Exists --------------------------------------------------------------- Sun BioPharma, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1,798,000 on $0 of revenue for the three months ended March 31, 2020, compared to a net loss of $1,581,000 on $0 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $2,136,000, total liabilities of $1,412,000, and $724,000 in total stockholders' equity. The Company said, "Our current independent registered public accounting firm included a paragraph emphasizing this going concern uncertainty in their audit report regarding our 2019 financial statements dated March 24, 2020. Our ability to continue as a going concern, realize the carrying value of our assets and discharge our liabilities in the ordinary course of business is dependent upon a number of factors, including our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our SBP-101 product candidate in the United States, Australia, the European Union or other markets and ultimately our ability to market and sell our SBP-101 product candidate. These factors, among others, raise substantial doubt about our ability to continue operations as a going concern." A copy of the Form 10-Q is available at: https://is.gd/fCJJp2 Sun BioPharma, Inc., a clinical-stage biopharmaceutical company, engages in developing therapeutics treatment for unmet medical needs. The company focuses on diseases of the pancreas, including pancreatitis and pancreatic cancer. Its lead product candidate is SBP-101, which is in Phase 1a/1b clinical trial for the treatment of patients with pancreatic cancer. The company has scientific collaborations with pancreatic disease experts Cedars Sinai Medical Center in Los Angeles, the University of Miami; the University of Florida; the Austin Health Cancer Trials Centre in Melbourne, Australia; the Ashford Cancer Centre in Adelaide, Australia; and the Blacktown Cancer and Haematology Centre in Sydney, Australia. Sun BioPharma, Inc., was founded in 2011 and is based in Waconia, Minnesota. SUNDIAL GROWERS: Reduces Debt Service to $10.1 Million ------------------------------------------------------ Vandana Singh of Seeking Alpha reports that Sundial Growers successfully managed its outstanding debt that resulted to the reduction of annual interest expense from $14.7 million to $3.8 million, while total annual debt service has fallen from $31.8 million to $10.1 million. Covenants related to Q1 of 2020 have been waived, and cash balance requirements have fallen to $2.5 million until the end of the year. Principal repayments have been halted until Sept. 30, 2020 and the company is now required to raise $10 million by the first of December 2020. $45 million under its term debt facility has been eliminated altogether via the sale of bridge farm. Remaining $70 million of this debt along with $3.2 million in deferred interest has been converted to a secured second lien convertible note that has no interest and doesn't mature until June 2022. The notes convert at a price of US$1.00 per share. 35M share purchase warrants were issued in connection with this restructuring, with half having a conversion price of $1.00 and half having a conversion price of $1.20. To further fund operations, the company also managed to raise $18 million in senior unsecured subordinated convertible notes, with a maturity of June 2022. About Sundial Growers Sundial Growers Inc. operates as a pharmaceutical company. The Company produces and grows a range of cannabis strains. Sundial Growers serves customers in Canada. The company is based in Calgary, AB, Canada. SUNTECH DRIVE: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Solar grid manufacturer SunTech Drive LLC filed for Chapter 11 bankruptcy protection. Dan Mika of the Colorado Hometown Weekly reports that the Louisville company claimed that it had just less than $200,000 in assets and $6.67 million in debts, according to its filing with the U.S. Bankruptcy Court of Colorado on June 8, 2020. The Hometown Weekly notes that American solar companies in general have struggled due to the ongoing economic crisis caused by the COVID-19 pandemic. A mid-May report from the national trade group Solar Energy Industries Association estimates that Colorado companies have shed about a third of solar jobs and are on track to miss out on installing enough panels to generate 33 megawatts of power in the second quarter of this year. SunTech is the second Boulder County-based solar company to declare bankruptcy in recent weeks behind Rack-Em-Up Inc., a Boulder installer of ground-level solar panels that filed for liquidation in mid-May. About SunTech Drive, LLC SunTech Drive, LLC -- http://suntechdrive.com-- is a privately held solar power electronics company. SunTech Drive provides source-agnostic, intelligent power conversion equipment. Its patent pending designs represent a dramatic departure from the large and costly legacy controllers of the past. SunTech has replaced traditional electromagnetic cores and windings with high-speed digital switching silicon and adaptive firmware. SunTech Drive filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-1394) on June 8, 2020. In the petition signed by Harold K. Michael, CEO, the Debtor disclosed $199,483 in assets and $6,675,846 in liabilities. Jeffrey S. Brinen, Esq., at KUTNER BRINEN, P.C., represents the Debtor. SW GOLF: Seeks to Hire Lexington Law as Counsel ----------------------------------------------- SW Golf, LLC, seeks authority from the United States Bankruptcy Court for the District of Arizona to hire Lexington Law Firm as its counsel. SW Golf requires Lexington Law to: a. provide the Debtor legal advice with respect to all matters to this case; b. prepare on behalf of the Debtor necessary applications, answers, orders, reports and other legal papers; and c. perform all other legal services for the Debtor which may be necessary. Lexington Law's hourly rates are: Vincent R. Mayr $425 Cody W. Johnson $300 Alexis A. Peacock $225 Paralegal $80-$200 Vincent R. Mayr, Esq., attests that his firm has no connection with the Debtor, the creditors, or any other party in interest, or any party in interest, or their respective attorneys. The firm can be reached through: Vincent R. Mayr, Esq. LEXINGTON LAW FIRM 20620 N. 19th Ave. Phoenix, AZ 85027 Tel: 602-474-2492 E-mail: vincent@lexingtonlaw.com About SW Golf, LLC SW Golf, LLC -- www.hungrybuffalo.com -- owns and operates a restaurant in Logan, Ohio. SW Golf, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-07328) on June 18, 2020. In the petition signed by Robert "Scott" Waddle, owner/general manager, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Vincent R. Mayr, Esq. at LEXINGTON LAW FIRM is the Debtor's counsel. TAILORED BRANDS: Taps Kirkland, PJT for Potential Chapter 11 ------------------------------------------------------------ Katherine Doherty and Eliza Ronalds-Hannon, writing for Bloomberg, report that Tailored Brands Inc., the owner of Men's Wearhouse and Jos A. Bank, is considering filing for bankruptcy protection after COVID-19 lockdown kept American office employees at home, thus resulting to the decline of demand of new suits. The retailer and its advisers have started reaching out to interested parties about reworking its debts of more than $1 billion, according to people with knowledge of the matter. One option is a Chapter 11 filing, which would allow Tailored Brands to keep some of its stores operating while it seeks to shut weaker locations and satisfy its creditors, the people said. Plans are in the early stages and could change, with Tailored Brands still seeking alternative forms of financing, according to the people. They asked not to be identified discussing a private matter. "As a matter of company policy, we don’t comment on market rumors or speculation," Houston-based Tailored Brands said in an email to Bloomberg. Management is getting counsel from law firm Kirkland & Ellis and investment bank PJT Partners Inc. A group of lenders is working with law firm Gibson Dunn and investment bank Houlihan Lokey Inc. Representatives from Kirkland, PJT and Houlihan declined to comment. Gibson Dunn didn't immediately return messages seeking comment. The restructuring plans could depend on market conditions and the outlook for stores to re-open, the people said. Sales have suffered because government officials were telling shoppers to stay home and nonessential businesses to stay shut to combat the Covid-19 pandemic. Tailored Brands was struggling even before the outbreak. Sales have fallen every year since 2016 as Men’s Wearhouse and Jos. A. Bank contended with changing consumer tastes and ecommerce rivals. The coronavirus made things worse by keeping office workers at home, all but eliminating the need for suits and ties. The outbreak also postponed events such as weddings and other celebrations, cutting into sales of formal wear. Debt issued by Men's Wearhouse has cratered to deeply distressed levels since March, with some of its bonds trading below 30 cents on the dollar after sitting near par in February. The stock, which topped $66 in 2015, now hovers under $3. The company traces its roots to 1973, when George Zimmer started Men's Wearhouse in the Houston area. He would go on to become the face of the brand, starring in television commercials spouting his catchphrase "You're going to like the way you look – I guarantee it," before he was ousted in 2013. The company acquired Jos. A. Bank the following year. Last month the retailer said it would reopen 300 stores by Memorial Day, which did little to reassure investors. A Men's Wearhouse store in downtown Boston was a target of recent looting. Chief Executive Officer Dinesh Lathi said in early May the company was taking "aggressive" measures to preserve liquidity, including furloughing or laying off a majority of corporate staff and distribution employees, borrowing from its credit facility and extending payment terms with suppliers, vendors and landlords. The dividend was suspended in September. About Tailored Brands Tailored Brands, Inc. is an omni-channel specialty retailer of menswear, including suits, formalwear and a broad selection of polished and business casual offerings. The Company delivers personalized products and services through its convenient network of over 1,400 stores in the United States and Canada as well as its branded e-commerce websites at www.menswearhouse.com and www.josbank.com. Its brands include Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G. Tailored Brands reported a net loss of $82.28 million for the year ended Feb. 1, 2020, compared to net earnings of $83.24 million for the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had $2.42 billion in total assets, $2.52 billion in total liabilities, and a total shareholders' deficit of $98.31 million. * * * As reported by the TCR on March 27, 2020, S&P Global Ratings lowered all ratings on Calif.-based specialty apparel retailer Tailored Brands Inc., including its issuer credit rating to 'CCC+' from 'B', reflecting its view of the company's capital structure as unsustainable in light of substantially weakened earnings prospects. TUESDAY MORNING: Appointment of Equity Committee Sought ------------------------------------------------------- A shareholder of Tuesday Morning Corp. asked the U.S. Bankruptcy Court for the Northern District of Texas to appoint a committee to represent shareholders of the company. In court papers, Jeremy Blum said there is "significant equity" held by shareholders of Tuesday Morning. According to Mr. Blum, the company has $143 million of tangible book value as of March 31 and much of that net worth is liquid assets, primarily inventory. He added that the company should be able to turn at least $45 million of inventory into cash over the summer as they close 230 stores. Tuesday Morning also has real estate, which the investor believes, is worth over $75 million. Mr. Blum also argued that the company's current lenders are "more than adequately secured by collateral." "There are no bondholders. All the lenders are banks, their original banks. That means no vulture bondholders there to take equity," Mr. Blum said. About Tuesday Morning Corp. Tuesday Morning Corporation, together with its subsidiaries, is a closeout retailer of upscale home furnishings, housewares, gifts, and related items. It operates under the trade name "Tuesday Morning" and is one of the original "off-price" retailers specializing in providing unique home and lifestyle goods at bargain values. Based in Dallas, Tuesday Morning operated 705 stores in 40 states as of Jan. 1, 2020. For more information, visit http://www.tuesdaymorning.com/ On May 27, 2020, Tuesday Morning and six affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-31476). Tuesday Morning disclosed total assets of $92 million and total liabilities of $88.35 million as of April 30, 2020. The Hon. Harlin Dewayne Hale is the case judge. Debtors tapped Haynes and Boone, LLP as general bankruptcy counsel; Alixpartners LLP as financial advisor; Stifel, Nicolaus & Co., Inc. as investment banker; A&G Realty Partners, LLC as real estate consultant; and Great American Group, LLC as liquidation consultant. Epiq Corporate Restructuring, LLC is the claims and noticing agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on June 9, 2020. The committee is represented by Munsch Hardt Kopf & Harr, P.C. TUESDAY MORNING: Seeks to Hire Ordinary Course Professionals ------------------------------------------------------------ Tuesday Morning Corporation and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ professionals utilized in the ordinary course of business. The Debtors shall pay such Ordinary Course Professional 100 percent of their fees and 100 percent of their disbursements incurred with respect to postpetition services, upon the submission to, and approval by, the Debtors of an appropriate invoice setting forth in reasonable detail the nature of the services rendered after the Petition Date; provided, however, that each Ordinary Course Professional's total compensation and reimbursement shall not exceed $40,000 per month on average over a three-month rolling basis. None of the Ordinary Course Professionals represents or holds any interest materially adverse to the Debtors or to their estates with respect to the matter in which they are retained, according to court filings. Initial Ordinary Course Professionals ARNOLD & PORTER KAYE SCHOLER LLP 601 Massachusetts Avenue, NW Washington, DC 20001-3743 Legal Counsel BAKER & MCKENZIE LLP 2300 Trammell Crow Center 2001 Ross Ave Dallas, TX 75201 Legal Counsel BAKER HOSTETLER P.O. Box 70189 Cleveland, OH 44190-0189 Legal Counsel BAKER TILLY VIRCHOW KRAUSE LLP Po Box 78975 Milwaukee, WI 53278-8975 Accounting Services BDO USA, LLP 615 South College Street, Suite 1200 Charlotte, NC 28202 Accounting Services BRIAN RESTIVO 150 Boland Street, #608 Fort Worth, TX 76107 Legal Counsel EDELMAN 200 E Randolph Street Chicago, IL 60601 Public Relations FINCHER STROUD LAW, PLLC 6009 W. Parker Road, Suite 149-289 Plano, TX 75093 Legal Counsel GIBSON, DUNN & CRUTCHER 200 Park Avenue New York, NY 10166-0193 Legal Counsel JACKSON LEWIS PC 10701 Parkridge Blvd Ste 300 Restin, VA 20191 Legal Counsel JACKSON WALKER LLP PO Box 130989 Dallas, TX 75313-0989 Legal Counsel MARVIN F POER & COMPANY P O Box 674300 Dallas, TX 75267-4300 Accounting Services MUNSCH HARDT KOPF & HARR , P.C. 3800 Lincoln Plaza 500 N Akard Dallas, TX 75201 Legal Counsel NORTON ROSE FULBRIGHT US LLP 1301 Mckinney Ste 5100 Houston, TX 77010-3095 Legal Counsel OGLETREE, DEAKINS, NASH, SMOAK & STEWART PC P O Box 89 Columbia, SC 29202 Legal Counsel PERKINS COIE LLP Attn: Client Accounting Po Box 24643 Seattle, WA 98124-0643 Legal Counsel RESOURCES GLOBAL PROFESSIONALS ("RGP") 15301 North Dallas Parkway, Suite 1050 Addison, TX 75001 Accounting Services RYAN LLC Three Galleria Tower 13155 Noel Road, Suite 100 Dallas, TX 75240 Accounting Services SEYFARTH SHAW LLP 233 S. Wacker Drive Suite 8000 Chicago IL 60606-6448 Legal Counsel SIDLEY AUSTIN LLP PO Box 0642 Chicago, IL 60690 Legal Counsel SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 4 Times Square New York, NY 10036 Legal Counsel TROUTMAN SANDERS LLP P.O. Box 933652 Atlanta, GA 31193-3652 Legal Counsel About Tuesday Morning Corp. Tuesday Morning Corporation, together with its subsidiaries, is a closeout retailer of upscale home furnishings, housewares, gifts, and related items. It operates under the trade name "Tuesday Morning" and is one of the original "off-price" retailers specializing in providing unique home and lifestyle goods at bargain values. Based in Dallas, Tuesday Morning operated 705 stores in 40 states as of Jan. 1, 2020. For more information, visit http://www.tuesdaymorning.com/ On May 27, 2020, Tuesday Morning and six affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-31476). Tuesday Morning disclosed total assets of $92 million and total liabilities of $88.35 million as of April 30, 2020. The Hon. Harlin Dewayne Hale is the case judge. Debtors tapped Haynes and Boone, LLP as general bankruptcy counsel; Alixpartners LLP as financial advisor; Stifel, Nicolaus & Co., Inc. as investment banker; A&G Realty Partners, LLC as real estate consultant; and Great American Group, LLC as liquidation consultant. Epiq Corporate Restructuring, LLC is the claims and noticing agent. TUESDAY MORNING: Starts Closing Sales of Over 130 Locations ----------------------------------------------------------- Store closing sales have begun at a select group of approximately 130 of Tuesday Morning's 687 retail locations across the United States. Tuesday Morning's limited store closing sales event is being conducted by Great American Group, LLC, a B. Riley Financial, Inc. company (NASDAQ:RILY) ("B. Riley" or the "Company"), and has been approved by order of the U.S. Bankruptcy Court. Tuesday Morning has indicated that it intends to identify an additional 100 stores for closure in the near future, and Great American Group will conduct store closing sales in those locations as well. Customers can expect initial discounts of up to 30% off original prices on all in-store merchandise in the closing store locations. Tuesday Morning is an off-price retailer specializing in high-quality and name-brand products for the home, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal décor. The retailer offers prices generally below those found in boutique, specialty and department stores, catalogs and online retailers. "Customers should shop early for the best in-store selection as the length of the sale will vary by location," said Scott Carpenter, President of Retail Solutions at B. Riley's Great American Group. "We are committed to providing customers with the best shopping experience possible. COVID-19 safety measures will be observed in stores in accordance with state and local mandates." Tuesday Morning has reopened over 80% of its locations and continues to reopen certain locations as state and local mandates allow. The retailer will continue to operate its go-forward store locations throughout the restructuring process. Sales at the closing store locations are expected to continue for approximately 10 weeks or until all merchandise at each location is sold. The length of the sale will vary by location. Store furniture, fixtures and equipment will also be available for purchase in certain locations. About Tuesday Morning Corp. Tuesday Morning Corporation is a closeout retailer of upscale home furnishings, housewares, gifts, and related items. It operates under the trade name "Tuesday Morning" and is one of the original "off-price" retailers specializing in providing unique home and lifestyle goods at bargain values. Based in Dallas, Tuesday Morning operated 705 stores in 40 states as of Jan. 1, 2020. For more information, visit http://www.tuesdaymorning.com/ On May 27, 2020, Tuesday Morning and six affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-31476). Tuesday Morning disclosed total assets of $92 million and total liabilities of $88.35 million as of April 30, 2020. The Hon. Harlin Dewayne Hale is the case judge. Debtors tapped Haynes and Boone, LLP as general bankruptcy counsel; Alixpartners LLP as financial advisor; Stifel, Nicolaus & Co., Inc. as investment banker; A&G Realty Partners, LLC as real estate consultant; and Great American Group, LLC as liquidation consultant. Epiq Corporate Restructuring, LLC is the claims and noticing agent. ULTA BEAUTY: All Stores Under Review ------------------------------------ Wall Street Journal reports that Ulta Beauty is initiating a clean sheet evaluation of all its stores. The retailer wants to evaluate if it should close, move or remodel its 1,254 brick-and-mortar locations. "If you did this with a white, clean piece of paper, how would you reorganize your store fleet?" asks CFO Scott Settersten in front of the strategy reset. Ulta Beauty said in a SEC filing that as of June 21, 2020, 1,177 Ulta Beauty stores, or about 93% of the fleet, offer curbside pickup, and 866 Ulta Beauty stores, or about 68% of the fleet, are open to guests for retail, with 827 stores offering salon services. The Company continues to expect to have substantially all stores reopened in some capacity by the end of June. On March 19, 2020, the Company temporarily closed all of its stores in an effort to help contain the spread of the Coronavirus, while continuing to support its essential e-commerce operations. On April 19, 2020, many of the store and salon associates were temporarily furloughed. About Ulta Beauty Ulta Beauty Inc., formerly known as Ulta Salon, Cosmetics & Fragrance Inc., is an American chain of beauty stores in the United States, headquartered in Bolingbrook, Illinois. UNIT CORPORATION: Hires Opportune LLP as Restructuring Advisor -------------------------------------------------------------- Unit Corporation and its debtor-affiliates seek approval from the United States Bankruptcy Court for the Southern District of Texas to hire Opportune LLP as its restructuring advisor. Services Opportune has provided and will continue to provide are: General Reorganization Efforts a. assistance with the preparation of financial and other information for distribution to stakeholders and others, including, but not limited to: short term cash flow projections and budgets, mid/long term business case, cash receipts and disbursement analysis, and analysis of various asset and liability accounts; b. analysis of proposed transactions; c. assistance with the identification and implementation of short-term cash management procedures; d. assistance to management, counsel, and other advisors focused on the coordination of resources related to ongoing reorganization efforts; e. attendance at meetings and assistance in discussions with potential investors, banks, other secured lenders, any committees, and other stakeholders and assistance with respect to due diligence requests from the same; f. certain tax advisory services; g. certain fresh start accounting and valuation services; and h. other general financial and restructuring advisory services as mutually agreed by the Company and Opportune. Bankruptcy Advisory Services i. assistance in the preparation of bankruptcy documents, including "first day" motions; j. assistance in developing forecasts and information for obtaining bankruptcy court approval of use of cash collateral or DIP financing and related compliance reporting; k. assistance in the preparation of financial related disclosures required by the Court, including but not limited to Schedules of Assets and Liabilities, Statements of Financial Affairs and Monthly Operating Reports; l. assistance in the preparation of financial information including cash flow forecasts, long term business plans, and other key information; m. assistance with respect to mortgages and lien perfections; n. assistance with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; o. analysis of creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track such claims; p. assistance in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in these chapter 11 cases, including information contained in the plan and disclosure statement; q. assistance in the analysis/preparation of information necessary to assess the tax attributes related to the confirmation of a plan of reorganization in these chapter 11 cases, including the development of the related tax consequences contained in the disclosure statement; r. litigation advisory services with respect to accounting and tax matters; s. expert witness testimony on case related issues; t. ongoing support with respect to managing the day-to-day requirements of the bankruptcy process; and u. rendering such other general financial, restructuring, and business consulting or such other assistance management or counsel may deem necessary consistent with the role of a financial and operational advisor to the extent that it would not be duplicative of services provided by other professionals in such proceeding. Opportune LLP will be paid at these hourly rates: Managing Partner $1,150 Partner $1,050 Managing Directors $875 Director $775 Manager $685 Senior Consultant $515 Consultant $450 Administrative Professional $275 Opportune received advance payments totaling $200,000. David Baggett, partner of Opportune LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Opportune LLP can be reached at: David Baggett, Esq. OPPORTUNE LLP 711 Louisiana Street, Suite 3100 Houston, TX 77002 Tel: (713) 490-5050 Fax: (713) 490-0355 Email: dbaggett@opportune.com About Unit Corporation Unit Corporation (NYSE- UNT) (OTC Pink- UNTCQ) -- http://www.unitcorp.com/-- is a Tulsa-based, publicly held energy company engaged through its subsidiaries in oil and gas exploration, production, contract drilling and natural gas gathering and processing. On May 22, 2020, Unit Corporation and five affiliates sought Chapter 11 protection (Bankr. S.D. Tex. 20-32740) with a pre-negotiated plan that reduces debt by $650 million. Unit Corp. disclosed $2,090,052,000 in assets and $1,034,417,000 in debt as of Dec. 31, 2019. Vinson & Elkins L.L.P. is serving as legal advisor, Evercore Group L.L.C. is serving as investment banker, and Opportune LLP is serving as restructuring advisor to the Company. Prime Clerk LLC is the claims agent, maintaining the page https://cases.primeclerk.com/UnitCorporation Weil, Gotshal & Manges LLP is serving as legal advisor and Greenhill & Co., LLC is serving as financial advisor to an ad hoc group of holders of Subordinated Notes. UNIT CORPORATION: Seeks to Hire Vinson & Elkins as Counsel ---------------------------------------------------------- Unit Corporation and its debtor-affiliates seek approval from the United States Bankruptcy Court for the Southern District of Texas to hire Vinson & Elkins L.L.P. as their counsel. Unit Corp requires Vinson & Elkins to: a. provide legal advice with respect to the Debtors' powers and duties as debtors in possession in the operation of their businesses and the management of estate property; b. prepare on behalf of the Debtors all necessary motions, answers, orders, reports, and other legal papers in connection with the administration of their bankruptcy estates; c. take necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a plan of reorganization; d. advise the Debtors regarding tax matters; e. advise the Debtors in connection with any potential sale of assets or stock and take necessary action to guide the Debtors through such potential sale; f. analyze proofs of claim filed against the Debtors and potential objections to such claims; g. analyze certain executory contracts and unexpired leases and potential assumptions, assignments, or rejections of such contracts and leases; h. represent the Debtors in connection with obtaining authority for debtor-in-possession financing and the continued use of cash collateral; i. advise the Debtors with respect to corporate and litigation matters as well as compliance with non-bankruptcy law; j. consult with the United States Trustee for the Southern District of Texas, an official committee of unsecured creditors appointed in the chapter 11 cases, if any, any other committees appointed in these chapter 11 cases, and all other creditors and parties in interest concerning the administration of these chapter 11 cases; and k. provide representation and all other legal services required by the Debtors in discharging their duties as debtors in possession or otherwise in connection with these chapter 11 cases. Vinson & Elkins will be paid at these hourly rates: Attorneys $565 to $1,630 Paraprofessionals $180 to $720 Vinson & Elkins agreed to a 13 percent discount of its standard or customary billing arrangements for this engagement consistent with its historical fee arrangement with the Debtors. The Debtors paid the firm an "advance payment retainer" in the amount of $600,000. David S. Meyer, Esq., a partner at Vinson & Elkins, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Meyer disclosed that: -- Vinson & Elkins has agreed to a discount of 13 percent. V&E will continue to apply the discount during the pendency of these chapter 11 cases. -- No Vinson & Elkins professional included in the engagement varied his rate based on the geographic location of the cases; -- For 2019, the firm's hourly rates for services rendered on behalf of the Debtors are as follows: Partners $975 - $1,550 Counsel/Of Counsel $930 - $1,550 Associates $525 - $1,065 Paraprofessionals $170 - $685 Effective Jan. 1, 2020, the firm has represented the Debtors using the following hourly rates: Partners $1,025 - $1,630 Counsel/Of Counsel $1,025 - $1,630 Associates $565 - $1,125 Paraprofessionals $180 - $720 -- Vinson & Elkins has approved the budget and staffing plan for the period of May 22, 2020 through August 22, 2020. The firm can be reached through: Paul E. Heath, Esq. Vinson & Elkins L.L.P. 666 Fifth Avenue, 26th Floor New York, NY 10103-0040 Tel: (212) 237-0000 Fax: (212) 237-0100 About Unit Corporation Unit Corporation (NYSE- UNT) (OTC Pink- UNTCQ) -- http://www.unitcorp.com/-- is a Tulsa-based, publicly held energy company engaged through its subsidiaries in oil and gas exploration, production, contract drilling and natural gas gathering and processing. On May 22, 2020, Unit Corporation and five affiliates sought Chapter 11 protection (Bankr. S.D. Tex. 20-32740) with a pre-negotiated plan that reduces debt by $650 million. Unit Corp. disclosed $2,090,052,000 in assets and $1,034,417,000 in debt as of Dec. 31, 2019. Vinson & Elkins L.L.P. is serving as legal advisor, Evercore Group L.L.C. is serving as investment banker, and Opportune LLP is serving as restructuring advisor to the Company. Prime Clerk LLC is the claims agent, maintaining the page https://cases.primeclerk.com/UnitCorporation Weil, Gotshal & Manges LLP is serving as legal advisor and Greenhill & Co., LLC is serving as financial advisor to an ad hoc group of holders of Subordinated Notes. UNITED CANNABIS: UST Says Bankr. Court Can’t OK Patent Termination -------------------------------------------------------------------- Law360 reports that the U.S. Trustee's Office has objected to the request of United Cannabis Corp. to the Colorado bankruptcy judge to approve termination of some patent licensing agreements, saying to do so would involve the court in a business that violates the Controlled Substances Act. Colorado-based United Cannabis has been fighting to use the bankruptcy process since it filed its Chapter 11 petition in April 2020. It argues that it is entitled to bankruptcy protection because it only handles federally legal industrial hemp and products made from it. But the U.S. Trustee's Office has objected to the petition, noting the company licenses a patent covering cannabinoids. A copy of the full-report is available at https://www.law360.com/ip/articles/1280904/bankruptcy-court-can-t-touch-pot-patent-trustee-says About United Cannabis Corporation United Cannabis Corporation -- http://www.unitedcannabis.us/-- is a biotechnology company dedicated to the development of phyto-therapeutic-based products supported by patented technologies for the pharmaceutical, medical and industrial markets. It has long advocated the application of cannabinoids for medical applications and is building a platform for designing targeted therapies to increase the quality of life for patients around the world. United Cannabis sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-12692) on April 20, 2020. The petition was signed by John Walsh, Debtor's chief financial officer. At the time of the filing, the Debtor had estimated estimated assets of between $1 million and $10 million and liabilities of the same range. Judge Kimberley H. Tyson oversees the case. The Debtor tapped Wadsworth Garber Warner Conrardy, P.C., as its legal counsel. UNITED METHODIST: Seeks Approval to Hire Waggoner Land Surveying ---------------------------------------------------------------- The United Methodist Village, Inc. seeks authority from the U.S. Bankruptcy Court for the Southern District of Illinois to employ Waggoner Land Surveying, Inc. Debtor requires the services of the firm to conduct a survey of its real properties before they are sold at public sale. The firm's services will be provided mainly by Jason Waggoner. The firm will be paid at hourly rates, which range from $60 to $100 per hour and will receive reimbursement for work-related expenses. Mr. Waggoner disclosed in court filings that his firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jason D. Waggoner Waggoner Land Surveying, Inc. 100 W Main St. Robinson, IL 62454 Phone: (618) 544-2020 Email: jwaggoner@waggonersurveying.com About The United Methodist Village The United Methodist Village, Inc., a non-profit nursing home in Lawrenceville, Ill., filed for bankruptcy protection under Chapter 11 (Bankr. S.D. Ill. Case No. 19-60046) on Feb. 22, 2019. In the petition signed by Ashli Wesley, administrator, Debtor disclosed $13,779,571 in assets and $7,164,533 in liabilities. Judge Laura K. Grandy oversees the case. Debtor has tapped Dent Law Office, Ltd. as bankruptcy counsel; Meyer Capel, A Professional Corporation as special counsel; and Svihla & Associates CPAs, LLC, as forensic accountant. UNIVERSAL TOWERS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Universal Towers Construction, Inc. d/b/a Crowne Plaza Universal Orlando 7800 Universal Blvd. Orlando, FL 32819 Business Description: Universal Towers Construction, Inc. is a privately held company in the traveler accommodation industry. Chapter 11 Petition Date: July 3, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-03799 Debtor's Counsel: Eric S. Golden, Esq. BURR & FORMAN LLP 200 S. Orange Ave. Suite 800 Orlando, FL 32801 Tel: 407-540-6600 E-mail: egolden@burr.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Lis R. Oliveira-Sommerville, president. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/QclkzN List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Amadeus Hospitality Americas I Trade Debt $20,843 29618 Network Place Chicago, IL 60673-1296 2. Dormakaba USA Inc. Trade Debt $2,740 P.O. Box 896542 Charlotte, NC 28289-6542 3. Ecolab, Inc. Trade Debt $3,847 P.O. Box 100512 Pasadena, CA 91189-0512 4. G & R Plumbing Enterprises Inc Trade Debt $2,131 2545 S Nashville Ave Orlando, FL 32805-5255 5. M7 Services LLC Trade Debt $2,656 19747 Highway 59 N #340 Humble, TX 77338-3576 6. Massey Services Inc. Trade Debt $3,397 P.O. Box 547668 Orlando, FL 32854-7668 7. Ocean Bank Bank Loan $763,340 780 NW 42nd Ave Ste 400 Miami, FL 33126 8. Onpeak Trade Debt $9,540 8313 Collection Center Dr Chicago, IL 60693-0083 9. Proscape Trade Debt $2,332 285 E Oak Ridge Rd Orlando, FL 32809-4140 10. RD Pool Maint Inc. Trade Debt $2,800 2353 N Stewart St Kissimmee, FL 34746-3046 11. Royal Cup Inc. Trade Debt $2,927 P.O. Box 841000 Dallas, TX 75284-1000 12. Sheraton Lake Trade Debt $10,803 Buena Vista 12205 Apopka-Vineland Rd Orlando, FL 32836 13. Southern Aluminum Trade Debt $11,012 P.O. Box 884 Magnolia, AR 71754-0884 14. Summit Broadband Trade Debt $4,101 P.O. Box 10822 Naples, FL 34101-0822 15. Summit Broadband Inc. Trade Debt $6,943 P.O. Box 10822 Naples, FL 34101-0822 16. Sunbrite Outdoor Furniture Inc. Trade Debt $4,080 610 Irene Street Orlando, FL 32805-1050 17. System Tech Services Inc Trade Debt $8,594 851 Central Park Dr Sanford, FL 32771-6602 18. Team Travel Source Trade Debt $8,245 12910 Shelbyville Road Ste 215 Louisville, KY 40243-1594 19. Visit Orlando Trade Debt $2,400 6277 Sea Harbor Dr, Ste 400 Orlando, FL 32821-8028 20. Waste Connect Trade Debt $4,319 1099 Miller Drive Altamonte Springs, FL 32701-2069 VALARIS PLC: Mulls Filing for Bankruptcy Protection --------------------------------------------------- Valaris PLC in early June skipped bond interest payments with the 30-day grace period expiring on July 1, 2020. According to Seeking Alpha, similar to peer Diamond Offshore Drilling in April 2020, expect Valaris to file for bankruptcy within or the very end of the current grace period. Valaris has announced it has not paid the June 1 interest payments on its senior notes due 2022 and 2042, and has entered into a 30-day grace period with its lenders. Jacob Lundberg from Credit Suisse said that Valaris could go through a restructuring in the second half of this year. Many of its bonds are trading around or below 10 cents on the dollar, and its stock is down 89% year to date. About Valaris PLC Valaris plc is an offshore drilling contractor headquartered in London, United Kingdom. It is the largest offshore drilling and well drilling company in the world and owns 74 rigs, including 50 offshore jack-up rigs, 16 drillships, and 8 semi-submersible platform drilling rigs. VISTA PROPPANTS AND LOGISTICS LLC: Files Chapter 11 and Reorganizes ------------------------------------------------------------------- Vista Proppants and Logistics, LLC and its subsidiaries (collectively, "Vista" or the "Company"), announced today that they have commenced cases for a voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. The Company intends to use the reorganization cases to restructure debt from its balance sheet, substantially deleveraging Vista's capital structure and positioning the Company for long-term success given the current significantly depressed industry environment. The Company currently estimates that it will emerge from the Chapter 11 reorganization within approximately 120 days, and fully expects to operate as normal when the oil and gas industry rebounds. The Company also announced it has secured an $11 million debtor-in-possession credit facility (the "DIP Facility") from the Company's senior lenders to finance the costs and limited business operations during the restructuring process, including meeting obligations to employees, vendors and other constituencies. The Company's senior lenders are fully-supportive of the bankruptcy filings and expect to sponsor a plan of reorganization with Vista to facilitate a prompt exit from Chapter 11. Chief Financial Officer Kristin Whitley Smith commented: "Today's Chapter 11 filings represent a significant milestone in our financial restructuring process to significantly strengthen our financial condition by reducing debt, enhancing liquidity and best positioning our Company to weather the storm and proactively respond when the market begins to recover. After thoroughly evaluating our options and strategic alternatives with our advisors and Board of Directors, we are confident that this is the best path forward for Vista and our stakeholders. During the reorganization proceeding, we will continue with limited day-to-day operations until an industry rebound, and we will maintain ample liquidity and resources to support our business. We appreciate the continued, strong support demonstrated by our lenders, which should enable us to move quickly and smoothly through the restructuring process and emerge as a stronger long-term competitor." About Vista Proppants and Logistics Vista Proppants and Logistics, LLC -- https://www.vprop.com/ -- is a pure-play, in-basin provider of frac sand solutions in producing regions in Texas and Oklahoma, including the Permian Basin, Eagle Ford Shale and SCOOP/STACK. It is headquartered in Fort Worth, Texas. Vista Proppants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-42002) on June 9, 2020. At the time of the filing, Vista Proppants had estimated assets of less than $50,000 and liabilities of between $100 million and $500 million. Judge Edward L. Morris oversees the cases. The Debtors tapped Haynes and Boone, LLP, as their legal counsel. The Company has retained Alvarez & Marsal North America, LLC, as its Chief Restructuring Officer. Kurtzman Carson Consultants, LLC, is the claims, noticing, balloting and solicitation agent. VYCOR MEDICAL: Incurs $175,000 Net Loss for Quarter Ended March 31 ------------------------------------------------------------------ Vycor Medical, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $174,948 on $351,051 of revenue for the three months ended March 31, 2020, compared to a net loss of $180,298 on $350,666 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $1,133,119, total liabilities of $2,691,213, and $1,558,094 in total stockholders' deficiency. The Company has incurred losses since its inception, including a net loss of $174,948 for the three months ended March 31, 2020 and has not generated sufficient positive cash flows from operations. As of March 31, 2020 the Company had a working capital deficiency of $560,861, excluding related party liabilities of $1,477,513. The Company said that these conditions, among others, raise substantial doubt regarding its ability to continue as a going concern. A copy of the Form 10-Q is available at: https://is.gd/CQYKfq Vycor Medical, Inc. designs, develops, and markets neurological medical devices and therapies in the United States and Europe. The company provides non-invasive rehabilitation therapies for those who have vision disorders resulting from neurological brain damage that caused by a stroke. It operates in two segments, Vycor Medical and NovaVision. The Vycor Medical segment provides devices for neurosurgery comprising ViewSite Brain Access System, a retraction and access system for brain and spine surgeries. The NovaVision segment offers non-invasive, computer-based rehabilitation targeted at an un-addressed market of people who have lost their sight as a result of stroke or other brain injury. It offers therapies that restore and compensate for lost vision, including VRT that delivers a series of light stimuli along the border of the patient's visual field loss; VRT and NeET restoration therapies; and NeuroEyeCoach compensation or saccadic therapies for those suffering vision loss as a result of neurological trauma. The company primarily serves hospitals and medical professionals. Vycor Medical, Inc. was founded in 2005 and is headquartered in Boca Raton, Florida. WASHINGTON PRIME: Needs Financial Waivers to Remain Going Concern ----------------------------------------------------------------- Washington Prime Group Inc. filed its quarterly report on Form 10-Q, disclosing a net income attributable to common shareholders of $3,375,000 on $152,600,000 of total revenues for the three months ended March 31, 2020, compared to a net loss attributable to common shareholders of $5,175,000 on $168,823,000 of total revenues for the same period in 2019. At March 31, 2020, the Company had total assets of $4,246,794,000, total liabilities of $3,375,254,000, and $868,275,000 in total equity. The Company said that the continuing spread of COVID-19 may have a material adverse effect on its ability to maintain compliance with its debt covenants and, under certain circumstances, remain a going concern. The Company further stated, "As a result of the related events due to the COVID-19 pandemic, we may experience a material adverse effect on our income and expenses. COVID-19's impact on our income and expenses may also impact our ability to maintain compliance with our credit facility and bond covenants. We are engaged in discussions with our unsecured creditors and based upon these discussions we believe, to the extent that the impact of COVID-19 results in potential non-compliance with financial covenants, it is probable that we will remain compliant with such covenants through some combination of waivers, modifications or other amendments to the related agreements. However, no assurances can be made in this regard, and if we are unable to agree on the terms of such waivers and changes, this could create substantial doubt about our ability to continue as a going concern through May 7, 2021." A copy of the Form 10-Q is available at: https://is.gd/aytV8Z WESTWATER RESOURCES: Says Substantial Going Concern Doubt Exists ---------------------------------------------------------------- Westwater Resources, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3,287,000 on $0 of revenue for the three months ended March 31, 2020, compared to a net loss of $3,174,000 on $0 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $26,304,000, total liabilities of $10,056,000, and $16,248,000 in total stockholders' equity. At March 31, 2020 the Company's cash balances were $0.9 million and the Company had a working capital deficit balance of $2.2 million. The Company's cash balance at May 8, 2020 is $0.5 million. Subsequent to May 8, 2020, the Company expects to fund operations as follows: * The new Stock Purchase Agreement with Lincoln Park Capital, LLC., approved by the Company's shareholders at the annual shareholders meeting on April 28, 2020, whereby the Company may place up to $12.0 million in the aggregate of the Company's common stock on an ongoing basis when required by the Company over a term of 24-months after execution of the agreement. * The Controlled Equity Offering Sales Agreement (the "ATM Offering Agreement") with Cantor Fitzgerald & Co. The Company currently has registered the offer and sale from time to time of shares of its common stock having an aggregate offering price of up to $3.1 million. As of May 8, 2020, $2.8 million registered shares are available for future sales under the ATM Offering Agreement. * The loan proceeds in the amount of $0.3 million received from the Paycheck Protection Program ("PPP") by URI, Inc., a wholly owned subsidiary of WWR, on May 4, 2020. The Company plans to use the proceeds from this loan for payroll and benefits costs for its South Texas operations, which are eligible expenses in accordance with the PPP. Under the terms of the promissory note executed by URI, principal and accrued interest are forgivable after eight weeks as long as the proceeds are used for eligible purposes. Any unforgiven portion of the loan is payable over two years at an interest rate of 1% with a deferral of payments for the first six months. * Other debt and equity financings and asset sales. "While the Company has been successful in the past in raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available to it in amounts sufficient to meet its needs, or on terms acceptable to the Company. Stock price volatility and uncertain economic conditions caused by the recent Covid-19 pandemic could significantly impact the Company's ability to raise funds through equity financing. In the event that we are unable to raise sufficient additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition, long-term prospects and ability to continue as a viable business. Considering all of the factors above, the Company believes there is substantial doubt regarding its ability to continue as a going concern." A copy of the Form 10-Q is available at: https://is.gd/E4q0F1 Westwater Resources, Inc. operates as a diversified energy materials development company. The Company was formerly known as Uranium Resources, Inc. and changed its name to Westwater Resources, Inc. in August 2017. Westwater Resources, Inc. was founded in 1977 and is based in Centennial, Colorado. WHITING PETROLEUM: Jones Walker Represents Mineral Lien Claimants ----------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Jones Walker LLP submitted a verified statement that it is representing the following parties in the Chapter 11 cases of Whiting Petroleum Corporation et al.: Freeport-McMoRan Oil & Gas LLC 11450 Compaq Center West Drive, Suite 450 Houston, TX 77070-1445 * Freeport-McMoRan Oil & Gas LLC is the designated Unit Operator of the Point Arguello Unit, as shown on the records of the United States Department of the Interior, Bureau of Safety and Environmental Enforcement, and has asserted claims related thereto in these Chapter 11 Cases in an aggregate amount to be determined. Arguello Inc. 11450 Compaq Center West Drive, Suite 450 Houston, TX 77070- 1445 * Arguello Inc. has asserted claims in these Chapter 11 Cases related to the Point Arguello Unit in an aggregate amount to be determined. Point Arguello Pipeline Company Partnership 11450 Compaq Center West Drive, Suite 450 Houston, TX 77070- 1445 * Point Arguello Pipeline Company Partnership has asserted claims in these Chapter 11 Cases related to the Point Arguello Unit in an aggregate amount to be determined. Point Arguello Natural Gas Line Company 11450 Compaq Center West Drive, Suite 450 Houston, TX 77070- 1445 * Point Arguello Natural Gas Line Company has asserted claims in these Chapter 11 Cases related to the Point Arguello Unit in an aggregate amount to be determined. Gaviota Gas Plant Company 11450 Compaq Center West Drive, Suite 450 Houston, TX 77070- 1445 * Gaviota Gas Plan Company has asserted claims in these Chapter 11 Cases related to the Point Arguello Unit in an aggregate amount to be determined. The foregoing parties have retained Jones Walker as their legal counsel with respect to matters arising in this case and/or for the purpose of asserting claims and/or protecting other rights and interests in relation to the Debtors. Jones Walker has fully advised each of the parties with respect to their concurrent representation, and each of the parties has consent to such representation. Jones Walker does not hold a claim against or interest in any of the Debtors at this time, and has not filed a proof of claim on its own behalf in any of these Chapter 11 Cases. The undersigned verifies that the foregoing is true and correct to the best of counsel's knowledge. Jones Walker reserves the right to amend or supplement this Verified Statement in accordance with the requirements of Bankruptcy Rule 2019 and any additional information that may become available throughout the course of these Chapter 11 Cases. The Firm can be reached at: Elizabeth J. Futrell, Esq. JONES WALKER LLP 201 St. Charles Avenue, Suite 5100 New Orleans, LA 70170-5100 Tel: (504) 582-8260 Fax: (504) 589-8260 Email: efutrell@joneswalker.com - and - Joseph E. Bain, Esq. JONES WALKER LLP 811 Main Street, Suite 2900 Houston, TX 77002 Tel: (713) 437-1800 Fax: (713) 437-1810 Email: jbain@joneswalker.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/GqSXgJ About Whiting Petroleum Corp Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. WHITING PETROLEUM: Paul, Porter Update on Noteholder Group ---------------------------------------------------------- In the Chapter 11 cases of PG&E Corporation and Pacific Gas and Electric Company, et al., the law firms of Paul, Weiss, Rifkind, Wharton & Garrison LLP and Porter Hedges LLP submitted a supplemental verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of Ad Hoc Committee of Noteholders that they are representing. The Ad Hoc Committee of Noteholders formed by holders of 5.75% senior notes due 2021, 6.25% senior notes due 2023, and 6.625% senior notes due 2026. In or around February 2020, certain members of the Committee engaged Paul Weiss to represent the Committee in connection with the Members' holdings of the Senior Notes. In March 2020, those certain members of the Committee engaged Porter Hedges to represent the Committee in connection with the Members' holdings of the Senior Notes. As of June 26, 2020, members of the Committee and their disclosable economic interests are: LOOMIS SAYLES & COMPANY One Financial Center Boston, MA 02111 * $8,366,000 in aggregate principal amount of 1.250% Convertible Senior Notes due 2020 * $125,017,000 in aggregate principal amount of 5.750% senior notes due 2021 * $28,838,000 in aggregate principal amount of 6.250% senior notes due 2023 * $123,000,000 in aggregate principal amount of 6.625% senior notes due 2026 WELLINGTON MANAGEMENT COMPANY LLP 280 Congress Street Boston, MA 02210 * $127,947,000 in aggregate principal amount of 6.625% senior notes due 2026 J.P. MORGAN INVESTMENT MANAGEMENT INC. and JP MORGAN CHASE BANK, N.A. 1 E. Ohio Street Indianapolis, IN 46204 * $8,430,000 in aggregate principal amount of 1.250% Convertible Senior Notes due 2020 * $41,281,000 in aggregate principal amount of 5.750% senior notes due 2021 * $38,895,000 in aggregate principal amount of 6.250% senior notes due 2023 * $71,055,000 in aggregate principal amount of 6.625% senior notes due 2026 BLACKROCK FINANCIAL MANAGEMENT 40 East 52nd Street New York, NY 10022 * $21,886,000 in aggregate principal amount of 5.750% senior notes due 2021 * $12,683,000 in aggregate principal amount of 6.250% senior notes due 2023 Upon information and belief formed after due inquiry, Counsel does not currently hold any claim against, or interest in, the Debtors or their estates. Paul Weiss's address is 1285 Avenue of the Americas, New York, New York 10019. Porter Hedges's address is 1000 Main Street, 36th Floor, Houston, Texas 77002. Counsel submits this Supplemental Statement out of an abundance of caution, and nothing herein should be construed as an admission that the requirements of Bankruptcy Rule 2019 apply to Counsel's representation of the Ad Hoc Committee of Noteholders. Co-Counsel to the Ad Hoc Committee of Noteholders can be reached at: PORTER HEDGES LLP John F. Higgins, Esq. 1000 Main Street, 36th Floor Houston, TX 77002-6341 Telephone: (713) 226-6648 Facsimile: (713) 226-6248 Email: jhiggins@porterhedges.com - and - PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Andrew N. Rosenberg, Esq. Alice Belisle Eaton, Esq. Michael M. Turkel, Esq. Omid Rahnama, Esq. 1285 Avenue of the Americas New York, NY 10019 Telephone: (212) 373-3000 Facsimile: (212) 757-3990 Email: arosenberg@paulweiss.com aeaton@paulweiss.com mtrukel@paulweiss.com orahnama@paulweiss.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/iJyohO About Whiting Petroleum Whiting Petroleum Corporation, a Delaware corporation -- http://www.whiting.com/-- is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange. Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant. WILLIAMS SCOTSMAN: Moody's Raises CFR to B1, Outlook Stable ----------------------------------------------------------- Moody's Investors Service upgraded Williams Scotsman International Inc.'s (Williams Scotsman) corporate family rating to B1 from B2 and confirmed its senior secured rating at B3, concluding the review for upgrade initiated on 3 March 2020. The outlook is stable. The rating actions follow the closing of the merger on 1 July between WillScot Corporation (the corporate parent of Williams Scotsman) and Mobile Mini, Inc. (Mobile Mini), which was announced on 2 March 2020. Outlook Actions: Issuer: Williams Scotsman International Inc. Outlook, Changed to Stable from Ratings Under Review Rating Actions: Issuer: Williams Scotsman International Inc. Corporate Family Rating, Upgraded to B1 from B2 Senior Secured Regular Bond/Debenture, Confirmed at B3 RATINGS RATIONALE The upgrade of the corporate family rating to B1 from B2 reflects Moody's assessment that Williams Scotsman's credit profile has improved following the closing of its merger with Mobile Mini, as reflected in an increase of its standalone assessment to b1 from b2. Moody's expects that the combined entity will have stronger profitability and lower leverage (as measured by Debt / EBITDA) than Williams Scotsman. Furthermore, Moody's believes that the merger strengthens the company's strong market position in modular leasing, by combining Williams Scotsman, the largest provider of modular space leasing in the US, and Mobile Mini, the largest provider of portable storage leasing solutions. Moody's expects the company's profitability to improve over the next 12-18 months as transaction-related charges abate, it begins to realize cost synergies related to the merger and remaining synergies from prior acquisitions. Williams Scotsman's profitability has been weak for the last two years due to the negative impact on its EBITDA from transaction-related and integration costs stemming from its three recent acquisitions. As a result of the merger, Moody's expects capital to decline due to the recognition of goodwill, which is likely to be created by the all-stock merger, while leverage is likely to improve over the next 12-18 months, as the company pays down debt and increases its EBITDA. Moody's also expects asset quality to remain solid as the company's fleet of modular space and portable storage units are long-lived assets with transparent contractual cash flows. The limited technological obsolescence of these assets results in low residual risk, in Moody's view. The company's liquidity profile benefits from absence of near-term maturities, and the extended maturity of its new asset-backed lending (ABL) credit facility and senior secured notes, which were issued as a part of the merger. The confirmation of the B3 senior secured rating reflects its priority ranking in Williams Scotsman's capital structure, as well as the increased preponderance and capacity of borrowings under its upsized ABL facility. The facility has first lien priority on the assets of Williams Scotsman, and is senior in payment priority to the company's rated second lien senior secured notes. The stable outlook reflects Moody's expectation that Williams Scotsman will continue to improve its profitability and leverage over the next 12-18 months. As a result of the turmoil stemming from the coronavirus pandemic outbreak, Williams Scotsman's traditional end markets are experiencing project delays and uncertain start dates, and the company is planning for a year-over-year decrease of approximately 20% in new project deliveries in the second quarter of 2020. However, as of 1 May 2020, the company had experienced no material changes in lease duration, renewal or payment activity to its units on rent. To mitigate the negative impact on EBITDA from the decline in new orders, Williams Scotsman has implemented reductions in its variable costs and capital spending. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the firm improves its profitability, achieving and sustaining a level corresponding to net income to average managed assets (NI/AMA) above 2.0%, and reduces and maintains its Debt/EBITDA to below 3.5x The ratings could be downgraded if the company's financial performance substantially deteriorates, if it fails to achieve the cost synergies related to the merger with Mobile Mini or if it increases leverage from current levels, for example due to additional borrowings or debt-financed acquisitions. WINDERMERE CLUB: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Windermere Club, LLC d/b/a Windermere Golf and Country Club 1101 Longtown Road E Blythewood, SC 29016 Case No.: 20-02780 Business Description: The Windermere Club, LLC owns and operates a golf course in South Carolina. Chapter 11 Petition Date: July 2, 2020 Court: United States Bankruptcy Court District of South Carolina Judge: Hon. David R. Duncan Debtor's Counsel: Jane H. Downey, Esq. MOORE TAYLOR LAW FIRM, PA PO Box 5709 1700 Sunset Boulevard West Columbia, SC 29171 Tel: (803) 454-1983 E-mail: jane@mttlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by John T. Bakhaus, general manager. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/rXj4ge WINDSTREAM HOLDINGS: Paul Weiss 5th Update on First Lien Group -------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP submitted a fifth amended verified statement to update its list of members of the First Lien Ad Hoc Group in the Chapter 11 cases of Windstream Holdings, Inc., et al. The ad hoc committee of certain unaffiliated holders of loans or other indebtedness issued under: (i) that certain Sixth Amended and Restated Credit Agreement, originally dated as of July 17, 2006, amended and restated as of April 24, 2015 and subsequently amended, among Windstream Services, LLC, the other loan parties party thereto, the lenders from time to time party thereto, J.P. Morgan Chase Bank, N.A., as administrative agent and collateral agent and the other parties thereto; and (ii) that certain Indenture for certain 8.625% notes due 2025 dated as of November 6, 2017, by and among Windstream Services, LLC and Windstream Finance Corp., the guarantor party thereto, Delaware Trust Company, as trustee and notes collateral agent and the holders thereunder. In February 2019, certain members of the First Lien Ad Hoc Group retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent them in connection with a potential restructuring involving the above-captioned debtors and debtors-in-possession. From time to time thereafter, certain additional holders of First Lien Obligations joined the First Lien Ad Hoc Group. On April 8, 2019, Paul, Weiss filed the Verified Statement of the First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019 [Docket No. 239]. On July 12, 2019, Paul, Weiss filed the Amended Verified Statement of the First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019 [Docket No. 790]. On November 19, 2019, Paul, Weiss filed the Second Amended Verified Statement of the First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019 [Docket No. 1228]. On January 22, 2020, Paul, Weiss filed the Third Amended Verified Statement of the First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019 [Docket No. 1444]. On April 20, 2020, Paul, Weiss filed the Fourth Amended Verified Statement of the First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019 [Docket No. 1699]. Since then, the members of the First Lien Ad Hoc Group and the disclosable economic interests in relation to the Debtors that such members hold or manage have changed. Accordingly, pursuant to Bankruptcy Rule 2019, Paul, Weiss submits this Fifth Amended Statement. As of the date of this Fifth Amended Statement, Paul, Weiss represents only the members of the First Lien Ad Hoc Group in their respective capacities as holders of First Lien Obligations, and does not represent or purport to represent any other entities with respect to the Debtors' chapter 11 cases. In addition, each member of the First Lien Ad Hoc Group does not purport to act, represent or speak on behalf of any other entity in connection with the Debtors' chapter 11 cases. As of June 16, 2020, members of the First Lien Ad Hoc Group and their disclosable economic interests are: Brigade Capital Management, LP Management, LP 399 Park Avenue, 16th Fl. New York, NY 10022 * Term Loan Obligations: $83,410,716 * Windstream Holdings, Inc. Common Stock: 88,583 shares Franklin Mutual Advisers, LLC 101 John F. Kennedy Parkway Short Hills, NJ 07078 * Term Loan Obligations: 43,089,000 * Revolving Credit Facility Obligations: $192,449,530 HBK Master Fund L.P. 2300 North Field Street, Suite 2200 Dallas, Texas 75201 * Term Loan Obligations: $56,196,809 * First Lien Note Obligations: $86,147,000 Oaktree Capital Management, L.P. 333 South Grand Avenue, 28th Floor Los Angeles, CA 90071 * Term Loan Obligations: $189,402,344 * Revolving Credit Facility Obligations: $90,495,597 * First Lien Note Obligations: $6,126,000 Pacific Investment Management Company LLC 650 Newport Center Drive Newport Beach, CA 92660 * Term Loan Obligations: $509,071,442 Counsel to the First Lien Ad Hoc Group reached at: PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Andrew N. Rosenberg, Esq. Brian S. Hermann, Esq. Samuel E. Lovett, Esq. 1285 Avenue of the Americas New York, NY 10019-6064 Telephone: (212) 373-3000 Facsimile: (212) 757-3990 E-mail: arosenberg@paulweiss.com bhermann@paulweiss.com slovett@paulweiss.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/jZIZYo About Windstream Holdings Windstream Holdings, Inc., and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as its financial advisor, and Perella Weinberg Partners LP as investment banker. WORLDS INC: Incurs $321,000 Net Loss for Quarter Ended March 31 --------------------------------------------------------------- Worlds Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $321,055 on $0 of revenue for the three months ended March 31, 2020, compared to a net loss of $264,144 on $0 of revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $1,532,827, total liabilities of $3,198,871, and $1,666,044 in total stockholders' deficit. The Company has a working capital deficiency of $1,872,616 and a stockholder's deficiency of $1,666,044 and used $241,050 of cash in operations for the year ended December 31, 2019. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. A copy of the Form 10-Q is available at: https://is.gd/9JDz9p Worlds Inc. designs and develops software, content, and related technology for the creation of interactive three-dimensional (3D) Internet Websites. Its 3D Internet sites are designed to enable visitation by users by providing them with online communities featuring various content, information content, and interactive capabilities. The company's technology includes WorldsShaper, a compositing 3D building tool that integrates pre-existing or custom content; WorldsServer, a scalable software to control and operate online virtual communities; WorldsBrowser to access the 3D environments; WorldsPlayer to view and experience multi-user, interactive technology; and Worlds Gamma Libraries to compose sample worlds, textures, models, avatars, actions, sensors, sounds, motion sequences, and other behaviors. Its technology is used in various applications, including virtual meeting places, 3D e-commerce stores, and virtual classrooms. The company was formerly known as Worlds.com Inc. and changed its name to Worlds Inc. in February 2011. Worlds Inc. is based in Brookline, Massachusetts. YRC WORLDWIDE: Needs to Fund Operations to Remain as Going Concern ------------------------------------------------------------------ YRC Worldwide Inc. filed its quarterly report on Form 10-Q, disclosing a net income of $4 million on $1,150 million of operating revenue for the three months ended March 31, 2020, compared to a net loss of $49 million on $1,182 million of operating revenue for the same period in 2019. At March 31, 2020, the Company had total assets of $1,853 million, total liabilities of $2,287 million, and $434 million in total shareholders' deficit. The Company said, "During 2019, the freight industry experienced a recession. This recession appeared to have stabilized in the first quarter of 2020. However, beginning the last two weeks of March our industry and the economy at-large experienced a precipitous and significant decline in economic activity due to the impact that COVID-19. The COVID-19 pandemic and related economic repercussions have created significant uncertainty and has resulted in a significant decrease in the volume that was expected during 2020 by both the Company and the industry as a whole. As COVID-19 is expected to negatively impact our liquidity levels, in order to maintain adequate liquidity to fund our operations the Company began taking liquidity preservation actions in late March and early April including layoffs, furloughs, further eliminations of short-term incentive compensation and reductions in capital expenditures, and we have sought deferment of payments to various parties. We also amended our New Term Loan Agreement to eliminate the vast majority of interest owed in cash for the first half of 2020. Further, we benefited from the support afforded to us under the CARES Act which has provided temporary relief related to the payment of employer payroll taxes and non-union pension payments. Further actions are currently being pursued to preserve liquidity as necessary over the duration of the current economic downturn. Not all of these actions are within our control. Given the significant uncertainty arising from the COVID-19 pandemic and the related economic repercussions, there can be no assurance that our efforts to maintain adequate liquidity will be achieved. "Under the New Term Loan, we are required to maintain at least $200.0 million in Adjusted EBITDA on a TTM basis measured each quarter until maturity. For the TTM period ended March 31, 2020, we achieved Adjusted EBITDA of $214.6 million. "In April 2020, we amended the New Term Loan to waive the Adjusted EBITDA covenant for every quarter of the year through and including December 31, 2020. While we obtained relief from this covenant for the duration of 2020, based on current projections and primarily as a result that COVID-19 had on our business, we do not believe that our results of operations will allow us to comply with the minimum Adjusted EBITDA covenant at March 31, 2021, which is within twelve months of the issuance date of the financial statements included in this report. We intend to amend the New Term Loan again; however, obtaining an amendment is not within our control. If we are unable to comply with our covenants, the New Term Loan lenders may exercise their rights available to them under the New Term Loan credit agreement. As such, absent governmental assistance or a meaningful stabilization of the economy in the near term, our ability to comply with our debt covenants for a period of one year from the date these financial statements have been issued, and our ability to generate sufficient cash flows and liquidity to fund operations raises substantial doubt about our ability to continue as a going concern, as defined in ASC 205-40, Going Concern. "We also cannot provide assurances that we will be able to comply with the Liquidity financial covenant during the Specified Period provided for in the Amendment. While a number of actions are being taken to manage liquidity, the duration of the current economic slowdown is uncertain, and these actions may not be sufficient if the economic environment is impacted for a sustained period of time." A copy of the Form 10-Q is available at: https://is.gd/WfBCYe ZPOWER TEXAS: Hires Local Liquidators as Auctioneer --------------------------------------------------- ZPower Texas, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ Local Liquidators, LLC as their auctioneer. The Debtor manufactures its microbatteries at its facility in Camarillo, California. Since the Petition Date, the Debtor has scaled back its operations. Eventually, the Debtor hopes to outsource its manufacturing to a third party. In the meantime, the Debtor is left with a considerable stock of equipment it no longer needs. Simultaneously with this Application, the Debtor is filing its Motion for Authority to Sell Excess Equipment via Online Auction, pursuant to which the Debtor proposes to have Local Liquidators sell the equipment in one or more online auctions. Local Liquidators is entitled to a commission of 15 percent of gross auction proceeds, inclusive of expenses. Local Liquidators does not hold or represent any interest adverse to the estates, according to court filings. The auctioneer can be reached through: Gabriel Prado Local Liquidators, LLC 9034 N. 23rd Ave Ste 13 Phoenix, AZ 85021 Toll Free - 1 (833) 622-2800 About ZPower Texas ZPower -- https://www.zpowerbattery.com -- is a manufacturer of silver-zinc rechargeable microbatteries. The Company serves the consumer electronics, medical, and military and defense industries. ZPower Texas, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Tex. Case No. 20-41158) on March 17, 2020. At the time of the filing, the Debtor estimated assets of between $10 million to $50 million and liabilities of between $10 million to $50 million. The petitions were signed by Glynne Townsend, chief restructuring officer. The case is presided by Hon. Mark X. Mullin. Davor Rukavina, Esq., of Munsch Hardt Kopf & Harr, P.C., is the Debtors' counsel. Honigman LLP is special IP counsel. [*] 2020 Paycheck Protection Program Flexibility Act ---------------------------------------------------- Lauren Deyo and David Robinson of Nexsen Pruet, PLLC published on JDSupra an article titled "Paycheck Protection Program Flexibility Act of 2020": President Trump signed H.R. 7010 – the Paycheck Protection Program Flexibility Act ("PPPFA") – into law on June 5, 2020. The PPPFA makes several sizable changes to the Paycheck Protection Program ("PPP"). This brief alert will address the major changes, including the extension of the borrower's "covered period" and change to the payroll/non-payroll expenses ratio. Extension of the covered period: The most significant change for those companies that have struggled to use their PPP funds in the allotted 8 week period is the increase of the covered period from 8 weeks to 24 weeks. However, borrowers can choose to use their original covered period instead of utilizing the extended period set out in the PPPFA. Change in payroll/non-payroll expenses ratio: Guidance in the wake of the CARES Act's passage mandated that borrowers use at least 75% of their PPP proceeds towards payroll expenses, and up to 25% could be used for non-payroll expenses, including rent, utilities, and mortgage interest payments. The PPPFA now allows for up to 40% of the loan to be used on non-payroll expenses instead of 25%, and at least 60% of the loan proceeds must be used for payroll expenses instead of 75%. Ability to "cure" reductions to workforce and pay: The time by which you may "cure" any reductions to your employment levels and/or pay has also changed. As you may recall, reduction to your workforce or their pay during your covered period would reduce the amount of forgiveness that you'd be eligible for. However, if these reductions were made between February 15, 2020 and April 26, 2020, you could restore these numbers by June 30, 2020 and your forgiveness would not be reduced as a result. The PPPFA has changed the deadline of June 30, 2020 to December 31, 2020. New exemption for inability to rehire workforce: Further, forgiveness will not be reduced as a result of reductions in the number of full-time equivalent employees if the borrower is able to, in good faith, adequately document: a. an inability to rehire individuals who were employees of the eligible recipient on February 15, 2020; and an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020; or b. an inability to return to the same level of business activity as such business was operating at before February 15, 2020, due to compliance with requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 1, 2020, and ending December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19. Extended loan maturity: As of the date of the Act's enactment, PPP loans with remaining unforgiven loan amounts will now have a minimum maturity of 5 years (recall that it was previously 2 years). Borrowers and their lenders may otherwise independently agree to alter the terms of their loans to conform to this new requirement, should said loans have been agreed upon prior to the passage of the PPPFA. New time period for payment deferral: Borrowers were previously not required to make any loan payments for six months. According to the PPPFA, deferment will be until the date on which the SBA remits the loan forgiveness amount to the lender. Further, if an eligible recipient fails to apply for forgiveness of a covered loan within 10 months after the last day of the covered period defined in section 1106(a) of the CARES Act, the borrower shall make payments of principal, interest, and fees on their loan beginning 10 months after the last day of their covered period. Deferral of payroll tax payment: Borrowers are now able to delay payment of the employer's share of 2020 payroll taxes, as section 2302 (a)(3) of the CARES Act has been eliminated (previously, deferment was not allowed for borrowers that received forgiveness of their PPP loan(s)). The SBA issued a statement on June 8, 2020, stating that it will be providing additional guidance shortly. Please let one of the members of the Nexsen Pruet team know if we can help you navigate these new requirements. [*] COVID-19 Pandemic Affects North American Trade -------------------------------------------------- Joaquin Contreras, Paul Lalonde, Anca Sattler, Sean Stephenson and Cody Wood of Dentons wrote on JDSupra an article "North American trade in the time of COVID-19": The COVID-19 pandemic has significantly disrupted international trade and supply chains across the world. In this insight, we look at specific measures affecting North America trade. 1. USMCA entry into force Despite the pandemic, the United States-Mexico-Canada Agreement (USMCA or the Agreement), the successor to the North American Free Trade Agreement (NAFTA), has now been ratified and signed into law in all three countries and will enter into force on July 1, 2020. While the COVID-19 pandemic continues to embroil trade flows, the overall timeline for the USMCA's implementation was only delayed by approximately one month. Canada submitted its entry into force notification on April 2, 2020, while Mexico submitted its notification on April 4, 2020. The US trailed behind its counterparts, providing its notification on April 24, 2020, almost three months after the US Congress ratified the Agreement. While the Agreement is now set to enter into force, COVID-19's global disruption of manufacturing operations and supply lines has created uncertainty as to whether businesses are prepared to meet its obligations. Chief among these is the auto industry, which is subject to a much higher rule of origin standard that requires more regional labour and content values into the production of autos and auto parts compared to NAFTA. Already, many automakers and industry representatives are requesting the parties to exercise discretion in enforcing regulatory requirements to allow for a longer transition period to implement the production and supply changes necessary for compliance. The United States Trade Representative (USTR) has begun soliciting requests from vehicle producers to start working on alternative staging regimes that allow for a longer period to comply with the Agreement’s rule of origin requirements. These alternative regimes, which are provided for under the Agreement, may vary depending on the Agreement of all parties. On June 3, 2020, the United States Trade Representative released an initial version of the uniform regulations, crucial for common understanding of customs procedures, such as determinations of rules of origin. Previously, the US Customs and Border Protection (CBP) has issued interim implementation instructions, the Canada Border Services Agency (CBSA) has set up a dedicated USMCA website, and the Mexican Ministry of the Economy has similarly set developed online seminars focused on implementation guidance. The new USMCA terminates the underlying NAFTA framework, but leaves the 1989 Canada-US Free Trade Agreement “suspended.” Certain provisions of the NAFTA, such as investment protections, will remain in force for a limited amount of time. 2. COVID-19, essential and non-essential businesses and supply chain disruption Since the start of the pandemic, supply chains have been strained and disrupted. Labour shortages due to COVID-19-related illness, shelter in place orders, and related business closures have forced vast swaths of the global population to suspend work or move online. The importance of cross border supply chains has been underlined by various agreements and declarations including a 42 WTO Member Statement on COVID-19 and the multilateral trading regime, a Joint Ministerial Statement on commitment to supply chain connectivity, and a Ministerial Coordination Group statement on maintaining essential global links. Data on supply chain disruptions first surfaced in January and February, where China reported a 17.2% decline in exports. Outlooks on global trade frequently predict significantly lower levels of trade, due in part to supply chain disruption, but also decreases and changes in demand as countries, business, and daily life adapts to COVID-19. To date, most North American border crossings and ports continue to operate smoothly and have only been minimally impacted by COVID-19. Here, we focus our review on the key trade-related impacts of the pandemic for North America. Canada * On March 18, 2020, Canada and the US agreed to close temporarily the land ports of entry along the Canada-US border to non-essential travel, to limit the spread of the 2019 Novel Coronavirus (COVID-19). This announcement followed the implementation of Canada’s initial air travel ban. The border closure was recently extended to June 21, 2020. For a full analysis of this measure, see Dentons’ client alert on this issue here. * Several Canadian provinces have enacted business closure orders for non-essential or non-priority businesses under emergency and public health-related legislation. This includes the following provinces: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, New Brunswick, Newfoundland & Labrador. These measures are fluid and change frequently, and several provinces have commenced re-opening plans. Business closures have resulted in certain domestic and international supply chain disruptions. * Further, the Canadian National Strategy for Critical Infrastructure has issued its guidance on essential federal services and functions. This includes work in the following sectors: health, water, food, information and communication technologies, energy and utilities, transportation, manufacturing, finance, safety, government, along with certain miscellaneous services. United States * President Trump issued a proclamation formally declaring a national emergency on March 13, 2020. Despite this proclamation, all orders concerning whether to shut down or restrict operations are being made at the state and local levels. Dentons maintains a comprehensive 50-state tracker addressing various shutdown procedures that can be accessed here. * The US Cybersecurity and Infrastructure Security Agency has identified numerous sectors as comprising "critical infrastructure" during COVID-19. Those are sectors encompass chemical, commercial facilities, communications, critical manufacturing, dams, defense industrial base, emergency services, energy, financial services, food and agriculture, government facilities, healthcare and public health, information technology, nuclear reactors, materials, and waste, transportation systems, and water and wastewater systems. More detailed guidance on identified critical infrastructure and their operations can be found here. * Travel into the United States is restricted for foreign nationals who have travelled to any of the following countries 14 days before their entry: China, Iran, European Schengen area, United Kingdom, and the Republic of Ireland. Current travel restrictions are updated here. * The US has currently restricted travel across the US-Mexico and US-Canada border to essential travel only. Mexico * On March 30, 2020, the Mexican Government issued an Order declaring the disease caused by COVID-19 as a Sanitary Emergency (Sanitary Emergency Declaration) which was originally to be in force until April 30, 2020, and was extended until May 30, 2020, and later June 15, 2020 for non-essential activities. This is subject to a possible regional extension in Mexico moving forward. * As a consequence of the Sanitary Emergency Declaration, on March 31, 2020, the Ministry of Health published in the Federal Register (DOF) an Order establishing Extraordinary Actions to Confront the COVID-19 (Extraordinary Measures Order) declaring that only certain economic activities considered essential to face the COVID-19 were allowed to continue operating. * Under the Extraordinary Measures Order, among the sectors that are considered essential are health, food, transportation (passengers and cargo related to the COVID-19), pharmaceutical telecommunications, agro-industry, finance, supply of essential goods, ports and rail services. * The scope of the essential activities definition has affected many relevant industries in Mexico, in particular, the manufacturing sector, which includes a number of Mexican subsidiaries of US or Canadian companies that manufacture and supply inputs to the North American market, in particular to the United States. Almost 80% or more of these manufacturing plants known as "Maquilas" have been shut down in strategic areas, such as the automotive and electronic sectors. * The return to work activities are comprised of 3 stages: -- Stage 1 began on May 18 and included municipalities that do not have cases of COVID19, nor neighborhood with contagious municipalities – in those municipalities all work activities opened; -- Stage 2 took place between May 18 and 31 and is applicable for companies deemed as essential activities, which must adopt the protocols included in the Guidelines for the return of activities. Please note that the Guidelines do not differentiate between those considered essential from March 30 and the last included. In addition, all "non-essential" companies must adopt said protocols according to the reopening dates of activities by the "traffic light system"; and -- Stage 3 began on June 1 through a weekly health alert "traffic light" system by regions, which will determine the level of alert and what type of activities are authorized to be carried out in the economic, labor, school and social activities. 3. Import and export restrictions on essential goods Despite numerous calls for open trade from the G20 and the WTO Director-General, specifically in relation to essential goods such as personal protective equipment, as well as cooperation agreements many states have adopted export controls in response to the COVID crisis. To date, various countries have reported export controls on personal protective equipment to the WTO. While integrally linked through extensive supply chains, North American states have each responded differently in relation to trade controls. Canada * Throughout the COVID-19 pandemic, Canada has committed to maintaining an open position on trade and supply chains. On March 25, Canada, Australia, Brunei , Chile, Myanmar, New Zealand and Singapore, a majority of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) states, issued a joint ministerial statement affirming their commitment to ensuring supply chain connectivity amidst the COVID-19 situation. * Canada's international commitment was followed by several domestic measures, which include waiving tariffs and sales taxes on all goods imported by or on behalf of public health agencies, hospitals, testing sites, and first response organizations as well as deferring all customs duties until June 30, 2020. Similarly, trade facilitation measures on PPE has been put in place, alongside with relaxing certain regulatory requirements for goods in Canada. The CBSA has also released a listing of applicable tariff classifications for medical supplies. * On April 7, 2020, Prime Minister Justin Trudeau, announced a plan to mobilize the Canadian industry to fight COVID-19. Notably, this included building supply chains for essential goods, including made-in-Canada protective gear and medical equipment, to respond to the higher demand due to the outbreak. The Government of Canada, through Public Works and Government Services Canada (PWGSC), has set up a specific webpage seeking suppliers' support to provide critical goods and services. For more on Canada's specific response to procure essential goods and services, see our insight here. United States * On April 7, 2020, the US Federal Emergency Management Agency (FEMA) and the Department of Homeland Security placed a temporary final rule into effect that extends control over the supply chain of PPE. The rule requires a potential exporter to obtain explicit approval from FEMA before PPE may be exported from the United States, effective until August 10, 2020. * Despite the COVID-19 pandemic, the US has moved forward on several fronts to advance its trade policy objectives. For example, the US recently announced the beginning of negotiations with the United Kingdom on a potential free trade agreement. * The President has, on several occasions, implemented orders under the Defense Production Act to direct the manufacture of PPE. * The US Trade Representative has implemented a special procedure to allow parties importing Chinese-origin products helpful to fighting the COVID-19 pandemic to apply for relief from the Section 301 tariffs that are otherwise imposed. The request process allows submission to be made until at least June 25. * The Food and Drug Administration (FDA), as well as the US CBP, have taken measures to help speed the process of importing PPE and other medical devices into the United States. The FDA guidance allows for certain PPE products to clear US Customs with limited entry documentation. Mexico * On March 27, 2020, the Ministry of Health issued and additional order conferring to the additional government powers to facilitate the supply of essential goods to combat the COVID-19 including (i) measures to require all types of goods and services, national or international, including medical equipment, diagnostic agents, surgical material and hygienic products, as well as all types of goods and devices that are necessary to confront the emergency, without the requirement of public tenders and the compliance of other bureaucratic procedures such as a sanitary license, import permits or sanitary authorizations. * No export controls have been issued as a result of the COVID-19 emergency. Dentons' COVID-19 hub provides a range of timely information, updates and practical guidance on this fast-moving situation, drawing on the full scope of our global legal, policy and innovation capabilities. [*] Employers Can Defer Payroll Taxes After PPP Loan Forgiveness ---------------------------------------------------------------- Morgan Lewis wrote on JDSupra an article titled "Employers May Continue to Defer Payroll Taxes Even After Paycheck Protection Loan Forgiveness": US President Donald Trump signed the Paycheck Protection Program Flexibility Act of 2020 (the Act) on June 5, 2020 modifying certain provisions related to the forgiveness of loans under the Paycheck Protection Program (PPP). We recently published a LawFlash discussing these modifications. In a welcome change, the Act permits employers that qualify for PPP loan forgiveness to continue to defer the employer's share of Social Security taxes under Section 2302 of the Coronavirus Aid, Relief and Economic Security (CARES) Act. Section 2302 of the CARES Act permits an employer to defer the deposit and payment of its share of Social Security taxes otherwise due during the period beginning on March 27, 2020 and ending on December 31, 2020. Half the deferred taxes are due on December 31, 2021, with the remaining 50% due on December 31, 2022. To the extent that an employer is eligible for an employee retention credit under Section 2301 of the CARES Act and/or payroll tax credits for qualified leave payments under the Families First Coronavirus Response Act (FFCRA), those payroll tax credits will supplement (as opposed to substitute) the deferral of the employer's Social Security tax. Therefore, as a practical matter, an employer may defer its share of Social Security tax prior to determining whether it is entitled to the leave credits under the FFCRA or the employee retention credit under Section 2301 of the CARES Act, and prior to determining the amount of employment tax deposits it may retain in anticipation of these credits. Under the CARES Act and IRS guidance issued thereunder, an employer that received a PPP loan could continue to defer the deposit and payment of the employer's share of Social Security tax due up until the point that the PPP loan was forgiven. Once the employer’s PPP loan was forgiven, an employer could continue to defer Social Security taxes that the employer already deferred, but the employer could not defer any employer Social Security taxes due after the date of forgiveness. The Act eliminates this rule so that an employer that has a PPP loan forgiven may continue to defer its share of Social Security tax due even after it receives a decision from the lender that the loan has been forgiven. However, the Act does not address whether an employer that did not utilize the deferral provision under Section 2302 in anticipation of PPP loan forgiveness—because it could not stop its deposits fast enough or because of the ambiguity surrounding the interplay between the PPP loan and the Social Security tax deferral provisions of the CARES Act—is able to retroactively defer the employer’s portion of Social Security taxes already deposited. The draft Form 941 instructions, dated June 1, 2020, provide that an employer cannot defer taxes it has already paid. However, the American Bar Association (ABA) submitted a letter to the Internal Revenue Service (IRS) on May 12, 2020 recommending that the IRS issue guidance providing that an employer may offset against other employment taxes owed during the remainder of 2020, in order to recoup any otherwise forgone deferrals of employer Social Security tax. We anticipate further guidance to address the issue raised by the ABA and resolve whether an employer may take full advantage of the deferral opportunity set forth in Section 2302. [*] Expanded SBRA Can Assist Distressed Businesses -------------------------------------------------- Leonard Spinelli of Genova Burns LLC wrote on JDSupra an article titled "CARES Act: Expanded Small Business Reorganization Act Can Assist Distressed Businesses": On Feb. 19, 2020, just a few months before the COVID-19 pandemic sent shockwaves throughout the business communities, the Small Business Reorganization Act ("SBRA") became effective. Now more than ever, as payroll protection loans and treasury funding appears to wane, small businesses should seriously consider whether leveraging the streamlined reorganization offered under the SBRA is a viable option to sustain operations and stave off liquidation during this period of economic shutdown. In particular, the CARES Act expanded the debt limits for filing under the SBRA, from under $2.725 million to $7.5 million. In doing so, Congress greatly expanded the availability of reorganization under the SBRA to businesses that would not have previously qualified. However, the increased debt limits are only available to filers who commence a reorganization on or before March 27, 2021. As a result, businesses who might otherwise not be eligible to reorganize under the SBRA should consider filing before March 27, 2021. The SBRA is intended to reduce the barriers that once prevented small businesses from effectively reorganizing under Chapter 11. Under "Subchapter V" of the Bankruptcy Code, a small business reorganization is streamlined by eliminating previously existing barriers, such as cumbersome reporting requirements, a lengthy and costly reorganization process, and limiting certain creditor rights under Chapter 11, such as “absolute priority,” and permissive modification of loans secured by a principal residence. In addition, a Trustee is appointed to oversee the case and facilitate a consensual reorganization plan – in other words, to promote a plan that all impaired creditors approve. Businesses who are currently engaged in a Chapter 11 reorganization whose total debt (secured and unsecured) is less than $7.5 million are now eligible to file under Subchapter V, and existing eligible debtors in Chapter 11 may be able to convert to a Subchapter V petition, as recently held by a California Bankruptcy Court. In practice, Subchapter V alleviates some of the burdens of small business reorganization through the following mechanisms: 1. Automatic Appointment of a Trustee: Upon filing a Subchapter V petition, a Trustee is appointed to oversee the case, whose primary function is to "facilitate a consensual plan of reorganization" – in other words, a plan in which all impaired creditors vote to confirm the plan; 2. Absolute Priority Rule Eliminated: Creditors who are impaired under a plan of reorganization lose their absolute right to reject a plan, as the Subchapter V debt has significantly more power to "cram down" a non-consensual plan so long as the debtor contributes all of its disposable income for a period of 3 to 5 years, as the court may determine. The "absolute priority rule" refers to the requirement in Chapter 11 that impaired creditors must receive at least the value to which they would be entitled in a hypothetical Chapter 7 liquidation of the business; under Subchapter V the court has more discretion to determine what is "fair and equitable" under the circumstances; 3. New Value Rule Eliminated: Equity holders of a small business debtor need not provide "new value" to retain their equity interest if creditors are not fully paid. To confirm a reorganization plan, the only requires that the plan does not discriminate unfairly, is fair and equitable and, provides that all of the debtor's projected disposable income will be applied to payments under the plan or the value of property to be distributed under the plan is not less than the projected disposable income of the debtor. 4. Administrative Expense Payments Delayed: Unlike a typical bankruptcy, a small business debtor may pay administrative expense claims over the term of the plan, rather than requiring the debtor to pay administrative expense claims – including claims for post-petition goods and services – on the effective date of the plan. 5. No Impaired Class Required: Under Subchapter V, a court may "cram down" a non-consensual plan even where no impaired class creditor has voted to confirm the plan. Traditionally, at least one impaired creditor vote to confirm is required to cram down a Chapter 11 reorganization plan. 6. Discharge: Debtors under Subchapter V are entitled to a discharge, either upon confirmation (for consensual plans) or after the first three years of payment for non-consensual plans. As a result, the Creditor's rights are immediately extinguished as to the pre-petition debt, and only the right to receive plan payments under the reorganization plan survives. 7. Principal Residence Loans Modified: Where a business owner borrows against their primary residence in order to finance the business, Subchapter V allows the debtor to modify such loans in the reorganization plan. Conversely, a debtor may not modify a first-position purchase money mortgage. The Bottom Line The Small Business Reorganization Act endeavors to facilitate the successful reorganization of viable small business by increasing process efficiencies, reducing costs and barriers, and providing flexibility to smaller businesses in distress. In response to the pandemic, Congress greatly expanded the availability of the SBRA to a greater number of larger businesses; however, these protections are only available for a limited time and businesses should act quickly to consider [*] FAQs on CARES Act SBA Loan Programs (Updated) ------------------------------------------------- Kyle Gilster, Lauren Hawkins, Christopher Peterson, Kirstin Salzman, and Jessica Zeratsky of Husch Blackwell LLP wrote on JDSupra an article titled "FAQ: CARES Act SBA Loan Programs-UPDATED June,2020 #1": Congress's coronavirus financial relief package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act is the largest economic relief bill in United States history and will support individuals and businesses affected by the pandemic. This piece addresses the Paycheck Protection Program (PPP), the Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants (EIDL Grants) and has been updated in light of the Paycheck Protection Program Flexibility Act of 2020, which was passed on June 5, 2020. Additional guidance and a new forgiveness application are expected soon, and this post will be updated accordingly once such information is released. Paycheck Protection Program Eligibility and Affiliations Q: Who is eligible to receive PPP loans? A: Generally, any business, 501(c)(3) nonprofit organization, 501(c)(19) veterans organization, or Tribal business with not more than 500 employees whose principal place of residence is in the United States; Any business, 501(c)(3) nonprofit organization, 501(c)(19) veterans organization, or Tribal business that meets the SBA employee-based size standards[1] for the industry in which it operates (if applicable); Any business that is a "small business concern" as defined in section 3 of the Small Business Act, 15 U.S.C. 632, and meets the SBA employee-based or revenue-based size standards[2] corresponding to its primary industry; or Any business that is a "small business concern" under the SBA's "alternative size standard" as of March 27, 2020, which standard is met if the business has not more than (1) a maximum tangible net worth of $15 million and (2) an average net income of $5 million (after Federal income taxes, excluding any carry-over losses) for 2 full fiscal years before the date of application. Sole proprietors, independent contractors, and "eligible self-employed individuals" (as defined in the Families First Coronavirus Response Act) are also eligible, so long as they submit documentation evidencing eligibility (including payroll tax filings reported to the IRS, Forms 1099-MISC, and income and expenses). An important exception has been made for a business that, at the time of loan disbursal, is assigned an NAICS code beginning with 72 (accommodation and food services). Such a business can have more than 500 employees, so long as that business employs not more than 500 employees per physical location. In order to qualify for the PPP, a business must count all domestic and foreign employees of all of its affiliates in determining the 500-person limit unless: Business, at the time of loan disbursal, is assigned an NAICS code beginning with 72 (accommodation and food services); or Business is operating as a franchise that is assigned a franchise identifier code by the SBA; or Business receives financial assistance from a small business investment company (SBIC). Additionally, in evaluating eligibility, a lender is required to consider whether the business was in operation on February 15, 2020 and had employees for whom the business paid salaries and payroll taxes. If a business meets the eligibility requirements set forth above, it will NOT be eligible for a PPP loan if it is a business identified in 13 C.F.R. 120.110 and described further in the SBA's SOP 50 10 5, Subpart B, Chapter 2 (with the exception that specific nonprofit organizations authorized under the CARES Act are eligible). Further, a recent SBA Interim Final Rule provides that hedge funds and private equity firms are ineligible, debtors in bankruptcy proceedings are not eligible, and portfolio companies of private equity funds are potentially ineligible. The Interim Final Rule can be found here. Q: As of what date do businesses calculate their headcount? A: As indicated in the SBA and Treasury's April 6, 2020 Frequently Asked Questions (FAQs), Borrowers may choose to calculate their headcount using (1) their average employment from the previous 12 months, (2) from calendar year 2019 or (3) the average number of employees per pay period in the 12 completed calendar months prior to the date of the loan application (or the average number of employees for each of the pay periods that the business has been in operation, if it has not been in operation for 12 months). Q: How does a business determine its "affiliates"? A: "Affiliate" status is determined under current SBA regulations, which provide generally for a broad definition based on control. Concerns and entities are affiliates of each other when one controls or has power to control the other, or a third party or parties controls or has power to control both. It does not matter whether control is exercised, so long as the power to control exists. Control/affiliation is a facts and circumstances test that includes both affirmative and negative control. Parties with significant equity, negative covenants, board seats, blocking rights, and other shareholder/contractual rights are generally considered affiliates, even when they don't have a majority voting control or control of the board. Additional guidance from the SBA and Treasury on affiliate status was issued on April 3, 2020. Such guidance can be found here. Q: If a business has financing available elsewhere is it still eligible for a PPP loan? A: Maybe. Although the SBA has waived its "credit-elsewhere" test, the SBA and Treasury issued guidance on April 23, 2020, April 28, 2020 and May 5, 2020 that borrowers (public and private) must still certify in good faith that their PPP loan request was necessary, "taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business." The SBA did, however, create two safe harbors for certain borrowers: (1) any business that applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 18, 2020 will be deemed by the SBA to have made the required certification in good faith and (2) any business that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. Q: How does a PPP loan coordinate with the SBA's existing loans? A: Businesses can apply for PPP loans and other SBA financial assistance, including Economic Injury Disaster Loans (EIDLs), traditional 7(a) loans, 504 loans, and microloans, and can also receive investment capital from Small Business Investment Corporation (SBIC). However, the business cannot use the PPP loan for the same purpose as its other SBA loan(s). For example, if a business uses its PPP loan to cover payroll for the 8-week covered period, it cannot use a different SBA loan product for payroll for those same costs in that period, although it could use it for payroll not during that period or for different workers. Further, per an Interim Final Rule from the SBA, if you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for PPP. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Q: How does the PPP loan work with the temporary Emergency Economic Injury Grants (up to $10,000 each) awarded under the EIDL Program? A: EIDL Grant (up to $10,000 each) and EIDL loan recipients may apply for and take out a PPP loan as long as there is no duplication in the uses of funds. Proceeds from an EIDL Grant will be deducted from the loan forgiveness amount on the PPP loan. Back to the top PPP Loan Amounts and Use of Proceeds Q: What is the maximum amount of a PPP loan? A: Businesses are eligible for the lesser of: $10,000,000, and 2.5 times the average monthly payroll costs (see below for definition) determined during the one-year period before the date on which the loan is made. Please note that for seasonal employers, as determined by the SBA, the measurement period is either the 12-week period beginning February 15, 2019 or March 1, 2019 to June 30, 2019, at the election of the borrower. Per an Interim Final Rule from the SBA, a seasonal employer may alternatively elect to determine its maximum loan amount as the average total monthly payments for payroll during any consecutive 12-week period between May 1, 2019 and September 15, 2019. If the business was not operating during the period from February 15, 2019 until June 30, 2019, the relevant measurement period is January 1, 2020 through February 29, 2020. If the business obtained an EIDL loan that was used for payroll costs, then the PPP loan must be used to refinance the EIDL loan. Q: What is included in "payroll costs"? A: "Payroll costs" include: The sum of any payments of any compensation with respect to an employee that is: salary, wages, commission, or similar compensation; bonuses and hazard pay; payroll taxes imposed on an employee and required to be withheld by an employer; payments of cash tips or the equivalent; payment for vacation, parental, family, medical or sick leave; allowance for dismissal or separation; payments required for the provision of group health care benefits, including insurance premiums; payment of any retirement benefit; and payment of state or local tax assessed on the employee. Q: What is not included in "payroll costs"? A: "Payroll costs" may not include: cash compensation of an individual employee in excess of an annual salary of $100,000 in one year, pro-rated during the Applicable Covered Period; an employer's share of payroll taxes; any compensation of an employee whose principal place of residence is outside of the United States; qualified sick leave wages or family leave wages for which a credit is allowed under sections 7001 or 7003 of the Families First Coronavirus Response Act; or amounts paid to independent contractors. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits, such as payment for provision of employee benefits consisting of group health care coverage, payment of taxes assessed on compensation, and employer contributions to defined-benefit or defined-contribution retirement plans. "Applicable Covered Period" as used in these FAQs for new and existing loans means (A) the period (i) beginning on the origination date of the loan and (ii) ending the earlier of (1) the date that is 24 weeks after the loan origination date or (2) December 31, 2020, and (B) only for borrowers that received loans before June 5, 2020, at their election, the original measuring period under the CARES Act, which is the 8 weeks beginning on the origination date of the loan. Q: May a PPP borrower deduct, for Federal income tax purposes, those expenses incurred in its business for which the borrower received a covered PPP loan and for which expenses the borrower received forgiveness of such covered loan? A: No. The IRS issued a notice on April 30, 2020 stating that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the CARES Act and the income associated with the forgiveness is excluded from gross income for purposes of the Code pursuant to Section 1106(i) of the CARES Act. Q: May a taxpayer delay its portion of social security taxes if it received debt forgiveness under the CARES Act? A: Yes, a taxpayer may delay these taxes if it had certain indebtedness forgiven under the CARES Act. Q: Can the loan proceeds be used to pay any expenses in the borrower's discretion? A: No. Proceeds can only be used for the following: payroll costs (as noted above); payments of interest on any business mortgage obligation on real or personal property (which shall not include any prepayment of or payment of principal on a mortgage obligation) incurred before February 15, 2020; payments on business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020; and utilities, including electricity, gas, water, transportation, telephone or internet access for which service began before February 15, 2020. Additionally, as part of the loan process, the business will need to acknowledge that the funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments as specified under the CARES Act. Further, 75% of the loan proceeds must be used to pay payroll costs. Back to the top PPP Lending Criteria and Loan Forgiveness Q: What will the banks require to make the loan? A: The CARES Act requires a lender to confirm the following: the borrower was in operation on February 15, 2020; the borrower had employees for whom it paid salaries and payroll taxes; and with respect to loan deferrals, the borrower was adversely impacted by COVID-19 (although this requirement is presumed). The borrower must also submit a loan application and payroll documentation, acceptable to its lender. Lenders must also submit an SBA form Lender's Application and maintain the forms and supporting documentation in its files. Q: Are PPP loans eligible for loan forgiveness? A: Yes. Under Section 1106 of the CARES Act, a borrower is eligible for forgiveness of part or all of the loan balance, subject to the adjustments and limitations described below, if the proceeds are used for eligible purposes (see below) and the borrower can provide required supporting documentation to demonstrate that it qualifies for forgiveness. The SBA has released the PPP Loan Forgiveness Application, which can be accessed here. For more information on loan forgiveness, see our separate FAQ available here. Q: What will be the terms of that forgiveness? A: The SBA's Loan Forgiveness Application can be found here and we have prepared a separate FAQ relating to loan forgiveness. The CARES Act states that the loan obligations eligible for forgiveness include amounts expended for those obligations and services listed below that are either incurred or paid during the Applicable Covered Period (as defined previously), but only where such obligation or service (in the case of mortgage obligations, rent and utilities) was an existing obligation as of February 15, 2020: all payroll costs expended (see definition above) excluding cash compensation for any individual employee over $100,000; plus any payment of interest on any mortgage incurred by borrower on real or personal property (not including any prepayment or payment of principal); plus any payment of rent obligated under a leasing agreement; plus any utility payment (electricity, gas, water, transportation, telephone, or internet access) (collectively, the "Covered Period Costs"). The limitations and adjustments to forgiveness of the Covered Period Costs are as follows: The amount of forgiveness cannot exceed the principal balance of the loan. The amount of forgiveness will be reduced based on the reduction in number of employees (as measured by the formula described below). The amount of forgiveness will also be reduced by the amount by which there is a reduction in total salary or wages for any employee that is in excess of 25% of the total salary or wages of such employee during the most recent full quarter during which the employee was employed prior to the Applicable Covered Period (excluding, subject to further review of the SBA regulations, reductions for employees making in excess of $100,000). Increased wages paid to tipped workers are eligible for forgiveness. The CARES Act also includes exemptions for rehires to encourage companies to hire workers that have been laid off due to COVID-19. In particular, reductions in employees and in salaries that occur between February 15, 2020 and April 26, 2020 are excluded from the reductions described in subsection (2) and (3) above, so long as the borrower re-hires or restores pay (as applicable) for the affected workers before December 31, 2020. The amount of forgiveness of the PPP loan shall also be reduced by any EIDL Grant amount (discussed below) received by borrower. Persuant to the Paycheck Protection Program Flexibility Act, in order to receive loan forgiveness, at least 60% of the loan must be used for payroll costs, while 40% may be attributable to eligible expenses other than payroll costs. The SBA plans to audit loans over $2 million (this includes borrowers that, together with their affiliates, received PPP loans with an original principal amount in excess of $2 million) before making a determination of forgiveness, and the SBA has reserved the right to review any PPP loan of any size at any time in its discretion. Q: How do I calculate the amount by which forgiveness of the Covered Period Costs will be reduced (under subsection (2), above) if I do not fully maintain my workforce? A: The Covered Period Costs shall be reduced by multiplying the amount of the Covered Period Costs by the Reduction in Number of Employees. The "Reduction in Number of Employees" shall be calculated by dividing the (i) average number of full-time equivalent employees per month employed by borrower during the Applicable Covered Period by (ii) at the election of borrower (not including seasonal employers, as determined by the SBA): (y) the average number of full-time equivalent employees per month employed by the borrower during the period beginning on February 15, 2019 and ending on June 30, 2019 or (z) the average number of full-time equivalent employees per month employed by borrower during the period beginning on January 1, 2020 and ending on February 29, 2020. Seasonal employers must use either of the preceding periods or a consecutive 12-week period between May 1, 2019 and September 15, 2019. The same reference period must be used for each employee. Further, a safe harbor may exempt certain borrowers from the loan forgiveness reduction based on FTE employee levels. Specifically, the Forgiveness Application provides that Borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met: (1) the Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than December 31, 2020 to its FTE employee levels in the Borrower's pay period that included February 15, 2020. Q: How does the borrower receive forgiveness on its PPP loan? A: The CARES Act requires that the borrower must apply to the lender by submitting: The SBA's Loan Forgiveness Application, which may be accessed here. Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings. For forgiveness of non-payroll costs, documentation including (1) the mortgage amortization schedule (and receipts or cancelled checks) or lender account statements from February 2020 and the covered months, (2) the current lease agreement (and receipts or cancelled checks) or lessor account statements from February 2020 and the covered months, and (3) the utility invoices from February 2020 and those paid during the covered period (and receipts, canceled checks or account statements). Certification from a representative of the business or organization that is authorized to certify that the documentation provided is true and that the amount that is being forgiven was used in accordance with the PPP guidelines for use. Borrower must retain all records relating to its PPP loan application, PPP loan, and loan forgiveness application for 6 years after the date the loan is forgiven or repaid in full. On May 22, 2020, the SBA issued its loan review procedures, which can be found here. Q: What happens after the forgiveness period? A: Any loan amounts not forgiven are carried forward as an ongoing five-year loan (or a two-year term for borrowers that obtained PPP loans prior to June 5, 2020) at an interest rate of 1.0%. Borrowers that obtained PPP loans prior to June 5, 2020 may negotiate longer terms with their PPP lenders. Payments of principal, interest and fees will be deferred until the lender receives payment of the forgiven portion of the borrower's loan from the SBA, or, if the borrower did not request forgiveness, until not earlier than the date that is ten months after the last day of the borrower's Applicable Covered Period. Q: Will a borrower's PPP loan forgiveness amount be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer? A: No. Employees whom the borrower offered to rehire are generally exempt from the CARES Act loan forgiveness reduction calculation. This exemption is also available if a borrower previously reduced the hours of an employee and offered to restore the employee's hours at the same salary or wages. Specifically, in calculating the loan forgiveness amount, a borrower may exclude any reduction in full-time equivalent employee headcount that is attributable to an individual employee if: the borrower made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or alternative payroll covered period; the offer was for the same salary or wages and same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours; the offer was rejected by such employee; the borrower has maintained records documenting the offer and its rejection; and the borrower informed the applicable state unemployment insurance office of such employee's rejected offer of reemployment within 30 days of the employees' rejection of the offer. On June 5, 2020, the PPP Flexibility Act was enacted, providing additional relief in the form of exemptions. A borrower's loan forgiveness amount will not be proportionately reduced for a decrease in full-time equivalency employees if the borrower, in good faith, can provide documentation of its inability to (a) rehire employees who were employed on February 15, 2020 and (b) hire "similarly qualified employees" for unfilled positions on or before December 31, 2020. Loan forgiveness will similarly not be proportionally reduced if the borrower can provide documentation of its inability to return to the same level of business activity such borrower was operating at before February 15, 2020 due to compliance with requirements established or guidance issued by HHS, the CDC or OSHA during the period beginning on March 1, 2020 and ending December 31, 2020, related to maintenance of standards for sanitation, social distancing or any other worker or customer service requirement related to COVID-19. Additional information regarding PPP loan forgiveness can be found on our separate FAQ, which can be accessed here. Back to the top PPP Application Process Q: How do small businesses apply for a PPP loan? A: PPP loans are made through an SBA-approved lender and are guaranteed by the SBA. If the business has a relationship with a lender, it should immediately contact that lender to see if that lender is making PPP loans. The business should immediately begin working with an SBA-approved lender to confirm eligibility and to start the application process. Lenders began taking applications on April 3, 2020 for the first round of PPP loan funds. That money was exhausted quickly. Lenders began processing applications again on April 27, 2020 for the second round of PPP loan funds. Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants (EIDL Grants) *As of April 29, 2020, the SBA's website indicates that it is currently only processing EIDL loan and EIDL Grant applications that are already in queue, and that it will provide further information on the availability of the EIDL portal to receive new applications as soon as possible. Back to the top Q: What is an Economic Injury Disaster Loan? A: The SBA's EIDL program provides small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue as the result of a declared disaster. The CARES Act sets out new rules that make it easier for small businesses that were damaged by closures, or had other losses, due to the coronavirus to apply for and receive loans quickly. As part of the initial round of funding, $30 billion was added to the EIDL loan fun, and $10 billion more was added for the EIDL Grants connected to the EIDL loans. As part of the second round of funding, an additional $50 billion was added to the EIDL loan fund, and an additional $10 billion was added for EIDL Grants. EIDLs are available from January 31, 2020 – September 30, 2020. The EIDL Grants are backdated to January 31, 2020 to allow those who have already applied for EIDLs to be eligible to also receive an EIDL Grant. While the original cap was $2 million, recent SBA communications indicate that, due to the large volume of applications, the initial EIDL loan disbursements will be limited to 2 months of working capital up to a maximum of $15,000 per applicant. Q: If a business needs funds immediately, can the EIDL loan help? A: Possibly. A borrower can apply for an EIDL loan and receive up to $10,000 (SBA calculation is $1,000 per employee up to $10,000) as an advance in the form of an EIDL Grant within 3 days, if an advance is requested. The borrower will not be required to pay back the Grant funds, even if the EIDL loan is later denied. The borrower will be required to certify to the SBA, under penalty of perjury, that it is eligible to apply. The EIDL Grant funds can be used for maintaining payroll, providing sick leave to employees, rent or mortgages payments, and paying other obligations that cannot be paid due to lost revenue. Q: Are there other special provisions that make it easier to get an EIDL loan based on the coronavirus? A: The CARES Act has simplified the process for EIDL applications for coronavirus loans made before September 30, 2020. For example: The SBA will waive personal guarantees on advances and loans below $200,000. The SBA will waive the test as to whether you can get credit elsewhere. The SBA will waive the usual requirement that you needed to be in business for a year before the declaration. The SBA will rely on your credit score instead of the usual "determination of ability to repay." If you have trouble with a credit score, the SBA has authority to determine if a reasonable alternative can be used. Q: What kinds of businesses can qualify and what proof do they need that they qualify? A: Sole proprietors (with or without employees), independent contractors, cooperatives and employee owned businesses, and Tribal small businesses with 500 or fewer employees are eligible for EIDLs. Also, small business concerns and small agricultural cooperatives that meet the applicable size standard for the SBA are also eligible, as well as most private non-profits of any size. In advance of disbursing the EIDL Grant, the SBA must verify that the entity is an eligible applicant for an EIDL. To do this, applicants must certify with the SBA, under penalty of perjury, that they are eligible. Q: If a business receives an EIDL and/or an EIDL Grant, can it also get a PPP loan? A: Yes. Whether the business has already received an EIDL unrelated to Coronavirus or a Coronavirus-related EIDL and/or an EIDL Grant between January 31, 2020 and December 31, 2020, it may also apply for a PPP loan. Per an Interim Final Rule from the SBA, if you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for PPP. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. If the business also receives a PPP loan, or refinances an EIDL into a PPP loan, any EIDL Grant amount will be subtracted from the amount forgiven in the PPP loan. Also, a business cannot use the EIDL for the same purpose as its PPP loan. For example, if the business used the EIDL to cover payroll for certain workers in April, it cannot use a PPP loan for payroll for those same workers in April, although it could use it for payroll in March or for different workers in April. [1] Employee-based size standards can be found on the SBA website. Back to the top [2] Employee-based and revenue-based size standards can be found on the SBA website. Send Print Report Related Posts SBA Amends PPP Forgiveness Rules To Conform With PPP Flexibility Act FAQ: CARES Act SBA Loan Programs-UPDATED June,2020 #3 FAQ: CARES Act SBA Loan Programs- UPDATED June, 2020 #2 FAQ: Paycheck Protection Program Forgiveness For Borrowers-UPDATED June, 2020 #2 FAQ: CARES Act SBA Loan Programs-UPDATED June, 2020 #1 SBA Issues Promised Guidance On PPP Loan Forgiveness And On SBA's Loan Review Procedures See more DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. © Husch Blackwell LLP 2020 | Attorney Advertising Written by: ---- Congress's coronavirus financial relief package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act is the largest economic relief bill in United States history and will support individuals and businesses affected by the pandemic. This piece addresses the Paycheck Protection Program (PPP), the Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants (EIDL Grants) and has been updated in light of the Paycheck Protection Program Flexibility Act of 2020, which was passed on June 5, 2020. Additional guidance and a new forgiveness application are expected soon, and this post will be updated accordingly once such information is released. Paycheck Protection Program Eligibility and Affiliations Q: Who is eligible to receive PPP loans? A: * Generally, any business, 501(c)(3) nonprofit organization, 501(c)(19) veterans organization, or Tribal business with not more than 500 employees whose principal place of residence is in the United States; * Any business, 501(c)(3) nonprofit organization, 501(c)(19) veterans organization, or Tribal business that meets the SBA employee-based size standards[1] for the industry in which it operates (if applicable); * Any business that is a "small business concern" as defined in section 3 of the Small Business Act, 15 U.S.C. 632, and meets the SBA employee-based or revenue-based size standards[2] corresponding to its primary industry; or * Any business that is a "small business concern" under the SBA's "alternative size standard" as of March 27, 2020, which standard is met if the business has not more than (1) a maximum tangible net worth of $15 million and (2) an average net income of $5 million (after Federal income taxes, excluding any carry-over losses) for 2 full fiscal years before the date of application. Sole proprietors, independent contractors, and "eligible self-employed individuals" (as defined in the Families First Coronavirus Response Act) are also eligible, so long as they submit documentation evidencing eligibility (including payroll tax filings reported to the IRS, Forms 1099-MISC, and income and expenses). An important exception has been made for a business that, at the time of loan disbursal, is assigned an NAICS code beginning with 72 (accommodation and food services). Such a business can have more than 500 employees, so long as that business employs not more than 500 employees per physical location. In order to qualify for the PPP, a business must count all domestic and foreign employees of all of its affiliates in determining the 500-person limit unless: * Business, at the time of loan disbursal, is assigned an NAICS code beginning with 72 (accommodation and food services); or * Business is operating as a franchise that is assigned a franchise identifier code by the SBA; or * Business receives financial assistance from a small business investment company (SBIC). Additionally, in evaluating eligibility, a lender is required to consider whether the business was in operation on February 15, 2020 and had employees for whom the business paid salaries and payroll taxes. If a business meets the eligibility requirements set forth above, it will NOT be eligible for a PPP loan if it is a business identified in 13 C.F.R. 120.110 and described further in the SBA's SOP 50 10 5, Subpart B, Chapter 2 (with the exception that specific nonprofit organizations authorized under the CARES Act are eligible). Further, a recent SBA Interim Final Rule provides that hedge funds and private equity firms are ineligible, debtors in bankruptcy proceedings are not eligible, and portfolio companies of private equity funds are potentially ineligible. The Interim Final Rule can be found here. Q: As of what date do businesses calculate their headcount? A: As indicated in the SBA and Treasury's April 6, 2020 Frequently Asked Questions (FAQs), Borrowers may choose to calculate their headcount using (1) their average employment from the previous 12 months, (2) from calendar year 2019 or (3) the average number of employees per pay period in the 12 completed calendar months prior to the date of the loan application (or the average number of employees for each of the pay periods that the business has been in operation, if it has not been in operation for 12 months). Q: How does a business determine its "affiliates"? A: "Affiliate" status is determined under current SBA regulations, which provide generally for a broad definition based on control. Concerns and entities are affiliates of each other when one controls or has power to control the other, or a third party or parties controls or has power to control both. It does not matter whether control is exercised, so long as the power to control exists. Control/affiliation is a facts and circumstances test that includes both affirmative and negative control. Parties with significant equity, negative covenants, board seats, blocking rights, and other shareholder/contractual rights are generally considered affiliates, even when they don't have a majority voting control or control of the board. Additional guidance from the SBA and Treasury on affiliate status was issued on April 3, 2020. Such guidance can be found here. Q: If a business has financing available elsewhere is it still eligible for a PPP loan? A: Maybe. Although the SBA has waived its "credit-elsewhere" test, the SBA and Treasury issued guidance on April 23, 2020, April 28, 2020 and May 5, 2020 that borrowers (public and private) must still certify in good faith that their PPP loan request was necessary, "taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business." The SBA did, however, create two safe harbors for certain borrowers: (1) any business that applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 18, 2020 will be deemed by the SBA to have made the required certification in good faith and (2) any business that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. Q: How does a PPP loan coordinate with the SBA's existing loans? A: Businesses can apply for PPP loans and other SBA financial assistance, including Economic Injury Disaster Loans (EIDLs), traditional 7(a) loans, 504 loans, and microloans, and can also receive investment capital from Small Business Investment Corporation (SBIC). However, the business cannot use the PPP loan for the same purpose as its other SBA loan(s). For example, if a business uses its PPP loan to cover payroll for the 8-week covered period, it cannot use a different SBA loan product for payroll for those same costs in that period, although it could use it for payroll not during that period or for different workers. Further, per an Interim Final Rule from the SBA, if you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for PPP. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Q: How does the PPP loan work with the temporary Emergency Economic Injury Grants (up to $10,000 each) awarded under the EIDL Program? A: EIDL Grant (up to $10,000 each) and EIDL loan recipients may apply for and take out a PPP loan as long as there is no duplication in the uses of funds. Proceeds from an EIDL Grant will be deducted from the loan forgiveness amount on the PPP loan. PPP Loan Amounts and Use of Proceeds Q: What is the maximum amount of a PPP loan? A: Businesses are eligible for the lesser of: * $10,000,000, and * 2.5 times the average monthly payroll costs (see below for definition) determined during the one-year period before the date on which the loan is made. Please note that for seasonal employers, as determined by the SBA, the measurement period is either the 12-week period beginning February 15, 2019 or March 1, 2019 to June 30, 2019, at the election of the borrower. Per an Interim Final Rule from the SBA, a seasonal employer may alternatively elect to determine its maximum loan amount as the average total monthly payments for payroll during any consecutive 12-week period between May 1, 2019 and September 15, 2019. If the business was not operating during the period from February 15, 2019 until June 30, 2019, the relevant measurement period is January 1, 2020 through February 29, 2020. If the business obtained an EIDL loan that was used for payroll costs, then the PPP loan must be used to refinance the EIDL loan. Q: What is included in "payroll costs"? A: "Payroll costs" include: The sum of any payments of any compensation with respect to an employee that is: * salary, wages, commission, or similar compensation; * bonuses and hazard pay; * payroll taxes imposed on an employee and required to be withheld by an employer; * payments of cash tips or the equivalent; * payment for vacation, parental, family, medical or sick leave; * allowance for dismissal or separation; * payments required for the provision of group health care benefits, including insurance premiums; * payment of any retirement benefit; and * payment of state or local tax assessed on the employee. Q: What is not included in "payroll costs"? A: "Payroll costs" may not include: * cash compensation of an individual employee in excess of an annual salary of $100,000 in one year, pro-rated during the Applicable Covered Period; * an employer's share of payroll taxes; * any compensation of an employee whose principal place of residence is outside of the United States; * qualified sick leave wages or family leave wages for which a credit is allowed under sections 7001 or 7003 of the Families First Coronavirus Response Act; or * amounts paid to independent contractors. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits, such as payment for provision of employee benefits consisting of group health care coverage, payment of taxes assessed on compensation, and employer contributions to defined-benefit or defined-contribution retirement plans. "Applicable Covered Period" as used in these FAQs for new and existing loans means (A) the period (i) beginning on the origination date of the loan and (ii) ending the earlier of (1) the date that is 24 weeks after the loan origination date or (2) December 31, 2020, and (B) only for borrowers that received loans before June 5, 2020, at their election, the original measuring period under the CARES Act, which is the 8 weeks beginning on the origination date of the loan. Q: May a PPP borrower deduct, for Federal income tax purposes, those expenses incurred in its business for which the borrower received a covered PPP loan and for which expenses the borrower received forgiveness of such covered loan? A: No. The IRS issued a notice on April 30, 2020 stating that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the CARES Act and the income associated with the forgiveness is excluded from gross income for purposes of the Code pursuant to Section 1106(i) of the CARES Act. Q: May a taxpayer delay its portion of social security taxes if it received debt forgiveness under the CARES Act? A: Yes, a taxpayer may delay these taxes if it had certain indebtedness forgiven under the CARES Act. Q: Can the loan proceeds be used to pay any expenses in the borrower's discretion? A: No. Proceeds can only be used for the following: * payroll costs (as noted above); * payments of interest on any business mortgage obligation on real or personal property (which shall not include any prepayment of or payment of principal on a mortgage obligation) incurred before February 15, 2020; * payments on business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020; and * utilities, including electricity, gas, water, transportation, telephone or internet access for which service began before February 15, 2020. Additionally, as part of the loan process, the business will need to acknowledge that the funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments as specified under the CARES Act. Further, 75% of the loan proceeds must be used to pay payroll costs. PPP Lending Criteria and Loan Forgiveness Q: What will the banks require to make the loan? A: The CARES Act requires a lender to confirm the following: * the borrower was in operation on February 15, 2020; * the borrower had employees for whom it paid salaries and payroll taxes; and * with respect to loan deferrals, the borrower was adversely impacted by COVID-19 (although this requirement is presumed). The borrower must also submit a loan application and payroll documentation, acceptable to its lender. Lenders must also submit an SBA form Lender's Application and maintain the forms and supporting documentation in its files. Q: Are PPP loans eligible for loan forgiveness? A: Yes. Under Section 1106 of the CARES Act, a borrower is eligible for forgiveness of part or all of the loan balance, subject to the adjustments and limitations described below, if the proceeds are used for eligible purposes (see below) and the borrower can provide required supporting documentation to demonstrate that it qualifies for forgiveness. The SBA has released the PPP Loan Forgiveness Application, which can be accessed here. For more information on loan forgiveness, see our separate FAQ available here. Q: What will be the terms of that forgiveness? A: The SBA's Loan Forgiveness Application can be found here and we have prepared a separate FAQ relating to loan forgiveness. The CARES Act states that the loan obligations eligible for forgiveness include amounts expended for those obligations and services listed below that are either incurred or paid during the Applicable Covered Period (as defined previously), but only where such obligation or service (in the case of mortgage obligations, rent and utilities) was an existing obligation as of February 15, 2020: * all payroll costs expended (see definition above) excluding cash compensation for any individual employee over $100,000; plus * any payment of interest on any mortgage incurred by borrower on real or personal property (not including any prepayment or payment of principal); plus * any payment of rent obligated under a leasing agreement; plus * any utility payment (electricity, gas, water, transportation, telephone, or internet access) (collectively, the "Covered Period Costs"). The limitations and adjustments to forgiveness of the Covered Period Costs are as follows: 1. The amount of forgiveness cannot exceed the principal balance of the loan. 2. The amount of forgiveness will be reduced based on the reduction in number of employees (as measured by the formula described below). 3. The amount of forgiveness will also be reduced by the amount by which there is a reduction in total salary or wages for any employee that is in excess of 25% of the total salary or wages of such employee during the most recent full quarter during which the employee was employed prior to the Applicable Covered Period (excluding, subject to further review of the SBA regulations, reductions for employees making in excess of $100,000). 4. Increased wages paid to tipped workers are eligible for forgiveness. 5. The CARES Act also includes exemptions for rehires to encourage companies to hire workers that have been laid off due to COVID-19. In particular, reductions in employees and in salaries that occur between February 15, 2020 and April 26, 2020 are excluded from the reductions described in subsection (2) and (3) above, so long as the borrower re-hires or restores pay (as applicable) for the affected workers before December 31, 2020. 6. The amount of forgiveness of the PPP loan shall also be reduced by any EIDL Grant amount (discussed below) received by borrower. 7. Persuant to the Paycheck Protection Program Flexibility Act, in order to receive loan forgiveness, at least 60% of the loan must be used for payroll costs, while 40% may be attributable to eligible expenses other than payroll costs. 8. The SBA plans to audit loans over $2 million (this includes borrowers that, together with their affiliates, received PPP loans with an original principal amount in excess of $2 million) before making a determination of forgiveness, and the SBA has reserved the right to review any PPP loan of any size at any time in its discretion. Q: How do I calculate the amount by which forgiveness of the Covered Period Costs will be reduced (under subsection (2), above) if I do not fully maintain my workforce? A: The Covered Period Costs shall be reduced by multiplying the amount of the Covered Period Costs by the Reduction in Number of Employees. The "Reduction in Number of Employees" shall be calculated by dividing the (i) average number of full-time equivalent employees per month employed by borrower during the Applicable Covered Period by (ii) at the election of borrower (not including seasonal employers, as determined by the SBA): (y) the average number of full-time equivalent employees per month employed by the borrower during the period beginning on February 15, 2019 and ending on June 30, 2019 or (z) the average number of full-time equivalent employees per month employed by borrower during the period beginning on January 1, 2020 and ending on February 29, 2020. Seasonal employers must use either of the preceding periods or a consecutive 12-week period between May 1, 2019 and September 15, 2019. The same reference period must be used for each employee. Further, a safe harbor may exempt certain borrowers from the loan forgiveness reduction based on FTE employee levels. Specifically, the Forgiveness Application provides that Borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met: (1) the Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than December 31, 2020 to its FTE employee levels in the Borrower's pay period that included February 15, 2020. Q: How does the borrower receive forgiveness on its PPP loan? A: The CARES Act requires that the borrower must apply to the lender by submitting: * The SBA's Loan Forgiveness Application, which may be accessed here. * Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings. * For forgiveness of non-payroll costs, documentation including (1) the mortgage amortization schedule (and receipts or cancelled checks) or lender account statements from February 2020 and the covered months, (2) the current lease agreement (and receipts or cancelled checks) or lessor account statements from February 2020 and the covered months, and (3) the utility invoices from February 2020 and those paid during the covered period (and receipts, canceled checks or account statements). * Certification from a representative of the business or organization that is authorized to certify that the documentation provided is true and that the amount that is being forgiven was used in accordance with the PPP guidelines for use. Borrower must retain all records relating to its PPP loan application, PPP loan, and loan forgiveness application for 6 years after the date the loan is forgiven or repaid in full. On May 22, 2020, the SBA issued its loan review procedures, which can be found here. Q: What happens after the forgiveness period? A: Any loan amounts not forgiven are carried forward as an ongoing five-year loan (or a two-year term for borrowers that obtained PPP loans prior to June 5, 2020) at an interest rate of 1.0%. Borrowers that obtained PPP loans prior to June 5, 2020 may negotiate longer terms with their PPP lenders. Payments of principal, interest and fees will be deferred until the lender receives payment of the forgiven portion of the borrower's loan from the SBA, or, if the borrower did not request forgiveness, until not earlier than the date that is ten months after the last day of the borrower's Applicable Covered Period. Q: Will a borrower's PPP loan forgiveness amount be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer? A: No. Employees whom the borrower offered to rehire are generally exempt from the CARES Act loan forgiveness reduction calculation. This exemption is also available if a borrower previously reduced the hours of an employee and offered to restore the employee's hours at the same salary or wages. Specifically, in calculating the loan forgiveness amount, a borrower may exclude any reduction in full-time equivalent employee headcount that is attributable to an individual employee if: 1. the borrower made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or alternative payroll covered period; 2. the offer was for the same salary or wages and same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours; 3. the offer was rejected by such employee; 4. the borrower has maintained records documenting the offer and its rejection; and 5. the borrower informed the applicable state unemployment insurance office of such employee's rejected offer of reemployment within 30 days of the employees' rejection of the offer. On June 5, 2020, the PPP Flexibility Act was enacted, providing additional relief in the form of exemptions. A borrower's loan forgiveness amount will not be proportionately reduced for a decrease in full-time equivalency employees if the borrower, in good faith, can provide documentation of its inability to (a) rehire employees who were employed on February 15, 2020 and (b) hire "similarly qualified employees" for unfilled positions on or before December 31, 2020. Loan forgiveness will similarly not be proportionally reduced if the borrower can provide documentation of its inability to return to the same level of business activity such borrower was operating at before February 15, 2020 due to compliance with requirements established or guidance issued by HHS, the CDC or OSHA during the period beginning on March 1, 2020 and ending December 31, 2020, related to maintenance of standards for sanitation, social distancing or any other worker or customer service requirement related to COVID-19. Additional information regarding PPP loan forgiveness can be found on our separate FAQ, which can be accessed here. PPP Application Process Q: How do small businesses apply for a PPP loan? A: PPP loans are made through an SBA-approved lender and are guaranteed by the SBA. If the business has a relationship with a lender, it should immediately contact that lender to see if that lender is making PPP loans. The business should immediately begin working with an SBA-approved lender to confirm eligibility and to start the application process. Lenders began taking applications on April 3, 2020 for the first round of PPP loan funds. That money was exhausted quickly. Lenders began processing applications again on April 27, 2020 for the second round of PPP loan funds. Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants (EIDL Grants) * As of April 29, 2020, the SBA's website indicates that it is currently only processing EIDL loan and EIDL Grant applications that are already in queue, and that it will provide further information on the availability of the EIDL portal to receive new applications as soon as possible. Q: What is an Economic Injury Disaster Loan? A: The SBA's EIDL program provides small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue as the result of a declared disaster. The CARES Act sets out new rules that make it easier for small businesses that were damaged by closures, or had other losses, due to the coronavirus to apply for and receive loans quickly. As part of the initial round of funding, $30 billion was added to the EIDL loan fun, and $10 billion more was added for the EIDL Grants connected to the EIDL loans. As part of the second round of funding, an additional $50 billion was added to the EIDL loan fund, and an additional $10 billion was added for EIDL Grants. EIDLs are available from January 31, 2020 – September 30, 2020. The EIDL Grants are backdated to January 31, 2020 to allow those who have already applied for EIDLs to be eligible to also receive an EIDL Grant. While the original cap was $2 million, recent SBA communications indicate that, due to the large volume of applications, the initial EIDL loan disbursements will be limited to 2 months of working capital up to a maximum of $15,000 per applicant. Q: If a business needs funds immediately, can the EIDL loan help? A: Possibly. A borrower can apply for an EIDL loan and receive up to $10,000 (SBA calculation is $1,000 per employee up to $10,000) as an advance in the form of an EIDL Grant within 3 days, if an advance is requested. The borrower will not be required to pay back the Grant funds, even if the EIDL loan is later denied. The borrower will be required to certify to the SBA, under penalty of perjury, that it is eligible to apply. The EIDL Grant funds can be used for maintaining payroll, providing sick leave to employees, rent or mortgages payments, and paying other obligations that cannot be paid due to lost revenue. Q: Are there other special provisions that make it easier to get an EIDL loan based on the coronavirus? A: The CARES Act has simplified the process for EIDL applications for coronavirus loans made before September 30, 2020. For example: * The SBA will waive personal guarantees on advances and loans below $200,000. * The SBA will waive the test as to whether you can get credit elsewhere. * The SBA will waive the usual requirement that you needed to be in business for a year before the declaration. * The SBA will rely on your credit score instead of the usual "determination of ability to repay." If you have trouble with a credit score, the SBA has authority to determine if a reasonable alternative can be used. Q: What kinds of businesses can qualify and what proof do they need that they qualify? A: Sole proprietors (with or without employees), independent contractors, cooperatives and employee owned businesses, and Tribal small businesses with 500 or fewer employees are eligible for EIDLs. Also, small business concerns and small agricultural cooperatives that meet the applicable size standard for the SBA are also eligible, as well as most private non-profits of any size. In advance of disbursing the EIDL Grant, the SBA must verify that the entity is an eligible applicant for an EIDL. To do this, applicants must certify with the SBA, under penalty of perjury, that they are eligible. Q: If a business receives an EIDL and/or an EIDL Grant, can it also get a PPP loan? A: Yes. Whether the business has already received an EIDL unrelated to Coronavirus or a Coronavirus-related EIDL and/or an EIDL Grant between January 31, 2020 and December 31, 2020, it may also apply for a PPP loan. Per an Interim Final Rule from the SBA, if you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for PPP. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. If the business also receives a PPP loan, or refinances an EIDL into a PPP loan, any EIDL Grant amount will be subtracted from the amount forgiven in the PPP loan. Also, a business cannot use the EIDL for the same purpose as its PPP loan. For example, if the business used the EIDL to cover payroll for certain workers in April, it cannot use a PPP loan for payroll for those same workers in April, although it could use it for payroll in March or for different workers in April. [1] Employee-based size standards can be found on the SBA website. [2] Employee-based and revenue-based size standards can be found on the SBA website. [*] Hospitals Will Lose $200B Revenue in June Due to Pandemic ------------------------------------------------------------- Mark Taylor, writing for Marketwatch, reports that the deadly COVID-19 not only takes toll on the lives of Americans but also hurt U.S. hospitals as well. U.S. hospitals are forecasted to lose over $200 billion worth of revenue by June 30 due to coronavirus pandemic, according to the report by the American Hospital Association. The industry group estimates the total revenue hit from the pandemic at about $50 billion a month among health-care facilities since March 2020. Hundreds face bankruptcy, industry experts say. "The worst is yet to come," said Michael Topchik, executive director of The Chartis Center for Rural Health, a Chicago-based management-consulting firm. It found that 453 of the country's 2,000 rural hospitals were in danger of closing and 216 were identified as “most vulnerable.” "It's no exaggeration to say the sky is falling," he said. "We're already starting to see major hot spots in rural areas in Iowa, Nebraska and South Dakota. It doesn’t take a rocket scientist to see this is bad." Rick Pollack, who heads the AHA and oversaw its study, said the virus has created an epic financial threat. "America's hospitals and health systems have stepped up in heroic and unprecedented ways to meet the challenges caused by Covid-19," he said. "However, the fight against this virus has created the greatest financial crisis in history for hospitals and health systems." The famed Mayo Clinic, which runs 23 hospitals around the country, is among the troubled institutions. It expects to lose $3 billion in revenue in 2020 after governors in Arizona, Florida and Minnesota, where most of Mayo's facilities are located, ordered all non-essential surgeries postponed in mid-March. Mayo announced in April extensive pay cuts and staff furloughs, despite its facilities having worked for weeks at or above capacity to handle critical cases related to the virus. Facilities in the country's heartland are now dealing with some of the biggest outbreaks of the virus, and they’re hurting financially as well. One rural hospital in Kansas and another in West Virginia went out of business in May, and two more closed in Florida. Five are in danger of closing in Washington state, according to the state’s hospital association. The flow of red ink has left many operations scrambling to refinance debt, merge with other outfits or seek protection by declaring bankruptcy. "The $64,000 question is whether hospitals and their allies will convince the federal government to provide another injection of financial support to hospitals adversely affected by the pandemic," said Jim Unland, president of Chicago-based Health Capital Group. "This is a nightmare." Hospitals got clobbered by a mix of maladies. Surges of critically ill Covid-19 patients didn’t only overwhelm hospital emergency rooms, strain staff and deplete personal protective equipment. The outbreak also sapped their supply of drugs, forced them to pay inflated prices for basic supplies and decimated a primary revenue source, elective surgeries. Those procedures, scheduled operations such as joint replacements, tumor removals and cardiac surgeries, comprise an average of 48% of all hospital income, according to experts. Like the Mayo Clinic, hospitals in New York state have gone more than two months without elective surgeries following Gov. Andrew Cuomo's statewide ban March 22 when he said, "If it's not critical, then postpone it." The result? Several New York medical centers are scrambling to make ends meet. The state's teaching hospitals lost between $350 million and $450 million a month as they worked to flatten New York's Covid-19 curve, pushing many to the brink of ruin. Many hospitals were unprepared to face the challenges of a worldwide pandemic. "The decision to eliminate elective surgeries and outpatient visits was the right decision in terms of protecting the safety of our patients and staff," said Mayo's chief administrative officer, Jeff Bolton. "But it has led to significant reductions in revenue." The outbreak came at a particularly tough time for smaller facilities. More than 120 rural hospitals have closed in the past decade, including 18 in 2019 and 10 more this year through April, according to the University of North Carolina's Cecil G. Sheps Center for Health Services Research. "Everyone in American hospitals is talking about this now," said management expert Eugene Litvak, a Harvard professor and private consultant who has worked with hospitals on patient flow — the journey patients take from admission to discharge — for more than 20 years. Cancelled elective surgeries "Canceling elective surgeries was the right thing to do to expand hospital capacity for the rush of Covid patients," he said. But now, "almost all hospitals are bleeding red ink." Unprepared medical systems Litvak said some health-care facilities might try to restart elective procedures before potentially having to scrap them again if additional outbreaks occur. "In many places the pandemic is waning, and hospitals may have a narrow window to reduce their backlog of elective surgeries, take care of those patients and strengthen their financial future for a second surge this fall," he said. Litvak, founder of the nonprofit Institute for Healthcare Optimization in Newton, Mass., said most American hospitals did a poor job managing patient surges and staffing prior to the virus. "U.S. hospitals were experiencing a pandemic of inefficiency even before Covid," he said. "And that crisis only highlighted existing vulnerabilities." [*] Husch Blackwell's FAQs on PPP Forgiveness for Borrowers ----------------------------------------------------------- Christopher Peterson, Chrissie Simpson and Jessica Zeratsky of Husch Blackwell LLP provided on JDSupra an "FAQ: Paycheck Protection Program Forgiveness For Borrowers- UPDATED June, 2020 #1": On May 22, 2020 the SBA and Department of the Treasury released the long awaited Interim Final Rule on Forgiveness of Paycheck Protection Program (PPP) Loans and the Interim Final Rule on SBA Loan Review Procedures, following up on the prior posting of the Borrower Forgiveness Application and accompanying Procedural Notice. For more information on the Paycheck Protection Program, the Economic Injury Disaster Loans (EIDL) and the Emergency Economic Injury Grants (EIDL Grants), please see the FAQ: CARES Act SBA Loan Programs. **This post is currently being updated to incorporate the terms of the PPP Flexibility Act – please check back soon for those updates.** PPP Loan Forgiveness Information Procedure – PPP Loan Forgiveness Q: How do Borrowers apply for PPP loan forgiveness? A: Eight weeks from the PPP loan closing date, a Borrower can begin to submit a request to its Lender for PPP loan forgiveness. Borrowers must complete and submit the Loan Forgiveness Application SBA Form 3508 to the Lender that provided the PPP Loan. Page 10 of the Forgiveness Application itemizes the documents that each Borrower must submit with its application, including specific payroll records, full-time equivalent employee (FTE) documentation, and non-payroll costs documentation. Borrowers should begin collecting this required documentation. Q: Is there a due date for the Forgiveness Application? A: As of the date of this publication, nothing in the Forgiveness Application, the Interim Final Rules or the SBA FAQs requires the Borrower to apply for forgiveness. These sources also do not provide a deadline by which Borrowers who do wish to apply for forgiveness must submit their forgiveness applications to their Lenders. However, Borrowers should review the promissory notes and other loan documents they executed in connection with their PPP loan, because Lenders may have included terms that require the Borrower to apply for forgiveness and to do so within a certain period of time. Q: When will I know if I was approved for forgiveness? A: For loans not reviewed by the SBA, the forgiveness process could take up to 5 months. This time period could be even longer for loans reviewed by the SBA. After a Borrower submits a complete application for forgiveness to its Lender, the Lender has 60 days to review the application and submit its decision to the SBA. The Lender's decision may take the form of an approval, in whole or in part; a denial; or if directed by the SBA, a “denial without prejudice” due to a pending SBA review of the loan. A Borrower may request that the SBA review a Lender's decision denying forgiveness within 30 days of receiving the denial notice from the Lender. The SBA, subject to any SBA review of the loan or loan application, has up to 90 days to remit the appropriate forgiveness amount to the Lender. As indicated on the Loan Forgiveness Application, the audit threshold is based on whether the Borrower, together with its affiliates, received PPP loans with an original principal amount in excess of $2 million. The SBA may also review a PPP loan of any size – regardless of whether a forgiveness application has been submitted – at any time in its discretion. If the SBA reviews a PPP Loan, the SBA will notify the Lender in writing and the Lender is required within five (5) business days to notify the Borrower in writing of receipt and to provide certain information to the SBA including the loan application, the forgiveness application, and all supporting documentation. If the SBA determines that a Borrower was ineligible for the PPP loan, was ineligible for the PPP loan amount obtained or for the loan forgiveness amount claimed, the SBA will direct the Lender to deny the loan forgiveness application in whole or in part, as appropriate. The SBA may also seek repayment of the outstanding PPP loan balance or pursue other available remedies. The Borrower may appeal the SBA's determinations, and the SBA has indicated that it intends to issue a separate interim final rule addressing this appeal process. The interim final rule does not impose a time frame on the SBA for its review of any PPP loan. Q: If my Lender denies my application for forgiveness, can I appeal the Lender's decision? A: Yes. If a Lender denies a Borrower’s application for forgiveness, the Lender must notify the Borrower in writing that it has issued a decision to the SBA denying the loan forgiveness application. Within 30 days of such notice from the Lender, the Borrower may request that the SBA review the Lender’s decision. If the SBA undertakes such a review, the SBA will notify the Lender in writing and the Lender must notify the Borrower in writing within five (5) business days of receipt. Q: If the SBA determines that I was ineligible for the PPP loan, or was ineligible for the PPP loan amount obtained or for the loan forgiveness amount claimed, can I appeal the SBA's determination? A: Yes. The SBA has indicated that it intends to issue a separate interim final rule addressing this appeal process. Q: Will my forgiveness application be audited by the SBA? A: As indicated on the Loan Forgiveness Application, the audit threshold is based on whether the Borrower, together with its affiliates, received PPP loans with an original principal amount in excess of $2 million. The SBA may also review a PPP loan of any size – regardless of whether a forgiveness application has been submitted – at any time in its discretion. If the SBA reviews a PPP loan, the SBA will notify the Lender in writing and the Lender is required within five (5) business days to notify the Borrower in writing of receipt and to provide certain information to the SBA including the loan application, the forgiveness application, and all supporting documentation. The SBA may request additional information from the Borrower in connection with its audit. The Borrower will have the opportunity to respond to the SBA's questions in a review. The Borrower's failure to provide the information requested by the SBA may result in a determination that the Borrower was ineligible for the PPP loan or ineligible to receive the loan amount or loan forgiveness amount claimed by the Borrower. If the SBA determines that a Borrower was ineligible for the PPP loan, was ineligible for the PPP loan amount obtained or for the loan forgiveness amount claimed, the SBA will direct the Lender to deny the loan forgiveness application in whole or in part, as appropriate. The SBA may also seek repayment of the outstanding PPP loan balance or pursue other available remedies. The Borrower may appeal the SBA's determinations, and the SBA has indicated that it intends to issue a separate interim final rule addressing this appeal process. The interim final rule does not impose a time frame on the SBA for its review of any PPP Loan. An audit may even occur after the PPP loan is forgiven or is repaid in full. Borrowers are reminded that they are required to keep all documentation related to their PPP loan for six (6) years after the date of forgiveness or repayment. Q: What happens if only a portion of my PPP loan is forgiven, or if my forgiveness application is denied? A: If a Borrower is denied forgiveness in whole or in part, the amount of the loan not forgiven must be repaid by the Borrower on or before the two-year maturity date. This applies only to loan forgiveness applications that are not reviewed by the SBA prior to the Lender's decision on the forgiveness application. A Borrower should also review its promissory note and the other loan documentation it executed in connection with its PPP loan for any additional implications of a denial of forgiveness and specific repayment requirements. If the SBA determines that the Borrower is ineligible for the PPP loan or is ineligible for the loan amount or the loan forgiveness amount claimed by the Borrower, the SBA may pursue other available remedies. Q: A Lender may deny a Borrower's loan forgiveness application "without prejudice" – what does this mean? A: If, at the time a Borrower submits its forgiveness application, the SBA is already reviewing the Borrower's loan and loan application, then the SBA may direct the Lender to "deny without prejudice" the Borrower's forgiveness application. In the case of a "denial without prejudice" the Borrower may subsequently request that the Lender reconsider its application for loan forgiveness, unless the SBA has determined that the Borrower is ineligible for a PPP loan. Eligibility – PPP Loan Forgiveness Q: What amount of my PPP loan is eligible for forgiveness? A: A Borrower is eligible for forgiveness of part or all of its PPP Loan, subject to adjustments and limitations, if proceeds are used for eligible purposes and the Borrower can provide the required supporting documentation to demonstrate that it qualifies for forgiveness. The Forgiveness Application is set up as a worksheet with instructions. Borrowers must complete the Schedules to the Forgiveness Application in accordance with the Forgiveness Application Instructions to determine the amount of forgiveness. Q: Which expenses from my PPP loan proceeds are eligible for forgiveness? A: The sum of the following costs incurred and payments made during the Covered Period or the Alternative Payroll Covered Period, as applicable (see below Q&As on "Covered Period" and "Alternative Payroll Covered Period"), subject to certain other terms and limits discussed elsewhere in this FAQ and as set forth on the Forgiveness Application and the terms of SBA Interim Final Rules and guidance, are eligible for forgiveness: * Payroll costs; * Interest payments on any business mortgage obligation on real or personal property that was incurred before February 15, 2020; * Business rent payments on real or personal property under a lease agreement in force before February 15, 2020; and * Business utility payments for the distribution of electricity, gas, water, transportation, telephone or internet access for which service began before February 15, 2020. It is important to note that the "Alternative Payroll Covered Period" is only applicable to payroll costs and cannot be used to determine non-payroll expenses included in the forgiveness calculation. Q: What is the "Covered Period" for loan forgiveness? A: The "Covered Period" is the 8-Week (56-day) period beginning on the date that the loan proceeds were disbursed to the Borrower. For example, if the Borrower received its PPP Loan proceeds on April 20, 2020, then the first day of the "Covered Period" is April 20, 2020 and the last day of the “Covered Period” is June 14, 2020. Q: What is the "Alternative Payroll Covered Period" for loan forgiveness? A: Borrowers with a bi-weekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs using the 8-Week (56-day) period beginning on the first day of the first pay period following the date that the loan proceeds were disbursed to the Borrower. For example, if the Borrower received its PPP loan proceeds on April 20, 2020, and the first day of its first pay period following its PPP loan disbursement is April 26, 2020, then the first day of the "Alternative Payroll Covered Period" – if elected by the Borrower – is April 26, 2020 and the last day of the "Alternative Payroll Covered Period" is June 20, 2020. If the Borrower elects the "Alternative Payroll Covered Period," it must apply the "Alternative Payroll Covered Period" wherever there is a reference in the Loan Forgiveness Application to "the Covered Period or the Alternative Payroll Covered Period." However, the Borrower must apply the "Covered Period" (not the "Alternative Payroll Covered Period") wherever there is a reference in the application to "the Covered Period" only. It is important to note that the "Alternative Payroll Covered Period" is only applicable to payroll costs and cannot be used to determine non-payroll expenses included in the forgiveness calculation. Q: What "payroll costs" are eligible for forgiveness? A: "Payroll costs" include compensation up to $100,000 which applies only to cash compensation, not to non-cash benefits, such as payment for provision of employee benefits consisting of group health care coverage, payment of state and local taxes assessed on compensation, and employer contributions to defined-benefit or defined-contribution retirement plans. The compensation is on an annualized basis to employees with a principal place of residence in the U.S. in the form of: * gross salary, gross wages, gross commissions, or similar compensation; * gross cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); * payment for vacation, parental, family, medical, or sick leave; * allowance for separation or dismissal; * payment for the provision of employee benefits consisting of group health care co average, including insurance premiums, and retirement; * payment of state and local taxes assessed on compensation of employees; and * for an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation. "Payroll costs" may not include: * compensation of an individual employee in excess of an annual salary of $100,000 in one year, pro-rated during the covered period; * an employer's share of payroll tax; * any compensation of any employee whose principal place of residence is outside of the United States; * qualified sick leave wages or family leave wages for which a credit is allowed under section 7001 or 7003 of the Families First Coronavirus Response Act; or * amounts paid to independent contractors. Borrowers are generally eligible for forgiveness for the payroll costs "paid" and the payroll costs "incurred" during the Covered Period or Alternative Payroll Covered Period. Payroll costs are considered "paid" on the day that paychecks are distributed or the Borrower originates an ACH credit transaction. Payroll costs are considered "incurred" on the day that the employee's pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period or Alternative Payroll Covered Period are eligible for forgiveness if paid on or before the next regular payroll date. Q: Are bonuses or hazard pay eligible for forgiveness? A: Yes. If an employee's total compensation does not exceed $100,000 on an annualized basis, the employee’s hazard pay and bonuses are eligible for loan forgiveness. Q: What non-payroll costs are eligible for forgiveness? A: Non-payroll costs eligible for forgiveness include: * covered mortgage obligations: payments of interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020; * covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020; and * covered utility payments: business payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020. Eligible non-payroll costs must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. As a reminder, eligible non-payroll costs cannot exceed 25% of the total forgiveness amount. Q: I incurred certain eligible payroll or non-payroll costs before I actually received my PPP Loan proceeds, but I paid those costs during the Covered Period or Alternative Payroll Covered Period (as applicable). Are those amounts incurred prior to – but paid during – the Covered Period or Alternative Payroll Covered Period (as applicable) eligible forgiveness? A: Yes. Borrowers are generally eligible for forgiveness for the payroll costs "paid" and the payroll costs "incurred" during the Covered Period or Alternative Payroll Covered Period. Payroll costs are considered "paid" on the day that paychecks are distributed or the Borrower originates an ACH credit transaction. Payroll costs are considered "incurred" on the day that the employee's pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period or Alternative Payroll Covered Period are eligible for forgiveness if paid on or before the next regular payroll date. For example, a Borrower's Covered Period runs from April 14 through June 8, 2020. The Borrower has a bi-monthly payroll schedule that pays on the 15th and the last day of each month. The Borrower may use PPP loan funds to pay the payroll costs that would be paid on April 15, 2020 ("paid" during the Covered Period even though for payroll prior to the Covered Period). The Borrower may also use PPP loan funds to pay the payroll costs that would be paid on April 30, 2020; May 15, 2020; and May 31, 2020 ("incurred" and "paid" during the Covered Period). Additionally, on June 15, 2020 (next regular payroll date), the Borrower may use PPP Loan funds to pay the payroll costs attributable to June 1 through June 8, 2020 ("incurred" during the Covered Period even though paid after the Covered Period). All such payments may be included in the requested forgiveness amount. Eligible non-payroll costs must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. The Interim Final Rule on forgiveness provide the example of an electric bill. Electric bills are typically paid in arrears. The Borrower's Covered Period is June 1 through July 26, 2020. The electric bills that the Borrower pays for May and June are paid during the Covered Period and eligible for forgiveness. The July electric bill is paid on August 10, 2020 (which is the next regular billing date). The payment on August 10, 2020 (only for the portion of the Borrower's July electricity bill through July 26, 2020 – the end of the Covered Period) may be included in the requested forgiveness amount because the related expenses were "incurred" during the Covered Period and paid on the next regular billing date. Q: Is interest that accrued on the PPP Loan eligible for forgiveness? A: It appears that the answer is yes, and that interest is included in the forgiveness amount that the SBA pays to the Lender. The May 22, 2020 Interim Final Rules provide that: "SBA will, subject to any SBA review of the loan or loan application, remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, not later than 90 days after the lender issues its decision to SBA. If the amount remitted by SBA to the Lender exceeds the remaining principal balance of the PPP loan (because the borrower made scheduled payments on the loan after the initial deferment period), the Lender must remit the excess amount, including accrued interest, to the borrower" Q: What if I applied for my PPP Loan based on a good faith belief that I was eligible, but a later Interim Final Rule or SBA guidance made clear my interpretation was not in line with what the SBA intended? A: In discussing the SBA's determination of forgiveness, the Interim Final Rule on forgiveness states "The Administrator may review whether a borrower is eligible for the PPP loan based on the provisions of the CARES Act, the rules and guidance available at the time of the borrower's PPP loan application, and the terms of the borrower's loan application. See FAQ 17 (posted April 6, 2020)." FAQ 17 states that Borrowers and Lenders may rely on the laws, rules and guidance available at the time of the application, but if the loan proceeds had not been disbursed at the time of the clarifying guidance, then the Borrower should have modified its application. The eligibility review will be “based on the provisions of the CARES Act, SBA rules or guidance available at the time of the borrower’s loan application, or the terms of the borrower's PPP loan application…” The SBA’s review will also examine whether the Borrower provided adequate documentation for the certifications on the loan application. Q: What if I have not been able to open my business at all, but I am still paying employees? A: For employees who are not performing work but are still on the Borrower's payroll, payroll costs are "incurred" based on the schedule established by the Borrower (typically, each day that the employee would have performed work). Therefore, such payroll costs are eligible for forgiveness. Reductions to Forgiveness Amount This FAQ section is limited to the additional information provided in the Interim Final Rule on Forgiveness and the Interim Final Rule on Loan Review Procedures. Additional instructions and examples are contained in the Interim Final Rules themselves, as well as on the Forgiveness Application. Q: What actions will reduce my forgiveness amount? A: Generally, the amount of loan forgiveness will be reduced if the number of full-time equivalent employees is reduced (FTE Reduction), if employees' salaries or hourly wages are reduced by more than 25% (Salary/Hourly Wage Reduction), or if the Borrower’s eligible non-payroll expenses exceed 25% of the total eligible expenses. Q: How should a Borrower calculate a full-time equivalent employee (FTE)? A: There are two (2) methods for a Borrower to calculate FTEs: * Option #1 – for each employee, take the number of hours paid per week, divide by 40, and round the total to the nearest tenth. The maximum for each employee is capped at 1.0. * Option #2 – Assign a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours. Borrowers may select only one of these two methods, and must apply that method consistently to all of their part-time employees for the Covered Period or the Alternative Payroll Covered Period and the selected reference period. Q: What is the FTE Reduction? A: Generally, the Borrower's loan forgiveness will be reduced if the Borrower’s average number of FTEs during the Covered Period or Alternative Payroll Covered Period is less than the average number of FTEs during the Borrower's chosen reference period. Borrowers can choose between the following reference periods: * February 15, 2019 to June 30, 2019; * January 1, 2020 to February 29, 2020; or * for seasonal employers, either of the preceding periods or a consecutive 12-week period between May 1, 2019 and September 15, 2019. The same method must be used for each employee. However, the FTE Reduction Safe Harbor provides that if both (1) the Borrower reduced its FTE employee levels between February 15, 2020 and April 26, 2020; and (2) the Borrower restored its FTE employee levels not later than June 30, 2020 to the levels in the Borrower's pay period that included February 15, 2020, then such reduction will not reduce the amount eligible for forgiveness. Additionally, the following situations do not count toward the FTE Reduction calculations: * the Borrower offered to rehire former employees or offered to restore the reduced hours of such employee so long as the following conditions are met: -- the Borrower made a good-faith, written offer to rehire the employee (or, if applicable, restore the reduced hours of such employee) during the Covered Period or the Alternative Payroll Covered Period; -- the offer was for the same salary or wages and the same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours; -- the employee rejected the offer; -- the Borrower maintained records documenting the offer and its rejection; and -- the Borrower informed the applicable state unemployment insurance office of the offer and rejection within 30 days of the employee’s rejection. This last requirement is a new provision from the Interim Final Rule on Forgiveness.The SBA will provide additional information on this reporting requirement on its website. * employees fired for cause during the Covered Period or the Alternative Payroll Covered Period; * employees who voluntarily resigned during the Covered Period or the Alternative Payroll Covered Period; or * employees who requested and received a reduction in their hours during the Covered Period or the Alternative Payroll Covered Period. Any FTE reductions in the above cases do not reduce the Borrower's loan forgiveness. Q: By what amount is my loan forgiveness reduced if I have fewer FTEs during the Covered Period or the Alternative Payroll Covered Period? A: If none of the FTE Reduction exceptions or the FTE Reduction Safe Harbor apply, the average number of FTEs during the Covered Period or the Alternative Payroll Covered Period reduces the amount of forgiveness proportionally by the percentage of reduction in FTEs. For example, if the Borrower has 20% fewer FTEs during the Covered Period or the Alternative Payroll Covered Period, then the amount of forgiveness is reduced by 20%. The Forgiveness Application and schedules account for these reductions. Q: What is the Salary/Hourly Wage Reduction? A: Generally, for employees who earned $100,000 or less in 2019 (or were not employed by the Borrower in 2019), the Borrower's loan forgiveness will be reduced for each employee whose average pay (salary or hourly wage) during the Covered Period or the Alternative Payroll Covered Period is less than 75% of their average pay compared to the period from January 1, 2020 to March 31, 2020. The Salary/Hourly Wage Reduction Safe Harbor provides that (1) if the average annual salary or hourly wages between February 15, 2020 and April 26, 2020 is equal to or greater than the annual salary or hourly wages as of February 15, 2020 or (2) if the average annual salary or hourly wage as of June 30, 2020 is restored to an amount equal to or greater than the average annual salary or wage as of February 15, 2020, then the reduction during the Covered Period or the Alternative Payroll Covered Period does not count to reduce the amount of forgiveness. If the Borrower does not meet the Salary/Hourly Wage Reduction Safe Harbor, the total amount of forgiveness is reduced by the total dollar amount of salary or wage reduction in excess of 25% of the salary or wages between January 1, 2020 and March 31, 2020. This reduction calculation is done on a per employee basis, not in the aggregate. Q: If I terminated an employee or reduced their hours from full-time to part-time, do I count those reductions in both the calculations for the FTE Reduction and the Salary/Hourly Wage Reduction? A: The Salary/Hourly Wage Reduction applies only to the portion of the Salary/Hourly Wage Reduction that is not attributable to the FTE Reduction.The SBA and Treasury make clear that Borrowers should not be doubly penalized by having such reductions count in both the Salary/Hourly Wage Reduction and the FTE Reduction. For example, an hourly wage employee had been working 40 hours per week during the Borrower selected reference period (FTE employee of 1.0) and the Borrower reduced the employee's hours to 20 hours per week during the Covered Period or the Alternative Payroll Covered Period (FTE employee of 0.5). There was no change to the employee's hourly wage during the Covered Period or the Alternative Payroll Covered Period. Because the hourly wage did not change, the reduction in the employee's total wages is entirely attributable to the FTE Reduction and the Borrower is not required to conduct a Salary/Hourly Wage Reduction calculation for that employee. However, in this same example, if that employee's hourly wage was also reduced, the FTE Reduction calculation is impacted and the Salary/Hourly Wage Reduction calculation is impacted, but only by the reduction attributable to the wage rate reduction, not the number of reduced hours. Q: Is there a cap on the amount of loan forgiveness for owner-employees and self-employed individuals’ payroll compensation? A: Yes. The amount of loan forgiveness for owner-employees and self-employed individuals’ payroll compensation can be no more than the lesser of 8/52 of 2019 compensation or $15,385 per individual in total across all businesses. In particular, owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement and health care contributions made on their behalf; Schedule C filers are capped at the amount of their owner compensation replacement, calculated based on 2019 net profit; and general partners are capped by the amount of their 2019 net earnings from self-employment (reduced by claimed section 179 expense deduction, unreimbursed partnership expenses and depletion from oil and gas properties) multiplied by 0.9235. [*] Issues on Overpayment on CARES Act Provider Relief Fund ----------------------------------------------------------- Andrew Brenton and Meg S.L. Pekarske of Husch Blackwell LLP wrote on JDSupra an article titled "CARES Act Provider Relief Fund: Connecting HHS's Dots On Whether Your Tranche #1 Payment Is An Overpayment": After the U.S. Department of Health and Human Services (HHS) automatically distributed $30 billion to providers as Tranche #1 Relief Fund payments based on 2019 Medicare fee-for-service payment data, HHS subsequently released a new formula that was based on 2018 "program service revenue" and intended to calculate providers' payments under Relief Fund Tranches #1 and #2 cumulatively. For providers whose Tranche #1 payments alone exceeded their expected payment under the new "program service revenue" formula, there have been ongoing questions about whether such providers were "overpaid" and needed to reject and return their Tranche #1 payments. While guidance in this area has evolved frequently,[1] there is support that HHS does not consider a Tranche #1 payment that merely exceeds a provider's expected payment under HHS's "program service revenue" formula to be an overpayment. The below chart contains examples of HHS guidance and actions that lend support to this position. It is important to note that payments that were received in error or that exceed a provider's qualifying expenses and losses will need to be returned.[2] While HHS says that unused payment amounts should be returned "at the conclusion of the pandemic," [3] HHS has not otherwise defined the end date for qualifying expenses and losses or the process for returning unused payment amounts. HHS Removed "Do Not Attest" Language HHS removed language from the Provider Relief Fund payment attestation portal that had instructed providers not to attest if their Tranche #1 payment exceeded their expected payment under the "program service revenue" formula. HHS Characterizes the "Program Service Revenue" Formula As Calculating a Provider's Minimum Payment Amount In its Relief Fund FAQs, HHS says that "[p]roviders do not need to be able to prove, at the time they accept a Provider Relief Fund payment, that prior and/or future lost revenues and increased expenses attributable to COVID-19 (excluding those covered by other sources of reimbursement) meet or exceed their Provider Relief Fund payment."[5] HHS Appears to Be Focusing Future Enforcement on Proper Use of Relief Payments In its Relief Fund FAQs, HHS says: "Generally, HHS does not intend to recoup funds as long as a provider's lost revenue and increased expenses exceed the amount of provider relief funding a provider has received."[6] "HHS expects that providers will only use Provider Relief Fund payments for permissible purposes and if, at the conclusion of the pandemic, providers have leftover Provider Relief Fund money that they cannot expend on permissible expenses or losses, then they will return this money to HHS. HHS will provide directions in the future about how to return unused funds."[7] "Retention and use of these funds are subject to certain terms and conditions. If these terms and conditions are met, payments do not need to be repaid at a later date."[8] The referenced terms and conditions do not require rejection of Tranche #1 payments based on application of the “program service revenue" formula. [1] Note that HHS has updated its Relief Fund FAQs repeatedly, sometimes on a near-daily basis. This article is based on the version of the FAQs that appeared on HHS's website as of June 9, 2020. It is likely that HHS will continue to update its FAQs subsequent to the publication of this article. [2] "HHS reserves the right to audit Relief Fund recipients in the future to . . . collect any Relief Fund amounts that were made in error or exceed lost revenue or increased expenses due to COVID-19." See HHS, Relief Fund FAQs at 10 (last accessed June 9, 2020). Note that HHS has not further defined what receiving a relief payment "in error" means. [3] See HHS, Relief Fund FAQs at 6 (last accessed June 9, 2020). [4] "HHS is distributing an additional $20 billion of the General Distribution to providers to augment their initial allocation so that $50 billion is allocated proportional to providers’ share of 2018 gross receipts or sales/program service revenue. The allocation methodology is designed to provide relief to providers, who bill Medicare fee-for-service, with at least 2% of that provider's gross receipts regardless of the provider's payer mix" (emphasis added). See HHS, Relief Fund FAQs at 10 (last accessed June 9, 2020). [5] See HHS, Relief Fund FAQs at 6 (last accessed June 9, 2020). [6] See HHS, Relief Fund FAQs at 10 (last accessed June 9, 2020). [7] See HHS, Relief Fund FAQs at 6 (last accessed June 9, 2020). See also HHS, Relief Fund FAQs at 5 (last accessed June 9, 2020) (“HHS has not yet detailed how recoupment or repayment will work.”). [8] See HHS, Relief Fund FAQs at 2 (last accessed June 9, 2020). [*] King & Spalding: Newly Enacted PPP Flexibilities ---------------------------------------------------- J. C. Boggs, Steve Cave, Daniel Kahan, Allison Kassir, Thomas Knox, Matthew Sandiford, and Thomas Spulak of King & Spalding wrote on JDSupra an article titled "New Flexibilities Enacted in Paycheck Protection Program (PPP)": On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act, H.R. 7010 (P.L. 116-142). While this law does not add any new funding to the Small Business Administration (SBA) Paycheck Protection Program (PPP) loan program, it amends the program to give small businesses greater flexibility in the use of loan proceeds and the term of the loans. After the House passed the bill on May 28 by a vote of 417-1, the Senate approved the bill by voice vote on June 3. Background: The PPP was enacted in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, or P.L. 116-136), to provide eight weeks of cash flow assistance, through federally guaranteed loans, to small businesses who used the loans to maintain employment. The entire amount of these loans is eligible to be forgiven if certain hiring and compensation criteria are satisfied. The PPP proved popular, and after the initial $349 billion of program funding was exhausted, Congress, as part of the Paycheck Protection Program and Health Care Enhancement Act (PL 116-139), increased the loan authorization level to $659 billion and targeted a portion of PPP funding to ensure PPP loans would (x) go to women, minority, and veteran-owned small businesses and (y) be disbursed by small- and medium-sized financial institutions. When the PPP was enacted at the end of March, it was not clear how long the economic disruptions of the COVID-19 public health crisis would last. However, as has become apparent, these disruptions for small businesses will continue for months longer than the time frames in the original PPP, particularly as social distancing continues. The initial rules for the program – in particular, the requirement that 75% of proceeds be used for payroll purposes – made it difficult for businesses to fully utilize loan proceeds for forgivable purposes within the required eight week period. Key provisions of Paycheck Protection Program Flexibility Act are summarized below: Minimum Loan Maturity Original: Two years (established by the initial Interim Final Rule). New: H.R. 7010 establishes a minimum maturity of five years for a PPP loan with a balance remaining after forgiveness if originated after June 5th, 2020; the maturity of existing PPP loans has not been changed by this law. Extending Rehiring Deadline Original: PPP gives employers until June 30 to rehire any laid off workers to achieve full loan forgiveness. New: H.R. 7010 extends the rehiring deadline from June 30 to December 31, 2020. Extending Expense Forgiveness Period Original: Only amounts spent within eight weeks of loan origination are eligible for loan forgiveness. New: H.R. 7010 extends the eight-week limit to the earlier of 24 weeks after loan origination or December 31, 2020 (at the election of the borrower for previously-disbursed loans). Loan Forgiveness/Employee Availability Original: No provision.[1] New: H.R. 7010 expands loan forgiveness provisions if the recipient is able to document that it is unable to rehire former employees who worked for the business as of February 15 and is unable to hire similarly qualified employees before December 31, or that it is unable to return to the same level of business activity due to compliance with federal guidance related to COVID-19. Reducing Payroll Ratio Requirement to 60% Original: The current loan forgiveness application requires that, in order to obtain full loan forgiveness, the borrower must spend at least 75% of the loan proceeds on payroll during the eight week period. New: H.R. 7010 establishes a requirement that at least 60% of a PPP loan must be used for payroll costs to be eligible for loan forgiveness. Up to 40% of a PPP loan could be used for "any covered mortgage obligation," rent, or utility payments. Note that H.R. 7010 as drafted would require companies to spend at least 60% on payroll or none of the loan would be forgiven (rather than capping the total forgiveness amount); if this drafting error cannot be addressed in rulemaking, a technical amendment may be enacted in a future legislative vehicle. Extension of Deferral Period Original: No interest, principal or fees are payable until six months after disbursement of the loans. New: Deferrals are extended through the date on which the lender receives reimbursement from SBA for the forgiven loan amount. A recipient is required to apply for loan forgiveness within 10 months of the end of the bill's 24-week loan period. If the recipient does not apply for loan forgiveness within that 10 months, loan repayments will begin at the conclusion of that 10 month period. Allow Payroll Tax Deferment Original: Businesses whose PPP loans were forgiven may not defer 2020 payroll taxes. New: H.R. 7010 eliminates this prohibition. Unless otherwise specified, the provisions of H.R. 7010 are retroactive to March 27, 2020, the date of enactment for the CARES Act. Next Steps: There is strong bipartisan, bicameral support for ensuring that the PPP meets the needs of small businesses, and it is likely that the PPP will be amended again. As noted above, there is an immediate need to address a drafting error in the payroll ratio requirement language, and members of Congress have expressed an interest in further refining the program, including allowing PPP recipients to use loans for personal protective equipment, medical supplies, and renovations needed to meet federal guidelines for reopening. Additional areas for reform will likely become apparent as PPP recipients transition from the loan to grant phase in the coming weeks. [1] The Interim Final Rule published on June 1, 2020 contains a similar provision which exempts individual employees from the headcount and salary reduction tests to the extent the individual worker did not accept a good faith offer to return to work on the same terms as their prior employment. [*] Moratorium on Involuntary Bankruptcies in Russia Set -------------------------------------------------------- Dentons wrote on JDSupra and article titled "COVID-19 bankruptcy moratorium amended to allow debtors to apply for judicial instalment plans": On June 8, 2020, President Vladimir Putin signed Federal Law No. 166-FZ. The law amended certain legislative acts to provide for further COVID-19 relief measures. One of the recent measures was the introduction of a new Article 9.1 of the Russian Bankruptcy Law, allowing the imposition of a moratorium on creditors' initiation of bankruptcy proceedings (the Moratorium) for certain categories of debtors (Eligible Debtors). The Russian Government then immediately imposed such a Moratorium for six months, effective as from April 6, 2020 (and subject to further potential extension(s)). Please see full publication for more information at https://www.jdsupra.com/legalnews/covid-19-bankruptcy-moratorium-amended-67651/ [*] Restaurants That Declared Bankruptcy Due to Pandemic -------------------------------------------------------- Joe Guszkowski, writing for Restaurant Business Online, reports that numerous restaurants had declared bankruptcy in 2020 due to coronavirus pandemic. The coronavirus pandemic and ensuing shutdown have had a massive impact on restaurants, with industry sales at one point cut in half compared to 2019. Some chains that had been struggling before the pandemic were unable to weather the storm. Seven chains have declared bankruptcy, though these may well be "the tip of the iceberg," as HopCat CEO Mark Sellers said after his chain filed earlier this month. Here's a look at the restaurant chains that have filed for credit protection since the shutdown began. * Vapiano The German chain of Italian fast casuals filed an application in Cologne, Germany, to open insolvency proceedings in early April 2020. It operated six units in the U.S. and blamed its financial problems on closures related to the COVID-19 outbreak. "No solution could be found” for the company's liquidity problem, “which has increased significantly due to the COVID-19 crisis." All of the chain's locations remained closed “until further notice” due to the coronavirus crisis. * FoodFirst Global Restaurants The parent of the Brio Italian Mediterranean and Bravo Fresh Italian casual chains filed for Chapter 11 bankruptcy protection in mid-April 2020 and raised the possibility of seeking a buyer after closing 71 of its 92 remaining restaurants. FoodFirst said the chains had been struggling with sales and profit declines before the COVID-19 pandemic. "The mandated dining room closure orders wiped out 60% of our restaurants within days and since then we have experienced nothing short of devastating sales declines," said CEO Steve Layt. In late May 2020, concept collector Robert Earl teamed up with the financial backer of the brands to buy 45 of the chains’ locations for $50,000 in cash, $25 million in forgiven credit and $4 million in assumed liabilities. * TooJay's TooJay's Original Gourmet Deli filed for federal bankruptcy protection in late April 2020, blaming the weekslong coronavirus shutdown for taking what had otherwise been a profitable company into the red. The 28-unit New York-style deli concept had received a $6.4 million Paycheck Protection Loan shortly before the filing, which it planned to use on payroll and expenses. * Sustainable Restaurant Holdings The parent company for seafood chains Bamboo Sushi and QuickFish filed for federal bankruptcy protection on May 12, 2020 blaming the coronavirus shutdown for limiting its ability to generate revenue or get financing to make it through the crisis. It operated 10 restaurants at the time, and had furloughed or laid off 90% of its employees in March 2020. By filing for bankruptcy, the company was able to secure financing to stay in business while it looks for a buyer. Sustainable Restaurants said funds from investor Bain Capital and available cash would help it continue to operate through the bankruptcy process. * Garden Fresh Restaurants The owner of buffet chains Souplantation and Sweet Tomatoes, filed for Chapter 7 bankruptcy protection in mid-May 2020, opting to liquidate its assets and close its doors for good. The filing came shortly after executives notified the company's 4,400 employees that its 97 restaurants would not reopen after their initial March closure. Executives said they saw no proper strategy for reopening as federal regulations forbid self-service operations such as salad bars. * Le Pain Quotidien The fast-casual chain filed for Chapter 11 bankruptcy protection on May 27, 2020 and proposed a sale to Aurify Brands for $3 million to save some of its operations. The chain, which had been struggling before the pandemic, closed all of its stores amid the coronavirus crisis and laid off the majority of its employees. A sale to Aurify would allow for the reopening of at least 35 of its 98 restaurants and avoid a liquidation, Le Pain said in its filing. * BarFly Ventures The parent of the HopCat brewpub chain filed for Chapter 11 bankruptcy protection on June 3, 2020 citing the challenges of operating beer-focused restaurants while dining rooms are closed because of the COVID-19 pandemic. The company operates three one-of-a-kind restaurants in Grand Rapids, eight HopCats in Michigan and three outside the state. HopCat revenues fell 100% after the pandemic hit, said CEO and founder Mark Sellers. In testimony before the Regulatory Reform Committee of Michigan's House of Representatives, Sellers warned that his company’s bankruptcy is "the tip of the iceberg," and that "there is going to be a giant wave of bankruptcies very soon." [*] SBA and U.S. Treasury Changes on PPP Flexibility Act Enactment ------------------------------------------------------------------ Isaias (Cy) Alba IV of PilieroMazza PLLC wrote on JDSupra an article "Treasury and SBA to Make Changes Regarding Enactment of PPP Flexibility Act": On May 28, 2020, we wrote about the Paycheck Protection Program Flexibility Act (the Act), a new piece of legislation introduced in the House of Representatives. The Act's intended purpose was to give employers more latitude regarding the use of their Paycheck Protection Program (PPP) loans while also increasing loan forgiveness in order to stimulate the economy. Since then, the Senate has passed the Act and President Trump signed it into law. On June 8, 2020, U.S. Department of the Treasury (Treasury) Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza issued a statement regarding the enactment of the Act. Treasury and SBA's proposed enactment makes some significant changes from the Act itself. Most notable among the legal deviations is that PPP borrowers will no longer be ineligible for loan forgiveness if they use less than 60% of their loan for payroll purposes. The Act was originally written to lower the required payroll threshold from 75% to 60%, but it made it so that if a borrower failed to meet the 60% standard, they would lose all forgiveness. Luckily, the statement released by the Treasury and SBA last night will allow businesses to receive partial loan forgiveness should they not meet the 60% quota. This change will provide even more flexibility for companies to use PPP loans as they see fit. The other major clarification of the Act is that a PPP loan approved after June 5, 2020 will have a five-year payback period. Not the two-year period based upon the prior guidance. The period applicable to your loan will be based upon the date the recipient received a loan number from the SBA. While loans issued before June 5, 2020 will still be subject to a two-year payback period, the statement from last night makes it clear that banks are allowed to extend that to five years if they so desire (so talk to your banks!). This change will also be welcomed by many borrowers, since it gives them much more time to pay back the loan than they would have had before. It seems likely that Treasury and SBA may make other changes to the Act as it is implemented. PilieroMazza is monitoring these rapid changes and will provide updates when more guidance is released by the government. [*] Sherman & Howard's PPP Flexibility Act Summary -------------------------------------------------- William “Bill” Peffer, Kenneth Siegel, and Lyle Wallace of Sherman & Howard L.L.C. provided on JDSupra a PPP Flexibility Act Summary: On June 5, 2020 President Trump signed into law the PPP Flexibility Act of 2020 (the Flexibility Act). The Flexibility Act modifies numerous loan eligibility, loan forgiveness, and loan repayment aspects of the PPP created under the CARES Act. The advisory outlines how the Flexibility Act can provide additional flexibility for the PPP borrower with respect to receiving PPP loans, maximizing PPP loan forgiveness, and assisting in PPP loan repayment for amounts that are not forgiven. You can see full Advisory at https://www.jdsupra.com/legalnews/ppp-flexibility-act-summary-97923/ [*] Shutts: Commercial Landlords Pre-Bankruptcy Considerations -------------------------------------------------------------- James Timko of Shutts & Bowen LLP wrote on JDSupra an article titled "Pre-Bankruptcy Considerations for Commercial Landlords": As many landlords are learning, unexpected circumstances can cause a good tenant to become a non-performing tenant almost instantly. Landlords will likely be more conservative in their dealings in order to protect themselves from unexpected bankruptcies. The following commentary addresses several ways that a landlord may seek to protect themselves from such financial distress and resulting bankruptcy cases. There are four main approaches for a landlord to protect at least a portion of their recovery rights in a bankruptcy case. * First, there is a cash security deposit. This is the most liquid way to protect against a default. The drawback to a cash security deposit is that it technically remains a part of the bankruptcy estate until the landlord files a motion for relief from the automatic stay to cash it, or the case is over. The advantage in the bankruptcy case is the security deposit provides for a secured claim that should be paid in full in the amount of the deposit. * Second, a line of credit may be a good option. As a general rule, the exercise of a line of credit is not stayed by the automatic stay in a bankruptcy case because it is the independent obligation of the issuer of the letter of credit. This type of security is more complicated than a security deposit and the landlord should structure the line of credit to avoid any approvals required by the debtor to exercise the letter of credit. Some bankruptcy courts also consider other factors with respect to the appropriate exercise of a line of credit. While the letter of credit can provide excellent protection, especially in larger transactions, it does require more scrutiny and attention than a cash security deposit. * Third, the third-party guaranty may also provide some protection. The guaranty does not provide an immediate recovery, but it does discourage the equity holder of a debtor from defaulting or causing a tenant to file bankruptcy because they may be personally liable for the unpaid rent. As a general rule, the automatic stay does not apply to third-party non-debtors and a landlord can seek relief from the guarantor. A note of caution, the guaranty should be unconditional and not require that the landlord first look to the tenant upon a default. * Finally, a landlord can avoid being sideswiped by an unexpected bankruptcy by including financial disclosure requirements in the lease and monitoring a tenant’s finances. This may allow a landlord to anticipate a potential default and act accordingly. Coupling financial requirements with termination provisions may also provide some protection. Although none of the above options offer complete protection against a defaulting tenant, they do at least provide for either some recovery or information to allow for informed decisions. These options with a little elbow grease by the landlord to find new tenants may significantly help the bottom line. While many of these discussed concepts are treated in a similar fashion by most bankruptcy courts, there may be courts that differ. Landlords should discuss their options with legal counsel when developing their pre-bankruptcy protection strategies. [*] Up to 25,000 Stores Could Shutter in 2020 due to COVID-19 ------------------------------------------------------------- Kelly Tyko of USA Today said that according to a new report from global market research company Coresight Research, as many as 25,000 stores could shutter in 2020 as businesses continue to feel the implications of COVID-19 pandemic. Coresight previously estimated 15,000 stores would close in 2020 following a record number of closings in 2019 and the liquidation of chains like Payless ShoeSource, Gymboree and Dressbarn. "We anticipate that approximately 55% to 60% of all store closures will be mall-based," Coresight said in the report. "The coronavirus outbreak could accelerate a correction in mall space that already looks overdue." COVID-19 has hit retailers who were already in debt harder than others and bankruptcy filings have increased due to the pandemic like Neiman Marcvus, J. Crew and J.C. Penney that recently filed Chapter 11. Pier 1 Imports is closing all of its stores in bankruptcy after previously planning to close half of its stores. Victoria's Secret plans to permanently close approximately 250 stores in the U.S. and Canada this year. Closing sales are expected to begin this June 2020 at the first wave of 242 J.C. Penney stores that will permanently close in bankruptcy. Coresight expects more bankruptcies will also be filed. Store closings 2020 due to COVID-19 These retailers are permanently closing stores. * Bath & Body Works: 50 stores * J.C. Penney: 242 locations * Nordstrom: 16 stores, three boutiques * Pier 1: All locations, 541 remaining stores * Signet Jewelers (Kay, Zales and Jared): 150 stores won't reopen from COVID-19 closures and 150 stores will shutter. * Starbucks: up to 400 company-owned locations over the next 18 months. * Tuesday Morning: 230 stores * Victoria's Secret: 235 U.S. Victoria's Secret and three Pink stores [^] BOND PRICING: For the Week from June 29 to July 3, 2020 ----------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 24 Hour Fitness Worldwide HRFITW 8.000 2.000 6/1/2022 24 Hour Fitness Worldwide HRFITW 8.000 2.020 6/1/2022 Ahern Rentals Inc AHEREN 7.375 47.211 5/15/2023 Ahern Rentals Inc AHEREN 7.375 48.074 5/15/2023 America West Airlines 2001-1 Pass Through Trust AAL 7.100 79.000 4/2/2021 American Airlines 2011-1 Class A Pass Through Trust AAL 5.250 84.611 1/31/2021 American Airlines 2013-1 Class B Pass Through Trust AAL 5.625 87.374 1/15/2021 American Airlines Group AAL 5.000 57.543 6/1/2022 American Energy- Permian Basin LLC AMEPER 12.000 11.515 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 9.808 10/1/2024 American Energy- Permian Basin LLC AMEPER 12.000 9.808 10/1/2024 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Basic Energy Services Inc BASX 10.750 40.201 10/15/2023 Basic Energy Services Inc BASX 10.750 40.201 10/15/2023 Bon-Ton Department Stores Inc/The BONT 8.000 9.532 6/15/2021 Briggs & Stratton Corp BGG 6.875 31.746 12/15/2020 Bristow Group Inc/old BRS 6.250 5.852 10/15/2022 Bristow Group Inc/old BRS 4.500 5.875 6/1/2023 Bruin E&P Partners LLC BRUINE 8.875 1.591 8/1/2023 Bruin E&P Partners LLC BRUINE 8.875 1.824 8/1/2023 Buffalo Thunder Development Authority BUFLO 11.000 50.125 12/9/2022 CBL & Associates LP CBL 5.250 27.750 12/1/2023 CBL & Associates LP CBL 4.600 27.955 10/15/2024 CEC Entertainment Inc CEC 8.000 8.621 2/15/2022 CSI Compressco LP / CSI Compressco Finance Inc CCLP 7.250 51.529 8/15/2022 Calfrac Holdings LP CFWCN 8.500 6.373 6/15/2026 Calfrac Holdings LP CFWCN 8.500 6.525 6/15/2026 California Resources Corp CRC 8.000 3.996 12/15/2022 California Resources Corp CRC 8.000 3.856 12/15/2022 California Resources Corp CRC 6.000 2.991 11/15/2024 California Resources Corp CRC 5.500 2.177 9/15/2021 California Resources Corp CRC 6.000 1.771 11/15/2024 Callon Petroleum Co CPE 6.250 37.130 4/15/2023 Callon Petroleum Co CPE 6.125 34.968 10/1/2024 Callon Petroleum Co CPE 6.125 33.175 10/1/2024 Callon Petroleum Co CPE 6.125 33.175 10/1/2024 Century Aluminum Co CENX 7.500 94.527 6/1/2021 Century Aluminum Co CENX 7.500 93.496 6/1/2021 Chaparral Energy Inc CHAP 8.750 16.000 7/15/2023 Chaparral Energy Inc CHAP 8.750 9.257 7/15/2023 Chesapeake Energy Corp CHK 11.500 10.715 1/1/2025 Chesapeake Energy Corp CHK 5.500 2.813 9/15/2026 Chesapeake Energy Corp CHK 11.500 10.750 1/1/2025 Chesapeake Energy Corp CHK 8.000 3.000 6/15/2027 Chesapeake Energy Corp CHK 8.000 3.000 1/15/2025 Chesapeake Energy Corp CHK 7.000 2.820 10/1/2024 Chesapeake Energy Corp CHK 5.750 3.141 3/15/2023 Chesapeake Energy Corp CHK 4.875 4.172 4/15/2022 Chesapeake Energy Corp CHK 7.500 2.856 10/1/2026 Chesapeake Energy Corp CHK 8.000 2.000 3/15/2026 Chesapeake Energy Corp CHK 8.000 2.642 3/15/2026 Chesapeake Energy Corp CHK 8.000 2.954 6/15/2027 Chesapeake Energy Corp CHK 8.000 2.954 6/15/2027 Chesapeake Energy Corp CHK 8.000 2.946 1/15/2025 Chesapeake Energy Corp CHK 8.000 2.642 3/15/2026 Chesapeake Energy Corp CHK 8.000 2.946 1/15/2025 Citigroup Inc C 5.950 94.262 N/A Dean Foods Co DF 6.500 2.250 3/15/2023 Dean Foods Co DF 6.500 1.990 3/15/2023 Denbury Resources Inc DNR 9.000 40.590 5/15/2021 Denbury Resources Inc DNR 6.375 10.050 12/31/2024 Denbury Resources Inc DNR 7.750 39.544 2/15/2024 Denbury Resources Inc DNR 5.500 0.428 5/1/2022 Denbury Resources Inc DNR 4.625 3.235 7/15/2023 Denbury Resources Inc DNR 9.000 40.615 5/15/2021 Denbury Resources Inc DNR 6.375 3.000 8/15/2021 Denbury Resources Inc DNR 9.250 38.093 3/31/2022 Denbury Resources Inc DNR 7.750 39.470 2/15/2024 Denbury Resources Inc DNR 9.250 38.039 3/31/2022 Denbury Resources Inc DNR 7.500 44.000 2/15/2024 Denbury Resources Inc DNR 7.500 38.000 2/15/2024 Diamond Offshore Drilling DOFSQ 7.875 12.250 8/15/2025 Diamond Offshore Drilling DOFSQ 5.700 12.250 10/15/2039 Diamond Offshore Drilling DOFSQ 4.875 12.250 11/1/2043 Diamond Offshore Drilling DOFSQ 3.450 12.250 11/1/2023 ENSCO International Inc VAL 7.200 13.402 11/15/2027 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 23.250 5/15/2026 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 2.000 11/29/2024 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 7.750 23.193 5/15/2026 EP Energy LLC / Everest Acquisition Finance Inc EPENEG 8.000 1.691 11/29/2024 EnLink Midstream Partners ENLK 6.000 39.938 N/A Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 1.076 0.072 1/30/2037 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 20.683 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 23.225 7/15/2023 Extraction Oil & Gas Inc XOG 7.375 20.000 5/15/2024 Extraction Oil & Gas Inc XOG 5.625 20.000 2/1/2026 Extraction Oil & Gas Inc XOG 5.625 8.700 2/1/2026 Extraction Oil & Gas Inc XOG 7.375 16.050 5/15/2024 FTS International Inc FTSINT 6.250 33.223 5/1/2022 Federal Farm Credit Banks Funding Corp FFCB 0.450 99.345 4/8/2021 Federal Home Loan Mortgage FHLMC 1.200 99.317 4/6/2023 Federal Home Loan Mortgage FHLMC 1.150 99.277 4/6/2023 Federal Home Loan Mortgage FHLMC 1.150 99.285 4/8/2022 Federal Home Loan Mortgage FHLMC 1.200 99.380 4/6/2022 Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011 Forum Energy Technologies FET 6.250 40.351 10/1/2021 Frontier Communications FTR 10.500 34.500 9/15/2022 Frontier Communications FTR 6.875 30.250 1/15/2025 Frontier Communications FTR 7.125 30.000 1/15/2023 Frontier Communications FTR 8.750 33.625 4/15/2022 Frontier Communications FTR 6.250 35.250 9/15/2021 Frontier Communications FTR 7.625 35.500 4/15/2024 Frontier Communications FTR 9.250 31.750 7/1/2021 Frontier Communications FTR 11.000 34.381 9/15/2025 Frontier Communications FTR 10.500 30.875 9/15/2022 Frontier Communications FTR 11.000 34.381 9/15/2025 Frontier Communications FTR 10.500 34.251 9/15/2022 Frontier Communications FTR 11.000 34.750 9/15/2025 GameStop Corp GME 6.750 80.906 3/15/2021 GameStop Corp GME 6.750 80.318 3/15/2021 General Electric Co GE 5.000 78.770 N/A Global Eagle Entertainment ENT 2.750 6.149 2/15/2035 Goodman Networks Inc GOODNT 8.000 19.875 5/11/2022 Great Western Bancorp Inc GWB 4.875 94.191 8/15/2025 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 59.885 9/30/2021 Great Western Petroleum LLC / Great Western Finance Corp GRTWST 9.000 61.856 9/30/2021 Grizzly Energy LLC VNR 9.000 6.000 2/15/2024 Grizzly Energy LLC VNR 9.000 6.000 2/15/2024 Guitar Center Inc GTRC 9.500 72.078 10/15/2021 Healthpeak Properties Inc PEAK 3.150 102.433 8/1/2022 Hertz Corp/The HTZ 6.250 32.063 10/15/2022 Hertz Corp/The HTZ 5.500 31.500 10/15/2024 Hertz Corp/The HTZ 7.000 19.291 1/15/2028 Hi-Crush Inc HCR 9.500 9.077 8/1/2026 Hi-Crush Inc HCR 9.500 10.073 8/1/2026 High Ridge Brands Co HIRIDG 8.875 2.000 3/15/2025 High Ridge Brands Co HIRIDG 8.875 2.000 3/15/2025 HighPoint Operating Corp HPR 7.000 23.164 10/15/2022 HighPoint Operating Corp HPR 8.750 24.272 6/15/2025 International Wire Group ITWG 10.750 78.975 8/1/2021 International Wire Group ITWG 10.750 78.975 8/1/2021 J Crew Brand LLC / J Crew Brand Corp JCREWB 13.000 50.500 9/15/2021 JC Penney Corp Inc JCP 6.375 1.030 10/15/2036 JC Penney Corp Inc JCP 5.875 35.250 7/1/2023 JC Penney Corp Inc JCP 7.400 1.000 4/1/2037 JC Penney Corp Inc JCP 7.625 0.750 3/1/2097 JC Penney Corp Inc JCP 8.625 2.000 3/15/2025 JC Penney Corp Inc JCP 5.650 2.125 6/1/2020 JC Penney Corp Inc JCP 8.625 2.500 3/15/2025 JC Penney Corp Inc JCP 5.875 32.000 7/1/2023 JC Penney Corp Inc JCP 7.125 0.706 11/15/2023 JC Penney Corp Inc JCP 6.900 0.506 8/15/2026 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 12.067 10/15/2025 Jonah Energy LLC / Jonah Energy Finance Corp JONAHE 7.250 11.825 10/15/2025 K Hovnanian Enterprises HOV 5.000 10.922 2/1/2040 K Hovnanian Enterprises HOV 5.000 10.922 2/1/2040 KLX Energy Services Holdings Inc KLXE 11.500 39.567 11/1/2025 KLX Energy Services Holdings Inc KLXE 11.500 40.231 11/1/2025 KLX Energy Services Holdings Inc KLXE 11.500 40.262 11/1/2025 LSC Communications Inc LKSD 8.750 9.000 10/15/2023 LSC Communications Inc LKSD 8.750 2.875 10/15/2023 Lexicon Pharmaceuticals LXRX 5.250 64.092 12/1/2021 Liberty Media Corp LMCA 2.250 47.250 9/30/2046 Lonestar Resources America LONE 11.250 10.349 1/1/2023 Lonestar Resources America LONE 11.250 10.204 1/1/2023 MAI Holdings Inc MAIHLD 9.500 16.899 6/1/2023 MAI Holdings Inc MAIHLD 9.500 16.899 6/1/2023 MAI Holdings Inc MAIHLD 9.500 16.899 6/1/2023 MF Global Holdings Ltd MF 9.000 15.625 6/20/2038 MF Global Holdings Ltd MF 6.750 15.625 8/8/2016 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 76.790 2/15/2021 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 77.844 2/15/2021 Martin Midstream Partners LP / Martin Midstream Finance Corp MMLP 7.250 77.844 2/15/2021 Mashantucket Western Pequot Tribe MASHTU 7.350 15.721 7/1/2026 McClatchy Co/The MNIQQ 6.875 2.004 3/15/2029 McClatchy Co/The MNIQQ 6.875 1.994 7/15/2031 McClatchy Co/The MNIQQ 7.150 1.696 11/1/2027 Men's Wearhouse Inc/The TLRD 7.000 8.746 7/1/2022 Men's Wearhouse Inc/The TLRD 7.000 15.346 7/1/2022 Mesquite Energy Inc SNEC 7.250 1.000 2/15/2023 Mesquite Energy Inc SNEC 7.250 0.751 2/15/2023 Morgan Stanley MS 5.550 91.860 N/A Murray Energy Corp MURREN 12.000 0.635 4/15/2024 Murray Energy Corp MURREN 12.000 0.635 4/15/2024 NWH Escrow Corp HARDWD 7.500 53.250 8/1/2021 NWH Escrow Corp HARDWD 7.500 53.250 8/1/2021 Nabors Industries Inc NBR 5.500 48.868 1/15/2023 Neiman Marcus Group NMG 7.125 8.100 6/1/2028 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 29.000 4/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.500 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 3.312 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.000 4.366 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 8.750 4.259 10/25/2024 Neiman Marcus Group LTD LLC / Neiman Marcus Group LLC / Mariposa Borrower / NMG NMG 14.000 24.932 4/25/2024 Neiman Marcus Group Ltd NMG 8.000 56.134 10/15/2021 Neiman Marcus Group Ltd NMG 8.750 53.745 10/15/2021 Neiman Marcus Group Ltd NMG 8.000 56.134 10/15/2021 Neiman Marcus Group Ltd NMG 8.750 53.745 10/15/2021 Northwest Hardwoods Inc HARDWD 7.500 35.000 8/1/2021 Northwest Hardwoods Inc HARDWD 7.500 35.023 8/1/2021 OMX Timber Finance Investments II LLC OMX 5.540 1.660 1/29/2020 Oasis Petroleum Inc OAS 6.875 17.864 3/15/2022 Oasis Petroleum Inc OAS 6.875 17.772 1/15/2023 Oasis Petroleum Inc OAS 2.625 16.000 9/15/2023 Oasis Petroleum Inc OAS 6.250 17.600 5/1/2026 Oasis Petroleum Inc OAS 6.500 26.811 11/1/2021 Oasis Petroleum Inc OAS 6.250 17.489 5/1/2026 Omnimax International Inc EURAMX 12.000 81.803 8/15/2020 Omnimax International Inc EURAMX 12.000 78.185 8/15/2020 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 50.500 6/1/2021 Optimas OE Solutions Holding LLC / Optimas OE Solutions Inc OPTOES 8.625 50.044 6/1/2021 PDC Energy Inc PDCE 6.250 84.196 12/1/2025 PHH Corp PHH 6.375 59.895 8/15/2021 Party City Holdings Inc PRTY 6.625 21.433 8/1/2026 Party City Holdings Inc PRTY 6.125 21.334 8/15/2023 Party City Holdings Inc PRTY 6.625 20.515 8/1/2026 Party City Holdings Inc PRTY 6.125 20.728 8/15/2023 Pride International LLC VAL 7.875 6.576 8/15/2040 Pyxus International Inc PYX 9.875 7.250 7/15/2021 Pyxus International Inc PYX 9.875 6.805 7/15/2021 Pyxus International Inc PYX 9.875 6.805 7/15/2021 Quorum Health Corp QHC 11.625 15.496 4/15/2023 Realogy Group LLC / Realogy Co-Issuer Corp RLGY 5.250 101.090 12/1/2021 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products REV 6.250 20.347 8/1/2024 Revlon Consumer Products REV 5.750 63.860 2/15/2021 Rolta LLC RLTAIN 10.750 6.956 5/16/2018 SESI LLC SPN 7.125 45.012 12/15/2021 SESI LLC SPN 7.125 30.403 12/15/2021 SESI LLC SPN 7.750 35.678 9/15/2024 SanDisk LLC SNDK 0.500 85.070 10/15/2020 Sears Holdings Corp SHLD 6.625 9.000 10/15/2018 Sears Holdings Corp SHLD 8.000 1.175 12/15/2019 Sears Holdings Corp SHLD 6.625 8.388 10/15/2018 Sears Roebuck Acceptance SHLD 6.750 1.187 1/15/2028 Sears Roebuck Acceptance SHLD 7.500 1.124 10/15/2027 Sears Roebuck Acceptance SHLD 6.500 0.651 12/1/2028 Sears Roebuck Acceptance SHLD 7.000 1.222 6/1/2032 Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014 Summit Midstream Partners SMLP 9.500 13.250 N/A Tapstone Energy LLC / Tapstone Energy Finance Corp TAPENE 9.750 0.716 6/1/2022 Tapstone Energy LLC / Tapstone Energy Finance Corp TAPENE 9.750 0.716 6/1/2022 Teligent Inc/NJ TLGT 4.750 38.928 5/1/2023 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tesla Energy Operations TSLAEN 3.600 94.214 8/6/2020 Transworld Systems Inc TSIACQ 9.500 26.793 8/15/2021 Tupperware Brands Corp TUP 4.750 61.441 6/1/2021 Tupperware Brands Corp TUP 4.750 62.122 6/1/2021 Tupperware Brands Corp TUP 4.750 62.122 6/1/2021 Ultra Resources Inc/US UPL 11.000 5.500 7/12/2024 Ultra Resources Inc/US UPL 7.125 0.250 4/15/2025 Ultra Resources Inc/US UPL 7.125 0.619 4/15/2025 Unit Corp UNTUS 6.625 13.500 5/15/2021 ViacomCBS Inc VIAC 3.875 104.528 12/15/2021 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 8.500 74.197 8/15/2021 Voyager Aviation Holdings LLC / Voyager Finance Co VAHLLC 8.500 74.579 8/15/2021 Warner Media LLC TWX 4.000 103.651 1/15/2022 Whiting Petroleum Corp WLL 5.750 21.500 3/15/2021 Whiting Petroleum Corp WLL 6.625 20.000 1/15/2026 Whiting Petroleum Corp WLL 6.250 17.500 4/1/2023 Whiting Petroleum Corp WLL 6.625 6.750 1/15/2026 Whiting Petroleum Corp WLL 6.625 21.077 1/15/2026 Windstream Services LLC / Windstream Finance Corp WIN 10.500 5.000 6/30/2024 Windstream Services LLC / Windstream Finance Corp WIN 9.000 4.738 6/30/2025 Windstream Services LLC / Windstream Finance Corp WIN 7.500 5.000 6/1/2022 Windstream Services LLC / Windstream Finance Corp WIN 6.375 5.000 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 8.750 5.000 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 6.375 4.659 8/1/2023 Windstream Services LLC / Windstream Finance Corp WIN 9.000 4.700 6/30/2025 Windstream Services LLC / Windstream Finance Corp WIN 8.750 2.717 12/15/2024 Windstream Services LLC / Windstream Finance Corp WIN 10.500 4.742 6/30/2024 Windstream Services LLC / Windstream Finance Corp WIN 7.750 3.576 10/1/2021 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2020. 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 ***