/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200724.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 24, 2020, Vol. 24, No. 205 Headlines 24 HOUR FITNESS: Closes 4 Utah Sites; Vasa Welcomes Members AAG CREPE: Seeks Approval to Hire Alla Kachan as Legal Counsel AAG CREPE: Seeks to Hire Wisdom Professional Services as Accountant AGGRESSIVELY ORGANIC: Seeks to Tap Meury Group as Accountant ALPHA KING: Seeks to Hire Moster Law Firm as Legal Counsel AMBAY PLASTIC: Seeks to Hire Thomas Zurcher as Accountant AMERICARE-TENNESSEE: Case Summary & 20 Largest Unsecured Creditors ANDRES LOPEZ: 1609 Mermaid Buying Brooklyn Property for $460K Cash ARCHDIOCESE OF NEW ORLEANS: To Auction St. Elizabeth Campus ASI CAPITAL: Files Chapter 11 Bankruptcy Protection ASTOR EB-5: U.S. Trustee Unable to Appoint Committee AVALONE HOSPITALITY: Taps H. Anthony Hervol as Legal Counsel BEST VIEW: Case Summary & 17 Unsecured Creditors BLANK LABEL: Files Chapter 11 Bankruptcy Protection BLUESTEM BRANDS: Must Provide More Bankruptcy Info, Says US Trustee BORDEN DAIRY: To Be Purchased by Private Equity Companies BREDA LLC: Sued SBA for Denying Loan During Pandemic BROOKS BROTHERS: U.S. Trustee Appoints Creditors' Committee BY CROWN: Moody's Affirms B2 CFR, Outlook Stable CARBO CERAMICS: Court Approves Bankruptcy Plan CBB ACQUISITION: Taps Altman & Company as Financial Advisor CELADON GROUP: Jaguar Sales Price Cut to $6.1 Million CENTRO EVANGELISTICO: Seeks to Hire Sagre Law Firm as Counsel CHISHOLM OIL: PE Firms-Owned Entity in Chapter 11 COMCAR INDUSTRIES: BGV Buying Auburndale Property for $3.95 Million DAVID A. ALLISON: Zimmerman Buying Muscogee Cty. Property for $561K DEMLOW PRODUCTS: Magna Seating Buying Equipment for $70K DEMLOW PRODUCTS: Solar Springs Buying Equipment for $280K DIAMOND RESORTS: Moody's Rates Secured Notes 'B3', Outlook Stable DIOCESE OF ST. CLOUD: In Chapter 11 After $22.5M Settlement DM WORLD: Gets Approval to Hire David M. Cole as Tax Accountant DUFL INC: Voluntary Chapter 11 Case Summary FOUNDRY DEVELOPMENT: Aug. 17 Auction of All Assets Set FRANCESCA’S HOLDINGS: Warns of the Possibility of Going Bankrupt FRONTIER COMMUNICATIONS: Seeks to Expand Scope of CMA's Services GLOBAL EAGLE: Case Summary & 30 Largest Unsecured Creditors GLOBAL EAGLE: Moody's Cuts PDR to D-PD on Chapter 11 Filing HERTZ GLOBAL: Major Airports Fear Being Shortchanged in Payments HERTZ GLOBAL: To Pay $650M to Halt Lender Fight Over Fleet HITZ RESTAURANT: Why Force Majeure Should Be De Rigueur HOPEDALE MINING: Case Summary & 40 Largest Unsecured Creditors HOWARD HUGHES: Fitch Assigns 'BB' IDR, Outlook Negative IMERIS TALC: Johnson & Johnson Says Chapter 11 Plan Lacks Info IMH FINANCIAL: Case Summary & 20 Largest Unsecured Creditors J. HILBURN: Successfully Exits 2 Big Real Estate Leases J.JILL INC: Nears Possible Bankruptcy, Enters Forbearance LAKELAND INTERMEDIATE: Case Summary & 50 Top Unsecured Creditors MAD MEN MARKETING: U.S. Trustee Unable to Appoint Committee MANIRRAH LLC: Gets Approval to Hire Selwyn D. Whitehead as Counsel MAVERICK RESTORATION: Hires Robert A. Whitley as Special Counsel MIDWEST TRAINING: Seeks to Hire Lela Steriovsky as Accountant NEIMAN MARCUS: Bankruptcy Doesn't Spell End for Retailers NEW YORK OPTICAL: Case Summary & 3 Unsecured Creditors NH HIGHWAY: Gets Approval to Tap Duane A. D'Agnese as Accountant NORTHEAST GAS: Files for Chapter 11 for 3rd Time NTS W. USA: Case Summary & 20 Largest Unsecured Creditors OCCASION BRANDS: Case Summary & 20 Largest Unsecured Creditors PADDOCK ENTERPRISES: Debtor's Future Claims Rep. Approved PAL DISTRIBUTION: Seeks to Hire Resnik Hayes as Legal Counsel PAPER STORE: Sets Bidding Procedures for All Assets PEAK SERUM: Taps Dennis & Company as New Accountant PFT TECHNOLOGY: Gets Approval to Tap Turman and Eimer as Accountant PG&E CO: Fined $3.49-Mil. for 2018 Camp FIre PG&E CORP: Emerges From Chapter 11 Bankruptcy PG&E CORP: Responds to CAL FIRE’s Finding on 2019 Kincade Fire QUORUM HEALTH: Says Debt Burdens Prompted Bankruptcy Filing RE PALM SPRINGS: Voluntary Chapter 11 Case Summary RELIABLE EXPRESS: Seeks to Hire Edward L. Kigozi PLLC as Accountant RENEGADE STORES: Seeks to Hire McMill CPAs as Accountant SKILLSOFT CORP: Gets Unusual Approval for Dual Track Chapter 11 TEMPLAR ENERGY: $91M Sale of All Assets to Presidio Approved TIDEWATER ESTATES: Bertuccis Buying Hancock County Propty for $800K TIDEWATER ESTATES: Bertuccis Buying Hancock County Propty for $800K TRANSPINE INC: Case Summary & 2 Unsecured Creditors TRAVEL LEADERS: S&P Lowers ICR to 'CCC' on Deteriorating Liquidity TRI MECHANICAL: Seeks Approval to Tap David P. Lloyd as Counsel TRIVASCULAR SALES: Seeks to Hire FTI as Financial Advisor TRIVASCULAR SALES: U.S. Trustee Appoints Committee Co-Chairpersons TRUE RELIGION: Has Plan to Convert Debt to Equity TRUE RELIGION: Proposes Debt-for-Equity Swap UNITI GROUP: Moody's Puts Caa2 CFR on Review for Upgrade VISTA PROPPANTS: Seek Court Approval to Hire OCPs VISTA PROPPANTS: Seek to Hire Alvarez & Marsal, Appoint CRO VISTA PROPPANTS: Seeks Approval to Hire Litigation Counsel VISTA PROPPANTS: Seeks Approval to Tap Haynes and Boone as Counsel WORLD MARKETING: Crane Heyman Denied Win in Trustee Suit [*] Chapter 11 Reforms Aid Troubled Small Companies [*] Congress Relaxes Rulings Paycheck Protection Program Rules [*] Continuing to Do Business With Bankrupt Retailer [*] Flexibility Act Significantly Improves PPP [*] PPP Revisions to First First Interim Final Rule [*] SBA and SBA Codify PPP Flexibility Act Changes [*] SBA Has New Instructions, Applications for PPP Loan Forgiveness [] Amending the Bankruptcy Code to Add CBA Changes Oversight [] Growing Use of Pre-Bankruptcy Retention Bonuses [^] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power ********* 24 HOUR FITNESS: Closes 4 Utah Sites; Vasa Welcomes Members ----------------------------------------------------------- Jasen Lee, writing for KSL, reports that included in the closures of 130 of 430 health clubs of 24 Hour Fitness are all four of its Utah locations in Murray, Taylorsville, Salt Lake City and Sandy. All 24 Hour Fitness members will be allowed to transition to the VASA location nearest to their former workout facility, said VASA Fitness chief brand and marketing officer Mindi Bridges. "When we closed our clubs back in March in response to the COVID-19 pandemic, I had no idea how long we'd be separated from you, our members. Now, after much consideration, we've made the difficult decision to close some of our clubs, including all of our Utah locations," CEO Tony Ueber said in a letter to members. "We are committed to your health and happiness, and so we have partnered with VASA Fitness to help you stay true to your goals. Your membership and any personal training sessions have been transferred to VASA Fitness, a supportive and inclusive network of gyms that is well equipped to provide you with dedicated personal trainers, exciting studio classes and all you need to keep fit." All 24 Hour Fitness members will be allowed to transition to the VASA location nearest to their former workout facility, said VASA Fitness chief brand and marketing officer Mindi Bridges. "So we have a Van Winkle location that we're bringing members into, our Brickyard location, Taylorsville and Sandy," she said, adding that the membership prices will not increase and the new members will be automatically transferred to a VASA membership. Bridges said the gym is not concerned about its ability to maintain safety with the increase in member volume to its existing clubs. "I'm really proud of the way that even prior to the 24 Hour partnership, that VASAs has reopened clubs and set the business up to run in a way that keeps our members safe and healthy," she said. The company launched a new mobile app a few weeks ago to allow members to book time to visit the facility of their choice for a workout, but limits attendance to prevent overcrowding at any given time. "We repurposed or built functionality into our app where members book gym time, so they book it by the hour for every hour that we're open," she explained. "Then we have capacities built in based on federal and local guidelines, how much space each person needs to have within the square footage that we have in each of our gyms and our also our group fitness rooms." Thus far, VASA locations in Utah have operated with reduced hours and reduced staffing as the company ramps up usage based on member attendance and local health directives. Bridges said that as more people venture out as they feel more comfortable, VASA will expand its operations and add staffing as needed to operate in a safe manner. "We have a whole plan built out for for getting our hours back to normal," she said. "So increasing our gym hours, as well as continuing to staff up as the demand increases." She noted that there is no set timeline for full reopening, but the company will monitor usage and make adjustments as necessary. "We opened with phase one, which was only cardio functional and strength equipment and free weights open — so just kind of the open floor area of our gym," she said. "We moved into phase two in Utah where we opened our group fitness classes, but only at 50% capacity and we’re still in that phase." For the time being, some amenities remain closed — such as basketball and racquetball courts — or at limited use, like swimming pools that only allow one person per lane in the pool. Additionally, the company is keeping close tabs on public health recommendations to ensure ongoing safety at their facilities. "We are in contact daily with the local health department, so we have field leadership on the ground in every one of our markets that communicate regularly with local officials and health departments to make sure that we have the latest guidelines and that we're following them," Bridges said. "And that we also know when we can increase capacity." About 24 Hour Fitness 24 Hour Fitness Worldwide, Inc., owns and operates fitness centers in the United States. As of March 31, 2017, the company operated 426 clubs serving approximately 3.6 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. For the 12 months ended March 31, 2017, the company generated total revenue of about $1.4 billion. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 24 Hour Fitness Worldwide and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11558) on June 15, 2020. 24 Hour Fitness was estimated to have $1 billion to $10 billion in assets and liabilities as of the bankruptcy filing. The Hon. Karen B. Owens is the case judge. The Debtors tapped Weil, Gotshal & Manges, LLP as lead bankruptcy counsel; Pachulski Stang Ziehl & Jones, LLP as local counsel; FTI Consulting, Inc. as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk, LLC as claims agent. AAG CREPE: Seeks Approval to Hire Alla Kachan as Legal Counsel -------------------------------------------------------------- AAG Crepe House, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ the Law Offices of Alla Kachan, P.C. as its legal counsel. The firm will provide the following services: (a) assist Debtor in administering its Chapter 11 case; (b) prepare motions and Debtor's plan of reorganization; (c) assist Debtor in prosecuting adversary proceedings to collect assets of its bankruptcy estate and take necessary steps to protect its assets; and (d) negotiate with creditors in formulating a plan of reorganization. The firm's professionals will be paid at hourly rates as follows: Clerks $250 Paraprofessionals $250 Attorneys $475 The Law Offices of Alla Kachan received an initial retainer of $15,000, of which $6,000 was used to pay for pre-bankruptcy services. Alla Kachan, Esq., 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: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 3099 Coney Island Avenue Brooklyn, NY 11235 Telephone: (718) 513-3145 Email: alla@kachanlaw.com About AAG Crepe House AAG Crepe House, Inc. filed a voluntary Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 20-42423) on June 24, 2020, listing under $1 million in both assets and liabilities. The petition was signed by AAG President Igor Korsunsky. Judge Carla E. Craig oversees the case. Debtor has tapped the Law Offices of Alla Kachan, P.C. as its legal counsel and Wisdom Professional Services Inc. as its accountant. AAG CREPE: Seeks to Hire Wisdom Professional Services as Accountant ------------------------------------------------------------------- AAG Crepe House, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Wisdom Professional Services Inc. as its accountant. Wisdom Professional will assist Debtor in the preparation of its monthly operating reports and will be compensated at the rate of $300 per report. The estimated monthly cost of services is $300 and depending on the duration of Debtor's Chapter 11 case, the total cost of services is $3,600. Michael Shtarkman, a certified public accountant at Wisdom Professional, 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: Michael Shtarkman, CPA Wisdom Professional Services Inc. 626 Sheepshead Bay Rd., Ste. 640 Brooklyn, NY 11224 Telephone: (718) 554-6672 Email: michael@shtarkmancpa.com About AAG Crepe House AAG Crepe House, Inc. filed a voluntary Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 20-42423) on June 24, 2020, listing under $1 million in both assets and liabilities. The petition was signed by AAG President Igor Korsunsky. Judge Carla E. Craig oversees the case. Debtor has tapped the Law Offices of Alla Kachan, P.C. as its legal counsel and Wisdom Professional Services Inc. as its accountant. AGGRESSIVELY ORGANIC: Seeks to Tap Meury Group as Accountant ------------------------------------------------------------ Aggressively Organic, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to employ Meury Group, Inc. as its accountant. The firm will assist Debtor in the preparation and filing of its state and federal tax returns. The services will be provided mainly by Herman Meury, a principal at Meury Group, who charges an hourly fee of $175. Meury Group has agreed to a flat fee of $2,500 to prepare the 2019 tax returns. Meury Group and its accountants neither represent nor hold any interest adverse to the matters upon which they are to be employed, according to court filings. The firm can be reached at: Herman G. Meury Meury Group, Inc. 150 Governors Ln. Zionsville, IN 46077 Telephone: (317) 225-5875 About Aggressively Organic Based in Fishers, Ind., Aggressively Organic, Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 19-08908) on Dec. 3, 2019, listing under $1 million in both assets and liabilities. Judge Robyn L. Moberly oversees the case. Debtor has tapped KC Cohen, Lawyer, PC as its legal counsel and Meury Group, Inc. as its accountant. ALPHA KING: Seeks to Hire Moster Law Firm as Legal Counsel ---------------------------------------------------------- Alpha King Electric, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ The Moster Law Firm, P.C. as its legal counsel. The firm's services will include: (a) advising Debtor with respect to its powers and duties and the continued operation and management of its business; (b) attending the initial debtor conference and Section 341 meeting of creditors; (c) preparing legal papers; (d) reviewing pre-bankruptcy executory contracts and unexpired leases to determine which of these contracts and leases should be assumed or rejected; and (e) assisting Debtor in the preparation and filing of a plan of reorganization and in seeking confirmation of such plan. The firm's attorneys and paraprofessionals will be paid at hourly rates as follows: Charles Moster Founder/Senior Shareholder $350 B. Blaze Taylor Litigation Chief/Shareholder $300 Erica Sisemore Associate Attorney $250 Randy Sherwood Financial Analyst $175 Paralegals $150 The firm received the sum of $50,067, which was spent as follows: (i) $1,717 for the filing fee; (ii) $350 for the NextChapter bankruptcy software; and (iii) $48,000 for pre-bankruptcy legal services. B. Blaze Taylor, Esq., at Moster Law Firm, disclosed in court filings that the firm is a "disinterested person" within the meaning of Bankruptcy Code Section 101(14). The firm can be reached through: B. Blaze Taylor, Esq. The Moster Law Firm, P.C. 4920 S. Loop 289, Suite 101 Lubbock, TX 79414 Telephone: (806) 778-6486 Facsimile: (866) 302-7046 Email: btaylor@themosterlawfirm.com About Alpha King Electric Midland, Texas-based Alpha King Electric LLC produces comprehensive oilfield electrical solutions designed for harsh midstream operations. Its technicians are equipped to upgrade, repair, program and manage electrical systems. Visit https://www.alphakingelectric.net for more information. Alpha King Electric filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-70080) on June 30, 2020. In the petition signed by Eder Soto, president, Debtor disclosed $961,330 in assets and $1,421,436 in liabilities. Judge Tony M. Davis oversees the case. Debtor has tapped The Moster Law Firm, P.C. as its bankruptcy counsel. AMBAY PLASTIC: Seeks to Hire Thomas Zurcher as Accountant --------------------------------------------------------- Ambay Plastic Surgery, P.A., seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Thomas, Zurcher & White PA, CPA as its accountant. The firm's services will include the preparation of income tax returns, monthly compilation reports and financial statements. Thomas Zurcher's standard fee for the preparation of tax returns and related accounting work is $2,000 per month. Thomas Zurcher does not represent any interest adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached through: Thomas A. Thomas, CPA Thomas, Zurcher & White PA, CPA 1302 Orange Avenue Winter Park, FL 32789-4912 Phone: (407) 599-5900 Toll Free: (866) 477-6912 Fax: (407) 599-5901 E-mail: info@tzwcpa.com About Ambay Plastic Surgery Ambay Plastic Surgery, PA, a Wesley Chapel, Fla.-based company that offers facelift, breast augmentation, body contouring, and many non-surgical cosmetic enhancement, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-05214) on July 7, 2020. In its petition, Debtor was estimated to have $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The petition was signed by Ambay President Raj S. Ambay, MD. Debtor has tapped Johnson Pope Bokor Ruppel & Burns, LLP as its bankruptcy counsel, and Thomas, Zurcher & White PA, CPA as its accountant. AMERICARE-TENNESSEE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Americare-Tennessee Property Group LLC 9114 Technology Lane Fishers, IN 46038-2839 Business Description: Americare-Tennessee Property Group LLC is an assisted living facility in Memphis, Tennessee. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Western District of Tennessee Case No.: 20-23683 Judge: Hon. Jennie D. Latta Debtor's Counsel: Toni Campbell Parker, Esq. LAW OFFICE OF TONI CAMPBELL PARKER 615 Oakleaf Office Lane Suite 201 Memphis, TN 38117 Tel: 901-683-0099 Fax: 866-489-7938 E-mail: tparker002@att.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by John Bartle, managing member. 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/Wg7eCy ANDRES LOPEZ: 1609 Mermaid Buying Brooklyn Property for $460K Cash ------------------------------------------------------------------ Andres Lopez asks the U.S. Bankruptcy Court for the Eastern District of New York to authorize the private sale of his right, title and interest in the real property located at 1609 Mermaid Avenue, Brooklyn, New York to 1609 Mermaid Realty, LLC for $460,000, cash, free and clear of all liens, claims, and encumbrances. The Debtor owns three pieces of real property, including the Mermaid Ave Property. The Mermaid Ave Property is currently vacant. The Mermaid Ave Property is subject to the first mortgage lien of The Bank of New York Mellon, as Trustee for the Certificateholders of the CWABS, Inc., Asset-Backed Certificates Series 2006-BC3 serviced by Shellpoint Mortgage Servicing. A proof of claim was filed for the Shellpoint Mortgage, Claim Number 4-2 on the Claims Register. On Feb. 20, 2019, the Debtor filed a Motion to Value the Mermaid Ave Property and to determine the secured status of Claim # 4-2. The Bank of New York Mellon by its prior servicer filed Opposition to the Claim Objection. Thereafter the Court held an evidentiary hearing on the value of the Mermaid Ave Property, and continued the hearing to Aug. 5, 2020. Subject to Court approval, the Debtor has entered into a contract of sale with the Buyer for the Mermaid Ave Property for $460,000, with $10,000 deposit. The sale is an all cash deal. The Property is encumbered by a first mortgage lien held by Shellpoint Mortgage Servicing as Servicer for the Bank of New York Mellon in the amount of approximately $993,164. Shellpoint has approved the Debtor's proposed sale of the Mermaid Ave Property subject to compliance with the terms set forth in the Short Sale Approval Letter. The proposed sale of the Mermaid Avenue Property will be beneficial to the estate in that it will resolve the on-going litigation between the Debtor and the secured lender on the Mermaid Ave Property in this case, and will result in satisfaction of the Shellpoint mortgage. The funds will be distributed at closing as follows: (A) First Mortgage no less than $420,000; (B) Broker for Seller to be paid a commission of 3% of the sale price (subject to bankruptcy court approval); (C) Broker for the Buyer to be paid a commission of 3% of the sale price (subject to bankruptcy court approval); (D) Andrew Shlomovich (proposed closing attorney for the Debtor) to be paid $1,500; (E) Government recording and transfer charges (anticipated to be $7,950); and (F) $2,950 for the seller's title insurance. The proposed private sale is necessary because the secured lender Shellpoint has agreed to the current proposed short sale terms provided that the closing take place no later than July 31, 2020. The Debtor also asks that the Court grants a waiver of the 14-day stay imposed by Fed. R. Bankr. P. 6004(h) so that the sale can be completed on the July 31, 2020 deadline set forth by Shellpoint. A hearing on the Motion is set for July 21, 2020 at 3:30 p.m. The objection deadline is seven days prior to the return date of the motion. A copy of the Agreement is available at https://tinyurl.com/yd2kvthg from PacerMonitor.com free of charge. Andres Lopez sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 18-41408) on March 14, 2018. The Debtor tapped Edward J. Waters, Esq., at E. Waters & Associates, PC, as counsel. ARCHDIOCESE OF NEW ORLEANS: To Auction St. Elizabeth Campus ----------------------------------------------------------- Ramon Antonio Vargas, writing for Nola, reports on the plan of New Orleans Archdiocese to auction the old St. Elizabeth Campus. In its first move to raise funds through selling land since filing for bankruptcy protection, the Archdiocese of New Orleans is set to auction off a campus that St. Elizabeth Ann Seton School moved out of last year, a church attorney said at a federal court hearing in June. The former owner of New Orleans' Fair Grounds race course, residential developer Bryan Krantz, offered to buy the vacant complex at 4119 St. Elizabeth Drive in Kenner for $1.8 million on May 26, according to court documents. But a committee of unsecured creditors in the bankruptcy case — which includes clergy abuse claimants — objected, saying there was no sign the property's market value had been appraised before the archdiocese agreed to sell to Krantz. "One concern we had was what basis was there (for the price), what marketing had been done, is there an appraisal?" committee attorney Davin Boldissar said during Thursday's phone-in hearing. Archdiocese attorney Mark Mintz told U.S. Bankruptcy Court Judge Meredith Grabill that his clients now planned to auction the facility through a process allowing for the possibility of higher bids. Mintz said he would file the details surrounding that auction ahead of a hearing which Grabill tentatively set for June 25, 2020. Krantz on Thursday declined to talk about his plans for the site, and an archdiocesan spokesman said he couldn't make additional comments, citing a policy against publicly discussing the bankruptcy proceedings outside of court. The archdiocese filed for Chapter 11 bankruptcy protection on May 1, 2020, saying the move was necessary after numerous clergy abuse lawsuits and the coronavirus pandemic dealt serious blows to its administrative offices' finances. Documents filed earlier in the bankruptcy have shown the church with $243 million in assets and $139 million in liabilities. But several parties who say they are owed by the church have argued that church officials are vastly understating archdiocesan assets, especially in documents which list the worth of a sprawling array of church properties as "undetermined." The archdiocese's leadership has denied those assertions. Bankruptcy filings offered a value for the current campus of St. Elizabeth on 4335 Sal Lentini Parkway, where it moved in the fall of 2019. That property is valued at nearly $1.5 million. But the filings don't mention any property under the address of St. Elizabeth's former campus that is currently up for sale. Archbishop Gregory Aymond and his vicar of finance, Patrick Carr, on May 1 said the archdiocese would generate funds by selling unused land and buildings — as well as other methods — before turning to investments or properties which the church or its parishes are currently using. "Parish funds are separate from archdiocesan accounts, and the pastor decides how those are used for parish ministry," Aymond wrote in a letter to local Catholics that day. The archdiocese has sold property it considered surplus before, when Aymond's predecessor Archbishop Alfred Hughes ordered the closures of several churches and mergers of others during a streamlining plan to ease financial hardships following Hurricane Katrina. That plan included merging the north Kenner parishes of St. Elizabeth Ann Seton and Nativity of Our Lord into a new church named Divine Mercy. Divine Mercy is next to the St. Elizabeth school's new campus. The rest of Thursday's hearing involved housekeeping matters in the bankruptcy case, such as allowing the archdiocese to hire a financial advisory firm and special insurance counsel. Eventually, Grabill will set a date by which anyone with claims against the archdiocese from before May 1 must file them. That deadline, called a "bar" date, has not been set as of Thursday. A flood of new claims, especially ones involving alleged clergy abuse, are expected before that bar date. About New Orleans Archdiocese The Roman Catholic Church of the Archdiocese of New Orleans -- https://www.nolacatholic.org/ -- is a non-profit religious corporation incorporated under the laws of the State of Louisiana. Created as a diocese in 1793, and established as an archdiocese in 1850, the Archdiocese of New Orleans has educated hundreds of thousands in its schools, provided religious services to its churches and provided charitable assistance to individuals in need, including those affected by hurricanes, floods, natural disasters, war, civil unrest, plagues, epidemics, and illness. Currently, the Archdiocese's geographic footprint occupies over 4,200 square miles in southeast Louisiana and includes eight civil parishes -- Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, St. Tammany, and Washington. The Roman Catholic Church for the Archdiocese of New Orleans sought Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1, 2020. The Archdiocese was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Meredith S. Grabill is the case judge. Jones Walker LLP, led by Mark A. Mintz, R. Patrick Vance, Elizabeth J. Futrell, and Laura F. Ashley, serves as counsel to the Debtor. Donlin, Recano & Company, Inc. is the claims agent and Blank Rome LLP is the Debtor's special insurance counsel. ASI CAPITAL: Files Chapter 11 Bankruptcy Protection --------------------------------------------------- Wayne Heilman, writing for The Gazette, reports that Colorado Springs-based ASI Capital filed Chapter 11 bankruptcy protection in Denver. Colorado Springs-based investment company ASI Capital and its ASI Capital Income Fund have sought protection from creditors amid significant revenue declines triggered by the COVID-19 pandemic. The Convergence Group, a Puerto Rico company with administrative offices in Colorado Springs that manages ASI and its affiliated fund, filed a petition in Denver under Chapter 11 of the federal bankruptcy laws. ASI and the fund each listed assets and liabilities owed to creditors. ASI had assets of $57 million and liabilities of $48 million at year's end. Both entities must file restructuring plans with the court by Oct. 13, 2020. ASI said in a news release that it "recently suffered significant setbacks in its ability to generate revenue due to the unprecedented nature of the government's economic shutdown to slow the spread of the COVID-19 virus." Convergence CEO C. Ryan Dunham said in the release that the company's "business was solid and we were looking forward to a good year" before the pandemic hit the state in mid-March. The 8-year-old investment company and fund offer investors a fixed yield of income from invstments in hospitality, commercial real estate, apartments and private credit in Colorado, Texas and Chicago. ASI said in the release that it had planned to sell some assets and refinance debt on some assets in April 2020, but those plans “came to a screeching halt in mid-March.” Dunham said before the pandemic hit, the company had never missed an interest payment on its five-year notes and 10-year bonds or refused to let investors cash out early. It agrees to stop selling promissory notes, will pay fine. After governments imposed stay-at-home orders, occupancy in the company’s three hotels in El Paso, Texas, fell to 5% and has recovered only to about 40%, the release said. ASI’s investments in apartment complexes were hurt by tenants losing jobs and not paying rent or renewing leases. Commercial real estate investments held by the company have been hurt by many businesses sending employees home to work, prompting those tenants to stop paying rent or renewing leases. The filing, the release said, will give ASI and the fund "time for business to normalize and resume producing income," so the company can "return to business as usual, reorganize with a new plan or proceed with an orderly wind down." Dunham said none of the properties or businesses ASI owns will be affected by the Chapter 11 filing. ASI's statement didn't indicate which option was most likely but said the goal "is to protect the value of the company and be able to maximize payments to creditors (including noteholders and bondholders) as well as trying to preserve the members' equity." Dunham said he couldn’t estimate how much investors might recover; it depends, he said, on how fast the U.S. economy recovers and what sort of additional relief the federal government provides. ASI’s investments include a $5.5 million loan to Colorado Springs-based PeakMed, which charges patients a monthly fee for basic medical care instead of paying for insurance coverage for those services. The 2017 loan was to fund expansion of the practice and included an ownership stake. PeakMed founder and CEO Dr. Mark Tomasulo said the filing would not have any impact on PeakMed. ASI agreed in 2017 to a settlement with the Colorado Division of Securities to stop selling unregistered promissory notes and pay the agency $300,000 for alleged selling more than $12.5 million in unregistered notes to 130 investors. About ASI Capital 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. ASICIF is wholly-owned by ASI, also an investment company as defined in 15 U.S.C. Section 80a-3. ASI also holds interests in a number of investments, including interests in hotels. ASI is the sole member of ASICIF. Since Jan. 1, 2019 both ASICIF and ASI have been managed by the same manager, The Convergence Group. ASTOR EB-5: 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 Astor EB-5, LLC, according to court dockets. About Astor EB-5 Astor EB-5, LLC is a Florida limited liability company doing business as Hotel Astor, an art deco boutique hotel that offers amenities such as modern rooms, private terraces with courtyard and on-site pools. Visit http://hotelastor.com/for more information. It first sought bankruptcy protection (Bankr. S.D. Fla. Case No. 18-24170) on Nov. 14, 2018. Astor EB-5 again sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-16595) on June 17, 2020. At the time of the filing, Debtor disclosed assets of $10 million to $50 million and liabilities of $1 million to $10 million. Judge A. Jay Cristol oversees the case. Joel M. Aresty, P.A. is the Debtor's bankruptcy counsel in the present case. AVALONE HOSPITALITY: Taps H. Anthony Hervol as Legal Counsel ------------------------------------------------------------ Avalone Hospitality, LLC, received approval from the U.S. Bankruptcy Court for the Western District of Texas to hire the Law Office of H. Anthony Hervol as its legal counsel. The firm's services will include legal advice regarding Debtor's powers and duties under the Bankruptcy Code, the preparation of a plan of reorganization, and representation in adversary proceedings. The firm will charge an hourly fee of $285. It received a retainer of $6,500 for its services and a deposit of $1,717 for costs and filing fees. H. Anthony Hervol, Esq., disclosed in court filings that he has no business or professional connections with Debtor, creditors and any other "party-in-interest." The firm can be reached through: H. Anthony Hervol, Esq. Law Office of H. Anthony Hervol 4414 Centerview Drive, Suite 207 San Antonio, Texas 78228 Tel: 210-522-9500 Fax: 210-522-0205 Email: hervol@sbcglobal.net About Avalone Hospitality Avalone Hospitality, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-51161) on June 23, 2020. At the time of the filing, the Debtor was estimated to have assets of between $100,001 and $500,000 and liabilities of the same range. Judge Craig A. Gargotta oversees the case. The Debtor has tapped the Law Office of H. Anthony Hervol as its legal counsel. BEST VIEW: Case Summary & 17 Unsecured Creditors ------------------------------------------------ Debtor: Best View Construction & Development, LLC 1910 Sunnyridge Road Nampa, ID 83686 Business Description: Best View Construction & Development, LLC -- http://bestviewidaho.com-- is a licensed and fully insured real estate construction company specializing in modern and post modern themed developments. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court District of Idaho Case No.: 20-00674 Judge: Hon. Joseph M. Meier Debtor's Counsel: Matthew T. Christensen, Esq. ANGSTMAN JOHNSON 199 N. Capitol Blvd, Ste 200 Boise, ID 83702 Tel: 208-384-8588 Email: info@angstman.com Total Assets: $1,513,330 Total Liabilities: $2,819,123 The petition was signed by Gaven J. King, owner/manager. A copy of the petition containing, among other items, a list of the Debtor's 17 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/2EP3Gk BLANK LABEL: Files Chapter 11 Bankruptcy Protection --------------------------------------------------- Gintautas Dumcius, writing for Boston Business Journal, reports that Boston-based menswear retailer Blank Label Group Inc. filed for Chapter 11 bankruptcy protection. The company, founded in 2009, joins the ranks of retailers, from Neiman Marcus to JCPenney, filing for restructuring as the pandemic shuttered their stores and forced consumers to work from home. Blank Label's flagship store is on Bromfield Street in Boston's Downtown Crossing. The company also has locations in Boston’s Seaport neighborhood, as well as on K Street in Washington D.C., Chicago and Atlanta. Fan Bi, Blank Label's president and co-founder, said the company has seen a 90% drop in revenue over three months, and consumer demand has “almost vanished” due to people working from home. "Over that time, we've still had bills to pay — payroll of operations team (some retail staff were furloughed), loans, rent, other vendors," he said in an email to the Business Journal. "Although there was some deferment offered, all of this is just accrued as more debt to be paid back." Creditors include First Republic Bank, the landlords of their retail locations, and the U.S. Small Business Administration, among others, according to court records. Blank Label, which started with a website offering custom-made dress shirts and men’s suits before opening brick-and-mortar stores, is looking to reopen as Massachusetts has loosened coronavirus-induced restrictions on retailers and allowed a limited number of people in stores. Its flagship store in Downtown Crossing is readying to reopen Thursday and will be the retailer's sole location for now, according to Bi. "The feedback from our clients is they're not expecting to be at full office capacity this year and most weddings and conferences have been postponed," he said in the email. "Retail is already a thin-margin business, so at 50% revenue for the next several months and (given) the accrued debts from the past few months, the best option was to seek Chapter 11 protection." But Bi, a Babson College graduate who helped start the business with $30,000, remains optimistic, saying the menswear company has 10 years under its belt and they "aim to be in business for many more." "We have tens of thousands of clients that actively shop with us who we hope, as things settle, even if not till 2021, that we'll be able to work with them again," he added. Attorneys from Casner & Edwards LLP are representing Blank Label in bankruptcy court. The next court date, a hearing via telephone, is June 24. About Blank Label Group Inc. Blank Label Group, Inc. -- https://www.blanklabel.com/ -- is a clothing retailer that has provided custom clothing in stores and online for the past 12 years. By developing an integrated supply chain and digitization, it has been able to offer custom clothing at a more affordable price point. On May 26, 2020, Blank Label sought Chapter 11 protection (Bankr. D. Mass. Case No. 20-11201). John T. Morrier, Esq., at CASNER & EDWARDS, LLP, is the Debtor's counsel. The Debtor was estimated to have $1 million to $10 million in assets and liabilities as of the filing. BLUESTEM BRANDS: Must Provide More Bankruptcy Info, Says US Trustee ------------------------------------------------------------------- Leslie A. Pappas, writing for Bloomberg Law, reports that the U.S. Trustee advises Bluestem Brands to provide additional information on its bankruptcy plan. Bluestem Brands Inc., an e-commerce retailer behind brands such as Fingerhut and Gettington.com, must disclose more information to stakeholders before they vote on the company's Chapter 11 plan, the Justice Department's bankruptcy watchdog said. The bankruptcy court shouldn't accept the company's disclosure statement unless it makes changes to resolve "several informational deficiencies," the U.S. Trustee's Office said in an objection filed June 12, 2020 with the U.S. Bankruptcy Court for the District of Delaware. About Bluestem Brands Inc. Bluestem Brands, Inc. and its affiliates are a direct-to-consumer retailer that offers fashion, home, and entertainment merchandise through internet, direct mail, and telephonic channels under the Orchard and Northstar brand portfolios. Headquartered in Eden Prairie, Minnesota, the Debtors employ approximately 2,200 individuals and own and/or lease warehouses, distribution centers, and call centers in 10 other states, including New Jersey, Massachusetts, Georgia, and California. The Debtors' supply chain consists of name-brand vendors -- e.g., Michael Kors, Samsung, Keurig, Dyson -- as well as private label and non-branded sources based in the United States and abroad. For more information, visit https://www.bluestem.com/ Bluestem Brands, Inc., based in Eden Prairie, MN, and its debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10566) on March 9, 2020. In its petition, Bluestem Brands was estimated to have $500 million to $1 billion in both assets and liabilities. The petition was signed by Neil P. Ayotte, executive vice president, general counsel and secretary. The Hon. Mary F. Walrath oversees the case. YOUNG CONAWAY STARGATT & TAYLOR, LLP, and KIRKLAND & ELLIS LLP, KIRKLAND & ELLIS INTERNATIONAL LLP as counsels; FTI CONSULTING, INC., as financial advisor; RAYMOND JAMES & ASSOCIATES, INC., as investment banker; IMPERIAL CAPITAL LLC, as restructuring advisor; and PRIME CLERK LLC as claims and noticing agent. BORDEN DAIRY: To Be Purchased by Private Equity Companies --------------------------------------------------------- US dairy processor and distributor, Borden Dairy will be bought out of bankruptcy by two investment firms, Capitol Peak Partners and KKR & Co. According to documents filed in the U.S. Bankruptcy Court for the District of Delaware, New Dairy Opco LLC was the highest bidder during the auction. New Dairy Opco's portfolio includes Capitol Peak Partners and KKR & Co. Capitol Peak Partners is led by former chairman and CEO of Dean Foods, Gregg Engles. Borden tried unsuccessfully to merge with Dean Foods -- which has also declared bankruptcy -- earlier this year. The majority of Dean's assets were purchased by Dairy Farmers of America at the beginning of April 2020. Meanwhile, KKR & Co is a previous owner of Borden, having bought and privatised the company for $2 billion in 1995. The news comes shortly after Borden filed for Chapter 11 bankruptcy back in January, citing market challenges facing the dairy industry and the rising cost of raw milk as contributing factors. Borden's debts at the time were allegedly somewhere between $100 million to £500 million. While the sale of Borden seems imminent, bankruptcy court approval is still required. These details and the purchasing price will be finalised during a hearing on Thursday 18 June. About Borden Dairy Borden Dairy Company -- http://www.bordendairy.com/-- is a processor and direct-to-store distributor of fresh fluid milk, dairy case products and other beverages. It produces and distributes a wide variety of branded and private label traditional, flavored and specialty milk, buttermilk, dips and sour cream, juices, tea, and flavored drinks to mass merchandisers, educational institutions, food service retailers, grocery stores, drug stores, convenience stores, food and beverage wholesale distributors, and retail warehouse club stores across the United States. Headquartered in Dallas, Borden Dairy operates 12 milk processing plants and nearly 100 branches across the U.S. It was founded in 1857 by Gail Borden, Jr. Borden Dairy and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10010) on Jan. 5, 2020. Judge Christopher S. Sontchi oversees the case. Borden Dairy was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Debtors tapped Arnold & Porter Kaye Scholer LLP as general bankruptcy counsel; Young Conaway Stargatt & Taylor LLP as special counsel; and Donlin Recano as the claims agent. BREDA LLC: Sued SBA for Denying Loan During Pandemic ---------------------------------------------------- Sarah Shepherd, reporting for Penobscot Bay Pilot, reports that Camden inn/restaurant Breda LLC filed a lawsuit against the U.S. Small Business Administration at the U.S. Bankruptcy Court of District of Main for denying a loan from the Paycheck Protection Program and the CARES Act of 2020 because the company already filed bankruptcy filing. The lawsuit was filed May 4,2020 by Breda, a Limited Liability Company, which owns and operates the Camden Harbour Inn and Natalie’s Restaurant on Bay View Street in Camden. The court document lists Oscar Verest as the part owner and manager of Breda LLC. Jovita Carranza is named as the defendant in her capacity as Administrator for the U.S. Small Business Administration. The SBA filed a motion to dismiss the lawsuit June 10. The lawsuit includes a brief history of the CARES Act (Coronavirus Aid, Relief, and Economic Stimulus Act), which was signed into law in March and passed by Congress in response to the public health and economic challenges created by the Coronavirus pandemic. "The CARES Act of 2020 was created by the Paycheck Protection Program (PPP), a program administered by the Small Business Administration (SBA) to provide small loans and stimulus funds to assist small businesses and nonprofits. The SBA defines the PPP as a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll," according to the suit. The lawsuit further describes the PPP, "as a loan program where the disbursements actually become grants with no repayment obligations if among other requirements, 75 percent of the PPP funds are used for payroll and wage expenses." Breda LLC said that its hospitality and restaurant businesses have been significantly impacted by COVID. On April 30, 2020 the company learned its application for a loan was denied and were informed by a local bank that Breda LLC did not meet the criteria of the PPP because they had filed for bankruptcy, the suit said. Breda LLC stated in its application, "that their purpose in seeking the PPP grant was to retain workers and maintain payroll, make other payments such as mortgage and interest payments, all of which are consistent with Congress's purpose in passing the PPP," according to the suit. The attorneys, Attorneys D. Sam Anderson and Adam R. Prescott of Bernstein Shur Sawyer and Nelson, PA in Portland, for Breda LLC contend that, "the debtor has a legal right to apply for the funds under the PPP and have its application considered on the same terms as other applicants without regard to its status as a debtor under Chapter 11 of the bankruptcy code." They also claim that the debtor is a small business in the meaning of the CARES Act and is eligible and the administrator of the SBA is discriminating against debtors by refusing them an opportunity to participate in PPP, soley because a company is involved in bankruptcy. The SBA determined that providing PPP loans to debtors in bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans. In addition, they claim that the bankruptcy code does not require any person to make a loan or a financial accommodation to a debtor in bankruptcy. According to the lawsuit, on April 24, concurrent with Congress’ extension of additional PPP funding, the SBA posted a new final interim rule which was then published in the Federal Register April 28, 2020. The ruling states that, "if the applicant or the owner of applicant is the debtor in a bankruptcy proceeding, either at the time it submits the application or at any time before the loan is disbursed, the applicant is ineligible to receive a PPP loan." The SBA determined that providing loans to debtors in bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans. They said they have a duty to implement the laws enacted by Congress. In addition, the SBA states that the 525 (a) Bankruptcy Code does not require any person to make a loan or a financial accommodation to a debtor in bankruptcy, the lawsuit states. The attorneys for Breda LLC counter, "that the SBA has violated the bankruptcy code with respect to their client's application and has also violated the same code by issuing its interim final rule on April 24 and having a PPP application form that excludes debtors." Breda LLC is seeking damages in an amount not less than $220,777. The Litigation Branch, Civil Division, of the U.S. Department of Justice in Washington, D.C. is representing Jovita Carranza, the administrator for the SBA. About Breda LLC Breda, a Limited Liability Company, and Tempo Dulu, LLC, own the Camden Harbour Inn and the Danforth Inn located in Camden and Portland, Maine, respectively. Breda and Tempo Dulu sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 18-20157) on March 28, 2018. In the petitions signed by Raymond Brunyanszki, member, the Debtors each estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Michael A. Fagone oversees the case. The Debtors tapped Bernstein, Shur, Sawyer& Nelson, P.A., as their legal counsel. BROOKS BROTHERS: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 on July 21, 2020, appointed a committee to represent unsecured creditors in the Chapter 11 cases of Brooks Brothers Group, Inc. and its affiliates. The committee members are: 1. 39-15 Skillman Realty Co. LLC Attn: Robert Zirinsky 60 East 56th St., Fl. 11 New York, NY 10022 Phone: 212-751-4625 Fax: 212-751-3636 Email: robertz50nyc@gmail.com 2. FedEx Corporate Services, Inc. Attn: Michael Siedband 3680 Hachs Cross Rd, Bldg H Memphis, TN 38125 Phone: 901-434-9121 Email: Michael.siedband@fedex.com 3. Workers United, affiliated with SEIU Attn: Fred Kaplan 305 Seventh Avenue New York, NY 10001 Phone: 212-475-3131 Fax: 212-475-6093 Email: fkaplan@workersunitednynj.org 4. Trajes Mexicanos S.A. de C.V. Attn: Mario Sanchez Llano Isidro Fabela #102 Parque Industrial Tianguistenco Tianguistenco, Mexico 52600 Mexico Phone: 52-713-133-66-66, Email: mario@tramex.com.mx 5. Swiss Garments Company Attn: Alaa Ahmed Adbel Maksoud Acafa Private Free Zone 3rd Industrial area AI 44634 10th Ramadan City, Egypt Phone: +205544110662/+226714044 Fax: +205544110661/+22731124 Email: aarafa@sgc.com.eg hhashem@sgc.com.eg 6. PT. Ungaran Sari Garments Attn: Sanjay Goyal JL P Dipnegoro No. 235 Kel Genuk, Ungarian Barat Kab. Semarang, Prov. Jawa tengah Indonesia 50512 Phone: (62) 811-900-366-2 Fax: (62) 21-300-560-52 Email: sgoyal@busanagroup.com 7. Pension Benefit Guaranty Corporation Attn: Jack Butler Corporate Finance & Restructuring Department 1200 K. St. NW Washington, DC 20005 Phone: 202-229-3471 Email: butler.jack@pbgc.gov 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 Brooks Brothers Group Brooks Brothers Group, Inc. -- https://www.brooksbrothers.com/ -- is a clothing retailer with over 1,400 locations in over 45 countries. While famous for its clothing offerings and related retail services, Brooks Brothers is known as a lifestyle brand for men, women, and children, which markets and sells footwear, eyewear, bags, jewelry, watches, sports articles, games, personal care items, tableware, fragrances, bedding, linens, food items, beverages and more. Brooks Brothers Group and 12 of its subsidiaries filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11785) on July 8, 2020. The petitions were signed by Stephen Marotta, chief restructuring officer. The Debtors were estimated to have assets and liabilities of $500 million to $1 billion. Hon. Christopher Sontchi presides over the cases. The Debtors tapped Richards, Layton & Finger, P.A. and Weil, Gotshal & Manges LLP as legal counsel; PJ Solomon, L.P., acts as investment banker; Ankura Consulting Group LLC as financial advisor; and Prime Clerk LLC as claims and noticing agent. BY CROWN: Moody's Affirms B2 CFR, Outlook Stable ------------------------------------------------ Moody's Investors Service affirmed BY Crown Parent, LLC's B2 Corporate Family Rating and B1 and Caa1 ratings for the existing 1st lien credit facilities and senior unsecured notes, respectively. Moody's also assigned B1 ratings to the company's proposed $500 million of senior secured notes and the amended portion of the revolving credit facility that will have a 5-year maturity. The ratings outlook is stable. Blue Yonder will use net proceeds from the senior secured notes issuance to refinance outstanding revolving loans and a portion of its 1st lien term loans and augment its cash balances. RATINGS RATIONALE The affirmation of the B2 CFR reflects Blue Yonder's good liquidity, strong growth in its Cloud revenues, and the nearly 60% of revenues that are derived under software maintenance and subscription agreements. This recurring revenue stream provides revenue stability amid the economic uncertainty. Moody's further expects that, if the Covid pandemic is contained and economic conditions improve in 2021 consistent with Moody's current baseline economic scenario, Blue Yonder's strong revenue growth and operating leverage in Cloud revenues will drive total debt to EBITDA (Moody's adjusted and including growth in deferred revenues) toward 6x and free cash flow of at least the mid-single digit percentages of total debt in 2021. The de-leveraging will also be aided by the abating impact from the business model transition to subscription services and the moderating pace of investments. The proposed amendment to the existing credit agreement will increase revolving commitments by $35 million and extend the maturity date of the revolving loan commitments. The refinancing transaction will provide Blue Yonder greater flexibility to manage through the economic uncertainties caused by the Covid-19 pandemic and execute its ongoing business model transformation from perpetual licenses to subscription-based software services. The impact of the business model transition and increase in operating expenses have eroded operating cash flow and EBITDA from their peak in 2017 while revenues have grown. Blue Yonder's total debt to EBITDA (Moody's adjusted and including growth in deferred revenues) was already very high around the mid 8x at 1Q 2020. Moody's expects leverage to approach 9x pro forma for the refinancing and to deteriorate further in 2020 due to profit declines from continuing revenue mix shift that will be compounded by the weak economic conditions. However, Blue Yonder's robust growth in SaaS revenues (Annual Recurring Revenue growth of 76% in 1Q 2020), albeit on a smaller base, and the growing backlog of SaaS revenues evidence the company's progress toward SaaS transformation that will strengthen its credit profile over time. 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. Blue Yonder has moderate exposure to customers that the company views as "non-essential" in the retail, transportation/logistics, and manufacturing industries. Moody's expects Blue Yonder's software sales and operating cash flow to be adversely impacted over the next few quarters but free cash flow should remain positive in 2020. The pandemic has also highlighted the significance of technology investments in supply chain and distribution operations, which will benefit Blue Yonder once the crisis abates. Blue Yonder's B2 CFR is supported by its good operating scale, a large installed base of 3,100 customers, and its good market position as the largest pure-play provider of supply chain management software products. The equity cushion reflected in Panasonic Corporation's acquisition of a 20% equity interest in Blue Yonder benefits Blue Yonder's credit profile. At the same time, Blue Yonder faces intense competition from the large and diversified software vendors as well as smaller pure-play software providers. Governance considerations, especially, Blue Yonder's tolerance for high financial leverage and Moody's expectation that financial strategy will favor shareholders, constrain its credit profile. The stable outlook reflects Moody's expectation that Blue Yonder will maintain good liquidity and revenue growth and improving profitability will drive free cash flow growth to at least the mid-single digit percentages of total debt in 2021. Moody's has rated the proposed senior secured notes B1 and expects the obligations under the notes to be pari passu with indebtedness under Blue Yonder's 1st lien credit facilities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade BY Crown Parent's ratings if operating challenges or increase in debt cause leverage to sustain above 7x (Moody's adjusted total debt to EBITDA plus change in deferred revenues) and free cash flow remains in the low single digit percentages of total adjusted debt. The rating could be upgraded if Blue Yonder generates sustained revenue and operating cash flow growth in the mid-single digit rates, and Moody's believes that the company will maintain more conservative financial policies such that total debt to EBITDA leverage (Moody's adjusted, including changes in deferred revenues) is sustained below the mid 5x level. Assignments: Issuer: BY Crown Parent, LLC Senior Secured Bank Credit Facility, Assigned B1 (LGD3) Senior Secured Regular Bond/Debenture, Assigned B1 (LGD3) Affirmations: Issuer: BY Crown Parent, LLC Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed B1 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD6) Outlook Actions: Issuer: BY Crown Parent, LLC Outlook, Remains Stable BY Crown Parent, LLC, formally known as RP Crown Parent, LLC, is a provider of supply chain management and retail software solutions. Affiliates of Blackstone Group, New Mountain Capital, and Panasonic Corporation own majority equity interest in the company. The principal methodology used in these ratings was Software Industry published in August 2018. CARBO CERAMICS: Court Approves Bankruptcy Plan ---------------------------------------------- Bloomberg Law reports that bankrupt frac-sand supplier CARBO Ceramincs Inc. obtained court approval for its reorganization plan, giving the company to its secured lender, after settling objections raised by the committee of unsecured creditors. Pre- and post-bankruptcy lender Wilks Brothers LLC will take over the company in exchange for its secured debt, and unsecured creditors will share from a liquidation trust, according to the plan approved Thursday by Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas. 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. The 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 the Web site 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. CBB ACQUISITION: Taps Altman & Company as Financial Advisor ----------------------------------------------------------- CBB Acquisition Company LLC received approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Altman & Company, LLC as its financial advisor. The firm's services will include: (a) Working with Debtor's senior management regarding its overall business and financial plans; (b) Performing a review of Debtor's historical financial information, including financial statements, financial projections and budgets; (c) Analyzing cash-flow projections to assist in the maintenance of property liquidity; (d) Providing specific recommendations for improvement to operations profit and working capital, where applicable; (e) Assisting Debtor in preparing all the necessary financial reports as required by the U.S. Trustee; (f) Assisting Debtor in structuring their plan of reorganization and identifying and attaining financing arrangements adequate to support the plan; and (g) participating in meetings and discussions at Debtor's request. The firm's services will be provided mainly by Gordon Lewis, III, a principal at Altman & Company, who will be compensated at the rate of $375 per hour. A retainer of $10,000 was provided to Mr. Lewis prior to Debtor's bankruptcy filing. Fees and costs will be charged against this retainer as they accrue. Mr. Lewis 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: Gordon A. Lewis, III Altman & Company, LLC 258 Main Street, Suite 205 Milford, MA 01757 Telephone: (781) 341-5170 Facsimile: (781) 297-7578 About CBB Acquisition Company CBB Acquisition Company, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-01951) on June 24, 2020. The petition was signed by Randolph M. Levinson, Debtor's manager. At the time of the filing, Debtor had total assets of $1,719,342 and total liabilities of $13,779,437. Debtor has tapped Thames Markey & Heekin, PA as its legal counsel and Altman & Company, LLC as its financial advisor. CELADON GROUP: Jaguar Sales Price Cut to $6.1 Million ----------------------------------------------------- CD Life reports that the Mexican business of bankrupt Celadon is purchased by Jaguar Transport Inc. Shuttered mega-carrier Celadon entered into an agreement to sell their Mexican assets for over $6 million. On June 11, 2020, Jaguar Transport Inc. bid $6.8 million to acquire Celadon's Mexican assets via an online auction, according to court documents filed in the U.S. Bankruptcy Court for the District of Delaware. The $6.8 million sum was adjusted down to $6.1 million after a June 12 stock and asset purchase agreement. Per the agreement, Jaguar Transport will assume Celadon's liabilities associated with their Chapter 11 filings. The assets purchased include Celadon Mexicana and Jaguar Logistics and Leasing Services. Included in the purchase are Celadon's terminal in Nuevo Laredo, five International ProStar Class 8 trucks, and 75 trailers. P.A.M. Transportation Services and White Willow Holdings also attempted to purchase Celadon’s Mexican assets, but both deals fell through. Celadon filed for Chapter 11 bankruptcy on December 9, 2019 and immediately announced that they would shut down operations. Around 4000 Celadon workers, many of them drivers, were suddenly laid off just weeks before the holidays. Jaguar Logistics also reportedly shut down for a time around the bankruptcy announcement but appears to have resumed operations of a fleet of 70 trucks. The bankruptcy and closure news came just days after the Department of Justice (DOJ) announced that two former executive officers with Celadon would face charges related to fraud and lying to investors. Earlier in 2019, Celadon agreed to pay $42.2 million in restitution to shareholders for "filing materially false and misleading statements to investors and falsifying books, records and accounts." Celadon was founded in 1985 and was the largest provider of international truckload services in North America, operating 3,300 tractors and 10,000 trailers at the time of the bankruptcy. About Jaguar Transport Jaguar Transportation is a transportation/trucking/railroad company based out of Colonia Andres Caballero, Escobedo, Nuevo Leon, Mexico. About Celadon Group Celadon Group, Inc. -- https://celadontrucking.com/ -- is a North American truckload freight transportation company, primarily providing point-to-point shipping, warehousing, supply chain logistics, tractor leasing and other transportation and logistics services for major customers throughout North America. Celadon Group and 25 affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12606) on Dec. 8, 2019. As of Dec. 2, 2019, the Debtors disclosed $427 million in assets and $391 million in liabilities. Judge Karen B. Owens oversees the cases. The Debtors tapped DLA Piper LLP (US) as bankruptcy counsel; Scudder Law Firm, P.C., L.L.O. as special counsel; Alixpartners, LLP as financial advisor; and Kurtzman Carson Consultants, LLC, as notice, claims and balloting agent and administrative advisor. CENTRO EVANGELISTICO: Seeks to Hire Sagre Law Firm as Counsel ------------------------------------------------------------- Centro Evangelistico La Roca, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Sagre Law Firm, P.A. as its legal counsel. The firm's services will include advising Debtor of its powers and duties under the Bankruptcy Code and representing Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. Ariel Sagre, Esq., the firm's attorney who will be handling the case, disclosed in court filings that he and his firm do not represent any interest adverse to Debtor and its bankruptcy estate. Sagre Law Firm can be reached through: Ariel Sagre, Esq. Sagre Law Firm, P.A. 5201 Blue Lagoon Drive, Suite 892 Miami, Florida 33126 Telephone: (305) 266-5999 Facsimile: (305) 265-6223 Email: law@sagrelawfirm.com About Centro Evangelistico La Roca Centro Evangelistico La Roca, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-17654) on July 15, 2020. At the time of the filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of between $500,001 and $1 million. Judge Laurel M. Isicoff oversees the case. Debtor has tapped Sagre Law Firm, P.A. as its legal counsel. CHISHOLM OIL: PE Firms-Owned Entity in Chapter 11 ------------------------------------------------- Fabian Graber, writing for Bloomberg News, reports that Chisholm Oil & Gas, owned by private equity firms Apollo Global Management and Ares Management Corporation, filed for bankruptcy on June 17, 2020,. The Tulsa, Oklahoma-based company sought Chapter 11 protection from creditors in U.S. Bankruptcy Court in Delaware. Chisholm had estimated liabilities between $500 million and $1 billion and assets ranging from $1 billion to $10 billion. Apollo acquired oil and gas exploration and production company Chisholm in 2017 and merged it with Ares-backed rival Gastar Exploration LLC last year. The combined company has net production of around 20,000 barrels of oil equivalent per day, according to a statement. Ares took control of Gastar after the company filed for Chapter 11 proceedings in the U.S. in 2018. About Chisholm Oil & Gas Chisholm Oil and Gas Operating, LLC, is an exploration and production company focused on acquiring, developing, and producing oil and natural gas assets in the Anarkado Basin in Oklahoma in an area commonly referred to as the Sooner Trend Anadarko Basin Canadian and Kingfisher County. Chisholm Oil and Gas Operating and its affiliates sought Chapter 11 protection (Bankr. Lead Case No. 20-11593) on June 17, 2020. In the petition signed by CFO Michael Rigg, the Debtors were estimated to have $1 billion to $10 billion in assets and $500 million to $1 billion in liabilities. The Hon. Brendan Linehan Shannon presides over the cases. The Debtors have tapped Weil, Gotshal & Manges, LLP and Young Conaway Stargatt & Taylor, LLP as legal counsel; Evercore Group, LLC as investment banker; Alvarez & Marsal North America, LLC as financial advisor; and Omni Agent Solutions as claims and noticing agent. COMCAR INDUSTRIES: BGV Buying Auburndale Property for $3.95 Million ------------------------------------------------------------------- Comcar Industries, Inc., and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to authorize the private sale of nonresidential real property located at the southeast corner of Charlotte Avenue and US Highway 92, Auburndale, Polk County, Florida, as contemplated by the certain Agreement for Sale and Purchase of Property, to BGV Limited, LLLP for $3.95 million, cash. The sale will be free and clear of any and all claims, liens, encumbrances and interests, with such claims, liens, encumbrances and interests to attach only to the net proceeds of the private sale enjoying the same extent and priority as on the Land. In addition to the non-residential real property, the private sale of the Auburndale Property includes (i) the Seller's right, title, and interest in (if any), to the extent transferable, those rights, easements and appurtenances pertaining to the Auburndale Property, and in and to adjacent street, alleys or rights-of-way; (ii) the structures and improvements on the Land; and (iii) the Seller's right, title and interest, to the extent transferable, in all vested development rights, impact fee credits, concurrency rights, entitlements, sewer or water connection rights, reservations or tap-in rights, licenses, applications, approvals, permits, zoning rights, plans, site plan rights, warranties and capacities, and any and all similar development rights incident or related to the Land. The Debtors are asking approval of the proposed private sale of the Auburndale Property free and clear of all liens, claims, encumbrances and other interests, and upon the terms and conditions set forth in the Purchase Agreement. Accordingly, there will be no auction or competitive bidding process for the Auburndale Property, but the Motion is subject to the Debtors' fiduciary duties. Notwithstanding, while the Purchase Agreement provides for and allows the consummation of an Alternative Transaction, which would terminate the transaction, the Purchaser is entitled to receive (i) the Break-Up Fee, in the amount $118,500, plus documented, reasonable expenses not to exceed $50,000, (ii) a return of the non-refundable portion of the total deposit, and (iii) a return of any feasibility period extension fee. The closing date of the private sale will take place on the date that is 60 days after the expiration the Permitting Period, provided that all conditions precedent have been satisfied. The Purchase Agreement requires the Purchaser to fund in good faith a deposit of $50,000. The Purchase Agreement does not address the use of proceeds generated by the private sale. All proceeds will be distributed pursuant to the Interim DIP Order and any subsequent final DIP order, or as otherwise ordered by the Court. The Debtors are not asking to have the private sale declared exempt from taxes, unless the closing has no occurred by the time any plan in these chapter 11 cases may be confirmed, in which such plan may propose to include the closing of the sale and seek an exemption of taxes. The Debtors are asking relief from the 14-day stay imposed by Bankruptcy Rule 6004(h) for the private sale. A hearing on the Motion is set for July 22, 2020 at 10:00 a.m. (ET). The objection deadline is July 15, 2020 at 4:00 p.m. (ET). About Comcar Industries Comcar Industries -- https://comcar.com/ -- is a transportation and logistics company headquartered in Auburndale, Fla., with over 40 strategically-located terminal and satellite locations across the United States. On May 17, 2020, Comcar Industries and related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In the petitions signed by CRO Andrew Hinkelman, Comcar Industries was estimated to have $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the presiding judge. The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting, Inc., as financial advisor; and Bluejay Advisors, LLC as investment banker. Donlin Recano & Company, Inc. is the claims agent. DAVID A. ALLISON: Zimmerman Buying Muscogee Cty. Property for $561K ------------------------------------------------------------------- David A. Allison asks the U.S. Bankruptcy Court for the Middle District of Georgia to authorize the sale of the real property legally described as all that lot, tract and parcel of land situate, lying and being in the State of Georgia, County of Muscogee and being known and distinguished as all of Lot Numbered Five in Block lettered "A" in that Subdivision of land known as Old Town, as said lot appears upon a map or plat of Section One, Old Town Subdivision, recorded at Plat Book 164, Page 179 in the Office of the Clerk of Superior County of Muscogee County, Georgia, to George Zimmerman for $561,000 cash. The Debtor scheduled, as his primary asset, the Property. The Debtor proposes to sell the property to the Purchaser pursuant to their Sale Contract. The sale will be for cash in the amount of $561,000. Under the terms of the sale, the Debtor will contribute, as seller, none of the closing costs. However, Debtor will provide a Buyer's Protection Plan Home Warranty (cost of about $580) and service the HVAC system and repair, if needed (cost unknown), all at the Debtor's cost. Any ad valorem property taxes owed to the Columbus Consolidated Government, which are currently due or past due, will be paid out of the sale, and a pro ration will be made for the 2020 real property taxes. The contract is subject only to those terms and conditions set forth therein. To the extent that the summary of the Motion contained in this paragraph varies from the terms of the contract, the contract will control. The property is or may be subject to certain liens and encumbrances, all of which will be paid in full at closing: (a) Any tax lien for unpaid ad valorem property taxes to CCG, although it is believed there are none, will be paid at time of closing; (b) A security deed in favor of Stifel Bank and Trust, serviced by Cenlar FSB, which has asserted a claim in the bankruptcy case for $397,648, as of case filing, adjusted for post-petition payments, will be paid in full, with interest, and if a per diem cannot be verified with Stifel the Court should determine what it is; (c) A federal tax lien in favor of the United States of America, by and through the Internal Revenue Service has been determined to be $143,882, as of confirmation, and will be paid at closing, with interest, if a per diem cannot be verified with IRS the Court should determine what it is; (d) Any tax lien in favor of the State of Georgia, by and through the Georgia Department of Revenue, although it is believed there is none, will be paid in full. The sale is appropriate under 11 U.S.C. Section 363(f) because all liens will be paid, and the Debtor believes that the secured claim holders will consent to the sale. Lien documents for secured creditors will be released by an appropriate release or partial release, releasing only the property, and maintaining lien status as to other properties, if any. The property has been listed for sale for five months with Coldwell Banker Kennon Parker Duncan & Davis, which is one of the largest, if not the largest in terms of employed agents, real estate brokerage firm in Columbus, Georgia, so there has been an adequate exposure to the market. KPDD has earned the commission provided for in the contract and approval of same is sought. The Debtor does not believe that there will be any net proceeds after liens are paid and believes that there will be an additional amount, contributed by the seller at closing, that he will have to pay out of third-party funds (David A. Allison, DDS, P.C.) in order for the sale to close, but, in the event there are any net funds, they will be paid out or otherwise treated in accordance with the Debtor's confirmed Chapter 11 plan. A copy of the Contract is available at https://tinyurl.com/ycgvv2nd from PacerMonitor.com free of charge. David A. Allison sought Chapter 11 protection (Bankr. M.D. Ga. Case No. 18-41266) on Dec. 31, 2018. The Debtor tapped Fife M. Whiteside, Esq., at Fife M. Whiteside, PC, as counsel. The Debtor's Third Amended Plan was confirmed by the Court on June 16, 2020. On Jan. 3, 2020, the Court appointed Coldwell Banker Kennon Parker Duncan & Davis, as broker. DEMLOW PRODUCTS: Magna Seating Buying Equipment for $70K -------------------------------------------------------- Demlow Products, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Michigan to authorize the private sale of the following machines and equipment: (i) Model R Zig zag wire former; (ii) Multeplex Model G-40 profile machine with check plates; and (iii) two clip guns and a turntable assembly fixture, to Magna Seating of America, Inc. for $70,450. The Equipment is impressed with a valid lien to the benefit of First Federal Bank of the Midwest in the amount of approximately $550,000. No other party has a secured interest in the Equipment. The Debtor has sought First Federal Bank of the Midwest's concurrence in the relief sought in the Motion. The terms and conditions of the sale are contained in the Purchase Agreement. The Purchaser proposes to pay the Debtor's estate $70,450 for the Equipment. From the sale proceeds, First Federal Bank of the Midwest will be paid $70,450, paying in part its secured claim, but paying in full its lien against the sold Equipment. The Debtor asks authority to sell the Equipment and to convey the proceeds to First Federal Bank of the Midwest to satisfy in part said Bank's secured claim. Other than as provided in the Motion and notwithstanding anything stated to the contrary in the Purchase Agreement, the sale of the Equipment will be on an "as is, where is" basis without any representations or warranties of any kind, nature or description by the Debtor, including any warranties of merchantability or fitness for a particular purpose; moreover, the Order will provide that Magna Seating will be deemed a good faith purchaser pursuant to Section 363(m) of the Bankruptcy Code. The sale to Magna Seating will be closed at the offices of the counsel for the Debtor as soon as possible following the entry of the Order approving the sale. The Equipment was appraised in February 2019 and First Federal Bank of the Midwest has a copy of said Appraisal. The proposed sale price of $280,000 exceeds the appraised value, demonstrating that the proposed sale price is the fair market value of the Equipment. The Debtor proposes a private sale under Rule 6004(f)(1). The Debtor's only secured creditor, First Federal Bank of the Midwest, will receive notice of the sale upon filing the Motion. All liens, claims or encumbrances on the Equipment will attach to the proceeds of the sale. It is in the best interest of the estate to sell the assets and close as soon as possible after approval by the Court. Therefore, the Debtor asks that the stays imposed by Bankruptcy Rules 6004(g) and 6006(d) be waived in any resulting Sale Order. A copy of the Agreement is available at https://tinyurl.com/y8ar7tfw from PacerMonitor.com free of charge. About Demlow Products Demlow Products, Inc. -- https://demlowproducts.com/ -- is an international supplier of formed wire products. Demlow Products is a privately held and founded in 1967. Demlow Products sought protection under Chapter 11 of the US Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-57161) on Dec. 7, 2019. In the petition signed by James Demlow, president, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Don Darnell, Esq. at Darnell, PLLC, represents the Debtor. DEMLOW PRODUCTS: Solar Springs Buying Equipment for $280K --------------------------------------------------------- Demlow Products, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Michigan to authorize the sale of the following machines and equipment: (i) Wells zig zag hydraulic end forming machine manufactured in 2006 and with serial number ZZ0897; (ii) 36' Uncoiler Turntable, Continuous Feed Rotary Zig Zag Forming Press, Gear Tooth Feeder Drive, C-Throat Through Feed Cutoff End Forming Punch Press, Chain Feed Indexing Punch Trigger; (iii) 36' Uncoiler Turntable, Continuous Feed Rotary Zig Zag Forming Press, Gear Tooth Feeder Drive, C-Throat Through Feed Cutoff End Forming Punch Press, Chain Feed Indexing Punch Trigger, Control Panel; (iv) Steel Square Tube Frame Stand, Chain Drive Part Carrier Conveyor, four Bridge Type Tooling Mount Frames, four Hydraulic Feed Line Manifold, Hydraulic Power Supplies, & Control Panel; (v) 12 Position Index Bender (custom); (vi) Genrich Annealing Oven. LP Gas Fired, 390000 BTU, 2 Door Access, Analog Controls, 106" x 118" x 9"; and (vii) Six Check fixtures, to include 82136-TLAA-A010-32; 82136-YNC9-J010-32, L&W fixture, Tachi-S fixture, and other TS Tech fixtures, to Solar Springs & Wire Forms, Inc. for $280,000. The Equipment is impressed with a valid lien to the benefit of First Federal Bank of the Midwest in the amount of approximately $550,000. No other party has a secured interest in the Equipment. The Debtor has sought First Federal Bank of the Midwest's concurrence in the relief sought in the Motion. The terms and conditions of the sale are contained in the Purchase Agreement. The Purchaser proposes to pay the Debtor's estate $280,000 for the Equipment. From the sale proceeds, First Federal Bank of the Midwest will be paid $280,000, paying in part its secured claim, but paying in full its lien against the sold Equipment. The Debtor asks authority to sell the Equipment and to convey the proceeds to First Federal Bank of the Midwest to satisfy in part said Bank's secured claim. Other than as provided in the Motion and notwithstanding anything stated to the contrary in the Purchase Agreement, the sale of the Equipment will be on an "as is, where is" basis without any representations or warranties of any kind, nature or description by the Debtor, including any warranties of merchantability or fitness for a particular purpose; moreover, the Order will provide that Solar Springs & Wire Forms, Inc. will be deemed a good faith purchaser pursuant to Section 363(m) of the Bankruptcy Code. The sale to Solar Springs will be closed at the offices of the counsel for the Debtor as soon as possible following the entry of the Order approving the sale. The Equipment was appraised in February 2019 and First Federal Bank of the Midwest has a copy of said Appraisal. The proposed sale price of $280,000 exceeds the appraised value, demonstrating that the proposed sale price is the fair market value of the Equipment. The Debtor proposes a private sale under Rule 6004(f)(1). The Debtor's only secured creditor, First Federal Bank of the Midwest, will receive notice of the sale upon filing the Motion. All liens, claims or encumbrances on the Equipment will attach to the proceeds of the sale. It is in the best interest of the estate to sell the assets and close as soon as possible after approval by the Court. Therefore, the Debtor asks that the stays imposed by Bankruptcy Rules 6004(g) and 6006(d) be waived in any resulting Sale Order. A copy of the Agreement is available at https://tinyurl.com/y9wk596f from PacerMonitor.com free of charge. About Demlow Products Demlow Products, Inc. -- https://demlowproducts.com/ -- is an international supplier of formed wire products. Demlow Products is a privately held and founded in 1967. Demlow Products sought protection under Chapter 11 of the US Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-57161) on Dec. 7, 2019. In the petition signed by James Demlow, president, the Debtor was estimated to have $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Don Darnell, Esq. at Darnell, PLLC, represents the Debtor. DIAMOND RESORTS: Moody's Rates Secured Notes 'B3', Outlook Stable ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed senior secured note issuance of Diamond Resorts International, Inc. Concurrently, Moody's affirmed the company's Caa1 Corporate Family Rating, Caa1-PD Probability of Default Rating, B3 senior secured rating and Caa3 senior unsecured rating. The outlook has been revised to stable from negative. The proceeds of the planned $525 million secured note issuance will be used to partially repay the company's existing senior secured notes due 2023, add about $57 million to the company's cash balances, and pay fees and expenses. The revision of the outlook to stable reflects the company's adequate liquidity and Moody's expectation that despite the impact from travel restrictions related to the spread of the coronavirus, the timeshare industry is in position to recover sooner than the lodging industry in general. Specifically, approximately 75% of Diamond Resorts' customers live within driving distance of one of the company's resorts, 80% of the company's resorts have reopened and bookings for the second half of 2020 indicate customers are expecting to travel to their timeshares this year. Assignments: Issuer: Diamond Resorts International, Inc. Senior Secured Regular Bond/Debenture, Assigned B3 (LGD3) Affirmations: Issuer: Diamond Resorts International, Inc. Probability of Default Rating, Affirmed Caa1-PD Corporate Family Rating, Affirmed Caa1 Senior Secured Bank Credit Facility, Affirmed B3 (LGD3) Senior Secured Regular Bond/Debenture, Affirmed B3 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Caa3 (LGD5) Outlook Actions: Issuer: Diamond Resorts International, Inc. Outlook, Changed to Stable from Negative RATINGS RATIONALE Diamond Resorts' Caa1 credit profile will be dominated in the near term by the disruption caused by ongoing travel restrictions and social distancing guidelines due to the spread of the coronavirus. The normal ongoing credit risks include the company's high leverage and modest interest coverage over the next two years -- Moody's forecasts the company's adjusted debt/ EBITDA and EBITA/interest expense will approximate 8.75x and 1.25x, respectively, at the end of 2022. Moody's notes that Diamond Resorts' term loan B and secured notes, which make up about 45% of the company's total debt (pro forma for the proposed transaction and excluding securitized debt), will become current in September 2022. Diamond Resorts has modest scale and focuses on the higher risk timeshare segment of hospitality, relative to the franchise/management agreement approach of other lodging companies. Approximately 50% of Diamond Resorts' segment EBITDA is derived from vacation interest sales. The company benefits from adequate liquidity including low capital requirements, favorable cash flow profile of its hospitality management business and lack of near-term debt maturities. Diamond's liquidity is adequate with pro forma cash balances of about $340 million and an undrawn $100 million committed revolver. The committed revolver expires in September 2021 which contains a springing first lien net leverage ratio covenant, which is only tested in the event the amount outstanding exceeded 30% of the total revolver commitment. Moody's expects the company will have difficulty meeting this test if increasing COVID-19 cases in regions that re-open cause earnings to remain pressured. Diamond Resorts' secured debt rating of B3, one notch higher than its Corporate Family Rating, reflects their priority position ahead of the senior unsecured notes. Both bank facilities are guaranteed by Diamond's domestic subsidiaries, as well as by its parent holding company. The senior unsecured notes are rated Caa3, two notches below Diamond's CFR, which reflects their structural subordination to the bank credit facility. The senior unsecured notes are guaranteed by the same domestic subsidiaries that guarantee the bank facilities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded further if the company's liquidity weakened in any way, if the probability of default increases for any reason, or if the recovery is delayed beyond its base assumptions. Although not expected in the near term due to the company's high financial leverage, ratings could be upgraded should its earnings diversify away from the vacation interest sales and financing segments and if the company is able to maintain debt/EBITDA below 6.5x and EBITA/interest coverage of above 2.0x. Diamond Resorts International, Inc. is a timeshare business that specializes in the sale of vacation ownership interests in the form of points. Members receive an annual allotment of points and through the membership club can use these points to stay at destinations within Diamond's global network of just over 430 destinations in 34 countries. Diamond Resorts operates two segments: hospitality and management services, where the company manages or operates resorts, resort amenities, homeowners' associations, and vacation interests, which includes sales and financing of timeshare vacation ownership and consumer financing related to the purchase of timeshares. 2019 revenues were about $1.3 billion. Diamond is owned by Apollo Global Management LLC. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. DIOCESE OF ST. CLOUD: In Chapter 11 After $22.5M Settlement ----------------------------------------------------------- The Star Tribune reports that the Diocese of St. Cloud filed for bankruptcy in U.S. Bankruptcy Court, just weeks after reaching a $22.5 million settlement with clergy abuse survivors. The Chapter 11 bankruptcy filing provides a "framework for resolution" of the clergy abuse claims filed by 70 individuals against 42 priests dating to the 1950s, the diocese said. The diocese announced its intent to file for bankruptcy in 2018 to pay for the claims, and has been negotiating with attorneys for the survivors since. "This Chapter 11 reorganization represents the diocese's commitment to finding a fair resolution for survivors," said the diocese news release announcing the filing. "It's been a long haul, a long process, for survivors," added survivors' attorney Mike Finnegan. "We're glad that they're on the path to resolution and putting the lawsuits behind them." St. Cloud is the fifth diocese in Minnesota, and the 26th Catholic diocese or religious order in the nation, to file for bankruptcy. In all cases, it followed a wave of lawsuits charging priest sexual misconduct with minors. The New Ulm Diocese, Duluth Diocese and Archdiocese of St. Paul and Minneapolis have emerged from bankruptcy, said Finnegan. Winona Diocese has not reached a resolution, he said. The Crookston Diocese, with 15 abuse lawsuits, did not file for bankruptcy. The $22.5 million survivor fund will be administered by an independent trustee appointed by the bankruptcy court, with input from the committee representing survivors' interest, the diocese said. The funds "are made up of insurance and benefits coverage settlements, cash and property contributions from the diocese, and contributions from parishes," the diocese said. In addition, the St. Cloud Diocese has agreed to release the personnel files and other information related to the clergy who were credibly accused of sexual abuse of minors. In 2014, the diocese released a list of 33 priests who had been accused of sexual misconduct. That list grew to 42, following the lawsuits and investigations across the country, said Finnegan. Bishop Donald Kettler was not available for comment, but made a statement following the announcement of the March 26 legal settlement. "I am particularly grateful to the survivors of abuse for their courage in coming forward and sharing their experiences, and I again apologize on behalf of the Church for the harm they suffered," Kettler said. "I remain committed to assist in the healing of all those who have been hurt, and I hope this is another step in that direction." About The Diocese of St. Cloud The Diocese of St. Cloud is a tax-exempt religious organization. The Roman Catholic Diocese of Saint Cloud encompasses 12,251 square miles in 16 central Minnesota counties, with an estimated total population of 555,400. The diocese stretches more than 175 miles from east to west, including some of Minnesota's most rural areas along the North and South Dakota borders. It also includes one of the nation's fastest-growing suburban corridors extending from Minneapolis northwest to St. Cloud. The diocese currently includes 131 parishes with a combined Catholic population of over 133,000. Visit http://stcdio.orgfor more information. The Diocese of St. Cloud filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Minn. Case No. 20-60337) on June 15, 2020. At the time of the filing, Debtor disclosed assets of $10 million to $50 million and liabilities of $1 million to $10 million. Debtor has tapped Quarles & Brady, LLP as its legal counsel. The U.S. Trustee for Region 12 appointed a committee of unsecured creditors on June 16, 2020. The committee is represented by Stinson, LLP. DM WORLD: Gets Approval to Hire David M. Cole as Tax Accountant --------------------------------------------------------------- DM World Transportation LLC received approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ David M. Cole, CPA, LLC as its tax accountant. The firm's services will include the preparation of Debtor's 2019 federal tax return, tax planning and consultation, and general accounting advice. The firm was paid the sum of $1,700 prior to Debtor's bankruptcy filing. David Cole, the firm's managing partner, disclosed in court filings that he and his firm represent no interest adverse to Debtor in matters upon which they are to be employed. The firm can be reached through: David M. Cole David M. Cole, CPA, LLC 5401 S Kirkman Rd., Suite 700 Orlando, FL 32819 Telephone: (407) 536-2033 About DM World Transportation DM World Transportation, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02684) on May 12, 2020. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Lori V. Vaughan oversees the case. Debtor has tapped the Law Firm of Shuker & Dorris, P.A. as its legal counsel and David M. Cole, CPA, LLC as its tax accountant. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors on June 2, 2020. The committee is represented by Greenberg Traurig, P.A. DUFL INC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: DUFL, Inc. 401 S. Mill Ave., Suite 201 Tempe, AZ 85281 Business Description: DUFL, Inc. develops and markets a mobile application for business travelers for baggage packing and shipping. DUFL is a premium travel service – a personal valet that simplifies business travel by shipping, cleaning and storing business attire. DUFL stores clothing in a personal DUFL closet, and allows users to virtually 'pack' by selecting clothing items from within the app. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court District of Arizona Case No.: 20-08464 Debtor's Counsel: Isaac M. Gabriel, Esq. QUARLES & BRADY LLP Renaissance One, Two North Central Avenue Phoenix, AZ 85701 Tel: (602) 229-5200 Email: isaac.gabriel@quarles.com Total Assets as of December 31, 2019: $1,453,192 Total Liabilities as of December 31, 2019: $10,505,511 The petition was signed by William Rinehart, president/CEO. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/K5iDL8 FOUNDRY DEVELOPMENT: Aug. 17 Auction of All Assets Set ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized the bidding procedures proposed by Foundry Development Group, LLC in connection with the sale of substantially all assets to The My Lu Group, LLC, subject to overbid. The Bidding Procedures will govern all bids and bid proceedings relating to the Debtor's Assets. The Debtor is authorized to take any and all actions necessary or appropriate to implement them. The deadline for (a) submitting a Qualified Bid and/or (b) objecting to approval of the Sale Transaction, including the sale of the Debtor's Assets free and clear of liens, claims, encumbrances and interests pursuant to section 363(f) of the Bankruptcy Code, will be Aug. 10, 2020. As further described in the Bidding Procedures, the Debtor will conduct the Auction on Aug. 17, 2020 if more than one Qualified Bid is timely received. The Court will conduct the Sale Hearing on Aug. 18, 2020 at 9:00 a.m., at which hearing the Court will consider approval of the Sale Transaction to the Successful Bidder. The Sale Hearing may be adjourned or rescheduled without notice, other than by announcement of such adjournment at the Sale Hearing. Objections to the Motion or any of the relief sought therein must be filed no later than 5:00 p.m. (ET) on Aug. 11, 2020. The form of the Sale Notice is approved in all respects. Notwithstanding Bankruptcy Rules 6004(g) and 6006(d), the Order will not be stayed for 10 days after its entry and will be effective and enforceable immediately upon signature thereof. About Foundry Development Group Foundry Development Group, LLC, is a privately-held company engaged in activities related to real estate. Its principal assets are located at 43 and 45 Edward St., Newburgh, New York. Foundry Development Group sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 18-36804) on Oct. 25, 2018. In the petition signed by Albert Weiss, manager, the Debtor was estimated to have assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Cecelia G. Morris oversees the case. The Debtor tapped Michael D. Pinsky, P.C., as its legal counsel. FRANCESCA’S HOLDINGS: Warns of the Possibility of Going Bankrupt ------------------------------------------------------------------ Samantha McDonald, writing for Footwear News, reports that struggling retailer Francesca's announced of the possibility of the company to go bbankrupt. Francesca's has issued another warning that it could go bankrupt. In a filing on June 15, 2020, with the Securities and Exchange Commission, the already-struggling retailer announced that the coronavirus-induced shutdown of its more than 700 boutiques from late March through the end of April had led to significant declines in its comparable sales, net revenues and gross profits. It expressed a need to obtain additional financing to keep its business up and running or enter into Chapter 11 protection. "If we are unable to generate or obtain the requisite amount of financing needed to fund our business operations or execute our growth strategy, our liquidity and ability to continue operations could be materially adversely affected," it wrote. "As a result, we may be required to delay, reduce and/or cease our operations and/or seek bankruptcy protection." The warning comes a month after Francesca's said it had substantial doubt about its ability to continue as a going concern. It has also failed to pay rent on its leased locations for the months of April, May and June, which it said violates certain covenants under its asset-based credit and term loan agreements. If it's unable to regain compliance with those covenants, the company could enter default and thus be prevented from making future borrowings under those credit agreements. Without the funds, it faces challenges repaying currently suspended accounts payable as well as abated rent to its landlords for its outposts, corporate headquarters and distribution center. "We cannot provide any assurance that we will be able to secure sufficient liquidity to fund our business operations, including through additional financings [or] re-financings, or that we will be able achieve positive results through our growth strategy," the chain added. As of Feb. 1, 2020, Francesca's had 5,236 employees — 1,159 of which work full time and 4,077 part time — but it furloughed “substantially all of our corporate and boutique employees” in mid-April as part of broader efforts to improve liquidity. It has also reduced the base salaries of its senior leadership team, as well as suspended all capital expenditures and limited its investments in e-commerce. With the rise of digital, shifting consumer preferences and increasing competition, Francesca's had fallen on hard times in recent years: The company reported its first operating loss in 2018 — and also posted an operating loss the following year. Last month, it logged "relatively flat" fourth-quarter revenues of $118.9 million, compared with last year's $119.3 million, and 1% gain in same-store sales. In the SEC filing, the retailer requested an extension to submit its quarterly report "no later than 45 days after June 16," when it was scheduled to post its Q1 financial results. About Francesca's Holdings Houston, Texas-based Francesca's Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. FRONTIER COMMUNICATIONS: Seeks to Expand Scope of CMA's Services ---------------------------------------------------------------- Frontier Communications Corp. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to expand the scope of services of their telecom services consultant, Communications Media Advisors, LLC. The additional services that Communications Media will render include: (a) extending the Rural Digital Opportunity Fund wireless financial model to Debtors' non-RDOF areas to assess the financial opportunity; (b) assessing the costs, revenue opportunity, churn reduction, and impact of varying levels of competition in different geographic areas for the deployment of fixed wireless services; and (c) providing additional model functionality, assumptions development, analysis, and presentation of output as directed by Debtors to support executive and investor decision making regarding the upcoming Citizens Broadband Radio Service auction participation. Debtors have agreed to pay Communications Media a fixed fee of $225,000 for the initial five-week project. Additional work beyond the scope of the initial project, including detailed business case planning and ad hoc support as requested by Debtors, will be billed at a rate of $45,000 per week. Nicholas Vantzelfde, a managing partner at Communications Media, 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: Nicholas Vantzelfde Communications Media Advisors, LLC 101 Federal Street, Suite 1000 Boston, MA 02110 Telephone: (617) 290-5900 Email: nick@cmacap.com - and – Ed Naef Communications Media Advisors, LLC 101 Federal Street, Suite 1000 Boston, MA 02110 Telephone: (617) 938-3350 Email: ed.naef@cmacap.com 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. Judge Robert D. Drain oversees the cases. Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; FTI Consulting, Inc., as restructuring advisor; and Communications Media Advisors, LLC (CMA) as telecom services consultant. 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. The committee has tapped Kramer Levin Naftalis & Frankel LLP as legal counsel; UBS Securities LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. GLOBAL EAGLE: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Global Eagle Entertainment Inc. DBA Airline Media Productions DBA Ambient Digital Media DBA AMP Inc. DBA AMP INT'L DBA CP USA DBA Criterion Pictures DBA Criterion Pictures USA DBA GEE DBA Global Eagle DBA Media Orbit DBA Over the Line DBA Post Modern Group DBA Sea Movies 6080 Center Drive Suite 1200 Los Angeles, CA 90045 Business Description: Global Eagle Entertainment Inc. -- www.globaleagle.com -- is a provider of media, content, connectivity and data analytics to markets across air, sea and land. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court District of Delaware Seventeen affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Global Eagle Entertainment Inc. (Lead Debtor) 20-11835 Airline Media Productions Inc. 20-11836 Emerging Markets Communications, LLC 20-11837 Entertainment In Motion, Inc. 20-11838 Global Eagle Entertainment Operations Solutions, Inc.20-11839 Global Eagle Services, LLC 20-11840 Global Eagle Telecom Licensing Subsidiary LLC 20-11841 IFE Services (USA), Inc. 20-11842 Inflight Productions USA, Inc. 20-11843 Maritime Telecommunications Network, Inc. 20-11844 MTN Government Services, Inc. 20-11846 MTN International, Inc. 20-11847 MTN License Corp. 20-11848 N44HQ, LLC 20-11845 Post Modern Edit, Inc. 20-11849 Row 44, Inc. 20-11850 The Lab Aero, Inc. 20-11851 Judge: Hon. John T. Dorsey Debtors' Bankruptcy Counsel: George A. Davis, Esq. Madeleine C. Parish, Esq. LATHAM & WATKINS LLP (NY) 885 Third Avenue New York, New York 10022 Tel: (212) 906-1200 Fax: (212) 751-4864 Email: george.davis@lw.com madeleine.parish@lw.com - and - Ted A. Dillman, Esq. Helena G. Tseregounis, Esq. Nicholas J. Messana, Esq. LATHAM & WATKINS LLP (CA) 355 South Grand Avenue, Suite 100 Los Angeles, California 90071 Tel: (213) 485-1234 Fax: (213) 891-8763 Email: ted.dillman@lw.com helena.tseregounis@lw.com nicholas.messana@lw.com Debtors' Bankruptcy Co-Counsel: Michael R. Nestor, Esq. Kara Hammond Coyle, Esq. Betsy L. Feldman, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: mnestor@ycst.com kcoyle@ycst.com bfeldman@ycst.com Debtors' Investment Banker: GREENHILL & CO., LLC Debtors' Financial Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC 2029 Century Park East Suite 2060 Los Angeles, CA 90067 https://www.alvarezandmarsal.com Tel: 310.975.2600 Fax: 310.975.2601 Debtors' Claims, Noticing & Solicitation Agent & Administrative Advisor: PRIME CLERK LLC https://cases.primeclerk.com/gee Debtors' Tax Advisor: PRICEWATERHOUSECOOPERS LLP Total Assets as of July 8, 2020: $630.5 million Total Debts as of July 8, 2020: $1.086 billion The petitions were signed by Christian M. Mezger, chief financial officer. A copy of Global Eagle Entertainment Inc.'s petition is available for free at PacerMonitor.com at: https://is.gd/9yz65G Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. U.S. Bank National Association 2.75% Convertible $82,500,000 425 Walnut Street Senior Notes Due Cincinnati, OH 45202 2035 Attn: Michael Debois Title: Chief Counsel - Global Corporate Trust Services Tel: (513) 458-7924 Fax: (612) 303-0782 Email: michael.debois@usbank.com 2. New Skies Satellites B.V. Trade Payables $26,614,764 Chateau De Betzdorf Rue Pierre Werner 6815 Betzdorf, 2517 Luxembourg Attn: Steve Collar Title: CEO Tel: 352 71 07 25 227 Fax: (352) 710-725-227 Email: steve.collar@ses.com 3. Intelsat USA Sales Corp Trade Payables $9,750,453 7900 Tysons One Place McClean, VA 22102-5972 Attn: Steve Spengler Title: CEO & Director Tel: (703) 559-6800 Email: steve.spengler@intelsat.com 4. Star Satellite Communications Trade Payables $3,565,127 Company Al Falah City Abu Dhabi United Arab Emirates Attn: Masood Mahmood Title: CEO Tel: 971 2 510 0000 Fax: 971 2 510 0000 Email: mmahmood@yahsat.ae 5. BMG Rights Management (US) LLC Licensing Fees $3,500,000 6100 Wilshire Boulevard Suite #1600 Los Angeles, CA 90048 Attn: Hartwig Masuch Title: CEO Tel: (212) 561-3000 Fax: (323) 969-0968 Email: hartwig.masuch@bmg.com 6. Hughes Network Systems Trade Payables $3,056,370 11717 Exploration Lane Germantown, MD 20876 Attn: Pradman Kaul Title: President & CEO Tel: (310) 428-5500 Fax: (301) 428-1868 Email: pradman.kaul@hughes.com 7. Telesat International Limited Trade Payables $2,505,555 160 Elgin Street Suite 2100 Ottawa, ON K2P 2P7 Canada Attn: Daniel S. Goldberg Title: President & CEO Tel: (613) 748-0123 Fax: (613) 748-8712 Email: dgoldberg@telesat.com 8. Qest Quantenelektronische Trade Payables $1,979,500 Systeme GMBH Max-EYTH-STR. 38 Geopark II, Entrance B Ground Floor Holzgerlingen, 71088 Germany Attn: Michael Stobinski Title: CCO Tel: 49 7031 20495100 Fax: 49 7031 20495100 Email: michael.stobinski@qest.de 9. Lionsgate Entertainment Trade Payables $1,907,601 2700 Colorado Avenue, 2nd Floor Santa Monica, CA 90404 Attn: Nathan Kahane Title: President Tel: (310) 449-9200 Fax: (310) 496-1319 Email: investorrelations@lionsgate.com 10. Santander Teleport Trade Payables $1,879,236 Albert Einstein 44 Scientific and Technological Park of Cantabria (PCTCAN) Santander, 39011 Spain Attn: Carlos Raba Oruna Tel: Managing Director & CFO Tel: 34 942 63 46 Email: carlos@santanderteleport.com 11. KPMG Trade Payables $1,311,845 550 South Hope Street Suite 1150 Los Angeles, CA 90071 Attn: Raymond S. Anderson Title: Partner Tel: (203) 979-8830 Fax: (213) 622-1217 Email: randerson@kpmg.com 12. Sony/ATV Licensing Fees $1,200,000 25 Madison Ave. 24th Floor New York, NY 10010 Attn: Jon Platt Title: Chairman & CEO Tel: (212) 833-7730 Fax: (212) 930-9725 Email: jon.platt@sonyatv.com 13. American Airlines, Inc. Trade Payables $1,137,600 1 Skyview Drive Fort Worth, TX 76155 Attn: Robert Isom Title: President Tel: (817) 963-1234 Fax: (817) 967-9641 (480) 693-5546 Email: robert.isom@aa.com 14. Arabsat Trade Payables $1,046,623 Diplomatic Quarter, Alfazari Square Abdulla Bin Huthafa Al Sahmy Street Public Pension Agency Complex, C-6 Riyadh, 1143 Saudi Arabia Attn: Mohamed Benaichouche Title: CIO Tel: 966 11 482 0000 Fax: 966 11 488 7999 Email: mohamedb@arabsat.com 15. Asia Broadcast Trade Payable $964,770 Satellite Limited Ohara House 3 Bermudian Road Hamilton, HM08 Bermuda Attn: Stephen Salem Title: General Counsel Tel: 1 63 47 252 9012 Fax: 63 47 252 9002 Email: info@absatellite.com 16. Warner Music Group Licensing Fees $818,610 1633 Broadway New York, NY 10019 Attn: Paul Robinson Title: EVP & General Counsel Tel: (818) 238-6320 Fax: (212) 954-5489 Email: paul.robinson@wmg.com 17. Innova Solutions Trade Payables $693,484 2400 Meadowbrook Parkway Duluth, GA 30096 Attn: Rajkumar Velagapudi Title: President & CEO Tel: (770) 493-5598 Email: rajkumar.velagapudi@innovations.com 18. Paramount Pictures Trade Payables $590,548 The Studios at Paramount 5555 Melrose Avenue Hollywood, CA 90038 Attn: Emma Watts Title: President Tel: (323) 956-5000 Fax: (323) 956-0121 Email: emma_watts@paramount.com 19. Hercules Film Investments SARL Trade Payables $584,320 5 Rue Jean Monnet, Luxembourg Attn: President or General Counsel 20. Aeroconseil SAS Trade Payables $556,305 3 Rue Dieudonne Costes Blagnac, 31703 France Attn: Liam Bolland Title: COO Tel: 33 5 67 20 80 00 Fax: 33 56 720 8501 Email: liam.boland@aerlingus.com 21. Fox International Channels Trade Payables $548,824 (US) Inc. 10201 W. Pico Blvd Los Angeles, CA 90064-2606 Attn: Robert Murdoch Title: Chairman Tel: (310) 369-8759 22. Universal Music Group Licensing Fees $545,642 2220 Colorado Avenue Santa Monica, CA 90404 Attn: Boyd Muir Title: EVP & CFO Tel: (818) 286-7420 Fax: (310) 235-4907 Email: boyd.muir@universalmusic.com 23. Trans World Entertainment LLC Trade Payables $544,642 200 5th Ave 7th New York, NY 10010 Attn: George Pyne Title: President Tel: (212) 489-8300 24. Boeing Trade Payables $535,651 100 North Riverside Plaza Chicago, IL 60606 Attn: Anand Mahendra Title: CFO Tel: (425) 965-4000 Fax: (202) 358-4338 Email: anand.mahendra@boeing.com 25. A24 Films LLC Trade Payables $518,738 31 West 27th St. 11th Floor New York, NY 10001 Attn: David Fenkel Title: Co-Founder & Partner Tel: (646) 568-6015 Email: david.fenkel@gmail.com 26. Microsoft Corporation Trade Payables $484,836 One Microsoft Way Redmond, WA 98052 Attn: Amy Hood Title: CFO Tel: (425) 882-8080 Fax: (725) 936-7329 Email: amyhood@microsoft.com 27. Scripps Networks Trade Payables $481,687 9721 Sherrill Blvd Knoxville, TN 37932 Attn: Kenneth W. Love Title: CEO Tel: (865) 694-2700 Fax: (865) 985-7778 Email: klowe@scripssnetworks.com 28. CBS Inc. Trade Payables $448,963 51 W. 52nd Street New York, NY 10019 Attn: Robert Bakish Title: President & CEO Tel: (212) 975-4321 Fax: (212) 975-4321 Email: robert.bakish@vimn.com 29. Kontron America Trade Payables $439,300 9477 Waples Street San Diego, CA 92121 Attn: Hames Niederhauser Title: Chairman of the Management Board & CEO Tel: (888) 294-4558 Fax: (858) 677-0898 Email: hannes.niederhauser@kontron.com 30. Turkish Airlines Technic Inc. Trade Payables $435,794 Turk Hava Yollari Teknik A.S. Sabiha Gokcen Uluslararasi Havalimani No. 3 E Kapisi 34912 Pendik Istanbul, Turkey Attn: Mehmet Ilker Ayci Title: Chairman of the Board & The Executive Committee Tel: 90 216 585 98 00 Fax: 90 216 585 98 18 Email: mehmet.ilker@turkishtechnic.com GLOBAL EAGLE: Moody's Cuts PDR to D-PD on Chapter 11 Filing ----------------------------------------------------------- Moody's Investors Service downgraded Global Eagle Entertainment, Inc. probability of default rating to D-PD from Ca-PD. Moody's affirmed the company's Ca corporate family rating and the Caa2 senior secured facilities rating. The speculative grade liquidity rating remains at SGL-4. The outlook is stable. Its rating actions follow the company's July 22, 2020 announcement that it had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. As per the filing, the company's first lien lenders have agreed to purchase the company for $675 million. The impact on air travel from the COVID-19 pandemic, which Moody's considers a social risk, is a key driver of its rating action as the virus's impact on air-travel weakened Global Eagle's liquidity and ultimately lead to the company's Chapter 11 filing. Affirmations: Issuer: Global Eagle Entertainment, Inc. Corporate Family Rating, Affirmed Ca Senior Secured Bank Credit Facility, Affirmed Caa2 (LGD2) from (LGD3) Downgrades: Issuer: Global Eagle Entertainment, Inc. Probability of Default Rating, Downgraded to D-PD from Ca-PD Outlook Actions: Issuer: Global Eagle Entertainment, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE The downgrade of the PDR to D-PD reflects the company's bankruptcy filing. The Ca CFR reflects Moody's assessment of the expected family loss rate upon ultimate resolution of the default event. The Caa2 instrument rating on the first lien reflects Moody's assessment of the expected loss rate of that instrument. Subsequent to its actions, Moody's will withdraw the ratings due to Global Eagle's bankruptcy filing. The global response to the coronavirus outbreak has meant that regional and international air-travel have experienced extreme cuts in demand and capacity. The severity and length of the crisis means that despite strong cost reduction efforts, Global Eagle is unable to continue operating in the longer term under its existing capital structure. With headquarters in Los Angeles, California, Global Eagle Entertainment Inc. is a provider of connectivity and content to the worldwide travel industry. The company operates through two segments Connectivity and Media & Content. The company generated revenue of $657 million in 2019. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. HERTZ GLOBAL: Major Airports Fear Being Shortchanged in Payments ---------------------------------------------------------------- Law360 reports that over a dozen major airports expressed fears of being shortchanged in payments by Hertz Holdings, thus they objected to a cash reserve motion in The Hertz Co.'s Delaware Chapter 11 that they say could shortchange them on payments for car rental facility charges owed by Hertz since the COVID-19 pandemic nearly grounded the business. In an objection filed on June 16, 2020, fifteen airports across the country argued that court filings by Hertz suggest the company might attempt to limit its definition of airport "customer facility charges," treating as property of the estate some fees collected from customers that Hertz is expected to hold in trust and then pass along to the airports. About Hertz Corp. Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. The Company also operates a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court (Bankr. D. Del. Case No. 20-11218). The Hon. Mary F. Walrath is the presiding judge. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting 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://restructuring.primeclerk.com/hertz HERTZ GLOBAL: To Pay $650M to Halt Lender Fight Over Fleet ---------------------------------------------------------- Steven Church at Bloomberg News reports that Hertz Global Holdings Inc. agreed to pay lenders who indirectly control the company’s fleet of rental cars $650 million under a deal to suspend a bankruptcy court fight over the vehicles, according to court documents. Under the accord, Hertz will for the rest of the year halt its effort to cancel some of the nearly 500,000 leases on the cars the company rents out to consumers. A separate Hertz entity owns the vehicles, which the company leases back under a contract that gives lenders strong collateral rights. Hertz will likely pay less that it would normally owe the lenders, who the company blamed in part for pushing it into bankruptcy in May. Under the vehicle lease contract, Hertz must not only pay regular rent for each car, but also a fee to cover depreciation as the fleet ages and loses value over time. “It seems like this is a minimum payment for depreciation of vehicles in the fleet,” said Philip Brendel, a senior distressed-debt analyst with Bloomberg Intelligence. The company will ask U.S. Bankruptcy Judge Mary Walrath to approve the settlement at a court hearing scheduled for July 24. It filed its proposed resolution in Wilmington, Delaware just before midnight on Monday. A representative of Hertz did not return an email requesting comment. Since filing for bankruptcy in May, Hertz has been fighting with lenders who funded the purchase of its vehicle fleet and are repaid through the lease deal. The two sides have been at a standoff over how best to shrink the Hertz fleet and still maintain regular payments to the lenders. Read more: Hertz, creditors in $11 billion standoff over 494,000 used cars The deal ends a spat over how much Hertz must pay in 2020. In January, should there be no permanently resolution, the company can return to court and renew its request to cancel some of the leases. The cars are housed in an entity linked to Hertz’s asset-backed securities and leased to the rental giant. Normally, when a company with ABS files for bankruptcy, it must choose to confirm or reject the entire master lease tied to the debt. If it keeps the lease, it has to continue making payments on the vehicles as it offloads them piecemeal. If it walks away, all of the collateral is liquidated to pay back bondholders. Hertz had sought to selectively reject leases for around 30% of the vehicles governed by the master lease. In April, the Hertz owed $400 million to lenders. The company refused to pay that debt and was unable to reach an agreement to manage the growing obligation, so Hertz filed bankruptcy. At the time of the filing, Hertz said it owed creditors $135 million to cover the cars’ depreciation costs alone. The pandemic hurt the company in two ways: fewer people are traveling and renting its cars and the value of the vehicles plunged earlier this year, which increased the amount Hertz owed to lenders. Used vehicle prices have since rebounded, but Hertz is still doing a fraction of the business it normally would during summer travel season. About Hertz Corp. Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. The Company also operates a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court (Bankr. D. Del. Case No. 20-11218). The Hon. Mary F. Walrath is the presiding judge. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting 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://restructuring.primeclerk.com/hertz HITZ RESTAURANT: Why Force Majeure Should Be De Rigueur ------------------------------------------------------- Nelson Mullins Riley & Scarborough LLP wrote on Lexology an article "In re Hitz: Bankruptcy Case Shows Why Force Majeure should be De Rigueur in the Age of Coronavirus": Over the past three months, as COVID-19 threatened to spread to more and more Americans, nearly every state-imposed restrictions — or outright prohibitions — for restaurants providing dine-in services. Restaurants were suddenly empty, with only take-out options available to those businesses able to adapt to that model. Restaurant revenue was decimated. But on the first of the month, landlords came calling. In In re Hitz Restaurant Group, No. 20-B-05012, 2020 WL 2924523 (Bankr. N.D. Ill. June 3, 2020), the landlord, Kass Management Services, Inc. did indeed come calling. The landlord moved to enforce payment of post-petition rent under 11 U.S.C. § 365(d)(3) and modify the automatic stay under § 362(d)(1). In response, the restaurant argued that the force majeure provision of its lease released the restaurant from its post-petition payment obligations due to the government-mandated shutdown of its business. The court, in part, agreed. Specifically, the court found that, under Illinois law, a state-ordered suspension of dine-in services is considered a triggering event for restaurants with applicable force majeure provisions in their lease. In this case, the restaurant's lease provided: "Landlord and Tenant shall each be excused from performing its obligations or undertakings provided in this Lease, in the event, but only so long as the performance of any of its obligations are prevented or delayed, retarded or hindered by...laws, governmental action or inaction, orders of government...Lack of money shall not be grounds for Force Majeure." In Illinois, Executive Order 2020-7 took effect on March 16, 2020. That Order required "all businesses in the State of Illinois that offer food or beverages for on-premises consumption—including restaurants, bars, grocery stores, and food halls—[to] suspend service for and may not permit on-premises consumption." As both a "governmental action" and "order of government," the Executive Order triggered the force majeure clause and impeded the restaurant's ability to pay its post-petition rent. The Executive Order did not require the restaurant to shut down entirely, however, but only suspend its dine-in service. In fact, the Executive Order encouraged a continuation of service of "food and beverages so that they may be consumed off-premises . . . through means such as in-house delivery, third-party delivery, drive-through, and curbside pick-up." Because the restaurant still had the ability to generate business, the Court determined that it should not be wholly excused from performing its obligation. In its response to the landlord’s motion, the restaurant estimated that 75 percent of its square footage was rendered unusable during the time period covered by the Executive Order and its subsequent extensions. Taking that estimation as an admission until such time as the parties can convene for an evidentiary hearing, the court ruled that the force majeure provision excused the restaurant from paying 75 percent of its post-petition payment obligation. The restaurant was ordered to pay 25 percent rent and other obligations for the months following the effective date of the Executive Order until restrictions are lifted in whole or in part. This case exemplifies the impact that the COVID-19 crisis is having on restaurants and the importance of the language of a lease. Many restaurants do not have leases that contain force majeure provisions, or have leases where the force majeure provision does not include "governmental action" as a triggering event. These provisions are strictly construed, so the language of such clauses are critical. If you own a restaurant or represent a restaurant client, force majeure provisions are likely the strongest protection at this time to abate, or otherwise reduce, burdensome rent obligations due to state-mandated closures. And as COVID-19 appears to likely remain a critical issue for the foreseeable future, these provisions should be sought by all restaurants seeking to enter into leases. About Hitz Restaurant Group Hitz Restaurant Group sought protection under Chapter 11 of the US Bankruptcy Code (Bankr. N.D. Ill. Case No. 20-05012) on Feb. 24, 2020, listing under $1 million in both assets and liabilities. Richard N. Golding, Esq. at THE GOLDING LAW OFFICES, P.C., represents the Debtor. HOPEDALE MINING: Case Summary & 40 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Hopedale Mining LLC 86391 Mine Rd. Hopedale, OH 43976 Twenty-eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Hopedale Mining LLC (Lead Debtor) 20-12043 Rhino GP LLC 20-12044 Rhino Resource Partners LP 20-12045 Rhino Energy LLC 20-12046 McClane Canyon Mining LLC 20-12047 Rhino Northern Holdings LLC 20-12048 CAM-Kentucky Real Estate LLC 20-12049 Castle Valley Mining LLC 20-12050 Rhino Trucking LLC 20-12051 CAM-Ohio Real Estate LLC 20-12052 CAM-Colorado Real Estate LLC 20-12053 CAM-BB LLC 20-12054 Jewell Valley Mining LLC 20-12055 Taylorville Mining LLC 20-12056 Rhino Exploration LLC 20-12057 Leesville Land LLC 20-12058 CAM Coal Trading LLC 20-12059 Triad Roof Support Systems LLC 20-12060 CAM Aircraft LLC 20-12061 Springdale Land LLC 20-12062 Rhino Services LLC 20-12063 Pennyrile Energy LLC 20-12064 Rhino Eastern LLC 20-12065 Rhino Oilfield Services LLC 20-12066 Rockhouse Land LLC 20-12067 Rhino Technologies LLC 20-12068 CAM Mining LLC 20-12069 Rhino Coalfield Services LLC 20-12070 Business Description: The Debtors are diversified coal producers focused on coal and energy related assets and activities. The Debtors produce, process and sell high quality coal of various steam and metallurgical grades from multiple coal producing basins in the United States. The Debtors market steam coal primarily to electric utility companies as fuel for their steam powered generators. The Debtors have a geographically diverse asset base with coal reserves located in Central Appalachia, Northern Appalachia, the Illinois Basin and the Western Bituminous region. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Southern District of Ohio Judge: Hon. Guy R. Humphrey Debtors' Counsel: Douglas L. Lutz, Esq. A.J. Webb, Esq. Erin P. Severini, Esq. FROST BROWN TODD LLC 3300 Great American Tower 301 East Fourth Street Cincinnati, Ohio 45202 Tel: (513) 651-6800 Fax: (513) 651-6981 E-mail: dlutz@fbtlaw.com awebb@fbtlaw.com eseverini@fbtlaw.com Debtors' Restructuring Officer: Thomas L. Fairfield CAMBIO GROUP LLC Debtors' Financial Advisor: ENERGY VENTURES ANALYSIS, INC. Debtors' Bankruptcy Consultant: FTI CONSULTING, INC. 1001 17th Street Suite 1100 Denver, CO 80202 www.fticonsulting.com Tel: 303-689-8800 Tel: 303-689-8803 Attn: Alan Boyko Debtors' Claims & Noticing Agent: EPIQ CORPORATE RESTRUCTURING, LLC https://dm.epiq11.com/case/hopedale/info Hopedale Mining's Estimated Assets: $10 million to $50 million Hopedale Mining's Estimated Liabilities: $1 million to $10 million The petitions were signed by Richard A. Boone, president and chief executive officer. A full-text copy of Hopedale Mining's petition is available for free at PacerMonitor.com at: https://is.gd/2x9bpV Consolidated List of Debtors' 40 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Blue Ridge Bank, N.A. PPP Loan $10,000,000 17 W Main Street Luray, VA 22835 Contact: Brett Taxin Executive Vice President Tel: 773-266-1638 Fax: 540-743-5536 Email: btaxin@mybrb.com 2. Whayne Supply Company Trade Debt $4,898,611 1400 Cecil Avenue Louisville, KY 40211 Contact: Joseph Yoerg, CEO Tel: 606-864-2276 Fax: 502-423-2726 Email: karen_ferris@wayne.com; joseph_yoerg@wayne.com 3. Rockwood Casualty Trade Debt $678,094 Insurance Co 654 Main Street Rockwood, PA 15557 Contact: Ron Davidson, Vice President Tel: 814-926-5372 Fax: 814-926-2641 Email: ron.davidson@rockwoodcasualty.com 4. Joy Global Underground LLC Trade Debt $620,728 177 Thornhill Road Warrendale, PA 15086 Contact: Edward Doheny, II CEO Tel: 724-779-4500 Fax: 724-779-4509 Email: devlin.ciarrochi@joyglobal.com 5. Minova USA Inc. Trade Debt $523,602 150 Summer Court Georgetown, KY 40324 Contact: Taylor Ogata Tel: 502-863-6805 Email: taylor.ogata@minovaglobal.com 6. Consol Mining Company LLC Trade Debt $492,126 1000 Consol Energy Drive Canonburg, PA 15317 Contact: Anthony Drezewski, Director Land Resources Tel: 724-416-8266 Email: anthonydrezewski@consolenergy.com 7. Austin Sales LLC Trade Debt $490,268 1327 Lovers Gap Rd Vansant, VA 24656-8422 Contact: Virlo Stiltner Tel: 276-597-4449 Email: info@vadrillco.com 8. C & M Giant Tire LLC Trade Debt $456,383 980 W. New Circle Rd. Lexington, KY 40511 Contact: Bradley Scott Tel: 859-281-1320 Fax: 859-281-1337 Email: cindy@cmgianttire.com 9. Phillips Machine Service Inc. Trade Debt $455,221 367 George Street Beckley, WV 25801 Contact: Bruce Dickerson, CEO Tel: 304-255-0537 Email: brucedickerson@phillips machine.com 10. PricewaterhouseCooper LLP Trade Debt $341,270 One North Wacker Chicago, IL 60606 Contact: Jon Dillow Tel: 832-335-2505 Email: jon.dillow@pwc.com 11. Warwood Armature Repair Co Trade Debt $332,126 128 North 7th Street Wheeling, WV 26003-6981 Contact: Raymond Thalman President Tel: 304-277-2570 Fax: 304-277-2917 Email: cthalman@warwoodarmature.com 12. Logan Coal & Timber Trade Debt $298,133 63 Chestnut Rd Ste 3 Paoli, PA 19301 Contact: Ruffner Woody Tel: 304-542-7833 Email: hollygroveforestry@gmail.com 13. Custom Engineering Inc. Trade Debt $283,650 656 Hall Street Clay, KY 42404 Contact: Craig McCormick, President Tel: 270-664-6207 Fax: 270-664-2002 Email: cmcculloch@ceimining.com; smcculloch@ceimining.com 14. Brandeis Machinery & Supply Trade Debt $277,221 1801 Watterson Trail Louisville, KY 40299 Contact: Brian Logsdon Tel: 502-493-4273 Email: brian_logsdon@bramco.com 15. Industrial Supply Co. Trade Debt $265,150 2715 Bond St. Knoxville, TN 37917-5102 Contact: Jerry Hutson, President of Knoxville Tel: 865-522-1848 Email: industrialsupplyco@comcast.net 16. Bills Electronics Inc. Trade Debt $254,565 1900 Jerry W Hwy Wilkinson, WV 25653 Contact: Bill R. Browning Tel: 304-752-8667 Fax: 304-752-2320 Email: billselect@hotmail.com 17. David Stanley Consultants LLC Trade Debt $224,764 100 Village Drive Ste 200 Fairmont, WV 26554-7986 Contact: Jim Hayhurst Tel: 304-534-3871 Fax: 304-534-3917 Email: jhayhurst@dsc-llc.com 18. Cincinnati Mine Machinery Trade Debt $222,276 2950 Jonrose Ave Cincinnati, OH 45239 Contact: Lois Grothaus Tel: 513-728-4040 Fax: 513-728-4041 Email: lgrothhaus@cinmine.com 19. TSJ Construction LLC Trade Debt $216,852 260 North 700 East Cleveland, UT 84518 Contact: Tate Jensen Tel: 435-749-1910 Fax: 435-653-2237 Email: office@tsjconstruction.com 20. Bookcliff Sales Inc. Trade Debt $210,115 42 S Carbon Ave Price, UT 84501 Contact: Marc Shiner Tel: 435-637-5926 Fax: 435-637-9766 Email: marcbrookcliff@gmail.com 21. D. Deel Trucking, Inc. Trade Debt $200,865 1027 Burr Oak Road Haysi, VA 24256 Contact: Doug Deel Tel: 276-275-1028 Email: ddeelinc@hotmail.com 22. Parsleys General Tire Trade Debt $197,918 2006 N Main Street London, KY 40741 Contact: John Parsley President Tel: 606-864-2276 Fax: 606-864-2334 Email: parsleytire@yahoo.com 23. Eberhart Service Center Inc. Trade Debt $192,611 272 Old Steubenville Pike Cadiz, OH 43907 Contact: Richard Eberhart, Pres. Tel: 304-752-8667 Fax: 304-752-2320 Email: eberhartoffice@frontier.com 24. United Central Industrial Sup. Trade Debt $184,055 1241 Volunteer Parkway Suite 1000 Bristol, TN 37620 Contact: Darrell H. Cole President & CEO Tel: 423-573-7300 Fax: 423-573-7297 Email: ar@unitedcentral.net 25. White Armature Works Inc. Trade Debt $174,893 1150 Huff Creek Hwy Mallory, WV 25634 Contact: Shelley Frazier Tel: 304-583-9681 Fax: 304-583-2972 Email: sfrazier@whitearm.com 26. C B Industries Inc. Trade Debt $172,708 997 Cowpen Road Pikeville, KY 41501 Contact: James Brown Tel: 606-432-4984 Fax: 606-432-4948 Email: cbindustries@hotmail.com 27. Appalachian Power Company Trade Debt $169,647 500 Ross St 154-0470 Pittsburgh, PA 15262-0001 Contact: Tracy Hertig Tel: 304-327-2113 Email: tnhertig@aep.com 28. Xpress Service & Sales Inc. Trade Debt $165,020 12744 Kingston Pike Suite 202 Knoxville, TN 37934 Contact: Melinda Nixon Tel: 276-395-7560 Fax: 276-395-5357 Email: mnixon@expresscable.com 29. Jones Day Trade Debt $161,635 250 Versy Street New York, NY 10281-1047 Contact: Randi Lesnick, Partner Tel: 212-326-3452 Email: rclesnick@jones.com 30. Savage Services Corporation Trade Debt $157,815 901 W. Legacy Center Way Midvale, UT 84047 Contact: Becky Hughes, AR Tel: 801-944-6655 Email: beckyh@savageservices.com 31. Pauls Fan Company Trade Debt $154,556 2738 Home Creek Rd Grundy, VA 26414 Contact: Samantha Charles, AR Tel: 276-530-7311 Fax: 276-530-7315 Email: samantha@paulsfan.com 32. Tug Valley Service & Supply, LLC Trade Debt $150,967 333 Route 52 PO Box 214 Kermit, WV 25674 Contact: Mikey Blackburn Tel: 304-393-3550 Email: mickeyblackburn@tugvalleyservice.com 33. Direct Energy Business, LLC Trade Debt $146,777 1001 Liberty Avenue, Suite 1200 Pittsburgh, PA 15222 Contact: Derrick Maschoff, Customer Relations Tel: 888-925-9115 Email: derrick.maschoff@directenergy.com 34. Jennmar Corporation Trade Debt $145,025 258 Kappa Drive Pittsburgh, PA 15238 Contact: James Pfeifer General Counsel Tel: 412-963-9071 Fax: 412-963-8099 Email: iradion@jennmar.com; ahruska@jennmar.com 35. Highland Machinery Corp. Trade Debt $142,451 40 Lamplighter St. Oak Hill, WV 25901 Contact: Bill Sullivan, President Tel: 304-465-3295 Fax: 304-465-8576 Email: contact@hmcwv.com 36. Warco Sales Inc. Trade Debt $137,905 128 North 7th Street Wheeling, WV 26003-6981 Contact: Chad Thalman Tel: 304-277-2550 Fax: 304-277-1383 Email: cthalman@warwoodarmature.com 37. Young Conaway Stargatt & Trade Debt $135,575 Taylor, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Contact: James Yoch, Partner Tel: 302-576-3584 Fax: 302-576-3744 Email: jyoch@ycst.com 38. Genco Mine Service Trade Debt $128,248 630 N 400 E Huntington, UT 84528 Contact: Dave Sebring Tel: 435-687-2464 Fax: 435-687-9256 Email: dave@gencomineservice.com 39. Chemical Sales & Consulting Trade Debt $124,971 403 Cedar Hills Drive Pikeville, KY 41501-8706 Contact: Randy Chapman Tel: 606-835-4666 Email: chemicalsandconsulting@yahoo.com 40. R&M Engineering Consultants LLC Trade Debt $121,226 5280 Commerce Drive E130 Murray, UT 84107 Contact: Nyla Miller Office Manager Tel: 801-263-3419 Email: nylam@rmstructural.com HOWARD HUGHES: Fitch Assigns 'BB' IDR, Outlook Negative ------------------------------------------------------- Fitch Ratings has assigned a first-time Issuer Default Rating of 'BB' to Howard Hughes Corporation. The rating actions include the assignment of a 'BB'/'RR4' rating to the company's senior unsecured debt and a 'BB+'/'RR1' rating to the company's senior secured debt, a one notch uplift. The Rating Outlook is Negative. The rating reflects HHC's strong portfolio asset quality, primarily located in, and around strategic master planned communities in select Sunbelt markets in addition to the mid-Atlantic and Hawaii. The ratings also consider the company's strategic land portfolio and development capabilities and track record, which should increase its portfolio mix of recurring NOI from contractual rents. HHC has not elected REIT status and does not pay a common dividend, allowing for greater cash retention and benefiting its financial flexibility, all else equal. High leverage and exposure to less recurring NOI from asset sales and development execution risk are factors that balance these rating positives. HHC has an active development program that includes speculative projects. The company mitigates development execution risk by emphasizing projects within its master planned communities and pre-funding projects. Fitch expects HHC's leverage to increase to 14x during 2020, driven by lower NOI at temporarily closed properties, volatile condo sales, and extended timing for non-core dispositions. Fitch anticipates leverage dropping to levels consistent with the 'BB' rating during the forecast period as rent collection and income improves at select retail and hotel assets and developments stabilize. The Negative Outlook reflects the near-term challenges and uncertainty around the recovery trajectory given the impact from the coronavirus pandemic. KEY RATING DRIVERS Key Assets in Attractive Markets: HHC owns strategic assets positions in select Sunbelt and mid-Atlantic markets, which benefit from migration and job growth but also face lower physical and zoning barriers to entry. Through its operating, Master Planned Communities, and development segments, the company is able to plan and grow its communities over multi-year periods while increasing its base of recurring income. The company's MPCs total over 80,000 acres with 10,000 acres remaining for sale. The vast majority of its operating assets are located with its MPCs. The portfolio is adequately diversified by tenant, limiting credit exposure. The company's April rent collection was approximately 44% for retail and approximately 95% for both office and multifamily. Roughly a third of the operating portfolio NOI comes from Retail/Lodging/Other, which was more heavily impacted by closures due to the coronavirus pandemic and will likely be slow to recover in uneven re-opening mandates. The majority of the operating NOI comes from Office/Multifamily, which should be relatively more stable, but will likely see some impact from the weak economy. Land and Condo Development Volatility: Fitch views HHC's rental income risk profile as below average relative to its equity REIT peers, generally consistent with high speculative grade category. The company generates approximately 47% of NOI from contractual rents from its operating portfolio properties, including office, multifamily, retail and, to a lesser extent, hotels located in and adjacent to its master planned communities. The company's development-for-sale segments provide incremental cash flow but increased volatility. Fitch anticipates declines in earnings for these segments in fiscal 2020-fiscal 2021. Fitch assumes modest declines of 5%-15% in revenue growth in MPC revenues in 2020-2021, which is generally tied to homebuilder sales. Condo sales at Ward Village in Honolulu are volatile and depend on the timing of deliveries and closing contracts. The company contracted to sell 239 condos in 1Q20, which are expected to close in subsequent quarters as towers under construction are completed in 2021 and beyond. Given the uncertainty around travel to Hawaii, Fitch has modelled minimal revenues for the segment this year, rebounding in 2021 to 80% of 2018-2019 levels. High Income-Based Leverage: Fitch expects net leverage to increase to 14x in 2020, up from 11x in 2019. NOI will be negatively impacted in 2020 by closures at the company's Hospitality and Seaport assets, as well as timing of condo sales. As revenues recover and development assets deliver, Fitch expects leverage to decline to around mid-7x over the forecast period to 2023. HHC's net debt to recurring operating EBITDA leverage is high relative to low investment grade rated equity REIT peers, partly due to the company's development focus and related non-income producing assets. Moreover, the company generates a high percentage of income from non-recurring asset sales within its master planned community and strategic developments segments, which Fitch views as more volatile than contractual rental income. Fitch also considers HHC's net debt/capital, a supplemental metric commonly used to analyze homebuilders, which was 50% for the quarter ended March 31, 2020 and 55% for the full year ended Dec. 31, 2019. Fitch expects this metric to improve to the mid 40% range during the forecast period through 2023. Prefunded Development Mitigates Risk: HHC prefunds all development with non-recourse secured debt. The company does not begin construction until all cash needed is on the balance sheet. Fitch views this strategy as mitigating unfunded development pipeline risk. As of March. 31, 2020, HHC's projects under construction had a total estimated cost of $4.7 billion with $1.5 billion remaining to be spent, including $1.1 billion in committed debt to be drawn. Unfunded development cost to complete represents approximately 5% of undepreciated assets. Fitch generally views development cost to complete as a percentage of undepreciated assets over 10% as a concern. The company develops within its core MPCs which Fitch views positively. The Seaport District development project in NYC has been affected by government restrictions related to the coronavirus pandemic. Public access areas have reopened during the day, but many business and venues remain closed. Although construction has been allowed to restart in the latest re-opening phase, new guidelines will likely delay the pace. The segment generated negative NOI in 2019 and 1Q20 and the path to recovery remains unclear. Fitch assumptions provide for positive NOI generation by 2022. Adequate Near-Term Liquidity: The company's ample near-term liquidity is primarily due approximately $1 billion readily available cash as of March 31, 2020 and remaining availability of $17.5 million on the company's revolving credit facility. The company enhanced its liquidity though an approximately $600 million equity issuance during the first quarter. The company has $1.5 billion remaining to be spent on projects under construction as of March 31, 2020, of which it has $1.1 billion in committed debt to be drawn. Speculative Grade Capital Access: The company has demonstrated capital access to the unsecured bond market with three issuances totaling $1.75 billion since the company's inception. The company has $2 billion in non-core assets it plans to redeploy into investment opportunities. Given the disruption to capital markets, Fitch's model provides for $1.5 billion of dispositions over the forecast period to fund spending needs and debt repayment. Strategic Management Shift: Since the management shift in 2019, HHC has established a transformation plan. The plan details reducing $45 million-$50 million annually in G&A expenses, disposing of $2 billion of non-core assets, and refining development focus to only core MPCs. Fitch believes the above transformation plan will take over 12 months to execute. DERIVATION SUMMARY Although HHC has not elected REIT status, Fitch views select U.S. equity REITs and, to a lesser extent, U.S. homebuilders as comparable peers, notwithstanding the company's differentiated business model that includes ownership of multiple commercial property types in and around select master planned communities, as well as its high exposure to sales income from developed lots and merchant developments. The company generates approximately half of its NOI from contractual rents from its operating portfolio properties, including office, multifamily, retail and, to a lesser extent, hotels located in and adjacent to its master planned communities. HHC's portfolio is more diversified by property type than higher-rated, sunbelt focused multifamily REIT peers Camden Property Trust (A-/Stable) and Mid-America Apartment Communities (BBB+/Stable); however, the company operates at considerably higher net debt/recurring operating EBITDA leverage and reliance on non-contractual residential land sales. HHC's portfolio is more diversified by geography and property type than Mid-Atlantic office and multifamily REIT peer Mack-Cali Realty Corporation (BB-/Negative), including greater exposure to select Sunbelt markets, which benefit from migration and job growth but also face lower physical and zoning barriers to entry. Fitch considers debt to capitalization as a secondary leverage measure given HHC's high level of non-income producing land and homebuilding industry exposure. Fitch expects the company will operate with a debt capitalization ratio of 40%-50% over the forecast period, which is which is moderately above the 35% to 40% range for homebuilding peer Toll Brothers, Inc. (BBB-/Stable). KEY ASSUMPTIONS -- Overall SSNOI declines of 10% in 2020 driven by closed assets, rebounds 8% in 2021 and grows 4% per year in 2022-2023. -- Development deliveries of operating and Seaport assets totaling $1.6 billion at 7.4% over the forecast period. Seaport District turns NOI positive in 2022 as developments stabilize. -- Modest revenue declines in the MPC segment in 2020-2021, predominantly tied to assumptions of homebuilder sales and low single digit increases through 2022-2023. Minimal condo sales in 2020, rebounding in 2021 to 80% of 2018-2019 levels and increasing 7% per year in 2022-2023. -- $1.5 billion of dispositions at 6% over the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- REIT leverage (net debt to recurring operating EBITDA) sustaining below 7x, assuming a similar or modestly greater percentage of NOI from contractual rents. -- REIT fixed charge coverage sustaining above 2.5x. -- Growth in HHC's operating assets resulting in NOI from recurring contractual rental income comprising 70% of net operating income. -- Growth in unencumbered assets and/or UA/UD coverage improving to 1.75x, or greater. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch expectations of net leverage (net debt to recurring operating EBITDA) sustaining above 9x. -- Expectations of REIT fixed charge coverage sustaining below 1.5x. -- Expectations of deteriorating access to capital markets. -- Execution missteps related to HHC's transformation plan in key areas, such as reducing corporate overhead, non-core asset sales, and growing the contribution from recurring operating portfolio rents. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Fitch estimates HHC's base case liquidity coverage at 1.2x through YE 2021. This figure improves to 1.4x assuming 80% secured refinancing. The company's sources include an estimated approximately $156 million in retained cash flow, $17.5 million availability on its $700 million credit facility, approximately $940 million cash on hand, and approximately $1 billion committed debt to be drawn on existing development projects. Fitch defines liquidity coverage as sources of liquidity divided by uses of liquidity. Sources include unrestricted cash, availability under unsecured revolving credit facilities and retained cash flows from operating activities after dividends. Uses include pro rata debt maturities, expected recurring capex and forecast (re)development costs. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. IMERIS TALC: Johnson & Johnson Says Chapter 11 Plan Lacks Info -------------------------------------------------------------- Law360 reports that Johnson & Johnson asked the Delaware bankruptcy judge to reject the Chapter 11 plan disclosure of Imerys Talc America due to lack of information on how the cash in the talc injury trust fund the plan would establish will be distributed. In a motion filed on June 16, 2020, J&J argued that Imerys' proposed Chapter 11 disclosure contains inaccurate and incomplete information on J&J's role in the case and no information on what talc injury claimants will recover or what the claim procedure will look like. A copy of the full-report is available at https://www.law360.com/lifesciences/articles/1283875/j-j-says-imerys-ch-11-plan-lacks-info About Imerys Talc America Imerys Talc and its subsidiaries --https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors estimated $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent. IMH FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: IMH Financial Corporation 7001 N. Scottsdale Road Suite 2050 Phoenix, AZ 85253 Business Description: IMH Financial Corporation is a real estate investment holding company. The Company's real estate investments are located primarily in the southwestern part of the United States, and are held by wholly-owned or indirectly wholly-owned subsidiaries, none of which are debtors in this proceeding. The Debtor's most significant real estate assets include: (a) a luxury hotel located in Sonoma, California, and (b) thousands of acres of undeveloped real property and related water rights located outside of Albuquerque, New Mexico. Visit https://www.imhfc.com for more information. Chapter 11 Petition Date: July 23, 2020 Court: United States Bankruptcy Court District of Delaware Case No.: 20-11858 Judge: Hon. Brendan Linehan Shannon Debtor's Bankruptcy Counsel: William P. Bowden, Esq. Gregory A. Taylor, Esq. Benjamin W. Keenan, Esq. Stacy L. Newman, Esq. Katharina Earle, Esq. ASHBY & GEDDES P.A. 500 Delaware Avenue P.O. Box 1150 Wilmington, DE 19899 Tel: (302) 654-1888 Fax: (302) 654-2067 Email: WBowden@ashbygeddes.com GTaylor@ashbygeddes.com BKeenan@ashbygeddes.com SNewman@ashbygeddes.com kearle@ashbygeddes.com - and - Christopher H. Bayley, Esq. Steven D. Jerome, Esq. Benjamin W. Reeves, Esq. Jill H. Perrella, Esq. James G. Florentine, Esq. Molly J. Kjartanson, Esq. SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren Street Suite 1900 Phoenix, AZ 85004-2202 Tel: (602) 382-6000 Fax: (602) 382-6070 Email: cbayley@swlaw.com sjerome@swlaw.com breeves@swlaw.com jperrella@swlaw.com jflorentine@swlaw.com mkjartanson@swlaw.com Debtor's Claims/Noticing Agent: DONLIN, RECANO & CO., INC. https://www.donlinrecano.com/Clients/imh/Dockets Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petition was signed by Chadwick S. Parson, chairman and CEO. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/MYdsXu List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. MidFirst Bank Bank Loan $37,000,000 1875 Century Park East Suite 1400 Los Angeles, CA 90067 George Sacco Tel: (310) 270-9500 Email: gsacco@1cbank.com 2. Squire Patton Boggs Professional $97,329 (US) LLP Services 1 E. Washington Street, Suite 2700 Phoenix, AZ 85004 Deanna Albert Tel: (602) 528-4000 Email: deanna.albert@squirepb.com 3. Gibson, Dunn & Crutcher LLP Professional $32,258 333 South Grand Services Los Angeles, CA 90071 Jeffrey C. Krause Tel: (213) 229-7000 Email: jkrause@gibsondunn.com 4. Delaware Secretary of State Corporate & $20,000 P.O Box 5509, Binghamton, NY LLC Taxes 13902-5509 Tel: (302) 577-8161 5. Holland & Knight Professional $19,164 P.O. Box 864084 Services Orlando, FL 32886-4180 Robert J. Gramming Tel: (813) 227-6515 Email: robert.gramming@hklaw.com 6. MidFirst Bank Credit Card $17,945 101 Cook Street Denver, CO 80206 Kelsey Sahli Tel: (303) 376-5479 Email: kelsey.sahli@midfirst.com 7. Ulmer Berne LLP Professional $8,802 Skylight Office Tower Services 1660 West 2nd Street, Suite 1100, Cleveland, OH 44113-1448 Kelly L. Jones Tel: (216) 583-7000 Email: kljones@ulmer.com 8. Computershare Inc. Dividends $7,733 480 Washington Blvd., 26th Floor, Jersey City, NJ 07310 Constance Adams Tel: (201) 680-5258 Email: constance.adams@computershare.com 9. Greenberg Traurig LLP Professional $3,932 1840 Century Park East, Suite 1900 Services Los Angeles, CA 90067 Tash H. Barksdale Tel: (602) 445-8130 Email: barksdaleet@gtlaw.com 10. ITH Partners, LLC Consulting $3,548 7117 North 68th Place, Paradise Valley, AZ 85253, Lawrence D. Bain Tel: (602) 999-2231 Email: ldb@ithpartners.com 11. Sutin, Thayer & Browne Professional $3,303 6100 Uptown Blvd., NE Suite Services 400 Albuquerque, NM 87110, P.O. Box 1945 Albuquerque, NM 87103, Tel: (505) 883-2500 12. Iron Mountain Trade Debt $1,142 1101 Enterprise Dr. Royersford, PA 19468 John Sargent, Tel: (610) 495-4946 Email: john.sargent@ironmountain.com 13. ACA Compliance Legal/Tax $542 Services Inc. Services P.O. Box 573 Rock Hill, SC 29731 Tel: (844) 234-0852 www.cimplxaca.com 14. Phoenix NAP Trade Debt $466 P.O Box 51514 Los Angeles, CA, 90051-5814 Mike Berry Tel: (480) 646-5417 Email: mikeb@phoenixnap.com 15. Neustar Trade Debt $135 Bank of America P.O. Box 277833, Atlanta, GA 30384-7833 Patrick Kilkelly Tel: (502) 653-3864 Email: patrick.kilkelly@neustarbiz.com 16. Modrall Sperling Professional $127 P.O. Box 2168 Services Albuquerque, NM, 87103-2168 Douglas R. Vadnais Tel: (505) 848-1800, Email: doug.vardnais@modrall.com 17. Cisco Credit Inc. Trade Debt $50 2815 S. Alma School Rd. Suite 1009, Mesa, AZ 85210 Terri Bottalico Tel: (800) 804-0043 E13 Email: terri@ciscocredit.com 18. ProCopy Office Trade Debt $47 Solutions, Inc. 1801 W. Olympic Blvd., File 2317, Pasadena, CA 91199-2317 Matt Singer Tel: (602) 776-2679 19. Veratad Technologies, Inc. Trade Debt $35 500 Frank W Burr Blvd., Suite 1400, Teaneck, NJ 07666, Tom Canfarotta Tel: (201) 510-6000 Email: tcanfarotta@veratad.com 20. Staples Contract & Commercial Trade Debt $32 777 S. Sable Blvd. Aurora, CO 80012 Anthony Manilla Tel: (807) 826 7755 Email: anthony.manilla@staples.com J. HILBURN: Successfully Exits 2 Big Real Estate Leases ------------------------------------------------------- Candace Carlisle, writing for Costar, reports that Dallas-based retailer and men's luxury custom clothier J. Hilburn successfully negotiated two big real estate leases. J. Hilburn, which filed for Chapter 11 bankruptcy protection because of the pandemic, has negotiated its way out of two big real estate leases and plans to emerge from the process by the end of the month with a new ownership group. About J. Hilburn J. Hilburn, Inc. -- https://www.jhilburn.com/ -- sells custom-made men's clothing. The Company offers shirts, suits, trousers, pants, sweaters, outerwears, and accessories. On April 30, 2020, J. Hilburn, Inc., and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 20-31308). The petition was signed by David DeFeo, chief executive officer. Diamondback was estimated to have $1 million to $10 million in assets and $10 million to $50 million liabilities. The Debtors tapped Patrick J. Neligan, Jr., Esq. of Neligan LLP as counsel. J.JILL INC: Nears Possible Bankruptcy, Enters Forbearance --------------------------------------------------------- Samantha McDonald, writing for Footwear News, reports that womenswear chain J. Jill Inc. is a step close in possible bankruptcy filing. The struggling womenswear chain has entered into two forbearance agreements after falling out of compliance with certain covenants under its asset-based lending and term loan credit facilities. As part of the respective deals, its lenders agreed not to exercise any rights and remedies against the company until July 16, 2020. The parties later amended the Company's existing Forbearance Agreements, dated as of June 15, 2020 to extend the forbearance period until July 30, 2020, providing additional time for J.Jill and its lenders to complete negotiations. The forbearance period has been extended until July 30, 2020. So long as it remains compliant with the terms of those agreements, J.Jill has been granted a month to explore financial options as it grapples with cash flow challenges that have accelerated amid the coronavirus pandemic. "These forbearance agreements will allow us to continue to work with our lenders on a course of action that will resolve the company's noncompliance and position the company to realize its long-term plans," interim CEO Jim Scully said in a statement. "We appreciate the patience and support of our associates, vendors and suppliers." Notice of the agreements were made public in a series of filings with the Securities and Exchange Commission on Monday, when J.Jill reiterated that it faced "substantial doubt" about its ability to continue as a going concern. In accordance with government-mandated lockdowns starting mid-March, the company shuttered all of its stores across the country. Currently, about 85% of its total brick-and-mortar fleet is back in business as state and local authorities gradually ease restrictions on nonessential business, and J.Jill expects to continue reopening outposts in a phased approach. For the fiscal year ended Feb. 1, the Massachusetts-based retailer logged sales of $691.3 million, compared with the prior year's $706.2 million. It also recorded a net loss of $128.5 million, or a loss of $2.94 per diluted share, versus the 2019 fiscal year's profits of $30.5 million, or earnings of 69 cents a share. It ended May with about approximately $60 million at hand. To reduce expenses, J.Jill has drawn down $33 million under its revolving credit facility, as well as furloughed store associates, reduced the base salaries of its executive officers and foregone its board of directors’ fees. "The company has strong liquidity to meet its financial obligations reflected by our cash balances at the end of May and appreciates the partnership of its vendors and suppliers," added EVP and CFO Mark Webb About J. Jill Inc. J.Jill, Inc. operates as an Omni channel retailer women's apparel under the J.Jill brand name in the United States. The company offers knit and woven tops, bottoms, and dresses, as well as sweaters and outerwear; and complementary footwear and accessories, including scarves, jewelry, and hosiery for misses, petites, and women. Its customers comprise women in 40-65 age range. The company markets its products through retail stores, Website, and catalogs. J.Jill, Inc. is headquartered in Quincy, Massachusetts. LAKELAND INTERMEDIATE: Case Summary & 50 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Lakeland Intermediate, LLC 218 Water Street West Suite 400 Charlottesville, VA 22902 Business Description: The Debtors, together with their non- Debtor affiliates, provide full-service educational travel and experiential learning programs domestically and internationally for students from K12 to graduate level. The Debtors are the United States' largest accredited travel company, providing organized educational travel and other experiential learning programs for more than 550,000 students in 2019. Chapter 11 Petition Date: July 22, 2020 Case No.: 20-11685 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. James L. Garrity, Jr. Debtor's Counsel: Nicole L. Greenblatt, Esq. KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 Email: nicole.greenblatt@kirkland.com Debtor's Financial Advisor: KPMG LLP Debtor's Investment Banker: HOULIHAN LOKEY CAPITAL, INC. Debtor's Notice & Claims Agent: BANKRUPTCY MANAGEMENT SOLUTIONS dba STRETTO https://cases.stretto.com/WorldStrides Debtor's Communications Consultant & Advisor: DANIEL J. EDELMAN HOLDINGS, INC. Estimated Assets (on a consolidated basis): $1 billion to $10 billion Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petition was signed by Kellie Goldstein, chief financial officer. Lakeland Tours, LLC and its affiliated debtors and debtor Lakeland Intermediate, LLC seek entry of an order, (a) amending the Court's Original Joint Administration Order, which directed procedural consolidation and joint administration of the Original Debtors' chapter 11 cases under Case No. 20-11647 (JLG) to include and incorporate the Lakeland Intermediate bankruptcy case. A copy of the petition containing, among other items, a list of the Debtors' consolidated list of 50 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/RyOEt8 MAD MEN MARKETING: 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 Mad Men Marketing, LLC, according to court dockets. About Mad Men Marketing Mad Men Marketing, LLC, is a creative advertising agency specializing in digital media, creative design and web development. Mad Men Marketing sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-01889) on June 18, 2020. At the time of the filing, the Debtor disclosed $234,594 in assets and $1,174,970 in liabilities. Judge Cynthia C. Jackson oversees the case. The Debtor has tapped The Law Offices of Jason A. Burgess, LLC, as its legal counsel. MANIRRAH LLC: Gets Approval to Hire Selwyn D. Whitehead as Counsel ------------------------------------------------------------------ Manirrah, LLC received approval from the U.S. Bankruptcy Court for the Northern District of California to employ the Law Offices of Selwyn D. Whitehead as its legal counsel. The firm's services will include: (a) advising Debtor of its rights, powers and duties under the Bankruptcy Code; (b) taking all actions necessary to protect and preserve Debtor's bankruptcy estate; (c) preparing legal papers; (d) assisting Debtor in the negotiation and documentation of financing agreements, debt and cash collateral orders, and related transactions; (e) reviewing the nature and validity of any liens asserted against Debtor's property and advising Debtor concerning the enforceability of such liens; (f) advising Debtor regarding (i) its ability to initiate actions to collect and recover property; (ii) any potential property dispositions; and (iii) assumption, assignment, rejection, lease restructuring and recharacterization of executory contracts and unexpired leases; and (g) negotiating with creditors concerning a plan of reorganization, preparing the plan, and taking the steps necessary to confirm and implement the plan. The firm will be paid at hourly rates as follows: Selwyn Whitehead, Esq. $650 Paralegal $150 Bookkeeper/Accountant $120 Selwyn D. Whitehead received a down payment of $5,284, plus $1,717 for the filing fee. The retainer fee is $15,283. The firm does not have any connection with Debtor, its creditors or any other party-in-interest, according to court filings. The firm can be reached through: Selwyn D. Whitehead, Esq. Law Offices of Selwyn D. Whitehead 4650 Scotia Avenue Oakland, CA 94605 Telephone: (510) 632-7444 Facsimile: (510) 856-5180 Email: selwynwhitehead@yahoo.com About of Manirrah LLC Manirrah, LLC is a company in Lafayette, Calif., which is primarily engaged in renting and leasing real estate properties. On June 24, 2020, Manirrah sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-41076). The petition was signed by Stephanie J. Harriman, Debtor's manager. At the time of the filing, Debtor had estimated assets of between $1 million and $10 million and estimated liabilities of the same range. Judge William J. Lafferty, III oversees the case. The Law Offices of Selwyn D. Whitehead is Debtor's legal counsel. MAVERICK RESTORATION: Hires Robert A. Whitley as Special Counsel ---------------------------------------------------------------- Maverick Restoration & Waterproofing, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Robert A. Whitley, Attorney at Law, P.L.L.C. as special counsel. The firm will represent Debtor in the collection of monies owed by American Elite Construction and in sending notices and filing lien claim pursuant to applicable provisions of Texas Property Code. The hourly rates charged by the firm are as follows: Robert Whitley, Esq. $275 Paralegal $75 Robert Whitley, Esq., the firm's attorney who will be providing the services, will begin work for Debtor when his firm receives $500 as an advance deposit. Mr. Whitley and his firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Robert A. Whitley, Esq. Robert A. Whitley, Attorney at Law, P.L.L.C. 12621 Featherwood Drive, Suite 282 Houston, TX 77034 Telephone: (281) 741-5225 Email: robert@whitlegal.com About Maverick Restoration & Waterproofing Maverick Restoration & Waterproofing, LLC, a restoration and waterproofing contractor based in Santa Fe, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-32528) on May 7, 2020, listing under $1 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. Judge Jeffrey P. Norman oversees the case. Debtor has tapped Corral Tran Singh, LLP as its legal counsel. MIDWEST TRAINING: Seeks to Hire Lela Steriovsky as Accountant ------------------------------------------------------------- Midwest Training and Ice Center, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Indiana to employ Lela Steriovsky CPA, P.C. as its accountant. Steriovsky will assist Debtor with certain accounting and tax-related matters and will provide routine bookkeeping, payroll and other financial support services. Additional services that the firm will render may also include the preparation of tax returns and other financial filings. Debtor has agreed to pay Steriovsky a flat fee, which includes a $1,150 quarterly payroll processing fee and a $500 quarterly fee for routine accounting and tax matters. The firm received a $1,150 retainer. Steriovsky is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Lela Steriovsky, CPA Lela Steriovsky CPA, P.C. 9111 Broadway, Suite G Merrillville, IN 46410 Telephone: (219) 769-7289 About Midwest Training and Ice Center Midwest Training and Ice Center, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ind. Case No. 20-20990) on May 13, 2020, listing under $1 million in both assets and liabilities. Judge James R. Ahler oversees the case. Debtor has tapped Hodges and Davis, P.C. as its legal counsel, and Lela Steriovsky, CPA of Lela Steriovsky CPA, P.C. as its accountant. NEIMAN MARCUS: Bankruptcy Doesn't Spell End for Retailers --------------------------------------------------------- Kati Chitrakorn, writing for Vogue Business, reports that filing for bankruptcy protection is not the end for retailers. Neiman Marcus is one in a spate of retailers leaning on Chapter 11 bankruptcy protection to survive Covid-19. Bankruptcy documents reveal that Neiman Marcus has been leaning heavily on outside consultants and an online marketing firm as it has navigated heavy debt and the devastating closures of its stores during coronavirus. The documents also reveal inner details of the company's workings. Chanel, Gucci and Dolce & Gabbana, its top fashion-label creditors, appear to be top-selling brands. Monument Consulting is the biggest creditor, owed $10 million, followed by Rakuten, owed $7.8 million. All of Neiman Marcus's creditors will have an opportunity to address the company and the US bankruptcy court at a creditors’ hearing on 16 June 2020. Neiman Marcus is part of a spate of bankruptcy filings among US companies both heavily indebted and under pressure from forced coronavirus closings, which have laid bare internal weaknesses. Retailers J.Crew and JCPenney and smaller labels True Religion and John Varvatos have also filed for bankruptcy protection. Retail futurist Doug Stephens expects more filings will follow in the coming months as retailers run out of ways to negotiate leases and other debts. "What we will see is a degree of panic in the market. Creditors are going to become very nervous when this becomes a case of more retailers falling into the abyss," he says. The problems facing traditional retailers didn't start with Covid-19; rather, those that were facing "significant challenges" before the pandemic are "the ones that are filing for bankruptcy first", says James Van Horn, a partner at the law firm Barnes & Thornburg and a specialist in retail bankruptcy. But the process isn't a death sentence, and some companies do emerge with fewer stores and less debt, though insolvency experts say it’s becoming harder and harder. Neiman Marcus hopes to exit bankruptcy in the autumn with a $750 million deal from creditors that provided its initial bankruptcy loan. It does not intend to conduct liquidation sales or mass closures among its 40-plus stores. It has also shuffled luxury e-commerce platform Mytheresa to an independent operation, beyond the reach of creditors. "Luxury has always been about interpersonal relationships and we give our brand partners unique access to our loyal luxury customers like no one else can," Geoffroy van Raemdonck, chairman and chief executive of the Neiman Marcus Group, told Vogue Business by email. Unlike European insolvency laws, where a vast majority of cases tend to end in a company's liquidation rather than fresh start, Chapter 11 in the US has proved an important tool for companies seeking to survive the crisis, offering a well-trodden path to free themselves of large costs or obsolete business models. US labels like Michael Kors and Tommy Hilfiger showcased its strength, using it to turn around stricken businesses in 1993 and 1977, respectively. When a company files for Chapter 11 protection, it normally results in one of three outcomes: reorganisation (J.Crew), a conversion to Chapter 7 bankruptcy, otherwise known as liquidation (Sonia Rykiel) or a potential sale (Barneys and JCPenney). Most Chapter 11 cases aim to confirm a reorganisation plan, although that may not always be possible. Stephens describes it as “an opportunity to wipe the slate clean”. Once a company files for bankruptcy, the clock is ticking on its effort to win approval of the bankruptcy court to stay alive. "In Neiman Marcus's case, a majority of creditors have agreed to the plan. The more of your creditors you have onboard, there's a higher likelihood you will emerge from bankruptcy successfully," says Moody's vice president Christina Boni. Financially distressed companies have increasingly used bankruptcy as the preferred method to sell significant assets or entire businesses, as it carries numerous benefits. For one, bankruptcy sales generally enable buyers to obtain assets at more favourable prices than they would pay if the sale was completed outside of bankruptcy. Marquee Brands had previously acquired the intellectual property of BCBGMaxAzria, BCBGeneration and Hervé Léger for $108 million in 2017. It partnered with Centric Brands, which owns labels like Hudson and Zac Posen, to produce apparel for these brands and to handle retail and e-commerce. When Centric filed for bankruptcy in May, Marquee took back the licence for the BCBG Group to focus on e-commerce and wholesale. Turnarounds like these require funding, which normally comes in the form of debtor-in-possession (DIP) loans from a retailer's existing lenders. Neiman Marcus, for example, was already in negotiations with lenders weeks ahead of its filing, having arranged $675 million of DIP funding to aid operations. "We expect [Neiman Marcus] to be able to emerge from the crisis and revive its online sales. We are collaborating ardently with them to surface new opportunities and support its growth as the economy revitalises. We have informed our community about Neiman Marcus's filing and what to expect from their affiliate relationships," says Amit Patel, CEO of Rakuten Americas. The marketing arm of the Japanese e-commerce giant helps retailers like Neiman Marcus advertise products online through sites such as Facebook and Google. As part of its restructuring plan, creditors will take control of Neiman Marcus in exchange for cancelling $4 billion of debt (the retailer's debt totals about $5 billion). In March, Neiman said that it would shutter most of its off-price Last Call stores by the first quarter of fiscal 2021. In the shorter term, it plans to reopen its 43 Neiman Marcus stores and two Bergdorf Goodman stores once it is safe to do so. Neiman's existing customers are loyal — about 35 per cent of the group's revenues comes from the retailer's credit cardholders, according to the filing — but it needs to entice new customers in a way that remains true to its brand. Both management and industry observers are optimistic about the department store’s revival. Van Raemdonck believes that seamless online and offline integration will be crucial to the group's recovery. For example, a pilot with two virtual stylists increased to about 60 a year ago, and now the company employs 3,500 sales associates who use digital tools to curate looks, based on personal interaction with a customer and information from past purchases and searches, "to drive revenue while most stores are closed", he says. However, Covid-19 has made the bankruptcy process more unpredictable by delaying court proceedings. "There are some preferences where there's no activity going on, which has never happened before in this country," says Van Horn. Plans could also be derailed if the economic climate turns out to be worse than expected, or new outbreaks force stores to close again. About 260,000 US stores have closed over the past month, according to Global Data Retail. The demise of department stores will continue for the next two quarters, says Jane Hali, chief executive of Jane Hali & Associates. "Brands will need to be distributed on pure-play websites," she advises. "Neiman's was in trouble before Covid-19 so I am not sure what will make it more successful this time around [when] its customers are buying from luxury pure-play retailers like Net-a-Porter." For Stephens, survival will depend on numerous factors, such as a store's safety measures. He says: "Are customers going to have their temperature taken before they go in? Do they have to wear masks? How many people are allowed in the store? Some businesses might be pinning their hopes on consumers returning in numbers to retail, but things won't go back to normal. Until there is a vaccine, there is always going to be a percentage of the population that will not be going back to crowded stores and shopping centres." 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 YORK OPTICAL: Case Summary & 3 Unsecured Creditors ------------------------------------------------------ Debtor: New York Optical-International, Inc. d/b/a Tuscany Eyewear 12960 West State Road 84 Davie, FL 33325 Business Description: New York Optical-International, Inc. doing business as Tuscany Eyewear, provides optical products. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Southern District of Florida Case No.: 20-17961 Judge: Hon. Scott M. Grossman Debtor's Counsel: David W. Langley, Esq. DAVID W. LANGLEY 8551 W. Sunrise Blvd., Suite 303 Plantation, FL 33322 Tel: 954-356-0450 Email: dave@flalawyer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Wayne R. Goldman, president. A copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/d6V5aM NH HIGHWAY: Gets Approval to Tap Duane A. D'Agnese as Accountant ---------------------------------------------------------------- NH Highway Hotel Group, LLC received approval from the U.S. Bankruptcy Court for the District of New Hampshire to employ Duane A. D'Agnese & Company, P.A. as its accountant. The firm's services will include the preparation of tax returns for the year ending Dec. 31, 2020, and other tax-related accounting services. The services will be provided mainly by Duane D'Agnese, a certified public accountant, who will be compensated at the rate of $200 per hour. Mr. D'Agnese estimates the cost to prepare the tax returns will be between $1,600 and $1,800. Mr. D'Agnese and his firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Duane A. D'Agnese Duane A. D'Agnese & Company, P.A. 132 Portsmouth Street Concord, NH 03301 Telephone: (603) 224-6169 About NH Highway Hotel Group NH Highway Hotel Group, LLC filed a Chapter 11 bankruptcy petition (Bankr. D.N.H. Case No. 19-11303) on Sept. 19, 2019, disclosing under $1 million in both assets and liabilities. Judge Bruce A. Harwood oversees the case. Debtor has tapped Ford McDonald McPartlin & Borden, P.A. as its legal counsel and Duane A. D'Agnese & Company, P.A. as its accountant. NORTHEAST GAS: Files for Chapter 11 for 3rd Time ------------------------------------------------ Vince Sullivan, writing for Law360, reports that NorthEast Gas Generation LLC, the owner of two gas-fired power generating stations, filed Chapter 11 bankruptcy in Delaware in June 2020, saying decreasing energy demands and dwindling gas prices have hurt its bottom line and forced the company into its third bankruptcy since 2014. In initial court filings, NorthEast Gas Generation LLC said it is looking to deleverage its balance sheet and reduce its $585 million debt load after years of historically low natural gas prices and a sustained drop in demand due to unusually high winter temperatures and the COVID-19 pandemic. "Under normal operating conditions, the debtors' steady cash flows would enable them to reliably service their funded debt obligations and weather ordinary variations in customer demands, but recent extraordinary fluctuations in the energy market have presented the debtors with new balance sheet challenges," Dale E. Lebsack Jr., president of NorthEast Gas, said in a first-day declaration. Beginning in March, the Debtor began negotiating with its secured lenders on potential strategic alternatives that included a sale of assets or a balance sheet restructuring, but liquidity problems continued, Lebsack said. NorthEast Gas realized it would run out of cash by early June and obtained a nearly $1 million emergency bridge loan from lenders under its senior credit facility to provide enough money to get the debtor to the petition date. Those same lenders have agreed to provide $40 million in post-petition financing, as well as sufficient cash to roll up the $1 million bridge loan, according to the declaration. The lenders imposed certain milestones on the Debtor's case, which require the filing of a Chapter 11 plan within 60 days of the petition date, with confirmation required 45 days after that. NorthEast Gas comes to court with $554 million in first-lien secured debt and $30.5 million in second-lien secured debt, according to the declaration. Another $13.3 million in trade debt is also on the debtor's balance sheet. About Northeast Gas Generation NorthEast Gas Generation, LLC -- https://www.talenenergy.com -- owns and manages a portfolio of two natural gas-fired electric generating facilities located in the United States: (1) a 1,080 MW facility located in Athens, New York that achieved commercial operation on May 5, 2004; and (2) a 360 MW facility, located in Charlton, Massachusetts, that achieved commercial operation on April 12, 2001. The NorthEast Gas is part of a group of privately-owned independent power generation infrastructure companies indirectly owned by non-debtors Talen Energy Corporation and Talen Energy Supply, LLC. The company filed for Chapter 11 protections for the first time in 2014, through which NorthEast Gas reduced its outstanding debt obligations by more than $600 million by exchanging its then-second-lien debt for 93.5% of the equity in a reorganized company while giving existing equity holders the remaining shares. The second case commenced in 2018 and reduced the debt load of the company by another $70 million and turned over the equity of an operating affiliate to former senior lenders. NorthEast Gas Generation LLC and its affiliates sought Chapter 11 protection (Bankr. Del. Case No. 20-11597) on June 18, 2020. NorthEast Gas was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. The current case has been assigned to U.S. Bankruptcy Judge Mary F. Walrath, who presided over both previous cases. The Debtors are represented by Mark D. Collins, Daniel J. DeFranceschi, Jason M. Madron, Brendan J. Schlauch and David T. Queroli of Richards Layton & Finger PA. ALVAREZ & MARSAL NORTH AMERICA, LLC, is the restructuring advisor. HOULIHAN LOKEY CAPITAL, INC., is the investment banker. PRIME CLERK LLC is the claims agent. NTS W. USA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: NTS W. USA Corp., a Delaware corporation d/b/a Desigual d/b/a Desigual USA f/k/a NTS W. USA LLC 498 Red Apple Court Suite 127 Central Valley, NY 10917 Business Description: NTS W. USA Corp. owns and operates a clothing store. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-35769 Judge: Hon. Cecelia G. Morris Debtor's Counsel: George P. Angelich, Esq. ARENT FOX LLP 1301 Avenue of the Americas Floor 42 New York, NY 10019-6040 Tel: (212) 484-3900 Email: george.angelich@arentfox.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Brian K. Ryniker, chief restructuring officer. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/ufGfwb OCCASION BRANDS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Occasion Brands, LLC 1441 Broadway 29th Floor New York, NY 10018 Business Description: Founded in 1998, Occasion Brands, LLC -- https://www.occasionbrands.com -- is a family of e-commerce websites that focuses on prom, homecoming, bridal, and other special occasion events. The Debtor is a pure-play e-commerce platform for prom dresses and operates its business through three web properties: promgirl.com, simplydresses.com, and KleinfeldBridalParty.com.r teen events. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Southern District of New York Case No.: 20-11684 Judge: Hon. Stuart M. Bernstein Debtor's Counsel: S. Jason Teele, Esq. Daniel J. Harris, Esq. SILLS CUMMINS & GROSS P.C. One Riverfront Plaza Newark, NJ 07102 Tel: (973) 643-4779 Email: steele@sillscummis.com dharris@sillscummis.com Debtor's Restructuring Advisor: INSIGHT PARTNERS, LLC Debtor's Claims & Noticing Agent: OMNI AGENT SOLUTIONS https://is.gd/oiEpDs Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Robert Nolan, chief restructuring officer. 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/TWjEIE PADDOCK ENTERPRISES: Debtor's Future Claims Rep. Approved --------------------------------------------------------- Law360 reports that Paddock Enterprises has obtained court approval to appoint a Chapter 11 claims representative. The future claims representative proposed by bankrupt Paddock Enterprises LLC received the nod on June 17, 2020, from a Delaware judge who ruled that the debtor's choice had the requisite experience to perform the role over a candidate proposed by the federal bankruptcy watchdog. During a hearing conducted via phone and video conferencing, U.S. Bankruptcy Judge Laurie Selber Silverstein approved the appointment of James L. Patton Jr. as the legal representative for future asbestos injury claimants, saying he met the standard for the role included in the bankruptcy code. About Paddock Enterprises Paddock Enterprises, LLC's business operations are exclusively focused on (i) owning and managing certain real property and (ii) owning interests in, and managing the operations of, its non-debtor subsidiary, Meigs, which is developing an active real estate business. It is the successor-by-merger to Owens-Illinois, Inc., which previously served as the ultimate parent of the company. Paddock Enterprises is a direct, wholly owned subsidiary of O-I Glass. Paddock Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-10028) on Jan. 6, 2020. At the time of the filing, Debtor disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Laurie Selber Silverstein oversees the case. The Debtor tapped Richards, Layton & Finger, P.A. and Latham & Watkins LLP as legal counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk, LLC as claims, noticing and solicitation agent and administrative advisor. PAL DISTRIBUTION: Seeks to Hire Resnik Hayes as Legal Counsel ------------------------------------------------------------- PAL Distribution, Inc., seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Resnik Hayes Moradi, LLP as its legal counsel. The firm's services will include: 1. advising Debtor regarding compliance with the requirements of the U.S. Trustee; 2. advising Debtor regarding matters of bankruptcy law; 3. advising Debtor regarding cash collateral matters, if any; 4. conducting examinations of witnesses, claimants or adverse parties and assisting in the preparation of reports, accounts and pleadings; 5. assisting Debtor in the negotiation, formulation and implementation of a Chapter 11 plan of reorganization; and 6. making any appearances in the bankruptcy court. The firm's attorneys and paralegals will be paid at hourly rates as follows: M. Jonathan Hayes Partner $525 Matthew Resnik Partner $450 Roksana Moradi-Brovia Partner $425 Russell Stong Associate $350 David Kritzer Associate $350 Sloan Youkstetter Associate $350 Pardis Akhavan Associate $200 Rosario Zubia Paralegal $135 Priscilla Bueno Paralegal $135 Rebeca Benitez Paralegal $135 The Debtor has agreed to pay the firm an initial retainer fee of $30,000. . Resnik Hayes is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: M. Jonathan Hayes, Esq. Matthew D. Resnik, Esq. Pardis Akhavan, Esq. Resnik Hayes Moradi, LLP 17609 Ventura Blvd., Suite 314 Encino, CA 91316 Telephone: (818) 285-0100 Facsimile: (818) 855-7013 E-mail: jhayes@RHMFirm.com E-mail: matt@RHMFirm.com E-mail: pardis@RHMFirm.com About PAL Distribution PAL Distribution, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-14663) on July 8, 2020. At the time of the filing, Debtor had estimated assets of between $100,000 and $500,000 and liabilities of between $1 million and $10 million. Judge Scott H. Yun oversees the case. The Debtor has tapped Resnik Hayes Moradi, LLP as its legal counsel. PAPER STORE: Sets Bidding Procedures for All Assets --------------------------------------------------- Judge Christopher J. Panos of the U.S. Bankruptcy Court for the District of Massachusetts will conduct a telephonic hearing on July 23, 2020 at 2:00 p.m. to consider the bidding procedures proposed by The Paper Store, LLC and TPS Holdings, LLC in connection with the auction sale of substantially all assets to TPS Acquisition Co., LLC, subject to overbid. To participate, the parties will dial (877) 873-8018 and enter access code 1167883. Objections or responses to the relief presented in the Sale Motion may be presented at the hearing. The salient terms of the Bidding Procedures are: a. Bid Deadline: Aug. 21, 2020 at 5:00 p.m. (EDT) b. Initial Bid: TBD c. Deposit: 10% of the proposed Purchase Price d. Auction: If the Debtors receive one or more Qualified Bids, the Debtors will conduct an auction of the Purchased Assets on Aug. 24, 2020 at 10:00 a.m. (EDT), at a virtual meeting by electronic means at the offices of Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., One Financial Center, Boston, MA 02111, or at such other location or by such other means as will be timely communicated to all entities entitled to attend the Auction. e. Bid Increments: To be established by the Debtor at the hearing f. Sale Hearing: Aug. 26, 2020 at 10:00 a.m. (EDT) g. Break-up Fee: 2.5% of the proposed Purchase Price of Bid h. Any party with a valid, properly perfected security interest in any of the Purchased Assets may credit bid for such Purchased Assets in connection with the Sale. A copy of the Bidding Procedures is available at https://tinyurl.com/y459fmwp from PacerMonitor.com free of charge. About The Paper Store, LLC The Paper Store, LLC -- http://www.thepaperstore.com-- is a family owned and operated specialty gift retailer, with 86 stores in seven states and an e-commerce business. The retail locations feature merchandise comprising fashion, accessories, spa, home decor, stationery, jewelry, sports and more, from well-regarded brands such as Vera Bradley, Lilly Pulitzer, Godiva, 47 Brands, Alex and Ani, Life is Good, Vineyard Vines, and Sugarfina. The Debtors are a proud Hallmark greeting cards partner. The Paper Store, LLC (Bankr. D. Mass. Case No. 20-40743), as the Lead Debtor, and its affiliate TPS Holdings, LLC (Bankr. D. Mass. Case No. 20-40745) sought Chapter 11 protection on July 14, 2020. Judge Christopher J. Panos is assigned to the case. The Debtors tapped Paul J. Ricotta, Esq., Kevin J. Walsh, Esq., and Timothy J. McKeon, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as counsel. G2 Capital Advisors serves as the Debtors' Restructuring Advisor, SSG Capital Advisors as their Investment Banker, and Verdolno & Lowet, P.C. as their Accountant, and Donlin, Recano & Co., Inc. as their Claims & Noticing Agent. The Paper Store estimated assets in the range of $10 million to $50 million, and $50 million to $100 million in debt. The petitions were signed by Don Van der Wiel, chief restructuring officer. PEAK SERUM: Taps Dennis & Company as New Accountant --------------------------------------------------- Peak Serum, Inc. received approval from the U.S. Bankruptcy Court for the District of Colorado to employ Dennis & Company as its new accountant. Dennis & Company will substitute for SL Biggs, the firm that initially handled Debtor's account. Dennis & Company's services will be provided mainly by Mark Dennis, a certified public accountant, who will charge an hourly fee of $250. Mr. Dennis 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 at: Mark Dennis, CPA Dennis & Company 2000 S. Colorado Blvd. Tower II, Suite 200 Denver, CO 80222 About Peak Serum Headquartered in Wellington, Colo., Peak Serum is a privately owned and independent supplier of life science laboratory products. Its core focus is Fetal Bovine Serum (FBS) for cGMP/clinical trial research and diagnostics applications. It offers a wide range of 100% US Origin and USDA-Approved FBS products for all levels of research compliance. Peak Serum sought Chapter 11 protection (Bankr. D. Colo. Case No. 19-19802) on Nov. 13, 2019. At the time of filing, Debtor disclosed total assets of $956,300 and total liabilities of $3,580,644. The petition was signed by Thomas Kutrubes, president and chief executive officer. Judge Joseph G. Rosania Jr. oversees the case. Debtor has tapped Wadsworth Garber Warner Conrardy, P.C. as its legal counsel and Dennis & Company as its accountant. PFT TECHNOLOGY: Gets Approval to Tap Turman and Eimer as Accountant ------------------------------------------------------------------- PFT Technology, LLC received approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Turman and Eimer, LLP as accountant. Debtor requires the services of an accountant to prepare and file its monthly operating reports, and to provide accounting assistance in connection with its financial reporting. The hourly billing rates for the firm's professionals are as follows: Clerical $35 Junior Accountant $150 Senior Accountant $225 Principal $350 Turman and Eimer is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Mark Bernstein Turman and Eimer, LLP 1980 Broadcast Plaza Merrick, NY 11566 Telephone: (516) 868-4877 Facsimile: (516) 223-3421 Email: mbernstein@taxmavens.com About PFT Technology PFT Technology LLC was founded in 2005 with an innovative technology that enables utilities to detect and locate gas and fluid leaks in underground cabling to within a few feet in as little as 24 hours using tracer compounds in underground feeder systems. Company personnel have found underground leaks in all types of pipeline systems including high-pressure pipe-type, low- and medium-pressure closed-circuit systems, and nitrogen-insulated systems. Visit https://www.pfttech.com for more information. PFT Technology sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-72180) on June 5, 2020. The petition was signed by PFT President Patrick Keelan. At the time of the filing, Debtor disclosed estimated assets of $1 million to $10 million and estimated liabilities of the same range. Judge Louis A. Scarcella oversees the case. Debtor has tapped Thaler Law Firm PLLC as its legal counsel and Turman and Eimer, LLP as its accountant. PG&E CO: Fined $3.49-Mil. for 2018 Camp FIre -------------------------------------------- Law360 reports that Pacific Gas and Electric Co.(PG&E) has been fined $3.49 million by California court for starting the camp fire that caused the death of 84 people. Following more devastating testimony from victims' families and a call for Pacific Gas and Electric Co. to "burn in hell," a California judge ordered PG&E to pay $3.49 million -- the maximum criminal fine -- for recklessly starting the 2018 Camp Fire that killed 84 people. A member of the Sacramento County Coroner's Office looks for human remains in the rubble of a house burned during the Camp Fire in Paradise, California, in November 2018. At the end of a sentencing hearing, Butte County Judge Michael R. Deems imposed the maximum criminal fine against PG&E. 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, 20 of whom are employed by PG&E Corp. Of Pacific Gas' regular employees, 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, and 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: Emerges From Chapter 11 Bankruptcy --------------------------------------------- PG&E Corporation and Pacific Gas and Electric Company announced July 1, 2020, that PG&E has emerged from Chapter 11, successfully completing its restructuring process and implementing PG&E's Plan of Reorganization ("Plan") that was confirmed by the United States Bankruptcy Court on June 20, 2020. "Today's announcement is significant for PG&E and for the many wildfire victims who are now one step closer to getting paid. Compensating these victims fairly and quickly has been our primary goal throughout these proceedings, and I am glad to say that today we funded the Fire Victim Trust for their benefit," said Interim Chief Executive Officer, PG&E Corporation, Bill Smith. "This is an important milestone, but our work is far from over. Our emergence from Chapter 11 marks just the beginning of PG&E's next era—as a fundamentally improved company and the safe, reliable utility that our customers, communities and California deserve." PG&E's emergence from Chapter 11 is an important milestone on several fronts: PG&E has implemented the settlement and resolution of all wildfire claims pursuant to the Plan; PG&E has elected to participate in the State's go-forward wildfire fund; PG&E Corporation has seated its new Board of Directors; PG&E is moving forward with commitments regarding its governance, operations, and financial structure to further prioritize safety; and As a result of the Chapter 11 proceedings, PG&E has retired expensive, high-coupon debt and replaced it with lower-cost debt, yielding significant annual savings for customers over the duration of the debt, estimated to be approximately $250 million annually. Payment of Wildfire Settlements Pursuant to the Plan—which was confirmed by the Bankruptcy Court, approved by the California Public Utilities Commission, and accepted by more than 85% of fire victims who cast votes on it—all negotiated settlements of wildfire claims have been implemented as provided in the Plan. In accordance with the Plan, PG&E has now funded the Fire Victim Trust established to satisfy the claims of individual wildfire victims and others. The Fire Victim Trust funding schedule is as follows: $5.4 billion in cash on the Plan effective date, which was July 1, 2020; an additional $1.35 billion in cash in two installments in 2021 and 2022; PG&E Corporation common stock on the Plan effective date representing 22.19% of the outstanding common stock as of such date (subject to potential adjustments); plus certain other rights. A $700 million payment scheduled for 2022 will be accelerated if the CPUC approves the rate-neutral securitization application PG&E filed on April 30, 2020. The Fire Victim Trust will be administered by the Fire Victim Trustee and Claims Administrator, both of whom have been approved by the Bankruptcy Court. Neither the Trustee, the Hon. John K. Trotter (Ret.), nor the Claims Administrator, Cathy Yanni, is associated with PG&E Corporation or the Utility. The Fire Victim Trust is solely responsible for administering, reviewing and satisfying all Fire Victim Claims. The Fire Victim Trust has adopted claims resolution procedures for the administration and resolution of Fire Victim Claims. Neither PG&E Corporation nor the Utility will have any role or responsibility in the administration of the Fire Victim Trust. The Fire Victim Trust's website, which is maintained by the Claims Administrator, can be found at www.firevictimtrust.com. In addition to funding the Fire Victim Trust, PG&E has also now funded two additional wildfire settlements, paying approximately $1 billion to satisfy the wildfire claims of certain cities, counties, and other public entities, and paying an $11 billion settlement to insurance companies and other entities that paid claims by individuals and businesses related to wildfires in recent years. Participation in State Wildfire Fund Today's announcement also confirms PG&E's participation in California's go-forward wildfire fund established by AB 1054. PG&E today deposited approximately $5 billion in the Wildfire Fund, representing PG&E's initial and first annual contributions. New Board of Directors As announced last month, PG&E Corporation's newly appointed Board of Directors is now officially in place along with the Corporation's new Interim CEO, Bill Smith, who officially took over from outgoing CEO, Bill Johnson, effective July 1, 2020. The new Board consists of 14 members, 11 of whom are new. The Board members bring substantial expertise in key areas including 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 PG&E operates. "We know that actions speak louder than words. As new Interim CEO and on behalf of PG&E's newly appointed Board, I can assure you we are fully committed to continuing to implement comprehensive and meaningful changes to position PG&E for the long term," said Smith. Implementation of Plan Commitments to Further Enhance Safety and Improve PG&E's Ability to Serve its Customers and Communities for the Long Term As part of its Plan, PG&E made a series of commitments, some of which are already underway, regarding its governance, operations, and financial structure, all designed to further prioritize safety. PG&E made these commitments working with the Governor's Office and incorporating guidance from CPUC President Batjer, which was included in the full Commission's approval of the Plan. The commitments include: * Supported the CPUC's enactment of measures to strengthen PG&E's governance and operations, including enhanced regulatory oversight and enforcement that provides course-correction tools as well as stronger enforcement if it becomes necessary; * Began hosting a state-appointed observer to provide the state with insight into PG&E's progress on safety goals; * Appointing an independent safety monitor when the term of the court-appointed Federal Monitor expires; * Establishing newly expanded roles of Chief Risk Officer and Chief Safety Officer, with both reporting directly to the PG&E Corporation CEO; * Formed an Independent Safety Oversight Committee to provide independent review of operations, including compliance, safety leadership, and operational performance; * Assumed all collective bargaining agreements with labor unions, pension obligations, and other employee obligations, and all power purchase agreements and Community Choice Aggregation servicing agreements; * Reformed executive compensation to further tie it to safety performance and customer experience; * A commitment that PG&E Corporation will not reinstate a common stock dividend until it has recognized $6.2 billion in non-GAAP core earnings; * Filed a proposal with the CPUC requesting a rate-neutral $7.5 billion securitization transaction after PG&E emerges from Chapter 11 in order to finance costs in an efficient manner that benefits customers and accelerates payment to wildfire victims; and * Committing not to seek recovery in customer rates of any portion of the amounts that will be paid to victims of the 2015, 2017, and 2018 wildfires under the Plan when PG&E emerges from Chapter 11 (except through the rate-neutral securitization transaction). Also on July 1, 2020, PG&E implemented the Noteholder Restructuring Support Agreement including implementation of the debt exchange, the reinstatement and collateralization of certain debt, and payment of accrued interest under the Plan. The exchange and reinstatement of debt and distributions of accrued interest to noteholders will be completed as soon as practicable. Questions can be directed to PG&E's administrative agent, Prime Clerk LLC, by emailing pgeballots@primeclerk.com. More information can also be found at https://restructuring.primeclerk.com/pge/. 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, as special regulatory counsel. Munger Tolles & Olson LLP, as 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: Responds to CAL FIRE’s Finding on 2019 Kincade Fire ---------------------------------------------------------------- Pacific Gas and Electric Company (PG&E) on July 16, 2020, issued the following statement in response to the release of information by the California Department of Forestry and Fire Protection (CAL FIRE) regarding the October 2019 Kincade Fire: We appreciate all the heroic efforts of the first responders who fought the 2019 Kincade Fire, helped local citizens evacuate and made sure no one perished in the fire. We are aware of CAL FIRE's news release stating that PG&E facilities caused the fire. At this time, we do not have access to CAL FIRE's investigative report or the evidence it has collected. We look forward to reviewing both at the appropriate time. We want our customers and communities to know that safety is our most important responsibility and that we are working hard every day to reduce wildfire risk throughout our service area. The Kincade Fire began on October 23, 2019, northeast of Geyserville in Sonoma County, Calif. On October 24, 2019, PG&E filed an Electric Incident Report with the California Public Utilities Commission (CPUC) related to the Kincade Fire. Ongoing Work to Reduce Wildfire Risk The wildfire safety actions and programs described in PG&E's 2020 Wildfire Mitigation Plan detail the company's comprehensive Community Wildfire Safety Program designed to address the growing threat of extreme weather and wildfires across PG&E's service area. Ongoing and expanded efforts include new grid technology, hardening of the electric system, enhanced vegetation management, and real-time monitoring and situational awareness tools such as high-definition cameras and hundreds of weather stations to better understand how severe weather can impact the system. Key wildfire safety improvements PG&E has made in recent years are detailed here https://www.pgecurrents.com/2020/06/15/state-of-art-technology-and-stronger-smarter-electric-grid-results-in-continuous-improvement-of-public-safety-and-increased-mitigation-of-wildfire-risk/ 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, as special regulatory counsel. Munger Tolles & Olson LLP, as 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. QUORUM HEALTH: Says Debt Burdens Prompted Bankruptcy Filing ----------------------------------------------------------- Law360 reports that bankrupt hospital chain Quorum Health Care Services LLC argued in June that unsustainable debt burdens, not a conspiracy to wipe out equity holders, drove the business into Chapter 11 during the opening of a multi-day plan confirmation argument in Delaware. Felicia Gerber Perlman of McDermott Will & Emery LLP, counsel to the rural health care provider, made the point during arguments before U. S. Bankruptcy Judge Karen B. Owens over a plan that would trim the company's debt by about $500 million while restructuring a business that operates nearly two dozen smaller hospitals in 13 states. Quorum's plan includes cancellation of equity investments. About Quorum Health Headquartered in Brentwood, Tennessee, Quorum Health (NYSE: QHC) --http://www.quorumhealth.com/-- is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 24 affiliated hospitals in rural and mid-sized markets located across 14 states with an aggregate of 1,995 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business. Quorum Health incurred net losses attributable to the company of $200.25 million in 2018, $114.2 million in 2017, and $347.7 million in 2016. As of Sept. 30, 2019, Quorum Health had $1.52 billion in total assets, $1.72 billion in total liabilities, $2.27 million in redeemable non-controlling interest, and a total deficit of $203.36 million. On April 7, 2020, Quorum Health Corporation and 134 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10766) to seek confirmation of a pre-packaged plan. Debtors hired McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz as legal counsel, MTS Health Partners, L.P. as financial advisor, and Alvarez & Marsal North America, LLC. as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent, maintaining the Web site https://dm.epiq11.com/Quorum RE PALM SPRINGS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: RE Palm Springs II, LLC 1518 Blake St. Denver, CO 80202-1322 Business Description: RE Palm Springs II is the owner of fee simple title to an under construction four-story, 150-room full-service hotel in Palm Springs, CA. Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Northern District of Texas Case No.: 20-31972 Debtor's Counsel: Charles B. Hendricks, Esq. Emily S. Wall, Esq. CAVAZOS HENDRICKS POIROT, PC 900 Jackson St Ste 570 Dallas, TX 75202 Tel: (214) 573-7302 Email: chuckh@chfirm.com ewall@chfirm.com Estimated Assets: $10 million to $50 million Total Liabilities: $57,309,877 The petition was signed by Thomas M. Kim, chief restructuring officer. The Debtor filed an empty list of its 20 largest unsecured creditors. A copy of the petition is available for free at PacerMonitor.com at: https://is.gd/aBt5R2 RELIABLE EXPRESS: Seeks to Hire Edward L. Kigozi PLLC as Accountant ------------------------------------------------------------------- Reliable Express Transportation, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Edward L. Kigozi PLLC as its accountant. The firm will provide the following services: (a) prepare monthly operating reports and financial statements; (b) assist Debtor in gathering and assembling information to determine creditor claims; (c) prepare federal and state tax returns and respond to inquiries by any governmental agency or tax authority; and (d) assist in responding to inquiries in case Debtor's tax return is selected for examination or audit. The firm's hourly billing rates are as follows: Associate $195 - $225 Paraprofessionals $65 - $115 Edward L. Kigozi has no prior relationship or connection with Debtor that would raise a possible disqualification or conflict of interest or that would otherwise render it ineligible to serve as Debtor's accountant. The firm can be reached through: Edward L. Kigozi Edward L. Kigozi PLLC 3330 Matlock Road, Suite 200 Arlington, TX 76015 Telephone: (972) 743-6157 Facsimile: (888) 508-3068 About Reliable Express Transportation Reliable Express Transportation, LLC, a privately held company in the general freight trucking industry, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 20-41910) on May 29, 2020. The petition was signed by Serges Ndarishikanye, Debtor's managing member. At the time of the filing, Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Edward L. Morris oversees the case. Debtor has tapped Hayward & Associates PLLC as its bankruptcy counsel and Edward L. Kigozi, PLLC as its accountant. RENEGADE STORES: Seeks to Hire McMill CPAs as Accountant -------------------------------------------------------- Renegade Stores, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Nebraska to hire McMill CPAs & Advisors as its accountant. The firm's services will include the preparation of tax returns and documents, accounting and tax advice regarding its business operations, and bookkeeping services. The hourly rates charged by McMill range from $60 per hour to $250 per hour. McMill does not represent any interest adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached at: McMill CPAs & Advisors McMill Building 125 South 4th Street Norfolk, NE 68701 Email: Info@WealthFirm.info About Renegade Stores Renegade Stores, L.L.C. is a western and work store, specializing in new, first-quality, fashion-forward western and work apparel, accessories, and footwear for the entire family. Visit https://renegadestores.com/ for more information. Renegade Stores sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No. 20-40902) on June 30, 2020. In the petition signed by Troy Weyhrich, president and chief executive officer, the Debtor disclosed $1,253,546 in assets and $1,600,701 in liabilities. Lauren R. Goodman, Esq., at McGrath North Mullin & Kratz PC LLO, is the Debtor's legal counsel. SKILLSOFT CORP: Gets Unusual Approval for Dual Track Chapter 11 --------------------------------------------------------------- Rose Krebs, writing for Law360, reports that Skillsoft Corp. obtains the approval of the bankruptcy judge for its dual-track Chapter 11 bankruptcy protection. On June 16, 2020, a Delaware judge gave global digital training and talent management company Skillsoft Corp. "unusual" permission to continue exclusive talks with a potential buyer as it also pursues its prepackaged plan for a Chapter 11 debt-for-equity swap with support from lenders. During a first-day hearing held virtually, U.S. Bankruptcy Judge Mary F. Walrath signed off on Skillsoft's self-described "unusual" request to give a potential buyer certain exclusive rights, including reimbursement of $2 million in expenses if a purchase deal is reached. "This certainly is unusual to request this at a first day [hearing]," Judge Walrath said. The judge said she was comfortable approving the request since Skillsoft's lenders have consented to the dual-track Chapter 11 process. Skillsoft attorney Robert J. Lemons of Weil Gotshal & Manges LLP acknowledged that it was outside the norm for the company to seek approval of the "exclusivity" agreement with the potential buyer even though it already has a prepackaged Chapter 11 plan on the table with support from its lenders to restructure debt. But a "short window" of time is needed to see if a sale deal can be reached that could possibly provide a better recovery for creditors, he said. The identity of the potential buyer has not been revealed publicly. "We simply ran out of time to try to finalize an agreement," Lemons said of negotiations before Skillsoft's Chapter 11 filing on Sunday. The company's liquidity crisis was so precarious that Skillsoft needed to file for bankruptcy in order to gain access to debtor-in-possession financing so business operations could continue, according to comments in court. Skillsoft and multiple affiliates hit Chapter 11 on June 15, 2020, Monday, citing market changes and the COVID-19 pandemic as reasons for its trip into bankruptcy. The company, which counts 65% of the Fortune 500 as customers along with thousands of other businesses worldwide, said in an initial filing that it had been considering transformation or restructuring options for more than a year, citing overleveraged balance sheets, increased competition and changes to its markets. "Like so many others, the company is also facing adverse near-term business consequences from the macroeconomic effects of the COVID-19 pandemic," John Frederick, Skillsoft's chief administrative officer, said in the company's Chapter 11 declaration. Skillsoft entered Chapter 11 with a restructuring support agreement already in place with its senior and junior secured lenders. Under the prepackaged plan, first-lien creditors would receive shares of $410 million in new term loans for their nearly $1.4 billion in claims along with 96% of the reorganized company's equity. Second-lien creditors would receive 4% of the new equity and additional warrants for their $670 million in claims. Unsecured creditors would be paid in full under the plan, while existing equity holder claims would be wiped out. Net debt would fall from about $2.1 billion to $536 million. In a supplemental declaration Tuesday, Frederick said Skillsoft's lenders also support the company's plan to continue negotiations with the potential buyer as an alternative path in Chapter 11 in what could be a "value-maximizing option" for the debtors. Skillsoft began marketing its businesses in October 2019, but by late April found it necessary to enter into forbearance agreements with first- and second-lien lenders that would have been due $42 million in debt and interest payments on April 30. Agreement on the restructuring support agreement with lenders was reached on June 12, 2020. Judge Walrath on Tuesday also gave Skillsoft approval to tap into $30 million of the up to $60 million in post-petition funds being provided by a group of first-lien lenders. Approval of the rest of the funding will be considered at a future hearing. Skillsoft has described its businesses as providing a "customized, learner-centric approach to skills development" in areas that include leadership development, business skills, technology and development, digital transformation and compliance. Its services have reached some 36 million individuals to date. Skillsoft provides its learning content through its Percipio intelligent learning experience platform along with a talent development suite, SumTotal. Skillsoft Corp. and its affiliates are represented by Mark D. Collins, Amanda R. Steele and Christopher M. De Lillo of Richards Layton & Finger PA and Gary T. Holtzer, Robert J. Lemons and Katherine Theresa Lewis of Weil Gotshal & Manges LLP. The case is In re: Skillsoft Corp., case number 1:20-bk-11532, in the U.S. Bankruptcy Court for the District of Delaware. About Skillsoft Corporation Skillsoft -- http://www.skillsoft.com/-- delivers online learning, training, and talent solutions to help organizations unleash their edge. Leveraging immersive, engaging content, Skillsoft enables organizations to unlock the potential in their best assets -- their people -- and build teams with the skills they need for success. Empowering millions of learners and counting, Skillsoft democratizes learning through an intelligent learning experience and a customized, learner-centric approach to skills development with resources for Leadership Development, Business Skills, Technology & Development, Digital Transformation, and Compliance. SumTotal provides a unified, comprehensive Learning and Talent Development suite that delivers measurable impact across the entire employee lifecycle. With SumTotal, organizations can build a culture of learning that is critical to growth, success, and business sustainability. SumTotal's award-winning technology provides talent acquisition, onboarding, learning management, and talent management solutions across some of the most innovative, complex and highly regulated industries, including technology, airlines, financial services, healthcare, manufacturing, and pharmaceuticals. Skillsoft and SumTotal are partners to thousands of leading global organizations, including many Fortune 500 companies. The company features three award-winning systems that support learning, performance and success: Skillsoft learning content, the Percipio intelligent learning experience platform, and the SumTotal suite for Talent Development, which offers measurable impact across the entire employee lifecycle. On June 14, 2020, Skillsoft Corp. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11532). The Debtors tapped Weil Gotshal & Manges LLP, as counsel; Richards Layton & Finger, as co-counsel; Stikeman Elliott LLP, as special Canadian counsel; William Fry, as Irish law advisor; FTI Consulting, Inc., as financial advisor; Houlihan Lokey Capital, Inc., as investment banker; AlixPartners, LLP, as financial advisor; and Kurtzman Carson Consultants LLC, as administrative advisor. TEMPLAR ENERGY: $91M Sale of All Assets to Presidio Approved ------------------------------------------------------------ Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized Templar Energy, LLC and its subsidiaries to sell substantially all assets to Presidio Investment Holdings, LLC for $91 million cash, plus the Estimated Closing Adjustment Amount, less the Good Faith Deposit, plus the assumption of the Assumed Liabilities. The Auction was properly conducted by the Debtors on July 9, 2020 in accordance with the Bidding Procedures Order and in a manner designed to result in the highest or otherwise best offer for the Assets. The APA, including all other ancillary documents, and all of the terms and conditions thereof, and the Sale contemplated thereby, are approved in all respects. In the event that the Sale to the Buyer does not close as a result of the termination of the APA, the Debtors are authorized, without further order of the Court, to consummate the Sale to the Backup Bidder, pursuant to that certain Asset Purchase Agreement by and among certain of the Debtors and the Backup Bidder. The sale is free and clear of all Interests or Claims (other than Assumed Liabilities and Permitted Encumbrances) that existed prior to the Closing, with all such Interests or Claims to attach to the cash proceeds of the Sale subject to the terms and conditions set forth in the DIP Financing Order, subject to any claims and defenses that the Debtors and their bankruptcy estates may possess with respect thereto. Notwithstanding anything in the Order or related documents to the contrary, the Buyer will assume the plugging and abandonment liabilities of the Debtors and their estates, as applicable, with respect to the Assets, including any such liabilities owed to the Railroad Commission of Texas. The assets sold pursuant to the Order and the terms of the APA will not include unclaimed property held in trust by the Seller, as defined pursuant to State unclaimed property laws including Texas Property Code, Title 6, Chapter 72-76, and other applicable Texas laws. Solely to the extent the 2020 Ad Valorem Taxes of the Certain Texas Taxing Entities are (i) not yet due or delinquent, (ii) being contested in good faith by appropriate Proceedings or (iii) will be satisfied or released prior to Closing, the 2020 Ad Valorem Taxes of the Certain Texas Taxing Entities are Permitted Encumbrances. The Buyer will be responsible for paying any ad valorem taxes imposed on a periodic basis pertaining to the tax period beginning on or after Jan. 1, 2020 when due (including of the Certain Texas Taxing Entities) in accordance with applicable legal requirements. The Debtors' assumption and assignment to the Buyer, and the Buyer's assumption, on the terms set forth in the Order and the APA of the Assumed Contracts, is approved in its entirety. At the Closing, the Buyer will pay to the respective counterparty the Cure Amounts relating to any Assumed Contract up to the Cure Costs Cap. Upon the Closing, the Buyer will assume the Assumed Contracts, and, the assignment by the Debtors of such Assumed Contracts will not be a default thereunder. After the payment of the relevant Cure Amounts in accordance with the APA, neither the Debtors and their estates nor the Buyer will have any further liabilities to the Non-Debtor Counterparties to the Assumed Contracts, other than Buyer's obligations under the Assumed Contracts that accrue or become due and payable on or after the date that such Assumed Contracts are assumed. Upon completion of the Cash Consideration adjustment mechanics set forth in Section 3.5 of the APA, the Debtors will have the authority and obligation to pay, and to cause the Escrow Agent to pay, all Net Adjustment Amounts due to Buyer (up to the Post-Closing Escrow Amount) without the need for Buyer to ask approval from the Court, and the entire Net Adjustment Amount due to Buyer (up to the Post-Closing Escrow Amount) will be deemed allowed as an administrative expense claim under sections 502, 503(b), 507(a)(2) or otherwise of the Bankruptcy Code. Notwithstanding any provision in the Bankruptcy Rules to the contrary, the Order will be effective immediately and enforceable upon its entry. A copy of the APA is available at https://tinyurl.com/yystqtvx from PacerMonitor.com free of charge. About Templar Energy Templar Energy LLC and its affiliates, founded in 2012, are independent exploration and production companies, with a core focus on the development and acquisition of oil and natural gas reserves in the Greater Anadarko Basin of Western Oklahoma and the Texas Panhandle. Templar Energy and its operating subsidiaries -- http://templar.energy/-- have acquired substantial assets in the Mid-Continent region covering, as of the Petition Date, approximately 273,400 net acres by directly leasing oil and gas interests from mineral owners. Templar Energy LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11441) on June 1, 2020. Templar Energy was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities. Guggenheim Securities, LLC is acting as the Company's investment banker, Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel, and Alvarez & Marsal North America, LLC, is acting as financial advisor. Young Conaway Stargatt & Taylor, LLP, is local co-counsel. Kurtzman Carson Consultants LLC is claims agent, maintaining the page http://www.kccllc.net/TemplarEnergy TIDEWATER ESTATES: Bertuccis Buying Hancock County Propty for $800K ------------------------------------------------------------------- Tidewater Estates, Inc., asks the U.S. Bankruptcy Court for the Southern District of Mississippi to authorize the sale of a parcel of real property located in Hancock County, Mississippi, said Property being approximately 96.6 acres with antiquated improvements in need of substantial repair, Tax Parcels No. 066-024-023.000 and 067-025-015.000, to Bryan J. Bertucci and Ruth Frey Bertucci for $800,000. Said parcel of land being located in Sections 24 and 25, Township 7 Range 14 West Hancock County, Mississippi and acquired in a land swap from Emile A. Bertucci, Jr. MD and Shirley J. Bertucci dated June 13, 1989 encompassing the sum of approximately 96.6 acres of land, there is a parcel of land not the Property, which is a line of credit deed of trust securing up to $300,000, with a current balance of approximately $144,925. Said third deed of trust is dated Oct. 30, 2017, and is recorded at Deed of Trust Book 2018, Page 8944 in the land records of Hancock County, Mississippi. Bryan J. Bertucci is an insider as defined in 11 U.S.C. Section 101(31)(B). The Property taxes are projected to be due to Hancock County for the tax year 2020 for the time prior to closing that the Property is owned by the Debtor during tax year 2020, which are estimated to be in the approximate amount of $13,470. As set forth in the Contract, the Debtor has agreed that the following expenses, charges and fees should be paid from the proceeds of the sale: a. Proration of the County ad valorem taxes for the current year of approximately $13,470, with the exact amount determined immediately prior to closing. b. Payment to Gulf Coast Bank and Trust Company of approximately $500,000, with the actual payoff amount being provided by Gulf Coast Bank and Trust Company to the closing attorney. c. Payment to Celeste Bertucci McShane of approximately $127,248 with the actual payoff amount being provided by Gulf Coast Bank and Trust Co. prior to closing. d. Payment to Bryan J. Bertucci of approximately $144,925 with the actual payoff amount being provided by Gulf Coast Bank and Trust Company prior to closing, or alternatively credit said amount to the Purchase Price at closing. There are no real estate commissions or brokerages fees to be paid in connection with the transaction, and the estate will not bear any closing costs, other than charges of the closing attorney and the Debtor's counsel. The sale contemplated by the Motion should release the Property from all existing liens and transfer such lien to the proceeds of sale. The Debtor further prays that the Court authorizes that the Property be sold free and clear of all liens, which liens will attach to the proceeds and the amount owed on said liens. A copy of the Agreement is available at https://tinyurl.com/yd8p7d8m from PacerMonitor.com free of charge. About Tidewater Estates Tidewater Estates, Inc., filed its voluntary petition for relief under CHapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 20-50955) on June 9, 2020. In the petition signed by Emile A. Bertucci, III, director, secretary/treasurer, the Debtor was estimated to have $1 million to $10 million in assets and $500,000 to $1 million in liabilities. The Debtor is represented by Patrick Sheehan, Esq. at SHEEHAN AND RAMSEY, PLLC. TIDEWATER ESTATES: Bertuccis Buying Hancock County Propty for $800K ------------------------------------------------------------------- Tidewater Estates, Inc., asks the U.S. Bankruptcy Court for the Southern District of Mississippi to authorize the sale of a parcel of real property located in Hancock County, Mississippi, said Property being approximately 96.6 acres with antiquated improvements in need of substantial repair, Tax Parcels No. 066-024-023.000 and 067-025-015.000 (95.1 acres more or less), Tax Parcel No. 066-0-24-030.000 (1.5 acres more or less), and Tax Parcel No. 066-0-24-025.000, to Bryan J. Bertucci and Ruth Frey Bertucci for $800,000, plus interest payments on the Debtor's line of credit from Jan. 1, 2020 until the closing date. Gulf Coast Bank and Trust Co. holds a promissory note and first deed of trust secured by the Property with a projected payoff balance of approximately $499,291 as of the Petition Date, plus accruing interest, which is to be paid in full from the proceeds of the sale, with the final amount to be provided by Gulf Coast Bank and Trust Company to the closing attorney immediately prior to closing. Said first deed of trust is dated Nov. 26, 2018, and is recorded at Deed of Trust Book 2018, Page 25780 in the land records of Hancock County, Mississippi. Celeste Bertucci McShane holds a promissory note and second position deed of trust secured by the Property, which is a line of credit deed of trust securing up to $300,000 with a current balance of approximately $127,248. Said second position deed of trust is dated Oct. 30, 2017, and is recorded at Deed of Trust Book 2018, Page 8933 in the land recor ds of Hancock County, Mississippi. Bryan J. Bertucci holds a promissory note and third position deed of trust secured by the Property, which is a line of credit deed of trust securing up to $300,000, with a current balance of approximately $144,924.88. Said third deed of trust is dated Oct. 30, 2017, and is recorded at Deed of Trust Book 2018, Page 8944 in the land records of Hancock County, Mississippi. The Property taxes are projected to be due to Hancock County for the tax year 2020 for the time prior to closing that the Property is owned by the Debtor during tax year 2020, which are estimated to be in the approximate amount of $13,470. The Debtor has entered into a Contract for the Sale and Purchase of Real Estate dated May 20, 2020 as to the Property, with the Buyers. As set forth in the Contract, the Debtor has agreed that the following expenses, charges and fees should be paid from the proceeds of the sale: a. Proration of the County ad valorem taxes for the current year of approximately $13,470, with the exact amount determined immediately prior to closing. b. Payment to Gulf Coast Bank and Trust Company of approximately $500,000, with the actual payoff amount being provided by Gulf Coast Bank and Trust Company to the closing attorney. c. Payment to Celeste Bertucci McShane of approximately $127,248 with the actual payoff amount being provided by Gulf Coast Bank and Trust Co. prior to closing. d. Payment to Bryan J. Bertucci of approximately $144,925 with the actual payoff amount being provided by Gulf Coast Bank and Trust Company prior to closing, or alternatively credit said amount to the Purchase Price at closing. There are no real estate commissions or brokerages fees to be paid in connection with the transaction, and the estate will not bear any closing costs, other than charges of the closing attorney and the Debtor's counsel. The sale contemplated by the Motion should release the Property from all existing liens and transfer such lien to the proceeds of sale. The Debtor further prays that the Court authorizes that the Property be sold free and clear of all liens, which liens will attach to the proceeds and the amount owed on said liens. A copy of the Agreement is available at https://tinyurl.com/ycue5kxf from PacerMonitor.com free of charge. About Tidewater Estates Tidewater Estates, Inc., filed its voluntary petition for relief under CHapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 20-50955) on June 9, 2020. In the petition signed by Emile A. Bertucci, III, director, secretary/treasurer, the Debtor was estimated to have $1 million to $10 million in assets and $500,000 to $1 million in liabilities. The Debtor is represented by Patrick Sheehan, Esq., at SHEEHAN AND RAMSEY, PLLC. TRANSPINE INC: Case Summary & 2 Unsecured Creditors --------------------------------------------------- Debtor: Transpine, Inc. 4256 Tarzana Estates Drive Tarzana, CA 91356 Chapter 11 Petition Date: July 22, 2020 Court: United States Bankruptcy Court Central District of California Case No.: 20-11286 Judge: Hon. Victoria S. Kaufman Debtor's Counsel: Leslie Cohen, Esq. J'aime K. Williams, Esq. LESLIE COHEN LAW PC 506 Santa Monica Blvd. Suite 200 Santa Monica, CA 90401 Tel: 310 394 5900 Fax: 310 394 9280 E-mail: leslie@lesliecohenlaw.com jaime@lesliecohenlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Nisan Tepper, CEO. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/Xtqb8O TRAVEL LEADERS: S&P Lowers ICR to 'CCC' on Deteriorating Liquidity ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based Travel Leaders Group LLC (Internova) and its issue-level rating on its senior secured credit facility by two notches to 'CCC' from 'B-' and removed all of its ratings on the company from CreditWatch, where it placed them with negative implications on March 20, 2020. S&P's 'CCC' rating reflects the anticipated deterioration in Internova's liquidity position as well as the worsening outlook for a recovery in leisure and business travel. Internova's travel business remains mostly shut down and it is burning about $15 million of cash a month. S&P expects that the company will likely continue to burn cash into 2021, which the rating agency believes is the earliest that business and leisure travel could return to a significant enough volume for Internova to generate positive cash flow. The company disclosed that as of March 31, 2020, it had about $112 million of available cash on hand, including a $40 million borrowing and $8.2 million usage of LC facility on the revolving credit facility. Until travel restrictions are lifted and consumer confidence returns, S&P expects Internova to continuing burning cash while undertaking all possible liquidity-preserving actions. So far, these include eliminating its discretionary capital expenditure, reducing its workforce, and implementing a four-day workweek. The company could also be forced to restructure its debt or file for bankruptcy if it is unable to add incremental liquidity, potentially through an injection from its sponsor Certares, such that it can weather the ongoing travel shutdown. S&P has no knowledge of Certares' plans. However, if the company chooses to make a cash contribution to Internova, it may be contingent on a debt restructuring that S&P would view as tantamount to a default. The prospects for a quick containment and subsequent recovery have worsened relative to our prior assumptions. Additionally, S&P's economists forecast a significant decline in U.S. and eurozone GDP in 2020, which could weigh on any potential recovery in leisure and business travel. Given the potential for a prolonged travel downturn, Internova's capital structure is likely unsustainable. Due to its current cash burn rate, S&P estimates that Internova will end the year with at least $50 million more incremental debt than in 2019. If the recovery in leisure and business travel is slow or uneven, it may be difficult for the company to generate sufficient cash flow to sustain its capital structure. Under S&P's current base-case scenario, which assumes that Internova's travel business begins to recover in early- to mid-2021, the rating agency expects the company's lease-adjusted debt to EBITDA to be very high while its EBITDA coverage of interest expense remains thin. As long as Internova retains a healthy agent network and successfully restarts its business, its scale should remain valuable to its travel partners when the industry begins to recover. The travel industry's recovery could be slowed by extended travel restrictions, lingering consumer apprehensions, and weak discretionary and business spending. The coronavirus pandemic could also spur a secular decline in business travel if the elevated use of videoconferencing reduces the need for in-person activities for an extended period. Additionally, the loosening of coronavirus-related restrictions has been uneven, slow, and unsuccessful in some parts of the world. If a second wave of the pandemic occurs later in 2020 or 2021, it would present a substantial impediment to recovery. Environmental, social, and governance (ESG) factors relevant for this rating action: -- Health and safety The negative outlook reflects the possibility that S&P will lower its rating on Internova if it believes a conventional default, restructuring, or transaction it would view as tantamount to a default is likely in the next six months. "We would likely lower our rating on Internova if its liquidity deteriorates or we believe a default or debt restructuring of some form is likely in the next six months," S&P said. "We could raise our rating on Internova if the virus is contained and consumer confidence improves such that the recovery enables it to ramp up its travel agencies and begin generating positive cash flow, leading us to believe its capital structure is sustainable. We could also raise the rating if Internova adds incremental liquidity without undertaking a restructuring such that we expect its liquidity will remain adequate for more than one year," the rating agency said. TRI MECHANICAL: Seeks Approval to Tap David P. Lloyd as Counsel --------------------------------------------------------------- Tri Mechanical LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ David P. Lloyd, Ltd. as its legal counsel. Debtor requires the services of the firm to represent it in matters concerning negotiation with creditors, preparation of a Chapter 11 plan and disclosure statement, examining and resolving claims filed against the estate, and the preparation and prosecution of adversary matters. The firm charges $400 per hour for its services. David P. Lloyd can be reached through: David P. Lloyd, Esq. David P. Lloyd, Ltd. 615B S. LaGrange Rd. LaGrange IL 60525 Telephone: (708) 937-1264 Facsimile: (708) 937-1265 Email: info@davidlloydlaw.com About Tri Mechanical Tri Mechanical LLC is a full-service contracting company that provides design and build services, equipment, installations, replacement and upgrade of current systems, and retrofitting services. Tri Mechanical sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 20-11762) on May 31, 2020. The petition was signed by Rodd Duff, manager. At the time of the filing, Debtor disclosed total assets of $157,155 and total liabilities of $2,551,893. Judge Jacqueline P. Cox oversees the case. David P. Lloyd, Esq. is Debtor's legal counsel. TRIVASCULAR SALES: Seeks to Hire FTI as Financial Advisor --------------------------------------------------------- TriVascular Sales, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire FTI Consulting, Inc. as its financial advisor. The firm's services will include: a. assisting TriVascular Sales and its affiliates in the preparation of financial-related disclosures required by the court, including the schedules of assets and liabilities, statement of financial affairs and monthly operating reports; b. assisting Debtors with information and analyses required pursuant to their debtor-in-possession financing; c. assisting in the identification and implementation of short-term cash management procedures; d. advise Debtors regarding the development and implementation of key employee retention and other critical employee benefit programs; e. assisting Debtors in the identification of their core business assets and the disposition of assets or liquidation of unprofitable operations; f. assisting in the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; g. assisting Debtors in connection with the valuation of the present level of operations and identification of areas of potential cost savings; h. assisting Debtors in the preparation of financial information for distribution to creditors and others, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which court approval is sought; i. attending meetings; j. analyzing creditor claims by type, entity and individual claim; k. assisting Debtors in the preparation of information and analysis necessary for the confirmation of a Chapter 11 plan; l. assisting Debtors in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; and m. providing litigation advisory services with respect to accounting and tax matters. The firm will be paid at hourly rates as follows: Senior Managing Directors $920 – $1,295 Directors/Senior Directors/Managing Directors $690 – $905 Consultants/Senior Consultants $370 – $660 Administrative/Paraprofessionals $150 – $280 As of the petition date, FTI is holding an unapplied residual retainer of $95,000, which will be held until the end of Debtors' bankruptcy cases. Janet Naifeh, senior managing director at FTI, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. FTI can be reached through: Janet R. Naifeh FTI Consulting, Inc. 155 Franklin Road, Suite 210 Brentwood, TN, 37027 Tel: +1 615 324 8500 / +1 615 324 8581 Fax: +1 615 324 8501 Email: jan.naifeh@fticonsulting.com About TriVascular Sales TriVascular Sales, LLC and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-31840) on July 5, 2020. At the time of the filing, TriVascular Sales had estimated assets of less than $50,000 and liabilities of between $100 million to $500 million. Judge Stacey G. Jernigan oversees the cases. The Debtors tapped DLA Piper LLP (US) as their legal counsel, and FTI Consulting, Inc., as their financial advisor. Omni Agent Solutions is the claims, noticing and administrative agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' bankruptcy cases. TRIVASCULAR SALES: U.S. Trustee Appoints Committee Co-Chairpersons ------------------------------------------------------------------ The Office of the U.S. Trustee on July 22, 2020, announced the appointment of Alan Collins and Partner Fund Management, LP as co-chairpersons of the official committee of unsecured creditors in the Chapter 11 cases of TriVascular Sales, LLC and its affiliates. As of July 22, 2020, the committee members are: 1. Alan Collins 44 Glores Drive Mastic, NY 11950 631-618-7922 olliec55@gmail.com 2. Partner Fund Management, LP c/o PFM Healthcare Master Fund, LP c/o Christopher Mosellen 4 Embarcadero Center, Ste. 3500 San Francisco, CA 94111 415-281-1022 415-281-1070-fax cmosellen@pfmlp.com 3. Ronald Santoro 598 Northwest 94th Terrace Portland, OR 97229 513-764-7172 rsant26659@aol.com 4. Wilmington Trust, National Association as Indenture Trustee c/o Steven Cimalore 1100 North Market Street Wilmington, DE 19890 302-636-6058 scimalore@wilmingtontrust.com 5. Oscor, Inc. c/o Juan Torres, Account Specialist 3816 DeSoto Blvd. Palm Harbor, FL 34683 727-937-2511 727-934-9835-fax jtorres@oscor.com About TriVascular Sales TriVascular Sales, LLC and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-31840) on July 5, 2020. At the time of the filing, TriVascular Sales had estimated assets of less than $50,000 and liabilities of between $100 million to $500 million. Judge Stacey G. Jernigan oversees the case. The Debtors tapped DLA Piper LLP (US) as their legal counsel, and Omni Agent Solutions as their claims, noticing and administrative agent. TRUE RELIGION: Has Plan to Convert Debt to Equity ------------------------------------------------- Ella Chochrek of Footwear News reports that Manhattan Beach, California-based apparel company True Religion shared its plans of converting over half of its debt for equity. True Religion, wich filed for Chapter 11 protection in April 2020, has roughly $110.5 million in first-lien term loan debt and owes $28.8 million on an asset-based loan facility, according to court documents. The Plan submitted to U.S. Bankruptcy Court for the District of Delaware would convert $45.6 million of the term loan debt into second-lien debt, with the option of conversion to equity; the remaining approximately $65 million in term loan debt would be swapped for equity. In addition, True Religion plans to pay back unsecured creditors using any funds clawed back from prepetition transfers. In court documents, True Religion said the coronavirus crisis precipitated its filing, writing that it "would have preferred to wait out the current instabilities of the financial markets and retail industry generally" but "simply could not afford to do so." At the time of its Chapter 11 filing in April 2020, True Religion operated 87 retail stores with roughly 1,000 employees. The coronavirus crisis forced the company to temporarily shutter all units, as well as to lay off more than 90% of its employees and to cut pay for remaining staff by 30%, according to court documents. Founded in 2002, True Religion first filed for bankruptcy in 2017, reemerging four months later. At the time, the retailer said it planned to expand its e-commerce globally as well as to increase its brand awareness and licensing. However, the company's challenges appear to have continued: For the fiscal year ended Feb. 1, 2020, True Religion posted a net loss of $50 million on $259 million in net revenue. For the 12 months ended Feb. 1, the company reported total assets of about $208 million, versus $250 million in liabilities on a consolidated basis. During the coronavirus crisis, retailers across the fashion and footwear industry have had to contend with numerous challenges — including government-mandated temporary store closures and a reduction in discretionary spending. To bolster their liquidity, companies have taken steps such as furloughing workers, reducing operating expenses and drawing down on their revolving credit lines. While True Religion was one of the first retailers to file for bankruptcy amid the pandemic, a growing list of companies — including JCPenney, Neiman Marcus Group and Stage Stores — have since submitted Chapter 11 petitions. About True Religion Founded in Los Angeles, Calif., in 2002, True Religion Apparel, Inc. and its affiliates design, market, sell and distribute premium fashion apparel centered on their core denim products using the brand names "True Religion" and "True Religion Brand Jeans." The companies' products are distributed through wholesale and retail channels and through the website at www.truereligion.com. On a global basis, the companies had 87 retail stores and over 1,000 employees as of April 13, 2020. True Religion Apparel and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10941) on April 13, 2020. At the time of the filing, Debtord disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Christopher S. Sontchi oversees the cases. The Debtors tapped Cole Schotz P.C. as legal counsel; Akin Gump Strauss Hauer & Feld, LLP as corporate counsel; Province, Inc. as financial advisor; Retail Consulting Services, Inc. as real estate advisor; and Stretto as claims and noticing agent. Richard Lynch of HRC Advisory, LP is Debtors' interim chief financial officer. TRUE RELIGION: Proposes Debt-for-Equity Swap -------------------------------------------- Law360 reports that bankrupt premium jeans retailer True Religion Apparel submitted Chapter 11 plan to the Delaware bankruptcy court that would swap just under $65 million of its more than $139 million in debt for equity. The Chapter 11 plan submitted to the court Tuesday would swap more than half of True Religion's term loan debt for equity and pay unsecured creditors out of any funds clawed back from prebankruptcy transfers. True Religion filed for bankruptcy protection April 13 in the wake of widespread business restrictions enacted amid the COVID-19 outbreak. A copy of the full-report is available at https://www.law360.com/articles/1284125/true-religion-proposes-65m-debt-equity-swap-ch-11-plan About True Religion Apparel Founded in Los Angeles, Calif., in 2002, True Religion Apparel, Inc. and its affiliates design, market, sell and distribute premium fashion apparel centered on their core denim products using the brand names "True Religion" and "True Religion Brand Jeans." The companies' products are distributed through wholesale and retail channels and through the website at http://www.truereligion.com/ On a global basis, the companies had 87 retail stores and over 1,000 employees as of April 13, 2020. True Religion Apparel and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10941) on April 13, 2020. At the time of the filing, Debtord disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Christopher S. Sontchi oversees the cases. The Debtors tapped Cole Schotz P.C. as legal counsel; Akin Gump Strauss Hauer & Feld, LLP as corporate counsel; Province, Inc. as financial advisor; Retail Consulting Services, Inc. as real estate advisor; and Stretto as claims and noticing agent. Richard Lynch of HRC Advisory, LP is Debtors' interim chief financial officer. UNITI GROUP: Moody's Puts Caa2 CFR on Review for Upgrade -------------------------------------------------------- Moody's Investors Service placed all ratings for Uniti Group Inc. on review for upgrade. The outlook was revised to ratings under review from negative. The review for upgrade reflects the June 2020 court approved bankruptcy plan of Windstream Services, LLC, Uniti's largest tenant and main source of revenue. Windstream is expected to exit bankruptcy in late August or September 2020 with about a $4 billion reduction in funded debt, significantly lower interest expense and renegotiated master lease agreements with Uniti that will benefit both companies. The current Windstream master lease agreement will be bifurcated into two master lease agreements under the renegotiated terms and will be comprised of a consumer ILEC network lease agreement with Windstream and a CLEC network lease agreement with Windstream. The credit profile of Uniti will continue to be significantly influenced by Windstream's credit profile until Uniti can broadly diversify its sources of revenue and EBITDA. On Review for Upgrade: Issuer: Uniti Group Inc. Probability of Default Rating, Placed on Review for Upgrade, currently Caa2-PD Corporate Family Rating, Placed on Review for Upgrade, currently Caa2 Senior Secured Bank Credit Facility, Placed on Review for Upgrade, currently Caa1 (LGD3) Senior Secured Regular Bond/Debenture, Placed on Review for Upgrade, currently Caa1 (LGD3) Senior Unsecured Regular Bond/Debenture, Placed on Review for Upgrade, currently Ca (LGD5) Outlook Actions: Issuer: Uniti Group Inc. Outlook, Changed to Rating Under Review from Negative RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Prior to review for upgrade, Uniti's Caa2 corporate family rating reflects its continuing reliance upon Windstream for about 66% of its revenue and a greater percentage of EBITDA. The degree of linkage between Uniti's credit profile and Windstream will only meaningfully diverge when Uniti diversifies its revenue stream. Windstream has been operating under US Chapter 11 bankruptcy protection since February 2019 and is now expected to exit from bankruptcy in late August or September under a court approved reorganization plan. Uniti's current rating also contemplates the company's high leverage (Moody's adjusted) and its negative free cash flow as a result of its dividend payout and capital intensity. Offsetting these limiting factors are Uniti's stable and predictable revenue and its high margins. Uniti's acquisitions of fiber networks in recent years have aided nominal revenue diversification, and its June 2020 sale of tower assets supports liquidity. However, Uniti's financial policy, specifically its need to employ debt to fund M&A and meet future capital investment commitments under renegotiated terms of master lease agreements with Windstream, its minimum dividend required to maintain REIT status and high leverage constrain the company's rating. Uniti's May 2020 renegotiated and court approved master lease agreements with Windstream strengthen contract terms and improve the certainty of future cash flow given Windstream's restructured balance sheet and improved liquidity at bankruptcy exit. Obligors under the renegotiated leases will now include Windstream and certain direct and indirect subsidiaries, as well as the current obligor, Windstream Holdings, Inc., the holding company parent of Windstream. The renegotiated leases will be cross-guaranteed and cross-defaulted unless Windstream ceases to be the tenant. The bifurcation into a consumer ILEC network lease and a CLEC network lease could facilitate the potential future sale of Windstream businesses focused on these different end markets. The annual lease payment Uniti currently receives from Windstream Parent under the renegotiated master lease agreements remains unchanged. Additionally, Uniti will pay approximately $490 million to Windstream under a cash settlement assuming quarterly installments over five years. Further, Uniti is expected to invest up to $1.75 billion of growth capital improvements, mainly upgrades of copper networks to fiber in Windstream's consumer ILEC footprint, over a period of 10 years. Uniti will earn a lease yield of 8%, subject to a 0.5% annual escalator, on those cumulative investments through the April 2030 initial term. These lessor-provided investments will benefit Windstream's competitive position as it pursues additional fiber-based network upgrades to the same leasehold assets itself. Moody's believes the renegotiated terms of these lease agreements will benefit the credit profiles of both companies if Windstream's post-bankruptcy execution strategy can deliver market share capture in both its primarily consumer-based rural ILEC footprint and in its enterprise and wholesale end markets over the next three years. Moody's review will focus on Windstream's capital structure at bankruptcy exit, the stronger contract terms under the renegotiated leases Uniti will have with Windstream at the time of that exit and Uniti's financial policies and financial flexibility. The principal methodology used in these ratings was Communications Infrastructure Industry published in September 2017. Uniti Group Inc. is a publicly traded, real estate investment trust that was spun off from Windstream Holdings, Inc. in April of 2015. The majority of Uniti's assets are comprised of a physical distribution network of copper, fiber optic cables, utility poles and real estate which are under long term, exclusive master lease to Windstream. Over time, Uniti has acquired additional fiber assets that it operates as a standalone carrier, serving enterprise and communications customers. VISTA PROPPANTS: Seek Court Approval to Hire OCPs ------------------------------------------------- Vista Proppants and Logistics, LLC and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ ordinary course professionals. The initial ordinary course professionals perform services, including legal, consulting, accounting, and tax services, that are not intrinsically related to the Chapter 11 Cases. The Debtors would require their services regardless of the pendency of the Chapter 11 Cases and the services do not significantly impact the direction of the Debtors' reorganization. The Debtors propose that, as with the initial ordinary course professionals, each additional ordinary course professional be required to provide to the Debtors and their counsel for filing with the Court and service upon the Notice Parties, a Declaration within thirty (30) days after the filing of the Supplement. Once the Debtors retain an ordinary course professional in accordance with these procedures, they propose to pay such professional one hundred percent (100%) of their fees and one-hundred percent (100%) of their disbursements incurred with respect to post-petition services. The initial ordinary course professionals, their type of services, and monthly fee cap are as follows: Ankura Consulting Group LLC, Litigation Consultant $7,500 Deloitte, Accounting / Tax $25,000 Kelly Hart & Hallman LLP, Non-Bankruptcy Legal Counsel $5,000 Whitley Penn, 401(k) Audit $5,000 Wick Phillips LLP, Non-Bankruptcy Legal Counsel $5,000 To the best of the Debtors' knowledge, the initial ordinary course professionals have no interest materially adverse to the Debtors and their estates. The firms can be reached through: Blake Widmoyer, Esq. ANKURA CONSULTING GROUP LLC 15950 Dallas Pkwy Suite 750 Dallas, TX 75248 Telephone: (214) 200-3680 Facsimile: (214) 200-3686 E-mail: blake.widmoyer@ankura.com - and – Randy Gullo Kevin Zinser DELOITTE 2200 Ross Ave, Suite 1600 Dallas, TX 75201 Telephone: (214) 840-7000 Facsimile: (214) 840-7050 E-mail: rgullo@deloitte.com kzinser@deloitte.com - and – Russell Cawyer, Esq. KELLY HART & HALLMAN LLP 201 Main St., Suite 2500 Fort Worth, TX 76102 Telephone: (817) 332-2500 Facsimile: (817) 878-9280 E-mail: russell.cawyer@kellyhart.com - and – Griff Babb WHITLEY PENN 640 Taylor Street, Suite 2200 Fort Worth, TX 76102 Telephone: (817) 259-9100 E-mail: Griff.Babb@whitleypenn.com - and – Erika L. Bright, Esq. WICK PHILLIPS LLP 3131 McKinney Ave., Suite 100 Dallas, TX 75204 Telephone: (214) 692-6200 Facsimile: (214) 692-6255 E-mail: erika.bright@wickphillips.com About Vista Proppants and Logistics Vista Proppants and Logistics, LLC 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. For more information, visit https://vprop.com Vista Proppants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas 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. Debtors tapped Haynes and Boone, LLP as legal counsel; Alvarez & Marsal North America, LLC as chief restructuring officer (CRO) provider; and James Lanter P.C. and Wickes Law, PLLC as special litigation counsel. Kurtzman Carson Consultants, LLC is the claims, noticing, balloting and solicitation agent. VISTA PROPPANTS: Seek to Hire Alvarez & Marsal, Appoint CRO ----------------------------------------------------------- Vista Proppants and Logistics, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Alvarez & Marsal North America, LLC and appoint Gary Barton, the firm's managing director, as their chief restructuring officer. The CRO and additional personnel from Alvarez & Marsal will render the following services: (a) assist in the evaluation of Debtors' current business plan and in the preparation and presentation of a revised operating plan and cash flow forecast to Debtors' Board of Directors and their creditors; (b) assist in the development and management of a 13-week cash flow forecast; (c) provide assistance in financing issues; (d) provide assistance with all aspects of preparation of pleadings and supporting materials and supplying testimony for court hearings, as well as other court matters; (e) assist in the creation of a debtor-in-possession or cash collateral budget, as necessary; (f) assist in the creation of monthly operating reports and other regular reporting as and to the extent required by the court; (g) manage payment of accounts payable to maximize cash and ensure only appropriate and authorized amounts are paid, and prepare reports and analyses to manage commitments and disbursements. (h) serve as the principal contact with creditors with respect to Debtors' financial and operational matters; and (i) report to the special committee as desired or directed by the committee. The hourly rates charged by Alvarez & Marsal's personnel for restructuring services are as follows: Managing Director $900 - $1,150 Director $700 - $875 Analyst/Associate $400 - $675 The hourly rates for case management are as follows: Managing Director $850 - $1,000 Director $675 - $825 Analyst/Associate $400 - $625 Alvarez & Marsal received $150,000 as a retainer. Gary Barton, a managing director at Alvarez & Marsal, 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: Gary Barton Alvarez & Marsal North America, LLC 700 Louisiana Street, Suite 3300 Houston, TX 77002 Telephone: (713) 571-2400 Facsimile: (713) 547-3697 Email: gbarton@alvarezandmarsal.com About Vista Proppants and Logistics Vista Proppants and Logistics, LLC 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. For more information, visit https://vprop.com Vista Proppants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas 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. Debtors tapped Haynes and Boone, LLP as legal counsel; Alvarez & Marsal North America, LLC as chief restructuring officer (CRO) provider; and James Lanter P.C. and Wickes Law, PLLC as special litigation counsel. Kurtzman Carson Consultants, LLC is the claims, noticing, balloting and solicitation agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on June 23, 2020. The committee is represented by Kilpatrick Townsend & Stockton LLP. VISTA PROPPANTS: Seeks Approval to Hire Litigation Counsel ----------------------------------------------------------- Vista Proppants and Logistics, LLC and its debtor affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ James Lanter P.C. and Wickes Law, PLLC as their special litigation counsel. The Debtors seek to employ and retain the firms as special litigation counsel to represent the Debtors in connection with certain litigation pending in the 51st Judicial District Court for Irion County, Texas, styled Maalt L.P. v. Sequitur Permian, LLC, Cause No. 19-003. The primary attorneys working on this case will be James Lanter and Paul Wickes, whose standard hourly rates are currently $450 and $300, respectively. Mr. Lanter and Mr. Wickes shall be paid 50% of their usual hourly rates, billed monthly, plus contingency fees. The firms will also bill the Debtors for all out-of-pocket expenses incurred in connection with the Debtors' cases. James Lanter, the sole shareholder in the law firm of James Lanter P.C., and Paul Wickes, a principal of the law firm of Wickes Law, PLLC, disclosed in court filings that the firms are "disinterested persons" within the meaning of section 101(14) of the Bankruptcy Code. The firms can be reached through: James Lanter, Esq. JAMES LANTER P.C. 560 N. Walnut Creek, Suite 120 Mansfield, TX 76063 Telephone: (817) 453-4800 E-mail: jim.lanter@lanter-law.com - and – Paul Wickes, Esq. WICKES LAW, PLLC 5600 Tennyson Pkwy Ste 205 Plano, TX 75024-3508 Telephone: (972) 473-6900 E-mail: pwickes@wickeslaw.com About Vista Proppants and Logistics Vista Proppants and Logistics, LLC 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. For more information, visit https://vprop.com Vista Proppants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas 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. Debtors tapped Haynes and Boone, LLP as legal counsel; Alvarez & Marsal North America, LLC as chief restructuring officer (CRO) provider; and James Lanter P.C. and Wickes Law, PLLC as special litigation counsel. Kurtzman Carson Consultants, LLC is the claims, noticing, balloting and solicitation agent. VISTA PROPPANTS: Seeks Approval to Tap Haynes and Boone as Counsel ------------------------------------------------------------------ Vista Proppants and Logistics, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Haynes and Boone, LLP as their legal counsel. The firm will render the following legal services: (a) Advising the Debtors of their rights, powers, and duties under the Bankruptcy Code; (b) Performing all legal services for and on behalf of Debtors that may be necessary or appropriate in the administration of their Chapter 11 cases and the Debtors' business; (c) Advising Debtors concerning, and assisting in, the negotiation and documentation of financing agreements and debt restructurings; (d) Reviewing the nature and validity of agreements relating to Debtors' interests in real and personal property and advising Debtors of their corresponding rights and obligations; (e) Advising Debtors concerning preference, avoidance, recovery, or other actions that it may take to collect and to recover property for the benefit of the estates and their creditors, whether or not arising under Chapter 5 of the Bankruptcy Code; (f) Preparing legal documents and reviewing all reports to be filed in Debtors' bankruptcy cases; (g) Advising Debtors concerning, and preparing responses to, applications, motions, complaints, pleadings, notices, and other papers that may be filed and served in their cases; (h) Counseling Debtors in connection with the formulation, negotiation, and promulgation of a plan of reorganization and related documents; (i) Working with and coordinating efforts among other professionals to attempt to preclude any duplication of effort among those professionals and to guide their efforts in the overall framework of Debtors' reorganization; and (j) Working with professionals retained by other parties-in-interest to structure a consensual plan of reorganization or other resolution for Debtors. The primary attorneys and paralegal at Haynes and Boone who will represent Debtors and their discounted hourly rates are as follows: Stephen M. Pezanosky, Partner $900 Matthew T. Ferris, Partner $710 Sakina Rasheed Foster, Partner $735 Alex Kirincic, Associate $380 David L. Staab, Associate $500 Kimberly Morzak, Paralegal $335 Haynes and Boone received $1,506,844.82 prior to Debtors' bankruptcy filing. As of June 9, the firm holds a retainer in the amount of $156,837.35. Stephen Pezanosky, Esq., a partner at Haynes and Boone, 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: Stephen M. Pezanosky, Esq. Matthew T. Ferris, Esq. David L. Staab, Esq. Haynes and Boone, LLP 301 Commerce Street, Suite 2600 Fort Worth, TX 76102 Telephone: (817) 347-6600 Facsimile: (817) 347-6650 Email: stephen.pezanosky@haynesboone.com matt.ferris@haynesboone.com david.staab@haynesboone.com About Vista Proppants and Logistics Vista Proppants and Logistics, LLC 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. For more information, visit https://vprop.com Vista Proppants and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas 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. Debtors tapped Haynes and Boone, LLP as legal counsel; Alvarez & Marsal North America, LLC as chief restructuring officer (CRO) provider; and James Lanter P.C. and Wickes Law, PLLC as special litigation counsel. Kurtzman Carson Consultants, LLC is the claims, noticing, balloting and solicitation agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on June 23, 2020. The committee is represented by Kilpatrick Townsend & Stockton LLP. WORLD MARKETING: Crane Heyman Denied Win in Trustee Suit -------------------------------------------------------- Law360 reports that the Illinois federal judge rejected the bid of law firm Crane Heyman Simon Welch & Clar to duck a World Marketing LLC bankruptcy trustee's malpractice suit accusing the firm of failing to properly advise the company before it instituted mass layoffs. U.S. District Judge Thomas M. Durkin determined that Crane Heyman failed to establish that summary judgment should be entered in its favor because bankruptcy trustee Norman Newman purportedly suffered no damages, or because its alleged failure to tell World Marketing about how to comply with the Worker Adjustment and Retraining Notification Act would have made a difference. A copy of the full-report is available at https://www.law360.com/illinois/articles/1283743/crane-heyman-denied-win-in-bankruptcy-trustee-s-suit- Norman V. Neweman, as the liquidating trustee of the World Marketing Liquidating Trust, brought this action against law firm Crane, Heyman, Simon, Welch & Clar, alleging Crane Heyman committed malpractice during the bankruptcy of World Marketing. About World Marketing Chicago Headquartered in Milwaukee, Wisconsin, World Marketing Chicago, LLC, offers marketing consulting and mailing services. World Marketing Chicago, LLC (Bankr. N.D. Ill. Case No. 15-32968), and affiliates World Marketing Atlanta, LLC (Bankr. N.D. Ill. Case No. 15-32975) and World Marketing Dallas, LLC (Bankr. N.D. Ill. Case No. 15-32977) filed for Chapter 11 bankruptcy protection on Sept. 28, 2015, each estimating their assets and liabilities at between $1 million and $10 million. The petitions were signed by Robert W. Kraft, the authorized individual. The cases are jointly administered. Judge Timothy A. Barnes presides over the cases. Jeffrey C Dan, Esq., at Crane Heyman Simon Wlch & Clar serves as the Debtors' bankruptcy counsel. The Official Committee of Unsecured Creditors appointed in the case are represented by Elizabeth Vandesteeg, Esq., and Aaron L. Hammer, Esq., at Sugar Felsenthal Grais & Hammer LLP as counsel. AEG Partners LLC serves as the Committee's financial advisor. [*] Chapter 11 Reforms Aid Troubled Small Companies --------------------------------------------------- Taruna Garg, Jonathan Horne, and Robert Kaelin of Murtha Cullina, wrote an article on JDSupra titled "Chapter 11 Reforms Provide Small Business Owners a Faster and Cheaper Way to Keep Control and Reorganize in Troubling Times": The Small Business Reorganization Act ("SBRA") took effect on February 19, 2020 to little fanfare. The new law was years in the making and intended to address a disconnect in the Chapter 11 process: small businesses that could benefit most from bankruptcy were reluctant to file, and when they did the cases often failed and the businesses shuttered. Failure was not the business owners' fault, but rather the result of a Chapter 11 process that had become too costly, time consuming and risky to be a viable restructuring alternative for most small businesses. The SBRA changes this calculus by providing small businesses access to a new "Subchapter V" Chapter 11 process that is designed to be cheaper, faster and pose far less risk that owners might lose control of their businesses. With a global pandemic and resulting economic fallout now posing an existential threat to many small businesses, the changes brought on by the SBRA, and recently enhanced under the Coronavirus Aid, Relief and Economic Security (CARES) Act, could not have arrived at a more opportune time, and are now available to provide small business owners the ability to restructure their debts while saving their businesses and many jobs. 1. Is Your Business Eligible? While any business that has the majority of its debts arise from commercial activities can file Chapter 11, currently only small businesses with aggregate debts of $7.5 million or less can access the enhanced protections under Subchapter V. However, this limit excludes debts owed to insiders or affiliates, or debts that are unliquidated or contingent. Examples of unliquidated or contingent debts include debts for which an amount is not yet fixed (like when a lawsuit is first filed) or debts which have not yet come due. 2. How is Subchapter V Faster? Time is money, and this is especially true in bankruptcy. Generally, the longer a case lasts, the costlier it becomes. Subchapter V aims to reduce expense by streamlining the reorganization process. To this end, Subchapter V provides that: • the court must hold a status conference within 60 days of filing at which the debtor provides a detailed overview of the status of its reorganization efforts and negotiations; • the debtor must file a proposed plan of reorganization within 90 days of filing; and • equity owners are provided greater flexibility to "cram down" their plan of reorganization on dissenting creditors, making it less likely there will be lengthy (and costly) plan confirmation litigation. 3. How is Subchapter V Cheaper? In addition to saving small businesses money by reducing the time they are in bankruptcy, Subchapter V also reduces costs by eliminating certain direct expenses that are otherwise paid by Chapter 11 debtors. For example, • Subchapter V debtors do not pay United States Trustee fees, which are paid quarterly and generally equal 1% of all disbursements made during the case (including all payments for wages, inventory, rent, etc.); • no Creditor's Committee is formed in Subchapter V cases, eliminating an additional layer of professional fees that are otherwise paid by Chapter 11 debtors; and • Subchapter V debtors are not required to file a disclosure statement with their plan of reorganization, a lengthy document often requiring significant attorney time to prepare, further reducing professional fees otherwise paid by Chapter 11 debtors. 4. How is Subchapter V Safer? The speed and cost saving measures outlined above mean nothing for small business owners if filing bankruptcy presents a significant risk that the business could ultimately be taken over by creditors or be forced to liquidate. In that regard, Subchapter V provides enhanced protections to ensure that owners can successfully reorganize their small businesses, while retaining control, including the following: • only a debtor may file and confirm a plan of reorganization, eliminating the risk that creditors will propose a competing plan that wrests control from ownership; • Subchapter V eases the bankruptcy absolute priority rule, making it easier for owners to retain equity in the reorganized company even when unsecured creditors object to the proposed plan; • plan payments, including unsecured claims and certain bankruptcy administrative claims, can be made over time from business earnings, reducing the need to make substantial payments to creditors upon confirmation, and making a successful reorganization more feasible; and • a trustee is appointed in every Subchapter V case to facilitate and work with the debtor in presenting a confirmable Chapter 11 plan. 5. Other Issues These are just some of the notable provisions that could allow small businesses and individuals to go through the bankruptcy process in a more streamlined and effective way, and it may become an attractive alternative should the economic fallout from this crisis deepen. However, certain restrictions apply if small businesses have applied or intend to apply for the Paycheck Protection Program (PPP), which is part of the CARES Act. The Small Business Administration, in charge of administering the PPP, released an interim rule restricting eligibility for PPP loans if the companies file bankruptcy. This issue has been considered by bankruptcy courts around the country. Hidalgo Cty. Emergency Serv. Found. v. Carranza (In re Hidalgo Cty. Emergency Serv. Found.), 2020 Bankr. LEXIS 1174 (Bankr. S.D. Tex. Apr. 25, 2020); Cosi Inc. v. Small Business Administration et al., Case No. 1:20-ap-50591 (Bankr. D. Del. Apr. 28, 2020). [*] Congress Relaxes Rulings Paycheck Protection Program Rules -------------------------------------------------------------- Ed Buchholz, Sean Crowley, Taylor Curtis, Vicky Gilbert, Kristen Greenberg, and David Kaufman of Thompson Coburn LLP wrote on JDSupra that in response to widespread concern from the business community around the popular Paycheck Protection Program (the "PPP"), the Paycheck Protection Program Flexibility Act (the "PPPFA"), enacted on June 5, 2020, was designed to provide increased flexibility in compliance for employers using PPP loans to offset the economic impacts of COVID-19. The original PPP loan program provides businesses with loans through lenders that are fully guaranteed by the Small Business Administration (“SBA”) and are eligible for forgiveness depending on whether a business meets certain criteria. The following summarizes the provisions of the PPPFA and related changes to the original Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). Extends forgiveness covered period from eight to 24 weeks The CARES Act provides an eight-week covered period where PPP loan proceeds used for qualified expenses during this covered period are eligible for forgiveness. In order to receive forgiveness of the entire PPP loan, the CARES Act requires that businesses spend the funds on qualified expenses (i.e. payroll costs, rent, mortgage interest payments and utilities) within eight weeks from the date the funds were received. However, the CARES Act also imposes restrictions and potential reductions to the amounts eligible for forgiveness. Businesses expressed concerns that the eight-week period was too short given that they may still be subject to significant operating restrictions because of COVID-19. In particular, many restaurants and retail establishments were forced to close or significantly reduce operations due to stay-at-home orders and other restrictions. Many businesses also had to lay-off or furlough employees due to the impact of such operating restrictions and stay-at-home orders and faced reductions in their forgiveness amounts due to related full-time equivalent employee ("FTE") reductions (as further discussed below). Businesses lobbied for more time to properly use the PPP loan for qualified expenses and expressed concerns on the impact of the FTE reductions. In response, the PPPFA extends the covered period from eight weeks to 24 weeks and qualified expenses incurred or paid during this extended covered period are eligible for forgiveness. Accordingly, businesses that have already received, or that plan to receive, a PPP loan have until the earlier of: (a) 24 weeks from the date the PPP loan is received, or (b) December 31, 2020, to use the PPP loan for qualified expenses. Businesses that received loans prior to June 5, 2020 may elect either the eight-week period or the 24-week period. Reduces payroll threshold for PPP loan The original PPP loan program provided that, when computing the amount of the PPP loan eligible for forgiveness, (i) at least 75% of the PPP loan must be used for payroll costs, and (ii) no more than 25% of the PPP loan may be used on other qualified non-payroll expenses (i.e., rent, mortgage interest payments and utilities). In response to concern from businesses over such arbitrary thresholds, the PPPFA reduced the amount of a PPP loan that must be spent on payroll costs to 60%, with 40% now eligible for use on other qualified non-payroll expenses (i.e., rent, mortgage interest payments and utilities). In a joint statement issued on June 8, 2020 (the "Joint Statement"), SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin clarified that businesses that spend less than 60% of the PPP loan on payroll expenses may still qualify for partial PPP loan forgiveness, provided that at least 60% of any forgiven amount was used for payroll expenses. This approach is consistent with the approach taken in the Interim Final Rules and outlined in the PPP Loan Forgiveness Application with respect to the prior 75% threshold requirement. For example, assume a business received a $100,000 PPP loan and spends only $50,000 on payroll expenses with the remaining $50,000 spent on rent and utilities. Under the guidance in the Joint Statement, a maximum of $83,333 of expenses are eligible for forgiveness (or $50,0000/60%). Also, for example, assume a business received a $100,000 PPP loan and spends only $30,000 on payroll expenses with the remaining $70,000 spent on rent and utilities. Under the guidance in the Joint Statement, a maximum of $50,000 of expenses are eligible for forgiveness (or $30,0000/60%). In other words, a business that spends less than 60% of its PPP loan on payroll expenses will still be eligible for forgiveness of its payroll expenses plus qualified non-payroll expenses equal to 66.66% of its payroll expenses. Extends deadline for rehiring workers and eases rehire requirements The original CARES Act (as further updated in the Interim Final Rules and in the PPP Loan Forgiveness Application) provided that any amount of loan forgiveness would also be subject to a proportional reduction calculated based on reductions in FTEs during the covered period (the "FTE Reductions"). The CARES Act allowed businesses to avoid reduction in forgiveness amounts for FTE Reductions (i) related to employees that were laid-off from March 27 2020 to April 26, 2020 (the “Safe Harbor Period”) as long as the employer restored the FTEs by June 30, 2020 or (ii) under certain conditions related to specific employees that (a) refused an offer of rehire, (b) were terminated for cause or (c) left their job voluntarily or took a voluntary salary/wage reduction. The PPPFA has added two provisions that would potentially eliminate the FTE Reductions (explained below). The PPPFA also allows businesses until December 31, 2020 to rehire employees previously laid off during the Safe Harbor Period. The PPPFA did not extend the Safe Harbor Period itself and employees that are laid off after April 26, 2020 will result in an FTE reduction, even if rehired by December 31, 2020 (unless the reduction is eliminated as discussed below). While the PPPFA extends the deadline for rehiring employees laid-off during the Safe Harbor Period, it does not change the manner in which salaries or wages are calculated for purposes of loan forgiveness. Accordingly, the salary limitations previously discussed still apply. For example, the pro-rata limitation on forgivable payroll costs for an employee remains $15,385 (or 8/52 * $100,000). The PPPFA adds two provisions that would eliminate the FTE Reductions. Under these provisions, a business must be able to document, in good faith: An inability to either rehire former employees or hire similarly qualified employees for unfilled positions on or before December 31, 2020; or An inability to return to the same level of business activity at which it was operating before February 15, 2020, due to compliance with OSHA, CDC or HHS guidance during the period beginning on March 1, 2020 and ending December 31, 2020, related to sanitation, social distancing, or other safety requirements related to COVID-19. The PPPFA only references federal agencies and related guidance. As many businesses were forced to shut-down due to orders at the state, county or city level, a question remains as to whether such state and local orders will be permissible documentation of a business’s inability to operate at its pre-COVID-19 level. The SBA is expected to issue additional guidance addressing the FTE reduction exemptions and related documentation requirements. Extends the repayment term for PPP loans with a remaining balance after forgiveness Under the CARES Act, businesses with a remaining PPP loan balance after forgiveness had two years to repay the loan. The PPPFA now provides that businesses will have five years to repay any outstanding PPP loan balance. Importantly, the five-year term only applies to loans made on or after June 5, 2020. Businesses that received PPP loans prior to the enactment of the PPPFA remain obligated to repay the loans under the original two-year maturity, however, the PPPFA provides that such businesses are permitted to negotiate an extended maturity with their lender. The remaining balance on any PPP loan is subject to a 1% interest rate. Extends deferral of principal and interest payments for the PPP loans The original CARES Act and subsequent guidance requires lenders to defer principal and interest payments on the PPP loans for six months. The PPPFA modifies this deferral period to extend until the date on which loan forgiveness funds are remitted by the SBA to the lender. After the covered period ends, businesses are required to submit a PPP loan forgiveness application to their lender together with documentation supporting the calculation of their loan forgiveness amount. The lender then has 60 days to review the application and make a decision on whether all or a portion of the loan forgiveness amount is accepted and to submit its decision to the SBA. The SBA has an additional 90 days to review the forgiveness application and related PPP loan. The extended deferral period under the PPPFA incorporates the lender and SBA review periods related to the forgiveness application. If a business does not file for forgiveness within 10 months after its covered period ends, then the business must begin paying principal and interest on the PPP loan. Removes limitation on businesses deferring payroll taxes under the CARES Act As we previously discussed, the CARES Act prevented a business that receives a PPP loan from deferring the deposit and payment of the employer portion of Social Security taxes once the PPP loan is forgiven. The PPPFA eliminates this restriction so that a business may now defer the deposit and payment of the employer portion of Social Security taxes in accordance with the terms of the CARES Act both before and after the PPP loan is forgiven. The elimination of this restriction will allow business to obtain the benefits of both deferring the employer portion of Social Security taxes and PPP loan forgiveness rather than having to decide which benefit to pursue. [*] Continuing to Do Business With Bankrupt Retailer ---------------------------------------------------- Olivera Medenica, the Fashion Practice Group Chair at Dunnington Bartholow & Miller LLP, wrote on The Fashion Law an article "Business When a Retailer Files for Bankruptcy: Should You Continue Doing Business with Them?" With weeks of mandates that businesses close up their brick-and-mortar shops only beginning to lift, and falling consumer demand still in play, retailers have been devastated by the COVID-19 pandemic and its seemingly endless fallout. It is no surprise that, as a result, a number of major retailers have filed for bankruptcy – from Neiman Marcus and True Religion to J. Crew and JCPenney. While the impact that such Chapter 11 filings will have on consumers may be minimal, when a company files for Chapter 11 bankruptcy, its suppliers may be put in a difficult position. As bankruptcy-filing companies (i.e., debtors) need trade support -- and in many cases, stock -- in order to survive, they usually reach out to suppliers in an attempt to maintain a steady supply of goods to keep their business afloat. This is particularly true for retailers, such as Neiman Marcus, which rely significantly on third-party brands' products. Companies can continue doing business with a debtor in bankruptcy and provide it with merchandise to stock, but there are risks inherent in doing so, including of course, the fact that the debtor may simply not pay for the goods sold after the bankruptcy proceeding has been filed. There are ways to manage such risks including, for example, by requiring that the debtor pay a deposit on the goods or pay for them in full upon delivery, or even in advance. Alternatively, a company may opt to shorten the trade credit terms, or require a letter of credit as security. Hardly fool-proof remedies, these options can be fraught with peril for the unwary, as payment does not guarantee that the transaction will not be challenged in court. Below is an outline of some of the issues that can arise in the context of doing business with a Chapter 11 debtor in bankruptcy. Chapter 11 is a Reorganization Bankruptcy A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy. In other words, the debtor – such as J. Crew or Neiman Marcus – is not planning on liquidating its assets and going out of business. On the contrary, it plans on reorganizing and continuing to do business. A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. Unless the court orders otherwise, a debtor must file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs. The petition filed by the debtor will include standard information about the company and its reorganization plan or intention to file a reorganization plan, as well as a request for relief under the Bankruptcy Code. Upon filing of the petition, the debtor automatically assumes an additional identity as the "debtor in possession." In other words, the debtor is in possession and control of its assets while undergoing a reorganization under chapter 11. Ultimately, the debtor files a plan of reorganization with the court, which includes a classification of claims reflecting the money its owes to creditors and specifies how each class of claims will be treated under the plan. Creditors whose claims are impaired – or altered by the debtor's plan – get to vote on the plan by ballot. After the ballots are collected and tallied, the court conducts a confirmation hearing to determine whether to confirm the debtor's proposed plan. Post-Bankruptcy Sales are "Administrative Expense Claims" In the meantime, once the debtor files its petition with the bankruptcy court, it is legally permitted to acquire and pay for post-bankruptcy filing ("post-petition") purchases of goods and services in the ordinary course of business. For a company like Neiman Marcus, this could mean everything from the pricey Tom Ford dresses and Balmain suits that it regularly stocks to the expensive La Mer skincare and designer beauty products that usually line its shelves. Such purchases are accorded administrative claim status, which means they are given priority over unsecured and certain other claims – in other words, they have priority over certain pre-bankruptcy claims. It also means that the debtor is permitted to pay them, even if the purchase was made post-filing. The reason the Bankruptcy Code prioritizes such expenses is because it encourages vendors to continue doing business with debtors in possession. In order to use the bankruptcy process to successfully restructure their company, a Chapter 11 debtors are obligated to pay their bills in a timely manner, and if the debtor fails to pay such post-petition bills, the court can step in and order payment. As a result, it is not uncommon for vendors to feel payment is “guaranteed” when dealing with a debtor in possession. Secured Creditors Trump "Administrative Expense Claims" It is important to note, however, that there is no such guarantee. Indeed, the Bankruptcy Code gives priority to a Chapter 11 debtor's secured lenders, and forbids a debtor from using "cash collateral" (i.e. cash subject to a lender's security interest) unless the lender consents, or the court has entered an order authorizing such use. In other words, if the debtor in possession uses cash collateral to pay for post-petition purchase orders, the transaction can be challenged in court and the vendor can be ordered to pay back all of the money it received. That is exactly what happened in In re Delco Oil, Inc., when the Eleventh Circuit Court of Appeals ordered a vendor to return more than $1.9 million that it had received from the debtor in bankruptcy. The vendor in that case had provided petroleum products worth $1.9 million to Delco Oilafter Delco had filed for bankruptcy. Delco, however, did not have a court order or stipulation allowing it to use cash collateral to pay for the goods. As a result, the vendor was required to pay every single penny back of the $1.9 million in received from Delco, despite its lack of knowledge that the company was using the cash improperly. In other words, the vendor was strictly liable to return the monies. "Ordinary Course of Business" Transactions Another important point is that these post-petition transactions must be done in the "ordinary course of business." Therefore, if the order is an unusually large purchase, or on unusual terms, the transaction runs the risk of not being incurred in the ordinary course of business. If that is the case, the vendor should consider getting the bankruptcy court’s approval so that its rights are protected. Conversion to Chapter 7 Liquidation Finally, it is not uncommon for a Chapter 11 bankruptcy proceeding to turn into a Chapter 7 liquidation. If that occurs, Chapter 7 administrative claims have priority over Chapter 11 claims. The likelihood of recovering monies on post-petition purchases thus becomes cents on the dollar, rather than the full payment that was originally anticipated in the context of Chapter 11 proceedings. This post addresses some of the issues that may arise when a retailer files for Chapter 11 bankruptcy. Each situation is unique and a Chapter 11 proceeding can be complicated. Any contract negotiated with a retailer in Chapter 11 bankruptcy must be done carefully and requires thorough due diligence to determine whether the debtor is creditworthy. [*] Flexibility Act Significantly Improves PPP ---------------------------------------------- Howard Berkower, Jillian Bray, and William Brown, Jr., of McCarter & English, LLP, signed on JDSupra an article titled "Flexibility Act Significantly Improves The Paycheck Protection Program": On June 5, 2020, the Paycheck Protection Program Flexibility Act (H.R. 7010) (the Flexibility Act) was signed into law, and on June 11, 2020, the Small Business Administration (SBA) released a revised interim final rule (Revised Rule) to address changes made by the Flexibility Act. The Flexibility Act and the Revised Rule expand the following key provisions of the Paycheck Protection Program (PPP) loan. 1. Increases Amount of Time to Spend PPP Funds The amount of time PPP loan recipients have to spend PPP loan proceeds would be extended from eight weeks to 24 weeks starting at the origination of the loan but ending no later than December 31, 2020. This addresses concerns that the current eight-week forgiveness period is not enough time for businesses (particularly bars, restaurants and salons) to reopen and spend their received funding and recover financially, particularly in light of the safety restrictions these businesses face because of COVID-19. PPP loan recipients that already have received their PPP loans have the option to extend their covered period to 24 weeks or to continue with the original eight-week period. 2. Reduces Required Payroll Costs From 75% to 60% After the PPP was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the SBA established a rule requiring no less than 75% of loan proceeds be spent on payroll costs during the relevant covered period in order to qualify for forgiveness. If payroll costs were less than 75% of the total permitted costs spent during the covered period, then the total loan amount to be forgiven would be lowered "to force" payroll costs to comprise 75% of the forgiveness amount. The Flexibility Act lowers the amount required to be spent on payroll costs from 75% to 60% and correspondingly increases the amount that may be used for other approved costs, such as mortgage interest payments, rent and utilities, from 25% to 40%. This change allows businesses to spend more of their received loan amount on other business operating expenses without sacrificing the amount of the loan that may be forgiven. The extension of time to use the loan and the amount of the loan that can be used for non-payroll costs will significantly increase the likelihood that PPP loan recipients will have the entire PPP loan forgiven. Of course, those loan recipients that used the loan to pay employees even though they were not open for business will likely require additional relief to restart and ramp up their businesses. 3. Extends Exemption Based on Employee Availability and Provides Additional Safe Harbor for FTE Reductions The deadline for rehiring employees and receiving loan forgiveness reductions under the PPP is extended six months, from June 30, 2020, to December 31, 2020. The additional six-month period should eliminate most loan forgiveness reductions resulting from a workforce reduction. In addition, the loan forgiveness amount will no longer be decreased due to a reduction in the number of full-time equivalent (FTE) employees from February 15, 2020, through December 31, 2020, if the loan recipient can document: (a) its inability to rehire individuals employed on February 15, 2020, and hire qualified replacements by December 31, 2020, or (b) the company's inability to return to its activity level before February 15, 2020, due to COVID-19-related restrictions, guidance or requirements imposed by the government between March 1, 2020, and December 31, 2020. This, in conjunction with the reduced percentage of the PPP loan required to be spent on payroll and the new deadline for rehiring employees, significantly increases a small business’s ability to maximize the impact of its PPP funding and obtain complete loan forgiveness. 4. Extends Loan Maturity to Five Years The maturity date for loans made after June 5, 2020, will be five years instead of two years. While this change will apply to all PPP loans made on or after June 5, 2020, the Flexibility Act and the Revised Rule specifically state that any recipient of a PPP loan funded prior to the law’s enactment and its lender may "mutually agree" to extend the term of the loan. A borrower so situated can request its lender to retroactively extend the maturity terms of the loan to five years. Given this express language, one would expect lenders to be receptive to such a request. 5. Extends Payment Deferral Period Originally under the CARES Act, payments of principal and interest on PPP loans were deferred until six months after the borrower received the loan proceeds. The Flexibility Act requires a borrower to request forgiveness no later than ten months after the end of the applicable covered period and extends the deferral period until the loan forgiveness application is acted upon and the SBA remits the applicable amount to the lender. It can take up to 90 days for loan forgiveness to be processed and funded by the SBA. Accordingly, although a borrower likely will apply for forgiveness as soon as possible after the end of the applicable covered period, if a borrower waits the full ten months to submit its forgiveness application, the resulting deferral period would continue until (a) July 2021, in the case of a covered period ending June 30, 2020, and (b) January 2022, in the case of a 24-month covered period. 6. Delays Employee Taxes Any loan recipient now can access the CARES Act deferral for its portion of Social Security payroll taxes up to 6.2% for payments required to be made between March 27, 2020, and December 31, 2020, regardless of whether any portion of its PPP loan is forgiven. Previously, a loan recipient could not continue to defer its portion of Social Security payments after any of its PPP loan was forgiven. 7. Borrower Certifications The Revised Rule emphasizes that borrowers must make the following additional certifications in connection with their PPP loan application: 1. The funds will be used to retain workers and maintain payroll or make mortgage interest payments, rent and lease payments for personal property and utility payments. The federal government may hold such borrower legally liable for using the funds for other purposes and press charges, such as for fraud. 2. Borrowers will provide to their respective lenders documentation verifying the number of FTE employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments and covered utilities for the loan forgiveness covered period. 3. Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utility payments. No more than 40% of the loan’s proceeds may be used for non-payroll costs. Warning: The June 30, 2020, PPP application deadline has not changed under the Flexibility Act and remains in effect. The Flexibility Act puts some power back in employers’ hands by granting greater spending and rehiring flexibility. With more time to use the funds, more time to rehire employees, and a decrease in the mandatory minimum funds to be spent on payroll costs, more borrowers will be able to meet the loan requirements and guarantee complete loan forgiveness for themselves. [*] PPP Revisions to First First Interim Final Rule --------------------------------------------------- R. Prescott Jaunich of Downs Rachlin Martin PLLC wrote on JDSupra an article titled "SBA Releases Business Loan Program Temporary Changes; Paycheck Protection Program – Revisions to First Interim Final Rule": On June 10, 2020, the Small Business Administration ("SBA") released Business Loan Program Temporary Changes; Paycheck Protection Program – Revisions to First Interim Final Rule.[1] These revisions implement regulatory changes to the Paycheck Protection Program ("PPP"), including amendments to the use of PPP loan proceeds, to conform to the recently adopted Paycheck Protection Program Flexibility Act ("Flexibility Act"). These revisions clarify how businesses that use less than 60% of the PPP loan amount for payroll costs during the forgiveness-covered period will continue to be eligible for partial loan forgiveness. The SBA includes the following example: If a borrower receives a $100,000 PPP loan, and during the covered period the borrower spends $54,000 (or 54%) of its loan on payroll costs, then because the borrower used less than 60 percent of its loan on payroll costs, the maximum amount of loan forgiveness the borrower may receive is $90,000 (with $54,000 in payroll costs constituting 60 percent of the forgiveness amount and $36,000 in nonpayroll costs constituting 40 percent of the forgiveness amount). The revisions also implement an extension of the covered period for loan forgiveness from eight weeks to 24 weeks, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Although businesses who elect the new longer 24-week covered period may be required to maintain employment levels and salary and wage levels through this longer covered period, this extension of the covered period may be particularly helpful for businesses that remain shuttered or with restricted operations due to COVID-19 orders. Now, businesses may also treat unfilled positions as if they were filled by the December 31, 2020, deadline if the business can establish, in good faith, and document: 1. An inability to rehire the same or similar employees that were in place as of February 15, 2020; or 2. An inability to return to the same level of business activity before February 15, 2020, due to COVID-related social distancing, sanitation, and other safety requirements or guidance from the Centers for Disease Control, Health and Human Services, or Occupational Safety and Health Administration issued between March 1, 2020, and December 31, 2020. The revisions also implement the Flexibility Act's modification of PPP loan maturity dates. For loans made before June 5, 2020, the maturity is two years; however, borrowers and lenders may mutually agree to extend the maturity of such loans to five years. For loans made on or after June 5, the maturity is five years. The revisions establish that the date SBA assigns a loan number to the PPP loan provides an efficient, transparent, and auditable means of determining when a PPP loan is "made" that provides certainty to lenders. The revisions further implement the extended deferral period for loan repayment adopted in the Flexibility Act. If a loan forgiveness application is submitted within 10 months after the end of the covered period, a business will not have to make any payments of principal or interest on its loan before the date on which SBA remits the loan forgiveness amount to the lender (or notifies the lender that no loan forgiveness is allowed). The revisions also clarify that the lender must notify each borrower of remittance by SBA of its loan forgiveness amount (or notification that SBA determined that no loan forgiveness is allowed) and the due date of the first required loan payment. Interest still continues to accrue during the deferment period. For businesses that do not submit a forgiveness application within 10 months after the end of their loan forgiveness covered period, payments of principal and interest begin promptly after that period. For example, if a borrower's PPP loan is disbursed on June 25, 2020, the 24-week period ends on December 10, 2020. If the borrower does not submit a loan forgiveness application to its lender by October 10, 2021 (the date being 10 months after the end of the covered period), the borrower must begin making payments on or after October 10, 2021. The revisions do not alter how PPP loans may be used. The proceeds of a PPP loan are still to be used for: 2. payroll costs (as defined in the Act and in 2.f.); 3. 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 (but not mortgage prepayments or principal payments); 1. rent payments; 2. utility payments; 3. interest payments on any other debt obligations that were incurred before February 15, 2020; and/or vii. refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020. Finally, the new revisions modify three of the required borrower certifications for consistency with the PPP changes under the Flexibility Act. These include: "iii. The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments; I understand that if the funds are knowingly used for unauthorized purposes, the Federal Government may hold me legally liable such as for charges of fraud. As explained above, not more than 40 percent of loan proceeds may be used for nonpayroll costs. 1. Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the loan forgiveness covered period for the loan will be provided to the lender. 2. Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utility payments. As explained above, not more than 40 percent of the forgiven amount may be used for nonpayroll costs." As evidenced by these first revisions, the PPP and its regulatory implementation continue to change. In these revisions the SBA expressly commits to issuing (i) revisions to its interim final rules on loan forgiveness and loan review procedures to address amendments the Flexibility Act made to the loan forgiveness requirements and (ii) additional guidance on advance purchases of PPP loans, which will include any effect of the amendments made to the loan forgiveness requirements. These recent revisions also expressly acknowledge that further guidance, if needed, may be provided through SBA notices which will be posted on SBA’s website at www.sba.gov. DRM attorneys will continue to monitor these developments. [1] The complete text of these revisions can be found here: https://home.treasury.gov/system/files/136/PPP-IFR-Revisions-to-First-Interim-Final-Rule.pdf [*] SBA and SBA Codify PPP Flexibility Act Changes -------------------------------------------------- Matthew Dyckman and Nicole Griffin of Goodwin wrote on JDSupra an article titled "Treasury And SBA Codify Changes To PPP Flexibility Act": On June 10, 2020, the Treasury and the SBA released an interim final rule to codify changes made by H.R. 7010, the Paycheck Protection Program Flexibility Act (Flexibility Act), to the PPP. The interim final rule revises the previous interim final rule posted on April 2, 2020, by changing key provisions, such as the loan maturity, deferral of loan payments, and forgiveness provisions, to conform to the Flexibility Act. The interim final rule also makes conforming amendments to the use of PPP loan proceeds for consistency with amendments made in the Flexibility Act. Specifically, the interim final rule: * Extends the end date of the "covered period" to incur costs that measure the amount of indebtedness that qualifies for loan forgiveness from June 30, 2020 to December 31, 2020; * Provides for a minimum maturity of five years for PPP loans made on or after June 5, 2020, while providing an option to extend the maturity of PPP loans made before that date from two years to five years upon the mutual agreement of the borrower and lender; * Clarifies that, if a borrower submits its forgiveness application within 10 months of the end of the loan forgiveness period, the borrower will not have to make any payments on the loan before the date on which the SBA remits the loan forgiveness amount to the lender; * Interprets the provision of the Flexibility Act requiring a borrower to use at least 60% of PPP loan proceeds on payroll in order to be eligible for loan forgiveness as a proportional limit on nonpayroll costs as a share of the borrower’s loan forgiveness amount, rather than as a threshold for receiving any loan forgiveness (meaning that borrowers using less than 60% of their PPP loan amount for payroll costs during the forgiveness covered period will be eligible for partial loan forgiveness); and * Extends the loan forgiveness period from eight weeks to 24 weeks, while permitting borrowers on PPP loans made prior to June 5, 2020 to elect to keep an eight-week forgiveness period. The SBA also indicated in the interim final rule that it will be issuing revisions to its interim final rules on loan forgiveness and loan review procedures to address amendments the Flexibility Act made to the loan forgiveness requirements and will also be issuing additional guidance on advance purchases of PPP loans, which will include any effect of the amendments made to the loan forgiveness requirements. In conjunction with the interim final rule, the SBA published updated application forms for borrowers and lenders for PPP loans made on or after June 5, 2020. For additional information about the changes made to the PPP by the Flexibility Act, read the recent Goodwin client alert. SBA and Treasury Announce New EZ and Revised Full Forgiveness Applications for the Paycheck Protection Program On June 17, the SBA and Treasury posted a revised, borrower-friendly PPP loan full forgiveness application implementing the changes made by the Flexibility Act. In addition to revising the full forgiveness application, the SBA also published a new, streamlined EZ forgiveness application that applies to borrowers who: * Are self-employed and have no employees; * Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; or * Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%. The EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form. Both applications give borrowers the option of using the original eight-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. According to the SBA, these changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan. Fed Opens Main Street Lending Program for Lender Registration On June 15, the Federal Reserve announced that its Main Street Lending Program (MSLP) is open for lender registration. Lenders can find the necessary registration documents on the program site. The Federal Reserve is encouraging lenders to begin making Main Street program loans immediately. Eligible lenders can now register through the program's lender portal, through which lenders will provide relevant identifying information, and sign and submit required registration forms and agreements. For additional information regarding the MSLP, please visit bostonfed.org/mslp. For information about the recent changes to the MSLP, read the recent Goodwin client alert. Fed Seeks Comment on Proposal to Expand Main Street Lending Program to Provide Access to Credit for Nonprofit Organizations On June 15, the Federal Reserve announced that it is seeking comment on a proposal to expand the MSLP to provide access to credit for nonprofit organizations. Loan terms under the proposed Main Street nonprofit loans, including the interest rate, deferral of principal and interest payments, and five-year term, are the same as for Main Street business loans. The minimum loan size is $250,000 while the maximum loan size is $300 million. Principal payments would be fully deferred for the first two years of the loan, and interest payments would be deferred for one year. Two loan options would be offered under the proposal. Borrower eligibility requirements for the proposed nonprofit facilities would be modified from the for-profit facilities to reflect the operational and accounting practices of the nonprofit sector and include: * Minimum of 50 and maximum of 15,000 employees; * Financial thresholds based on operating performance, liquidity and ability to repay debt; * An operational history of at least five years; and * A limit on endowments of no more than $3 billion. Additionally, each organization must be a tax-exempt organization under section 501(c)(3) or 501(c)(19) of the Internal Revenue Code. The proposal included proposed term sheets for two facilities: the Nonprofit Organization New Loan Facility (NONLF) and the Nonprofit Organization Expanded Loan Facility (NOELF). Comments on the proposed NONLF and NOELF term sheets will be accepted through June 22, 2020, via this feedback form. Fed Releases Updates to Secondary Market Corporate Credit Facility On June 15, the Federal Reserve released updates to the Secondary Market Corporate Credit Facility (SMCCF), which will begin buying a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers. As detailed in a revised term sheet and updated FAQs, the SMCCF will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds. This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility's minimum rating, maximum maturity and other criteria. This indexing approach is designed to complement the facility's current purchases of exchange-traded funds. Fed Announces It Will Resume Bank Examination Activities On June 15, the Federal Reserve announced that it will resume examination activities for all banks, after previously announcing a reduced focus on exam activity in light of the coronavirus pandemic. In March, the Federal Reserve announced that it would temporarily reduce its examination activity and focus on monitoring response efforts during the period of uncertainty caused by the coronavirus pandemic, with the greatest reduction in examination activity for smaller banks with less than $100 billion in total consolidated assets. Since then, banks have had time to implement contingency operating plans and adapt their operations, therefore, the Federal Reserve intends to resume its examination activity. The Federal Reserve anticipates that exams will continue to be conducted offsite until conditions improve and will continue to work with banks to understand any specific issues they may be facing. CFPB Publishes Updated FAQs on Credit Reporting During the COVID-19 Pandemic On June 16, the CFPB published updated frequently asked questions regarding its April 1, 2020 statement regarding financial institutions’ reporting obligations under the Fair Credit Reporting Act during the COVID-19 pandemic. U.S. SEC Chairman Confirms June 30 Deadline and Areas of Focus for Regulation Best Interest and Form CRS In a public statement issued on June 15, SEC Chairman Clayton confirmed the June 30 deadlines for compliance with Regulation Best Interest (Reg. BI) and the Form CRS requirements, echoing his statements from April that the implementation of Reg. BI and Form CRS requirements is necessary to protect investors, especially in the midst of COVID-19. As broker-dealers and investment advisers are well aware, the SEC adopted Reg. BI and Form CRS last year to enhance the quality and transparency of relationships with retail investors, which the SEC believes is more important than ever in times of market volatility. In the time since adoption, the SEC has continued to engage with broker-dealers, investment advisers, and market participants about these new requirements, including by providing answers to various FAQs. For additional information, read the Goodwin client alert. U.S. PPP Lenders: Risks of False Claims Act Enforcement Actions Congress has recently updated the PPP to stabilize the economy in response to the troubling economic impact of the COVID-19 pandemic. As of June 10, 5,456 lenders have participated in the program, issuing loans totaling $511.5 billion. Lenders should be aware that the federal government’s efforts to provide loans to small businesses in the wake of the pandemic may also result in increased litigation risk for lenders. Read the client alert to learn more about PPP for lenders and the potential for False Claims Act enforcement. Mitigating Risks After Reopening in the U.S.: What to Do When an Employee Who Has Returned to the Workplace Has Symptoms of, Tests Positive For or Has Been Exposed to COVID-19 Although state and local stay-at-home orders are being lifted as the country begins to reopen, the COVID-19 pandemic continues. In light of this, employers need to be prepared to properly and safely respond to employees who are in the workplace or have recently been in the workplace that (i) have COVID-19 symptoms, (ii) test positive for COVID-19, or (iii) have been exposed to COVID-19. Read the client alert for considerations and steps that employers may want to take in conjunction with guidance and directives issued by the Centers for Disease Control and Prevention, the Occupational Safety and Health Administration, the Equal Employment Opportunity Commission and state and local authorities. ENFORCEMENT & LITIGATION Big Win for Stock Exchanges as DC Circuit Court Grounds SEC Transaction Fee Pilot On June 16, the United States Court of Appeals for the D.C. Circuit dealt a blow to the SEC by overturning the agency’s “Transaction Fee Pilot.” The court ruled that the SEC’s adoption of the Pilot “was an unprecedented action that clearly exceeded the SEC’s authority under the Exchange Act.” Analyzing transaction fees that exchanges charge their members is one of several “market structure” initiatives the SEC has attempted to tackle under the leadership of Chairman Clayton along with Trading and Markets Director Redfearn. At the end of 2018, the SEC adopted a temporary "Pilot Program" (as Rule 610T) that was designed "to gather data" on transaction fees. As the SEC stated at that time, "[t]he pilot is designed to generate data that will help the [SEC] analyze the effects of exchange transaction fee and rebate pricing models on order routing behavior, execution quality, and market quality generally." The SEC intended to use the data "to facilitate an empirical evaluation of whether the exchange transaction-based fee and rebate structure is operating effectively to further statutory goals and whether there is a need for any potential regulatory action in this area." Several exchanges sued the SEC to prevent the Pilot from getting off the ground. The SEC paused the launch of the Pilot while the suit was pending. It now appears that the Pilot will stay grounded. The court ruled that the SEC acted without the proper authority when it adopted the Pilot. The opinion was quite harsh, referencing that the "Pilot Program emanates from an aimless 'one-off' regulation, i.e., a rule that imposes significant, costly, and disparate regulatory requirements on affected parties merely to allow the Commission to collect data to determine whether there might be a problem worthy of regulation." The opinion also referenced that the SEC "did not identify any problems with existing regulatory requirements or propose rules that might rectify any perceived issues," instead, the SEC "acted solely to 'shock the market' to collect data so that it might ponder the 'fundamental disagreements' between parties affected by [SEC] rules and then consider whether to regulate in the future." This marks the second big win for the exchanges last month. On June 5, 2020, the same court overturned prior SEC action relating to market data fees the exchanges charge. [*] SBA Has New Instructions, Applications for PPP Loan Forgiveness ------------------------------------------------------------------- David Guadagnoli and Jeffrey Morlend of Sullivan & Worcester wrote on JDSupra an article titled "SBA Releases New Paycheck Protection Program Loan Forgiveness Applications and Instructions": As we previously predicted, the Small Business Administration (SBA) recently released a new loan forgiveness application and related instructions for those borrowers seeking forgiveness of Paycheck Protection Program (PPP) loans to reflect changes to the PPP implemented as a result of the recently enacted Paycheck Protection Program Flexibility Act of 2020. In addition, the SBA released a simplified forgiveness application and related instructions for borrowers who meet certain criteria as specified therein. [] Amending the Bankruptcy Code to Add CBA Changes Oversight ------------------------------------------------------------ Kenneth A. Rosen, a partner at Lowenstein Sandler LLP and chair of the firm's bankruptcy, financial reorganization and creditors rights practice, wrote on Law360 an article titled "Amend Bankruptcy Code To Add Oversight For CBA Changes" As more companies file for Chapter 11 amid the pandemic, expect to see more filings focus on reducing labor, legacy and environmental costs as key to a successful reorganization. This theme will come from debtor management hoping to mask broken promises of performance improvement. It will be heard behind the scenes from secured lenders and investors that have placed too much debt on the debtor or relied too much on underperforming management. Of course, one way to improve the bottom line is to reduce leverage, which immediately improves profitability and cash flow. But that often requires concessions and contributions that equity holders are unwilling to make. Consequently, under pressure from lenders and equity holders, debtors will seek to reject or renegotiate collective bargaining agreements, or CBAs, and legacy benefits. Labor is the first place in the budget from which debtors will seek a subsidy — often only after key employee retention plans for senior management have gotten board approval. Secured lenders can do a big "favor" for the debtor by mandating that the debtor reject or renegotiate CBAs as a condition to continued financing. Then, management can blame its lenders for the fire-drill timeline within which to complete negotiations or obtain a ruling by the court. Politics make it unlikely that the creditors committee will oppose reducing labor and legacy costs. Committees often sit on the sidelines reluctant to choose sides or make enemies. Plus, anything that enhances valuation is viewed by the committee as a big positive. And the banks will sit by, not looking to make enemies, and relying on the debtor and the mandates of the debtor-in-possession financing order. Shareholders are pleased for the debtor to be under extreme pressure and remain silent. The idea is to ram a collective bargaining rejection process through the bankruptcy court as quickly as possible while claiming that "Rome is burning" and that the success or failure of the Chapter 11 case is wholly dependent upon renegotiation of the CBAs. The court is often placed in a position of great discomfort. A goal of Chapter 11 is to preserve jobs and going concern value and so the court is squeezed between wanting to protect the rights of employees for whom jobs are critical in periods of high unemployment while at the same time wanting to facilitate a reorganization. The judge may be of the view that reducing compensation and benefits or modifying work rules is painful, but it is better than risking the alternative. Chapter 11 is perceived as a good forum in which to renegotiate CBAs. A debtor seeking to reject a CBA or modify retiree welfare benefit obligations is required to first satisfy the procedural and substantive requirements set forth in Sections 1113 and 1114 of the Bankruptcy Code. The list of the requirements includes the requirements that the company must provide the union or other authorized representative with complete and reliable information about the company; make a formal proposal to the union to reject and modify the CBA or the retiree benefits; and meet in good faith with the union in an attempt to negotiate the changes. The CBA can be rejected, or the retiree benefits modified, only if the union/other authorized representative rejects the proposed changes and the bankruptcy court ultimately finds that the changes are "necessary" for the debtor's reorganization. However, in many instances, labor costs are not the real problem, or they are only one of several problems. The debtor may be carrying too much indebtedness. The indebtedness may be from a prior leveraged buyout or acquisition. Shareholders refuse to invest more capital in order to pay down debt; nor do they want to give up equity. And, in many instances, management has simply failed to achieve the goals that it promised would be transformative in order for the debt to be serviced. Section 1114 motions are also typically fast-tracked and the union often is at a disadvantage because the debtor has had months to orchestrate its crisis. However, bankruptcy judges should be reluctant to expedite the Section 1114 process. The remedy, instead, is for the court to have the benefit of someone akin to an ombudsman or public advocate — someone able to provide the court with an impartial view as to the cause of the debtor's need for reorganization, the appropriate remedy, and how the cost -- or blame? -- should be allocated. Reducing wages or benefits for union employees solely in order to increase value for the benefit of equity holders and lenders is unjustified. An examiner functioning as a public advocate or ombudsman should determine whether the relief sought is reasonable, necessary and equitable given the relative contributions proposed to be provided by secured lenders and by equity holders. Often, Section 1114 relief is sought before the final terms of a plan of reorganization even are known. All parties are more likely to be reasonable if they know that an examiner will be looking over their shoulders. In order to better assure that the resolution of Section 1113 or Section 1114 motions is fair and equitable to all parties in interest and in order to assure that the public interest is protected, the Bankruptcy Code should be amended to require the appointment of an examiner with the limited scope of responsibilities described above upon the filing of a motion to reject CBAs or to modify benefits. The threat of appointment of an examiner will cause all parties -- not just the debtor and labor -- to work harder toward a fair and equitable resolution of the debtor's financial difficulties before filing motions. In an economy where unemployment is reaching a level not seen since the Great Depression, it is especially unreasonable for labor to bear a disproportionate portion of the cost of a debtor's reorganization. Instead, the cost should be borne first by the parties who are responsible for the problem and the parties who have the most to gain from its resolution: lenders, which provided more debt than was justified, and equity holders, which have the upside. [] Growing Use of Pre-Bankruptcy Retention Bonuses -------------------------------------------------- David Farrell of Thompson Coburn LLP wrote on JDSupra an articled titled "Payday before mayday: The increasing use of pre-bankruptcy executive retention bonuses": The initial wave of post-COVID Chapter 11 business bankruptcies has revealed an increasing tendency for senior executives of financially distressed companies to award themselves substantial bonuses and similar forms of compensation immediately before placing their companies into bankruptcy. If this trend continues, it may largely nullify the efforts of Congress and the courts to rein in and strictly regulate such forms of compensation. Historically, companies filing for Chapter 11 bankruptcy routinely sought bankruptcy court approval to implement so-called key employee retention plans ("KERPs"). Pursuant to these KERPs, Chapter 11 debtors would pay large retention bonuses to certain members of their senior management on the condition that the individuals remain with the company throughout the entire Chapter 11 process. The Debtors argued that such "pay to stay" arrangements were critical and necessary to the Debtor's overall reorganization efforts because essential management personnel might otherwise abandon a "sinking ship." Over time, bankruptcy courts grew increasingly comfortable with KERPs, so much so that requesting and obtaining bankruptcy court approval of a KERP in a large Chapter 11 case became a perfunctory exercise. Eventually, however, union leaders and other constituencies began to complain to Congress about the gross inequities of allowing bankrupt companies to pay large retention bonuses to the same senior managers who drove the companies into bankruptcy in the first place -- particularly when those companies then used the Chapter 11 process to severely curtail the rights and interests of union members and other creditors. The parties voicing such complaints found a receptive ally in the late Senator Edward "Ted" Kennedy, whose home state of Massachusetts had witnessed one of its most prominent companies, The Polaroid Corporation, file for Chapter 11 protection and obtain bankruptcy court approval to pay out more than $7 million in KERP payments to the company's senior executives-- only to have those executives quickly turn-around and sell substantially all of the company's assets to an investment fund under a bankruptcy court-approved transaction that left many of the company's employees and retirees with little recourse or recovery. Ultimately, as part of the Bankruptcy Abuse and Consumer Protection Act of 2005 ("BAPCPA" or the "2005 Amendments"), Kennedy pushed through an amendment to Bankruptcy Code Section 503 that significantly restricted the use of KERPs in bankruptcy. In the case of senior management, these restrictions are so substantial that, as a practical matter, they effectively ended the practice of using post-filing KERPs as a means of providing enhanced compensation and incentives to high-level executives. Undeterred, Chapter 11 practitioners responded to the 2005 Amendments by developing an alternative means of providing enhanced compensation to senior management personnel: key employee incentive plans or "KEIPs" (pronounced keeps). Under a KEIP, select members of a Chapter 11 debtor's senior management are awarded bonuses and other forms of incentives if the company achieves certain milestones and/or outcomes during the Chapter 11 process. Because the underlying bonuses and incentives under these programs are not conditioned solely upon a senior executive’s commitment to stay with the company throughout the Chapter 11 process, KEIPs ostensibly fall outside the scope of the severe restrictions that the 2005 Amendments to the Bankruptcy Code impose on "pay to stay" retention plans. As the use of KEIPs proliferated in the years following the enactment of the 2005 Amendments, bankruptcy courts became increasingly sensitive to the argument that the proposed milestones and outcomes triggering the award of KEIP payments represented such "low hurdles" that the KEIPs were, for all intents and purposes, affording senior executives with the same "pay to stay" compensation that Congress sought to limit through its 2005 restriction on the approval of KERPs. Accordingly, before approving a KEIP, most bankruptcy courts today scrutinize the proposed KEIP under one or more judicially-developed "tests" -- the most prominent being a six-part test first articulated by departed Bankruptcy Judge Burton E. Lifland in In re Dana Corporation. Satisfying such a test is typically more than a perfunctory exercise and, instead, often requires a Chapter 11 debtor's counsel to make a series of challenging and uncertain evidentiary showings. In a departure from this now well-established practice, debtors in several recent Chapter 11 cases have dispensed with post-filing KEIPS altogether and have instead paid significant retention bonuses to senior management immediately before filing for bankruptcy. For instance, five days before its May 15, 2020 bankruptcy filing, storied clothing retailer J.C. Penney Company, Inc. awarded nearly $10 million in bonuses and incentives to four of its most senior executives. The stated purpose of this compensation was "to retain and continue to motivate [these senior executives] through the volatile and uncertain environment affecting the retail industry." Some of the bonuses are subject to repayment if a covered executive voluntarily leaves the company before certain, specified dates set out at least into the next calendar year. Similarly, one week before filing for Chapter 11 protection on May 26, 2020, rent-a-car giant Hertz Corporation adopted a "Key Employee Retention Program" where it immediately paid out more than $16 million in cash bonuses to various executive officers. Like in the case of J.C. Penney, the Hertz executives must repay the bonuses if the covered executive voluntarily leaves the company before March 31, 2021. In addition to J.C. Penney and Hertz, several other companies with less familiar names have also paid large retention bonuses to their senior executives immediately before filing for bankruptcy, including Whiting Petroleum Corporation, Libbey Glass, Inc. and Extraction Oil & Gas Inc. The payment of prepetition bonuses may not be the end of the story. Ostensibly, the 2005 Amendments to the Bankruptcy Code provide creditors and other parties-in-interest with a potential means of challenging such eve-of-bankruptcy retention bonus payments. Under Bankruptcy Code Section 548(a)(1)(B), a bankruptcy estate representative can avoid and recover a transfer made by a Chapter 11 debtor within two years before the bankruptcy filing if the transfer constitutes a "constructively fraudulent" fraudulent transfer. Traditionally, in order to establish the occurrence of a "constructively fraudulent" fraudulent transfer, an estate representative had to demonstrate the following, two elements: (1) the debtor received less than reasonably equivalent in exchange for the transfer; and (2) at the time -- or as a result -- of the transfer, the debtor was experiencing one of three standards of financial distress (i.e., insolvency, unreasonably small capital and/or an inability to pay its debts as they mature). As part of the 2005 Amendments, however, Congress amended Bankruptcy Code Section 548(a)(1)(B) to relieve an estate representative from the burden of demonstrating any "financial distress" for transfers made by a debtor to an "insider" (such as a senior executive) "under an employment agreement and not in the ordinary course of business." Thus, Bankruptcy Code Section 548(a)(1)(B) now allows an estate representative to avoid a pre-bankruptcy bonus paid to a senior executive outside of the ordinary course of business without demonstrating that the company was insolvent or experiencing financial distress at the time the payment was made. Instead, in such situations, the estate representative need only demonstrate that the debtor received less than reasonably equivalent value in exchange for the payment. In the context of retention bonuses paid on the eve of bankruptcy, however, demonstrating that the debtor was experiencing "financial distress" at the time of the transfer (i.e., on the eve of bankruptcy) is usually not a difficult burden to carry. Instead, from evidentiary standpoint, the far more challenging and contentious element of proof is that the debtor did not receive reasonably equivalent value in exchange for such bonuses. The 2005 Amendments to the Bankruptcy Code, however, did not ease in any way the estate's burden in having to establish the latter element. Consequently, it may not be surprising that following the 2005 Amendments, those instances in which pre-bankruptcy bonuses paid to a Chapter 11 debtor's senior management have been successfully challenged under Bankruptcy Code Section 548(a)(1)(B) appear to be few and far between. One possible instance involved former Twinkie-maker Hostess Brands Inc., which filed a second Chapter 11 proceeding in 2012 after having gone through a Chapter 11 reorganization less than ten years earlier. In the months leading up to its second Chapter 11 filing, Hostess' then CEO dramatically increased his own compensation and the compensation of several other senior executives. After the commencement of the company's Chapter 11 proceeding, the Creditors Committee investigated these pre-bankruptcy compensation increases. In response, Hostess' newly-appointment CEO, who assumed his position two months after the company's Chapter 11 filing, intervened and drastically slashed most, if not all, of the executives' previously awarded compensation packages. Following this action, the Committee elected not to pursue the matter further. More recently, the Creditor Litigation Trust created under the Chapter 11 Plan of Liquidation confirmed in the Toys-R-Us bankruptcy filed suit against various former officers and directors of the company for, among other things, implementing a retention bonus plan under which senior executives received over $7 million in alleged retention bonuses in the week preceding Toys-R-Us' September 18, 2017 bankruptcy filing. In its Complaint, the Litigation Trust alleges that the company's outside bankruptcy counsel had specifically advised the former CEO of the bankruptcy law restrictions on the award of such bonuses and that in a deliberate effort "[t]o circumvent these restrictions, [the CEO] ordered all bonuses to be paid three days before [the company] filed for bankruptcy." Not surprisingly, the former officers and directors of Toys-R-Us vehemently denied the foregoing allegations and sought to dismiss the Liquidation Trust's Complaint. As of June 2020, the court presiding over the action has not made a ruling. As the Hostess and Toys-R-Us bankruptcies evidence, the phenomena of financially distressed companies paying retention bonuses on the eve-of-bankruptcy is not entirely new. Nevertheless, it now appears that this strategy is being employed with increased frequency-- even in high profile cases such as J.C. Penney's and Hertz. This suggests that Chapter 11 practitioners have become increasingly comfortable and confident in advising prospective Chapter 11 debtor clients to consider making such retention bonus payments prior to filing bankruptcy. Absent a successful challenge to this practice (such as the one currently being pursued in connection with the Toys-R-Us bankruptcy), this trend may continue to the point that eve-of-bankruptcy retention bonuses potentially become the rule rather than the exception. [^] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power ---------------------------------------------------------------- Authors: Arthur Fleischer, Jr., Geoffrey C. Hazard, Jr., and Miriam Z. Klipper Publisher: Beard Books Softcover: 248 pages List Price: $34.95 Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981629/internetbankrupt A ruling by the Delaware Supreme Court on January 29, 1985 was a wake-up call to directors of U. S. corporations. On this date, overruling a lower court decision, the Delaware Supreme Court ruled that the nine board members of Chicago company Trans Union Corporation were "guilty of breaching their duty to the company's shareholders." What the board members had done was agree to sell Trans Union without a satisfactory review of its value. The guilty board members were ordered by the Court to pay "the difference between the per share selling price and the 'real' market value of the company's shares." Needless to say, the nine Trans Union directors were shocked at the guilt verdict and the punishment. The chairman of the board, Jerome Van Gorkom, was a lawyer and a CPA who was also a board member of other large, respected corporations. For the most part, it was he who had put together the terms of the potential sale, including setting value of the company's stock at $55.00 even though it was trading at about $38.00 per share. News of the possible sale immediately drove the stock up to $51.50 per share, and was commented on favorably in a "New York Times" business article. Still, Van Gorkom and the other directors were found guilty of breaching their duty, and ordered by Delaware's highest court to pay a sum to injured parties that would be financially ruinous. This was clearly more than board members of the Trans Union Corporation or any other corporation had ever bargained for. It was more than board members had ever conceived was possible without evidence of fraud or graft. The three authors are all attorneys who have worked at the highest levels of the legal field, business, and government. Fleischer is the senior partner of the law firm Fried, Frank, Harris, Schriver & Jacobson at the head of its mergers and acquisitions department. He's also the author of the textbook "Takeover Defenses" which is in its 6th edition. Hazard is a Professor of Law and former reporter for the American Bar Association's special committee on the lawyers' ethics code; while Klipper has been a New York assistant district attorney prosecuting corporate and financial fraud, and also a corporate attorney on Wall Street. Using the Trans Union Corporation case as a watershed event for members of boards of directors, the highly-experienced legal professionals lay out the new ground rules for board members. In laying out the circumstances and facts of a number of cases; keen, concise analyses of these; and finding where and how board members went wrong, the authors provide guidance for corporate directors, top executives, and corporate and private business attorneys on issues, processes, and decisions of critical importance to them. Household International, Union Carbide, Gelco Corp., Revlon, SCM, and Freuhauf are other major corporations whose merger-and-acquisitions activities resulted in court cases that the authors study to the benefit of readers. The Boards of Directors of these as well as Trans Union and their positions with other companies are listed in the appendix. Many other corporations and their board members are also referred to in the text. With respect to each of the cases it deals with, BOARD GAMES outlines the business environment, identifies important individuals, analyzes decisions, and discusses considerations regarding laws, government regulations, and corporate practice. In all of this, however, given the exceptional legal background of the three authors, the book recurringly brings into the picture the legalities applying to the activities and decisions of board members and in many instances, court rulings on these. Passages from court transcripts are occasionally recorded and commented on. Elsewhere, legal terms and concepts -- e. g., "gross nonattendance" -- are defined as much as they can be. In one place, the authors discuss six levels of responsibility for board members from "assure proper result" through negligence up to fraud. Without being overly technical, the authors' legal experience and guidance is continually in the forefront. Needless to say, with this, BOARD GAMES is a work of importance to board members and others with the responsibility of overseeing and running corporations in the present-day, post-Enron business environment where shareholders and government officials are scrutinizing their behavior and decisions. ********* 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 ***