/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/210312.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, March 12, 2021, Vol. 25, No. 70 Headlines 218 JACKSON: Wants to Use Cash Collateral on Interim Basis 806 RACE: Gets OK to Hire Robert M. Stahl as Legal Counsel ACADEMY DRIVE: Seeks Cash Collateral Access AE HOTEL: Seeks Approval to Hire Eric A. Liepins as Counsel AES CORP: Moody's Gives Ba3(hyb)' Rating to New Preferred Stock ALCOA CORP: Fitch Affirms BB+ Issuer Default Rating, Outlook Stable ALCOA NEDERLAND: S&P Rates New $500MM Senior Unsecured Notes 'BB+' ALPHA HOUSE: Case Summary & 6 Unsecured Creditors AMERICAN PURCHASING: Committee Taps Gray Robinson as Legal Counsel AMT TOPCO: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable ART VAN FURNITURE: T.H. Lee Raises Payout for Former Workers AVERY COMMERCIAL: Seeks Interim Authority to Use Cash Collateral BADGER FINANCE: Moody's Completes Review, Retains B3 CFR BALATON, MN: S&P Downgrades ICR to 'BB', Outlook Stable BIOXXEL LLC: Court OKs Deal on Cash Collateral Access BL RESTAURANTS: Fine-Tunes Plan; Confirmation Hearing April 21 BLANK LABEL: Combined Plan & Disclosure Confirmed by Judge BW GAS: S&P Assigns 'B+' Rating on New Credit Facilities CAROUSEL CENTER: Moody's Lowers Rating on Revenue Bonds to B3 CASTEX ENERGY: U.S. Trustee Appoints Creditors' Committee CASTEX ENERGY: Will Transfer Talos Shares, Cash in Bankruptcy Plan CENTRALSQUARE TECH: Moody's Completes Review, Retains Caa2 CFR CHARGING BEAR: Seeks Approval to Use Cash Collateral Thru June 1 CHARLES RIVER: S&P Assigns 'BB' Rating on New Sr. Unsecured Notes CHASE MERRITT: Has Until April 20 to File Plan & Disclosures CHIEF CORNERSTONE: Case Summary & 5 Unsecured Creditors CHOBANI LLC: Moody's Completes Review, Retains B3 CFR CHURCHILL DOWNS: Moody's Rates New $200MM First Lien Loan 'Ba1' CINEMARK HOLDINGS: Fitch Affirms 'B+' IDR, Outlook Negative CINEMARK USA: Moody's Gives Caa1 Rating on New $405MM Senior Notes CLEARY PACKAGING: Gets OK to Hire George S. Magas as Accountant CLEARY PACKAGING: Gets OK to Hire Yumkas Vidmar as Counsel COMCAR INDUSTRIES: Court Okays Chapter 11 Liquidation Plan CONSTANT CONTACT: Moody's Assigns First Time B3 Corp Family Rating CROCS INC: S&P Assigns 'BB-' ICR on Notes Offering, Outlook Stable DEL MONTE FOODS: Moody's Completes Review, Retains Caa1 CFR DESOTO HOLDING: Romspen US Says Plan Patently Unconfirmable DESOTO OWNERS: Romspen US Says Plan Patently Unconfirmable EAGLE HOSPITALITY: Queen Mary Ship Lease Included in Auction ENLINK MIDSTREAM: Fitch Alters Outlook on 'BB+' LT IDR to Stable ENTERCOM COMMUNICATIONS: S&P Affirms 'B' ICR, Outlook Negative FREEDOM MORTGAGE: Moody's Affirms B1 CFR & Alters Outlook to Pos. FRIENDS OF CITRUS: Unsecureds to Get 13% Distribution in Plan FULL HOUSE: Posts $3.5 Million Net Income in Fourth Quarter GARRETT MOTION: Mountaineer Master Out as Equity Committee Member GENCANNA GLOBAL: Trustee Wants to Get $1.4 Mil. Back From Execs GIBSON FARMS: Rabo Says Plan Disclosures Inadequate GIP III STETSON: Fitch Affirms 'B-' IDR, Outlook Stable GLASS MOUNTAIN: Moody's Lowers CFR to Ca on Weak Cash Flow GLENROY COACHELLA: U.S. Trustee Appoints Creditors' Committee GLOBAL DISCOVERY: Case Summary & 20 Largest Unsecured Creditors GOLDEN HOTEL: June 17 Plan Confirmation Hearing Set GOLDEN HOTEL: Plan Gives Unsecureds 15% Lump Sum or 100% in 7 Yrs GREYLOCK CAPITAL: Seeks to Hire Amini LLC as Legal Counsel GUDORF SUPPLY: Case Summary & 20 Largest Unsecured Creditors GULFPORT ENERGY: Committee Taps Jefferies LLC as Investment Banker HAIR CUTTERY: 2 Executives Released From NJ COVID-19 Pay Suit HERTZ CORP: Disclosure Statement Hearing Set for April 16 HEXAGON AUTOMOTIVE: Case Summary & 3 Unsecured Creditors HIGHLAND CAPITAL: Chancery Freezes Cases Until Chapter 11 Done HSA ENTERPRISES: Cash Collateral Hearing Continued to March 31 HUDSON RIVER TRADING: Moody's Affirms Ba1 Corp. Family Rating INSPIREMD INC: Incurs $10.5 Million Net Loss in 2020 J.J.W. METAL: Gets Court Approval to Hire Special Counsel J.J.W. METAL: Gets OK to Hire Toro & Arsuaga as Special Counsel JFG HOLDINGS: Sutherland Objects to Disclosure Statement JO-ANN STORES: Moody's Completes Review, Retains Caa1 CFR JOHN PICCIRILLI: Gets OK to Hire S.J. Julian & Co. as Accountant K & W CAFETERIAS: April 6 Disclosure Statement Hearing Set KAMAN CORP: S&P Alters Outlook to Negative, Affirms 'BB' ICR KFIR GAVRIELI: U.S. Trustee Appoints Creditors' Committee KLAUSNER LUMBER: Unsecureds to Recover 24.2% to 13.5% in Plan L C of SHREVEPORT: Seeks Approval to Hire Bankruptcy Attorney LIGHTHOUSE RESOURCES: Court Okays Chapter 11 Reorganization Plan LOMPA RANCH: Case Summary & 10 Unsecured Creditors LUXURY OUTER: To Seek Plan Confirmation on May 6 MALLINCKRODT PLC: Adds Senior Term Lenders to RSA MATTEL INC: S&P Upgrades ICR to 'BB' on Strong EBITDA Growth MCAFEE CORP: S&P Places 'BB-' ICR on CreditWatch Positive MERCY HOSPITAL: U.S. Trustee Adds Committee Member MICHAEL FELICE: BMW Bank Has Objection to Plan & Disclosures MICHAELS STORES: Moody's Puts Ba3 CFR Under Review for Downgrade MILLER BRANGUS: Cash Collateral Motion Set for March 24 Hearing MILLS FORESTRY: Creditor CFSC Says Amended Disclosures Deficient MILLS FORESTRY: Responds to Disclosure Objections MILLS FORESTRY: US Trustee Opposes to Plan & Disclosures NATIONSTAR MORTGAGE: Moody's Alters Outlook on B2 CFR to Positive NCR CORP: Fitch Assigns First-Time 'BB-' LongTerm IDR NEW YORK HOSPITALITY: To Sell Austin Hotel to Fund Plan NINE ENERGY: Incurs $378.9 Million Net Loss in 2020 NSITE VENTURES: Distribution to Creditors in October 2021 O & B HACKING: Plan Approval Deadline Extended to May 10 OECONNECTION LLC: Moody's Completes Review, Retains B3 CFR OSUM PRODUCTION: Moody's Withdraws B3 CFR on Waterous Takeover PACIFIC ALLIANCE: Unsecured Creditors to Recover 100% in Plan PAUL F. ROST: Unsecureds Creditors to Get 10% Dividend in Plan PEARL 53: To Present Plan for Confirmation on March 24 PENNYMAC MORTGAGE: Moody's Alters Outlook on Ba3 CFR to Stable PERFORMANCE AIRCRAFT: Has Access to XL Specialty's Cash Collateral PIKEWOOD INC: Case Summary & 20 Largest Unsecured Creditors POLONIA DEVELOPMENT: April 8 Plan Confirmation Hearing Set PROVIDENT FUNDING: Moody's Affirms B1 CFR, Outlook to Stable QUICKEN LOANS: Moody's Affirms Ba1 CFR & Alters Outlook to Positive R & R INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors RECYCLING REVOLUTION: Interim Use of Cash Collateral Allowed RELDS LLC: Seeks to Hire Hayes Law Firm as Counsel REMINGTON OUTDOOR: To Dissolve After Court Okays Bankruptcy Plan RUBY PIPELINE: Moody's Lowers CFR to Caa1 on High Refinancing Risk SABON HOLDINGS: U.S. Trustee Says Disclosures Not Sufficient SALEM CONSUMER: $2.8M Settlement With Ex-Owner to Fund 100% Plan SC SJ HOLDINGS: In Chapter 11 With Deal to Keep Luxury Hotel SEADRILL LIMITED: Cash Collateral Access OK'd on Final Basis SECOND SOUTHERN: Failed to Obtain Financing; Files Liquidating Plan SOMO AUDIENCE: Case Summary & 20 Largest Unsecured Creditors SOUTH CLAIBORNE: Seeks to Hire Hayes Law Firm as Counsel SOUTHERN FOODS: US Trustee Opposes to Joint Liquidating Plan SOVOS BRANDS: Moody's Completes Review, Retains B3 CFR STA VENTURES: Unsecured Creditors to Recover 100% in Plan SUNDANCE ENERGY: Case Summary & 30 Largest Unsecured Creditors SUNDANCE ENERGY: Has $50MM DIP Financing from Morgan Stanley SUNDANCE ENERGY: RSA Milestones Require Confirmation in 45 Days SYNAPTICS INC: S&P Assigns 'BB-' ICR, Outlook Stable SYNCHRONOSS TECHNOLOGIES: Reports GAAP Net Loss of $10.9-Mil. in Q4 THE NEXT PLACE: Directed to File Supplemental Budget TREEHOUSE FOODS: S&P Rates New Senior Secured Facilities 'BB+' TRITON WATER: Moody's Assigns B2 CFR on Nestle Acquisition TROIANO TRUCKING: Trustee Gets OK to Hire Altus as Collection Agent VALLEY STREAM, NY: Moody's Alters Outlook on Ba1 Rating to Stable VERTEX ENERGY: Incurs $12 Million Net Loss in 2020 VILLAS OF WINDMILL: Allowed to Use Cash Collateral Until March 31 VOLUNTEER MOTORSPORTS: Case Summary & 4 Unsecured Creditors WILDBRAIN LTD: S&P Rates New US$280MM Senior Secured Debt 'B-' WILSON DUMORNAY: Seeks to Hire Hoffman Larin as Bankruptcy Counsel WOOF HOLDINGS: Moody's Completes Review, Retains B3 CFR WR GRACE: Fitch Puts 'BB+' LongTerm IDR on Watch Negative WYNTHROP PARTNERS: April 20 Hearing on Disclosure Statement YACHT CLUB: Plan Confirmation Hearing Slated for April 6 [*] Chapter 11 Bankruptcy: The Ultimate Corporate Finance Tool [*] Deighan Agrees to Return $300K, 6-Year Practice Ban [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ********* 218 JACKSON: Wants to Use Cash Collateral on Interim Basis ---------------------------------------------------------- 218 Jackson LLC asks the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, for authorization to use cash collateral on an interim basis and provide adequate protection to lender National Loan Acquisitions Company. The Debtor owns two parcels of real property, including an office building at 218 Jackson Street, Maitland, Florida 32751 and vacant land at 226 Jackson Street. The Debtor's primary source of income is derived from the rental income it receives from a COVID-19 testing and treatment lab that rents space at 218 Jackson Street, Maitland, FL 32751. As of the Petition Date, the Debtor estimates the value of the Property is approximately $1,300,000 to $1,500,000. The Debtor owed Lender approximately $910,799.76, which amount is secured by a mortgage lien on the Property and substantially all of the Debtor's assets pursuant to a foreclosure proceeding styled National Loan Acquisitions Company v. 218 Jackson LLC, et al., Case No: 2020-CA-00245-O, which matter is pending in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida. The cash collateral the Debtor seeks to use is comprised of the Debtor's cash on hand and funds to be received from the collection of rent which may be encumbered by the Lender's lien. "The Debtor will require the use of approximately $9,825.00 of Cash Collateral to continue to operate its business for the next four weeks, and, depending on the month, a greater or lesser amount will be required each comparable period thereafter. The Debtor will use the Cash Collateral to pay utilities, pay suppliers and vendors for performance of routine maintenance and repairs on the Property, and pay other ordinary course expenses to maintain its Property," the Debtor tells the Court. "As adequate protection for the use of Cash Collateral, Debtor proposes to grant the Lender a replacement lien on the Debtor's post-petition Cash Collateral to the same extent, priority and validity as its pre-petition lien, to the extent Debtor's use of Cash Collateral results in a decrease in the value of Lender's interest in the Cash Collateral. The Debtor further submits the Lender is adequately protected by virtue of the substantial equity cushion in the Property. The Debtor will also submit reporting on actual income and expenses for the applicable period through its monthly operating reports. If the Debtor fails to comply with such terms, then the Lender shall be afforded relief from stay to pursue its state court remedies against the Property," the Debtor further tells the Court. The Debtor contends that if it is not permitted to use Cash Collateral, it may be forced to halt operations, which will result in loss of its current tenant; will hamper the Debtor's ability to secure an additional tenant; and will jeopardize the Debtor's efforts to obtain the refinancing required to satisfy the claims of its creditors. A full-text copy of the Motion, dated March 9, 2021, is available for free at https://tinyurl.com/4au37af7 from PacerMonitor.com. About 218 Jackson 218 Jackson LLC sought protection under Chapter 11 of the Bankruptcy Code on March 8, 2021 (Bankr. M.D. Fla. Case No. 21-00983). The petition was signed by Amos Vizer, member of TwoChi, LLC. As of January 31, 2020, the Debtor had total assets in the amount of $1,283,900 and total liabilities in the amount of $41,287,387. The Debtor is represented by Justin M. Luna, Esq. and Daniel A. Velasquez, Esq. at Latham, Luna, Eden & Beaudine, LLP. 806 RACE: Gets OK to Hire Robert M. Stahl as Legal Counsel ---------------------------------------------------------- 806 Race, LLC, received approval from the U.S. Bankruptcy Court for the District of Maryland to hire the Law Offices of Robert M. Stahl, LLC as its legal counsel. The firm's services will include: a. advising the Debtor of its rights, powers and duties under the Bankruptcy Code; b. assisting the Debtor in the negotiation and documentation of financing agreements, debt restructurings cash collateral arrangements and related transactions; c. representing the Debtor in defense of any proceedings instituted to reclaim property or to obtain relief from the automatic stay under Section 362(a) of the Bankruptcy Code; d. representing the Debtor in any proceedings instituted with respect to the Debtor's use of cash collateral; e. reviewing the nature and validity of liens asserted against the property of the Debtor and advising the Debtor concerning the enforceability of such liens; f. advising the Debtor concerning the actions that it might take to collect and recover property for the benefit of its estate; g. preparing legal papers and reviewing all financial reports to be filed in the Debtor's Chapter 11 case; h. preparing response to applications, motions, pleadings, notices and other papers that may be filed and served in the case; i. counseling the Debtor in connection with the formulation, negotiation and promulgation of a plan of reorganization or liquidation and related documents; and j. other legal services necessary to administer the case. Robert M. Stahl will be paid at these rates: Robert Stahl $390 per hour Christina Thomas $300 per hour Paralegals $160 per hour The firm holds a retainer in the amount of $5,000. Robert M. Stahl is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Robert M. Stahl, Esq. Law Offices of Robert M. Stahl, LLC 1142 York Road Lutherville, MD 21093 Phone: (410) 825-4800 Fax: (410) 825-4880 E-mail: stahllaw@comcast.net About 806 Race 806 Race, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 20-20789) on Dec. 15, 2020. At the time of the filing, the Debtor disclosed assets of between $500,001 and $1 million and liabilities of the same range. Judge David E. Rice oversees the case. The Debtor is represented by the Law Offices of Robert M. Stahl, LLC. ACADEMY DRIVE: Seeks Cash Collateral Access ------------------------------------------- Academy Drive Development, LLC asks the U.S. Bankruptcy Court for the Eastern District of Louisiana for authority to use cash collateral on an interim basis in accordance with its proposed budget. The Debtor desires to utilize the cash collateral to pay its regular bills and to accumulate over the span of three months enough rental income to pay the remainder due and owing on Debtor's property tax debt. The Debtor receives approximately $18,220.08 in rent proceeds which are subject to the collateral agreement with the Debtor's only secured creditor Hancock /Whitney. Use of these proceeds will not effect, prime or prejudice any other secured creditors as there are none. The Debtor has in its checking account the amount of $41,590.99 and the outstanding property tax obligation is approximately $59,070.81 plus interest which is minimal at this point. The Debtor seeks to use the current funds and over the course of three months accumulate the remainder of the balance of the property tax due. The Debtor's monthly obligations are around $10,775.00 per month with an income of $18,220.08. The Debtor seeks to use these funds to pay the ongoing monthly obligations. This would leave roughly around $5,000.00 per month to pay the Creditor Hancock/Whitney once the Court’s quarterly fees are factored in which are unknown at this point. The Debtor suggests that the $5,000 be applied directly to the principal on the loan and that any accrued interest be set at the Court's set rate as part of the Debtor's exit plan. About Academy Drive Development, LLC Academy Drive Development is a Covington, La.-based company engaged in renting and leasing real estate properties. Academy Drive Development filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-10087) on Jan. 22, 2021. Adam Ackel, manager, signed the petition. In the petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Meredith S. Grabill oversees the case. Pepper & Associates, PC serves as the Debtor's legal counsel. AE HOTEL: Seeks Approval to Hire Eric A. Liepins as Counsel ----------------------------------------------------------- AE Hotel, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Eric A. Liepins, PC as its legal counsel. The Debtor needs legal assistance to orderly liquidate its assets, reorganize the claims of the estate, and determine the validity of claims asserted in its bankruptcy estate. The firm will be paid at these rates: Eric A. Liepins $275 per hour Paralegals and Legal Assistants $30 - $50 per hour The firm received a retainer of $10,000, plus the filing fee. In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Eric Liepins, Esq., disclosed in court filings that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, PC 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Facsimile: (972) 991-5788 Email: eric@ealpc.com About AE Hotel, LLC AE Hotel, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Texas Case No. 21-70025) on March 2, 2021. In the petition signed by Wasim Beshay, authorized representative, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Eric A. Liepins, Esq. is the Debtor's counsel. AES CORP: Moody's Gives Ba3(hyb)' Rating to New Preferred Stock --------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 (hyb) rating to AES Corporation, (The)'s proposed Series A Cumulative Perpetual Convertible Preferred Stock cumulative perpetual preferred stock. The outlook of AES is stable. AES intends to use the net proceeds from this offering to fund its investments, including in renewables and liquified natural gas infrastructure, as well as to make contributions to its regulated utility subsidiaries. RATINGS RATIONALE The Ba3 (hyb) rating assigned to the preferred stock is two notches below AES' corporate family rating (CFR) of Ba1 and reflects its relative position in the company's capital structure compared to its senior unsecured debt. The preferred stock is subordinated, and junior in right of payment, to nearly $3.5 billion of AES unsecured debt. This two notch differential is consistent with our methodology guidance for notching corporate instrument ratings based on differences in security and priority of claim. Moody's considers these securities to have sufficient equity-like features to receive hybrid securities basket "E" treatment, which is equivalent to 100% equity. Should AES' credit quality improve such that the company is rated investment grade, the preferred stock could receive basket "C" treatment (i.e. 50% equity and 50% debt) for the purpose of adjusting financial statements. AES' Ba1 CFR considers the resilience shown by the group's operations in the face of economic disruptions caused by the coronavirus pandemic in 2020. This resilience has been evidenced by AES' ability to record a consolidated ratio of cash flow from operations pre changes in working capital (CFO pre-W/C) to net debt of 13.8% at year-end 2020 compared to 13.2% at year-end 2019. AES' total net debt reduction of nearly $1.5 billion during the last quarter of 2020, contributed to the improvement from the ratio of 11.7% recorded for the last twelve month period ended September 30, 2020. These debt reduction included total net repayments of AES' parent debt of nearly $500 million during the last quarter of 2020 as well as repayment of subsidiaries' debt of around $250 million. In addition, at year-end 2020, AES started to report around $1 billion debt outstanding at Mong Duong 2 under held-for-sale liabilities following the agreement entered to sell its 51% interest in this the Vietnamese coal-fired generation subsidiary in December 2020. AES recently disclosed plans to make equity contributions to its subsidiaries of around $4.8 billion during the 2021-2025 period, a significant increase compared to around $2.9 billion during the 2016-2020 period (including the acquisition of an interest in sPower for $382 million in 2017). The purpose of these contributions is to help the subsidiaries to fund their material investment programs in renewables and natural gas related infrastructure. Moody's view as to whether AES will report additional, sustainable improvements in its consolidated credit metrics is tempered by the impact on its consolidated financial performance of: (i) the subsidiaries' incremental debt, associated with their large capital expenditure (capex) programs; (ii) the consolidation of the recently created AES Clean Energy, following the merger of sPower and AES Distributed Energy in January 2021; (iii) AES' planned holding company debt issuance of $1 billion; and (iv) whether the newly issued $1 billion of preferred stock will be fully redeemed with common stock in March 2024. Outlook The stable outlook considers AES' progress in continuing to implement its business de-risking initiatives, including reducing its exposure to carbon transition risks. Additionally, the stable outlook reflects Moody's expectation that AES' 3-year ratio of consolidated CFO pre W/C to consolidated net debt of approximately 13-14% over the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Factors that Could Lead to an Upgrade AES' ratings could be upgraded if the company continues to be successful in executing its construction projects and in de-risking its business and if there is a continued improvement in its consolidated financial profile, where the ratio of consolidated CFO pre-W/C to consolidated net debt will exceed 14% on a sustained basis. Factors that Could Lead to a Downgrade A downgrade could occur if AES diverges from its de-risking business strategy or implements more aggressive financial policies, if consolidated leverage ratios increase, or if a more contentious regulatory environment emerges in any of AES' key subsidiary jurisdictions (Indiana or Ohio). Ratings could also be downgraded if the ratio of CFO pre-W/C to consolidated net debt falls below 11%, for a sustained period of time. Liquidity Analysis The Speculative Grade Liquidity Rating (SGL) of SGL-2 reflects good liquidity from both strong internal cash flow generation and external cash sources, including' availability under its $1 billion unsecured bank credit facility of $853 million at year-end 2020. The Borrowings available excluded $77 million in letters of credit at year-end 2020. Borrowings under the facility, scheduled to expire in 2024, are subject to conditionality including a material adverse change clause representation, a credit negative. The facility has two financial covenants including a minimum cash flow coverage ratio of 2.5x and a maximum recourse debt to cash flow ratio of not more than 5.75x (both metrics calculated on a parent only basis). Moody's anticipate that AES will remain in compliance with substantial headroom. The SGL-2 also factors in management's expectation that the company's free cash flow will range between $775 million and $825 million in 2021. AES also expects to receive net proceeds from the sale of assets of around $100 million this year. AES has disclosed that during the 2021-2025 period, it expects to have access to around $7.3 billion of discretionary cash that includes nearly $4.8 billion of parent free cash flow dividends received (minus parent company costs such as interest payments) and total net proceeds from assets sales of $500 million (including the aforementioned $100 million). AES has also disclosed that it plans to use these funds to make equity contributions to its subsidiaries of $4.8 billion and to distribute around $2.5 billion. The principal methodology used in this rating was Unregulated Utilities and Unregulated Power Companies published in May 2017. ALCOA CORP: Fitch Affirms BB+ Issuer Default Rating, Outlook Stable ------------------------------------------------------------------- Fitch Ratings affirmed Alcoa Corporation's and Alcoa Nederland Holding B.V.'s Issuer Default Ratings (IDR) at 'BB+'. The Rating Outlooks are Stable. The ratings of Alcoa Nederland Holding B.V. senior unsecured notes and secured revolving credit facility are affirmed at 'BB+'/'RR4'. The ratings of subsidiary Alcoa Nederland Holding B.V. benefit from an Alcoa Corporation guarantee and reflect Alcoa's modest leverage; leading positions in bauxite, alumina and aluminum; strong control over costs and spending; and flexibility afforded by the scope of its operations. The Stable Outlook reflects Fitch's view that operations will continue to see no material impact from the coronavirus, total debt/operating EBITDA after minority distributions will generally be below 2.5x (YE 2.6x), and that FCF will generally be positive after minimum pension contributions. KEY RATING DRIVERS Low-Cost Upstream Position: Alcoa assesses its bauxite costs in the first quartile, its alumina costs in the first quartile and its aluminum costs in the second quartile of global production costs. Most of Alcoa's alumina facilities are located next to its bauxite mines, cutting transportation costs and allowing consistent feed and quality. Aluminum assets benefit from prior optimization and smelters co-located with cast houses to provide value-added products, including slab, billet and alloys. Forecasted Sub-3.0x Leverage Metrics: Total debt of $2.5 billion was 2.6x operating EBITDA after dividends from associates and distributions to minority interests and net debt/operating EBITDA after dividends from associates and distributions to minority interests was 0.9x at Dec. 31, 2020. Fitch expects operating EBITDA of at least $1.3 billion in 2021, net debt/EBITDA after minority distributions to be less than 1.0x and total debt to EBITDA after minority distributions to remain under 2.5x, assuming average London Metal Exchange (LME) aluminum prices at $1,950/tonne (t) in 2021 and $1,850/t in 2022 and 2023. Fitch expects FFO leverage before voluntary pension contributions to trend under 3.0x longer term. The company's initial capital structure was set in a $1,600/t aluminum price environment and the $500 million notes issued in 2018 were used to fund contributions to pension plans thereby providing flexibility in making required contributions. While the $750 million notes issued in July 2020 were for general corporate purposes, Fitch expects total debt to return to roughly $1.8 billion longer term absent opportunistic issues to fund pension contributions. Sensitivity to Aluminum Prices: While bauxite and alumina are priced relative to market fundamentals in those markets and their sales account for the bulk of Alcoa's earnings, these product prices are sensitive to aluminum prices over the long run. The company estimates a $100/t change in the LME price of aluminum affects EBITDA by $195 million, including the effect of the power LME linked agreements. Alcoa has some value-added energy and conversion income, and some power costs are LME linked, but the company will remain exposed to the aluminum market. Aluminum Price Volatility: Fitch raised its aluminum price assumptions to $1,950/t from $1,600/t for 2021 on a stronger demand recovery in China, particularly from the automotive and solar energy sectors, and re-stocking outside of China, particularly in Europe. Fitch expects a production surplus outside of China to persist, causing prices to soften modestly once pent-up demand is satisfied. Supply rationalization improved the average LME aluminum cash price to about $1,969/t in 2017 from about $1,660/t in 2015 and $1,620/t in 2016. The LME aluminum price averaged about $2,110/t in 2018 on dislocation from sanctions on United Company RUSAL Plc (B+/Stable), and $1,791/t in 2019 as trade tensions bit into demand growth while supply rebounded. The current spot price is about $2,150/t, compared with the average of about $1,916/t in 4Q20. AWAC Considerations: The company's alumina and bauxite operations are owned through AWAC. In 2019, AWAC generated $1.6 billion in adjusted EBITDA and paid $1.0 billion in dividends, net of capital contributions. AWAC's dividend policy is generally to distribute at least 50% of the prior calendar quarter's net income of each AWAC company, and certain companies will also be required to distribute excess cash. Alcoa consolidates AWAC's results, and Fitch expects minority distributions net of contributions to range from about $100 million to $200 million per year under its price assumptions. AWAC has scant debt, and incurrence would fall under the subsidiary debt basket in Alcoa's revolver, equal to the greater of $150 million and 1% of Alcoa's consolidated tangible assets, thereby limiting the risk of structural subordination. Pension Underfunding: Minimum required pension funding through 2025 was estimated at $965 million at Dec. 31, 2020, and the funded status of direct benefit plans was a $1.5 billion shortfall. The discretionary contributions made in 2018 resulted in flexibility for future mandatory minimum payments. Fitch expects Alcoa to manage its contributions through cash generation and cash on hand, making voluntary contributions consistent with its capital-allocation policies when generating excess cash flow, and using flexibility to defer contribution to shore up liquidity when cash balances are expected to be below $1 billion. Fitch expects annual FCF before pension contributions to average at least $250 million. Alcoa has taken several actions to freeze the defined pension plans for U.S. and Canadian salaried employees and eliminate retiree medical subsidies, effective Jan. 1, 2021. DERIVATION SUMMARY Alcoa Corp.'s total debt/operating EBITDA after associate and minority dividends generally under 2.5x position it well against 'BB+' metals peers. While pension obligations are high, required contributions are expected to be manageable. Fitch expects EBITDA margins to average around 11% based on Fitch's price assumptions over the next 24 months. The ratings of Alcoa Nederland Holding B.V. are equalized with those of Alcoa Corp. due to their strong operational and strategic linkages, in line with Fitch's Parent and Subsidiary Rating Linkage (PSL) criteria. Comparable Fitch-rated aluminum peers include United Company RUSAL international public joint-stock company (B+/Stable), China Hongqiao Group Limited (BB-/Stable), and Aluminum Corporation of China Ltd. (Chalco; A-/Stable). RUSAL benefits from substantial size (it is the largest aluminum company outside of China) and its stake in PJSC MMC Norilsk Nickel. FFO leverage is expected to be above 3.5x through 2022. RUSAL's rating also captures the higher-than-average systemic risks associated with the Russian business and jurisdictional environment. Hongqiao benefits from greater size, higher vertical integration and EBITDA margins above 20%. Before the pandemic, Fitch expected Hongqiao to continue to report positive FCF in the near term and FFO net leverage to remain at 2.4x-2.7x. The company's ratings are constrained by weak internal controls and uncertainties regarding the policy implications of unpaid power tariffs and potential surcharges on power costs, which could significantly increase production costs. Chalco is rated on a top-down approach based on the credit profile of parent Chinalco, which owns 32% of the company. Fitch's internal assessment of Chinalco's credit profile is based on its Government-Related Entities Rating Criteria and is derived from China's (A+/Stable) rating, reflecting its strategic importance. KEY ASSUMPTIONS -- Fitch commodity price assumptions for aluminum (LME spot) of $1,950/t in 2021, $1,850/t in 2022 and 2023; -- Estimated shipments at guidance; -- Capex at guidance; -- Warrick Rolling Mill sale is completed as announced; -- Pension contributions deferred while cash on the balance sheet is less than $1 billion and capacity exists; -- No change in capital allocation framework. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Meaningful and sustainable reduction in unfunded pension status; -- EBITDAR margins expected to be sustained above 15%; -- FFO leverage expected to be sustained below 2.5x; -- Total debt/EBITDA expected to be sustained below 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- EBITDAR margins sustained below 10%; -- FFO leverage expected to be sustained above 3.0x; -- Total debt/EBITDA expected to be sustained above 2.5x; -- LME aluminum prices expected to be sustained below $1,600/t. 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 Strong Liquidity: Cash on hand was $1.6 billion at Dec. 31, 2020. The company has an undrawn $1.5 billion senior secured revolver due to mature on Nov. 21, 2023 (scant utilization for LOC). Based on the leverage ratio calculation as of Dec. 31, 2020, the maximum additional borrowing capacity available to remain in compliance with the covenant was $1.3 billion. The revolver was amended on June 24, 2020 to allow for netting of interest or financing cost accrued on the $750 million notes issued in July 2020 notes for cash interest expense calculation purposes; and netting from total debt of the lesser of unrestricted cash on the balance sheet and proceeds of the $750 million notes issued in July 2020 to the extent not used to repay the $750 million notes due 2024, through the quarter ended June 30, 2021, provided the company would have to issue cash netting notices for the March 31, 2021 and June 30, 2021 quarters, and the revolver availability for those quarters would be reduced by one-third of the net proceeds of the notes issued in July 2020. The revolver was further amended on March 4, 2021 to allow the company to issue notes to fund voluntary or mandatory pension or other post retirement obligation plan contributions while enhancing access to the facility. The agreement amended the maximum leverage ratio (substantially, total debt/EBITDA) to 2.75x from 3.0x (through April 1, 2021 and from 2.5x thereafter) provided that if the company issues senior notes and funds contributions to pension or other postretirement benefit plans during 2021, then on or after March 31, 2022 the maximum leverage ratio shall be increased by an amount equal to the lesser of such contributions and the principal amount of the notes divided by consolidated EBITDA for the four fiscal quarters most recently ended on or prior to the date of issuance of the notes to 1.00. The amendment also allows the netting from total debt, for any period on or before Dec. 31, 2021, the amount of notes issued in 2021, proceeds of which have been, or are intended to be, used to fund contributions to pension or other postretirement benefit plans. The interest expense coverage ratio (substantially, EBITDA/cash interest expense) covenant was amended to a minimum of 4.0x from a minimum of 5.0x. The company has a $120 million receivables purchase facility maturing in October 2022, which was unutilized at Dec. 31, 2020. Fitch anticipates FCF to be positive over the ratings horizon before voluntary pension contributions. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. ALCOA NEDERLAND: S&P Rates New $500MM Senior Unsecured Notes 'BB+' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' issue-level rating and '3' recovery rating to Alcoa Nederland Holding B.V.'s proposed $500 million senior unsecured notes. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. Alcoa Nederland Holding B.V. is a subsidiary of Alcoa Corp., which will guarantee the notes. S&P expects the company to use the proceeds from these unsecured notes, along with cash on hand, to redeem its $750 million of debt maturing in 2024 and contribute $500 million to its pension plans. S&P said, "We revised our outlook on Alcoa to stable from negative in December 2020 to reflect the ongoing improvement in its credit ratios, due to the rebound in aluminum prices, as well as its continued capital discipline. Our base-case assumptions for aluminum prices of $1,800 per ton in 2021 and $1,900 per ton in 2022 are lower than current spot prices and we still expect the company's adjusted debt to EBITDA to drop toward 2.0x in 2021 from 3.2x in 2020. The disclosure during 2020 of a notice of assessment from the Australian Taxation Office (ATO) will not affect our ratings until the timing and size of the obligation, plus any penalties, becomes clearer." The $380 million potential liability disclosed in the notice would not likely be a decisive rating factor given that the company's leverage has ranged from 1x-3x over the last few years due to its cyclical earnings and heavy capital intensity. ISSUE RATINGS--RECOVERY ANALYSIS Simulated default assumptions -- Year of default: 2025 -- EBITDA at emergence: $756 million -- Implied enterprise value (EV) multiple: 5x -- Gross EV: $3.7 billion Simplified waterfall -- Net EV after 5% administrative costs: $2.4 billion -- Obligor (U.S. operations)/nonobligor (foreign operations) valuation split: 5%/95% -- Priority secured claims: $167 million -- Estimated secured claims at default: $1.3 billion (revolving credit facility 85% drawn) --Recovery expectations for secured claims: 90%-100% (rounded estimate: 95%) -- Remaining value: $750 million -- Additional unencumbered value: $80 million -- Total value available to unsecured claims: $830 billion -- Estimated unsecured debt claims at default: $1.5 billion --Recovery expectations for unsecured debt: 50%-70% (rounded estimate: 55%) ALPHA HOUSE: Case Summary & 6 Unsecured Creditors ------------------------------------------------- Debtor: The Alpha House, Inc. 6945 Abbott Avenue Miami Beach, FL 33141 Business Description: The Alpha House, Inc. operates in the traveler accommodation industry. Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court Southern District of Florida Case No.: 21-12338 Judge: Hon. Robert A. Mark Debtor's Counsel: Robert C. Meyer, Esq. ROBERT C. MEYER, PA 2223 Coral Way Miami, FL 33145-3508 Tel: 305-285-8838 E-mail: meyerrobertc@cs.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Matthieu Mamoudi, president. A copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2JQFPGI/The_Alpha_House_Inc__flsbke-21-12338__0001.0.pdf?mcid=tGE4TAMA AMERICAN PURCHASING: Committee Taps Gray Robinson as Legal Counsel ------------------------------------------------------------------ The official committee of unsecured creditors of American Purchasing Services, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Gray Robinson, P.A. as its legal counsel. The firm's services will include: a. advising the committee regarding its rights, powers and duties in the Debtors' Chapter 11 cases; b. preparing legal papers; c. representing the committee in matters involving contests with the Debtors, alleged secured creditors and other third parties; d. analyzing a potential sale or liquidation of substantially all of the Debtors' assets and the interests of unsecured creditors with respect to such a sale; e. reviewing pre-bankruptcy transactions and relationships; f. representing the committee in the negotiation of a plan of reorganization or liquidation; g. assisting the committee in analyzing the claims of creditors and the Debtors' capital structure and in negotiating with holders of claims and equity interests; h. assisting the committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors (and, to the extent applicable, the Debtors' officers, directors and shareholders) and of the operation of the Debtors' businesses; i. advising the committee as to its communications to the general creditor body regarding significant matters in the Debtors' cases; j. reviewing and analyzing all applications, orders, statements of operations and schedules filed with the court and advising the committee as to their propriety; and k. other legal services, which may be necessary and proper in the Debtors' bankruptcy proceedings. The firm will be paid at these rates: Steven Solomon Shareholder $595 per hour Robert Schatzman Shareholder $595 per hour Cynthia Montgomery Shareholder $460 per hour Jack Brennan Shareholder $350 per hour Steven Solomon, Esq., at Gray Robinson, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Gray Robinson can be reached through: Steven J. Solomon, Esq. Robert A. Schatzman, Esq. Gray Robinson, P.A. 333 S.E. 2nd Avenue, Suite 3200 Miami, FL 33131 Tel: (305) 416-6880 Fax: (305) 416-6887 Email: steven.solomon@gray-robinson.com Email: robert.schatzman@gray-robisnon.com About American Purchasing Services American Purchasing Services, LLC, which conducts business under the name American Medical Depot, is a distributor of medical, surgical, dental and laboratory supplies and equipment. It is owned 100% by American Medical Depot Holdings, LLC. American Purchasing Services and its affiliates, including DVSS Acquisition Company, LLC, AMD Pennsylvania, LLC and American Medical Depot Holdings sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 20-23495) on Dec. 11, 2020. At the time of the filing, the Debtors had estimated assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. Judge Scott M. Grossman oversees the cases. The Debtors tapped Berger Singerman LLP as their legal counsel, CR3 Partners LLC as restructuring advisor, and Prime Clerk LLC as notice and claims agent. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Jan. 5, 2021. The committee tapped Gray Robinson, P.A., as its bankruptcy counsel, Cimo Mazer Mark as special counsel, and CBIZ Accounting, Tax and Advisory of New York, LLC, as financial advisor. AMT TOPCO: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable ---------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to AMT TopCo LLC. The outlook is stable. S&P said, "We are also assigning our 'B-' issue-level rating and '3' recovery rating to the proposed senior secured facilities in which will be issued by Gordian Medical Inc. and (not rated) RXH Acquisition Corp. The '3' recovery rating reflects our expectation for meaningful recovery (50%-70%; rounded estimate 65%) in the event of payment default." Gordian Medical Inc. (d/b/a American Medical Technologies), the largest provider of specialized wound care supplies and related education to the post-acute sector, has announced it is acquiring RestorixHealth (Restorix), a leading provider of outpatient wound care management services. AMT TopCo LLC, owned by financial sponsor, One Equity Partners, will be the parent organization of the combined companies. S&P said, "The stable outlook on AMT Topco LLC reflects S&P Global Ratings' expectation that the company will post mid-single-digit percent revenue growth, maintain steady margins, and generate moderate free cash flow. We also expect the private equity owners will prioritize growth capital spending or acquisitions over deleveraging, leading to adjusted debt leverage above 5x over the next two years. "Our ratings on AMT reflect the company's narrow focus on wound care, its inherent exposure to Medicare reimbursement risk and changes in third-party payments, and uncertainties about the long-term trend in outsource wound care. AMT is highly focused on wound care, providing durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) to skilled nursing facilities (SNFs) (53% of last-12-months revenues) and providing wound care services in outpatient clinics run with hospital partners (45%). The company is rapidly expanding its nascent at-home wound care and at-home DMEPOS service offerings (2%). Despite the company's leadership in the SNF wound care space and position as the second-largest operator of outpatient wound care centers, we believe the industry is competitive with only modest differentiation and limited barriers to entry." The company is exposed to modest reimbursement risk, particularly with regard to timing, that could strain liquidity as the combined company derives about 40% of revenue from Medicare, 45% from hospitals (with top five hospitals representing 5%), and 15% from Managed Care payors. Offsetting strengths are the company's scale, geographic diversification, market leadership position, and record for quality. With a presence in all 50 states, the combined company will be the largest provider of advanced wound products to the long-term care industry and second-largest operator of outsourced wound centers in outpatient hospitals. S&P said, "Although its outpatient wound care business operates about 60% fewer clinics than CDRH Parent, Inc. (d/b/a Healogics), we believe Restorix's business model, particularly through the risk-sharing nature of its percentage of reimbursement contracts, is often preferred by hospitals and allows Restorix to leverage the hospitals' infrastructure and maintain a lower, more flexible cost structure by employing only non-physician staff. We believe the company's narrow focus contributes to slightly lower-than-average employee turnover and above-average customer satisfaction. We also view the combined company's relatively low reliance on hyperbaric oxygen (HBO) therapy (15% of pro forma revenue), as a positive despite HBO's higher margin profile, as we expect growth in that therapy to lag the broader wound care industry." Given financial sponsor ownership, we expect leverage will remain elevated above 5x for the next two years as the company prioritizes growth and acquisitions over deleveraging. S&P said, "We expect adjusted debt leverage will be about 6.1x in fiscal 2022 for the combined company and 5.4x in fiscal 2023 based on our forecast. We project that cash flow metrics will be solid, at about 8%-10% funds from operations (FFO) to total debt annually, though free cash flows will be initially modest, at $5 million to $6 million, before growing to about $20 million." The stable outlook on AMT Topco LLC reflects S&P Global Ratings' expectation that the company will post mid-single-digit percent revenue growth, maintain steady margins, and generate moderate free cash flow. S&P also expects the private equity owners will prioritize growth capital spending or acquisitions over deleveraging, leading to adjusted debt leverage above 5x over the next two years S&P said, "We could downgrade the company if we expect it to sustain material free cash flow deficits that lead us to conclude its capital structure is unsustainable. This could occur due to increased competition, significant changes in reimbursement rates, or operational challenges associated with expanding into the at-home space or into new centers. "Although an upgrade is unlikely within the next 12 months given leverage and financial sponsor ownership, we could raise our ratings if we expect AMT to sustain leverage below 5x or demonstrate meaningful growth and diversification of the business." ART VAN FURNITURE: T.H. Lee Raises Payout for Former Workers ------------------------------------------------------------ Lauren Coleman-Lochner and Eliza Ronalds-Hannon of Bloomberg News report that Thomas H. Lee Partners is nearly doubling a fund to assist former workers at its bankrupt Art Van Furniture chain, after months of pressure from employees who said a payment of around $400 each was "grossly inadequate." The private equity firm is adding $950,000 to a $1.1 million fund it established last year, according to United for Respect, the group that worked with former employees to demand health coverage or cash assistance after Art Van filed for bankruptcy last 2020. A representative for Boston-based T.H. Lee, which manages $11.6 billion, declined to comment on the decision. About Art Van Furniture Art Van is a brick-and-mortar furniture and mattress retailer headquartered in Warren, Michigan. The Company operates 169 locations, including 92 furniture and mattress showrooms and 77 freestanding mattress and specialty locations. The Company does business under brand names, including Art Van Furniture, Pure Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress, and Wolf Furniture. The Company was founded in 1959 and was owned by its founder, Art Van Elslander, until it was sold to funds affiliated with Thomas H. Lee Partners, L.P. in March 2017. As part of this transaction, THL acquired the operating assets of the Company and certain real estate investment trusts, who closed the transaction alongside THL, acquired the owned real estate portfolio of the Company, and entered into long-term leases with Art Van. The proceeds from the sale-leaseback transaction were used to fund the purchase price paid to the selling shareholders. Art Van Furniture, LLC, and 12 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8, 2020. Art Van was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as counsel. Kurtzman Carson Consultants LLC is the claims agent. AVERY COMMERCIAL: Seeks Interim Authority to Use Cash Collateral ---------------------------------------------------------------- Avery Commercial Small C, LLC asks the U.S. Bankruptcy Court for the Southern District of Texas, Laredo Division, for authorization to use cash collateral on an interim basis. The Debtor tells the Court it does not have sufficient unencumbered cash or other assets with which to continue to operate its business in Chapter 11. The Debtor further tells the Court that it requires immediate authority to use cash collateral in order to continue its business operations without interruption toward the objective of formulating an effective plan of reorganization. The Debtor adds that its use of cash collateral, is necessary to avoid immediate and irreparable harm to the estate. The Debtor contends that it will be using the cash collateral to pay for: a. reasonable and necessary operating expenses; b. maintenance and preservation of property of the estate; c. payment of expenses associated with this Chapter 11 case, including United States Trustee's fees and professional fees and expenses. The Debtor proposes to grant the secured creditors, as applicable and necessary, a replacement lien on rental accounts receivable acquired by the Debtor after the Petition Date, and affirms that such lien(s) and replacement lien(s) shall continue until further Order of the Court or confirmation of a Plan of Reorganization. "In the event Debtor is authorized to use such cash collateral, lien holders are adequately protected by the value of the real estate. Wells Fargo Bank is owed approximately $998,844.00. The value of the real estate pledged to secure this debt is $1,650,000.00. Great Western Bank is owed an approximate amount between $2,100,000.00 and $2,300,000.00. The real estate pledged to secure the Great Western Debt has been appraised at a value of between 3,100,000.00 and $3,3000,000. Each bank has a substantial equity cushion in the real estate securing their loans, that more than adequately protects them. Debtor will provide continuing post-petition liens to the lienholders to the extent the lienholders have valid pre-petition security interests in the cash collateral," the Debtor says. A full-text copy of the Motion, dated March 9, 2021, is available for free at https://tinyurl.com/4j4kjwj7 from PacerMonitor.com. About Avery Commercial Small C Avery Commercial Small C, LLC sought protection under Chapter 11 of the Bankruptcy Code on February 22, 2021 (Bankr. S.D. Tex. Case No. 21-50020). The petition was signed by Brian T. Moreno, the Debtor's vice president and chief operating officer. At the time of the filing, the Debtor disclosed total assets of $4,985,519 and total liabilities of $3,398,302. The Debtor is represented by Carl M. Barto, Esq., at the Law Offices of Carl M. Barto. BADGER FINANCE: Moody's Completes Review, Retains B3 CFR -------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Badger Finance, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 1, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Badger Finance, LLC, B3 CFR reflects high financial leverage, limited cash flow due to heavy investments in startup businesses, and relatively small scale compared to its much larger peers. Further, the rating reflects high manufacturing concentration and a limited operating history. However, these credit challenges are counterbalanced by key strengths, including the company's solid sales growth, attractive profit margins in core segments, and favorable growth prospects in its U.S. single-serve and ready-to-drink coffee businesses. Central to the company's coffee pod strategy is its fully integrated manufacturing -- from green coffee procurement and roasting to high-speed coffee pod production and packaging -- that enables its low-cost producer strategy. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. BALATON, MN: S&P Downgrades ICR to 'BB', Outlook Stable ------------------------------------------------------- S&P Global Ratings lowered its long-term rating on the City of Balaton, Minn.'s general obligation (GO) debt to 'BB' from 'BB+'. The outlook is stable. The city's GO pledge secures the bonds, in addition to a pledge of special assessments levied against benefited properties and net revenues of Balaton's municipal water utility system. The rating is based on the GO pledge. "The downgrade reflects our view of the city's inability to respond to adverse conditions with structural budgetary changes, reflecting governance risk that we consider above those of sector peers," said S&P Global Ratings credit analyst Emma Drilias. "In our view, Balaton's lack of financial planning initiatives has led to the city's rapid and substantial financial deterioration and second year of a negative general fund balance with no plan to correct," Ms. Drilias added. S&P said, "We expect Balaton could continue to experience structural imbalance over upcoming years, given management's lack of projections of a possible year-end result, which could further weaken the city's financial position. Based on the city's current negative reserve position, we anticipate Balaton will remain vulnerable to adverse business, financial, or economic conditions, especially those related to the COVID-19 pandemic, that could potentially compromise its ability to repay its outstanding obligations. "The 'BB' rating reflects our view that the city's large negative general fund balance, which we do not expect will improve in the near term, severely limits Balaton's financial flexibility. The rating is capped due to our view of Balaton's ongoing structural budgetary imbalance, persistent large negative general fund balance, and vulnerable financial management policies and practices." Previous major weather events (a flood in July of 2018 and a snowstorm in April of 2019) created significant infrastructure damage that caused immediate and lasting pressure on the city's budget and cash flow. Balaton's ensuing poor financial condition necessitated a one-year cash flow loan from the League of Minnesota Cities, which the city could not repay on schedule due to insufficient liquidity. Balaton converted the one-year cash flow loan to a five-year term as of 2019, essentially financing current operations with long-term debt. The rating reflects our assessment of the following factors for the city: -- Very weak economy; -- Weak management; -- Very weak budgetary performance; -- Very weak budgetary; -- Very strong liquidity; -- Very weak debt and contingent liability profile; and -- Strong institutional framework score. S&P said, "In our view, Balaton's weak financial policies and practices, in particular the city's lack of planning for long-term operations, are a significant contributor to structural imbalance and a negative reserve position, reflecting governance risk that we consider above those of sector peers. We also view Balaton's environmental risk as elevated relative to the sector standard, given the city's history of infrastructure damage caused by flooding and snowstorms. We view social risks as being in line with our view of the sector as a whole. "If the general fund's reserves decline from their current negative position, weakening budgetary flexibility even further, we could lower the rating. We could also lower the rating if the city's liquidity were to decline due to reduced available cash balances, or if its debt were to increase, putting greater pressure on Balaton's very weak budgetary performance. "If the city shows evidence of improved budgetary performance, leading to consistent positive reserves, we could raise the rating." BIOXXEL LLC: Court OKs Deal on Cash Collateral Access ----------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, has approved the Stipulation entered into by BioXXel, LLC and BREF1 30590 Cochise, LLC regarding BioXXel's use of cash collateral. BioXXEL, LLC and Secured Creditor, BREF1 30590 Cochise have agreed on the Debtor's continued use of cash collateral through August 31, 2021. The Debtor is the legal and equitable owner of an approximately 100,000 square-foot industrial building located at 30590 Cochise Circle, Murrieta, California. The senior secured creditor on the Property is BREF1. The Stipulation contains, among others, these relevant terms: (1) BREF is entitled to adequate protection and is adequately protected by (a) the equity cushion in the Property, and (b) a replacement lien attaching to rents generated post-petition by the Property. (2) The Debtor's right to use cash collateral shall terminate immediately and automatically upon: (a) The appointment of a chapter 11 trustee for the Debtor; (b) The dismissal or conversion of the Debtor's chapter 11 case to a chapter 7 case; (c) An event occurs which gives BREF the right to terminate the Stipulation and BREF exercises that right; (d) The entry of an order granting relief from the automatic stay with respect to the Property; or (e) The written agreement of BREF and the Debtor to terminate the Agreement. (3) All cash generated from the operation of the Property, including without limitation all rents, accounts and the proceeds thereof, is and for all purposes shall be deemed to constitute cash collateral in which BREF has an interest under 11 U.S.C. Sections 363(a) and (c)(2), properly perfected under 11 U.S.C. Section 546(b) and any other applicable law. BREF has valid, properly perfected, unavoidable, enforceable, first in priority liens on the personal property described in the Loan Documents. To the extent, if any, not covered by BREF's prepetition liens on the property of the estate, the Debtor grants to BREF a security interest in all proceeds, products and profits of all cash collateral generated by rent(s), profit(s), and offspring(s) by the Property and acquired by the Debtor after the commencement of the Debtor's Chapter 11 case. (4) The Debtor acknowledges and agrees that it was indebted in the aggregate to BREF in the amount of $6,779,550.58 including principal, interest, fees and costs as of the Petition Date. The Debtor acknowledges and agrees that the Debt to BREF is absolute, unconditional, due, owing, unpaid, and not subject to any offset, cross-claim, demand, claim, suit, action, proceeding, counterclaim, or other dispute. (5) The Debtor shall be authorized to use the income generated from the Property solely for the purpose of funding ordinary and necessary costs of operating and maintaining the Property and limited to the amounts set forth in the Budget, The Debtor's use of income generated from the Property shall be limited strictly to items and amounts set forth in the Budget except that the monthly interest payments made to BREF as set forth in the Budget, shall not commence until after 90 days after the Petition Date, and as otherwise specifically stated in the order approving this Stipulation. Except with respect to the fees and costs of the CRO, which shall not be subject to adjustment (absent further written agreement by the Parties), the Debtor may, for any particular operating month and on a line-item basis, exceed the projected expenses set forth in the Budget by no more than ten (10%) percent without the consent of BREF. (6) The Debtor shall continue to deposit all cash collateral from the Property into the Debtor's DIP Account promptly after receipt. (7) As further adequate protection to BREF for the Debtor's use of cash collateral, BREF shall have a lien pursuant to 11 U.S.C. Section 364(c) on all pre-petition and post-petition personal property assets of the Debtor, including, but not limited to, all rents, leases, profits, sums held in the DIP account, and all collateral described in the Loan Documents. (8) The Debtor agrees to maintain, keep and preserve the Property in accordance with the terms and conditions of the Order approving this Stipulation and the Loan Documents. The Debtor agrees to pay prior to delinquency all property taxes becoming due on the Property following the Petition Date. (9) In consideration of the foregoing, BREF agrees to an extension of the U.S.C. Section 362(d)(3) deadline to file a plan of reorganization and/or to make monthly interest payments at the non-default rate through and including August 31, 2021, without prejudice to further stipulations extending such time. The proposed Budget provides for total operating expenses in the amount of $50,970 for each of the months of February, March, May, June and July, and $97,870 for April. About BioXXel, LLC BioXXel, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Court (Bankr. C.D. Cal. Case No. 21-10256) on February 2, 2021. In the petition signed by Josh Teeple, chief restructuring officer, the Debtor disclosed up to $50 million in both assets and liabilities. BioXXel, LLC is a Single Asset Real Estate company. The Debtor is owned by Bioxxel Investment Holding Inc. and Pharmaxx, Inc. Both BIHI and Pharmaxx are owned by Mr. Phoung Nguyen, who owns and operates four of the tenants at the Debtor's industrial building in California. The tenants are Pharmaxx, International Pharmaceutical Distribution Co. Ltd., ExxelUSA, Inc. and Pharmaxx Medical Inc. Judge Theodor Albert oversees the case. David A. Wood, Esq. at MARSHACK HAYS LLP represents the Debtor as counsel. Joshua Teeple of Grobstein Teeple LLP acts as the Debtor's chief restructuring officer. The CRO has retained Onyx Asset Advisors, LLC to market and sell the Debtor's property. Secured creditor BREF1 30590 Cochise LLC is represented by Jennifer R. Tullius, Esq., at Tullius Law Group. BL RESTAURANTS: Fine-Tunes Plan; Confirmation Hearing April 21 -------------------------------------------------------------- Debtors BL Restaurants Holding, LLC, BL Restaurant Operations, LLC, BL Restaurant Franchises, LLC, and BL Hunt Valley, LLC, submitted a Disclosure Statement with respect to Amended Joint Chapter 11 Plan of Liquidation on March 4, 2021. The Bankruptcy Court has scheduled April 21, 2021 at 10:30 a.m. for the Confirmation Hearing. The Bankruptcy Court has set April 14, 2021 at 4:00 p.m. Eastern Time, as the deadline for filing and serving upon Debtors’ counsel and the United States Trustee’s Office objections to Confirmation of the Plan. April 14, 2021 is the Voting Deadline. The Plan Administrator shall continue to seek to sell and close on any pending sales of any remaining Revested Assets, which consists primarily of liquor licenses, and shall pay from Available Cash, all amounts remaining due under the Plan to Allowed: Administrative Claims, 503(b)(9) Claims, Priority Tax Claims, DIP Facility Claim, Professional Fee Claims (to the extent any mount of Professional Fee Claims remain outstanding after payment from the Professional Fee Claim Escrow), Class 1 Miscellaneous Secured Claims, and Class 2 Priority NonTax Claims. All Available Cash after payment of Allowed: Administrative Claims, 503(b)(9) Claims, Priority Tax Claims, DIP Facility Claim, Professional Fee Claims (to the extent any mount of Professional Fee Claims, and any Cash remaining in the Professional Fee Claims Escrow, if any, shall be transfer to the GUC Trust as pat of the GUC Trust Assets. The GUC Trustee shall, to the extent it determines, pursue any GUC Trust Avoidance Actions and any claims reconciliation of Class 4 General Unsecured Claims. The GUC Trustee shall make distributions to holders of Allowed Class 4 General Unsecured Claims from the GUC Trust Assets. Like in the prior iteration of the Plan, General Unsecured Claims have $38,771,428 unpaid allowed claims which are projected to have a 2% to 5% recovery under the Plan. Except to the extent that a holder of an Allowed General Unsecured Claim agrees to a less favorable treatment, each holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of GUC Trust Interests. Interests will be cancelled, released and extinguished as of the Effective Date and holders of Interests shall not receive any Distribution on account of such Interests under the Plan. The Plan is a liquidating plan and provides for the liquidation of the Estate Assets and the payment of the proceeds generated therefrom to holders of Allowed Claims in accordance with the priorities set forth in the Bankruptcy Code. Counsel for the Debtors: KLEHR HARRISON HARVEY BRANZBURG LLP Domenic E. Pacitti Michael W. Yurkewicz Sally E. Veghte 919 N. Market Street, Suite 1000 Wilmington, DE 19801 Telephone: (302) 426-1189 Facsimile: (302) 426-9193 E-mail: dpacitti@klehr.com E-mail: myurkewicz@klehr.com E-mail: sveghte@klehr.com About BL Restaurants Founded in 1991, BL Restaurants Holding, LLC operates gastrobars at various locations including lifestyle centers, traditional shopping malls, event locations, central business districts, and other stand-alone specialty sites. BL Restaurants and three affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-10156) on Jan. 27, 2020. At the time of the filing, the Debtors estimated assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. The petitions were signed by Howard Meitiner, CRO. The Debtors tapped Klehr Harrison Harvey Branzurg LLP as legal counsel; Configure Partners LLC as investment banker; Carl Marks Advisory Group LLC as restructuring advisor; and Epiq Bankruptcy Solutions Inc as notice and claims agent. BLANK LABEL: Combined Plan & Disclosure Confirmed by Judge ---------------------------------------------------------- Judge Janet E. Bostwick has entered findings of fact, conclusions of law, and an order confirming the First Amended Combined Plan of Reorganization and Disclosure Statement of Blank Label Group, Inc. The Modified Plan complies with all the applicable provisions of the Bankruptcy Code and has been proposed in good faith and not by any means forbidden by law. The Modified Plan satisfies Section 1129(a)(1) and (3) of the Bankruptcy Code. The Debtor disclosed that Fan Bi will continue as President and Director of the Debtor on and after the Effective Date. The continuation of Mr. Bi in such offices is consistent with the interests of creditors and equity security holders and with public policy. The Modified Plan satisfies Section 1129(a)(5) of the Bankruptcy Code. The Debtor confirmed that no governmental regulatory commission has approval over the Debtor's rates. The Modified Plan satisfies Section 1129(a)(6) of the Bankruptcy Code. Reliable and credible evidence was adduced or proffered at the hearings on Feb. 4, 2021 and Feb. 24, 2021, that the Modified Plan is feasible and that confirmation of the Modified Plan is not likely to be followed by the need for further financial restructuring of the Debtor. The Modified Plan satisfies Section 1129(a)(11) of the Bankruptcy Code. A full-text copy of the order dated March 4, 2021, is available at https://bit.ly/3taX7i0 from PacerMonitor.com at no charge. 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). The Debtor was estimated to have $1 million to $10 million in assets and liabilities as of the filing. John T. Morrier, Esq., at CASNER & EDWARDS, LLP, is the Debtor's counsel. BW GAS: S&P Assigns 'B+' Rating on New Credit Facilities -------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level and '2' recovery ratings to BW Gas And Convenience Holdings LLC's (BW Gas) first-lien credit facilities, which are composed of a $125 million revolver maturing in 2026 and a $410 million term loan maturing in 2028. The '2' recovery rating indicates its expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of a default. S&P's 'B' issuer credit rating and stable outlook on BW Gas are unchanged. The company will use proceeds from the new debt to refinance about $390 million of outstanding debt. Issue Ratings--Recovery Analysis Key analytical factors -- S&P updated its recovery analysis on BW Gas following the revolver and term loan refinancing. -- S&P simulates a default occurring in 2024 because of a steep drop in EBITDA resulting from an economic downturn, which causes the overall volume of miles driven to fall significantly and deteriorates fuel margins amid intense competition. -- S&P valued BW Gas on a going-concern basis by applying a 6x multiple to our projected emergence-level EBITDA. This multiple is in line with what it for its peer companies (including EG Group Ltd. and Murphy USA Inc.) and reflects the company's significant asset ownership. Simulated default assumptions -- Simulated year of default: 2024 -- EBITDA at emergence: $67.4 million -- Implied enterprise value (EV) multiple: 6x -- Estimated gross EV at emergence: $404 million Simplified waterfall -- Net EV after 5% administrative costs: $384 million -- Valuation split (obligors/nonobligors): 100%/0% -- Senior secured credit facility claims: $524 million --Recovery expectations: 70%-90% (rounded estimate: 70%) All debt amounts include six months of prepetition interest. CAROUSEL CENTER: Moody's Lowers Rating on Revenue Bonds to B3 ------------------------------------------------------------- Moody's Investors Service, Inc. has downgraded the Syracuse Industrial Development Agency, NY's (SIDA) Carousel Center Project Series 2007B, Series 2016A, and Series 2016B PILOT Revenue Bonds to B3 from B1 and placed the ratings on review for downgrade. The rating action follows the severe deterioration in the publicly reported value of the mall at $203 million with the legacy Carousel portion valued at $118 million, which is about 41% of the $285 million of PILOT bonds outstanding. The low valuation reflects the material decline in occupancy related to tenant losses because of the coronavirus pandemic. RATINGS RATIONALE The downgrade to B3 reflects Moody's view that the issuer's default risk has materially increased owing to the rapid decline in occupancy in the legacy Carousel portion of the Destiny USA mall that has reduced cashflows and the publicly reported asset's value that is materially lower than the PILOT bonds and the subordinate CMBS loans outstanding. This very low valuation draws into question the ability of the pledged collateral to support the outstanding CMBS loan at its current level and if the CMBS loan servicer (Wells Fargo) will continue to advance liquidity to cover potential shortfalls until the loan matures. Moody's understand the CMBS loan servicer has given no indication that they will not advance liquidity and that the Standstill Agreement has been amended to extend the loan's maturity until June 6, 2022 with no NOI test required. This is in line with Moody's view that the issuer will need to continue to negotiate with the CMBS loan servicer for liquidity support, covenant waivers and maturity extensions as a market refinancing is unlikely and the NOI remains pressured. The B3 rating incorporates the PILOT bond protections, whereby the payments are in lieu of the annual tax payments due on the property and cannot be accelerated. However, the borrower for the CMBS loan is Carousel Center Company L.P., the same obligor of the PILOT revenue bonds, which potentially exposes the PILOT bonds to the broader credit stress of the borrower and a bankruptcy filing if the CMBS loan amount continues to notably exceed the mall's value. Additionally, the rating incorporates the cash-funded $31 million PILOT bond debt service reserve fund (DSRF) held under a guaranteed investment contract as compared to the $22 million of debt service due in 2021, providing liquidity before a PILOT bond payment default would occur. This liquidity reduces the likelihood of a payment default on the PILOT bonds but does not insulate the project from the broader credit stress on the mall and the industry that will remain pressured for several years. The rating also reflects the mall's diminishing market position and cashflow predictability compared to online retail, a trend the coronavirus outbreak accelerated. Factors That Could Lead to an Upgrade or Downgrade of the Ratings During the rating review, Moody's will focus on whether the CMBS loan servicer will continue to advance liquidity as needed until the CMBS loan matures in June 2022 given new valuation data; if a restructuring of the issuer or the outstanding debt is being considered; the potential for equity support to reduce total leverage; and the feasibility of the issuer's updated cash flow forecast. LEGAL SECURITY The PILOT bonds are special obligations of SIDA, secured solely by the trust estate and funds held by the bond trustee pledged to secure the bonds, including scheduled PILOT payments for the existing Carousel Center (pursuant to a PILOT agreement between the Carousel owner and SIDA). The PILOT bonds are senior to the subordinate $300 million CMBS loan except under an unlikely casualty, condemnation, or eminent domain scenario. A cash-funded debt service reserve fund (DSRF) held under a guaranteed investment contract at $30.9 million satisfies the DSRF requirement of 125% of average annual debt service. OBLIGOR PROFILE Carousel Center Company, L.P. is a New York limited partnership and a single purpose entity with the sole purpose of owning and operating the Carousel Center. Syracuse Industrial Development Agency, NY (SIDA) is a public benefit corporation established to enhance the city's economic development, and has acted as the financing conduit by issuing the bonds on behalf of the Carousel Center Company, L.P. METHODOLOGY The principal methodology used in these ratings was Generic Project Finance Methodology published in November 2019. CASTEX ENERGY: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------- The U.S. Trustee for Region 6 on March 10 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Castex Energy 2005 Holdco, LLC and its affiliates. The committee members are: 1. Wood Group PSN Inc 17325 Park Row Houston, TX Attention: Catalina Nino Phone: 281-828-3554 E-mail: catalina.nino@woodplc.com 2. Petra Consultants Inc. 201 Rue Iberville, Suite 400 Lafayette, LA 70508 Attention: Britt Johnson Phone: 337-210-3426 E-mail: bjohnson@petracon.com 3. W&T Offshore, Inc. 5718 Westheimer Road, Suite 700 Houston, TX 77057 Attention: Shahid Ghauri Phone: 713-626-8525 E-mail: sghauri@wtoffshore.com 4. Shore Offshore Services LLC 2033 State Hwy 249, Ste. 200 Houston, TX 77070 Attention: Cody Sims Phone: 281-378-1504 E-mail: cody@shoreoffshore.com 5. Offshore Marine Contractors, Inc 133 West 113th Street Cut Off, LA 70345 Attention: Raimy D. Eymard Phone: 985-632-7927 E-mail: raimye@omci.biz 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 Castex Energy 2005 Holdco Castex Energy 2005 Holdco, LLC and its affiliates, Castex Energy 2005, LLC, Castex Energy Partners, LLC, and Castex Offshore, Inc., sought protection under Chapter 11 of the Bankruptcy Code on February 26, 2021 (Bankr. S.D. Texas Lead Case No. 21-30710) on Feb. 26, 2021. Douglas J. Brickley, the chief restructuring officer, signed the petitions. At the time of the filing, the Debtors estimated their assets and liabilities at $100 million to $500 million. Judge David R. Jones oversees the cases. The Debtors tapped Okin Adams LLP as their bankruptcy counsel, The Claro Group, LLC as financial advisor, and Thompson & Knight LLP as special counsel and conflicts counsel. Donlin, Recano & Company, Inc. is the notice, claims and balloting agent. CASTEX ENERGY: Will Transfer Talos Shares, Cash in Bankruptcy Plan ------------------------------------------------------------------ Alex Wolf of Bloomberg Law reports that Castex Energy 2005 Holdco LLC filed a bankruptcy plan that would pay back creditors by transferring available cash, 4.6 million shares it holds in Talos Energy, and claims related to a $69.5 million court judgment. The oil and gas interest holder's Chapter 11 plan contains terms it reached with creditors before filing for bankruptcy about $200 million in funded debt. Castex also has proposed establishing a liquidation trust for general unsecured creditors, which are owed $16 million, to pursue recoveries on outstanding company claims, according to a plan filed Monday, March 8, 2021, in the U.S. Bankruptcy Court. About Castex Energy 2005 Holdco Castex Energy 2005 Holdco, LLC and its affiliates, Castex Energy 2005, LLC, Castex Energy Partners, LLC, and Castex Offshore, Inc., sought protection under Chapter 11 of the Bankruptcy Code on February 26, 2021 (Bankr. S.D. Tex. Lead Case No. 21-30710) on February 26, 2021. The petitions were signed by chief restructuring officer, Douglas J. Brickley. At the time of the filing, the Debtors estimated their assets and liabilities at $100 million to $500 million. Judge David R. Jones oversees the case. The Debtors are represented by Matthew Okin, Esq. at Okin Adams LLP. The Debtors tapped The Claro Group, LLC as their Financial Advisors, Thompson & Knight LLP as their Special Counsel and Conflicts Counsel, and Donlin, Recano & Company, Inc. as their Notice, Claims & Balloting Agent. CENTRALSQUARE TECH: Moody's Completes Review, Retains Caa2 CFR -------------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of CentralSquare Technologies, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 2, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations CentralSquare' Caa2 corporate family rating reflects the company's aggressive financial policies and very high financial leverage since the company's formation in 2018. Declining revenue, driven by CentralSquare's non-recurring professional services segment, and persistent negative free cash flow are credit concerns. Higher than anticipated operating costs and a heavy debt load have burdened cash flows and reduced liquidity, weakening the credit. The rating benefits from CentralSquare's sticky software solutions, with a large proportion of recurring revenue and a diversified customer base. The COVID-19 pandemic has created additional headwinds in 2020, increasing uncertainty around the company's path to deleveraging. The principal methodology used for this review was Software Industry published in August 2018. CHARGING BEAR: Seeks Approval to Use Cash Collateral Thru June 1 ---------------------------------------------------------------- Charging Bear, LLC asks the U.S. Bankruptcy Court for the Western District of Oklahoma for authorization to use cash collateral from March 1, 2021 to June 1, 2021. The Debtor was previously authorized to use cash collateral through February 28, 2021. The Debtor filed its Chapter 11 Disclosure Statement and Plan of Reorganization on February 9, 2021. On February 11, 2021, the Court entered an order setting the hearing on approval of the Disclosure Statement for March 31, 2021 at 9:30 a.m. the Debtor says the Plan will be amended before the Disclosure Statement hearing to encompass comments and revisions of creditors. The Debtor says one of the revisions will be the payment in full of Bank 7's mortgage debt from the sale proceeds or from a capital contribution on or before June 20, 2021. On August 15, 2015, the Debtor executed a promissory note in favor of Bank 7 in the original principal amount of $3,160,000.00 and further executed modifications of the promissory note. As of the Petition Date, approximately $1,957,276 plus accrued interest, fees and costs was due under the Note. Contemporaneously with the execution of the Note, the Debtor executed a mortgage and subsequent modifications in favor of Bank 7 to secure the Note. Pursuant to the Mortgage, Bank 7 asserts a first lien and security interest on the Property and all improvements, fixtures and equipment located at the Property. Pursuant to the Mortgage, Bank 7 also asserts that it has an assignment of the rents attributable to the Property, as well as a lien on the cash proceeds of the Pre-Petition Collateral. On January 31, 2020 (effective January 27, 2020), the Debtor executed a Second Mortgage of Real Estate in favor of Walt's Trucking, LLC to secure the debt of affiliate Husky Ventures, LLC. The Second Mortgage also includes a mortgage lien on "rents". The balance of the Husky Ventures debt that is secured by the second mortgage is approximately $250,000. On August 31, 2020, the Debtor executed a guaranty and third mortgage, including an assignment of rents, in favor of CrossFirst Bank to secure the guaranty. The balance of the indebtedness guaranteed and secured by the third mortgage is approximately $1,757,691.00. In addition to the referenced consensual liens, $51,191 in ad valorem taxes are owed to the Oklahoma County Treasurer for pre- and post-petition assessments and $30,539.15 is owed for pre- and post-petition assessments by the MacArthur Crossing Office Park, Inc. The Debtor owns a business office building located within the MacArthur Crossing Business Park at 5800 NW 135th Street Oklahoma County, Oklahoma which provides business office space to its tenants. Pre-petition, the Debtor retained a real estate appraiser to prepare an appraisal of the Property. The appraisal was completed post-petition and appraised the value of the Property as of November 12, 2020 to be $2,940,000.00. "Without authority to use Cash Collateral, the Debtor will not be able to meet simple operating needs, including future utilities (and deposits), insurance, and/or otherwise comply with state and local ordinances to maintain and preserve the value of its assets," the Debtor tells the Court. The Debtor's proposed budget anticipates monthly expenses in the amount of $3,980 for each of the months of March, April and May. The Budget projects $10,020 monthly net income after payment of ordinary course obligations. "Ultimately, the use of Cash Collateral will maintain the going concern value of the Debtor's business and improve the ability of the Debtor to facilitate an effective and timely reorganization. the Debtor will be able to keep its property insured, safe, and secure and maintain ongoing utilities for the health and safety of its tenants. These are all expenses necessary to preserve the value of the Debtor's property. Without such minimal financial accommodations, the Debtor's ability to provide basic services to its tenants, including water, electricity and heating will be jeopardized and result in the loss of tenants and rental income. the Debtor loss of tenants, will likewise jeopardize any hope of effective reorganization," the Debtor further tells the Court. The Debtor asserts Bank 7 and Walt's Trucking mortgage debt are fully secured. As adequate protection for any diminution of Bank 7's and Walt's Trucking interest in the pre-petition and post-petition collateral to which their liens attach, to the extent Bank 7 holds valid, perfected and unavoidable security interests in property of the Debtor's estate, without any requirement to file any additional documents to perfect such interests, the Debtor will provide adequate protection in the form of a post-petition security interest upon all post-petition property of the same kind and type that is subject to Bank 7, Walt's Trucking, and CrossFirst Bank properly perfected pre-petition security interests. The Replacement Liens will extend to: (a) all property acquired by the Debtor, and its bankruptcy estate, of the kind or type that would otherwise constitute Pre-Petition Collateral; and (b) all products and proceeds of the Replacement Collateral and the Pre-Petition Collateral, of the kind or type that would otherwise constitute Pre-Petition Collateral. "The Replacement Liens afforded to Bank 7 and Walt's Trucking provide adequate protection with the approximate $700,000.00 equity cushion for their first and second liens. Unfortunately, the equity does not extend to providing adequate protection for the mortgage guaranty to CrossFirst Bank. In order to protect CrossFirst's equity position, the Debtor proposes to pay the monthly interest accrual for Bank 7 in the amount of $7585.00 commencing January 1, 2021. The interest accrual payment will protect the equity position of CrossFirst Bank. the Debtor believes that the payment affords adequate protection to CrossFirst Bank," the Debtor contends. The Debtor says that these will constitute events of default: (1) The Debtor's use or transfer of Cash Collateral in excess of the amounts permitted under the budget or for purposes not specifically authorized under the budget (however, a 10% global variance will not constitute a default); (2) Entry of an order providing for the conversion of the Debtor's case to a chapter 7 case or for dismissal thereof; (3) Lapse of adequate loss insurance on the Pre-Petition Collateral, if any is required; or (4) the Debtor's material failure to keep or observe any other provision of an order entered hereon. The Debtor proposes that it be authorized to use cash collateral of up to $14,000 per month for the payment of the expenditures stated in its proposed Budget, and interest accrual payment for the period March 2021 through May 2021. The hearing on the Motion is scheduled for March 31, 2021 at 9:30 a.m. A full-text copy of the Motion, dated March 9, 2021, is available for free at https://tinyurl.com/43d7zk8p from PacerMonitor.com. About Charging Bear Charging Bear LLC is a single asset real estate the Debtor (as defined in 11 U.S.C. Section 101(51B)). It is the owner of fee simple title to certain parcels located in Oklahoma City, Oklahoma having an appraised value of $3.4 million. Charging Bear sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No. 20-13610) on Nov. 11, 2020. Charles V. Long, Jr., managing member, signed the petition. At the time of the filing, the Debtor had total assets of $3,400,544 and total liabilities of $4,081,531. Douglas N. Gould, PLC, is the Debtor's legal counsel. CHARLES RIVER: S&P Assigns 'BB' Rating on New Sr. Unsecured Notes ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level and '5' recovery ratings to Charles River Laboratories International Inc.'s (CRL's; 'BB+/Stable') proposed $1 billion senior unsecured notes. The '5' recovery rating indicates its expectation for modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. S&P's issue-level rating on the company's upsized revolver remains 'BB+'. The recovery rating remains '3', indicating its expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. CRL plans to issue $1 billion aggregate principal amount of senior unsecured notes (split between 8- and 10-year tenors), as well as to upsize its revolver to $3 billion from $2.05 billion. It will use proceeds from the notes offering to repay the senior notes due 2026, repay the term loan A, and to fund a portion of the acquisition of Cognate BioServices. S&P said, "Our 'BB+' issuer credit rating on CRL reflects the company's strong market share. CRL delivers nonclinical research and development services critical to the pharmaceutical and biotechnology industries, providing steady demand and reliable revenue. The rating also reflects CRL's focus on a very niche market with limited pricing power and limited revenue visibility compared to clinical-focused contract research organizations. We expect long-term adjusted debt to EBITDA will be in the higher end of the 2x-3x range, and we expect CRL to prioritize debt repayment when leverage spikes above 3x for periodic acquisitions. Given the recently announced Cognate BioServices acquisition ($875 million purchase price), CRL has limited capacity at the 'BB+' rating for additional acquisitions through year-end 2021." CHASE MERRITT: Has Until April 20 to File Plan & Disclosures ------------------------------------------------------------ Judge Erithe Smith of the U.S. Bankruptcy Court for the Central District of California has entered an order within which debtor Chase Merritt Global Fund, LLC shall file a plan of reorganization and disclosure statement no later than April 20, 2021, and the Status Conference is continued to June 17, 2021 at 10:30 a.m. A full-text copy of the order dated March 4, 2021, is available at https://bit.ly/2N70Tta from PacerMonitor.com at no charge. The Debtor is represented by: W. Derek May, Esq. Law Office of W. Derek May 400 N. Mountain Ave., Suite 215B Upland, CA 91786 Tel: (909) 920-0443 Email: wdmlaw17@gmail.com About Chase Merritt Chase Merritt Global Fund, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-10135) on Jan. 20, 2021. Paul Nguyen, manager, signed the petition. At the time of the filing, the Debtor disclosed $2.7 million and liabilities of $1.315 million. Judge Scott C. Clarkson oversees the case. The Debtor is represented by the Law Office of W. Derek May. CHIEF CORNERSTONE: Case Summary & 5 Unsecured Creditors ------------------------------------------------------- Debtor: Chief Cornerstone Builders LLC 3531 Kahala Bay Ln Las Vegas, NY 89147 Business Description: Chief Cornerstone Builders LLC is the owner of fee simple title to three properties in Las Vegas, Nevada having a total current value of $1.13 million. Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court District of Nevada Case No.: 21-11172 Judge: Hon. Natalie M. Cox Debtor's Counsel: Rory Vohwinkel, Esq. VOHWINKEL & ASSOCIATES 6272 Spring Mountain Road Suite 110 Las Vegas, NV 89146 Tel: 702-735-1500 Fax: 702-735-0505 E-mail: rory@vohwinkellaw.com Total Assets: $1,126,471 Total Liabilities: $1,201,213 The petition was signed by Tess Pascual, president. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6W5RLKQ/CHIEF_CORNERSTONE_BUILDERS_LLC__nvbke-21-11172__0001.0.pdf?mcid=tGE4TAMA CHOBANI LLC: Moody's Completes Review, Retains B3 CFR ----------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Chobani, LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 1, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Chobani's B3 CFR reflects its high financial leverage, significant exposure to dairy price volatility, and high concentration in the U.S. Greek yogurt category, which pre-COVID suffered perennial sales volume declines from 2015 to 2019 and increasing competition. Further, the rating also reflects high execution risk associated with Chobani's high-paced innovation strategy, which is a key component of its plan for driving sales and earnings growth, margin expansion and financial deleveraging. Corporate governance remains a weakness, reflecting concentrated control by the founder of the board of directors and of key senior executive roles including the CEO position. Chobani's credit profile is supported by attractive profit margins and the strong asset value of the Chobani brand that holds a leading position in the $4 billion U.S. Greek yogurt category. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. CHURCHILL DOWNS: Moody's Rates New $200MM First Lien Loan 'Ba1' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 to Churchill Downs Incorporated's (CHDN) proposed $200 million 1st lien term B loan due 2028. Proceeds from the proposed term loan, will go towards repaying a portion of CHDN's $361 million of outstanding borrowings under the company's $700 million revolver and increasing the company's balance sheet cash for future capital expenditures and for general corporate purposes. CHDN's other ratings including the Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, Ba1 senior secured debt rating and B1 senior unsecured debt rating. The rating outlook is stable and CHDN has an SGL-2 Speculative Grade Liquidity. Despite the leverage increase that will occur as a result of the transaction -- pro forma Dec. 31, 2021 debt/EBITDA on a gross basis is 7.7x compared to 7.0x based on Dec. 31, 2020 actual results -- CHDN's Corporate Family Rating and stable rating outlook are not affected. Moody's remains confident of CHDN's ability to grow EBITDA in fiscal 2021 through increased seating capacity at Churchill Downs Racetrack and a full year impact of Oak Grove (opened in Sept. 2020) and Newport Gaming (opened in Oct. 2020) in 2021. In fiscal 2022, continued growth in EBITDA along with free cash flow of between $400 million and $500 million after capital expenditures and common dividends will enable the company to achieve its longer-term targeted net leverage target of 3.0x--4.0x. The proposed transaction will also benefit CHDN's liquidity as the proposed term loan proceeds will be used to repay some portion of the revolver and increase cash balances. Part of the leverage increase relates to a debt-funded $194 million privately negotiated share repurchase from one investor, an event Moody's considers aggressive from a financial policy standpoint, and not something that Moody's previously anticipated. Because the share repurchase will result in CHDN taking longer to reduce leverage to the targeted range, the company is more weakly positioned within the Ba3 rating category. The Ba1 rating on CHDN's proposed term loan and existing $388 million term loan, two-notches higher than CHDN's Ba3 Corporate Family Rating, considers the loss absorption provided by the company's existing $1.1 billion senior unsecured notes. The following ratings/assessments are affected by the action: New Assignments: Issuer: Churchill Downs Incorporated Senior Secured 1st Lien Term Loan B, Assigned Ba1 (LGD2) RATINGS RATIONALE CHDN's credit profile and Ba3 CFR reflects the strong history, popularity and performance of the Kentucky Derby along with the company's practice of operating with moderate leverage during normal operating conditions. Also viewed favorably is the consistent and stable performance of TwinSpires.com, the company's horse racing digital wagering platform. Key credit concerns include the highly discretionary nature of consumer spending on traditional gaming and betting activities in general. Continued pressure from efforts to contain the coronavirus, potential for a slow longer-term recovery, and the long-term fundamental challenges facing regional gaming companies are also considered risks. The stable outlook considers CHDN's lower cost structure and revenue and EBITDA growth at the company's online wagering segment, a trend Moody's believe will continue despite the ongoing effects of the corona virus pandemic. This has improved the company's ability to bring its debt-to-EBITDA leverage back down to a range more consistent with CHDN's Ba3 Corporate Family Rating by the end of 2021 - between 4.5x and 5.5x times. CHDN's debt/EBITDA pro forma for the revolver repayment on a Moody's adjusted basis for the fiscal year ended Dec. 31, 2020 was very high at 7.0x, and 8.5x on a pro forma basis, but that metric was significantly affected by several months of temporary asset closures during March through June related to the coronavirus pandemic. Moody's assume in the stable outlook that CHDN's gaming and horse racing businesses will continue to operate without interruption and that capacity restrictions will be eased over time. Additionally, the stable outlook also assumes that CHDN will maintain good liquidity including the ability to comfortably meet the 4.0x senior secured debt-to-EBITDA leverage ratio covenant that returns during the September 30, 2021 quarter. On April 28, 2020, CHDN entered into the second amendment to its credit agreement, which provided for a financial covenant relief period through the fiscal quarter ending June 30, 2021. CHDN's SGL-2 Speculative Grade Liquidity considers that despite the stress on financial resources that has occurred as a result of the coronavirus crisis, CHDN can still generate and maintain an excess level of internal cash resources after satisfying all scheduled debt service. There are also no material debt maturities until CHDN's $400 million term loan B matures in 2024. The $700 million revolver expires in March 2025. Additionally, as a result of bank loan covenants amendments obtained on April 28, 20, CHDN will not be required to comply with its existing consolidated total secured net leverage ratio financial covenant and the interest coverage ratio financial covenant through June 30, 2021 ("financial covenant relief period"). CHDN has agreed to a minimum liquidity financial covenant that requires the company to maintain liquidity of at least $150 million during that same period. Moody's believe the company has ample cushion within the minimum liquidity covenant. Moody's projects CHDN will meet the 4.0x senior secured debt-to-EBITDA leverage ratio covenant that returns during the September 30, 2021 quarter. ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody's analysis has considered the effect on the performance of CHDN from the current weak US economic activity and a gradual recovery for the coming year. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in CHDN's credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and CHDN remains vulnerable to the outbreak continuing to spread. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A rating upgrade requires a high degree of confidence that the gaming sector has returned to a period of long-term stability along with a continued positive free cash flow outlook and good liquidity profile, and debt/EBITDA sustained below 4.0x. Factors that could lead to a downgrade include any revenue and earnings decline due to renewed facility shutdown, reduced visitation, increased competition, deterioration in liquidity, or debt/EBITDA sustained above 5.5x The principal methodology used in these ratings was Gaming Methodology published in October 2020. Churchill Downs Incorporated (CHDN) is a racing, online wagering and gaming entertainment company that owns and operates: The Kentucky Derby; three pari-mutuel gaming entertainment venues in Kentucky: Derby City Gaming, Oak Grove Racing, Gaming, and Hotel, and Newport Racing and Gaming; TwinSpires, one of the largest online horse race wagering, online sportsbook and iGaming platforms in the U.S.; and brick-and-mortar casino gaming with approximately 11,000 slot machines and video lottery terminals and 200 table games in eight states. CHDN is organized in 3 reporting business segments: Churchill Downs, On-line Wagering, and Gaming. Net revenue for the fiscal year ended Dec. 31, 2020 was $1,05 billion. The company is publicly traded (NASDAQ:CHDN). CINEMARK HOLDINGS: Fitch Affirms 'B+' IDR, Outlook Negative ----------------------------------------------------------- Fitch Ratings has affirmed Cinemark Holdings, Inc. and Cinemark USA, Inc.'s Long-Term Issuer Default Rating (IDR) at 'B+'. The Rating Outlook remains Negative. Fitch has also affirmed the company's senior secured credit facility and secured notes at 'BB+'/'RR1' and its senior unsecured notes at 'B'/'RR5'. Fitch has assigned a 'B'/'RR5' rating to Cinemark USA's issuance of senior unsecured notes. Proceeds are expected to be used to fund the tender offer to purchase or redeem Cinemark USA's existing 5.125% senior notes due 2022 in a leverage neutral transaction. The notes are expected to rank pari passu with the company's existing senior unsecured debt and to have a substantially similar guaranty structure as the existing senior unsecured notes. Cinemarks' ratings and Negative Outlook reflect ongoing disruption of its operating profile and weakened credit protection metrics from the coronavirus pandemic. Theater closures have extended beyond Fitch's initial expectations, but the company has managed its operating cost structure, pace of capital expenditures and dividend policy and capital allocation to provide necessary financial and operating flexibility during the pandemic. Fitch believes Cinemark has sufficient liquidity resources to manage until theaters begin to operate at greater capacity, potentially in mid-2021. The company ended 2020 with a global cash balance of approximately $655 million, $100 million of revolver availability and expects to receive a $100 million cash infusion from the Coronavirus Aid, Relief and Economic Security Act of 2020 (CARES Act) during 1H21. Based on 4Q20 cash burn of approximately $65 million per month, Fitch anticipates Cinemark's current liquidity provides operational runway under current conditions through 2021. The Negative Outlook also incorporates the potential impact of longer-term shifts in theatrical content distribution windows. Major studios are executing strategic pivots to direct-to-consumer (DTC) distribution models and are funneling more film slate productions to their respective DTC platforms, thereby reducing the volume of new films available for theatrical exhibition. Structurally lower overall theater attendance once the threat of the coronavirus pandemic subsides could pressure Cinemark's operating and credit profiles. KEY RATING DRIVERS Coronavirus Pandemic: The coronavirus pandemic added a significant ongoing challenge to Cinemark's operations, which are dependent on consumer discretionary spending and attendance. Concerns over public health and safety have resulted in widespread cancellation of live events and mandated closure of out-of-home entertainment venues. Although Cinemark's theaters were initially closed in mid-March, 257 of its domestic theaters have since reopened (78% of its total domestic theaters), including 13 expected to open on March 5, 2021, and 129 international theaters (as of Dec. 31, 2021). The company is operating with enhanced cleaning and safety protocols in place, which has reduced its capacity. Adequate Liquidity: As of Dec. 31, 2020, Cinemark had $655 million of cash and full availability under a $100 million revolving credit facility maturing November 2022. The company also expects to receive $100 million from the CARES Act during 1H21. Fitch believes this provides Cinemark with sufficient liquidity to fund its stated monthly run-rate losses of approximately $65 million through 2021 if the current environment continues. However, Fitch's base case assumes Cinemark operates at reduced attendance levels through June before returning to more normalized levels during 2H21 and that the company will generate modestly positive EBITDA for the FYE Dec. 31, 2021. Fitch notes Cinemark managed down its monthly cash burn through a reduction in operating cost and Capex along with the temporary suspension of its dividend. Cinemark's financial and liquidity metrics are strong compared to theatre exhibitor peers. It has modest annual term loan amortization (approximately $6.6 million annually) and its next maturities are in December 2022 ($400 million) and June 2023 ($755 million). Cinemark's current issuance is in line with Fitch's expectations that the company would look to extend outstanding debt well before its maturity. Dependent on Film Studios' Product: Cinemark and its peers rely on the quality, quantity and timing of movie product, all of which are beyond management's control. Throughout the pandemic, film studios have been shifting theatrical release dates into 2021 and later while also redirecting certain titles to their own DTC offerings, with options ranging from day-and-date releases on DTC platforms and in theaters to recalibrated theatrical release windows. Fitch will monitor any changes to theatrical windowing, including a permanent shortening of the theatrical release window. Cinemark's ratings are reliant on the assumption that theatrical exhibition will remain a key window for film studios' large film releases (tent poles) once the pandemic abates. Studios have consistently reasserted their belief in theatrical windowing throughout the pandemic as they understand the unique opportunity it presents for branding and raising consumer awareness for content/IP. Fitch believes film studios will return to theatrical exhibition at a minimum for its tent pole releases to offset the high production and marketing costs associated with these projects. In addition, the talent involved in creating films are reliant to some extent on box office metrics for current and future income generation. Increasing Competitive Threats: The increase in competitive threats continues to elevate concerns over secular declines in theatrical attendance. The ratings factor in the intermediate- to long-term risks associated with increased competition from alternative at-home distribution channels (video on demand [VOD], over the top [OTT] and streaming services). Theatrical Attendance: Fitch believes there will be a meaningful near-term rebound in theatrical attendance once the coronavirus crisis has abated. However, the substitution threat posed by the heightened competitive landscape could have a longer-term impact on theatrical attendance, which could also lead to a shortening of the theatrical window. Fitch believes the preference for in-home filmed entertainment viewership will cannibalize traditional theatrical attendance over the long term. As such, it does not expect theatrical attendance to return to historical levels over the rating horizon, offsetting some of the expected growth in average ticket prices and concessions. Scale and Market Position: Cinemark's ratings are supported by its scale, as the third largest theater exhibitor in the U.S., operating 4,507 screens in 331 theaters across 42 states. The company also has a dominant position in Latin American where it operates 1,451 screens in 200 theaters across 15 countries. Cinemark is the leading theater exhibitor in Brazil and Argentina, and it the second largest exhibitor in Chile, Colombia and Peru. DERIVATION SUMMARY Cinemark's ratings reflect its scale and market position as the third largest theater chain in the U.S., the largest theater chain in Brazil and Argentina, and the second largest theater chain in Colombia, Chile and Peru. Cinemark maintains a more conservative balance sheet and greater liquidity than its peers, AMC Entertainment and Cineworld plc (CCC), which provides it with a better ability to manage the business through this period of operating uncertainty. KEY ASSUMPTIONS -- Flat attendance levels through June before returning to more normalized levels during 2H21 and 2022. Despite growth in 2023 driven by strong slate, attendance declines in 2024 as studios narrow theatrical film slates and funnel more low- to mid budget movies to their DTC offerings. Attendance does not return to historical levels over the rating horizon; -- Average ticket prices increase low single digits domestically and decline low single digits internationally; -- Concession revenues return to historical levels by 2024; -- EBITDA margin at mid-single digits in 2021 as performance slowly turns positive and Cinemark begins to cover its operating costs and then returns to 20% by 2022; -- Capex grows to $120 million in 2021 and returns to 10% of revenues thereafter; -- Dividend reinstated in 2022 at $42 million quarterly and grows 5% per annum thereafter; -- Current liquidity cushion is sufficient to support expected cash burn in 1H21; -- $755 million 2023 maturity refinanced in 2022; -- Total Adjusted Debt/Operating EBITDAR falls below 5.5x in 2022 and remains in low-5x range over rating horizon. KEY RECOVERY RATING ASSUMPTIONS -- The recovery analysis assumes Cinemark would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. -- EBITDA: Cinemark's going concern EBITDA is based on FY 2019 pre-pandemic EBITDA of $656 million. Fitch then stresses EBITDA by assuming theatres close due to theater closures and accelerated declines in theatrical attendance as a result of continued media fragmentation and changing consumer preferences. This results in a going-concern EBITDA of $230 million, or a roughly 60% stress. -- Prior recessions provide little precedent for a stress case. Theatre attendance increased in six of the last eight recessions because theatrical exhibition remains a relatively cheap form of entertainment. However, the rise of alternative distribution platforms and streaming subscription plans (e.g. Netflix, Hulu, Disney+, HBO Max etc.) could place pressure on theatrical exhibition attendance in future downturns, particularly in urban areas where the cost of an average theatre ticket exceeds $15. Fitch believes that the recently launched theatre subscription plans like AMC's Stubs List and Cinemark's Movie Club could help support attendance levels. -- Multiple: Fitch employs an enterprise value multiple of 5x to calculate post-reorganization valuation, roughly in-line with the median TMT emergence enterprise value/EBITDA multiple, and incorporates the following intro its analysis: (1) Fitch's belief that theatre exhibitors have a limited tangible asset value and that the business model bears the risk of being disrupted over the longer-term by new distribution models (e.g. Netflix typically releases films in theatres and to its streaming subscribers simultaneously, with some limited exceptions for awards contention); (2) Recent trading multiples (EV/EBITDA) in a range of 6x-17x; (3) Recent transaction multiples in a range of 9x (e.g. Cineworld Group plc acquired U.S. theatre circuit Regal Entertainment for $5.8 billion in February 2018 for an LTM EBITDA purchase price multiple of roughly 9.0x. AMC purchased U.S. theatre circuit Carmike for $1.1 billion in Dec. 2016 for a purchase price multiple of 9.2x and AMC purchased international circuit Odeon and UCI for $1.2 billion in November 2016 at a purchase price multiple of 9.1x). -- Fitch estimates an adjusted, distressed enterprise valuation of $1.1 billion. -- Debt: Fitch assumes a fully drawn revolver in its recovery analysis since credit revolvers are tapped when companies are under distress. For Fitch's recovery analysis, leases are a key consideration. While Fitch does not assign recovery ratings for the company's operating lease obligations, it is assumed the company rejects only 30% of its remaining $1.3 billion in operating lease commitments (calculated at a net present value) due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values. This incorporates the importance of the leased space to the core business prospects as a going concern. Fitch excludes Cinemark Holdings, Inc's $450 million convertible notes as they rank junior to Cinemark's existing debt, are structurally subordinated and have no security or liquidity requirements. -- Cinemark had $2.5 billion in total debt as of Dec. 31, 2020. -- The recovery results in a 'BB+'/'RR1' on the senior secured notes and existing secured credit facilities reflecting expectations that 91%-100% recovery is reasonable. The recovery results in a 'B'/'RR5' on the secured notes reflecting reduced recovery prospects owing to the weighting towards secured debt in the capital structure. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Outlook could be revised to Stable if Fitch believes the severity and duration of the coronavirus pandemic will not continue to materially affect Cinemark's credit profile. This may present itself through capacity increases leading to increased attendance. -- The ratings for Cinemark have limited upside potential due to the inherent nature of the theatrical exhibition business, the resulting hit-driven volatility and the reliance on film studios for the quantity and quality of films in any given period. In strong box office years, metrics may be stronger in order to provide a cushion in weaker box office years. -- Total leverage (total debt with equity credit/operating EBITDA) sustained below 2.5x and adjusted leverage (including lease equivalent debt) below 4.5x. -- FCF margins sustained in the mid- to high-single digits. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Longer than expected deterioration of Cinemark's liquidity position due to the cash burn. -- Increasing secular pressure as illustrated in sustained declines in attendance and/or concession spending per patron. 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 Adequate Liquidity: As of Dec. 31, 2020, Cinemark had $655 million of cash and full availability under a $100 million revolving credit facility maturing December 2022. The company also expects to receive $100 million from the CARES Act during 1H21. Fitch believes this provides Cinemark with sufficient liquidity to fund its stated monthly run-rate losses of approximately $65 million through 2021 if the current environment continues. However, Fitch's base case assumes Cinemark operates at reduced attendance levels through June before returning to more normalized levels during 2H21 and that the company will generate modestly positive EBITDA for the FYE Dec. 31, 2021. Cinemark has modest annual term loan amortization (approximately $6.6 million annually), and its next maturities are in December 2022 ($400 million) and June 2023 ($755 million). Cinemark's current issuance is in line with Fitch's expectations that the company would look to extend outstanding debt well before its maturity. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. CINEMARK USA: Moody's Gives Caa1 Rating on New $405MM Senior Notes ------------------------------------------------------------------ Moody's Investors Service assigned a Caa1 rating to Cinemark USA, Inc.'s ("Cinemark USA") proposed $405 million 5-year senior notes offering. Cinemark USA's B3 Corporate Family Rating, B3-PD Probability of Default Rating, Ba3 senior secured bank credit facilities rating, Ba3 senior secured notes rating, Caa1 senior unsecured notes rating and negative outlook remain unchanged. Cinemark USA is a wholly-owned subsidiary of Cinemark Holdings, Inc. ("Cinemark" or the "company") and its ratings derive support from the parent, which is the financial reporting entity. Proceeds will be used to fully redeem the $400 million 5.125% senior notes due 2022 via a tender offer and pay transaction-related fees, including the tender premium. The new senior notes will rank pari passu with Cinemark USA's existing senior notes and contain the same joint and several upstream guarantees on an unsecured basis from certain Cinemark USA operating subsidiaries. Following is a summary of the rating action: Assignment: Issuer: Cinemark USA, Inc. $405 Million Senior Unsecured Notes due 2026, Assigned Caa1 (LGD5) The assigned rating is subject to review of final documentation and no material change to the size, terms and conditions of the transaction as advised to Moody's. RATINGS RATIONALE Moody's expects that the refinancing transaction will be leverage neutral since Cinemark's total debt quantum and financial leverage will remain relatively unchanged with pro forma total debt at December 31, 2020 staying at roughly $2.67 billion on an as-reported basis (approximately $4.0 billion, on a Moody's adjusted basis). Cinemark's total debt to EBITDA metric is not meaningful because the company's EBITDA was negative in 2020. Moody's views the transaction favorably given the extension of the 2022 debt maturity. Upon full extinguishment of the 5.125% senior notes, Moody's will withdraw the rating. Cinemark USA's B3 CFR is forward-looking and supported by the parent's (Cinemark Holdings, Inc.) position as the third largest movie exhibitor in the US. The rating reflects the company's materially weakened operating and financial performance, which has suffered from significant revenue losses during the five-month forced closure of Cinemark's global theatre circuit from mid-March to mid-August 2020 due to the coronavirus pandemic. The CFR captures the delayed reopening of the company's theatres following repeated postponement of several theatrical film releases during the summer months of 2020 and the possibility of further film release delays in 2021. Moody's also expects that seating capacity restrictions and lackluster moviegoer attendance for its reopened theatres will likely continue until vaccines are more widely administered. In 2020, Cinemark generated negative EBITDA of approximately -$277 million on an as-reported basis or roughly -$135 million on a Moody's adjusted basis. At December 31, 2020, 75% of Cinemark's domestic circuit and 65% of its Latin American circuit was open and operational. Many of the company's theatres in major metropolitan cities remain closed, although some large municipalities recently approved the reopening of theatres with capacity limits (e.g., the California Bay area in late-February and New York City in early-March). The rating also considers Moody's concerns that decisions by some of the major film studios to: (i) release their films, including blockbuster titles, on their streaming platforms and in theatres simultaneously; (ii) shorten the theatrical window for certain films; and/or (iii) forego wide theatrical release for some films and instead release them directly to streaming platforms, will likely depress Cinemark's profits over the next several quarters and keep financial leverage at an elevated level, especially given the company's sizable debt raises last year. As vaccines are more widely dispersed, Moody's expects this will lead to improved attendance levels and better operating performance on a sequential and year-over-year basis in Q3 2021 during the important summer box office season. Moody's projects Cinemark will continue to experience adequate liquidity, driven by the company's current cash burn of roughly $65 million per month, which will likely exhaust existing liquidity by early 2022 absent additional sources of liquidity or a sharp rebound in future attendance. The negative outlook reflects Moody's expectation for lower revenue and EBITDA this year compared to 2019 (albeit better than 2020) coupled with weakened liquidity as a result of the temporary closure of roughly 25% of Cinemark's global theatre circuit, seating capacity restrictions and weak moviegoer attendance at reopened theatres, as well secular attendance challenges facing the theatre industry. It also incorporates the numerous uncertainties related to the social considerations and economic impact from COVID-19 on Cinemark's cash flows, especially if film studios continue to postpone releases of their movies or seek alternative distribution methods. For example, studios could increasingly release movies simultaneously to streaming platforms or much sooner than previously, or avoid theatrical release altogether. The negative outlook embeds Moody's view that Cinemark will experience negative operating cash flows in the first half of 2021 or until vaccines are more widely administered despite the company's efforts to reduce operating expenses. Cinemark's SGL-3 rating reflects adequate liquidity. Moody's projects negative free cash flow generation in 2021. This is chiefly due to EBITDA shortfalls and negative operating cash flow primarily in H1 2021 resulting from theatre closures, as well as seating capacity restrictions and weak moviegoer attendance for theatres that are currently open or will reopen later this year. It also results from Cinemark's increased interest expense burden as a result of its leveraged balance sheet. The company's cash burn is roughly $195 million per quarter ($65 million per month). Cash balances at December 31, 2020 were $655.3 million. Cinemark believes its cash position will allow it to sustain operations through the end of Q4 2021 if operating results do not improve from current levels, its unopened theatres remained closed indefinitely, and the company timely receives tax refunds expected later this year in connection with tax benefits related to NOL carrybacks that were allowed under the CARES Act. Nonetheless, Moody's is concerned that Cinemark's liquidity could be exhausted by early 2022, if it is unable to reopen its remaining theatres and/or moviegoer demand remains lackluster, which would force the company to raise cash via additional debt issuance, potentially pressuring ratings. 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. Moody's analysis has considered the effect on the performance of corporate assets from the current weak global economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around Moody's forecasts is unusually high. Owing to Cinemark's exposure to US and Latin American economies, the company remains vulnerable to shifts in market demand and business and consumer sentiment in these unprecedented operating conditions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating outlook could be revised to stable if Cinemark reopens its remaining closed theatres in 2021 (especially in major metropolitan cities), attendance revives to profitable levels and the company returns to positive operating cash flow. A ratings upgrade is unlikely over the near-term given the expectation for continued weak operating performance and challenged debt protection measures. Over time, an upgrade could occur if Cinemark experiences positive growth in box office attendance, stable-to-improving market share, higher EBITDA and margins, and enhanced liquidity, and exhibits prudent financial policies that translate into an improved credit profile. An upgrade would also be considered if financial leverage as measured by total debt to EBITDA was sustained below 6x (Moody's adjusted) and free cash flow as a percentage of total debt improved to the 2% area (Moody's adjusted). The ratings could be downgraded if there was: (i) prolonged closure of Cinemark's remaining unopened cinemas and/or delays in lifting seating capacity restrictions or poor attendance levels at reopened theatres leading to a longer-than-expected cash burn period, an exhaustion of the company's liquidity resources or an inability to access additional sources of liquidity to cover cash outlays; (ii) poor execution on reducing or managing operating expenses; or (iii) limited prospects for operating performance recovery in 2021. A downgrade could also be considered if total debt to EBITDA was sustained above 7.5x (Moody's adjusted) or free cash flow generation will likely remain negative on a sustained basis. Headquartered in Plano, Texas, Cinemark USA, Inc. is a wholly-owned subsidiary of Cinemark Holdings, Inc., a leading movie exhibitor that operates 531 theaters and 5,958 screens worldwide with 331 theatres and 4,507 screens in the US across 42 states and 200 theatres and 1,451 screens across 15 countries in Latin America. Revenue totaled approximately $686.3 million for the fiscal year ended December 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CLEARY PACKAGING: Gets OK to Hire George S. Magas as Accountant --------------------------------------------------------------- Cleary Packaging, LLC, received approval from the U.S. Bankruptcy Court for the District of Maryland to hire George S. Magas CPA, PC as its accountant. The firm will provide these services: (a) render tax compliance and tax consulting services; (b) consult with the Debtor in connection with other business matters relating to the Debtor's financial activities; (c) provide expert testimony; (d) work with accountants and other financial consultants; (e) provide accounting advice; and (f) assist in other tax and financial matters. George Magas, a certified public accountant, charges an hourly fee of $250. The initial retainer fee is $10,000. The firm 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: George S. Magas CPA George S. Magas CPA, PC 9422 Damascus Road Damascus, MD 20872 Phone: 301-253-0013 301-370-7167 About Cleary Packaging Cleary Packaging, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-10765) on Feb. 7, 2021. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor tapped Yumkas, Vidmar, Sweeney & Mulrenin as its legal counsel and George S. Magas CPA, PC as its accountant. CLEARY PACKAGING: Gets OK to Hire Yumkas Vidmar as Counsel ---------------------------------------------------------- Cleary Packaging, LLC, received approval from the U.S. Bankruptcy Court for the District of Maryland to hire Yumkas, Vidmar, Sweeney & Mulrenin, LLC as its legal counsel. The firm's services will include: (a) advising the Debtor of its rights, powers and duties under the Bankruptcy Code; (b) assisting in the negotiation and documentation of financing agreements, debt restructurings, cash collateral arrangements and related transactions; (c) representing the Debtor in defense of any proceedings instituted to reclaim property or to obtain relief from the automatic stay under Section 362(a) of the Bankruptcy Code; (d) representing the Debtor in any proceedings instituted with respect to the use of cash collateral; (e) reviewing the nature and validity of liens asserted against the property of the Debtor and advising the Debtor concerning the enforceability of such liens; (f) advising the Debtor concerning the actions that it might take to collect and to recover property for the benefit of the Debtor's estate; (g) preparing legal papers and reviewing financial reports to be filed in the Debtor's Chapter 11 case; (h) preparing responses to applications, motions, pleadings, notices and other papers that may be filed in the Debtor's case; (i) advising the Debtor in connection with the formulation, negotiation and promulgation of a plan of reorganization or liquidation and related documents; and (j) other legal services necessary to administer the Debtor's case. The firm's services will be provided mainly by Paul Sweeney, Esq., who will be paid at the hourly rate of $515. The hourly rates for the other attorneys and paralegals at the firm are as follows: Members $415 - $520 per hour Associates $320 - $330 per hour Paralegals $150 - $225 per hour Prior to the Debtor's Chapter 11 filing, Yumkas received a total of $50,000, of which $16,584 was used to pay for the firm's pre-bankruptcy services. The firm also used $1,738 of the amount received to pay the filing fee. Yumkas is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Paul Sweeney, Esq. Yumkas, Vidmar, Sweeney & Mulrenin 10211 Wincopin Circle, Suite 500 Columbia, MD 21044 Tel: (443) 569-5972 Fax: (410) 571-2798 Email: psweeney@yvslaw.com About Cleary Packaging Cleary Packaging, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-10765) on Feb. 7, 2021. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor tapped Yumkas, Vidmar, Sweeney & Mulrenin as its legal counsel and George S. Magas CPA, PC as its accountant. COMCAR INDUSTRIES: Court Okays Chapter 11 Liquidation Plan ---------------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that hauling services provider Comcar Industries Inc. will create two trusts to liquidate after selling its business units and settling outstanding disputes with creditors. The Chapter 11 liquidation plan confirmed Wednesday, March 10, 2021, will distribute the company's remaining assets via a wind-down trust and liquidating trust. Since its bankruptcy filing in May 2020, the Auburndale, Fla.-based Comcar has sold all its major business units, including a construction material trucking business, chemical transport business, bulk carrier business, and several trailers. 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. * * * On June 25, 2020, the Bankruptcy Court entered orders authorizing the Debtors to (i) sell substantially all of the assets of CT to Bulk Transport Company, East, Inc., (ii) sell substantially all of the assets of CTL to Adams Resources & Energy, Inc., and Service Transport Company, and (iii) sell the MCT assets to Contract Freighters, Inc. On Sept. 4, 2020, the Court entered an order authorizing the sale of substantially all of CCC's assets to Bulk Transport Company East, Inc. CONSTANT CONTACT: Moody's Assigns First Time B3 Corp Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned a B3 Corporate Family Rating B3-PD Probability of Default Rating to Constant Contact, Inc. in connection with the company's spin-out from Endurance International Group Holdings, Inc. (dba "Newfold Digital"). At the same time, Moody's assigned a B2 rating to the company's proposed first lien senior secured credit facility, consisting of a $125 million revolving credit facility, a $670 million term loan, and a $180 million delayed draw term loan, as well as a Caa2 rating to the company's $300 million senior secured second lien term loan. The outlook is stable. The proceeds from the proposed debt financing, along with a contribution of common equity from Clearlake Capital Group, L.P. ("Clearlake") and Siris Capital Group, LLC ("Siris) will be used to finance the carve-out of Constant Contact from Newfold Digital following the February 2021 merger of Web.com and Endurance International Group. Both sponsors will retain equal ownership and voting interest in the new company. The delayed draw term loan will be available for the next 12 months from closing and will primarily be used to fund acquisitions. "While Constant Contact provides a strong value proposition to small and medium sized businesses by offering an easy-to-use integrated suite of online marketing solutions at various price points and maintains strong profitability metrics, we view the company's business risk as high. Its modest scale, significant customer churn rate, the-term nature of its subscriptions and high customer acquisition cost are key constraints on the rating, " said Moody's Assistant Vice President Oleg Markin. Furthermore, Constant Contact's high closing leverage in the mid-6.0x range (Moody's adjusted and expensing all capitalized software costs) as of December 31, 2020, historically weak topline and earnings growth and the potential for more aggressive financial policy further weigh on the rating," added Oleg Markin. Assignments: Issuer: Constant Contact, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured 1st Lien Delayed Draw Term Loan, Assigned B2 (LGD3) Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD3) Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5) Outlook Actions: Issuer: Constant Contact, Inc. Outlook, Assigned Stable The assigned first-time ratings remain subject to Moody's review of the final terms and conditions of the proposed financing expected to close in March 2021. RATINGS RATIONALE Constant Contact's B3 CFR reflects the company's high business risk given its narrow focus on providing digital marketing solutions primarily to small & medium businesses ("SMBs"), its modest scale, historically weak revenue and earnings growth, high customer churn rate and short term nature of its subscription agreements. The company's high closing leverage, estimated at 6.6x (Moody's adjusted and expensing all capitalized software costs) as of December 31, 2020 and its concentrated operations within the highly fragmented and increasingly competitive email marketing industry with low barriers to entry further constrain the rating. Furthermore, Moody's believes that ongoing technology investments are required over the medium to long term for Constant Contact to gain increased scale and relevance. Finally, the rating incorporates the company's high governance risk associated with private equity ownership, tolerance for high leverage and potential for an aggressive growth strategy. The rating favorably considers Constant Contact's established market position within the SMB email marketing software market with good brand presence, diversified and long-tenured customer base, and attractive EBITDA margins. The rating is further supported by the company's largely variable and flexible cost structure as well as the favorable free cash flow characteristics of its business model. Moody's expects the company will maintain good liquidity with free cash flow generation in excess of $50 million over the next 12-15 months. The stable outlook reflects Moody's view that Constant Contact will generate revenue growth in the low-single digit range driven by an expectation for continued increases in email marketing spend in the US. EBITDA will grow more strongly than revenues driven bythe realization of cost savings. Moody's expects debt-to-EBITDA to decline to the low-6.0x over the next 12-18 months and the company will maintain good liquidity, including free cash flow-to-debt (Moody's adjusted) in the low-to-mid-single digit percentages of total debt. Moody's expects Constant Contact to have good liquidity over the next 12-15 months. Sources of liquidity include modest balance sheet cash of $10 million at the close of the transaction, Moody's expectation for annual free cash flow in excess of $50 million, along with full availability under a new $125 million revolving credit facility due 2026 (undrawn at closing). These cash sources provide good coverage for required annual term loan amortization of approximately $6.7 million (excluding delayed draw term loan), paid quarterly. There are no financial covenants on the first or second lien term loans. However, the revolver is expected to have a springing first lien net leverage ratio of 7.55x when the amount drawn under the revolver is greater than 35% ($43.75 million). Moody's does not expect a covenant test to apply over the next 12-15 months. The B2 rating assigned to Constant Contact's first lien credit facility (revolver, term loan and delayed draw term loan), one notch above the company's B3 CFR, reflects their senior position in the capital structure relative to the second lien term loan and other unsecured claims. The first lien credit facility is secured by a first priority interest in substantially all tangible and intangible assets (including capital stock of subsidiaries) of the borrower and guarantors. The Caa2 rating on the second lien term loan, two notches below the company's B3 CFR, reflects lien subordination to the first lien credit facility. The second lien term loan is secured by a second priority interest in the same assets securing the first lien credit facility. The senior secured credit facility and second lien term loan are guaranteed on a senior secured basis by the borrower, Digital Marketing Technology Intermediate, Inc. (the direct parent company of the borrower) and each of the borrower's direct and indirect wholly-owned domestic subsidiaries. As proposed, the new credit facility is expected to provide covenant flexibility that if utilized could negatively impact creditors, including: i) an incremental first lien credit facility capacity not to exceed (x) the greater of $182 million and 100% of consolidated EBITDA, less any incremental second lien debt, plus (y) the unused portion of the general basket, (z) an unlimited amount such that pro forma first lien leverage does not exceed 4.7x (for pari passu debt), or either amount such that the senior secured leverage ratio does not exceed 6.75x or the interest coverage ratio is not less than 1.75x (for secured debt junior to the first lien or unsecured debt). The credit agreement requires 100% of non-ordinary course asset sales to be used to repay the credit facility, stepping down to 50%, 25% and 0% if secured first lien net leverage is below 4.2x, 3.95x and 3.7x, respectively, subject to a reinvestment opportunity of 100% of these proceeds. There are no unrestricted subsidiaries preventing potential collateral leakage to unrestricted subsidiaries. Only wholly-owned subsidiaries must provide guarantees, raising the risk of potential guarantee release; partial dividends of ownership interests could jeopardize guarantees. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Constant Contact's rating if the company builds a track record of sustained organic revenue growth and margin expansion, while meeting planned cost savings targets. Metrics that could support a higher rating include debt-to-EBITDA (Moody's adjusted) below 5.5x and free cash flow to debt (Moody's adjusted) in the mid-single digits. Moody's could downgrade Constant Contact's ratings if revenues decline for an extended period of time and free cash flow falls to near breakeven level. The ratings could also be downgraded if operating challenges or more aggressive financial policy leads to debt-to-EBITDA (Moody's adjusted) sustained above 7.5x, or liquidity becomes weak. Headquartered in Waltham, Massachusetts, Constant Contact, Inc. is a SaaS online marketing platform that enables SMBs to create, send and track email marketing campaigns. The company is being carved-out of Endurance International Group Holdings, Inc. and will be majority owned by Clearlake and Siris. The principal methodology used in these ratings was Software Industry published in August 2018. CROCS INC: S&P Assigns 'BB-' ICR on Notes Offering, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issuer credit rating to Colorado–based footwear seller Crocs Inc. At the same time, S&P assigned its 'BB-' rating on the company's proposed senior unsecured notes. The recovery rating is '3', indicating its expectation for meaningful (50%-70%, rounded estimate 65%) recovery in the event of a payment default. S&P said, "The stable outlook reflects our expectation that the company will continue to increase its sales over the next one to two years by servicing pent-up demand in North America and return to growth in Asia on its continued digital expansion and improving tourism trends in the second half of 2021. We believe this will enable Crocs to maintain most of the margin improvements it reported in 2020 while continuing to generate strong free operating cash flow. "Our rating reflects Crocs' brand concentrations, narrow product focus, supplier concentration, and participation in the highly competitive and fragmented global footwear industry. Our rating also incorporates the benefits of the company's well-known global brand and good market position, geographic, channel and customer diversity, and our expectation for the company to operate with moderate leverage." Crocs is benefiting from the accelerated shift toward casual footwear due to the COVID-19 pandemic. The company's portfolio of comfortable footwear has enjoyed a resurgence in popularity because coronavirus-related stay-at-home mandates have led to a shift in consumers spending toward casual, outdoor, and athletic attire rather than work and dress wear. Despite an initial drop in its revenue at the beginning of the pandemic when retail stores were shuttered, Crocs increased its revenue by the double-digit-percent area in the third quarter and by more than 50% in the fourth quarter (ended December 2020). S&P said, "We believe the company will benefit from the ongoing shift in consumer spending toward more casual dress and expect this trend to continue even as the world gradually returns to normal toward the end of 2021. Therefore, we project that Crocs will report a healthy mid-teen-percent increase in its revenue in 2021, supported by its strong order backlogs." Crocs' geographic diversity has helped it manage some of the risks associated with being a single-brand company and narrow product line. Consumer tastes and trends vary across regions. The company's signature clog has proven to have global appeal and it generates over 40% of its revenue from outside the U.S. That said, Crocs' success in the U.S. during the pandemic is helping to offset the declines it is experiencing in Southeast Asia, where its sales remain weak due to the very limited volume of international tourism. S&P said, "Over the longer term, we believe the company's business in Asia will grow at a faster rate than that of its counterparts in North America and Europe because the rising middle class in the Asia-Pacific region is increasing their spending on global brands for apparel and footwear. Asia currently accounts for 20% of the company's sales. We also believe Crocs has good channel diversity given that its digital platforms accounted for 42% of its 2020 revenue. The company has limited customer concentration as no customer accounts for more than 10% of its total revenue." Crocs has a niche market position and its performance could be hurt by changes in fashion trends and increasing competition as it grows its sandals business. S&P said, "We estimate the company's classic clog-style shoe accounts for approximately 70% of its revenue. While Crocs is a category leader in the clogs segment, with market share of approximately 20%, we view this as a niche segment and expect its demand to ebb and flow with global fashion trends. We estimate the global market for clogs is small at about $5 billion, which compares with the $30 billion market for sandals and $300 billion for footwear in general. The company has expanded into the sandals category; however, we believe this segment is more competitive than clogs and it will take time for this segment to achieve scale and help diversify its business away from its concentration in clogs." Crocs is currently a small player in the sandals category and will be competing against industry giants such as Nike, Adidas, VF, and Wolverine, which have greater financial wherewithal. Crocs lacks a diversified supplier base. The company's top-three third-party manufacturers accounts for a majority of its production capacity. Moreover, all three suppliers are concentrated in Vietnam and China. Disruptions at one of its key suppliers or a regional disruption in Vietnam could significantly affect the company's ability to source its footwear. Crocs plans to diversify into neighboring countries over the next few years. Currently, the company's exposure to China is moderate (only about 10% of production), thus S&P believes future tensions between the U.S. and China would have a limited effect on its profitability. The company's need to diversify could increase its leverage. Crocs is diversifying its products and geographic reach. S&P said, "We believe it may undertake a debt-financed acquisition to position its business for long-term growth. The company has maintained modest levels of leverage in the mid- to high-1x area over the past several years. Although we forecast its leverage will decrease to the low-1x area in 2020, we do not believe Crocs will sustain its leverage at this level. We believe management is willing to increase the company's leverage for the right target, as acquisitions would be an effective way for Crocs to diversify its brand and category concentrations while expanding internationally. In the absence of acquisitions, we expect the company would return its excess cash flow to its shareholders and likely continue to operate with leverage in the mid- to high-1x area." S&P said, "We expect investing in its business to remain Crocs' top capital allocation priority. The company has invested heavily in its infrastructure and digital platform over the last several years. Because of these investments, its free cash flow generation has been relatively low and uneven at $50 million-$100 million a year. Given its strong cash flow generation of over $200 million for 2020, Crocs is currently planning two major distribution center expansions to better support its digital growth. We currently project the company will generate sufficient cash flow to fund these initiatives and generate over $130 million of free operating cash flow a year. However, if its revenue growth slows, we believe it could quickly cut back on parts of its expansion spending to preserve cash. Given the company's strong focus on expansion, we continue to expect its free operating cash flow generation to remain uneven. "The stable outlook on Crocs reflects our expectation that it will continue to increase its revenue by servicing the pent-up demand in North America and return to growth in Asia and Europe through its continued digital expansion and the improving tourism trends in the second half of 2021. This will likely enable the company to maintain most of the margin improvements it reported in 2020 and continue to generate strong free operating cash flow. We expect Crocs' financial policy to become modestly less conservative because of its need for growth and that its leverage could increase above 2x over the next few years. "We could lower our ratings on Crocs if its profitability drops substantially or its cash flow weakens materially, causing its leverage to rise above 3x. We believe the company's EBITDA would need to decline by 60% for this to occur at its current debt levels." S&P believes this would likely occur due to: -- Intense competition in the footwear industry and rapidly changing fashion trends that cause Crocs to lose a significant number of customers to its competitors; -- Its brand is tarnished or its products are viewed as out of favor due to a product recall, decline in product quality, or marketing missteps; or -- The company's financial policy is more aggressive than indicated and it increases its leverage above 3x for debt-funded acquisitions or excess returns to its shareholders. S&P estimates it would need to raise approximately $600 million of debt at current EBITDA levels for this to occur. While unlikely, S&P could raise its rating on Crocs if it successfully diversifies into other categories while demonstrating that it can manage its rapid growth and maintain its profitability with sustained leverage of less than 2x. For this to occur: -- The company would have to continue gaining market share in an increasingly competitive digital footwear market; and -- Demonstrate a more conservative financial policy, including sustaining leverage of less than 2x even when incorporating acquisitions. DEL MONTE FOODS: Moody's Completes Review, Retains Caa1 CFR ----------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Del Monte Foods, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 1, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Del Monte Foods' Caa1 CFR reflects its high financial leverage, declining category sales volume in U.S. canned fruit and vegetables, and high execution risk related to a major operational restructuring underway. The ratings are supported by the strength of the Del Monte(TM) brand, which holds leading shares in core shelf stable fruits and vegetables and significantly improved liquidity profile following a May 2020 refinancing. In regard to governance, the ratings reflect a history of liquidity support provided by parent company Del Monte Pacific Ltd. that Moody's expects will continue. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. DESOTO HOLDING: Romspen US Says Plan Patently Unconfirmable ----------------------------------------------------------- Romspen US Master Mortgage, LP, submitted a limited objection and reservation of rights to the Disclosure Statement concerning Joint Plan filed by debtor Desoto Holding LLC. Romspen asserts that the Court should not approve the Disclosure Statement because it fails to provide adequate information as required by section 1125 of the Bankruptcy Code, and further asserts: * The Disclosure Statement lacks basic information that would allow holders of claims and interests to make an informed decision about whether to vote in favor of, or against, the Plan. * The Disclosure Statement does not explain who the members of NewCo will be, how or when the Debtors will obtain construction funding, or why the Released Parties are entitled to releases. * The proposed treatment for Romspen's claim is contingent on multiple factors, including a valuation of the underlying property, and the Debtors' election of certain options. * The treatment cannot possibly provide Romspen with the ability to make an informed decision about how to vote on the Plan. Romspen claims that the Plan suffers from numerous defects that render the Plan patently unconfirmable, citing that: * The Plan does not satisfy the Bankruptcy Code's cramdown requirements with respect to Romspen's secured claim because, among other things, it partially strips Romspen of its lien and does not provide for deferred cash payments equal to the present value of its secured claim. * The Plan is not feasible because the Debtors have not demonstrated committed funding sources for either the NewCo transaction or the Construction Loan. * The Plan violates the absolute priority rule of the Bankruptcy Code by permitting Class 6 equity holders in Desoto Owners to retain their equity interests even though general unsecured creditors will not be paid in full. * The Plan contains impermissible nonconsensual third-party releases. A full-text copy of Romspen's objection dated March 4, 2021, is available at https://bit.ly/3t4iWzq from PacerMonitor.com at no charge. Attorneys for Romspen US: COLE SCHOTZ P.C. Leo V. Leyva, Esq. James T. Kim, Esq. Michael R. Yellin, Esq. Jacob S. Frumkin, Esq. Telephone: (646) 563-8930 Facsimile: (646) 563-7930 E-mail: LLeyva@coleschotz.com JKim@coleschotz.com MYellin@coleschotz.com JFrumkin@coleschotz.com About Desoto Holding Based in Brooklyn, New York, Desoto Holding LLC filed a Chapter 11 petition (Bankr. E.D.N.Y Case No. 20-43388) on Sept. 22, 2020. At the time of filing, the Debtor estimated assets of between $0 to $50,000 and $10 million to $50 million liabilities. Isaac Nutovic, Esq. of NUTOVIC & ASSOCIATES is the Debtor's Counsel. DESOTO OWNERS: Romspen US Says Plan Patently Unconfirmable ---------------------------------------------------------- Romspen US Master Mortgage, LP, submitted a limited objection and reservation of rights to the Disclosure Statement concerning Joint Plan filed by debtor Desoto Owners LLC. Romspen asserts that the Court should not approve the Disclosure Statement because it fails to provide adequate information as required by section 1125 of the Bankruptcy Code, and further asserts: * The Disclosure Statement lacks basic information that would allow holders of claims and interests to make an informed decision about whether to vote in favor of, or against, the Plan. * The Disclosure Statement does not explain who the members of NewCo will be, how or when the Debtors will obtain construction funding, or why the Released Parties are entitled to releases. * The proposed treatment for Romspen's claim is contingent on multiple factors, including a valuation of the underlying property, and the Debtors' election of certain options. * The treatment cannot possibly provide Romspen with the ability to make an informed decision about how to vote on the Plan. Romspen claims that the Plan suffers from numerous defects that render the Plan patently unconfirmable, citing that: * The Plan does not satisfy the Bankruptcy Code's cramdown requirements with respect to Romspen's secured claim because, among other things, it partially strips Romspen of its lien and does not provide for deferred cash payments equal to the present value of its secured claim. * The Plan is not feasible because the Debtors have not demonstrated committed funding sources for either the NewCo transaction or the Construction Loan. * The Plan violates the absolute priority rule of the Bankruptcy Code by permitting Class 6 equity holders in Desoto Owners to retain their equity interests even though general unsecured creditors will not be paid in full. * The Plan contains impermissible nonconsensual third-party releases. A full-text copy of Romspen's objection dated March 4, 2021, is available at https://bit.ly/2PV59x2 from PacerMonitor.com at no charge. Attorneys for Romspen US: COLE SCHOTZ P.C. Leo V. Leyva, Esq. James T. Kim, Esq. Michael R. Yellin, Esq. Jacob S. Frumkin, Esq. Telephone: (646) 563-8930 Facsimile: (646) 563-7930 E-mail: LLeyva@coleschotz.com JKim@coleschotz.com MYellin@coleschotz.com JFrumkin@coleschotz.com About Desoto Owners Desoto Owners LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)), owning a real property commonly known as the Desoto Square Mall, which is located at 303 301 Blvd W., Bradenton, Fla. and is situated on a 58-acre parcel of land. Desoto Owners LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20 43387) on Sep. 22, 2020. The petition was signed by Moshe Fridman, chief executive officer. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. Isaac Nutovic, Esq., at NUTOVIC & ASSOCIATES, represents the Debtor. EAGLE HOSPITALITY: Queen Mary Ship Lease Included in Auction ------------------------------------------------------------ Kelly Puente of Long Beach Post reports that the operator for Long Beach's Queen Mary plans to auction its lease for the historic ocean liner after filing for Chapter 11 bankruptcy in January 2020 following a string of financial problems. In an announcement Tuesday, March 9, 2021, Singapore-based Eagle Hospitality Trust said it will sell 15 of the 18 hotels in its portfolio, including the Queen Mary, Sheraton Pasadena and Holiday Inn Anaheim for a starting price of $470 million in an auction set tentatively for May 20. The city of Long Beach owns the Queen Mary but for decades has leased the ship to various operators, some of whom have met similar financial struggles. Alan Tantleff of FTI Consulting, who was appointed as the chief restructuring officer in the bankruptcy, said Eagle has received an initial bid for the entire portfolio from a private investment firm called Monarch Alternative Capital. However, Eagle could choose to sell the Queen Mary or any of its properties individually in the auction, he said, adding that it has received multiple offers for the Long Beach landmark. Tantleff said Eagle hopes to sell the Queen Mary lease individually to someone who recognizes the opportunities for development. "The Queen Mary is a special asset that has tremendous redevelopment opportunity on the 45 acres of waterfront," he said. "It's a world-renowned asset and we hope the next custodian can allow it to reach its full potential." Tantleff said Eagle has been working with Long Beach city leaders and will remain responsible for the ship's upkeep during the sale. "The city of Long Beach has been extremely helpful in this process," he said. The city in a statement said it has "participated in the ongoing bankruptcy proceedings in order to protect this important city asset and will continue to do so." Eagle Hospitality filed for bankruptcy with a total of more than $500 million in debt on Jan. 18, 2021, as the COVID-19 pandemic has ravaged the hospitality industry. But the company showed signs of problems in 2019 before the pandemic, including a $341 million default on a loan from Bank of America. Former Queen Mary operator Urban Commons, which signed a 66-year lease to run the ship in 2016, created Eagle Hospitality in 2019 to list on the Singapore Stock Exchange, with the goal of raising millions for a massive development project called Queen Mary Island. But Urban Commons hit tensions with the board of Eagle Hospitality and its shareholders when it didn't fulfill financial obligations and repeatedly failed to pay rent for its portfolio of hotel properties. The problems culminated in September 2020, when Eagle Hospitality's managers terminated the master lease agreements for Urban Commons' hotels, including the Queen Mary—a move that essentially removed Urban Commons as the Queen Mary's operator. Urban Commons is now in legal disputes with Eagle Hospitality. Meanwhile, the lease for the Queen Mary will change hands yet again as one of the biggest concerns remains the repairs and maintenance for the aging vessel. A city-commissioned marine survey in 2015 projected costs of up to $289 million for urgent repairs over the next several years. Under its original agreement with Urban Commons, the city issued $23 million in bonds to fix some of the most critical repairs listed in the marine survey, but many of the repairs went over budget and the $23 million was spent before other critical projects could be addressed. Long Beach City Auditor Laura Doud is conducting an audit on how the $23 million was spent. City officials have said they have documentation for the approved work. Long Beach has a history of operators who have struggled to make the ship profitable. Among the failed operators, Joe Prevratil, who signed a lease to run the ship in 1993, filed for bankruptcy in 2006 when the city demanded several million dollars in unpaid rent. Save the Queen LLC purchased the lease through an auction at bankruptcy and then defaulted on its loan in 2009. About Eagle Hospitality Group Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality stapled group comprising Eagle Hospitality Real Estate Investment Trust and Eagle Hospitality Business Trust. Based in Singapore, Eagle H-REIT is established with the principal investment strategy of investing on a long-term basis in a diversified portfolio of income-producing real estate, which is used primarily for hospitality or hospitality-related purposes as well as real estate-related assets in connection with the foregoing, with an initial focus on the United States. EHT US1, Inc. and 26 affiliates, including 15 LLC entities that each owns hotels in the U.S., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10036) on Jan. 18, 2021. EHT US1 estimated $500 million to $1 billion in assets and liabilities as of the bankruptcy filing. The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their bankruptcy counsel, FTI Consulting Inc. as restructuring advisor, and Moelis & Company LLC as investment banker. Rajah & Tann Singapore LLP and Walkers serve as Singapore Law counsel and Cayman Law counsel, respectively. Donlin, Recano & Company, Inc. is the claims agent. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Feb. 4, 2021. The committee is represented by Morris James, LLP and Kramer Levin Naftalis & Frankel, LLP. ENLINK MIDSTREAM: Fitch Alters Outlook on 'BB+' LT IDR to Stable ---------------------------------------------------------------- Fitch Ratings has affirmed EnLink Midstream, LLC (ENLC) and EnLink Midstream Partners, LP's (ENLK) Long-Term (LT) Issuer Default Rating (IDR) at 'BB+' and senior unsecured rating at 'BB+'/'RR4'. Fitch has also affirmed ENLK's preferred equity rating at 'BB-'/'RR6'. The Rating Outlook for both entities has been revised to Stable from Negative. The Stable Outlook and ratings reflect Fitch's expectation that ENLC will maintain leverage (total debt with equity credit/op. EBITDA) below 5.5x in 2021 and 2022. ENLC is projected to post lower EBITDA in 2021 versus 2020 driven by declining volume and cashflow in Oklahoma and in the Barnett, resulting in leverage elevating from YE20's 5.1x to 5.2x-5.4x. Fitch continues to expect the Permian and Louisiana segments to be the growing segments that help partially offset declines in Oklahoma and North Texas in the near term. In 2022, Fitch expects ENLC to lower its leverage based on debt repayment aided by a modest capex program. Another factor underlying the Outlook changing to Stable from Negative is that ENLC now possesses ample liquidity to proactively manage its $350 million term loan maturing in December 2021. KEY RATING DRIVERS Deleveraging Underpinned by Financial Policy: Fitch calculated ENLC's YE21 leverage to be approximately 5.1x. During 2020, ENLC was able to execute on credit enhancement items, such as distribution cuts, capex reduction, and cost savings, and posted great 2H20 results (including stronger volumes in the Permian). During 3Q20, ENLC also announced its $100 million unit repurchase program. Given ENLC's current distribution policy and modest capex program, Fitch forecasts that ENLC's leverage will trend to 5.2x-5.4x by the end of 2021, above the YE20 leverage, but below the negative rating sensitivity of 5.5x. ENLC's 2021 earnings remain vulnerable to the declining performance of its operating segments in Oklahoma and North Texas. Fitch expects ENLC's growth in the Permian and Louisiana will continue to help maintain leverage below 5.5x under Fitch's current price deck. Permian and Louisiana Assets Growth: The Permian and Louisiana segment remain as the two growing segments for ENLC, in Fitch's forecast, as ENLC's diversification in these regions allows the company to partially offset declining operating results in Oklahoma and North Texas. Fitch projects ENLC's Permian segment to continue its recent growth in 2021, underpinned by strong natural gas volume production. ENLC plans to relocate an underutilized 80 mcfpd natural gas processing plant from Oklahoma to the Permian under project warhorse. The relocation is expected to be completed during the 2H21. Additionally, ENLC also has long-term contracts with high-quality producer customers that have a focus on allocating capital in the Permian in the near term. Within Louisiana, ENLC has built an integrated gas and NGL pipeline network that has interconnectivity to key export markets near the Gulf Coast. Fitch also expects ENLC to continue to benefit from the Cajun-Sibon pipeline system and additional bolt-on high return projects. Production growth in these two regions remain favorable for ENLC under the current commodity price environment and Fitch price deck. Oklahoma and North Texas Challenges: The Oklahoma segment will remain challenged for ENLC as overall production volume is forecast to decline in 2021. The minimum volume commitment (MVC) contracts with Devon Energy (DVN; BBB/Positive) in Oklahoma rolled off at the end of 2020, under which ENLC received $56 million in deficiency payments in 2020. Future growth in Oklahoma production will be largely dependent on the DVN/Dow Chemicals (BBB+/Stable) JV drilling program. ENLC also has exposure in the Barnett, where production volume and segment profit have been in a decline in the past years. Fitch expects cashflow and volume to continue to decrease in the near term, driven by lower processing fees charged to the new producer customer, BKV Barnett, and overall declining production volume in this mature basin. Customer Exposures and Volumetric Risk: Customer risk is a general concern across most G&P operators in the midstream sector with exposure to non-IG producer customers. Fitch continues to view the counterparty risk for ENLC as limited across its three main segments. Counterparty exposure in the Barnett could pose as a concern given the basin economics and unknown hedging policy by its main producer customer in that region. Another key risk that ENLC faces given its contract structure is volumetric risk. This risk further increases starting in 2021 as the MVC with DVN expired at the end of 2020. While ENLC also holds some MVC with other producer customers as part of the fixed-fee contracts, Fitch expects that there is an immaterial amount of deficiency payment across those customers under its rating case. Acreage Dedication: ENLC's term periods for dedications are all long term; however, some of those expiry years are relevant for consideration of credit strength. The increased competitive landscape in the Permian is also likely to pressure these contracts to be renewed at a less favorable rate that could result in lower cash flow. Fee-Based Cash Flow: ENLC has exhibited a strong focus on fee-based contracts to mitigate commodity price volatility. Fitch expects ENLC will continue to generate at least 90% of its gross margin from fee-based services in 2021 and 2022. G&P operations in the Permian and Oklahoma are further underpinned by long-term, fee-based contracts. For 2020, approximately 5% of ENLC's adjusted gross margin as generated from Percent of Liquids (POL) or Percent of Proceeds (POP) contracts. Parent Subsidiary Linkage: Fitch considers the consolidated credit profile of ENLC and ENLK under its Parent Subsidiary Ratings Linkage Criteria for the existing ratings of these two entities. ENLK exhibits a stronger credit profile considering that it is closer to the operating subsidiary where the assets are located and cash flow is generated. The existing ENLC's unsecured revolver, term loan and ENLC notes are guaranteed by ENLK and are ranked pari passu to the existing debt at ENLK. Accordingly, Fitch also views the legal and operational ties to be strong between the two entities. DERIVATION SUMMARY Western Midstream Partners, LP (WES; BB/Stable) is a G&P comparable for ENLC. Both companies have similar degree of geographic diversification (moderate diversification) and customer concentration. Fitch views that WES is better positioned financially relative to ENLC given WES's larger size (by EBITDA size) and lower leverage of 4.6x-4.8x at YE21 (versus ENLC's above 5.0x). However, WES's overall counterparty risk is somewhat greater than ENLC's, as WES is largely exposed to non-investment-grade E&P producer customers. WES's largest counterparty, Occidental Petroleum Corp. (OXY; BB/Stable), contributed approximately 60%-65% of WES's revenue in 2020. ENLC has a customer concentration (greater than 10% of revenue) from higher quality customers, including Devon Energy (BBB/Stable). Another comparable for ENLC is DCP Midstream Operating, LP's (BB+/Stable), whose ratings are reflective of its favorable size, scale, geographic and business line diversity within the natural gas gathering and processing space. Relative to ENLC, DCP has greater exposure to commodity prices than many of its midstream peers, with approximately 70% of gross margin supported by fixed-fee contracts. This commodity price exposure has been partially mitigated in the near term through DCP's use of hedges for its NGL, natural gas and crude oil price exposure, pushing the percentage of gross margin, either fixed-fee or hedged, up to 88% as of 4Q20. This helps DCP's cash flow stability, but exposes it to longer-term hedge roll-over and commodity price risks. DCP is larger and more geographically diversified than ENLC. Fitch expects DCP and ENLC to have similar leverage in the 5.1x-5.4x range in the near term. DCP and ENLC have the same leverage sensitivities (see below; 4.5x for a positive action, and 5.5x for a negative action) based on Fitch viewing business risk to be about the same at the two companies, though the profiles are different (DCP is larger, more geographically diverse, and shows more resilient volumes, than ENLC, while ENLC has the advantage as far as fee-based revenues). KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Fitch Price Deck of West Texas Intermediate for 2021 at $42/barrel, 2022 at $47, and long-term at $50; and Henry Hub 2021 and out, $2.45/thousand cubic feet; -- Declining operating results in Oklahoma and Barnett to be partially offset by performance in the Permian and Louisiana in 2021; Permian segment profit to exceed midpoint guidance in 2021; 3-4% annual growth in the Louisiana segment profit in forecast years; -- Flat to moderate growth in EBITDA in forecast years; -- 2021 total capex aligns with management guidance of $140 million-$180 million; Project Warhorse to be completed on time and on budget; -- Unit repurchases in 2021 and 2022 under its unit repurchase program; -- Distribution remains level in forecast years. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Leverage and distribution coverage sustains below 4.5x and above 1.1x underpinned by stable segment performances. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A significant change in cash flow stability, including a move away from the current profile of fee-based profits that could lead to a negative rating action; -- Leverage above 5.5x on a sustained basis and/or distribution coverage consistently below 1.1x. 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 Ample Liquidity: As of Dec 31, 2020, the company had no borrowings outstanding under its $1.75 billion revolving credit facility that matures in January 2024, though it did have $22.2 million of letters of credit issued. This facility contains a leverage covenant maximum of 5.0x for consolidated indebtedness to consolidated EBITDA (each term as defined, and where EBITDA includes EBITDA from certain capital expansion projects) and consolidated indebtedness excludes the existing and currently contemplated preferred securities. At Dec. 31, 2021, ENLC had 4.1x leverage under this credit facility calculation. The maximum leverage level may rise to 5.5x from 5.0x for four quarters following an acquisition (with the rise subject to limitations). In October 2020, ENLC entered into a $250 million Accounts Receivable Securitization Facility maturing in 2023, creating additional financial flexibility to reduce its revolver borrowings, and has recently increased the size of the facility to $300 million. In Dec 2020, ENLC also issued $500 million senior unsecured notes to partially repay the $850 million term loan that is due in December of 2021. The rest of ENLC's term loan ($350 million) is due in December 2021. The next maturity is the $250 million borrowings outstanding under its accounts receivables securitization facility as of Dec. 31, 2020 that terminates in October 2023. ENLC was in compliance with its covenant as of Dec. 31, 2020 and is expected to remain in compliance under Fitch's forecast period. Fitch expects ENLC will continue to largely fund its modest capex program with its internally generated cash flow in the near term. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch applied 50% equity credit to ENLK's preferred convertibles. ESG CONSIDERATIONS ENLK and ENLC have an ESG Relevance Score of '4' for Group Structure and Financial Transparency as the company operates under a complex group structure, with private equity levered holding company owning its general partner. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ENTERCOM COMMUNICATIONS: S&P Affirms 'B' ICR, Outlook Negative -------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit rating on Entercom Communications Corp. because it expects the company's FOCF to debt will improve comfortably above 5% in 2022, which is its threshold for the current rating. The negative outlook reflects the potential for a lower rating if radio advertising takes longer to recover and S&P expects FOCF to debt to remain below 5% in 2022. S&P said, "We expect radio advertising will largely recover, but it will be slower than we initially expected and extend into 2022. Reduced advertising spending from the U.S. recession brought on by the pandemic reduced Entercom's broadcast radio advertising revenue by approximately 35% in 2020. We believe Entercom's revenue declined more than its peers in 2020 because it has a higher percentage of stations in large urban markets, which were more affected by stay-at-home orders during the pandemic and have been slower to reopen. Additionally, Entercom is the industry leader in sports radio and sporting events that were highly disrupted in 2020 from the pandemic. "Radio advertising has sequentially improved since its low point in April, and we continue to expect it will recover to about 90% of full-year 2019 levels. However, we now expect this will occur in 2022 and not in 2021. The U.S. economy has been slower to recover than we previously expected given the rise in coronavirus cases in the fourth quarter of 2020, which continued into 2021 during the winter months, as well as the slower-than-expected rollout of the coronavirus vaccine. As a result, many local advertisers have not yet returned to radio advertising. As of December 2020, 42% of Entercom's local spot advertiser base remained off the air, albeit somewhat lower than the 44% of advertisers off the air in September 2020 and significantly lower than the 55% of advertisers off the air in June 2020. "While radio advertising normally has short lead times, we believe the recession further shortened advertiser commitments, giving us little visibility into the recovery of radio advertising. As the pandemic continues, we are uncertain to what degree smaller advertisers will permanently close their businesses due to financial distress from the recession." Digital revenue growth modestly offsets the company's exposure to radio advertising. While digital revenue growth slowed in the second quarter of 2020, it quickly returned to growth in the third quarter and continued to grow in the fourth quarter, resulting in total digital revenue growth of around 30% in 2020. Digital revenue contributed 18% of total revenue in 2020, up from 10% in 2019 (due to a combination of digital revenue growth and declines in radio advertising revenue). S&P said, "We expect digital revenue will be an increasing share of Entercom's revenue over the next several years, although radio advertising will still make up the majority of total revenue. Entercom acquired podcasting companies Pineapple Street Media and Cadence13 in 2019, which we expect will accelerate its digital revenue growth given the increasing popularity of podcasting. Additionally, Entercom has continued to invest in its digital platform, Radio.com, which had double-digit growth in monthly active users and total listening hours in 2020. As Radio.com's reach grows, we expect the company will be able to better monetize the platform and grow digital revenue further." The negative outlook reflects the potential for a lower rating if radio advertising takes longer to recover and S&P expects FOCF to debt to remain below 5% in 2022. S&P could lower the rating if it expects FOCF to debt to remain below 5% in 2022. This could occur if: -- The recovery timeline for radio advertising is delayed further, or we expect radio to lose greater share to other forms of advertising above our current expectation between 5%-10%; or -- The company uses its cash for sizable acquisitions that are not immediately accretive rather than paying down debt. S&P could revise the outlook to stable if it has increased confidence in the recovery of radio advertising, therefore increasing its expectation that FOCF to debt will improve above 5% in 2022. This could occur if: -- Radio advertising continues to sequentially recover in the second and third quarters of 2021, increasing S&P's expectation that it will recover to 90% of full-year 2019 levels in 2022; and -- S&P expects the company will have more than 15% covenant headroom. FREEDOM MORTGAGE: Moody's Affirms B1 CFR & Alters Outlook to Pos. ----------------------------------------------------------------- Moody's Investors Service has affirmed Freedom Mortgage Corporation's corporate family rating at B1, its long-term senior unsecured rating at B2, and has revised the outlook to positive from stable. While the ratings were affirmed at their current levels, the change in outlook to positive from stable reflects its solid performance and improved capitalization level, which Moody's expects to persist over the next 12-18 months. Affirmations: Issuer: Freedom Mortgage Corporation LT Corporate Family Rating, Affirmed B1 Senior Unsecured Regular Bond/Debenture, Affirmed B2 Outlook Actions: Issuer: Freedom Mortgage Corporation Outlook, Revised To Positive From Stable RATINGS RATIONALE The affirmation of Freedom's B1 corporate family rating reflects the company's historically solid profitability and capitalization levels. However, capitalization declined from Q3 2019 to Q2 2020, as modest profitability only partially offset an increase in assets, due to rising origination volumes. Capitalization as measured by tangible common equity to adjusted tangible common assets (which excludes the Ginnie Mae loans eligible from repurchase from the capital ratio) was 17.2% as of September 30, 2020. The rating also incorporates the credit challenges resulting from the company's reliance, similar to other non-bank mortgage companies, on confidence-sensitive secured funding to finance loan originations, resulting in high refinancing risk, as well as the risks from its mortgage servicing rights assets. With modest levels of unencumbered assets, the company's alternative financing options are limited, particularly during times of stress, in Moody's view. Moody's also increased the operating environment score for nonbank mortgage companies to Ba3 from B1. The operating environment, a key component of Moody's rating analysis, measures the extent to which external conditions can have a meaningful influence on finance companies' credit profiles, capturing the relevant economic, judicial, regulatory, institutional and general operating conditions that may affect finance companies' creditworthiness. The revision reflects a modest increase in barriers to entry, modestly increasing stability of nonbank mortgage firms as larger companies mature, particularly with respect to a strengthening of their governance and liquidity profiles, and reduced mortgage industry uncertainty as accelerated reform for Federal National Mortgage Association (Fannie Mae, Aaa) and Federal Home Loan Mortgage Corp. (Freddie Mac, Aaa) is unlikely to be pursued. The revision of Freedom's outlook to positive from stable reflects the company's continued solid performance and improved capitalization levels, which Moody's expects to continue over the next 12-18 months. The B2 senior unsecured bond rating is based on Freedom's B1 corporate family rating and the application of Moody's Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Freedom continues to demonstrate solid financial performance, whereby Moody's expects that long-term, through the cycle profitability as measured by net income to average assets will average at least 3.5%. In addition, the company would need to maintain solid capital levels such as tangible common equity to adjusted tangible assets of around 20.0%, as well as continue to strengthen its franchise positioning and maintain its current liquidity and funding profile. Given the positive outlook, a ratings downgrade is unlikely over the next 12-18 months. Negative ratings pressure could occur if financial performance deteriorates, for example if profitability deteriorates with net income to assets falling below and expected to remain below 2.0%, the company's tangible common equity to tangible managed assets falls below and is expected to remain below 13.5%, or the company's liquidity position weakens. An increase in the company's reliance on secured debt could result in a downgrade of the long-term senior unsecured rating as it would further subordinate its priority ranking. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. FRIENDS OF CITRUS: Unsecureds to Get 13% Distribution in Plan ------------------------------------------------------------- Friends of Citrus and the Nature Coast, Inc., f/k/a Hospice Of Citrus County, Inc., filed a Plan of Reorganization and a Disclosure Statement. The Debtor has been operating its business and managing its affairs as a debtor-in-possession pursuant to Secs. 1107 and 1108 of the Bankruptcy Code. The Debtor's priority has been to continue to provide grief counseling to the community, continue to provide jobs, attempt to raise funds while performing its charitable mission through sales of merchandise at its two thrift stores, obtaining donations and grants from the state and large company donors. Initially, the Debtor worked to cut costs and to reduce the monthly cash burn, but also recognized that it could only reorganize by keeping a certain amount of cash and/or cash equivalents as a charitable res (property) upon confirmation in order to sustain its charitable mission of providing grief counseling in the twelve counties of the Nature Coast. The retention of such funds will entail paying its creditors under the Plan less than what was owed to them pre-petition. As of the date of the filing of the Disclosure Statement the Debtor's assets consisted of cash and cash equivalents, two parcels of real property in Homosassa and Lecanto, Florida that house the two thrift shops and the Debtor's administrative office. Class 3 consists of Allowed General Unsecured Government IRO Claim arising from a five-year Corporate Integrity Agreement between HHS-OIG and Debtor for the third reporting period beginning 11/4/2017 in the amount of $1,477,789. This Allowed General Unsecured Claim shall receive a 13% percent distribution or approximately $192,113 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan, with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from post-confirmation Available Cash. Class 3 is impaired. Class 4 consists of Allowed General Unsecured CMS Final Cost Report PIP Claim arising from a Medicare overpayment amount, per PIP Reconciliation/FY 2018 in the amount of $177,378. This Allowed General Unsecured Claim shall receive a 13% percent distribution or approximately $23,059 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan or alternatively, at the discretion of CMS, the Debtor is willing to dismiss all of its ALJ appeals for recovery of denied claims in return for this Allowed Unsecured Claim to be reduced to zero and Claimant not receive any distribution on the Effective Date, or with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from post-confirmation Available Cash. Class 4 is impaired. Class 5 consists of Allowed General Unsecured DOJ Settlement Claim arising from the Settlement Agreement and Supplemental Agreement Addendum in the amount of $2,118,541. This Allowed General Unsecured Claim shall receive a 13% percent distribution or approximately $275,410 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan, with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from post-confirmation Available Cash. Class 5 is Impaired. Class 6 consists of Allowed General Unsecured Riverwood (Greystone) Claim arising from services rendered by the Riverwood nursing home for room and board retroactive Medicaid reimbursement for the Debtor's hospice patients. The claim was objected to and the parties entered into a Plan Support Agreement pursuant to which the amount of the claim is $74,978 to be reduced so that the aggregate of all Greystone allowed claims would equal $50,000 in consideration for which Riverwood would support approval of the plan provided it is not receiving less than 75% of the allowed aggregated Greystone claims. This Allowed General Unsecured Claim shall receive a 13% percent distribution or approximately $9,747 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan, with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from post-confirmation Available Cash. Class 6 is impaired. Class 7 consists of Allowed General Unsecured Citrus Hills (Greystone) Claim arising from services rendered by the Citrus Hills nursing home for room and board retroactive Medicaid reimbursement for the Debtor's hospice patients. The claim was objected to and the parties entered into a Plan Support Agreement pursuant to which the amount of the claim is $208,039 to be reduced so that the aggregate of all Greystone allowed claims would equal $50,000 in consideration for which Riverwood would support approval of the plan provided it is not receiving less than 75% of the allowed aggregated Greystone claims. This Allowed General Unsecured Claim shall receive a 13% percent distribution, or approximately $27,045 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan, with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from post-confirmation Available Cash. Class 7 is impaired. Class 8 consists of Allowed General Unsecured Terrace Health (Greystone) Claim arising from services rendered by the Terrace Health nursing home for room and board retroactive Medicaid reimbursement for the Debtor's hospice patients. The claim was objected to and the parties entered into a Plan Support Agreement pursuant to which the amount of the claim is $6,265.71 to be reduced so that the aggregate of all Greystone allowed claims would equal $50,000 in consideration for which Riverwood would support approval of the plan provided it is not receiving less than 75% of the allowed aggregated Greystone claims. This Allowed General Unsecured Claim shall receive a 13 percent distribution or approximately $814.54 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan, with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from post-confirmation Available Cash. Class 8 is impaired. Class 9 consists of Allowed General Unsecured Claims under $1,000 that were listed on Schedules E/F, or alternatively any other Allowed Unsecured Claimant who elects to reduce its Allowed Claim to $1,000 that has not been previously classified above, which is estimated in a maximum aggregate approximate amount of $6,000. These Allowed General Unsecured Claims in this class shall receive a 50% percent distribution, or approximately combined amount of $3,000 on the Effective Date of the Plan. Class 9 is Impaired. Class 10 consists of all Other Allowed Unsecured Claims above $1,000 that were listed on Schedules E/F that has not been previously classified above, which is estimated in a maximum aggregate approximate amount of $25,000. The Other Allowed Unsecured Claims in this class shall receive an 18% percent Distribution, or approximately maximum combined amount of $3250.00 to be paid pro-rata with all other classes from Available Cash not required to continue the non-profit charitable mission on the Effective Date of the Plan, with any balance unpaid on the Effective Date, over 60 months in equal monthly installments from Available Cash. Class 10 is Impaired To support the Plan, the Debtor anticipates that there will be some proceeds from a partial or full release of the Vitas Escrow coming from the Vitas Litigation, along with cash presently on hand, and Available Cash from post-confirmation operations that will be sufficient to pay all claims necessary to confirm the Plan. Counsel for the Debtor: Frank P. Terzo, Esq. Florida Bar No. 906263 Nelson Mullins Broad and Cassel 100 S.E. 3rd Avenue, Suite 2700 Ft. Lauderdale, FL 33394 Telephone: (954) 764-7060 Facsimile: (954) 761-8135 frank.terzo@nelsonmullins.com Nicolette Corso Vilmos, Esq. Florida Bar No. 469051 Nelson Mullins Broad and Cassel 390 North Orange Avenue, Suite 1400 Orlando, FL 32801 Telephone: (407) 839-4200 Facsimile: (407) 650-0955 nicolette.vilmos@nelsonmullins.com A copy of the Disclosure Statement is available at https://bit.ly/3bDcoBW from PacerMonitor.com. About Friends of Citrus Friends of Citrus And The Nature Coast, Inc. -- https://friendsofcitrus.org/ -- is a charitable organization providing community grief support workshop for anyone who has experienced a loss; telephone support; grief support resources for all ages; educational materials for parents and teachers; and children's grief support camps. Friends of Citrus And The Nature Coast, Inc. filed a voluntary petition in this Court for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03101) on Aug. 14, 2019. On Aug. 15, 2019, the case was transferred to Tampa Division and was assigned a new case number (Case No. 19-07720). In the petition signed by Bonnie L. Saylor, chief executive officer, Friends of Citrus estimated $7,510,918 in assets and $5,283,937 in liabilities. Judge Michael G. Williamson oversees the case. Frank P. Terzo, Esq. and Nicolette Corso Vilmos, Esq., at Nelson Mullins Broad and Cassel serves as the Debtor's legal counsel. FULL HOUSE: Posts $3.5 Million Net Income in Fourth Quarter ----------------------------------------------------------- Full House Resorts, Inc. announced results for the fourth quarter ended Dec. 31, 2020. On a consolidated basis, revenues in the fourth quarter of 2020 were $38.3 million, versus $39.0 million in the prior-year period. Net income for the fourth quarter of 2020 rose to $3.5 million, or $0.12 per diluted common share, from a net loss of $4.1 million, or $(0.15) per diluted common share, in the prior-year period. Net income in both periods was affected by the accounting for the fair market value of outstanding warrants, which the Company repurchased in February 2021 for $4.0 million. Adjusted EBITDA(a) in the 2020 fourth quarter was $9.8 million, versus $2.3 million in the fourth quarter of 2019. This strong growth primarily reflects new marketing programs and staffing improvements enacted in late 2019 and early 2020 at the Company's properties. Results for the fourth quarter of 2020 also include $0.6 million of revenue related to a full quarter of operations for two of the Company's six permitted sports wagering websites and approximately one week of operations from a third sports wagering website. The Company expects the other three websites to begin operations shortly. For the full year, total revenues declined to $125.6 million in 2020 from $165.4 million in the prior year, reflecting approximately three months of pandemic-related closures for all of the Company's properties last spring. Net income for 2020 was $0.1 million, or $0.01 per diluted common share, compared to a net loss of $5.8 million, or $(0.22) per diluted common share, in the prior year. Despite several months of closure, Adjusted EBITDA in 2020 rose 23.3% to $19.7 million from $15.9 million in 2019, reflecting operational and marketing improvements that bore results in the second half of 2020. "Much like our third quarter, we had a phenomenal fourth quarter," said Daniel R. Lee, president and chief executive officer of Full House Resorts. "The fourth quarter tends to be seasonally weaker than the third quarter, but our properties continued to perform extremely well adjusted for the seasonality. Adjusted EBITDA for the second half of 2020 was more than the total for all of 2019. We now have approximately eight months of successful 'reset operations' behind us. While capacity restrictions remain, as well as some additional costs related to the pandemic, so do the structural changes that we have made regarding our marketing and the ways we operate. We continue to believe that these results of the past several months are sustainable." Continued Mr. Lee, "Many of the changes to our business operations were in the implementation process prior to the pandemic. For example, at both Bronco Billy's and Rising Star, we replaced antiquated slot marketing systems late in 2019. With the improved systems, we are now able to provide a better customer experience, while the improved analytics of those systems have allowed us to eliminate unprofitable marketing offerings that cost us more than the incremental revenue they created. "Physical improvements that we made in recent years have also helped our results. We refurbished the casino and buffet at the Silver Slipper, for example, in 2019. We built a new restaurant at Rising Star, also in 2019, which now supplants the unprofitable buffet we had been operating. The ferry boat service we implemented at Rising Star in 2018 has now become a contributor to our results when one considers the same-day gaming activity of ferry boat passengers, which we can track with the new system. "Our sports 'skins' also continue to go live. In late 2020, an affiliate of Wynn Resorts launched its sports offering through one of our licenses in Colorado. As of today, two of our three permitted skins are live in Colorado and one of our three permitted skins is live in Indiana. We receive a percentage of defined revenues of each skin, subject to annual minimums. Combined, these three sports wagering websites represent a minimum of $3.5 million of annualized contractual revenue. We continue to expect our three remaining skins to go live shortly. When all six skins are in operation, we should receive a contractual minimum of $7 million per year of sports gaming revenues. Since we incur very little expense related to these operations, almost all of such revenues should result in income." Commented Lewis Fanger, chief financial officer of Full House Resorts, "We made significant strides with our balance sheet in recent weeks. In February 2021, we issued $310 million of new 8.25% senior secured notes, marking our debut with the high-yield debt markets. That debt issuance was important for several reasons. First, it replaced our existing floating rate notes with new fixed rate debt, at largely the same interest rate. Our new notes no longer have a quarterly leverage test that we must meet, thereby eliminating the quarterly waiver fees that we were previously incurring after several months of shutdown operations. Second, we used bond proceeds to redeem all of our outstanding warrants totaling approximately one million shares. Using our closing stock price on February 12, the day we completed the warrant redemption, the net repurchase price would have been more than $6.0 million. Our actual repurchase price to redeem the warrants was $4.0 million, a 34% discount to such amount. Most importantly, our new debt issuance included $180 million of proceeds dedicated to the construction of our Cripple Creek project, enabling us to now build that luxury casino hotel all at once, rather than in phases." Concluded Mr. Lee, "Prior to completing the funding of our Cripple Creek project, we expanded the project's size. In November, Colorado voters eliminated betting limits and permitted new table games, which significantly enhanced the already-favorable feasibility of the project. To address this larger opportunity, we increased the size of our Cripple Creek hotel by 67% to 300 guest rooms, leaving other aspects of the project largely unchanged. For various reasons, this required the approval of the Cripple Creek City Council and the city's Historic Preservation Commission, which we received in January and February. The total remaining investment to complete our Cripple Creek project is approximately $180 million, which was fully funded through our recent debt offering. We believe that our project will be transformational for Cripple Creek. It is not an expansion of our existing Bronco Billy's casino; it is an entirely new casino hotel, with its own unique name and personality, that happens to be located adjacent to, and behind, Bronco Billy's. We look forward to disclosing that name and personality at a future date. With funding complete, we recently restarted construction of the project and plan to welcome guests to our new casino hotel beginning in the fourth quarter of 2022. Bronco Billy's will remain open during construction and points earned in the Bronco Billy's loyalty program will be redeemable at the new property, which will be connected to Bronco Billy's." Fourth Quarter and Full-Year 2020 Highlights and Subsequent Events * Revenues at Silver Slipper Casino and Hotel in the fourth quarter of 2020 increased 8.1% to $18.3 million from $17.0 million in the prior-year period. Silver Slipper's operating results improved despite continuing capacity limitations throughout the property's casino and dining outlets. Adjusted Property EBITDA grew to $5.1 million in the 2020 fourth quarter, an 89.6% increase from $2.7 million in the prior-year period. For the full year, Silver Slipper's operational performance reflects a focus on marketing and labor improvements, as well as the benefit of numerous investments in the property in recent years. Such investments included a substantial renovation of the casino and the buffet, a renovated porte cochere and other sense-of-arrival improvements, the Beach Club, the Oyster Bar, and the introduction of on-site sports betting. Revenues were $62.5 million in 2020, reflecting its pandemic-related closure for more than two months in early 2020, compared to $73.2 million in 2019. Adjusted Property EBITDA rose to $14.7 million in 2020, an 11.5% increase from $13.2 million in 2019, despite being closed for more than two months in Spring 2020. * At Rising Star Casino Resort, revenues declined for the fourth quarter of 2020 to $10.8 million from $11.4 million. This decline reflects pandemic-related limitations on operations and an increase in competition, as a casino near Louisville replaced its original casino boat with a large new casino in December 2019. Additionally, in January 2020, racetrack casinos near Indianapolis began offering live table games. Adjusted Property EBITDA was $3.5 million in the fourth quarter of 2020, a significant increase from $0.2 million in the prior- year period. These strong results reflect the positive impact of a new slot marketing system installed in the fourth quarter of 2019, the launch of an improved loyalty program in June 2020, labor efficiencies from more appropriately matching the operating hours of table games and food and beverage outlets to the demand for such services, a full quarter of operations of one of the Company's three permitted sports betting "skins" in Indiana, and additional sales of "free play" that the state's casinos are permitted to transfer to other casino operators within Indiana. Because Indiana has a progressive gaming tax system and Rising Star is one of the smaller casinos in the state, the property has consistently sold its ability to deduct "free play" in computing gaming taxes to operators in higher tax tiers, as it is permitted to do under state law. Such sales resulted in $2.1 million and $1.0 million of revenue in the fourth quarters of 2020 and 2019, respectively. For the full year, revenues and Adjusted Property EBITDA at Rising Star were $31.0 million and $3.8 million, respectively, in 2020, with both amounts including $1.5 million from the sports revenue agreements and reflecting approximately three months of closure in early 2020 due to the pandemic. In 2019, such amounts were $45.6 million and $1.3 million, respectively, including $0.1 million from the sports revenue agreements. * At Bronco Billy's Casino and Hotel in Colorado, revenues declined for the fourth quarter of 2020 to $5.7 million from $6.1 million. The decline was due to state-mandated restrictions on operations in response to the continuing pandemic, including the temporary shutdown of all table games at the property from Spring 2020 until late-February 2021 and a steep reduction in the number of slot machines being operated. Revenues in the fourth quarter of 2020 include $0.3 million from two of the Company's three permitted sports wagering websites in Colorado, which launched in June 2020 and December 2020, respectively. The remaining sports wagering website is expected to commence operations shortly. Adjusted Property EBITDA rose to $1.7 million in the fourth quarter of 2020 from a loss of $0.1 million in the prior-year period. The increase in Adjusted Property EBITDA was due to an improved customer experience and analytics from Bronco Billy's new slot marketing system, labor controls (partially offset by certain labor expenses related to the pandemic), and the launch of two sports "skins" in 2020. Results also benefited from the closure of the small, free-standing Christmas Casino, which operated from November 2018 to September 2020. While the unique decor of the small casino resulted in an increase in overall revenues, the increase was not sufficient to offset the additional costs of operations. For the full year, revenues and Adjusted Property EBITDA at Bronco Billy's were $20.3 million and $4.5 million, respectively, in 2020, with both amounts including $0.7 million from the sports revenue agreements and reflecting approximately three months of closure in early 2020 due to the pandemic. In 2019, such amounts were $27.5 million and $3.0 million, respectively. None of Bronco Billy's sports agreements were active in 2019. * In November 2020, Colorado voters approved favorable changes to the state's gaming laws, including the elimination of betting limits and allowing Colorado casinos to offer new table games, such as baccarat and pai gow poker. To reflect the new opportunity created by those changes, the Company increased the size of its planned Cripple Creek expansion by 67% to approximately 300 luxury guest rooms and suites, from its previously planned 180 guest rooms. Such plans were approved by the Cripple Creek Historic Preservation Commission and Cripple Creek City Council in January and February 2021. Other planned amenities for the new casino hotel - including a new parking garage, meeting and entertainment space, outdoor rooftop pool, spa, and fine-dining restaurant - remain largely unchanged. The expected remaining investment to complete the Cripple Creek expansion is $180 million, which the Company financed through the issuance of new senior secured notes, as further discussed below. With funding fully in place, the Company no longer intends to complete the project in phases, but rather all at once, with an expected opening in the fourth quarter of 2022. In late-February 2021, the Company began relocating some significant storm sewers and other underground utilities that transit the project site, allowing construction of the foundations to begin within the next few weeks. A live webcam of the construction project is available at www.BroncoBillysCasino.com. * The Northern Nevada segment consists of the Grand Lodge and Stockman's casinos and is historically the smallest of the Company's segments. This segment of the Company's operations has been the most negatively affected by the COVID-19 pandemic. Revenues were $3.4 million and $4.6 million for the fourth quarters of 2020 and 2019, respectively. Adjusted Property EBITDA was $0.4 million and $0.6 million, respectively. For the full year, revenues were $11.7 million in 2020, reflecting approximately three months of pandemic-related closures, versus $19.1 million in 2019. Adjusted Property EBITDA was $0.5 million in 2020 and $3.2 million in 2019. Grand Lodge Casino is located within the Hyatt Regency Lake Tahoe luxury resort in Incline Village, Nevada. Its customer base includes the local community, as well as visitors to the Hyatt. The pandemic has adversely affected visitation to the Hyatt, including visitation for its meeting and convention business. The pandemic also affected the capacity of nearby ski areas this winter. To ensure social distancing, ski areas are currently required to operate their lifts at substantially less than full capacity. Many ski areas have also limited lift ticket sales to attempt to control the resultant lift lines. This has affected visitation to the region, including to the Hyatt and our casino. Stockman's Casino is in Fallon, Nevada, home to a large Naval Air Station, where Navy pilots and crews visit for training. To protect the health of both its servicemembers and the host community, the Navy has restricted much of its personnel from leaving the base. * On Feb. 12, 2021, the Company closed on its issuance of $310 million of new 8.25% senior secured notes due 2028. The proceeds from the offering were used to redeem all $106.8 million of the Company's senior secured notes due 2024 and to redeem all outstanding warrants totaling 1,006,568 shares. Additionally, the proceeds will be used to fund the Company's expansion project in Cripple Creek, Colorado, to pay expenses related to the offer and sale of the 2028 Notes, and for general corporate purposes. * The Company continues to be one of three bidders for the opportunity to build a new casino in Waukegan, Illinois, an area midway between Chicago and Milwaukee with high population density and no existing casino. The Company's proposal involves construction of a temporary casino, which would generate tax revenues and jobs quickly. Profits from the temporary casino would help fund a permanent casino on the same site, to be named "American Place." The site is owned by the City of Waukegan and would be leased by the Company. In October 2020, the Company signed a commitment letter with a multi-billion-dollar investment management firm that has experience with casino construction projects. The commitment letter anticipates fully funding the project with non-recourse development capital. The Company would be required to invest $25 million in the project as equity, will own no less than 60% of the project, and will receive management fees for operating the casino and related amenities. The commitment letter is conditioned upon the Company being awarded the Waukegan casino license by the Illinois Gaming Board and the investment firm’s further due diligence review, among other items. Liquidity and Capital Resources As of Dec. 31, 2020, the Company had $37.7 million in cash and cash equivalents, $106.8 million in outstanding senior secured notes due 2024, and $5.6 million in outstanding unsecured loans obtained under the CARES Act. In February 2021, the Company issued $310 million of new senior secured notes due 2028 and used a portion of the proceeds to redeem all $106.8 million of its outstanding 2024 Notes. As of Feb. 28, 2021, the Company had approximately $232 million of cash and equivalents (including $180 million held in a construction reserve account). About Full House Resorts, Inc. Headquartered in Las Vegas, Nevada, Full House Resorts -- www.fullhouseresorts.com -- owns, leases, develops and operates gaming facilities throughout the country. The Company's properties include Silver Slipper Casino and Hotel in Hancock County, Mississippi; Bronco Billy's Casino and Hotel in Cripple Creek, Colorado; Rising Star Casino Resort in Rising Sun, Indiana; and Stockman's Casino in Fallon, Nevada. The Company also operates the Grand Lodge Casino at the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada under a lease agreement with the Hyatt organization. The Company is currently constructing a new luxury hotel and casino in Cripple Creek, Colorado, adjacent to its existing Bronco Billy's property. Full House reported a net loss of $5.82 million for the year ended Dec. 31, 2019, compared to a net loss of $4.37 million for the year ended Dec. 31, 2018. Deloitte & Touche LLP, in Las Vegas, Nevada, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 30, 2020, citing that the Company has temporarily suspended operations at its casinos and hotels. A prolonged closure would negatively impact the Company's ability to remain in compliance with its debt covenants. These conditions raise substantial doubt about its ability to continue as a going concern. * * * As reported by the TCR on Feb. 9, 2021, Moody's Investors Service assigned a Caa1 Corporate Family Rating and Caa1-PD Probability of Default Rating to Full House Resorts Inc. (FHR). The Caa1 CFR reflects the long, approximately 24 months, Bronco Billy's construction period, uncertainty related to the level of visitation and earnings at the redesigned property, FHR's modest scale, and exposure to cyclical discretionary consumer spending. GARRETT MOTION: Mountaineer Master Out as Equity Committee Member ----------------------------------------------------------------- The U.S. Trustee for Region 2 disclosed in a notice that as of March 10, these companies are the remaining members of the official committee of equity security holders in the Chapter 11 cases of Garrett Motion Inc. and its affiliates: 1. Gem Partners LP 92 Chester Place Englewood, NJ 07631 Attention: Daniel Lewis, Managing Member Tel: (201) 500-4095 E-mail: dlewis@gemasset.com 2. S. Muoio & Company LLC 509 Madison Avenue – Suite 406 New York, NY 10022 Attention: Salvatore Muoio, Managing Member Tel: (212) 297-2555 E-mail: smuoio@sminvestors.com Mountaineer Master Fund, Ltd. was previously identified as member of the equity committee. Its name no longer appears in the new notice. About Garrett Motion Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs, manufactures and sells highly engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers and the global vehicle and independent aftermarket. Garrett Motion and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020. Garrett disclosed $2.066 billion in assets and $4.169 billion in liabilities as of June 30, 2020. The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg Partners and Morgan Stanley & Co. LLC as investment bankers, and AlixPartners LP as restructuring advisor. Kurtzman Carson Consultants LLC is the claims agent. On Oct. 5, 2020, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. White & Case LLP and Conway MacKenzie, LLC serve as the creditors committee's legal counsel and financial advisor, respectively. The U.S. Trustee also appointed an official committee to represent equity security holders in the Debtors' cases. The equity committee tapped Kasowitz Benson Torres LLP as its legal counsel, MAEVA Group LLC as financial advisor, and Cowen and Company, LLC as investment banker. GENCANNA GLOBAL: Trustee Wants to Get $1.4 Mil. Back From Execs --------------------------------------------------------------- Law360 reports that the trustee overseeing the wind-down of hemp company GenCanna has filed another claw-back action in Kentucky bankruptcy court, this one seeking $1. 4 million that it claims were paid to a company owned by GenCanna executives for services it never performed. In a complaint filed on Tuesday, March 9, 2021, trustee Oxford Restructuring Advisors said that a web design company owned by GenCanna executives Alex Green and Roberto Felipe received 21 payments over the course of 2019 and early 2020 under the terms of agreements to provide media and public relations services. About GenCanna Global USA GenCanna Global USA, Inc. -- https://www.gencanna.com/ -- is a vertically-integrated producer of hemp and hemp-derived CBD products with a focus on delivering social, economic and environmental impact through seed-to-scale agricultural production. GenCanna Global USA was the subject of an involuntary Chapter 11 proceeding (Bankr. E.D. Ky. Case No. 20-50133) filed on Jan. 24, 2020. The involuntary petition was signed by alleged creditors Pinnacle, Inc., Crawford Sales, Inc., and ntegrity/Architecture, PLLC. On Feb. 6, 2020, GenCanna Global USA consented to the involuntary petition and on Feb. 5, 2020, two affiliates, GenCanna Global Inc. and Hemp Kentucky LLC, filed their own voluntary Chapter 11 petitions. Laura Day DelCotto, Esq., at DelCotto Law Group PLLC, represents the petitioners. The Debtors tapped Benesch Friedlander Coplan & Aronoff, LLP and Dentons Bingham Greenebaum, LLP as legal counsel, Huron Consulting Services, LLC as operational advisor, and Jefferies, LLC as financial advisor. Epiq is the claims agent, which maintains the page https://dm.epiq11.com/GenCanna The Office of the U.S. Trustee appointed a committee of unsecured creditors on Feb. 18, 2020. The committee tapped Foley & Lardner LLP as its bankruptcy counsel, DelCotto Law Group PLLC as local counsel, and GlassRatner Advisory & Capital Group, LLC as financial advisor. GIBSON FARMS: Rabo Says Plan Disclosures Inadequate --------------------------------------------------- Rabo AgriFinance LLC, f/k/a Rabo Agrifinance, Inc., submitted an objection to Gibson Farms, et al.'s Consolidated Plan of Reorganization and Disclosure Statement. Rabo is objecting to the Debtor's Disclosure Statement as currently constituted because it fails to meet the requirements of 11 U.S.C. Sec. 1125 in that it does not provide "adequate information" that would enable a hypothetical investor to make an informed judgment about the Debtors' Plan of Reorganization. Rabo points out that * The Disclosure Statement lacks adequate information because it provides only five years of income projections and cash flow notwithstanding the 30-year life of the Plan. The Debtors assert that "net income from their farming operations along with the revenues produced by the operations of NWC will enable the Debtor (sic) to make timely payments under the Plan." This assertion is curious given the statement on page 30 of the Disclosure Statement that "in order to meet the cash flow short fall in 2025 the Debtors anticipate third party financing through either the Farm Service Agency or another third party lender." Even more troubling is the Debtors' proposal to obtain this financing by granting the Farm Service Agency or another third party lender a first priority priming lien of up to $1,000,000 on the crops, crop insurance and USDA farm program benefits on which Rabo currently has a first priority lien. In other words, if the Plan is confirmed as drafted, Rabo would be forced to subordinate its lien and its priority to a $1,000,000.00 priming lien, regardless of its equity cushion or how much risk a subordination could cause. Notwithstanding the foregoing, the Debtors provide absolutely no explanation or legal support as to why Rabo and other secured lenders should have to make such a concession without their consent. Moreover, it appears that the duration of the proposed subordination may cover multiple crop years. * The Disclosure Statement lacks adequate information because it does not contain sufficient information as to where it obtained its financial projections. The income and cash flow projections only cover a five year period which is well short of the plan duration. While the Debtors state that the projected commodity prices are based on futures for wheat, corn and grain sorghum "to the extent such information is available" (p. 29), there is no identification of the futures pricing reports that were reviewed, or0 the crops (i.e., wheat, corn or grain) for which no future pricing reports were available. Further, no information is provided as to what the future pricing reports state, or for what period those futures are projecting to. * The Disclosure Statement fails to adequately discuss the legal basis for the debtors' failure to pay pre-petition and post-petition default interest on Rabo's claims. Rabo's filed claims in the total amount of $10,629,288 per claim includes default interest in the amount $1,651,911. Absent the inclusion of default interest, the claim would have been $8,977,377. As noted in the Disclosure Statement, "the Plan provides for the treatment of approximately $9.1 million in Allowed Secured Claims to be restructured and treated" by the Plan. As an initial matter, the Disclosure Statement should disclose how the $9.1 million number was calculated. It appears clear to Rabo that the Debtors have eliminated the default interest that was owed as of the Petition Date, but doing so results in a Petition Date claim amount of $8,997,377.31. * The Disclosure Statement and Plan fail to specify a process for adding Rabo's post-petition attorneys' fees and costs to its claims. As an oversecured creditor, Rabo is entitled to its "reasonable attorneys' fees and expenses" in this case. But it and the Plan provide no disclosure about how the amount of Rabo's fees and expenses will be determined or when the fees and expenses will be paid. * The Disclosure Statement is inadequate because it does not include an actual liquidation analysis. The Disclosure Statement does not include an actual liquidation analysis. Instead, there are three short paragraphs containing general statements about why the Debtors believe the Plan is better for creditors than a chapter 7 liquidation. * The Disclosure Statement fails to disclose the numerous risk factors that jeopardize the potential success of the Plan. The Disclosure Statement lacks adequate information because it does not address the consequences to creditors if the Plan is not accepted by Rabo in its current form or is not confirmed over Rabo's objection. * The Disclosure Statement and Plan fail to specify if the original loan documents will be assumed or if new loan documents will be drafted. It is not clear from the Disclosure Statement whether new loan documents will be drafted to reflect the Debtors' restructured obligations to Rabo or if, instead, the existing loan documents will be assumed as modified by the Plan. That issue must be addressed. * The Disclosure Statement and Plan need to make clear that there will be no release or modification of Rabo's rights against non-debtors and property pledged by them. * The Disclosure Statement should provide more information relating to potential causes of action against Rabo. The Debtors appear to be saying that even though they clearly acknowledge owing Rabo at least $9,100,000 and have no issue paying that amount under the Plan in the manner they propose, they will not make any payments to Rabo at all, irrespective of what the Plan otherwise provides, if they end up objecting to the amount claimed by Rabo in this case (i.e., if they have to litigate the default interest issue) and the objection has not been resolved by the time a payment is due. * The Disclosure Statement contains insufficient disclosures regarding events of default and enforcement rights. The Disclosure Statement contains no discussion of defaults or enforcement rights in the event of a Plan default. Moreover, while the Plan does address these issues, the entire disclosure is less than a page in length. The Plan only sets forth three events of default: (a) failure to make timely payments on allowed claims; (b) failure to observe or perform any provision of the Plan which remains uncured for 45 days; and (c) failure to perform any other term of provisions of the Plan that remains uncured for a period of 45 days. Attorneys for Rabo AgriFinance LLC: W. Heath Hendricks RINEY & MAYFIELD 320 South Polk Street, Suite 600 Amarillo, Texas 79101 Telephone: (806) 468-3200 Facsimile: (806) 376-4509 Email: hhendricks@rineymayfield.com - and - Michael R. Johnson RAY QUINNEY & NEBEKER P.C. 36 South State Street, Suite 1400 Salt Lake City, Utah 84111 Telephone: (801) 532-1500 Facsimile: (801) 532-7543 E-mail: mjohnson@rqn.com About Gibson Farms Gibson Farms has over 45 years' experience in farm management as well as an established history in Moore County agriculture. Gibson Farms rents farmland from Beauchamp Estates Partnership and Gibson Investments as well as other landowners in the area. They raise feed grains, forage crops, cotton which they sell either through private contract or on the open market. Gibson Farms and its affiliates filed voluntary petitions for relief under Chapter 11 of Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-20271) on Oct. 5, 2020. Paula Gibson, a partner, signed the petitions. At the time of the filing, the Debtors estimated assets of between $1,000,001 and $10,000,000 and liabilities of between $10,000,001 and $50,000,000. Judge Robert L. Jones oversees the cases. The Debtors have tapped Mullin Hoard & Brown, LLP as legal counsel; Clint W. Bumguardner of W.T. Appraisal, Inc. as real estate appraiser; and Frost, PLLC as accountant. GIP III STETSON: Fitch Affirms 'B-' IDR, Outlook Stable ------------------------------------------------------- Fitch Ratings has affirmed GIP III Stetson I, L.P. and GIP III Stetson II, L.P.'s (collectively GIP Stetson) Issuer Default Rating (IDR) at 'B-', and upgraded its senior secured rating to 'B-'/'RR4' from 'CCC'/'RR6'. The Rating Outlook is Stable. The upgrade of the secured term loan rating and Stable Outlook are reflective of the improved credit outlook at ENLC, which is constructive to GIP Stetson's cashflow stability. GIP Stetson is an entity with no hard assets that is entirely dependent on the cashflow distribution received from its subsidiary, EnLink Midstream LLC (ENLC; BB+/Stable). Fitch believes that ENLC should have ample liquidity and financial flexibility to meet its needs while maintaining its current distribution policy in the near term. GIP Stetson's IDR and term loan ratings consider GIP Stetson's elevated stand-alone leverage through 2023, cash flow concentration, and the structural subordination of GIP Stetson's debt to ENLC's debt and EnLink Midstream Partners, LP's (ENLK; BB+/Stable) debt and preferred security. Fitch primarily assesses GIP Stetson's credit profile and metrics on its stand-alone financial characteristics with the recognition that GIP Stetson's earnings and cash flow are very much tied to ENLC's performance and equity distributions. Under ENLC's current distribution policy and GIP Stetson's excess cashflow sweep provision, Fitch projects GIP Stetson's leverage to remain above 9.0x until the end of 2023. The ratings are also reflective of GIP Stetson's profile of cash flow concentration, as the cash flow used to service GIP Stetson's term loan is solely dependent on the dividends received from ENLC. KEY RATING DRIVERS Leverage Remains Elevated but Improving: Fitch projects GIP Stetson's stand-alone leverage to remain high at above 9.0x through YE22, but trend below 9.0x starting at YE23. GIP Stetson currently owns approximately 46% of ENLC's outstanding shares, as of February 2021. Fitch views that under ENLC's current distribution policy, GIP Stetson will sufficiently service its required interest expense and deleverage under its excess cash flow sweep during the forecast years. GIP Stetson's debt service coverage ratio (DSCR) and FFO fixed-charge coverage ratio are projected to be above 2.0x. The excess cash flow sweep provision mandated GIP Stetson to distribute 75% of its excess cash flow when leverage is above 5.0x. Cash Flow Concentration: GIP Stetson's ratings reflect concerns around cash flow concentration in receiving dividend distribution from its subsidiary ENLC. Cash flow to service GIP Stetson's term loan is solely dependent on dividends received from the operating entity. Any outsized events or financial distress at ENLC resulting in material dividend reduction would impair cash flow to GIP Stetson. However, more than 90% of ENLC's gross operating margin is tied to long-term fee-based services, which should provide some levels of cash flow stability. Further, ENLC also has historically had a strong focus on fee-based contracts to mitigate commodity price volatility. Structural Subordination: GIP Stetson's ratings also reflect that the $1.0 billion senior secured term loan is structurally subordinated to the senior debt at the subsidiaries-level, ENLC and ENLK, and is solely reliant on the dividend distribution from its subsidiaries for debt service payment. Cash flow generated at its operating subsidiary ENLK is prioritized to service debt and interest payment at ENLK and ENLC. Additionally, GIP Stetson's term loan is only secured by pledged equity interest in ENLC and is junior to both senior debt and preferred equity at the subsidiaries in recovery claims should a credit event occur at either ENLC or ENLK. Under Fitch's parent-subsidiary linkage analysis, GIP Stetson also exhibits a weaker credit profile relative to its operating subsidiary ENLK (strong subsidiary/weak parent relationship) given the cash flow structure and provisions around ENLC's distribution. Legal ties are weak, as, among other things, ENLK does not guarantee the debt of GIP Stetson. Operational ties are approximately weak. In particular, there is no centralized treasury. The EnLink family also has its own revolving credit facility at ENLC. Global Infrastructure Partners' Track Record: Global Infrastructure Partners has a wealth of expertise as to operations best practices and financial structuring. The firm has invested or committed over $20 billion in equity capital in the energy sector, specifically across the midstream space as well. DERIVATION SUMMARY GIP Stetson generates its cash flow from distribution payments under its ownership interest in EnLink Midstream LLC (ENLC). The cash flow structure is similar to FR BR Holdings (FR BR; B-/Stable). For GIP Stetson, its IDRs and ratings also reflect the structural subordination, in which GIP Stetson's term loan is junior to the senior debt and preferred security at ENLC. FR BR's ratings are also reflective of its term loan structural subordination to the operating and cash flow needs at Blue Racer, as well as any borrowings on Blue Racer's $1 billion revolving credit facility and $1.0 billion senior unsecured notes. Relative to FR BR, GIP Stetson has a higher leverage level, with Fitch forecasting FR BR's stand-alone leverage to trend below 6.0x in 2022. However, refinancing risk at FR BR is larger than GIP Stetson's. While GIP Stetson currently has a manageable refinancing risk with its term loan has maturing in 2025, FR BR has an approaching maturity for its term loan in 2023. Refinancing or sale of assets at FR BR will be needed to repay the maturing debt as the term loan will not be fully amortized by its maturity in 2023, in Fitch's view. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Distribution remains level through the forecast years; -- Deleveraging supported by term loan amortization and debt repayment under excess cash flow sweep; -- Excess cash flow after required debt service payments is distributed to Global Infrastructure Partner. Recovery Assumption The Recovery Rating 4 (RR4) for GIP Stetson's Term Loan B is based on a scenario where GIP Stetson is in financial distress during the year when the term loan matures, while both ENLC and ENLK remain healthy, though not as healthy as in the Fitch's rating case. In such scenario, the combined proforma leverage of GIP Stetson and EnLink family is too high for the term loan to be refinanced, triggering a credit event at GIP Stetson. Fitch assumes the going-concern EBITDA at GIP Stetson to be approximately $84 million, reflective of GIP Stetson's distribution received from ENLC under its ownership stakes. The previous 'RR6' was based on the scenario in which ENLC's distribution was entirely suspended given a much weaker ENLC's credit profile. An EBITDA multiple of 5.0x is used to calculate a post-reorganization valuation, below the 6.1x median EV exit multiples observed in the 35 energy cases studied in the Fitch's Bankruptcy Case Study Report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries," which was published in April 2019. There have been a limited number of bankruptcies and reorganizations within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. The multiple applied in the GIP Stetson recovery scenario is reflective of the company's operating profile as an entity without any real assets that solely depends on the cashflow distribution from its operating subsidiary. Using this going concern EBITDA and a 10% administrative claim in the recovery calculation as specified in Fitch's Corporates Notching and Recovery Ratings Criteria, Fitch determines the term loan's recovery rating to be 'RR4'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Improving credit profile at ENLC could lead to positive rating action; -- GIP Stetson's Stand-alone debt to distributions below 9.0x over a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Negative rating action could happen if stand-alone debt to distributions received exceeds 11x on a sustained basis; -- FFO fixed-charge coverage sustains below 1.5x; -- Significant deterioration of credit profile at ENLC and/or ENLK reflecting the deteriorating cash flow from the subsidiaries. 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 Manageable Liquidity: Fitch views that under ENLC's current distribution policy, GIP Stetson will have the sufficient liquidity to service its required interest expense and deleverage under its cash flow sweep in the near term. However, the deleveraging pace is now much slower than the previous year's given the current distribution received from ENLC. The excess cash flow sweep provision mandated GIP Stetson to distribute 75% of its excess cash flow when leverage is above 5.0x. The remaining amount is the cash flow available as distribution to Global Infrastructure Partners. GIP Stetson also has a six-month debt service reserve account in place supported by letters of credit (LOC). The instrument that provides back-up liquidity directed toward term loan holders is in the form of a LOC issued by a bank. The LOC is for approximately $35million-$40 million, which represents six months of expected interest and schedule principal repayments. The LOC is written in favor of the collateral agent. The obligation to repay the LOC resides at an entity above GIP Stetson, in GIP Stetson's ownership chain. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch primarily assesses GIP Stetson's leverage through the use of stand-alone leverage. Stand-alone leverage is the following ratio: GIP Stetson debt in the numerator, and actual distributions to GIP Stetson in the denominator. ESG CONSIDERATIONS GIP III Stetson I, L.P. and GIP III Stetson II, L.P. have an ESG Relevance Score of '4' for Group Structure and Financial Transparency as the company has a complex group structure with significant structural subordination. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. GLASS MOUNTAIN: Moody's Lowers CFR to Ca on Weak Cash Flow ---------------------------------------------------------- Moody's Investors Service downgraded Glass Mountain Pipeline Holdings, LLC's Corporate Family Rating to Ca from Caa2, Probability of Default Rating to Ca-PD from Caa2-PD and rating on the senior secured revolving credit facility and term loan B to Ca from Caa2. The rating outlook remains negative. "The downgrade of Glass Mountain Pipeline's ratings reflects Moody's expectation that the pipeline's throughput volumes and cash flow will not recover sufficiently in 2021 to support its debt service obligations on a standalone basis." stated James Wilkins, Moody's Vice President. Downgrades: Issuer: Glass Mountain Pipeline Holdings, LLC Probability of Default Rating, Downgraded to Ca-PD from Caa2-PD Corporate Family Rating, Downgraded to Ca from Caa2 Senior Secured Revolving Credit Facility, Downgraded to Ca (LGD3) from Caa2 (LGD3) Senior Secured Term Loan B, Downgraded to Ca (LGD3) from Caa2 (LGD3) Outlook Action: Issuer: Glass Mountain Pipeline Holdings, LLC Outlook, Remains Negative RATINGS RATIONALE Glass Mountain Pipeline's Ca CFR reflects heightened probability of default due to its diminished revenue base, poor credit metrics and weak cash flow generation that is not sufficient to service its debt interest and amortization requirements such that the company may be required to restructure its debt. Reduced drilling activity in 2020 by exploration & production (E&P) companies in the midcontinent area serviced by Glass Mountain Pipeline has resulted in a drop in crude oil production and pipeline throughput volumes. Despite the rebound in oil commodity prices in 2021, drilling activity has not picked up meaningfully and Moody's does not expect the company to cover its interest expense obligation with internally generated cash flow. Its sponsor has been supportive of the pipeline, funding significant expansions of the asset, but the deterioration in the underlying profitability and dim outlook for a rebound in E&Ps investment may limit the pipeline's ability to service its debt. Additionally, the credit quality of its E&P customers and their financial resources available for investments has declined. Its transportation contracts include acreage dedication contracts that do not provide for certain cash flow; it no longer enjoys the benefit of a contract with minimum volume commitments. The senior secured term loan B and senior secured revolving credit facility are rated Ca, the same level as the CFR. The lack of notching of the ratings on the debt relative to the CFR reflects the fact that the debt under the credit facilities comprises all of the company's third-party debt and almost all of its liabilities. The term loan and revolver are pari passu. The company has few lease obligations and carries a low trade accounts payable balance. Glass Mountain Pipeline has weak liquidity. Moody's does not expect it to generate sufficient cash flow to service its debt or meet its financial covenants. It has an undrawn revolving credit facility due 2022, but no available borrowing capacity as a result of not being able to meet the 4.50x leverage incurrence covenant. Capital expenditures for extensions to its pipeline network have been funded by additional committed equity. There is an excess cash flow sweep mechanism under the credit facility that requires repayment of debt with excess cash flow as long as the Consolidated Net Leverage Ratio is above 3.0x, but ongoing weak funds from operations and growth capital expenditures will result in no near-term debt repayment under the sweep. Moody's does not expects the company will comply with its credit facility financial covenants through 2021, without the benefit from equity cures funded by the company's sponsor (a minimum debt service coverage ratio of 1.10x and, if the revolver is drawn or there are more than $10 million of letters of credit issued, a Maximum Consolidated Net Leverage Ratio of no more than 4.50x). The company has no debt maturities until 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects Moody's expectation that the company's transportation volumes will not rebound such that it can service its debt obligations in 2021. The ratings could be downgraded if Moody's view of Glass Mountain Pipeline's asset valuation diminishes or the company defaults on its debt obligations. An upgrade is unlikely at this time, but the ratings could be upgraded if industry conditions improve, Glass Mountain Pipeline's EBITDA to interest expense exceeds 1.5x and liquidity is adequate. The principal methodology used in these ratings was Midstream Energy published in December 2018. Glass Mountain Pipeline, LLC, a wholly-owned subsidiary of Glass Mountain Pipeline Holdings, LLC, is the owner of a pipeline system transporting crude oil from the Mississippi Lime, Granite Wash and STACK oilfields to Cushing, OK, where it has storage capacity and interconnects to major pipeline systems. GLENROY COACHELLA: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------- The U.S. Trustee for Region 16 on March 10 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Glenroy Coachella, LLC. The committee members are: 1. Kurt Saxon c/o Saxon Engineering Services, Inc. 2605 Temple Heights Dr., Suite A Oceanside, CA 92056 Phone: (949) 366-2180 E-mail: kurts@saxonengr.com Represented by: Brinkman Law Group, PC 543 Country Club Dr., Suite B Wood Ranch, CA 93065 Phone: (818) 597-2992 E-mail: db@brinkmanlaw.com 2. Mike Cooper c/o Legacy FoodService Design 505 East Windmill Lane, Suite 1C #316 Las Vegas, NV 89123 Phone: (702) 425-5550 E-mail: accounting@triglobal.com 3. Keith Matoi c/o KMA Consulting 151 Kalmus Dr. #C230 Costa Mesa, CA 92626 Phone: (714) 662-7355 E-mail: keithm@kmaconsulting.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Glenroy Coachella Glenroy Coachella, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-11188) on Feb. 15, 2021. Stuart Rubin, manager, signed the petition. In the petition, the Debtor had estimated assets of between $50 million and $100 million and liabilities of between $10 million and $50 million. Judge Sheri Bluebond oversees the case. Weintraub & Selth APC, is the Debtor's legal counsel. GLOBAL DISCOVERY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Global Discovery Biosciences Corporation, a Delaware corporation 13885 Alton Parkway #B Irvine, CA 92618 Business Description: Global Discovery Biosciences Corporation -- https://www.gdbiosciences.com -- is a fully licensed diagnostic laboratory running specialized, highly specific and accurate testing for its clients, domestic and global. Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-10619 Debtor's Counsel: Jeffrey I. Golden, Esq. WEILAND GOLDEN GOODRICH LLP 650 Town Center Drive Suite 600 Costa Mesa, CA 92626 Tel: (714) 966-1000 Email jgolden@wgllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Dan Angress, chief executive officer and secretary. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available at PacerMonitor.com at: https://www.pacermonitor.com/view/XDHHNRQ/Global_Discovery_Biosciences_Corporation__cacbke-21-10619__0001.0.pdf?mcid=tGE4TAMA GOLDEN HOTEL: June 17 Plan Confirmation Hearing Set --------------------------------------------------- On Feb. 18, 2021, the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, conducted a hearing to consider approval of the First Amended Disclosure Statement describing Joint Chapter 11 Plan of Reorganization filed by Debtors Golden Hotel LLC and Golden Capital Venture LLC. On March 4, 2021, Judge Scott C. Clarkson approved the Disclosure Statement and ordered that: * June 17, 2021, at 11:00 a.m. is the hearing to consider the confirmation of the Plan. * April 15, 2021, is fixed as the last day to submit Ballots accepting or rejecting the Plan. * April 29, 2021, is fixed as the last day to file any responses, oppositions, or objections to confirmation of the Plan. * May 27, 2021, is fixed as the last day to file any replies to the Debtors' memorandum in support of confirmation of the Plan. A full-text copy of the order dated March 4, 2021, is available at https://bit.ly/3qGeGoi from PacerMonitor.com at no charge. Counsel for the Debtors: Lei Lei Wang Ekvall Robert S. Marticello Michael L. Simon SMILEY WANG-EKVALL, LLP 3200 Park Center Drive, Suite 250 Costa Mesa, California 92626 Telephone: 714 445-1000 Facsimile: 714 445-1002 E-mail: lekvall@swelawfirm.com rmarticello@swelawfirm.com msimon@swelawfirm.com About Golden Hotel Golden Hotel LLC and Golden Capital Venture LLC collectively own and operate the Radisson Hotel Anaheim-Buena Park located at 7762 Beach Boulevard, Buena Park, California. Golden Capital Venture owns the real property and Golden Hotel operates the hotel pursuant to a lease from Golden Capital Venture and a license from Radisson Hotels International, Inc. Invobal Corporation is the sole member of both Golden entities. Golden Hotel LLC and Golden Capital Venture LLC concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case Nos. 20-12636 and 20-12637, respectively) on Sept. 21, 2020. The petitions were signed by Hieu M. Bui, manager. At the time of filing, the Debtors estimated $10 million to $50 million in both assets and liabilities. Judge Scott C. Clarkson oversees the case. SMILEY WANG-EKVALL, LLP, led by Lei Lei wang Ekvall, is serving as the Debtors' counsel. GOLDEN HOTEL: Plan Gives Unsecureds 15% Lump Sum or 100% in 7 Yrs ----------------------------------------------------------------- Golden Hotel LLC and Golden Capital Venture LLC filed with the U.S. Bankruptcy Court for the Central District of California a First Amended Chapter 11 Plan of Reorganization and a corresponding Disclosure Statement on March 5, 2021. The reorganizing plan pays all Allowed Claims in full. The Plan enables the Debtors to survive the COVID-19 pandemic and make payments to the Holders of Allowed Claims as the restrictions imposed by the pandemic are lifted and performance improves. The Plan is a joint plan of Golden Hotel and Golden Capital Venture and treats all claims asserted in the cases of both Debtors. Plan payments will be made from the Reorganized Debtors' ongoing operations pending a sale of the Real Property and Hotel and/or a refinance of the loan secured by the Real Property and Hotel as necessary to pay all Allowed Claims in full. Distributions to the Holders of Allowed Claims will be made by the Reorganized Debtors and will continue until the earlier of payment in full or the date certain specified in the Plan. The payments proposed by the Plan will be completed by a fixed maturity date, which date depends on the character and classification of the Claim. Under the Plan, holders of general unsecured claims in Class 6(a)-(b), estimated to total $224,533, may elect between two types of treatment: * Option No. 1 – Lump Sum Payment: Each Holder of an Allowed Unsecured Claim in this Class who timely elects Option No. 1 on his or her ballot, shall receive, in full settlement and satisfaction of such Holder's Allowed Unsecured Claim, a lump sum payment of 15 percent of the Allowed amount of such Claim on the later of (a) the date that is 60 days after the Effective Date, or (b) the date that is 10 Business Days after the entry of a Final Order allowing such Holder's Claim. * Option No. 2 – Installment Payments: Each Holder of an Allowed Claim in this Class who does not affirmatively elect Option No. 1 on his or her ballot shall be paid 100% of such Holders' Allowed General Unsecured Claims in quarterly pro rata installments from Available Cash. Each Holder of an Allowed General Unsecured Claim in this Class will receive a Pro Rata Payment from Available Cash on the first Business Day of each calendar quarter beginning on the Payment Commencement Date and continuing each calendar quarter thereafter until the earlier of (a) the GUC Maturity Date, and (b) the payment of such Holder's Allowed General Unsecured Claim in full. Any unpaid balance of the Holder's Allowed General Unsecured Claim as of the GUC Maturity Date will be paid in full on such date. The "GUC Maturity Date" shall be the first Business Day that is at least seven years after the Effective Date. An Allowed General Unsecured Claims in this Class will accrue simple interest on the outstanding amount of such Allowed General Unsecured Claim at the Unsecured Creditor Interest Rate. The Plan contemplates that the Reorganized Debtors will continue to operate the Hotel, making periodic payments from cash flow as required or permitted by the Plan, and making any lump sum payments required by the Plan from a post-confirmation refinance or sale of the Real Property and Hotel as necessary. The distributions to the Holders of Allowed Claims will be made by the Reorganized Debtors and will be funded from (i) the cash flow generated by the operations of the Reorganized Debtors after the Effective Date, (ii) a sale of the Real Property and Hotel, and/or (iii) a refinancing of the Allowed Claims secured by the Real Property and Hotel. The hearing where the Court will determine whether or not to confirm the Plan will take place on June 17, 2021, at 11:00 a.m., via Zoom.gov. (unless otherwise noticed for Courtroom 5C of the Ronald Reagan Federal Building located at 411 West Fourth St., Santa Ana, California 92701). Ballots are due no later than April 15, 2021 or it will not be counted. A copy of the Disclosure Statement filed March 5, 2021, is available at https://bit.ly/30xAGXT About Golden Hotel Golden Hotel LLC and Golden Capital Venture LLC collectively own and operate the Radisson Hotel Anaheim-Buena Park located at 7762 Beach Boulevard, Buena Park, California. Golden Capital Venture owns the real property and Golden Hotel operates the hotel pursuant to a lease from Golden Capital Venture and a license from Radisson Hotels International, Inc. Invobal Corporation is the sole member of both Golden entities. Golden Hotel LLC and Golden Capital Venture LLC concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case Nos. 20-12636 and 20-12637, respectively) on Sept. 21, 2020. The petitions were signed by Hieu M. Bui, manager. At the time of filing, the Debtors estimated $10 million to $50 million in both assets and liabilities. Judge Scott C. Clarkson oversees the case. SMILEY WANG-EKVALL, LLP, led by Lei Lei wang Ekvall, is serving as the Debtors' counsel. GREYLOCK CAPITAL: Seeks to Hire Amini LLC as Legal Counsel ---------------------------------------------------------- Greylock Capital Associates seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Amini LLC as its counsel. The firm will render these services: (a) advise it as to its rights and powers as debtor in possession, and with respect to the administration of this case; (b) prepare motions, objections, notices, orders, reports and other papers as may be appropriate; (c) attend meetings and negotiate with creditors and other parties in interest; (d) appear before this Court and any appellate courts to represent the interests of the Debtor and its estate; (e) assist the Debtor in reviewing, estimating and resolving claims; (f) take any necessary action on behalf of the Debtor to negotiate and confirm a plan; and (g) perform all other necessary legal services for the Debtor in connection with the administration of this case. The firm's attorneys and paralegals will be paid at hourly rates as follows: Avery Samet $600 Jeffrey Chubak $500 Paralegal $130 - $150 Amini neither holds nor represents an interest adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached through: Jeffery Chubak, Esq. AMINI LLC 131 West 35th Street, 12th Floor New York, NY 10001 Tel: (212) 497-8247 E-mail: jchubak@aminillc.com About Greylock Capital Associates Greylock Capital Associates is a hedge fund known for making bets on distressed debt and troubled sovereign bonds. Greylock Capital Associates filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-22063) on Jan. 31, 2021. The petition was signed by David Steltzer, chief financial officer. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Debtor is represented by Jeffery Chubak, Esq., at Amini LLC. GUDORF SUPPLY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gudorf Supply Company, Inc. 1280 3rd Ave Jasper, IN 47546 Chapter 11 Petition Date: March 10, 2021 Court: United States Bankruptcy Court Southern District of Indiana Case No.: 21-70158 Judge: Hon. Andrea K. Mccord Debtor's Counsel: KC Cohen, Esq. KC COHEN, LAWYER, PC 151 N Delaware St., Ste. 1106 Indianapolis, IN 46204 Tel: 317-715-1845 E-mail: kc@esoft-legal.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Gudorf, president. 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://www.pacermonitor.com/view/VN53RRI/Gudorf_Supply_Company_Inc__insbke-21-70158__0001.0.pdf?mcid=tGE4TAMA GULFPORT ENERGY: Committee Taps Jefferies LLC as Investment Banker ------------------------------------------------------------------ The official committee of unsecured creditors of Gulfport Energy Corp. and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Jefferies LLC as its investment banker. The firm's services will include: a. advising the committee on any potential or actual transaction under which a significant portion of the equity securities, businesses or assets of the Debtors are transferred to, disposed of, or combined with another entity; b. assisting the committee in examining and analyzing any potential or proposed restructuring; c. assisting the committee in evaluating and analyzing the proposed implementation of any transaction, including the value of the securities or debt instruments, if any, that may be issued in connection therewith; d. assisting the committee in negotiations with other stakeholders; e. assisting the committee in evaluating and negotiating any restructuring, settlement proposals or alternatives and evaluating the impact on unsecured recoveries; f. assisting the committee in connection with its investigation into the Debtors' pre–bankruptcy transactions; g. attending meetings of the committee; h. providing testimony i. advising the committee on the current state of the restructuring and capital markets; and j. other investment banking services necessary in connection with the Debtors' Chapter 11 cases. Jefferies will receive a $2.95 million fee upon consummation of a transaction and a monthly fee of $150,000. Commencing with the seventh full monthly fee actually paid to Jefferies, an amount equal to 50 percent of such fee and subsequent monthly fees will be credited once against the $2.95 million fee paid to the firm. Jefferies is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Michael O'Hara Jefferies LLC 520 Madison Avenue New York, NY 10022 Phone: +1 212 284 2300 About Gulfport Energy Gulfport Energy Corporation (NASDAQ: GPOR) -- http://www.gulfportenergy.com/-- is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and a producer of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds non-core assets that include an approximately 22% equity interest in Mammoth Energy Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. As of Sept. 30, 2020, Gulfport had $2,375,559,000 in assets and $2,520,336,000 in liabilities. Gulfport and its subsidiaries sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35562) on Nov. 13, 2020. The Hon. David R. Jones is the case judge. The Debtors tapped Kirkland & Ellis LLP as their bankruptcy counsel; Jackson Walker L.L.P. as local bankruptcy counsel; Alvarez & Marsal North America, LLC as restructuring advisor; and Perella Weinberg Partners L.P. and Tudor, Pickering, Holt & Co. as financial advisor; and PricewaterhouseCoopers LLP as tax services provider. Epiq Corporate Restructuring LLC is the claims agent. Wachtell, Lipton, Rosen & Katz is counsel for the special committee of Gulfport's Board of Directors while Chilmark Partners is the financial advisor. Katten Muchin Rosenman LLP is counsel for the special committee of the governing body of each Debtor other than Gulfport while M III Partners, LP is the financial advisor. The U.S. Trustee for Region 7 formed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Norton Rose Fulbright US LLP and Kramer Levin Naftalis & Frankel, LLP. HAIR CUTTERY: 2 Executives Released From NJ COVID-19 Pay Suit ------------------------------------------------------------- Law360 reports that a New Jersey federal judge on Wednesday, March 10, 2021, released two Hair Cuttery executives from a collective action claiming the company shorted stylists' pay when operations shuttered due to the COVID-19 pandemic, reasoning that the Garden State has no jurisdiction over the employees, who are based near the company's Virginia headquarters. Dennis Ratner and Phil Horvath, respectively the chief executive officer and the chief operating officer of Hair Cuttery parent Ratner Cos. Inc., never lived in, owned property in or had driver's licenses in New Jersey, U.S. District Judge Robert B. Kugler ruled in granting the executives' dismissal motions. About Creative Hairdressers Creative Hairdressers, Inc. -- http://www.ratnerco.com/-- operates over 750 salons nationwide under the trade names Hair Cuttery, BUBBLES, and Salon Cielo. The company began in 1974 to create a quality whole-family salon where stylists could make a good living. Today, the family of salons continues to share this commitment with a transparent, people-first culture that offers the best career trajectory in the industry for salon professionals, field leaders and corporate employees. Creative Hairdressers and Ratner Companies, L.C., sought Chapter 11 protection (Bankr. D. Md. Case No. 20-14583 and 20-14584) on April 23, 2020. Creative Hairdressers was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Creative Hairdressers is represented by Shapiro Sher Guinot & Sandler. Carl Marks Advisors is acting as strategic financial advisor to assist the Company in the process. A&G Realty Partners is the real estate advisor. Epiq Bankruptcy Solutions is the claims agent. HC Salon Holdings, Inc., is represented by DLA Piper LLP (US). HERTZ CORP: Disclosure Statement Hearing Set for April 16 --------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware will hold a hearing on April 16, 2021, at 10:30 a.m. (ET), 824 North Market Street, 5th Floor, Courtroom 4 in Wilmington, Delaware, to consider approval of the adequacy of the disclosure statement dated March 2, 2021, explaining the joint Chapter 11 plan of reorganization of The Hertz Corporation and its debtor-affiliates. Objections to the approval of the Debtors' disclosures statement, if any, must be filed by April 9, 2021, at 4:00 p.m. (ET). As reported in the Troubled Company Reporter, the proposed Plan contemplates that Knighthead Capital Management, LLC and its affiliates ("Knighthead") and Certares Opportunities LLC and its affiliates ("Certares") will serve as the Plan Sponsors and will commit to invest up to $4.2 billion to purchase up to 100% (but not less than a majority) of the common stock of the reorganized Hertz. This proposed investment, if consummated, will, together with a new $1 billion first-lien financing, a new $1.5 billion revolving credit facility, and a new asset-backed securitization facility to finance Hertz's U.S. vehicle fleet, provide the basis for the proposed Plan and the funding needed for Hertz to complete its financial restructuring and emerge from Chapter 11 in early to mid summer. The equity investment will take the form of a direct purchase of up to approximately $2.3 billion of common equity of reorganized Hertz, together with a commitment to backstop a rights offering for up to approximately $1.9 billion of common equity in reorganized Hertz, which will be made available to unsecured creditors as part of the Plan. 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. They also operate 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 for the District of Delaware (Bankr. D. Del. Case No. 20-11218). Judge Mary F. Walrath oversees the cases. The Debtors have tapped White & Case LLP as their bankruptcy counsel, Richards, Layton & Finger, P.A. as local counsel, Moelis & Co. as investment banker, and FTI Consulting as financial advisor. The Debtors also retained the services of Boston Consulting Group to assist the Debtors in the development of their business plan. Prime Clerk LLC is the claims agent. The U.S. Trustee for Regions 3 and 9 appointed a Committee to represent unsecured creditors in Debtors' Chapter 11 cases. The Committee has tapped Kramer Levin Naftalis & Frankel LLP as its bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as Delaware counsel, UBS Securities LLC as investment banker, and Berkeley Research Group, LLC as financial advisor. Ernst & Young LLP provides audit and tax services to the Committee. HEXAGON AUTOMOTIVE: Case Summary & 3 Unsecured Creditors -------------------------------------------------------- Debtor: Hexagon Automotive, LLC 2666 Honolulu Ave Montrose, CA 91020 Business Description: Hexagon Automotive, LLC -- http://www.hexagoncompleteauto.com-- owns and operates a full-service auto repair shop in Los Angeles. Chapter 11 Petition Date: March 9, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-11880 Judge: Hon. Deborah J. Saltzman Debtor's Counsel: Michael Jay Berger, Esq. LAW OFFICES OF MICHAEL JAY BERGER 9454 Wilshire Boulevard, 6th Floor Beverly Hills, CA 90212 Tel: (310) 271-6223 Fax: (310) 271-9805 E-mail: michael.berger@bankruptcypower.com Total Assets: $1,163,500 Total Liabilities: $1,252,169 The petition was signed by Ahmad P. Nawabi, the managing member. 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://www.pacermonitor.com/view/6MR52AY/Hexagon_Automotive_LLC__cacbke-21-11880__0001.0.pdf?mcid=tGE4TAMA HIGHLAND CAPITAL: Chancery Freezes Cases Until Chapter 11 Done -------------------------------------------------------------- Law360 reports that a Delaware Chancery Court judge stayed a pair of fraudulent transfer cases in her court Wednesday, March 10, 2021, saying the Texas Chapter 11 case of investment firm Highland Capital Management needs to be resolved before damages in Delaware can be properly addressed. During a hearing conducted via telephone conference, Vice Chancellor Morgan T. Zurn said plaintiff Patrick Daugherty had signed on to a settlement with the bankruptcy investment firm in Texas and will be receiving millions of dollars in recoveries once that case is finalized and the Chapter 11 plan goes into effect. About Highland Capital Highland Capital Management LP was founded by James Dondero and Mark Okada in Dallas in 1993. Highland Capital is the world's largest non-bank buyer of leveraged loans in 2007. It also manages collateralized loan obligations. In March 2007, it raised $1 billion to buy distressed loans. Collateralized loan obligations are created by bundling together loans and repackaging them into new securities. Highland Capital Management, L.P., sought Chapter 11 protection (Bank. D. Del. Case No. 19-12239) on Oct. 16, 2019. Highland was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. On Dec. 4, 2019, the case was transferred to the U.S. Bankruptcy Court for the Northern District of Texas and was assigned a new case number (Bank. N.D. Tex. Case No. 19-34054). Judge Stacey G. C. Jernigan is the case judge. The Debtor's counsel is James E, O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Foley & Lardner LLP, as special Texas counsel. Kurtzman Carson Consultants LLC is the claims and noticing agent. Development Specialists Inc. CEO Bradley Sharp as a financial adviser and restructuring officer. The Office of the U.S. Trustee appointed a committee of unsecured creditors on Oct. 29, 2019. The committee tapped Sidley Austin LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor LLP as co-counsel with Sidley Austin; and FTI Consulting, Inc. as financial advisor. HSA ENTERPRISES: Cash Collateral Hearing Continued to March 31 -------------------------------------------------------------- A hearing to consider HSA Enterprises LLC's request to use of cash collateral and show cause as to why the case should not be dismissed or why the Debtor should not be removed as debtor-in-possession has been continued to March 31, 2021 at 3 p.m. The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, has authorized HSA Enterprises LLC to use cash collateral on an interim basis. The Debtor is authorized to use cash collateral to the extent needed to pay for insurance on the real properties and to pay up to $600 for further repairs for its properties. The Debtor is required to provide invoices and proof of payment of the expenses to the Court, the subchapter V Trustee, the US Trustee and the lienholders on the Properties. The Debtor is required to provide proof of continued insurance on all Properties, naming the respective lienholder as additional insured in the amounts and form required by the lienholders' respective loan documents and adding the US Trustee for notice purposes and invoices and verification of the payment of the insurance and repair expenses, no later than March 29. The Debtor is required to provide a full accounting as of the date of filing of all HSA funds, supported by documentation showing every entry of income and every entry of expense, and the report must further contain information on all funds transferred out of the HSA account from the date of filing to any other account, as well as the total amount of the HSA transferred funds. This accounting must include all underlying documentation for any deposit and expense item. The Court has approved the Application to Employ Robert Norris as the accountant for the Debtor with all fees and expenses of Mr. Norris to be paid from earnings by Hemarani Sivarajan, the co-owner of the Debtor, as a capital contribution to the Debtor and not from cash collateral. A copy of the order is available at https://bit.ly/3by7kis from PacerMonitor.com. About HSA Enterprises LLC HSA Enterprises, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-30023) on Jan. 4, 2021. HSA Enterprises President Shawn LePorte signed the petition. At the time of filing, the Debtor estimated $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. Judge Eduardo V. Rodriguez presides over the case. Reese Baker, Esq., at Baker & Associates serves as the Debtor's legal counsel. HUDSON RIVER TRADING: Moody's Affirms Ba1 Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Hudson River Trading LLC's (HRT) Ba1 Corporate Family Rating and Ba2 senior secured first lien term loan rating. The rating action follow's HRT's announcement of its intention to issue a new $1,725 million senior secured term loan B due 2028 that is assigned at Ba2. Moody's said HRT plans to use the issuance's net proceeds to refinance its existing $1,222 million term loan, support its growing operations, increase its trading capital and for general corporate purposes. HRT's outlook remains stable. Affirmations: Issuer: Hudson River Trading LLC Issuer Rating, Affirmed Ba2 Senior Secured 1st Lien Term Loan, Affirmed Ba2 Corporate Family Rating, Affirmed Ba1 Assignments: Issuer: Hudson River Trading LLC Senior Secured Term Loan-B, Assigned Ba2 Outlook Actions: Issuer: Hudson River Trading LLC Outlook, Remains Stable RATINGS RATIONALE Moody's said the ratings' affirmation reflects HRT's strong profitable track record, liquid balance sheet and healthy levels of capital. The rating action also reflects HRT's successful navigation of the challenging operating environment during 2020, while maintaining strong risk management oversight and generating strong profits. The ratings' affirmation also reflects the sustained oversight from a highly engaged ownership and leadership team and a nurturing corporate culture that is typical of technology-focused companies in the sector. Moody's said HRT's credit profile also reflects the inherently high level of operational and market risk in the firm's relatively narrow principal trading and market making activities, that could result in severe losses and a deterioration in liquidity and funding in the event of a severe risk management failure. Such operational and market risks have historically been successfully mitigated by HRT's relatively modest and short-lived individual trade positions in liquid securities, with a relatively predictable range of daily trading profit levels. Moody's said HRT has sequentially increased its holding company's long-term debt to help fund an increase in the firm's trading portfolio, while also retaining a significant amount of capital. While debt increases make for a relatively stable source of funding during growth periods, it could result in funding, liquidity and refinancing risks in periods leading up to maturity, especially if there is a reduction in profitability. Moody's expects HRT to mitigate this risk by maintaining ample liquidity and an extended debt maturity profile. The stable outlook reflects Moody's assessment that HRT will continue to generate strong profits and cash flows and that HRT's management will continue to place a high emphasis on maintaining an effective risk management and controls framework. The stable outlook also reflects Moody's expectation that the increase in debt will not result in any significant deterioration in the firm's leverage, risk appetite or liquidity profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade Improved quality and diversity of profitability and cash flows from the development of substantial and lower-risk ancillary business activities Further improvements in retained capital and liquidity that lead to a reduced reliance on key prime brokerage relationships outside of US equities trading Factors that could lead to a downgrade - Reduced profitability from changes in the market or regulatory environment - Increased risk appetite or failure in managing and controlling operational risks - Adverse changes in corporate culture or management quality or a shift towards a more aggressive strategic policy (such as an acquisition of another entity on terms that would result in significantly worsened key credit metrics) - Significant reduction in retained capital or change in cash retention policy The principal methodology used in these ratings was Securities Industry Market Makers Methodology published in Novemeber 2019. INSPIREMD INC: Incurs $10.5 Million Net Loss in 2020 ---------------------------------------------------- InspireMD, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $10.54 million on $2.48 million of revenues for the year ended Dec. 31, 2020, compared to a net loss of $10.04 million on $3.72 million of revenues for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $17.78 million in total assets, $5.61 million in total liabilities, and $12.16 million in total equity. As of March 8, 2021, the Company has the ability to fund its planned operations for at least the next 12 months. However, the Company said it expects to continue incurring losses and negative cash flows from operations until its products (primarily CGuard EPS) reach commercial profitability. Therefore, in order to fund its operations until such time that the Company can generate substantial revenues, it may need to raise additional funds. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1433607/000149315221005564/form10-k.htm About InspireMD Inc. Headquartered in Tel Aviv, Israel, InspireMD -- http://www.inspiremd.com-- is a medical device company focusing on the development and commercialization of its proprietary MicroNet stent platform technology for the treatment of complex vascular and coronary disease. A stent is an expandable "scaffold-like" device, usually constructed of a metallic material, that is inserted into an artery to expand the inside passage and improve blood flow. Its MicroNet, a micron mesh sleeve, is wrapped over a stent to provide embolic protection in stenting procedures. J.J.W. METAL: Gets Court Approval to Hire Special Counsel --------------------------------------------------------- J.J.W. Metal Corp. received approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Frank Inserni Milam, Esq., an attorney practicing in Puerto Rico, as its special counsel. The attorney will represent the Debtor in matters related to its request before the Court of First Instance of Puerto Rico, Superior Section of Carolina, to execute and enforce a settlement agreement with the Municipality of Carolina regarding the reopening of its metal recycling operations. Mr. Milam will be paid at the rate of $175 per hour. In court papers, Mr. Milam disclosed that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Milam holds office at: Frank Inserni Milam, Esq. P.O. Box 193748 San Juan, PR 00919-3748 Tel: (787) 763-3851 Fax: (787) 763-5233 Email: finserni@gmail.com About J.J.W. Metal Corp. J.J.W. Metal Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-04536) on Nov. 23, 2020. J.J.W. Metal President Jorge Rodriguez Quinones signed the petition. At the time of filing, the Debtor disclosed total assets of $1,649,341 and total liabilities of $1,750,865. Judge Edward A. Godoy oversees the case. The Debtor tapped Charles A. Cuprill, P.S.C., Law Offices as its legal counsel and Luis R. Carrasquillo & Co. P.S.C. as its financial consultant. Gino Negretti Lavergne, Esq., and Frank Inserni Milam, Esq., serve as the Debtor's special counsel. J.J.W. METAL: Gets OK to Hire Toro & Arsuaga as Special Counsel --------------------------------------------------------------- J.J.W. Metal Corp. received approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Toro & Arsuaga, LLC as its special counsel. The firm will represent the Debtor in environmental matters, including the evaluation of ecological and human health risk assessments and applicable criteria under the guidelines promulgated by the U.S. Environmental Protection Agency and the Federal Comprehensive Environmental Response. The firm will be paid at these rates: Partners $175 per hour Junior Partners $125 per hour Associates $110 per hour Paralegals/Law Clerks $75 per hour Toro & Arsuaga is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Rafael Toro Ramirez, Esq. Toro & Arsuaga, LLC P.O. Box 11064 San Juan, PR 00922-1064 Tel: (787) 299-1100 Email: rtoro@toro-arsuaga.com About J.J.W. Metal Corp. J.J.W. Metal Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-04536) on Nov. 23, 2020. J.J.W. Metal President Jorge Rodriguez Quinones signed the petition. At the time of filing, the Debtor disclosed total assets of $1,649,341 and total liabilities of $1,750,865. Judge Edward A. Godoy oversees the case. The Debtor tapped Charles A. Cuprill, P.S.C., Law Offices as its legal counsel and Luis R. Carrasquillo & Co. P.S.C. as its financial consultant. Gino Negretti Lavergne, Esq., and Frank Inserni Milam, Esq., serve as the Debtor's special counsel. JFG HOLDINGS: Sutherland Objects to Disclosure Statement -------------------------------------------------------- Secured lender Sutherland Asset I, LLC, filed an objection to the Disclosure Statement filed by debtor JFG Holdings Inc. Secured Lender holds a promissory note made by the Debtor and secured by the Debtor's real property and improvements. The Debtor's affiliate, Enchantment Hotels, Inc., is a co-maker of the promissory note. The Debtor's principal, Janice Grimes, is a guarantor of the promissory note. On Jan. 28, 2021, the Debtor filed its proposed Disclosure Statement and related Plan of Reorganization. Secured Lender points out that the Disclosure Statement fails to adequately disclose and explain essential details of the Plan, including among other things: (1) information about future rental arrangements with Enchantment Hotels, (2) financial projections regarding Enchantment Hotels' ability to pay rent, (3) and valuation information regarding the Property. The Debtor's failure to adequately disclose this information renders the Disclosure Statement inadequate under Section 1125(b) and requires disapproval of the Disclosure Statement. "The Liquidation Analysis attached to the proposed plan is confusing and misleading. It uses two different valuations for the Property: one for Chapter 7 and another for Chapter 11. The Chapter 7 valuation is $1,400,000, which is the value that Secured Lender believes is correct. The Chapter 11 valuation uses a $4,000,000 valuation, presumably from the alleged Compass Bank appraisal. There is no explanation as to why the value of the Property -- which consists solely of real property and improvements -- would be materially different between a liquidation and a reorganization," Secured Lender tells the Court. Secured Lender further points out that the Disclosure Statement also contains a number of incorrect statements, typographical errors, and confusing statements. For example, the Plan names the Debtor as "JFG Holdings, LLC." The Debtor is JFG Holdings, Inc., a corporation, not a limited liability company. A copy of the document is available at https://bit.ly/3l5Ltlo Sutherland is represented by: James Billingsley POLSINELLI PC 2950 N. Harwood Street, Suite 2100 Dallas, TX 75201 Telephone: (214) 397-0030 Facsimile: (214) 397-0033 E-mail: jbillingsley@polsinelli.com About JFG Holdings JFG Holdings, Inc., a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)), filed a voluntary petition for relief under Chapter 11 of Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-43378) on Nov. 2, 2020. JFG Holdings President Janice Grimes signed the petition. At the time of filing, the Debtor estimated assets of up to $50,000 and estimated liabilities of $1 million to $10 million. Eric A. Liepins, P.C., serves as the Debtor's legal counsel. JO-ANN STORES: Moody's Completes Review, Retains Caa1 CFR --------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Jo-Ann Stores LLC. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 4, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Jo-Ann Stores LLC. Caa1 Corporate Family Rating reflects the company's outperformance as customer demand shifts to favor its key core sewing and craft categories. Nonetheless, the company's small size and the risk of business normalization as the pandemic subsides remain key constraints. The company's financial sponsor ownership can also lead to aggressive financial strategies. Jo-Ann has been supported by the demand for personal protective equipment that is expected to continue, and the improving demand for do-it-yourself arts and crafts as well as its relatively higher margins relative to other retail segments and good liquidity. The company's essential service status enabled the vast majority of its stores to either remain fully open. Curbside and buy-online-pick-up-in-store services also mitigated the impact of disruption at the onset of the pandemic. The principal methodology used for this review was Retail Industry published in May 2018. JOHN PICCIRILLI: Gets OK to Hire S.J. Julian & Co. as Accountant ---------------------------------------------------------------- John Piccirilli, Inc., received approval from the U.S. Bankruptcy Court for the Northern District of New York to hire S.J. Julian & Co. as its accountant. The Debtor needs the services of an accountant to prepare weekly payroll, annual tax returns, monthly operating reports and financial projections for its Chapter 11 plan of reorganization. The firm will be paid at the rate of $125 per hour for the services of its accountant, Austin Conrad, and $80 per hour for the services rendered by non-accountant staff. S.J. Julian and its associates do not have any connection with and do not hold interest adverse to the Debtor, creditors and other parties in interest, according to court filings. The firm can be reached through: Austin Conrad S.J. Julian & Co. 2301 Country Club Road Endicott, NY 13760 Phone: (607) 748-2255 Fax: (607) 748-8305 Email: AustinC@Sjjco.com salj@sjjco.com About John Piccirilli John Piccirilli, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Case No. 21-60057) on Jan. 28, 2021. At the time of the filing, the Debtor had estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. Judge Diane Davis oversees the Debtor's Chapter 11 case. The Debtor is represented by Orville & McDonald Law, P.C. in its case. K & W CAFETERIAS: April 6 Disclosure Statement Hearing Set ---------------------------------------------------------- On March 1, 2021, debtor K & W Cafeterias, Inc., f/k/a K & W Restaurant, Inc. filed with the U.S. Bankruptcy Court for the Middle District of North Carolina a disclosure statement with respect to a chapter 11 plan. On March 4, 2021, Judge Benjamin A. Kahn ordered that: * April 6, 2021, at 9:30 am is the telephonic hearing to consider the approval of the Disclosure Statement. * March 26, 2021, is fixed as the last day for filing and serving written objections to the Disclosure Statement. A full-text copy of the order dated March 4, 2021, is available at https://bit.ly/30zhJEo from PacerMonitor.com at no charge. Counsel for the Debtor: John A. Northen Vicki L. Parrott John Paul H. Cournoyer Northen Blue, LLP Post Office Box 2208 Chapel Hill, NC 27515-2208 Telephone: 919-968-4441 E-mail: jan@nbfirm.com vlp@nbfirm.com jpc@nbfirm.com About K&W Cafeterias K&W Cafeterias, Inc., a company based in Winston Salem, N.C., filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 20-50674) on Sept. 2, 2020. Judge Benjamin A. Kahn presides over the case. In the petition signed by Dax C. Allred, president, the Debtor disclosed $30,085,274 in assets and $22,189,229 in liabilities. The Debtor tapped Northen Blue, LLP as its bankruptcy counsel, and Bell Davis & Pitt P.A. and Constangy Brooks Smith & Prophete LLP as its special counsel. William Miller, U.S. bankruptcy administrator, appointed a committee to represent unsecured creditors in Debtor's Chapter 11 case. The committee is represented by Waldrep Wall Babcock & Bailey, PLLC. KAMAN CORP: S&P Alters Outlook to Negative, Affirms 'BB' ICR ------------------------------------------------------------ S&P Global Ratings revised its outlook on Kaman Corp. to negative from stable and affirmed its 'BB' issuer credit rating. The negative outlook reflects the uncertainty around JPF sales, a further reduction in demand for commercial aerospace parts, and depressed margins. Lower JPF sales and an uncertain recovery in commercial aerospace could constrain credit metrics in 2021. Kaman generates a significant portion of its revenue from Safe And Arm Devices (32% of 2020 revenue), which includes JPF sales, to both the U.S. military and foreign customers. Under the new administration, foreign policy has changed and could restrict sales to certain foreign countries. It is also important to note the direct commercial sales (DCS) to international customers provide the highest margins for the program, so earnings will see a more pronounced impact. While the impact is smaller, there is still uncertainty around the recovery in the commercial aerospace market for both original equipment manufacturers and aftermarket. S&P said, "We expect Kaman's credit metrics to recover in 2021 as margins recover. The company's credit metrics weakened materially in 2020 because of lower commercial aerospace revenue and significant one-time costs. These costs totaled about $44 million and consist of costs associated with the Bal Seal acquisition, the distribution business divestiture, and restructuring charges. These costs resulted in adjusted EBITDA margins declining to 7.2%. We expect margins to recover to 12.5%-13.5% in 2021, as we do not expect these costs to persist. This results in debt to EBITDA improving to 2.5x-2.9x in 2021 from more than 4x in 2020. "We expect the company's liquidity to remain strong. As of Dec. 31, 2020, Kaman had $104 million of cash on hand, and about $364 million of availability on the revolver based on covenants. The company also has about $25 million of restricted cash on the balance sheet to be used for a payment to Bal Seal employees. We expect the company to generate a modest amount of free cash flow in 2021 in the range of $10 million to $20 million. The company repaid all the drawings made on the revolver in early 2020 in response to uncertainty around the credit market due to the pandemic. We expect the company to pursue additional acquisition opportunities, though they will likely be smaller than previously expected given the company's weaker financial position. We would expect the company to use a combination of cash on hand and debt to fund any acquisitions. "The negative outlook on Kaman reflects our expectation that credit metrics could remain weak in 2021 because of weaker JPF sales, further impact on the commercial aerospace market due to the pandemic, limited margin recovery, or a more aggressive financial policy than expected. We now expect debt to EBITDA of 2.5x-2.9x in 2021, improving from above 4x in 2020." S&P could lower the rating on Kaman over the next 12 months if the company's debt to EBITDA remains higher than 3x and it does not expect improvement. This could be due to: -- Additional cancelations or delays of international JPF sales; -- A greater impact on commercial aerospace sales due to the pandemic; -- Adjusted EBITDA margins not recovering as much as expected; or -- A larger-than-expected amount of acquisitions or share repurchases. S&P could revise the outlook back to stable if debt to EBITDA improves to below 3x and we expect it to remain there. This could be due to: -- Fulfilling existing JPF orders, without any further impact from changes in U.S. foreign policy; -- Commercial build rates do not deteriorate further; or -- Margin recovery. KFIR GAVRIELI: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------- The U.S. Trustee for Region 16 on March 10 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Kfir Gavrieli. The committee members are: 1. Roman Margolin c/o KRKB Family Trust 100 De Sabla Rd. Hillsborough, CA 94010 Phone: (415) 254-1006 E-mail: roman@m3g.capital 2. Adam Milstein 16027 Ventura Blvd., Suite 550 Encino, CA 91436 Phone: (818) 231-7130 E-mail: adam.milstein@hagerpacific.com 3. Ronald Jose Paz Vargas Av. Presidente Juscelinno Kubitschek 1545 Apt. 203 Sao Paulo, Brasil, 04543-011 Phone: 5511971110875 E-mail: ronaldpaz@hotmail.com 4. Dick Brouwer 45 Willow Road Menlo Park, CA 94025 Phone: (650) 799-2762 E-mail: dick@dickbrouwer.com 5. Eyal Bilgrai 771 18th Ave. Menlo Park, CA 94025 Phone: (650) 521-4842 E-mail: eyalbilgrai@gmail.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Kfir Gavrieli Kfir Gavrieli sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-10826) on Feb. 1, 2021. The Debtor is represented by Jeffrey M. Reisner, Esq. -- jreisner@steptoe.com -- Steptoe & Johnson, LLP as counsel. KLAUSNER LUMBER: Unsecureds to Recover 24.2% to 13.5% in Plan ------------------------------------------------------------- Klausner Lumber One LLC and its Official Committee of Unsecured Creditors filed a Chapter 11 Plan of Reorganization and a Disclosure Statement. On Aug. 31, 2020, the Court held a hearing on the sale portion of the Bidding Procedures Motion, approved the sale of substantially all of the Debtor's assets to Binder for the cash purchase price of $61 million, plus certain assumed liabilities as set forth in Binder's modified Asset Purchase Agreement. Class 4 FS Deficiency/Unsecured Claim total $39,600,000 to $66,010,413, Class 5 General Unsecured Claims total $6,296,987 to $9,386,550, and Class 6 Affiliate Unsecured Claim total $34,172,946 to $68,345,892. Each of the classes will recover 24.2% to 13.5% of their claims. Each holder will receive its pro rata share of an amount equal to the Net Distribution Proceeds, less any amounts that the Liquidating Trustee in her, his, or its reasonable discretion determines to be necessary to be held to wind up the Debtor's affairs and administer the Liquidating Trust. The Plan provides that the Liquidating Trust will fund distributions under the Plan with Distribution Proceeds. Attorneys for the Debtor: Thomas A. Draghi Alison M. Ladd WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP 1201 RXR Plaza Uniondale, New York 11556 Telephone: (212) 622-9200 Facsimile: (212) 622-9212 Robert J. Dehney Eric Schwartz Daniel B. Butz MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street, 16th Floor P.O. Box 1347 Wilmington, Delaware 19899 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 Attorneys for the Official Committee of Unsecured Creditors: Richard J. Bernard FAEGRE DRINKER BIDDLE & REATH LLP 1177 Avenue of the Americas, 41st Floor New York, New York 10036 Richard.Bernard@faegredrinker.com Direct: (212) 248-3263 Alissa M. Nann FOLEY & LARDNER LLP 90 Park Avenue New York, NY 10016 Tel: (212) 682-7474 Fax: (212) 687-2329 Eric J. Monzo Brya M. Keilson MORRIS JAMES LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 Tel: (302) 888-6800 Fax: (302) 571-1750 A copy of the Disclosure Statement is available at https://bit.ly/3rEhMdI from PacerMonitor.com. About Klausner Lumber One Klausner Lumber One, LLC, is a privately-held company in the lumber and plywood products manufacturing industry. It is 100% owned by non-debtor Klausner Holding USA, Inc. Klausner Lumber One sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-11033) on April 30, 2020. At the time of the filing, Debtor disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Karen B. Owens oversees the case. The Debtor has tapped Westerman Ball Ederer Miller Zucker & Sharfstein, LLP as its bankruptcy counsel; Morris, Nichols, Arsht & Tunnell, LLP as local counsel; Asgaard Capital, LLC as restructuring advisor; and Cypress Holdings, LLC, as investment banker. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Foley & Lardner LLP and Faegre Drinker Biddle & Reath LLP as its counsel. L C of SHREVEPORT: Seeks Approval to Hire Bankruptcy Attorney ------------------------------------------------------------- L C of Shreveport LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Louisiana to hire Robert Raley, Esq., an attorney practicing in Bossier City, La., to handle its Chapter 11 case. The Debtor requires a bankruptcy attorney to give legal advice regarding its rights, duties and powers under the Bankruptcy Code; prepare and file a plan of reorganization and other documents; and represent the Debtor at the meetings of creditors, hearings and other proceedings related to its Chapter 11 case. Mr. Raley will be paid at the rate of $350 per hour. He will be assisted by Rebecca Harden, a paralegal, who will charge $90 per hour for her services. The attorney received a retainer in the amount of $25,717. Mr. Raley holds office at: Robert W. Raley, Esq. 290 Benton Spur Road Bossier City, LA 71111 Tel: 318-747-2230 Email: bankruptcy@robertraleylaw.com About L C of Shreveport L C of Shreveport LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 21-10113) on Feb. 9, 2021. The petition was signed by Chad D. Fangue, managing member. At time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Robert W. Raley, Esq. serves as the Debtor's counsel. LIGHTHOUSE RESOURCES: Court Okays Chapter 11 Reorganization Plan ---------------------------------------------------------------- Law360 reports that a Delaware bankruptcy judge on Wednesday, March 10, 2021, approved coal mining company Lighthouse Resources Inc.'s plan to get out from under $256 million in debt and reorganize under the control of a trust dedicated to cleaning up its coal mines. At a virtual hearing, counsel for Lighthouse told U.S. Bankruptcy Judge John Dorsey it had answered an objection by the U.S. trustee's office to the plan's third-party releases and secured overwhelming creditor support for the reorganization. "I know you worked very hard on what was a difficult case," Judge Dorsey said. Utah-based Lighthouse and multiple affiliates hit Chapter 11 in December 2020. About Lighthouse Resources Lighthouse Resources Inc., is an owner and operates two coal mines located in Wyoming and Montana, delivering low sulfur, subbituminous coal to both domestic and export customers. It also owns and operates the Millennium Bulk Terminal in Longview, Washington. The Company is widely recognized for its extraordinary performance in both safety and environmental stewardship. Its flagship project is the development of a trade route for coal from the Rocky Mountain region of the United States to demand centers in Asia. Utah-based Lighthouse Resources and 13 subsidiaries, including Decker Coal Company, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 20-13056) on Dec. 3, 2020. Lighthouse Resources was estimated to have $100 million to $500 million in assets and liabilities as of the filing. The Debtors tapped JACKSON KELLY PLLC as general bankruptcy counsel and BDO USA LLP as restructuring advisor. POTTER ANDERSON & CORROON LLP is the local bankruptcy counsel. LANG LASALLE AMERICAS, INC. is the marketer and seller of assets related to the dock facility owned by Millennium Bulk Terminals-Longview, LLC. ENERGY VENTURES ANALYSIS is the marketer and seller of Debtors' coal mining assets. STRETTO is the claims agent. LOMPA RANCH: Case Summary & 10 Unsecured Creditors -------------------------------------------------- Debtor: Lompa Ranch East Hills, LLC 9516 West Flamingo Road, Suite 300 Las Vegas, NV 89147 Business Description: Lompa Ranch East Hills, LLC is engaged in activities related to real estate. Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court District of Nevada Case No.: 21-11161 Debtor's Counsel: Charles ("CJ") E. Barnabi Jr., Esq. THE BARNABI LAW FIRM, PLLC 375 E. Warm Springs Road, Ste. 104 Las Vegas, NV 89119 Tel: (702) 475-8903 Fax: (702) 966-3718 Email: cj@barnabilaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jaimee Yoshizawa, manager. A copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KX4GJHI/LOMPA_RANCH_EAST_HILLS_LLC__nvbke-21-11161__0001.0.pdf?mcid=tGE4TAMA LUXURY OUTER: To Seek Plan Confirmation on May 6 ------------------------------------------------ Judge Joseph N. Callaway has entered an order conditionally approving the disclosure statement of Luxury Outer Banks Homes, LLC, and setting a hearing to consider confirmation of the Debtor's Plan for May 6, 2021, at 10:00 a.m. April 26, 2021, is fixed as the last day for (I) filing and serving written objections to approval of the Disclosure Statement and confirmation of the Plan, (ii) written acceptances or rejections of the Plan. Luxury Outer Banks Homes, LLC, filed a Plan and a Disclosure Statement on March 5, 2021. The Plan contemplates a continuation of the Debtor's business. In accordance with the Plan, the Debtor intends to satisfy creditor claims from contributions from its member/manager, Kimberly Lane, and from income earned through continued operations of its business. The Nationstar Mortgage claim in Class 4 totaling $347,315, the JPMorgan Chase Bank claim in Class 5 totaling $1,834,755, and general unsecured claims in Class 6 totaling $9,800 are impaired. Class 4, 5, and 6 will be payable from Net Rental Income and contributions from member. A copy of the Disclosure Statement dated March 5, 2021, is available at https://bit.ly/3t5xaQG About Luxury Outer Banks Luxury Outer Banks Homes, LLC, is in the business of renting real property located in Dare County, North Carolina. It owns a house and lot located at 1340 DuckRoad, Duck, NC valued at $4.85 million and a house and lot located at 116 Duchess Court, Kill Devil Hills, NC valued at $489,700. Luxury Outer Banks Homes previously sought Chapter 11 protection on Aug. 10, 2009 (Bankr. E.D.N.C. Case No. 09-06678). Trawick H. Stubbs Jr., at Stubbs & Perdue, P.A., served as counsel to the Debtor. Luxury Outer Banks Homes again filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 21-00508) on March 5, 2021. In the petition signed by Kimberly H. Lane, manager, the Debtor disclosed total assets of $5,352,747 and total liabilities of $2,192,061 as of the bankruptcy filing. The Hon. Joseph N. Callaway is the case judge. HOWARD, STALLINGS, FROM, ATKINS, ANGELL & DAVIS, P.A., led by James B. Angell, is the Debtor's counsel. MALLINCKRODT PLC: Adds Senior Term Lenders to RSA ------------------------------------------------- Law360 reports that bankrupt pharmaceutical company Mallinckrodt PLC said Wednesday, March 10, 2021, it has reached a deal with senior term loan lenders holding $1.3 billion in claims against the debtor that will see them join onto an existing restructuring support agreement. The restructuring support agreement, or RSA, calls for the issuance of new term loan debt to replace the existing first-lien term loans and resolves an outstanding dispute about the senior lender's treatment under Mallinckrodt's proposed Chapter 11 plan. "We continue to make substantial progress toward implementing a consensual restructuring that addresses the company's legal uncertainties and positions us to move ahead with our strategic plans," said the company. About Mallinckrodt Mallinckrodt is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On the Web: http://www.mallinckrodt.com/ On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware in the U.S. (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley LLP as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon Advisers LLC as its financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid related claimants. The OCC tapped Akin Gump Struss Hauer & Feld LLP as its lead counsel, Cole Schotz as Delaware co-counsel, Province Inc. as financial advisor, and Jefferies LLC as investment banker. MATTEL INC: S&P Upgrades ICR to 'BB' on Strong EBITDA Growth ------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on U.S.-based toy manufacturer Mattel Inc. two notches to 'BB' from 'B+' and removed all ratings from CreditWatch with positive implications, where S&P placed them on Feb. 11, 2021. S&P said, "Additionally, we are raising our issue-level ratings on the company's unsecured notes with subsidiary guarantees to 'BB' from 'B+' and on the unsecured notes without subsidiary guarantees to 'B+' from 'B-'. "The stable outlook reflects our belief that Mattel's restructuring could drive sustainable cost savings and operating improvements that may lessen Mattel's cash flow volatility over the next few years. We assume our measure of Mattel's net lease-adjusted debt to EBITDA could be in the low-3x area in 2021. "We are upgrading Mattel two notches because we expect leverage in the low-3x area in 2021, well below our 4x downgrade threshold at the 'BB' rating. In our updated base-case forecast, we assume revenue increases in the low-single-digit percent area in 2021. Although macroeconomic risks remain elevated, with U.S. unemployment at 6.2% in February and average eurozone unemployment forecast to be 8.7% this year, we believe strong demand for Mattel's products will continue through at least the first half of 2021. This reflects good point-of-sale trends that exceed gross billings in key product categories. In addition, we believe consumers continue to seek in-home entertainment options with social distancing guidelines and limitations on some out-of-home activities. Our low-single-digit percent revenue growth assumption in 2021 is lower than Mattel's guidance in the mid-single digits because we assume consumers will pull back modestly on toy purchases once widespread COVID-19 immunization is achieved, perhaps in the third quarter, and if consumers feel safe to resume out-of-home entertainment. We also assume a modest deterioration in gross margin due to higher input costs for Mattel's products, primarily resin, and higher costs for shipping and freight. However, we expect these increases to be partially offset by Mattel's new optimizing for growth cost savings to reduce selling, general, and administrative and advertising expense. We revised our base-case forecast for adjusted EBITDA in the $700 million-$730 million range in 2021 and leverage in the low-3x area." S&P expects good demand for in-home entertainment consumer purchases as social distancing guidelines and local restrictions remain in place. Consumer spending and retail sales rebounded quickly following initial declines in spring 2020. As states and municipalities implemented stay-at-home orders and imposed strict limitations on commercial activity, consumer behavior shifted toward in-home entertainment and significantly benefited the toy industry, including Mattel. Furthermore, consumer spending likely benefited from multiple rounds of direct payments to individuals intended to support the economy during the COVID-19 pandemic. North American toy sales grew 16% in 2020, according to industry trade group NPD. Mattel underperformed the industry, with North American net gross sales increasing 6.4% driven in part by the outperformance of some toy categories in which Mattel does not have a strong presence, specifically sports toys and games. Mattel's underindexing in categories that boomed could soften a modest demand pullback when consumers shift back toward more out-of-home entertainment options. If Mattel can adapt product development, brand management, and marketing strategies to shifting consumer preferences, the company may sustain recent strength in its power brands over the next several years. Mattel appears to have strengthened its core brands, most notably Barbie, which we believe resulted partly from centralizing global product design and development, as well as enabling design-driven product development. However, Mattel recently turned around the sales performance of its core products after several years of market share losses. Mattel has stated it believes the company can adapt over the near-term shift of play patterns and consumer preferences better than it could in recent years because its major brands are built around loyalty, repeat purchases, collecting, and cultural relevance. It seems plausible that focusing on these may enable Mattel to anticipate continued buying or when a product or brand loses momentum. S&P said, "We believe the fashion nature of the toy business presents challenges every year, with which all operators in the industry must cope. We believe the best evidence will be a longer track record of product success over the next few years." Mattel's multiyear restructuring substantially improved margins, which may be sustainable and decrease the risk of operating volatility over the next few years. Multiple cost-saving initiatives implemented since 2018 generated material margin improvement. Through its Capital Light and Structural Simplification programs, Mattel closed three owned manufacturing plants and plans to exit a fourth, reduced the number of products offered by divesting underperforming brands and products, and significantly reduced manufacturing and nonmanufacturing headcount. As a result, the company has realized approximately $1 billion in run-rate cost savings. Additionally, Mattel announced a new initiative that it expects will save an incremental $250 million. Although many of these programs involve upfront costs, including severance expense, we believe they will allow higher EBITDA margin and may reduce operating variability. However, S&P believes Mattel maintains healthy advertising and design and development (D&D) spending, which are key to the continued success of its core brands. Should demand weaken temporarily for some core products, the company's recently expanded margin may cushion the impact. S&P said, "Although it is not our base case, we believe the 'BB' rating could withstand some temporary volatility from an operating misstep, weakness in some core brands, or weak consumer demand for toys following a rollback of pandemic restrictions. Under a downside scenario assumption that sales decline in the high-single-digit percents and EBITDA margin deteriorates several hundred basis points compared to our base case in the next two years, we believe leverage could weaken to just above our 4x downgrade threshold. However, we believe the 'BB' rating could withstand moderate short-term demand weakness because a more streamlined cost structure could lower EBITDA volatility." Although it may take a few years for the company to reach its desired leverage range, Mattel has publicly stated it intends to use free cash flow to repay debt until it reaches its target of 2x-2.5x. Debt repayment, particularly if material, can result in limited deterioration in Mattel's credit measures during unexpected moderate temporary cash flow volatility. Even though Mattel's multiyear restructuring may decrease the risk of extreme volatility in its operations generated during several recent years, ratings upside would likely depend on a longer track record of stable operating performance. Mattel's input prices, seasonality and supply chain remain key risks. Volatility in commodity prices for raw material inputs and being unable to pass these fully through to retailers are key risks for the toy industry. In addition, the toy business has high seasonality, which can magnify potential sales and inventory missteps. The potential for supply-chain disruptions and product recalls can be costly and reduce profitability. Mattel manufactures most of its toys in China, which could leave it exposed to tariffs or trade disputes, increasing costs that cannot be passed to consumers. As is typical among toy manufacturers, Mattel faces a perpetual risk of negative product safety events that could harm consumers and damage a core brand. In 2019, Mattel recalled and discontinued its Fisher-Price Rock 'n Play Sleeper after reports of infant deaths. S&P said, "We believe the company took these actions to demonstrate to consumers that product safety is a priority and to avoid long-term damage to the Fisher-Price brand. The risk of brand damage and the associated impact to sales is elevated in the toy industry, given most sales happen shortly before the holiday season. We believe this risk might be even higher for Mattel given some revenue concentration among the company's five core brands: Barbie, Hot Wheels, American Girl, Fisher-Price, and Thomas & Friends. While we believe the company has successful quality-control programs in its manufacturing and assembly operations comparable to those of peers, expensive product recalls temporarily impaired Mattel's margin." In addition, the company is exposed to and has periodically incurred regulatory fines and costs of environmental clean-up actions at its manufacturing sites. However, increased regulatory and environmental clean-up costs have not recently impaired cash flow significantly, nor are they expected to. Mattel has outsourced approximately 30%-40% of its manufacturing to third parties, which could elevate product safety and environmental risks, unless quality-control programs are robust enough to mitigate the risk. S&P said, "The stable outlook reflects our belief that Mattel's restructuring could drive sustainable cost savings and operating improvements that may lessen Mattel's cash flow volatility over the next few years. We assume our measure of Mattel's net lease-adjusted debt to EBITDA could be in the low-3x area in 2021. "We would likely lower the rating if we believed the company would sustain leverage greater than 4x, likely the result of some combination of poor product execution, margin degradation, and weak consumer demand for toys. "While further rating upside partially depends on a longer track record of operating stability, we could raise the rating if we expected Mattel would sustain leverage below 3x." MCAFEE CORP: S&P Places 'BB-' ICR on CreditWatch Positive --------------------------------------------------------- S&P Global Ratings placed its 'BB-' issuer credit rating on McAfee Corp. and all issue-level ratings on its debt on CreditWatch with positive implications. The CreditWatch positive placement follows McAfee's announcement that it plans to sell its enterprise security business to Symphony Technology Group for $4 billion and deploy $1 billion of proceeds to repay debt. S&P expects that the announced post-close debt repayment, combined with a strong bookings trajectory in McAfee's remaining consumer franchise, consistent cash generation, and stated financial leverage target of under 3x will lead to continued improvement in credit metrics over the planned divestiture horizon. Although enterprise security products provided nearly half of McAfee's revenue in 2020, this business operated at substantially lower margins than the consumer segment and represents a declining share of consolidated EBITDA. S&P expects the planned $1 billion of debt reduction will more than offset this incremental loss of scale. S&P said, "We will monitor developments related to the proposed transaction, including required approvals. We will conduct a detailed review of post-close business strategies, associated separation and restructuring charges, capital structure, and ongoing financial policy. We expect to resolve our CreditWatch by transaction close. An upgrade, if any, would likely be limited to one notch." MERCY HOSPITAL: U.S. Trustee Adds Committee Member -------------------------------------------------- The U.S. Trustee for Region 11 on March 10 appointed Brian Less, the administrator of the estate of Dayna Less, as new member of the official committee of unsecured creditors in the Chapter 11 cases of Mercy Hospital and Medical Center and Mercy Health System of Chicago. Mr. Less can be reached at: Brian Less, c/o Hughes Socol Piers Resnic 70 W. Madison, Ste. 4000 Chicago, IL 60602 About Mercy Hospital Mercy Hospital and Medical Center -- http://www.mercy-chicago.org/ -- operates a general acute care hospital located at 2525 South Michigan Ave., Chicago. The hospital offers inpatient and outpatient services. Mercy Health System of Chicago, an Illinois not-for-profit corporation, is the sole member of Mercy Hospital. The health care facilities are part of Trinity Health's network of health care providers. Mercy Hospital and Mercy Health System of Chicago sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 21-01805) on Feb. 10, 2021. Mercy Hospital estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge Timothy A. Barnes oversees the cases. Foley Lardner LLP, led by Matthew J. Stockl, is the Debtors' legal counsel. Epiq Corporate Restructuring, LLC is the claims, noticing, solicitation and administrative agent. The U.S. Trustee for Region 11 appointed an official committee of unsecured creditors in the Debtors' cases on March 3, 2021. The committee is represented by Perkins Coie, LLP. MICHAEL FELICE: BMW Bank Has Objection to Plan & Disclosures ------------------------------------------------------------ Creditor BMW Bank of North America filed an objection to confirmation to the Plan of Reorganization and approval of the Disclosure Statement filed and presented by Michael Felice Interiors LLC. Creditor points out that pursuant to Article 2(a), BMW Bank of North America's claim is listed as belonging to Class Six as a secured claim. Class Six's treatment describes the payment of "all post-confirmation regular monthly payments, and...all pre-confirmation and post-petition arrears" but there is no reference $2,894 in pre-petition arrears included in the Creditor's Proof of Claim 2-1. The treatment is intended to "pay the entire amount due" but the entire amount due cannot be paid without paying the pre-petition arrears. Creditor further points out that the disclosure has a contradictory provision. On the one hand, Class Six is listed as impaired. On the other, the description of the plan notes, "Rights unaltered." While the Creditor believes the "Rights unaltered" language was mistaken, it is still present in the disclosure and should be clarified. Attorney for BMW Bank of North America: Mester & Schwartz, P.C. Jason Brett Schwartz, Esquire Bar No. 4217 1917 Brown Street Philadelphia, PA 19130 Tel: (267) 909-9036 About Michael Felice Interiors Michael Felice Interiors LLC -- https://www.michaelfeliceinteriors.com/ -- is a full-service design firm located in Wyckoff, NJ. It offers a large selection of furniture, window coverings, carpet, lighting, and a gallery of Hunter Douglas shades and blinds. Michael Felice Interiors sought Chapter 11 protection (Bankr. D.N.J. Case No. 20-11531) on Jan. 30, 2020. The Debtor disclosed total assets of $97,524 and total liabilities of $2,300,540. SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA, LLP, led by David L. Stevens, is the Debtor's counsel. MICHAELS STORES: Moody's Puts Ba3 CFR Under Review for Downgrade ---------------------------------------------------------------- Moody's Investors Service placed Michaels Stores, Inc.'s Ba3 corporate family rating on review for downgrade. Moody's also placed the Ba3-PD probability of default rating, Ba3 senior secured and B2 senior unsecured ratings on review for downgrade. The outlook was revised to ratings under review from stable. The review for downgrade reflects governance considerations which include Michaels' announcement[1] that it has entered into a definitive agreement to be acquired by investment funds managed by affiliates of Apollo Global Management, Inc. in a deal valued at approximately $5 billion. Michaels will have the right to terminate the agreement to enter a superior agreement in the next 25 days subject to certain conditions. The proposed transaction will be financed through committed equity from Apollo and committed debt financing. The deal is subject to customary closing conditions and the receipt of regulatory approvals and it is expected to close in the first half of the Company's fiscal year. On Review for Downgrade: Issuer: Michaels Stores, Inc. Probability of Default Rating, Placed on Review for Downgrade, currently Ba3-PD Corporate Family Rating, Placed on Review for Downgrade, currently Ba3 Senior Secured Bank Credit Facility Placed on Review for Downgrade, currently Ba3 (LGD3) Senior Secured Regular Bond/Debenture, Placed on Review for Downgrade, currently Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently B2 (LGD5) Outlook Actions: Issuer: Michaels Stores, Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's review will focus on Michaels' completion of the transaction, its final capital structure, future governance considerations particularly its financial strategies, including its willingness to de-leverage using excess cash and free cash flow under new private ownership. Michaels Stores, Inc. is a wholly-owned subsidiary of Michaels Companies, Inc., the largest dedicated arts and crafts specialty retailer in North America based on number of stores operated. The company operates more than 1,270 stores in 49 states and Canada and generated revenues of approximately $5.3 billion for the latest twelve months ended January 30, 2021. The company primarily sells general and children's crafts, home decor and seasonal items, framing and scrapbooking products. Michaels Companies, Inc., (ticker "MIK"), is publicly traded, and remains approximately 36% owned by affiliates of Bain Capital Partners, LLC, who acquired the company in 2006. The principal methodology used in these ratings was Retail Industry published in May 2018. MILLER BRANGUS: Cash Collateral Motion Set for March 24 Hearing ---------------------------------------------------------------- Judge Charles M. Walker of the U.S. Bankruptcy Court for the Middle District of Tennessee, Columbia Division, scheduled a hearing on Miller Brangus, LLC's Expedited Motion for Entry of Interim and Final Orders (i) Authorizing the Debtor to Use Cash Collateral, (ii) Approving the Sale of Assets, (iii) Granting Adequate Protection, and (iv) Scheduling Final hearing for March 24, 2021 at 11:00 a.m. About Miller Brangus LLC Headquartered in Franklin, Tennessee, Miller Brangus LLC filed for Chapter 11 bankruptcy protection (Bankr. M.D. Tenn. Case No.: 20-05282) on Dec. 2, 2020. The petition was signed by David Doyle Miller, member. The Debtor estimated $4,579,945 in assets and $3,304,162 in liabilities. Judge Marian F. Harrison presides over the case. Griffin S. Dunham, Esq. at DUNHAM HILDEBRAND, PLLC serves as the Debtor's counsel. MILLS FORESTRY: Creditor CFSC Says Amended Disclosures Deficient ---------------------------------------------------------------- Creditor Caterpillar Financial Services Corporation ("CFSC") objects to the First Amended Disclosure Statement for Plan of Reorganization filed by debtors Mills Forestry Service, LLC and Sammy Clyde Mills III. CFSC asserts certain claims against the Estate of Sammy Mills that are not properly addressed in the Disclosure Statement. Specifically, the Disclosure Statement fails to account for, and provide payment for, the guaranteed obligations as entered into between CFSC and Sammy Mills. CFSC objects to the Disclosure Statement to the extent it improperly discriminates against CFSC's anticipated deficiency claims arising from the repossession and sale of the Security Agreement 4 Collateral and any additional collateral that may later be surrendered. CFSC asserts that the Disclosure Statement fails to set forth the value of the Retained Collateral as agreed to by the parties. Without this information, a creditor cannot determine if the Liquidation Test is satisfied or if the proposed claim treatment is fair and equitable. CFSC contends to the Disclosure Statement to the extent it allows Mills Forestry to surrender the Retained Collateral in exchange for a credit in the amount of the value of the Retained Collateral. CFSC states that the Disclosure Statement fails to accurately account for CFSC's claims. CFSC is an oversecured creditor, but the Disclosure Statement fails to provide for the allowance of post-petition interest, fees and costs on CFSC's claims. A full-text copy of CFSC's objection dated March 4, 2021, is available at https://bit.ly/3esUgN6 from PacerMonitor.com at no charge. Attorneys for Caterpillar Financial: ADAMS AND REESE LLP 3424 Peachtree Road, NE, Suite 1600 Atlanta, Georgia 30308 Tel: (470)427-3701 Fax: (404)500-5975 E-mail: ron.bingham@arlaw.com About Mills Forestry Service Sammy Clyde Mills, III, is a resident of Kite, Georgia. He and his mother each own 50% of the outstanding membership interests in Mills Forestry Service, LLC, a Georgia limited liability company that operates a timber harvesting and forest service business out of Adrian, Georgia. Mr. Mills and Mills Forestry Service sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 20 30046 and 20-30058) on March 7, 2020. At the time of the filing, Mills Forestry disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Edward J. Coleman III oversees the cases. The Debtors tapped Stone & Baxter, LLP as legal counsel. MILLS FORESTRY: Responds to Disclosure Objections ------------------------------------------------- The Debtors responded to the objections to the First Amended Disclosure Statement for the Plan of Reorganization of Sammy Clyde Mills, III and Mills Forestry Service, LLC filed by Citizens Bank of Laurens County ("Citizens"), AgSouth Farm Credit ("AgSouth"), Caterpillar Financial Services Corporation ("CFSC"). Four parties objected to the Disclosure Statement. According to the Debtors, some of the objections have merit and will be resolved in an amended Plan and Disclosure Statement to be filed before the March 9 hearing; some of them are without merit and should be overruled; and others of them are typical pre-confirmation objections that, unless the Debtors indicate that they will address them now, should be reserved for the confirmation hearing. Response to Citizens' Objections: * Citizens alleges that its Claim Nos. 15, 16, and 17 are not classified in Mr. Mills' treatment chart. Class 17, an alleged unsecured claim, is classified in Mr. Mills' Class 8, along with all other unsecured claims alleged against Mr. Mills. That leaves Claims 15 and 16. The Debtors are not inclined to change the Plan and reserve their rights as to Citizens claims. * Citizens objects to Disclosure Statement § V(E)(9) (DS at 53)2 regarding awards of (preconfirmation) post-petition interest, attorneys' fees, and expenses. Those items are never awarded unless a plan provides for them—Debtors' Plan does not—or a court awards them on a creditor's motion. * Without providing any legal support, Citizens thinks that the Debtors should lose their Petition Date rights and defenses as to claims and causes of action unless they're "filed and resolved prior to confirmation." That's not how it works. Indeed, every single Plan that Debtors' undersigned counsel has ever confirmed involves post-confirmation claims objections and/or post-confirmation causes of action, including bankruptcy causes of action. The same is true for all Chapter 11 plans in the United States unless a plan provides otherwise. * Citizens objects to § V(G)(7) of the Disclosure Statement but does not explain why. Thus, the objection should be overruled unless Citizens can articulate the reason for its objection. * Citizens states that the Disclosure Statement doesn't contain adequate information, but doesn't state what information is lacking, such that it's impossible for the Debtors to respond. This objection should be overruled. Response to AgSouth's Objections: * AgSouth objects to its classification of AgSouth under the MFS Class 9. The claims between one or more of the Debtors, on the one hand, and AgSouth, on the other hand, are complicated and confusing, and allegedly secured by collateral that is owned by one or more Debtors. To be sure, a portion of the collateral allegedly securing the AgSouth claims is owned by Debtor MFS and a portion is owned by Debtor Mills. However, all of the collateral allegedly securing the AgSouth claims will be sold via an auction, with all of the net auction proceeds going to AgSouth for its collateral as its interests appear. * AgSouth objects that its Claim No. 4 is not classified on the Sammy Mills side. However, following the proposed auction, the remaining claims of AgSouth will be unsecured deficiency claims that will be treated in Class 8 or non-dischargeable claims that will be treated in Class 7. Thus, Debtors' treatment of AgSouth properly accounts for all claims of AgSouth. * The Disclosure Statement's Claim Summary exhibit is not intended to be exhaustive. Debtors have disclosed asset ownership and their understanding of lien status and position based on their best information. When revising the Disclosure Statement, however, the Debtor will check the disclosures again and will revise it for AgSouth as appropriate. Response to CFSC's Objections * CFSC states that the Disclosure Statement fails to account for or provide payment of alleged guaranties of Mr. Mills in favor of CFSC. Presumably, CFSC is referring to the fact that its Claim Nos. 26, 27, 28, and 29 are not listed on the Claims Summary exhibit for Mr. Mills. To start, the Claims Summary exhibit is not intended as an exhaustive or binding summary of claims or a summary that would somehow alienate or exclude a creditor's already-pending claims against the Debtors. That said, the confusion appears to be that the Debtors listed on that exhibit four claims against Mr. Mills by CFSC as unsecured claims (i.e., the alleged guaranties) but inadvertently listed the Proof of Claim numbers for the related secured claims against MFS. The Debtors will revise the exhibit for Mr. Mills so that it refers to Claim Nos. 26, 27, 28, and 29 rather than 21, 22, 23, and 24. * CFSC states that the Disclosure Statement—really the Plan—fails to account for any anticipated deficiency on claims for which MFS surrendered collateral. However, the Plan and Disclosure Statement propose the treatment of all deficiency claims in Class 8 for Mr. Mills and Class 15 for MFS. Response to United States Trustee's Objections * The UST objects to the Plan to the extent that Mr. Mills is only proposing three years of disposable income as projected in the Budget. To resolve this objection, Mr. Mills will revise the treatment in Class 8 to provide for five years of Mr. Mills' disposable income in the event that an unsecured creditor with an allowed claim objects to confirmation, and will reference § 1129(a)(15) in the Class 8 treatment proposal. * There is no requirement that the Debtors provide in the Disclosure Statement a summary of past historical income and expenses, especially from a year that reflects an extraordinary departure from prior years due to COVID-19. Additionally, the Budgets for Mr. Mills and MFS provide a detailed, line item by line item explanation of the underlying Budget Assumptions, including a description of how each item was calculated and a summary of any departures from amounts received or expended since the Petition Date. * The UST alleges that Mr. Mills is delinquent in paying his quarterly fees in the amount of $650.10. According to Mr. Mills, he mailed a check for $651.10 last Wednesday. Paying quarterly fees is no doubt a Code requirement but the Debtors disagree that it has any bearing on feasibility assessments in these cases. * The unsecured treatment description is extensive, detailed, and sufficient. The Liquidation Analysis explicitly discloses the anticipated payout percentage in each case—approximately 1.01% in Mr. Mills' case and 4.41% in MFS's case. Finally, the Budget shows all unsecured payments that are to be made and when they will be made. Finally, the Liquidation Analysis and the Budgets are not inconsistent. What the United States Trustee overlooks is that the Liquidation Analysis figures not only include the payments to unsecured creditors in Classes 8 and 15, but they also include the administrative convenience class payments to unsecured creditors in Classes 6 and 14. Counsel for Debtors: David L. Bury, Jr. Georgia Bar No. 133066 G. Daniel Taylor Georgia Bar No. 528521 STONE & BAXTER, LLP 577 Mulberry Street, Suite 800 Macon, Georgia 31201 (478) 750-9898; (478) 750-9899 (fax) dbury@stoneandbaxter.com dtaylor@stoneandbaxter.com About Mills Forestry Service Sammy Clyde Mills, III, is a resident of Kite, Georgia. He and his mother each own 50% of the outstanding membership interests in Mills Forestry Service, LLC, a Georgia limited liability company that operates a timber harvesting and forest service business out of Adrian, Georgia. Mr. Mills and Mills Forestry Service sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 20-30046 and 20-30058) on March 7, 2020. At the time of the filing, Mills Forestry disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Edward J. Coleman III oversees the cases. The Debtors tapped Stone & Baxter, LLP as legal counsel. MILLS FORESTRY: US Trustee Opposes to Plan & Disclosures -------------------------------------------------------- Nancy J. Gargula, United States Trustee for Region 21, objects to the Disclosure Statement and to Plan confirmation filed by debtors Mills Forestry Service, LLC and Sammy Clyde Mills III. The United States Trustee claims that the Disclosure Statement provides no information regarding the debtors' actual income and expenses during the pendency of this chapter 11 case. As a result, creditors have no baseline of actual historical income and expense data to compare against the income and expense projections in the Disclosure Statement. The United States Trustee points out that the chart summarizing the treatment of creditor classes fails to specify the minimum amount of money that will be the subject of each annual pro rata distribution to the creditors in Class 8 in the individual case and Class 15 in the corporate case. The United States Trustee asserts that paragraph 4.2.7(b) of the Plan should be modified to provide a deadline for filing any delinquent federal, state, and local tax returns. The debtors are currently delinquent in filing corporate and individual income tax returns for 2019. The United States Trustee further asserts that paragraph 4.2.9 of the Plan appears to be another exculpation provision in favor of the Reorganized Debtors, Carla Womack, and Sammy Clyde Mills, III. As such, it is overly broad and duplicative of the exculpation provision appearing in Paragraph 8.2 of the Plan. The United States Trustee states that the Plan does not provide for full payment of unsecured claims with interest, and the existing owners of the corporate debtor are retaining their ownership interests without contributing new value or subjecting the ownership interest in reorganized MFS to competing bids from interested parties. A full-text copy of the United States Trustee's objection dated March 4, 2021, is available at https://bit.ly/2N6mTEv from PacerMonitor.com at no charge. About Mills Forestry Service Sammy Clyde Mills, III, is a resident of Kite, Georgia. He and his mother each own 50% of the outstanding membership interests in Mills Forestry Service, LLC, a Georgia limited liability company that operates a timber harvesting and forest service business out of Adrian, Georgia. Mr. Mills and Mills Forestry Service sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 20-30046 and 20-30058) on March 7, 2020. At the time of the filing, Mills Forestry disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Edward J. Coleman III oversees the cases. The Debtors tapped Stone & Baxter, LLP, as legal counsel. NATIONSTAR MORTGAGE: Moody's Alters Outlook on B2 CFR to Positive ----------------------------------------------------------------- Moody's Investors Service has affirmed Nationstar Mortgage Holdings Inc.'s B2 corporate family and backed long-term senior unsecured ratings, as well as Wand Merger Corporation's B2 backed long-term senior unsecured rating and Nationstar Mortgage LLC's B2 long-term issuer rating. The outlook was revised to positive from stable. While the ratings were affirmed at their current levels, the change in outlook to positive from stable reflects the company's profitability improvements and its enhanced capacity to grow its capitalization levels through increased earnings, which Moody's expects to persist over the next 12-18 months. Affirmations: Issuer: Nationstar Mortgage Holdings Inc. LT Corporate Family Rating, Affirmed B2 Backed Senior Unsecured Regular Bond/Debenture, Affirmed B2 Issuer: Wand Merger Corporation Backed Senior Unsecured Regular Bond/Debenture, Affirmed B2 Issuer: Nationstar Mortgage LLC LT Issuer Rating, Affirmed B2 Outlook Actions: Issuer: Nationstar Mortgage Holdings Inc. Outlook, Revised To Positive From Stable Issuer: Wand Merger Corporation Outlook, Revised To Positive From Stable Issuer: Nationstar Mortgage LLC Outlook, Revised To Positive From Stable RATINGS RATIONALE The affirmation of Nationstar's B2 corporate family rating reflects the company's strong position in the US residential mortgage origination and servicing market, which will allow it to continue to benefit from profitability improvements due to high origination volumes in the current low interest rate environment. Additionally, it reflects the company's solid liquidity position. The rating also takes into consideration the risks to creditors from its modest capitalization, which limits its ability to absorb unexpected losses. As Moody's expected, lower interest rates led to an increase in origination volumes in 2020, particularly refinancing, which combined with elevated gain on sale margins, which boosted the company's profitability and allowed it to modestly reduce leverage. The company reported net income of approximately $191 million in the fourth quarter of 2020, which corresponds to an annualized net income/average managed assets ratio of 3.2%, compared to 1.5% for 2019. Moody's expects profitability to continue to be strong in 2021 but lower than in 2020, which should allow the company to continue to reduce leverage. Nationstar's capital level is adequate with adjusted tangible common equity (tangible common equity minus deferred tax assets) to adjusted tangible managed assets (tangible assets minus Ginnie Mae loans eligible from repurchase and Home Equity Conversion Mortgages) of 9.0% as of 30 December 2020. The company has continued to maintain solid liquidity, as evidenced by the extension of the maturity of its corporate debt. In December 2020, Nationstar issued $650 million in 5.125% senior unsecured notes due in 2030 to redeem in full its outstanding 9.125% senior unsecured notes due 2026. It also attained a fully committed two-year $900 million Ginnie Mae mortgage servicing rights and advance facility in August 2020. Moody's also increased the operating environment score for nonbank mortgage companies to Ba3 from B1. The operating environment, a key component of Moody's rating analysis, measures the extent to which external conditions can have a meaningful influence on finance companies' credit profiles, capturing the relevant economic, judicial, regulatory, institutional and general operating conditions that may affect finance companies' creditworthiness. The revision reflects a modest increase in barriers to entry, modestly increasing stability of nonbank mortgage firms as larger companies mature, particularly with respect to a strengthening of their governance and liquidity profiles, and reduced mortgage industry uncertainty as accelerated reform for Federal National Mortgage Association (Fannie Mae, Aaa) and Federal Home Loan Mortgage Corp. (Freddie Mac, Aaa) is unlikely to be pursued. Moody's has revised Nationstar's outlook to positive from stable, reflecting the company's profitability improvements and its enhanced capacity to grow its capitalization levels through increased earnings, which Moody's expects to continue over the next 12-18 months. The B2 senior unsecured bond rating is based on Nationstar's B2 corporate family rating and the application of its Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company continues to demonstrate sustainable improvement in its financial performance, such as achieving and maintaining capitalization as measured by adjusted tangible common equity to adjusted tangible managed assets of 13.5% or higher and maintaining net income to total assets of more than 1.5%, while preserving its servicing performance and franchise value. Given the positive outlook, a ratings downgrade is unlikely over the next 12-18 months. Negative rating pressure could occur if the company's financial performance materially deteriorates, for example, if capitalization decreases to 5% or lower as measured by adjusted tangible common equity to adjusted tangible managed assets, or if net income to assets falls to less than 0.75% for an extended period of time or if the company's liquidity position deteriorates beyond an adequate buffer to its debt covenants. In addition, the ratings could be downgraded in the event of material negative regulatory actions that would impair Nationstar's franchise and therefore its ability to remain profitable. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. NCR CORP: Fitch Assigns First-Time 'BB-' LongTerm IDR ----------------------------------------------------- Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR) of 'BB-' to NCR Corporation (parent and financial filer). The Rating Outlook is Stable. Fitch also assigned a 'BB-' IDR to co-borrowers on the company's senior secured facilities, including NCR Limited, NCR Nederland B.V. and NCR Global Solutions Limited. Fitch also assigned issue-level ratings of 'BB'/'RR2' to the company's senior secured revolving credit facility and term loan as well as 'BB-'/'RR4' to the company's senior unsecured notes and convertible preferred stock. The ratings impact approximately $3.3 billion of outstanding gross debt at YE 2020, not including the company's $1.1 billion senior secured revolving facility. The rating also contemplates the expected mid-2021 closure of the $2.5 billion Cardtronics acquisition, which could add $2.6 billion or more of incremental debt. NCR is one of the leading technology providers of various hardware and software solutions that service the banking, retail and hospitality industries including ATMs, point-of-sale (POS) devices/systems, self-service kiosks and digital banking solutions. The company historically generated solid FCF but revenue growth has been volatile and NCR faces both competitive challenges and secular pressures in certain areas of its business. Additionally, leverage will be elevated in the near term following its pending acquisition of Cardtronics plc. KEY RATING DRIVERS Cardtronics Acquisition: Fitch believes the pending Cardtronics acquisition will further diversify the company's business mix away from hardware sales and advance its strategy toward a higher mix of recurring revenue, as Cardtronics generates most of its revenue from ATM operation fees. Leverage will be high upon completion (gross leverage in the mid-4.0x range) but Fitch expects it to come down quickly and return to within the context of the IDR. Management indicated publicly it plans to use all excess FCF in the near-term to reduce debt and net leverage to below 3.5x by YE 2022. Cardtronics claims to operate the world's largest non-bank ATM network. Fitch believes there are secular challenges for ATMs and cash over time, but independent operators such as Cardtronics can benefit for years to come from ongoing outsourcing as banks continue to close branches. Coronavirus Impact: NCR's business was materially impacted in 2020 with revenue and Fitch-calculated EBITDA down 10% and 17%, respectively. Fitch believes NCR could remain pressured in the near-term, given nearly 50% of its business is from less recurring sources of revenue including hardware and certain services/software sales. The company also has meaningful exposure to customers in the retail and hospitality industries, which were materially impacted by the pandemic. Its biggest exposure in retail includes grocery stores, drug stores and big-box retailers. Areas such as groceries that fared better during the pandemic may be too resource-constrained for meaningful equipment/IT investments. Recurring Revenue: Approximately 54% of NCR's 2020 revenue is from recurring revenue sources, including products and services under contract where revenue is recognized over time. This recurring mix is materially lower than other companies Fitch rates in the payments and digital banking technology industries and is a consideration with respect to the IDR. Management seeks to grow this mix to 60%-70% of total sales by 2024, which Fitch believes will come via a combination of internal sales initiatives, growth in payment processing (via its December 2018 JetPay acquisition) and incremental M&A. M&A Risk: Fitch believes NCR will continue to use M&A as a way to grow its business in the coming years, which brings both integration and balance sheet risk. The FinTech industry has been particularly active with M&A, and Fitch expects this trend will continue given secular growth trends underway and strong/stable FCF characteristics in the industry. Including Cardtronics, NCR will have completed nearly 20 deals since 2014 for more than $4.6 billion collectively. The company's largest acquisitions to date were its pending Cardtronics deal ($2.5 billion) and its January 2014 Digital Insight Corp. purchase ($1.6 billion), which diversified it beyond ATMs, POS and self-service kiosks and into digital banking solutions. ATM Challenges: ATMs and related software/services comprise the biggest piece of legacy NCR's revenue, or near 40% by Fitch's estimate. Fitch believes ATM sales could be pressured over the medium/long-term as consumer habits shift further away from cash toward electronic payments although increased outsourcing from banks could act as an offset to lower cash usage. The Nilson Report projects cash usage will decrease from 22% of transactions in the U.S. in 2019 to 12% by 2024. Management's latest guidance forecasts ATM hardware sales will be flat in the next five years, which is reflective of this view. Fitch believes demand for cash/ATMs will have a long tail and NCR, as one of two market leaders with combined 50%-60% share, will continue to derive material profitability from the business. Competitive End Markets: NCR has meaningful presence in its key end markets, but competition is intense and fragmented in a number of areas. NCR has leading market share in retail POS software, restaurant software and self-checkout systems and is the No. 2 vendor in ATM manufacturing with 25%-30% share behind that of Diebold Nixdorf, Inc. It also will have the world's largest non-bank ATM operator following its Cardtronics acquisition. Across its business, however, it faces a wide range of competition from large FinTech providers (Fidelity National Information Services, Inc.; Fiserv, Inc.; and others), technology-focused disruptors (Square, Inc.; Toast, Inc.; and others) and others that could limit growth over time. Increased Leverage Post Cardtronics: Fitch expects NCR's leverage to increase to levels beyond Fitch's negative rating sensitivity for the 'BB-' rating category upon completion of the Cardtronics deal. However, this should be temporary and Fitch believes management will prioritize debt reduction through YE 2022. Fitch estimates gross leverage will increase to the mid-4x range on a pro forma basis in 2021 upon completion of the Cardtronics deal. However, stable FCF generation should enable deleveraging to the mid-3x range by YE 2022 absent any material M&A activity. Gross leverage was in the 3x-4x range in recent years, which Fitch believes is manageable for the rating category and for the company's solid FCF generation profile. Solid Cash Flow: Fitch views the company's historic track record of solid FCF generation as a key rating consideration. NCR generated positive FCF in all except two years from 2007-2020, with 2012-2013 being negatively impacted by approximately $800 million of pension contributions (FCF was positive during these years adjusted for these items). Fitch believes NCR will continue to generate strong FCF in the next few years although working capital improvements realized during 2020 may be tough to replicate and an underfunded pension could consume cash in the future. Underfunded Pension: Fitch believes NCR's unfunded pension could be a use of cash in the future, but a $70 million discretionary payment made in 2020 should delay any material mandatory contributions until 2023. Any future contributions should be manageable given the company's historic track record of positive FCF generation. NCR's pension obligation was $3.3 billion and was underfunded by $667 million in December 2020 versus $579 million in December 2015. The company has domestic and foreign defined benefit pension and postemployment as well as domestic postretirement plans. DERIVATION SUMMARY Fitch's ratings and Outlook for NCR are supported by the company's strong market position across its business, diversification of end markets, history of positive FCF generation, and moderate leverage for the rating category. NCR does not have any direct comparables given the diverse nature of its end markets, but Fitch assesses the rating relative to other FinTech companies that provide a range of similar software, hardware and service offerings. Unlike other companies that Fitch rates in the FinTech space, NCR's exposure to payments processing is minimal and the company derives most of its revenue and profitability from software, services and hardware. It operates a meaningfully lower margin business than other Fitch-rated FinTech peers due to a higher mix of hardware and services. Euronet Worldwide, Inc. (BBB/Negative) is materially smaller by revenue and EBITDA but historically managed a much more conservative balance sheet, with gross leverage historically in the 1x-2x range. NCR has a much stronger operating position than competitor Diebold Nixdorf Incorporated (b-*/Stable), which has much higher leverage (above 6.5x), lower EBITDA margins (in the high single-digit percentages versus NCR's mid/high-teens percentages) and burned FCF in recent years. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3' - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -− Revenue: Organic growth in the low to mid-single-digit range in the coming years, with incremental growth from the Cardtronics acquisition (projected to close in 2021). -- EBITDA: Margin expansion to more than 20% in the next few years driven by a higher mix of software and services, higher margin EBITDA from Cardtronics and cost-saving initiatives. -- Capex: Near 5% of revenue in the next few years, or similar to recent years. -- M&A: Assumes $2.5 billion Cardtronics acquisition closes in mid-2021. -- Capital Allocation: The majority of excess cash flow goes to debt reduction in the near-term until the company achieves net leverage below 3.5x, with share repurchases likely being resumed after this leverage is achieved. -- Debt/leverage: Increases materially to mid-4x following the Cardtronics deal in 2021, but leverage returns to mid-3x range by YE 2022 via debt reduction and EBITDA growth. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch-defined gross leverage, or total debt with equity credit to operating EBITDA, sustained at/below 3.5x; -- Revenue expected to grow by low-to-mid-single digit percentage (above 3%-5%) or higher over multiple years, signaling an improved long-term growth profile. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Gross leverage sustained at/above 4.0x; -- FCF margins expected to be sustained near 1.0% or below, or below historical levels; -- Competitive and/or structural changes to industry that pressure revenue, EBITDA and/or FCF. 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 Sufficient Liquidity: NCR's liquidity is stable and should support its operations, growth, and M&A strategy in the coming years. Liquidity is supported by: (i) $338 million of cash and equivalents at December 2020; (ii) an undrawn $1.1 billion senior secured revolver; (iii) FCF generation, which ranged between $223 million and $628 million per year from 2016 to 2020 (FCF margins of 4%-10%); and (iv) up to $300 million of borrowing capacity under its accounts/receivables securitization facility. Cardtronics generated average FCF of $132 million per year from 2014 to 2020, with a range between $79 million and $227 million. Debt Profile: Approximately 75% of NCR's debt was fixed rate at December 2020, excluding preferred stock. Outstanding debt consists of: (i) $741 million of senior secured term loans; and (ii) $2.5 billion of senior unsecured notes with maturities ranging between 2025 and 2030. The company also has a $1.1 billion senior secured revolver and a $300 million trade receivables securitization facility available for liquidity needs. The company also has $273 million of Series A convertible preferred stock outstanding as of December 2020, which Fitch considers to be debt as per Fitch's Corporate Hybrids criteria. NEW YORK HOSPITALITY: To Sell Austin Hotel to Fund Plan ------------------------------------------------------- New York Hospitality, JV, has proposed its First Amended Plan of Liquidation Dated March 8, 2021 that is designed to repay its debts from the sale of substantially all of its property, including the real and personal property of a 62-room hotel in Austin, Texas, known as the Days Inn South. In particular, the Debtor received a written offer, in the form of Commercial Contract – Improved Property, to purchase the Sale Assets for $3.8 million from Vishal Dave, who is the on-site manager of the Hotel. The Bankruptcy Court has approved Mr. Dave as a "Stalking Horse Bidder," to attract and compete against other bidders in an auction of the Sale Assets. The Bankruptcy Court has also established bidding procedures in connection with the solicitation of pre-Auction opening bids and at the Auction itself. As of the filing of this Disclosure Statement, the deadline for submitting opening bids is March 15, 2021, and the Auction is scheduled to take place on April 1, 2021, with closing of the sale to the highest bidder anticipated to occur on April 15, 2021. Creditors will be paid in the order of their priority under the Bankruptcy Code and other applicable law. Some will be paid in full at closing or within 30 days after closing, and others will receive their first payments within 30 days after closing, with a final payment to follow after the payment of all Administrative Claims and Disputed Claims. The Plan gives the Debtor until June 14, 2021, to close the Sale. If there has been no closing as of that date, and if the Secured Creditor does not consent to any extension of that deadline, it will be permitted to foreclose its lien, and almost all other Creditors are not expected to receive any payment from the Debtor on their Claims. The Debtor hopes that the Sale Assets can be sold through the Auction for more than $4.324 million; with each (approximately) $45,000 increment above that purchase price, the Debtor estimates, an additional 10% dividend on Unsecured Claims may be paid. There is, however, no guarantee it can be sold for even as much as the current offer, which has contingencies such as financing and a due diligence period. For more information, please review the full Plan, which is being sent to you with this Disclosure Statement. Class 8 consists of the Allowed Claims listed as Unsecured, but not as unliquidated, contingent or disputed, as it has been or may be amended, and/or those asserted in the proofs of claim filed in the Bankruptcy Case. The Class 8 Claims this time are estimated to total $455,612.33, not including the Claim of Days Inn for the pre-petition arrearage on its franchise agreement, which will be paid as if it were a Priority Claim if the agreement is assumed and assigned in the Sale. Each of these Claims will be paid the lesser of (1) the Allowed amount of the Claim, including interest at 2.0% per annum from and after the Filing Date, or (2) the Claim's pro rata share of the net proceeds of the Sale of the Sale Assets after payment in full, with interest, of all other Classes of Claims. Attorneys for the Debtor: B. WELDON PONDER, JR. Spicewood Professional Offices 4408 Spicewood Springs Rd., Austin, TX 78759 Office: (512) 342-8222 Fax: (512) 342-8444 E-mail: welpon@austin.rr.com - and - CATHERINE LENOX Post Office Box 9904, Austin, TX 78766 Office: (512) 689-7273 Fax: (512) 451-7273 E-mail: clenox.law@gmail.com A copy of the Disclosure Statement is available at https://bit.ly/3erYrc2 from PacerMonitor.com. About New York Hospitality New York Hospitality, JV, a single asset real estate (as defined in 11 U.S.C. Sec. 101(51B)). It owns a 61-room hotel with fitness center in Austin, Texas, on the south-bound frontage road of IH-35, just south of its intersection with U.S. Route 290/Texas State Highway 71. The hotel is operated via a franchise agreement with Days Inn Worldwide, Inc. New York Hospitality filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-10765) on July 6, 2020. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Tony M. Davis oversees the case. The Debtor has tapped B. Weldon Ponder, Jr., Esq., and Catherine Lenox, Esq., as its bankruptcy attorneys, and Calzaretto & Company, LLC as its accountant. NINE ENERGY: Incurs $378.9 Million Net Loss in 2020 --------------------------------------------------- Nine Energy Service, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $378.95 million on $310.85 million of revenues for the year ended Dec. 31, 2020, compared to a net loss of $217.75 million on $832.94 million of revenues for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $442.60 million in total assets, $422.19 million in total liabilities, and $20.41 million in total stockholders' equity. During the fourth quarter of 2020, the Company reported revenues of $62.0 million with adjusted gross loss of $(5.0) million. During the fourth quarter, the Company generated ROIC of (35)%. During the fourth quarter of 2020, the Company reported selling, general and administrative expense of $11.0 million, compared to $10.7 million for the third quarter of 2020. For the year ended Dec. 31, 2020, the Company reported SG&A expense of $49.3 million, compared to year ended Dec. 31, 2019 SG&A expense of $81.3 million. Depreciation and amortization expense in the fourth quarter of 2020 was $11.8 million, compared to $11.9 million for the third quarter of 2020. For the year ended Dec. 31, 2020, the Company reported D&A expense of $48.9 million, compared to year ended Dec. 31, 2019 D&A expense of $68.9 million. The Company recognized an income tax benefit of approximately $0.1 million in the fourth quarter of 2020 and an overall income tax benefit for the year of approximately $2.5 million, resulting in an effective tax rate of 0.6% for 2020. The 2020 income tax benefit is primarily comprised of changes to the Company's valuation allowance position due to impairment recorded during the first quarter of 2020, as well as tax benefit from the five-year net operating loss carryback provision provided by the Coronavirus Aid, Relief, and Economic Security Act signed into law during the first quarter of 2020. For the year ended Dec. 31, 2020, the Company reported net cash used in operating activities of $(4.9) million. For the year ended Dec. 31, 2020, the Company reported total capital expenditures of $10.2 million, which fell within Management's guidance of $10-$15 million, compared to the year ended Dec. 31, 2019 total capital expenditures of $62.1 million. As of Dec. 31, 2020, Nine's cash and cash equivalents were $68.9 million, and the Company had $37.9 million of availability under the revolving credit facility, which remains undrawn, resulting in a total liquidity position of $106.8 million as of Dec. 31, 2020. Management's Comments "As anticipated, holiday and weather shutdowns were not as pronounced as we have seen historically during the fourth quarter," said Ann Fox, president and chief executive officer, Nine Energy Service. "Activity improvements are reflected in our 25% increase in revenue quarter over quarter; however, a combination of continued pricing pressure, as well as one-off, non-cash items negatively affected net loss and adjusted EBITDA." "The market continues to face unparalleled uncertainty and heightened volatility. Throughout 2020, we were always balancing the short, medium, and long-term needs of the Company including making significant cost-reductions to preserve liquidity, but also maintaining key people, assets, and our footprint in order not to impede the future earnings of the Company. Although profitability was down year over year in conjunction with activity, we were able to demonstrate our ability to flex with the market and preserve liquidity through good working capital management and ended the year with a cash balance of $68.9 million and an undrawn ABL. We were also able to reduce our debt through opportunistic bond buybacks at approximately 27% of par value." "Operationally, our team once again demonstrated their ability to gain market share, growing our percentage of US stages completed from approximately 17% in 2019 to approximately 23% in 2020. We organically expanded our cementing service line into the Haynesville and continue to be pleased with the adoption of our dissolvable plugs, despite an unprecedented backdrop for commercializing new technology. Additionally, despite a year with new protocols and ways of working, Nine ended the year with the lowest TRIR in the Company's history of 0.30." "While we have seen improvement in the market throughout Q4 2020, we are still anticipating a very challenging environment in 2021 and expect E&P capital spend will be down year over year. Q1 2021 is off to a slower start as customers finalize their 2021 activity plans and many completion schedules are delayed. Additionally, the inclement weather in Texas caused significant shutdowns within all service lines. Texas weather-related shutdowns in February aside, we anticipate the pace of Q1 activity and revenue will be better sequentially than Q4, but still expect to generate a net loss and negative adjusted EBITDA for the quarter. For Nine, we will continue to flex with the market and our strategy is unchanged. We are focused on building an asset-light business with high barriers to entry and will continue to differentiate through our service execution and leading technology." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1532286/000153228621000006/nine-20201231.htm About Nine Energy Service Nine Energy Service is an oilfield services company that offers completion solutions within North America and abroad. The Company brings years of experience with a deep commitment to serving clients with smarter, customized solutions and resources that drive efficiencies. Serving the global oil and gas industry, Nine continues to differentiate itself through superior service quality, wellsite execution and cutting-edge technology. Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and throughout Canada. * * * In March 2020, Moody's Investors Service downgraded Nine Energy Service, Inc.'s Corporate Family Rating to Caa1 from B2, Probability of Default Rating to Caa1-PD from B2-PD and senior unsecured notes rating to Caa2 from B3. Nine's Speculative Grade Liquidity rating remains unchanged at SGL-2. The outlook remains negative. "Nine's rating downgrades reflect pressures on credit quality in the weak commodity price environment and lower capital spending by the upstream energy sector," said Jonathan Teitel, Moody's Analyst. As reported by the TCR on Nov. 23, 2020, S&P Global Ratings raised its issuer credit rating on U.S.-based oil field services provider Nine Energy Service Inc. to 'CCC' from 'SD', reflecting its assessment of the company's credit risk following debt repurchases. NSITE VENTURES: Distribution to Creditors in October 2021 --------------------------------------------------------- [N]Site Ventures, LLC, submitted an Amended Plan of Reorganization. The Plan was amended to include the following language to the unsecured creditors: "The Debtor has extended the term of lease through Sept. 30, 2021. An amendment to the lease was executed. The Debtor will continue to do business in Ventura California through September 2021. Distribution of monies to creditors will occur on or before October 2021." As reported in the TCR, the Debtor has proposed a plan that says allowed unsecured claims will be paid 100%. A copy of the Plan of Reorganization dated March 8, 2021, is available at https://bit.ly/3epCPNr from PacerMonitor.com. A full-text copy of the Disclosure Statement dated Jan. 13, 2021, is available at https://bit.ly/3nNqXpp from PacerMonitor.com at no charge. Counsel for the Debtor: Corey B. Beck THE LAW OFFICE OF COREY B. BECK, P.C. 425 South Sixth Street Las Vegas, Nevada 89101 Ph: (702) 678-1999 Fax: (702) 678-6788 E-mail: becksbk@yahoo.com About [N]Site Ventures [N]Site Ventures, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 20-12931) on June 18, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Corey B. Beck, Esq. O & B HACKING: Plan Approval Deadline Extended to May 10 -------------------------------------------------------- Judge Jil Mazer-Marino has granted O & B Hacking, Corp.'s motion to extend until May 10, 2021, its time to obtain approval of a Chapter 11 Small Business Disclosure Statement and to confirm a Chapter 11 Small Business plan of reorganization. In seeking the extension, the Debtor said a 60-day extension is necessary in case it needs to file an amended plan. The Debtor has reached a settlement agreement with DePalma Acquisition I, LLC, as successor in interest to National Credit Union Administration Board, as liquidating agent for Melrose Credit Union, the main creditor in the case. About O & B Hacking, Corp. Based in Brooklyn, New York, O & B Hacking, Corp., owner of two NYC Taxi medallions #7J18 and 7J19, filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-46885) on Nov. 14, 2019, listing under $1 million in both assets and liabilities. Alla Kachan, Esq. at the Law Offices of Alla Kachan, P.C., is the Debtor's counsel. OECONNECTION LLC: Moody's Completes Review, Retains B3 CFR ---------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of OEConnection LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 2, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations OEConnection's B3 corporate family rating reflects its small scale, relative to peers in the rating category, as well as the company's customer concentration within Ford and GM networks. Aggressive financial policies with very high financial leverage also weigh on the credit. The ratings are supported by a strong market position in the niche original auto parts software segment. A sticky business model with a recurring revenue base and high retention rates are credit positive. High margins with low capex requirements support cash flow generation. The company's subscription-based software solutions provide stability against economic downturns, despite the cyclical characteristics of its client base. The principal methodology used for this review was Software Industry published in August 2018. OSUM PRODUCTION: Moody's Withdraws B3 CFR on Waterous Takeover -------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings for Osum Production Corp., consisting of a B3 Corporate Family Rating, B3-PD Probability of Default rating, Ba3 on its senior secured revolving credit facility and B3 rating on its senior secured first lien term loan following the full repayment of its credit facilities. The outlook was changed to rating withdrawn from negative. The repayment follows the completion of Waterous Energy Fund's takeover transaction of Osum Oil Sands Corp., the parent of Osum Production Corp., on March 2, 2021. The transaction resulted in a change of control under the Osum term loan that required the outstanding balance to be repaid. Moody's no longer rates any of Osum's debt obligations post transaction, resulting in the withdrawal of the issuer's corporate family rating and its probability of default rating. Withdrawals: Issuer: Osum Production Corp. Corporate Family Rating, Withdrawn , previously rated B3 Probability of Default Rating, Withdrawn , previously rated B3-PD Senior Secured First Lien Term Loan, Withdrawn, previously rated B3 (LGD4) Senior Secured Priority Revolving Credit Facility, Withdrawn, previously rated Ba3 (LGD1) Outlook Actions: Issuer: Osum Production Corp. Outlook, Changed To Rating Withdrawn From Negative RATINGS RATIONALE Osum is a private Calgary, Alberta based exploration and production company that produced 17,360 bbl/d in 2019 (all production and reserves figures are net of royalties) of bitumen from its Orion SAGD project in Cold Lake, Alberta. Osum Production Corp. is a subsidiary of Osum Oil Sands Corp. PACIFIC ALLIANCE: Unsecured Creditors to Recover 100% in Plan ------------------------------------------------------------- Pacific Alliance Corporation filed a Plan of Reorganization and a Disclosure Statement on March 8, 2021. The hearing at which the Court will determine whether to confirm the Plan will commence on Tuesday, April 27, 2021, beginning at 11:00 a.m., MDT, before the Honorable R. Kimball Mosier, United States Bankruptcy Judge, in Room 369 of the Frank E. Moss United States Bankruptcy Court for the District of Utah, 350 South Main Street, Salt Lake City, UT 84101. The ballot must be received by no later than 5:00 p.m., MDT, on Thursday, April 15, 2021, or it will not be counted. Objections to the confirmation of the Plan must be filed with the Court and served so that they are received by no later than 5:00 p.m., MDT, on Thursday, April 15, 2021. Following payment of Parr Brown Gee & Loveless's contingency fees in this action and certain other approved legal fees and other costs, the Debtor is holding approximately $400,000. It is these funds with which the Debtor proposes to make certain initial payments under the Plan and to pursue litigation against Menscer in Utah state court, and, if successful, to pursue collection in North Carolina. The Plan treats claims as follows: * Class 3A - General Unsecured Claims will recover 100% of their claims. Each holder of an Allowed Class 3A Claim will receive from the New Litigation Proceeds Fund, payment up to in full of its Allowed Class 3A Claim, without interest. Class 3A is impaired. * Class 3B - Unsecured Insider Claims will recover 25% to 100%. Each holder of an Allowed Class 3B Claim will receive from the New Litigation Proceeds Fund payment up to in full of its Allowed Class 3B Claim, without interest. Class 3B is impaired. * Class 4 - A Series A Interests will recover 0% to 100%. Holders of Allowed Class 4A Interests will receive ownership of the Reorganized Debtor in the same percentages of their ownership of Series A Interests. Class 4 is impaired. * Class 4B - Series B Interests will recover 0% to 50%. Each holder of an Allowed Class 4B Interest will receive payment of cash from the New Litigation Proceeds Fund in an amount equal to the holder's percentage interest in an amount of up to $2,593,945 after Class 1A, 1B, 3A, 3B, and 4A are satisfied in full. Class 4B is impaired. * Class 4C to Common Interests. Each holder of an Allowed Class 4C Interest will receive payment of cash from the New Litigation Proceeds Fund in an amount equal to the holder's percentage interest in all amounts remaining in the New Litigation Proceeds Fund after Class 1A, 1B, 3A, 3B, 4A, and 4B are satisfied in full. Class 4C is impaired. The funds required for confirmation and performance of the Plan will be provided from existing funds from the North Carolina Settlement and further litigation the Debtor has brought and will continue or will bring. The Debtor projects that the litigation it intends to pursue will result in the recovery of between $1,000,000 and $8,500,000 or more. Attorneys for Pacific Alliance Corporation: Kenneth L. Cannon II Penrod W. Keith DENTONS DURHAM JONES PINEGAR P.C. 111 South Main Street, Suite 2400 P O Box 4050 Salt Lake City, UT 84110-4050 Telephone: (801) 415-3000 Fax: (801) 415-3500 Email: kenneth.cannon@dentons.com penrod.keith@dentons.com A copy of the Disclosure Statement is available at https://bit.ly/3t3AbB2 from PacerMonitor.com. About Pacific Alliance Pacific Alliance Corporation is the holding company for Superior Filtration Products, LLC, and Star Leasing Inc. Superior is in the business of retail residential and commercial/industrial air filter frame and housing manufacturing for the clean air industry. Star Leasing is in the trucking industry and is a general commodity carrier. Based in North Salt Lake, Utah, Pacific Alliance filed a Chapter 11 petition (Bankr. D. Utah Case No. 17-28911) on Oct. 12, 2017. The petition was signed by Steven K. Clark, its president. At the time of filing, the Debtor disclosed $2.80 million in assets and $3.38 million in liabilities. The Hon. Kimball R. Mosier is the case judge. Kenneth L. Cannon, II, Esq., at Durham Jones & Pinegar, P.C., represents the Debtor. PAUL F. ROST: Unsecureds Creditors to Get 10% Dividend in Plan -------------------------------------------------------------- Paul F. Rost Electric submitted a Second Amended Plan and a corresponding Disclosure Statement. The future business activity of the company will concentrate on the refurbishment of the Corporate Headquarters located at 716 Long Run Road, McKeesport, PA, 15132 and rental, or possibly sale, of the property. Class 4 Unsecured Tax Claimants will receive a 10% dividend on behalf of their allowed, unsecured claims. Distributions will be made pro-rata among the three claimants, beginning on the last business day of the third month following Effective Date and continuing thereafter on or before the last business day of each following three-month period, until the 24th and final payment is made 71 months after the initial payment. No interest shall be paid on unsecured claims. Class 4 is impaired under the Plan. As to Class 5 Disputed Unsecured Claims, the Debtor is unaware of any prepetition disputed unsecured claims. In the event that any disputed, unsecured claims are brought to the Debtor's attention prior to Plan confirmation, an objection will be filed to each such claim. Any disputed, unsecured claim deemed to be allowed by the Court shall be paid a 10 percent dividend of such allowed claim, on the same terms of payment as set forth in class 4. Class 6 Equity Security Claimants will not receive any distribution under the Plan, but shall retain their interest in the reorganized Debtor, in consideration of value provided by the Equity Security Holder to the Debtor to effectuate the Plan. Class 6 is impaired under the Plan. Payment for the first round of refurbishment of the building will be provided by Richard E. Rost. It is anticipated that post-renovation, the procurement of a tenant or sale of the property will provide income to make payments under the Plan. In the event that Debtor's business does not provide sufficient income to pay creditors under the Plan, the Debtor's owner, Mr. Richard E. Rost agrees to make the required payments. A copy of the Disclosure Statement is available at https://bit.ly/3clZEz1 from PacerMonitor.com. About Paul F. Rost Electric Paul F. Rost Electric, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 20-20344) on Jan. 30, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $500,001 and $1 million. Judge Jeffery A. Deller oversees the case. Dennis J. Spyra & Associates is the Debtor's legal counsel. PEARL 53: To Present Plan for Confirmation on March 24 ------------------------------------------------------ Judge Jil Mazer-Marino entered an order conditionally approving Pearl 53 LLC's Disclosure Statement as containing adequate information pursuant to Section 1125 of the Bankruptcy Code. The Court will convene a hearing to consider final approval of the Disclosure Statement and thereafter confirm the Plan on March 24, 2021 at 10:00 a.m. at the U.S. Bankruptcy Court for the Eastern District of New York, 271-C Cadman Plaza East, Brooklyn, NY 11201. Objections, if any, to final approval of the adequacy of the Disclosure Statement and/or confirmation of the Plan are due no later than March 22, 2021. About Pearl 53 LLC Pearl 53 LLC is engaged in activities related to real estate. The Company has a contract to purchase real property at 53 Pearl Street, Brooklyn, NY, having a current value of $9.85 million. Pearl 53 LLC sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-41911) on April 28, 2020. The Debtor disclosed total assets of $13,029,500 and total liabilities of $9,434,104 as of the bankruptcy filing. The Hon. Carla E. Craig is the case judge. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP, led by Kevin J. Nash, is the Debtor's counsel. PENNYMAC MORTGAGE: Moody's Alters Outlook on Ba3 CFR to Stable -------------------------------------------------------------- Moody's Investors Service has affirmed PennyMac Mortgage Investment Trust's (PMT) corporate family rating at Ba3, its long-term issuer rating at B2 and has revised the outlook to stable from negative. While the ratings were affirmed at their current levels, the change in outlook to stable from negative reflects the company's improved profitability, liquidity position and capitalization levels, which Moody's expects to persist over the next 12-18 months. Affirmations: Issuer: PennyMac Mortgage Investment Trust LT Issuer Rating, Affirmed B2 LT Corporate Family Rating, Affirmed Ba3 Outlook Actions: Issuer: PennyMac Mortgage Investment Trust Outlook, Changed To Stable From Negative RATINGS RATIONALE The affirmation of PMT's Ba3 corporate family rating reflects the company's franchise position as a top ten US mortgage originator, historically solid profitability and experienced management team. Partly offsetting these credit strengths are the risks to creditors from the company's government-sponsored enterprise (GSE) credit risk transfer (CRT) investments, along with the risks embedded in the company's reliance on short-term secured funding to finance its origination pipeline, which poses refinancing risks. In addition, the rating reflects PMT's reliance on PennyMac Financial Services Inc. (Ba3 corporate family rating, positive) as PMT is almost entirely reliant on the employees and resources of the company as its manager. Over the last several quarters, profitability and capitalization levels have improved while the company also strengthened its liquidity and funding position. In the first quarter of 2020, the company experienced an approximately 29% decline in book equity due to a $600.9 million net loss driven by an approximately $1 billion non-cash fair value (FV) decline on its GSE CRT investments. These investments represent portions of interests in newly originated loans, which PMT sells into Federal National Mortgage Association (Fannie Mae; Aaa, stable) securitizations, and as such carry credit risks for PMT. As Moody's expected, lower interest rates led to an increase in refinancing volumes in 2020, along with elevated gain on sale margins, which along with the partial FV recovery of its GSE CRT investments, boosted PMT's profitability. As a result, and despite the sizeable losses in the first quarter of 2020, the company reported net income of approximately $52.4 million for 2020, resulting in a net income to average managed assets ratio of 0.7%. With interest rates continuing to remain low, Moody's expects the company's profitability to remain solid over the next 12-18 months because of higher than historic average origination volumes. The company's capital levels have rebounded since it experienced the approximately 29% decline in book equity in the first quarter of 2020. However, PMT's strong profitability since then, resulted in a rebound in capital levels. The company's capitalization as measured by tangible common equity to tangible managed assets (TCE/TMA) was 19.9% as of December 31, 2020, compared with 20.8% as of year-end 2019, evidencing the company's continued strong ability to absorb unexpected losses. Moody's expects PMT's capital levels to remain around 20% over the next 12-18 months, due to strong profitability in its mortgage production segment. While the current economic uncertainty and volatility increases liquidity risk, the rating agency recognizes that PMT has taken steps to boost its liquidity, including diversifying its funding profile and continuing to expand as well as innovate on its MSR secured funding facilities, a credit positive. PMT has also increased the issuance of multi-year term notes, securing term financing for all of its funded CRT investments, a credit positive since term notes do not contain mark-to-market provisions that could result in margin calls. Furthermore, the majority of term notes may be extended by an additional two years at PMT's discretion, which reduces refinancing risk for the company. Moody's also increased the operating environment score for nonbank mortgage companies to Ba3 from B1. The operating environment, a key component of Moody's rating analysis, measures the extent to which external conditions can have a meaningful influence on finance companies' credit profiles, capturing the relevant economic, judicial, regulatory, institutional and general operating conditions that may affect finance companies' creditworthiness. The revision reflects a modest increase in barriers to entry, modestly increasing stability of nonbank mortgage firms as larger companies mature, particularly with respect to a strengthening of their governance and liquidity profiles, and reduced mortgage industry uncertainty as accelerated reform for Federal National Mortgage Association (Fannie Mae, Aaa) and Federal Home Loan Mortgage Corp. (Freddie Mac, Aaa) is unlikely to be pursued. The revision of PMT's outlook to stable from negative, reflects the company's improving profitability, liquidity position and strong capital levels, which Moody's expects to persist over the next 12-18 months. The B2 long-term issuer rating is based on PMT's Ba3 corporate family rating and the application of its Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company continues to improve its profitability and maintain strong capital levels, for example evidenced by net income to average managed assets increasing to, and remaining above 4.0%, and TCE/TMA remaining consistently above 20.0%. The ratings could be downgraded if the company's liquidity position deteriorates beyond an adequate buffer to its debt covenants, its franchise deteriorates demonstrated by materially weakened profitability, or its capitalization as measured by tangible common equity to tangible managed assets declines, and remains below 15%. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. PERFORMANCE AIRCRAFT: Has Access to XL Specialty's Cash Collateral ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois has authorized Performance Aircraft Leasing, Inc. to use the cash collateral of XL Specialty Insurance Company on an interim basis -- but only to the extent of payments due to Stein's Aircraft Services in the amount of $2,500 per month and additional monthly maintenance and repair charges not to exceed $1,000 per month upon approval of XL's attorneys. The Debtor and XL specifically reserve their respective rights and remedies regarding the issue of whether the lien of XL is subject to avoidance pursuant to §547(b) of the Bankruptcy Code and to determine the extent and priority of any liens held by XL. The Court will hold a hearing on April 13, 2021 commencing at 1 p.m. to determine whether or not the Debtor's offer to adequately protect XL's alleged security interest in the use of Cash Collateral by offering to (a) grant XL a replacement lien upon the assets in Debtor's estate subsequent to the filing of the Chapter 11 petition to the extent of XL's Citation lien attached to assets of the Debtor and subject to the security interest of Wachs Trust and the pending XL Adversary Action; (b) provide for adequate protection of the prior lien to Wachs Trust; and (c) maintain adequate insurance to protect the collateral against risk of loss, damage and destruction is the indubitable equivalent of the value being expended. The Debtor's authorization for the use of Cash Collateral will be terminated on the earlier of (a) the entry of a Court order vacating or reversing the Order; (b) the Effective Date under the Plan of Reorganization to be proposed by the Debtors and confirmed by final order of the Bankruptcy Court; or (c) the conversion of this case to one under Chapter 7. The matter is set for status hearing on April 13 at 1 p.m. through Zoom for Government. The Court will also holding a hearing April 13 commencing at 1 p.m. on the validity of XL's lien. A copy of the order is available for free at https://bit.ly/3vnYsUy from PacerMonitor.com. About Performance Aircraft Leasing, Inc. Performance Aircraft Leasing, Inc., a corporation that leases aircraft, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-02211) on Feb. 19, 2021. In the petition signed by Edward H. Wachs, president, the Debtor disclosed $327,921 in assets and $3,684,754 in liabilities. Judge Donald R. Cassling oversees the case. Golan Christie Taglia, LLP and Chuhak & Tecson, PC serve as the Debtor's bankruptcy counsel and special counsel, respectively. PIKEWOOD INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Pikewood, Inc. 123 E. Broad Street Bethlehem, PA 18018 Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court Eastern District of Pennsylvania Case No.: 21-10595 Debtor's Counsel: Douglas J. Smillie, Esq. FITZPATRICK LENTZ & BUBBA, P.C. 645 W. Hamilton Street Allentown, PA 18101 Tel: (610) 797-9000 Fax: (610) 797-6663 E-mail: dsmillie@flblaw.com Total Assets: $113,419 Total Liabilities: $3,039,125 The petition was signed by David A. Pike, vice president. 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://www.pacermonitor.com/view/PBQUGBI/Pikewood_Inc__paebke-21-10595__0001.0.pdf?mcid=tGE4TAMA POLONIA DEVELOPMENT: April 8 Plan Confirmation Hearing Set ---------------------------------------------------------- On January 13, 2021, Debtor Polonia Development & Preservation Services Co., LLC d/b/a Liberty Street LLC filed with the U.S. Bankruptcy Court for the Eastern District of New York a disclosure statement with respect to a plan. On March 4, 2021, Judge Elizabeth S. Stong approved the disclosure statement and ordered that: * April 8, 2021, at 10:30 a.m. is the telephonic hearing for consideration of Confirmation of the Plan. * April 1, 2021, at 4:00 p.m. is fixed as the last day to submit all ballots voting in favor of or against the Plan. * April 1, 2021, at 4:00 p.m. is fixed as the last day to file objections to confirmation of the Plan. Plan of Reorganization The Plan will be funded by funds received pursuant to a certain settlement, previously authorized by the Court between the Debtor on one hand and Henry Street Settlement and Apollon Contracting LLC on the other with net proceeds in the amount of $63,000 and a cash contribution in the amount of $9,800 to be made by Gerardo Sanchez and $200.00 to be made by Emilio I. Gonzalez. After payment of administrative and priority claims, the balance of the Plan fund will be distributed to unsecured creditors. Additional funding from ongoing operations from the Reorganized Debtor in the amount of $150,000.00 will be provided to pay Secured Claims. General Unsecured Creditors are classified in Class 4 and will receive a pro rata distribution of the gross amount of $33,000.00 (currently estimated as 5.3% of their allowed claim) to be distributed through lump sum payment to be made within 30 days after the effective date of the Plan. A full-text copy of the order dated March 4, 2021, is available at https://bit.ly/3qARM1K from PacerMonitor.com at no charge. A full-text copy of the Plan dated Jan. 13, 2021, is available at https://bit.ly/3etccai from PacerMonitor.com at no charge. Counsel for the Debtor: Barry D. Haberman, Esq. 254 South Main Street, #404 New City, NY 10956 Tel: 845-638-4294 Fax: 845-638-6080 E-mail: bdhlaw@aol.com About Polonia Development & Preservation Polonia Development & Preservation Services Co., LLC, is a privately held company in the nonresidential building construction industry. It is based in Astoria, New York. The Debtor previously sought bankruptcy protection (Bankr. E.D.N.Y. Case No. 14-45726) on Nov. 10, 2014. Polonia Development & Preservation Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-45438) on Sept. 21, 2018. At the time of the filing, the Debtor estimated assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Elizabeth S. Stong. Barry Haberman, Esq., is the Debtor's counsel. PROVIDENT FUNDING: Moody's Affirms B1 CFR, Outlook to Stable ------------------------------------------------------------ Moody's Investors Service has affirmed Provident Funding Associates, L.P.'s corporate family rating at B1, its long-term senior unsecured rating at B2, and has revised the outlook to stable from negative. While the ratings were affirmed at their current levels, the change in outlook to stable from negative reflects the company's improved profitability and capital levels, as well as a strengthened liquidity position, which Moody's expects to persist over the next 12-18 months. Affirmations: Issuer: Provident Funding Associates, L.P. LT Corporate Family Rating, Affirmed B1 Senior Unsecured Regular Bond/Debenture, Affirmed B2 Outlook Actions: Issuer: Provident Funding Associates, L.P. Outlook, Revised To Stable From Negative RATINGS RATIONALE The affirmation of Provident's B1 corporate family rating incorporates the company's conservative credit and operational risk appetite, which lessens asset quality performance risks. Since before the 2008/9 financial crisis, Provident has maintained its focus on very-high quality prime loans, solid capital, and adequate liquidity, which contributed to a long and stable operating history. With interest rates likely to remain low, Moody's expects the company's profitability to continue to remain adequate over the next 12-18 months because of higher than historic average origination volumes. Over the last several quarters, Provident has strengthened its liquidity and funding position as well as increased its capitalization levels. In the first quarter of 2020, the company experienced material liquidity stress due to margin calls on its mortgage servicing rights (MSR) facilities and mortgage origination pipeline hedges, as interest rates declined rapidly and materially. The decline in interest rates reduced the value of Provident's MSRs, as projected prepayment rates increased significantly, leading to margin calls on its MSR facilities. In addition, the value of its mortgage origination pipeline hedges, mostly selling agency MBS futures, fell which also required the company to meet margin calls from its hedge providers. While the hedge losses were offset by gains on the company's held for sale mortgage loans, there is a several week timing difference before such gains are monetized, which placed stress on Provident's liquidity. As Moody's expected, lower interest rates led to an increase in origination volumes in 2020, particularly, refinancing volumes, which combined with elevated gain on sale margins, boosted the company's profitability. The company reported net income of approximately $53.6 million in the first nine months of 2020, corresponding to a net income to average managed assets of 3.6%, a significant improvement from -3.6% for 2019. The company's capital level, as measured by tangible common equity to tangible managed assets (TCE/TMA), and including preferred limited partnership interests, increased to 16.3% as of September 30, 2020, from 10.6% as of year-end 2019, driven by solid earnings. Provident's capitalization also benefitted from a $20 million capital injection in March 2020 from the holding company of Colorado Federal Savings Bank (CSFB) as well as a reduction in total assets. While the current economic uncertainty and volatility increases liquidity risk, the rating agency recognizes that Provident has taken steps to boost its liquidity, including the investment from CSFB, extending the maturity of its MSR facilities, and increasing its cash balance to approximately $30.9 million as of September 30, 2020, from $22.8 million as of year-end 2019. Moody's also increased the operating environment score for nonbank mortgage companies to Ba3 from B1. The operating environment, a key component of Moody's rating analysis, measures the extent to which external conditions can have a meaningful influence on finance companies' credit profiles, capturing the relevant economic, judicial, regulatory, institutional and general operating conditions that may affect finance companies' creditworthiness. The revision reflects a modest increase in barriers to entry, modestly increasing stability of nonbank mortgage firms as larger companies mature, particularly with respect to a strengthening of their governance and liquidity profiles, and reduced mortgage industry uncertainty as accelerated reform for Federal National Mortgage Association (Fannie Mae, Aaa) and Federal Home Loan Mortgage Corp. (Freddie Mac, Aaa) is unlikely to be pursued. The revision of Provident's outlook to stable from negative reflects the company's improved profitability and capital levels, as well as a strengthened liquidity position, which Moody's expects to persist over the next 12-18 months. The B2 senior unsecured bond rating is based on Provident's B1 corporate family rating and the application of its Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Provident's ratings could be upgraded if the company is able to sustainably improve its profitability, measured as net income to total managed assets, to greater than 3.5% while also achieving and maintaining an adequate capital cushion of around 20% tangible common equity to tangible assets. The ratings could be downgraded if Provident's liquidity, funding or asset quality deteriorate. The ratings could also be downgraded if company's capital level (as measured TCE/TMA) falls below 13.5%, if Moody's determines that Provident was unable to maintain modest profitability as measured by net income to assets of at least 1.5%, or if the company materially increases its reliance on recourse, secured funding. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. QUICKEN LOANS: Moody's Affirms Ba1 CFR & Alters Outlook to Positive ------------------------------------------------------------------- Moody's Investors Service has affirmed Quicken Loans, LLC's corporate family rating at Ba1, its long-term senior unsecured rating at Ba1, and has revised the outlook to positive from stable. While the ratings were affirmed at their current levels, the change in outlook to positive from stable reflects the continued strengthening of the company's financial profile, which Moody's expects to persist over the next 12-18 months. Affirmations: Issuer: Quicken Loans, LLC LT Corporate Family Rating, Affirmed Ba1 Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 Outlook Actions: Issuer: Quicken Loans, LLC Outlook, Revised to Positive from Stable RATINGS RATIONALE The affirmation of the Ba1 ratings reflects Quicken Loans' strengthened franchise in the US mortgage market, supporting its strong profitability and solid funding profile, but also captures some governance risk from its ownership structure. A further unique strength to Quicken Loans' franchise is the potentially complementary businesses additionally held under Rocket Companies, Inc. For the first nine months of 2020, Quicken Loans was the largest overall US mortgage originator with a market share of around 7.6%, up from just under 7% in 2019 and around 5% from 2014 through 2018. In addition, the company was the largest retail originator in the US. With interest rates declining, mortgage originations, particularly refinancing, surged in 2020, constraining industry capacity. Origination volumes more than doubled in 2020 versus 2019 and a material increase in gain-on-sale margins boosted Quicken Loans' profitability, with $6.1 billion in net income corresponding to around 30% of average assets during the first nine months of 2020, compared with $750 million or 5.0% of assets for 2019. Moody's expects profitability to remain strong in 2021 as origination volumes will likely continue to remain elevated despite the recent increase in long-term interest rates. Moody's expects longer-term profitability for Quicken to remain strong, such as net income to assets of 5%, or higher. The company's funding profile is somewhat weaker than those of other highly rated non-bank finance company peers. Like other non-bank mortgage companies, Quicken Loans largely relies on secured repurchase facilities to fund its residential mortgage originations. However, its funding profile is solid given its very modest reliance on secured corporate debt, the long tenor of its unsecured corporate debt, and the availability of a $1.0 billion three-year unsecured revolving credit facility, which was recently arranged. In addition, the company has maintained up to half of its warehouse/repurchase facilities with original tenors of more than a year, reducing its refinancing risk; typically mortgage origination warehouse facilities have maturities of 364 days. In August, Rocket Companies, Inc., the parent of Quicken Loans, completed its initial public equity offering (IPO) that raised almost $2 billion for the selling stockholders. Moody's considers Rocket's IPO as credit positive for Quicken Loans, because of the additional disclosure and market discipline associated with being a public company. The IPO's benefits will be somewhat offset by the pressure on management from the quarterly earnings and market share growth expectations of public investors. However, Moody's continues to assess that some governance risk remains in respect to Dan Gilbert, the company's founder and chairman, who will continue to control the company as the its principal stockholder, holding a super majority of all voting rights and the fact that a majority of the board of directors are not independent. The company has recently communicated a long-term market share target of 25%, a substantial increase from its current 7.6%. While the company has a solid track record of managing rapid growth over the last ten years, Moody's views fast growth as credit negative due to the potential for increased operational risks which may lead to stress on liquidity, controls, management and system resources. In addition, sacrificing profitability to continue rapid growth or to defend market share could further increase credit risks. The company's ambitious market share target could also lead to an increase in its very modest share of non-GSE and non-government loan origination volumes, or could cause Quicken Loans to transition away from its mortgage banking focus of selling all new originations within a couple of weeks after loan closing. Were this to occur without a commensurate increase in alternative liquidity sources and capital to address the risker liquidity and asset quality profile that such an increase would entail, it would be a material credit negative development. Moody's also increased the operating environment score for nonbank mortgage companies to Ba3 from B1. The operating environment, a key component of Moody's rating analysis, measures the extent to which external conditions can have a meaningful influence on finance companies' credit profiles, capturing the relevant economic, judicial, regulatory, institutional and general operating conditions that may affect finance companies' creditworthiness. The revision reflects a modest increase in barriers to entry, modestly increasing stability of nonbank mortgage firms as larger companies mature, particularly with respect to a strengthening of their governance and liquidity profiles. and reduced mortgage industry uncertainty as accelerated reform for Federal National Mortgage Association (Fannie Mae, Aaa) and Federal Home Loan Mortgage Corp. (Freddie Mac, Aaa) is unlikely to be pursued. The revision of Quicken's outlook to positive from stable was driven by the continued strengthening of the company's financial profile, which Moody's expects to continue over the next 12-18 months. The Ba1 senior unsecured bond rating is based on Quicken Loans' Ba1 corporate family rating and the application of Moody's Loss Given Default (LGD) for Speculative-Grade Companies methodology and model, which incorporate their priority of claim and strength of asset coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The company's ratings could be upgraded if the company is able to demonstrate improved profitability from its purchase mortgage originations while achieving and maintaining: 1) expected long-term strong profitability such as net income to assets (excluding MSR fair value marks) in excess of 5.0%, 2) a strong capital position with its ratio of tangible common equity (TCE) to tangible managed assets (TMA) remaining above 20%, 3) solid financial flexibility, such as reducing its secured debt to gross tangible assets ratio to less than 50%, 4) low refinance risk on its warehouse facilities with at least 40% or more of its warehouse lines having average remaining maturities of 18 months or more and 5) disciplined growth coupled with a lack of significant operational or regulatory issues. Given the positive outlook, a ratings downgrade is unlikely over the next 12-18 months. Negative ratings pressure may develop if Quicken Loans' financial profile or franchise position weakenfor example if the company's: 1) origination market share drops materially, 2) profitability weakens whereby Moody's expects net income to average assets to remain below 4.0% for an extended period of time, 3) TCE to TMA ratio declines to less than 17.5%, or 4) percentage of non-GSE and non-government loan origination volumes grow to more than 7.5% of its total originations without a commensurate increase in alternative liquidity sources, and capital to address the riskier liquidity and asset quality profile that such an increase would entail. In addition, an aggressive reach for market share would be viewed negatively. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. R & R INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: R & R Industries, Inc. 500 Carswell Ave Daytona Beach, FL 32117 Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court Middle District of Florida Case No.: 21-01050 Debtor's Counsel: Scott W. Spradley, Esq. THE LAW OFFICES OF SCOTT W. SPRADLEY, P.A. P.O. Box 1 109 South 5th Street Flagler Beach, FL 32136 Tel: 386-693-4935 Fax: 386 693 4937 E-mail: scott@flaglerbeachlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Larry T. Beasley II, president. 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://www.pacermonitor.com/view/ZP6DM7I/R__R_Industries_Inc__flmbke-21-01050__0001.0.pdf?mcid=tGE4TAMA RECYCLING REVOLUTION: Interim Use of Cash Collateral Allowed ------------------------------------------------------------ Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern District of Florida authorized Recycling Revolution, LLC to use cash collateral on an interim basis. The Debtor was authorized to use the cash generated by the operation of its business in the ordinary course, and make authorized payments pursuant to the orders of the Court. The Secured Creditors were granted, to the extent that Secured Creditors' cash collateral is used by the Debtor, a first priority postpetition security interest and lien in, to and against all of the Debtor's assets, to the same extent that the Secured Creditors held a properly perfected prepetition security interest in such assets, which are or have been acquired, generated or received by the Debtor subsequent to the Petition Date. The Debtor was directed to make monthly adequate protection payments to NEWTEK SMALL BUSINESS FINANCE LLC of $2,924.00 for every month during its Chapter 11 case, due on the 1st day of each and every month, unless otherwise altered or discontinued by Court order or by agreement of the parties. The Debtor was also directed to file an amended budget, reflecting the payments to NEWTEK, as well as United States Trustee Quarterly Fees, within seven days from the date of the Interim Order. The Debtor has until April 16, 2021, to file a proposed budget related to the continued use of cash collateral for a 90-day period. A continued hearing on the cash collateral motion is scheduled for April 20, 2021 at 1:30 p.m. A full-text copy of the Interim Order, dated March 9, 2021, is available for free at https://tinyurl.com/4y56pxdp from PacerMonitor.com. About Recycling Revolution Recycling Revolution, LLC -- http://www.RecyclingRevolution.net/-- is a recycling company specializing in low end, contaminated and hard-to-handle materials. It purchases all types of plastic, metal and electronic waste. Recycling Revolution and its affiliate RR3 Resources, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 19-25063) on Nov. 7, 2019. Recycling Revolution disclosed $365,896 in assets and $9,318,956 in debt, while RR3 Resources disclosed under $1 million in both assets and liabilities. Judge Mindy A. Mora oversees the cases. The Debtors tapped Marshall Grant, PLLC as their legal counsel and Daszkal Bolton, LLP as their accountant. RELDS LLC: Seeks to Hire Hayes Law Firm as Counsel -------------------------------------------------- Relds, LLC seeks approval from U.S. Bankruptcy Court for the Eastern District of Louisiana to hire The Hayes Law Firm, PLC as its counsel. The firm's services include: a. advising the Debtor with respect to the rights, powers and duties as debtor and debtor-in-possession in the continued operation and management of the business and property; b. preparing, with consultation with the appointed SubChapter V Trustee, pursuing confirmation of a plan of reorganization; c. preparing on behalf of the Debtor all necessary applications, motions, answers, proposed orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed; d. advising the Debtor concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed by other parties; e. appearing in court to protect the interests of the Debtor before this cCourt, appearing and assisting the Debtor regarding the initial debtor interview, the Section 341 meeting, and the Section 1188 status conference; f. representing the Debtor in connection with use of cash collateral and/or obtaining postpetition financing; g. advising the Debtor concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions; h. investigating the nature and validity of liens asserted against the property of the Debtor, and advising the Debtor concerning the enforceability of said liens; i. investigating and advising the Debtor concerning, and taking such action as may be necessary to collect income and assets in accordance with applicable law, and the recovery of property for the benefit of the estate; j. advising and assisting the Debtor in connection with any potential property dispositions; k. advising the Debtor concerning executory contracts and unexpired lease assumptions, assignments and rejections and lease restructuring, and recharacterizations; l. assisting the Debtor in reviewing, estimating and resolving claims asserted against the Debtor's estate; m. commencing and conducting litigation (not performed by other firms) necessary and appropriate to assert rights held by the Debtor, protecting assets of the Debtor's SubChapter V estate or otherwise further the goal of completing the Debtor's successful reorganization; and n. performing all other legal services for the Debtor which may be necessary and proper in the SubChapter V Case. The firm will be paid a flat fee of $10,000. The firm received $1,500 toward the flat fee retainer at the time of the filing of the said voluntary petition. DaShawn Hayes, Esq., managing attorney at Hayes Law, assures the court that the firm is a "disinterested person" as that phrase is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached through: DaShawn Paul Hayes, Esq. The Hayes Law Firm, PLC 1100 Poydras Street, Ste 1530, New Orleans, LA 70163 Phone: 504-799-0374 Email: dphayesesquire@gmail.com Anout Relds, LLC Relds, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-10204) on Feb. 18, 2021. At the time of filing, the Debtor estimated $1,000,001 to $10 million in assets and $500,001 to $1 million in liabilities. Judge Meredith S. Grabill oversees the case. DaShawn P. Hayes, Esq. at The Hayes Law Firm, PLC, serves as the Debtor's counsel. REMINGTON OUTDOOR: To Dissolve After Court Okays Bankruptcy Plan ---------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that Remington Outdoor Co. Inc., the 200-year old gun-maker that recently sold most of its assets, will liquidate and dissolve following court approval of its bankruptcy plan. The Huntsville, Ala.-based company, which calls itself "America's Oldest Gunmaker," sold its main businesses in a series of deals during its bankruptcy case, including the sale of the Lonoke ammunition line to Vista Outdoor Inc. Its sales proceeds of $175 million will largely be used to pay secured creditors, according to the plan that was tentatively approved Tuesday, March 9, 2021. About Remington Outdoor Based in Madison, North Carolina, Remington Outdoor Company, Inc. -- https://www.remingtonoutdoorcompany.com/ -- manufactures and markets firearms, ammunition, and related products for commercial, military, and law enforcement customers worldwide. The company operates through two segments, Firearms and Ammunition. Remington Outdoor Company, Inc., and its affiliates filed their voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020. The petitions were signed by CEO Ken D'Arcy. At the time of filing, the Debtors estimated $100 million to $500 million in both assets and liabilities. O'MELVENY & MYERS LLP, led by Stephen H. Warren, and Karen Rinehart, is the Debtors' general bankruptcy counsel. BURR & FORMAN LLP, led by Derek F. Meek and Hanna Lahr, is the Debtors' local counsel. M-III ADVISORY PARTNERS, LP, is the Debtors' financial advisor, while DUCERA PARTNERS LLC, is the investment banker. PRIME CLERK LLC is the Debtors' notice, claims & balloting agent. RUBY PIPELINE: Moody's Lowers CFR to Caa1 on High Refinancing Risk ------------------------------------------------------------------ Moody's Investors Service downgraded Ruby Pipeline, LLC's Corporate Family Rating to Caa1 from B1, Probability of Default Rating to Caa1-PD from B1-PD and senior unsecured notes rating to Caa1 from B1. The rating outlook remains negative. "The downgrade and negative rating outlook reflect Ruby's high refinancing risk amid cash flow uncertainty and weak liquidity as its senior notes mature in 2022," said Amol Joshi, Moody's Vice President and Senior Credit Officer. "The company also faces high re-contracting risk in 2021 when its non-PG&E contracts mature, and the weak pricing and volume environment for such re-contracting." Downgrades: Issuer: Ruby Pipeline, LLC Probability of Default Rating, Downgraded to Caa1-PD from B1-PD Corporate Family Rating, Downgraded to Caa1 from B1 Senior Unsecured Notes, Downgraded to Caa1 (LGD4) from B1 (LGD3) Outlook Actions: Issuer: Ruby Pipeline, LLC Outlook, Remains Negative RATINGS RATIONALE Ruby's Caa1 CFR is challenged by the weak credit quality of its principal shipper Pacific Gas & Electric Company (PG&E), whose parent PG&E Corporation is rated Ba2 stable, high re-contracting risk in 2021 when its non-PG&E contracts mature, and the weak pricing and volume environment for such re-contracting while facing the upcoming maturity of its senior unsecured notes in 2022. Ruby has been supported by natural gas pipeline transportation contracts with non-PG&E shippers having good weighted-average credit quality for about 70% of its revenue, but which mature in mid-2021. As Ruby manages its maturing contracts, it will be imperative that committed contract cash flow and debt are managed to ensure continued leverage and coverage metrics consistent with the credit profile. As existing contracts mature, if Ruby executes firm transportation contracts from the larger producers in the Rocky Mountains, it will likely be at significantly reduced rates as Canadian natural gas remains competitive. Ruby's owners, Kinder Morgan, Inc. (KMI, Baa2 stable) and Pembina Pipeline Corporation (unrated), have the ability to provide support, but Pembina has a preferred ownership interest relative to KMI's ownership interest. At this point, the partners' equity interests are not aligned and they do not have any commitment to provide future financial support to Ruby, beyond the remaining term loan committed payments. Ruby has weak liquidity. The company's cash flow from operations will fall in 2021 as non-PG&E contracts expire in mid-2021, while a material portion of its cash flow will be used for required debt payments in 2021. The remaining cash flow will likely be distributed, but it should still be insufficient to fully cover Pembina's preferred distribution. Because it's a relatively new pipeline, maintenance capital expenditures are minimal at less than $1 million per year. Ruby does not have a revolving credit facility. The company has a term loan with $31.3 million outstanding at September 30, 2020, maturing in March 2021, which is scheduled to be repaid using a committed subordinated debt facility provided by subsidiaries of the partners that should grow to $250 million and mature in 2026. The company also had $562.5 million of senior unsecured notes at September 30, 2020, with scheduled payments of $44 million in 2020 and $44 million in 2021, and final maturity of $475 million in April 2022. Ruby has a financial covenant of debt to EBITDA less than 5x under the term loan and 5.5x under the senior unsecured notes, with likely non-compliance in 2022 as the non-PG&E contracts expire after mid-2021. Ruby's senior unsecured notes are rated Caa1, consistent with the Caa1 CFR, despite its senior claim to the subordinated debt (unrated) from the partners in the capital structure. The Caa1 rating for the senior unsecured notes is more appropriate than the rating suggested by Moody's Loss Given Default for Speculative-Grade Companies methodology, because of the proximity of a potential default and the subordinated debt effectively being considered as a preferred equity instrument for notching purposes. The term loan (unrated) is pari passu with the notes. The negative rating outlook reflects Ruby's significant cash flow uncertainty and weak liquidity while its senior unsecured notes mature in 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ruby's ratings could be downgraded if the company is unable to refinance its debt in a timely manner, there is a significant change to its contract terms with PG&E, contracting with non-PG&E shippers fails to sufficiently materialize, or if liquidity weakens further. Ruby's ratings could be upgraded if contract counterparty risk and tenor improve, and the company achieves adequate liquidity while mitigating refinancing risk. The principal methodology used in these ratings was Natural Gas Pipelines published in July 2018. Ruby Pipeline, LLC (Ruby) is owned equally by Kinder Morgan, Inc. (Baa2 stable), one of the largest midstream energy companies in North America, and Pembina Pipeline Corporation (unrated), a diversified energy infrastructure company based in Calgary, Alberta. A subsidiary of Kinder Morgan, Inc. operates the company's sole asset, the Ruby Pipeline, a 1,500 MMBtu per day natural gas pipeline that entered service in July 2011 and runs 680 miles from Opal, Wyoming to Malin, Oregon. SABON HOLDINGS: U.S. Trustee Says Disclosures Not Sufficient ------------------------------------------------------------ William K. Harrington, the United States Trustee for Region 2, submitted an objection to Sabon Holdings LLC, et al.'s First Amended Disclosure Statement for First Amended Joint Plan of Reorganization The United States Trustee points out that a disclosure statement serves to provide creditors with sufficient information to evaluate the risks and financial consequences of the proposed plan of reorganization and to make an informed choice as to whether to approve or reject the proposed plan. In this case, unsecured creditors will only receive a distribution of between 15% to 18%. Despite this small dividend, the Debtors ultimate shareholder seeks to maintain its ownership in the reorganized debtors as well as obtain "consensual" releases from unsuspecting creditors who vote to reject the plan, or do not vote, but fail to check a box on the ballot to opt-out of the releases. The Disclosure Statement makes no attempt to explain why creditors that clearly do not support the plan – creditors that vote to reject or do not vote –- can be deemed to have consented to the releases. In addition, the Disclosure Statement should provide adequate information of the existence of the rare and exceptional circumstances that the Second Circuit has held would justify imposing a third-party release on an impaired non-consenting creditor. The Disclosure Statement provides zero information that there is anything unusual about this case that would justify such extraordinary relief. Not only are the proposed releases extremely overbroad, but other than vague assertions, there is no information establishing that the released parties (especially the representatives of the equity holder that also seek releases) provided consideration for the releases. As such, the releases do not appear to comport with Second Circuit law or the Bankruptcy Code, and the Debtors should provide information to explain why they believe otherwise. About Sabon Holdings Sabon Holdings distributes personal care products. It offers, among other items, bath balls, foams, mineral powders, body scrubs, shower gels, milky soaps, deodorants, perfumes, massage oil, body lotions, hand soaps, scrubs and exfoliants, moisturizers, hand sanitizers, lip care, and eye care products. Sabon Holdings LLC and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-11320) on May 29, 2020. The petitions were signed by Yale Scott Bogen, CRO. At the time of the filing, Sabon Holdings LLC disclosed total assets of $140,094 and total liabilities of $10,283,527. Judge James L. Garrity, Jr., oversees the cases. The Debtors tapped Smith, Gambrell & Russell, LLP as counsel; Development Specialists, Inc., as restructuring advisor; and Eshel, Aminov & Partners LLP as certified public accountant. SALEM CONSUMER: $2.8M Settlement With Ex-Owner to Fund 100% Plan ---------------------------------------------------------------- Salem Consumer Square OH LLC filed an Amended Chapter 11 Plan of Reorganization and a Disclosure Statement on March 5, 2021. On May 27, 2019, the Debtor's property in Dayton, Ohio was substantially destroyed by a tornado and required significant repairs to continue operations. BELFOR Group USA, Inc. began making some of the repairs but further damaged the Property in the process. To cover the cost of repairs that BELFOR asserted having made and without reducing the value of BELFOR's repairs by the damage that BELFOR did to the Property, the Debtor's insurance company provided a payment in the amount of $2,800,000. Moonbeam Capital Investments was the equity owner of the Debtor at the time BELFOR performed services on the Property. When insurance proceeds were distributed, the check written by the Debtor's insurance company was written jointly to both the Debtor and MCI. Instead of the Proceeds being made available to the Debtor to continue with the necessary repairs to the Property and make payment to BELFOR for the amount of services that it did perform, reduced by the value of damage that BELFOR caused to the Property, the Proceeds were deposited into MCI's account. The Debtor's equity ownership changed on Dec. 27, 2019, when Beacon Commercial Limited purchased 100% of the Debtor's equity interests from MCI. As part of the Plan, the Debtor will seek approval of a settlement agreement with MCI, which would result in a payment in the amount of $2,800,000 to the Debtor. The Settlement Payment would substantially fund the Plan. To the extent that the Settlement Payment does not support the funding of all Plan payments, Beacon will provide the cash necessary to pay all Allowed Claims and Beacon guarantees all payments under the Plan. The claims of both BELFOR and Nations Roof of Ohio, LLC, that are related to services provided on the Debtor's Property and the Proceeds in question are disputed. The Debtor will be filing an adversary proceeding to determine the extent and validity of BELFOR's claims if it has not already done so. The Debtor disputes the value of the work that was completed on the Property and, as has been referenced above and as BELFOR has been well aware of at least since the Debtor filed its answer in the State Court Action, the claim of BELFOR should also reflect the damage that it caused to the Property and the value of its services provided should be reduced accordingly. The Debtor has, or will be, obtaining experts to provide a report on both the reasonable value of services provided to the Debtor by BELFOR as well as the damage that it caused to the Property. By obtaining both of these figures, the Court will be able to determine the appropriate allowed amount of BELFOR's claims. The Debtor proposes to pay all Allowed Secured Claims on the later of (i) the Effective Date, and (ii) the date on which the Claim becomes Allowed. The Debtor proposed to pay Unsecured Claims in full without interest in two distributions with the first distribution occurring on the Effective Date and the second distribution occurring 180 days after the Effective Date of the Plan. Holders of Equity Interests shall continue to own the "reorganized" Debtor following confirmation of the Plan. If any class of Unsecured Claims does not accept the Plan, the Debtor reserves the right to seek confirmation under the "cram down" provisions of section 1129(b) of the Bankruptcy Code. A copy of the Disclosure Statement dated March 5, 2021, is available at https://bit.ly/3vbB8ZY About Salem Consumer Salem Consumer Square OH LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). It owns and operates the shopping center known as "Salem Consumer Square" located at 5447 Salem Avenue, Dayton, OH 45426. On Jan. 5, 2021, Salem Consumer Square sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 21-20020). The Debtor disclosed total assets of $3,385,461 and total liabilities of $3,134,072. BERNSTEIN-BURKLEY, P.C., led by Kirk B. Burkley, is the Debtor's counsel. SC SJ HOLDINGS: In Chapter 11 With Deal to Keep Luxury Hotel ------------------------------------------------------------ Eagle Canyon Management's SC SJ Holdings LLC and affiliate FMT SJ LLC, owners of the recently shut The Fairmont San Jose, have sought Chapter 11 protection with a deal with their secured lender to extend the maturity of a $173 million debt and select new branding for the hotel. SC SJ, which filed for Chapter 11 bankruptcy protection on March 10, 2021, is the owner of an 805-room luxury hotel located at 170 South Market Street, San Jose, California, in the heart of Silicon Valley. The hotel, which was named Fairmont San Jose before it was shut on March 5, 2021, is near many of the largest Fortune 1000 corporations and is a popular location for conferences and conventions, particularly in the technology industry. "Though normally a profitable enterprise, the Debtors' business took a dramatic and sudden downturn following the spread of the global pandemic caused by the COVID-19 virus and the related travel, gathering, and other restrictions implemented to reduce the infection rate. Conventions, conferences, business retreats, and social gatherings are not currently being scheduled, and travel remains significantly reduced. As a result, the Hotel's average occupancy during the pandemic has been approximately 7.7%. The Hotel's losses for 2020 exceeded $18.6 million, and losses for 2021 are projected to exceed $18.8 million. Because the Hotel is not a "vacation-destination" resort, much of its business during the pandemic has been to accommodate airline pilots, flight attendants, and essential health workers. The losses incurred have substantially exhausted the Debtors' immediately available cash resources," Neil Demchick, CRO, of the Debtors, explains. Prior to the Petition Date, FMT SJ leased the Hotel from SC SJ pursuant to a lease agreement, dated as of Jan. 2, 2018. The Lease was terminated pursuant to a lease termination agreement on March 5, 2021. Prior to the Petition Date, the Hotel was managed by Fairmont Hotels & Resorts (U.S.) Inc. pursuant to a Hotel Management Agreement, dated as of Dec. 2, 2005. $173.5MM Debt Substantially all the Debtors' outstanding funded indebtedness arises under a Loan Agreement, dated as of Jan. 2, 2018, between the Debtors, as co-borrowers, and CLNC 2019-FL1 Funding, LLC as Lender. As of the Petition Dates, approximately $175 million of principal and accrued interest is outstanding under the Secured Loan. MT SJ has trade debt of $10 million or more. This includes an estimated sum due to Fairmont under the Hotel Management Agreement as prospective liquidated damages under Section 16.11 of the HMA. Since the start of the pandemic, the Debtors relied on approximately $14 million of capital contributions from their equity owner to pay ordinary course expenses and monthly debt service payments on the Secured Loan. During August 2020, in an effort to provide funding to survive the impact of the pandemic, ST SJ LLC, the Debtors' indirect parent company issued preferred equity to CLNC Fair Jose Pref, LLC, a Delaware limited liability company -- Preferred Member -- in exchange for funds that were then contributed to the Debtors so that the Debtors could cover (a) one or more shortfalls on their monthly debt service payments, up to an original amount not to exceed $2.4 million in the aggregate, and (b) costs and expenses for capital improvement projects at the property. Approximately $4.8 million was ultimately raised through this mechanism. Pandemic Losses, Dispute With Fairmont As the pandemic persisted, the Debtors in August 2020 retained Jones Lang LaSalle to solicit investors to purchase the Hotel or provide financing. CHMWarnick, a hotel owner advisor, was also retained to perform a market analysis and contact competing management companies to assess their level of interest in the Hotel. Despite almost $2 million per month in Hotel losses, the Debtors claim that: * Fairmont refused to provide any financial support for the Hotel and instead demanded the Debtors pay almost $2 million in allegedly past due management fees and continue to fund millions of dollars of accounts payable incurred or to be incurred at the Hotel. * Fairmont refused to acknowledge FMT SJ's Feb. 4, 2021 termination of the HMA under Section 16.11 (which addresses "Breach Termination" and provides for liquidated damages), in order for the Debtors to approach and negotiate a transition with a brand that appeared likely willing to provide substantial subordinate financing. * Fairmont has pushed foreclosure upon the Hotel. A Fairmont executive asserted to Secured Lender, as recently as March 4, 2021, that if Secured Lender were to foreclose, an existing SNDA would require it to abide by the HMA and keep Fairmont as the Hotel's manager. * Fairmont commenced an arbitration proceeding with the AAA at or around midnight (prior to FMT SJ's chapter 11 filing), seeking a temporary restraining order to prevent the closure of the Hotel. Bankruptcy Plan Considering these circumstances, and guided by their goals of protecting and insuring the Hotel through the end of the COVID-19 pandemic, reaching an agreement to extend or refinance the existing first mortgage, and funding a resumption of operations, the Debtors have filed these chapter 11 cases to restructure the Hotel's business around three core objectives: (a) engage with the Debtors' Secured Lender to restructure and extend the Secured Loan; (b) reject the HMA with Fairmont so that the Debtors can transition to a new hotel brand; and (c) run a comprehensive process to solicit proposals from competing hotel brands that are willing to provide exit financing for the Hotel. The Debtors have reached an agreement with the Secured Lender and the Preferred Member to support a chapter 11 plan that, among other things and subject to certain conditions, including raising new mezzanine debt or equity) could extend the maturity date under the Secured Loan by three years from the effective date of an agreed chapter 11 plan, with options to extend the maturity to five years in the aggregate. The terms of this agreement are set forth in that Restructuring Support Agreement, dated as of March 9, 2021 (the "RSA"). Under the RSA even if the Debtors were not successful in raising the new mezzanine debt or equity, the plan would provide a nine-month period after confirmation to refinance the Secured Loan. In light of historical and anticipated operating losses, the Hotel was closed on March 5, 2021. Stakeholder interests will be protected by the Owner's substantial equity cushion in the Hotel and by a post-petition unsecured loan to be provided by an affiliate of the Debtors. The loan proceeds will be used to pay the administrative expenses in these chapter 11 cases and to adequately protect the rights of the Secured Lender in the Hotel by funding, inter alia, utilities, security, and insurance. The affiliate's willingness to fund these chapter 11 cases on favorable terms is intended to send a clear message to potential hotel operators, vendors, customers, and all stakeholders that the Debtors will have the resources necessary to successfully complete their chapter 11. About FMT SJ and SC SJ San Ramon-based Eagle Canyon Management's SC SJ Holdings LLC owns The Fairmont San Jose, an 805-room luxury hotel located at 170 South Market Street, San Jose, California, in the heart of Silicon Valley. The Hotel is near many of the largest Fortune 1000 corporations and is a popular location for conferences and conventions, particularly in the technology industry. On March 5, 2021, FMT SJ LLC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Case No. 21-10521). On March 10, 2021, SC SJ Holdings LLC filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case No. 21-10549). The Debtors' bankruptcy cases are pending joint administration before the Honorable John T. Dorsey. The Debtors tapped PILLSBURY WINTHROP SHAW PITTMAN LLP as bankruptcy counsel; COLE SCHOTZ P.C. as local counsel; and VERITY LLC as financial advisor. STRETTO is the claims agent. SEADRILL LIMITED: Cash Collateral Access OK'd on Final Basis ------------------------------------------------------------ Judge David R. Jones of the U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Seadrill Limited and its affiliated Debtors to use cash collateral on a final basis. Judge Jones acknowledged that "the Debtors and the SFL Debtors would not have sufficient available sources of working capital to operate their business in the ordinary course or to maintain their property without the use of the Cash Collateral and the SFL Cash Collateral as contemplated herein. Without access to, and the ability to use, the Prepetition Collateral, which includes certain drilling rigs. . . and the Cash Collateral and the SFL Cash Collateral, the Debtors' and the SFL Debtors' ability to manage, administer and preserve their estates would be immediately and irreparably harmed, thereby materially impairing their respective estates and creditors, as well as the likelihood of a successful outcome in the Chapter 11 Cases." The Debtors were authorized to use cash collateral from the Petition Date until the occurrence of a Termination Event, and in accordance with the approved 13-week cash disbursements and receipts budget. The approved budget provides for a total of $307,971,000 in operating disbursements, with these allocations: Week ending March 5, 2021: $30,255,000 Week ending March 12, 2021: $42,597,000 Week ending March 19, 2021: $40,644,000 Week ending March 26, 2021: $23,213,000 Week ending April 2, 2021: $14,331,000 Week ending April 9, 2021: $32,553,000 Week ending April 16, 2021: $12,561,000 Week ending April 23, 2021: $11,498,000 Week ending April 30, 2021: $17,402,000 Week ending May 7, 2021: $31,011,000 Week ending May 14, 2021: $28,599,000 Week ending May 21, 2021: $12,597,000 Week ending May 28, 2021: $10,711,000 The occurrence of any of these events will constitute a Termination Event: (a) The Final Order shall cease to be in full force and effect for any reason; (b) Any of the Chapter 11 Cases shall be dismissed or converted to a case under chapter 7 of the Bankruptcy Code, a chapter 11 trustee or examiner with expanded powers pursuant to section 1106(b) of the Bankruptcy Code shall be appointed in any of the Chapter 11 Cases, the Court shall abstain from hearing any of these Chapter 11 Cases, or any of the Debtors shall file a motion or other pleading with the Court seeking any of the foregoing relief; (c) The Debtors shall have failed to deliver to the CoCom and the Ad Hoc Group a comprehensive restructuring proposal on or before March 31, 2021; (d) The Debtors shall have failed to deliver to the CoCom and the Ad Hoc Group a draft joint chapter 11 plan of reorganization with respect to the Debtors and a disclosure statement in connection with the Plan on or before May 14, 2021, or an order approving such disclosure statement shall not have been entered by this Court on or before June 30, 2021; (e) An order confirming a Plan shall not have been entered by this Court on or before August 31, 2021; (f) An order shall have been entered (or any of the Debtors shall seek an order) reversing, amending, supplementing, extending, staying, vacating, or otherwise modifying this Final Order without the prior written consent of the CoCom and the Ad Hoc Group (which consent shall not be unreasonably withheld); provided that any withholding of consent by the CoCom or Ad Hoc Group to an extension of this Final Order shall not be deemed unreasonably withheld; (g) The Debtors' exclusive right to file and solicit acceptance of a plan of reorganization is terminated or terminates; (h) Other than in respect of any intercompany receivables and payables among the Debtors arising from any transactions between and among the Debtors and their non- Debtor affiliated entities in the ordinary course of business, the Debtors shall file or the Court shall grant any application, motion or borrowing request seeking to: (i) incur indebtedness from any party secured by a lien on, or otherwise having a claim against or recourse to, as the case may be, the Debtors, the Prepetition Collateral, or the Adequate Protection Collateral, unless such liens or claims are junior and subordinated in all respects to the Prepetition Liens, the Prepetition Facility Obligations, the Prepetition Notes Obligations, the Adequate Protection Liens, and the Adequate Protection Superpriority Claims; or (ii) use any Cash Collateral on a nonconsensual basis; (i) The Debtors shall fail to make any Adequate Protection Payment when due or the Debtors shall terminate or file a motion to reject an engagement letter of any of the CoCom Professionals or the Ad Hoc Group Professionals; (j) The Court shall grant any application by any party seeking allowance or payment of any claim on a superpriority administrative claim basis pari passu with, or senior to, the Adequate Protection Superpriority Claims; (k) The entry of an order by this Court granting relief from or modifying the automatic stay applicable under section 362 of the Bankruptcy Code to allow a holder or holders of any lien on or security interest in a Rig to foreclose on its lien or security interest in respect thereof; (l) Any Debtor breaches any material covenant or undertaking (after any applicable cure period) in any of the Prepetition Facility Documents relating to the insurance, operation, management, and maintenance of a Rig, including without limitation a breach in connection with expropriation, arrest, detention, capture, condemnation, confiscation, requisition, purchase, seizure, or forfeiture of, or any taking of title to, the applicable Rig, in each case other than in connection with a Rig-recycling program agreed to among the Debtors, the CoCom, and the Ad Hoc Group (which consent shall not be unreasonably withheld), and approved by the Court; (m) The entry of an order by this Court or any other court having jurisdiction to do so (i) authorizing the sale of all or substantially all of a Debtor's assets; or (ii) authorizing any other sale or disposition of any of the Prepetition Facilities Collateral outside the ordinary course of business, in each case other than in connection with a Rig-recycling program agreed to among the Debtors, the CoCom, and the Ad Hoc Group (which consent shall not be unreasonably withheld) and approved by this Court; (n) Any Debtor shall make any material payment (including adequate protection payments) on or in respect of any prepetition indebtedness other than in accordance with the Budget or otherwise pursuant to this Final Order or any other interim or final order entered with respect to the "first day" motions; (o) The entry of an order of the Court avoiding, disgorging, or requiring repayment of any portion of the Adequate Protection Payments made by the Debtors; (p) The entry of an order of the Court or any other court having jurisdiction to do so approving any claims for recovery of amounts under section 506(c) of the Bankruptcy Code or otherwise arising from the preservation or disposition of any Prepetition Collateral; (q) Any Adequate Protection Liens or Adequate Protection Superpriority Claims granted to the Prepetition Secured Parties shall cease to be valid, perfected and enforceable in all respects, or any Debtor shall assert the invalidity, non-perfection or unenforceability of any of the Adequate Protections Liens or the invalidity or unenforceability of the Adequate Protection Superpriority Claims; (r) Any Debtor shall seek, or shall support (in any such case by way of, inter alia, any motion or other pleading filed with the Court or any other writing to another party-in-interest executed by or on behalf of any Debtor) any other person's motion, to disallow or subordinate in whole or in part any Prepetition Secured Party's claim in respect of Prepetition Obligations or to challenge the validity, enforceability, perfection or priority of the liens in favor of any Prepetition Secured Party (including, without limitation, any Prepetition Liens); (s) Any Debtor shall file a chapter 11 plan or enter into a restructuring support agreement (or similar agreement or arrangement) or backstop commitment agreement (or similar agreement or arrangement) that is not acceptable to the CoCom or the Ad Hoc Group without consulting with the CoCom or the Ad Hoc Group (as applicable) at least seven business days prior to any such filing or entering into such agreement; (t) The Debtors shall fail to adhere to the Budget, subject to the RigCo Permitted Variance, AOD Permitted Variance, or NADL Permitted Variance; or (u) The Debtors shall fail to comply with any other provision of this Final Order in a material respect. As adequate protection for the respective interests of the Prepetition Secured Parties in the Prepetition Collateral, pursuant to sections 361 and 363(e) of the Bankruptcy Code, and as a condition for the use of their respective Prepetition Collateral, each of the Prepetition Secured Parties, were granted, among other things: (1) Prepetition Facility Adequate Protection Liens. Solely to the extent of, and in an aggregate amount equal to, any diminution in value of any Prepetition Facility Secured Party's interests in its respective Prepetition Collateral, including on a dollar-for- dollar basis in respect of any Cash Collateral, from and after the Petition Date, arising from the imposition and enforcement of the automatic stay and the Debtors' use, sale or lease of such Prepetition Collateral, including any Cash Collateral, and in each case subject to the Carve Out, each Prepetition Facility Secured Party is granted, pursuant to sections 361(2) and 363(c)(2) of the Bankruptcy Code, these security interests and liens: (a) valid, binding, continuing, enforceable, fully-perfected, non-avoidable first priority replacement liens on, and security interests in, the Adequate Protection Collateral of each borrower and obligor under the applicable Prepetition Facility under which such Prepetition Facility Secured Party is a party that is not subject to (i) valid, perfected, non-avoidable and enforceable liens in existence on or as of the Petition Date or (ii) valid and non-avoidable liens in existence as of the Petition Date that are perfected after the Petition Date, as permitted by section 546(b) of the Bankruptcy Code, which liens shall be senior and prior to all other liens on such Adequate Protection Collateral; and (b) valid, binding, continuing, enforceable, fully-perfected, non-avoidable senior priming replacement liens on, and security interests in, all other Adequate Protection Collateral of each borrower and obligor under the applicable Prepetition Facility under which such Prepetition Facility Secured Party is a party, which replacement liens and security interests shall be (x) (i) junior to the Prepetition Liens of the Prepetition Facility Secured Parties and (ii) any valid, perfected and non-avoidable liens in existence as of the Petition Date and any valid and non-avoidable liens in existence as of the Petition Date that are perfected after the Petition Date as permitted by section 546(b) of the Bankruptcy Code, which in each case are senior in priority to the Prepetition Liens of the Prepetition Facility Secured Parties and are permitted by the terms of the Prepetition Facility Documents and (y) senior and prior to all other liens on and security interests in such Adequate Protection Collateral, including any liens of third parties which were junior to the Prepetition Liens of the Prepetition Facility Secured Parties as of the Petition Date; (2) Prepetition Notes Adequate Protection Liens. Solely to the extent of, and in an aggregate amount equal to, any dollar-for-dollar Diminution in Value of its respective interest in any Cash Collateral, and in each case subject to the Carve Out, each Prepetition Notes Secured Party is granted, pursuant to sections 361(2) and 363(c)(2) of the Bankruptcy Code, these security interests and liens: (a) valid, binding, continuing, enforceable, fully-perfected, non-avoidable second priority replacement liens on, and security interests in, any Adequate Protection Collateral of RigCo and CashPoolCo that is not subject to (x) valid, perfected, non-avoidable and enforceable liens in existence on or as of the Petition Date or (y) valid and non-avoidable liens in existence as of the Petition Date that are perfected after the Petition Date as permitted by section 546(b) of the Bankruptcy Code, which liens shall be junior to the Prepetition Facility Adequate Protection Liens in such Adequate Protection Collateral; and (b) valid, binding, continuing, enforceable, fully-perfected, non-avoidable replacement liens on, and security interests in, all other Adequate Protection Collateral of RigCo and CashPoolCo, which replacement liens and security interests shall be (x) junior to (i) the Prepetition Liens, (ii) the Prepetition Facility Adequate Protection Liens, and (iii)(A) any valid, perfected and non-avoidable liens in existence as of the Petition Date, and (B) valid and non-avoidable liens in existence as of the Petition Date that are perfected after the Petition Date as permitted by section 546(b) of the Bankruptcy Code, which in each case are senior in priority to the Prepetition Liens of the Prepetition Facility Secured Parties and are permitted by the terms of the Prepetition Finance Documents, and (y) senior and prior to all other liens on and security interests in such Adequate Protection Collateral, including any liens of third parties which were junior to the Prepetition Liens of the Prepetition Facility Secured Parties as of the Petition Date. (3) Adequate Protection Collateral. All of the Debtors' property and assets, including, without limitation, each Debtor's rights with respect to the applicable Presumptive Cash Pool Cash Collateral, all Prepetition Collateral, Rigs, postpetition revenues, insurance, bank accounts, and other security or deposit accounts of the Debtors, all equity interests, all intercompany claims and recoveries in respect thereof, accounts, and receivables, and any and all proceeds, products, rents, and profits of all of the foregoing. (4) Adequate Protection Superpriority Claims. To the extent of, and in an aggregate amount equal to, any Diminution in Value in respect of the Prepetition Collateral securing its respective Prepetition Facility, each Prepetition Facility Secured Party is granted an allowed superpriority administrative expense claim against each borrower and obligor under the applicable Prepetition Facility under which such Prepetition Facility Secured Party is a party. The Adequate Protection Superpriority Claims shall be junior and subject only to (a) the Carve Out, (b) any Intercompany Claims and (c) the obligations of the SFL Debtors owing to the SFL Owners under the Charter Agreements, the SFL Agreements, and the provisions of the Final Order. The Adequate Protection Superpriority Claims of the Prepetition Notes Secured Parties shall be subordinate to the Adequate Protection Superpriority Claims of the Prepetition Facility Secured Parties, and shall not recover any payment unless and until the Prepetition Facility Secured Parties' claims are satisfied in full. A full-text copy of the Final Order, dated March 9, 2021, is available for free at https://tinyurl.com/pbbpzxa2 from PacerMonitor.com. A status conference is scheduled for April 15, 2021 at 11:00 a.m. for the status of the Debtors' restructuring efforts and any other matter raised by the Debtors, CoCom, or Ad Hoc Group. About Seadrill Ltd. Seadrill Limited (OSE:SDRL, OTCQX:SDRLF) -- http://www.seapdrill.com/-- is a deepwater drilling contractor providing drilling services to the oil and gas industry. As of March 31, 2018, it had a fleet of over 35 offshore drilling units that include 12 semi-submersible rigs, 7 drillships, and 16 jack-up rigs. On Sept. 12, 2017, Seadrill Limited sought Chapter 11 protection after reaching terms of a reorganization plan that would restructure $8 billion of funded debt. It emerged from bankruptcy in July 2018. Demand for exploration and drilling has fallen further during the COVID-19 pandemic as oil firms seek to preserve cash, idling more rigs and leading to additional overcapacity among companies serving the industry. In June 2020, Seadrill wrote down the value of its rigs by $1.2 billion and said it planned to scrap 10 rigs. Seadrill said it is in talks with lenders on a restructuring of its $5.7 billion bank debt. Seadrill Partners LLC, a limited liability company formed by deep-water drilling contractor Seadrill Ltd. to own, operate and acquire offshore drilling rigs, along with its affiliates, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on Dec. 1, 2020, after its parent company swept one of its bank accounts to pay disputed management fees. Mohsin Y. Meghji, managing partner at M3 Partners, acting as the Company's Chief Restructuring Officer, signed the petitions. On Feb. 7, 2021, Seadrill GCC Operations Ltd., Asia Offshore Drilling Limited, Asia Offshore Rig 1 Limited, Asia Offshore Rig 2 Limited, and Asia Offshore Rig 3 Limited sought Chapter 11 protection. Seadrill GCC estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Additionally, on February 10, 2021, Seadrill Limited and 114 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code with the Court. The lead case is In re Seadrill Limited (Bankr. S.D. Tex. Case No. 21-30427). Seadrill Limited disclosed $7.291 billion in assets against $7.193 billion in liabilities as of the bankruptcy filing. In the new Chapter 11 cases, Kirkland & Ellis LLP is counsel for the Debtors. HoulihanLokey, Inc., is the financial advisor. Alvarez & Marsal North America, LLC, is the restructuring advisor. The law firm of Jackson Walker L.L.P. is co-bankruptcy counsel. The law firm of Slaughter and May is co-corporate counsel. Advokatfirmaet Thommessen AS is serving as Norwegian counsel. Conyers Dill & Pearman is serving as Bermuda counsel. Prime Clerk LLC is the claims agent. SECOND SOUTHERN: Failed to Obtain Financing; Files Liquidating Plan ------------------------------------------------------------------- Second Southern Baptist Church of New York filed with the U.S. Bankruptcy Court for the Southern District of New York a Disclosure Statement for Plan of Liquidation on March 4, 2021. The Debtor is a New York religious corporation which owned certain real property located in the Bronx, New York, having street addresses of 1340 Edward L. Grant Highway,59A West 170th Street, 53-59 West 170th Street and 1372A Jesup Avenue (the "Property"). The Property consisted of the Church building and seven store front tenancies. The filing of the Chapter 11 case was necessitated by a scheduled sale of the Property due to a tax lien foreclosure proceeding pending in the Bronx County Supreme Court. The filing of this Chapter 11 case prevented the loss of title to the Property and allowed the Church to proceed with its efforts to sell the Property on an arms-length basis so as to not suffer the significant financial loss which would have occurred as a result of a foreclosure sale. In an attempt to reorganize its financial affairs, the Debtor undertook extensive efforts to obtain mortgage financing in order to satisfy approximately $750,000.00 in tax and other liens against the Property. Those attempts failed for several reasons. First, the Debtor's status as a religious corporation was problematical for those entities approached for financing. Second, the terms sought by any proposed lenders involved in the Church's real property financing were very onerous as to interest rates, loan-to-value ratios and maturity dates. Once it became apparent to the Debtor that it was not feasible to obtain mortgage financing on reasonable terms, it determined that it was appropriate to proceed with efforts to sell the Property and dissolve the Church pursuant to the provisions of the Bankruptcy Code and the New York Religious Corporation Law. The Plan provides for the resolution of outstanding Claims against the Debtor pursuant to the provisions of Chapter 11 of the Bankruptcy Code. To that end, the Plan also provides for the creation of the Second Southern Trust into which the Debtor's Assets as of the Effective Date will be transferred pursuant to the Second Southern Trust Agreement. The Plan further provides for the ultimate dissolution of the Second Southern Baptist Church pursuant to the provisions of the New York Religious Corporation Law. After extensive, and ultimately unsuccessful, efforts by the Debtor to attempt to obtain compliance by the highest bidder, the Bankruptcy Court approved the sale of the Property to the second highest bidder for $2,000,000 by Order ("Sale Order") dated December 13, 2017. As a result of the default of the first bidder, his down payment of $140,000 was forfeited to, and retained by, the Debtor. On February 1, 2018 a title closing was held for the Property with the second highest bidder. After the closing the net proceeds of the sale ($934,303.07), and the purchaser's forfeited down payment ($135,000.00) were deposited in an interest-bearing account by Debtor's counsel pursuant to the Sale Order. Class 1 consists of General Unsecured Claims. The only Claim in this Class is the Impaired Claim of Larry May. Holders of Claims in Class 1 are Impaired by the Plan and shall be entitled to vote to accept or reject the Plan. In order for the Plan to be confirmed by the Bankruptcy Court an affirmative vote to accept the Plan will be required from the only Class 1 claimant, Larry May. On the Effective Date, the Second Southern Trust shall be formed pursuant to the Plan and the Second Southern Trust Agreement, and the Second Southern Trust Assets shall be transferred to and vest in the Second Southern Trustee pursuant to the Plan and the Second Southern Trust Agreement. In the event of any inconsistencies or conflict between the Second Southern Trust Agreement and the Plan, the terms and provisions of the Second Southern Trust Agreement shall control. A full-text copy of the Disclosure Statement dated March 4, 2021, is available at https://bit.ly/2OM7CZS from PacerMonitor.com at no charge. Attorneys for Second Southern: REICH REICH & REICH, P.C. 235 Main Street, Suite 450 White Plains, NY 10601 Telephone: (914) 949-2126 Facsimile: (914) 949-1604 About Second Southern Baptist Church of NY Second Southern Baptist Church of New York is a New York religious corporation which owned certain real property located in the Bronx, New York. The Property consisted of the Church building and seven store front tenancies. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y.. Case No. 15-12509) on Sept. 9, 2015. The petition was signed by Mary Willis, vice president. The Debtor disclosed total assets of $1.2 million and total liabilities of $389,384. The Hon. Sean H. Lane presides over the case. Reich Reich & Reich P.C. serves as counsel to the Debtor. MK Property Group NYC Corp. is the Debtor's estate broker. SOMO AUDIENCE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: SoMo Audience Corp. P.O. Box 1583 Livingston, NJ 07039 Business Description: SoMo Audience Corp. -- https://somoaudience.com -- is an advertising technology company focused on providing solutions for Web Publishers, Mobile, CTV and DOOH. Chapter 11 Petition Date: March 11, 2021 Court: United States Bankruptcy Court Southern District of New York Case No.: 21-10464 Judge: Hon. Michael E. Wiles Debtor's Counsel: David H. Harthelmer, Esq. MAYERSON & HARTHELMER PLLC 845 Third Avenue New York, NY 10022 Tel: 646-778-4381 Email: david@mhlaw-ny.com Total Assets: $437,993 Total Liabilities: $4,426,241 The petition was signed by Robert Manoff, CEO. 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://www.pacermonitor.com/view/UVZRVFQ/SoMo_Audience_Corp__nysbke-21-10464__0001.0.pdf?mcid=tGE4TAMA SOUTH CLAIBORNE: Seeks to Hire Hayes Law Firm as Counsel -------------------------------------------------------- South Claiborne Holdings, LLC, seeks approval from U.S. Bankruptcy Court for the Eastern District of Louisiana to hire the law firm of The Hayes Law Firm, PLC as its counsel. The firm's services include: a. advising the Debtor with respect to the rights, powers and duties as debtor and debtor-in-possession in the continued operation and management of the business and property; b. preparing, with consultation with the appointed SubChapter V Trustee, pursuing confirmation of a plan of reorganization; c. preparing on behalf of the Debtor all necessary applications, motions, answers, proposed orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed; d. advising the Debtor concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed by other parties; e. appearing in Court to protect the interests of the Debtor before this Court, appearing and assisting the Debtor regarding the initial debtor interview, the Section 341 meeting, and the Section 1188 status conference; f. representing the Debtor in connection with use of cash collateral and/or obtaining postpetition financing; g. advising the Debtor concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions; h. investigating the nature and validity of liens asserted against the property of the Debtor, and advising the Debtor concerning the enforceability of said liens; i. investigating and advising the Debtor concerning, and taking such action as may be necessary to collect income and assets in accordance with applicable law, and the recovery of property for the benefit of the estate; j. advising and assisting the Debtor in connection with any potential property dispositions; k. advising the Debtor concerning executory contracts and unexpired lease assumptions, assignments and rejections and lease restructuring, and recharacterizations; l. assisting the Debtor in reviewing, estimating and resolving claims asserted against the Debtor's estate; m. commencing and conducting litigation (not performed by other firms) necessary and appropriate to assert rights held by the Debtor, protecting assets of the Debtor's SubChapter V estate or otherwise further the goal of completing the Debtor's successful reorganization; and n. performing all other legal services for the Debtor which may be necessary and proper in the SubChapter V Case. The firm will be paid a flat fee of $10,000. The firm received $1,500 toward the flat fee retainer at the time of the filing of the said voluntary petition. DaShawn Hayes, Esq., managing attorney at Hayes Law, assures the court that the firm is a "disinterested person" as that phrase is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached through: DaShawn Paul Hayes, Esq. The Hayes Law Firm, PLC 1100 Poydras Street, Ste 1530, New Orleans, LA 70163 Phone: 504-799-0374 Email: dphayesesquire@gmail.com Anout South Claiborne Holdings South Claiborne Holdings, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-10205) on Feb. 18, 2021. At the time of filing, the Debtor estimated $500,001 to $1 million in assets and $100,001 to $500,000 in liabilities. DaShawn P. Hayes, Esq. at The Hayes Law Firm, PLC, serves as the Debtor's counsel. SOUTHERN FOODS: US Trustee Opposes to Joint Liquidating Plan ------------------------------------------------------------ Kevin M. Epstein, the United States Trustee for Region 7, objects to the Joint Chapter 11 Plan of Liquidation of Southern Foods Group, LLC, Dean Foods Company, and Their Debtor Affiliates. The United States Trustee claims that the Plan improperly provides overly broad exculpation coverage to a myriad of parties in violation of section 524(e) of the Bankruptcy Code and black letter Fifth Circuit law. This controlling decision is unequivocal. Unless the Debtors conform the Plan’s exculpation provision to this mandate, the Plan violates section 1129(a)(1) and the Court should deny confirmation. The United States Trustee points out that the Plan contains a broad exculpation clause that provides that none of the Exculpated Parties shall have or incur any liability for any act or omission in connection with, relating to, or arising out of the Chapter 11 Cases, the negotiation of any settlement or agreement, contract, instrument, the Disclosure Statement, release, or document created or entered into in connection with the Plan or in the Chapter 11 Cases. The United States Trustee asserts that the Plan provides Exculpation Coverage to a laundry list of parties. Except for the Creditors' Committee and its members, none of the Exculpated Parties may receive Exculpation Coverage under Pacific Lumber's interpretation of 11 U.S.C. Sec. 524(e). About Southern Foods Group Southern Foods Group, LLC, d/b/a Dean Foods, is a food and beverage company and a processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. The Company and its 40+ affiliates filed for bankruptcy protection on Nov. 12, 2019 (Bankr. S.D. Texas, Lead Case No. 19-36313). The petitions were signed by Gary Rahlfs, senior vice president and chief financial officer. Judge David Jones presides over the cases. The Debtors posted estimated assets and liabilities of $1 billion to $10 billion. David Polk & Wardell LLP serves as general bankruptcy counsel to the Debtors, and Norton Rose Fulbright US LLP serves as local counsel. Alvarez Marsal is the financial advisor to the Debtors, Evercore Group LLC is the investment banker, and Epiq Corporate Restructuring LLC is notice and claims agent. SOVOS BRANDS: Moody's Completes Review, Retains B3 CFR ------------------------------------------------------ Moody's Investors Service has completed a periodic review of the ratings of Sovos Brands Intermediate, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 1, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Sovos Brands Intermediate, Inc.'s B3 CFR reflects its moderately high financial leverage, limited operating history (since 2017), and execution risks associated with its acquisition driven growth strategy. In addition, the rating is supported by the growing brand equities of its "Rao's", "noosa", and "Birch Benders" brands. Sovos has improving segmental sales diversification in pasta sauce, yogurt, frozen meals, and pancake mix although Rao's represents more than half of total sales. On the other hand, the rating is constrained by its high financial policy risk reflecting possible future acquisitions; concentration of earnings in the highly competitive pasta sauce and yogurt categories; weak long-term growth prospects of the US yogurt category; and small scale of its "Michael Angelo's" frozen food brand. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. STA VENTURES: Unsecured Creditors to Recover 100% in Plan --------------------------------------------------------- Sta Ventures, LLC, submitted an Amended and Restated Disclosure Statement for its Chapter 11 Plan of Reorganization. The Debtor owns 35.449 acres of Walton County property located within the City of Loganville, Walton County, Georgia. The property is in a mixed-use area of City of Loganville, Walton County and the area has been developed with substantial density. This 35.449-acre tract is zoned for 317 housing units. Units can be single-family residential or multi-family units. The Debtor also owns 1.769 acre Fulton County property located in Alpharetta, Fulton County, Georgia. The property is split by the Westside Parkway. Approximately 1.01 acres of the tract are located on the south east side of the Westside Parkway. The approximately .759-acre tract is on the south side of the Westside Parkway. The 1.01-acre tract is located across the street from the highly acclaimed Avalon multi-use development in downtown Alpharetta. This 1.01-acre tract is zoned to allow eight multi-family residential units. The Plan treats claims as follows: * Class 4 Bay Point Capital Secured Claim. The Class 4 Bay Point Capital Secured Claim is scheduled as a disputed claim which has an outstanding principal amount of $1,700,000 and an amount of interest that has not yet been determined. In the event Debtor and Bay Point Capital are able to resolve terms for restructuring and repayment of the Bay Point Capital Secured Claim, the settlement will be reflected by amendments to Debtor's Plan filed prior to the Confirmation Hearing or by an order of Court. In the event that Debtor is not able to reach agreement regarding the treatment of the Class 4 Bay Point Capital Secured Claim, the Claim shall be satisfied by a specific request of Debtor for treatment pursuant to 11 U.S.C. Sec. 1129(b) as set out in Debtor's Second Plan Amendment dated and filed February 23, 2021. * Class 5 Ray Family IRA/Unell Investments Joint Claim. The Debtor and Ray Family IRA Investments, LLC and Unell Investments, LLC have reached a settlement and resolved treatment of the Class 5 Claim. By consent, Debtor STA Ventures and Ray Family IRA/Unell Investments Joint Claimants agree as follows: post-Petition Ray Family IRA/Unell Investments Joint Claimants have continued to hold their pre-Petition second in priority Ray/Unell Security Deed and Rent Assignment on the Loganville/Walton County 35.449 Acre Property. Post- Petition, the Ray/Unell Security Deed and Rent Assignment have secured only a debt of a non-Debtor; and these instruments have not secured any debt of Debtor STA Ventures. Post-Petition, a non-Debtor has agreed to provide Ray Family IRA/Unell Investments Joint Claimants additional security for the indebtedness of a non-Debtor to Ray Family IRA/Unell Investments Joint Claimants. As a result, Ray Family IRA/Unell Investments Joint Claimants have accepted Debtor STA Ventures demand and request that Ray Family IRA/Unell Investments Joint Claimants grant a quitclaim and release of the Ray/Unell Security Deed and Rent Assignment. As a result of this acceptance by Ray Family IRA/Unell Investments, the Debtor will not provide any other treatment of the Ray Family IRA/Unell Investments Joint Claim; and Debtor STA Ventures will transact business regarding its Loganville/Walton County 35.449 Acre Tract free and clear of any liens which Ray Family IRA/Unell Investments Joint Claimants have agreed to release. * Class 6 Unsecured, Non-Priority Tax Claims. Unsecured, Non-Priority Tax Claims are impaired. The Debtor's Plan provides that any Class 6 Unsecured, Non-Priority Tax Claims will be paid as follows: the total amount of each Class 6 Allowed, Unsecured, Non-Priority Tax Claim plus any additional payment ordered by the Court as provided herein, shall be paid 25% of the Allowed Claim in four, consecutive, quarterly installments over a period which commences on the first day of the calendar quarter commencing not less than 70 days from the Consummation Date and 25% of the Allowed Claim payments are thereafter made on the first day of each three consecutive calendar quarters. * Class 7 Unsecured, Non-Priority, Non-Insider, Non-Tax, Non- Deficiency Claims. The Debtor's Plan provides that holders of all Allowed Class 7 Unsecured, Non-Priority, Non-Insider, Non-Tax, Non-Deficiency Claims shall be paid 100 cents on the dollar on terms and conditions as follows: on the Consummation Date, Class 7 Claims will be paid pro rata 20% of their Allowed Claims. Thereafter, Class 7 Claims will be paid from Net Sales Proceeds from sales of all or parts of the 35.449 Acre Loganville/Walton County Property and the 1.769 Acre Alpharetta/Fulton County Property which Net Sales Proceeds remain after payment of any unpaid Class 1 Administrative Claims and Class 4 Bay Point Capital Secured Claim. Payments to Class 7 Unsecured, Non- Priority, Non-Insider, Non-Tax, Non-Deficiency Claims shall be made Pro Rata to Class 7 claimants. * Class 8 Unsecured, Non-Priority, Insider Claims. The Class 8 Unsecured, Non-Priority, Insider Claims shall be either: (i) paid after payment of all Class 1, 2, 3, 4, 5, 6, and 7 Claims; or (ii) converted to equity of Debtor, as agreed between Debtor, Insider Logan Point, LLC, and Insider Stephen T. Allen. * Class 9 Equity Interest Holder Claims. The Debtor's Plan provides that the Class 9 Claims consist of the equity interests in Debtor. The holder of the equity interests shall retain his 100% interest in Debtor. The Debtor shall remain in control of its assets during the entire administration of this Plan. Counsel for STA Ventures: JIMMY L. PAUL DREW V. GREENE CHAMBERLAIN, HRDLICKA, WHITE WILLIAMS & AUGHTRY 191 Peachtree Street, N.E., 46th Floor Atlanta, Georgia 30303 Tel: (404) 659-1410 A copy of the Disclosure Statement is available at https://bit.ly/38qwvkR from PacerMonitor.com. About STA Ventures STA Ventures, LLC is a limited liability corporation with principal office address at 145 Houze Way, Roswell, Fulton County, Ga. On June 1, 2020, STA Ventures filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 20-66843). The petition was signed by Stephen T. Allen, its managing member. At the time of the filing, the Debtor disclosed assets of $1 million to $10 million and estimated liabilities of the same range. The Debtor has tapped Chamberlain, Hrdlicka, White, Williams & Aughtry as legal counsel; Peach Appraisal Group, Inc. as appraiser; and Magaro & Conine, CPA as accountant. SUNDANCE ENERGY: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Sundance Energy Inc. 1050 17th Street, Suite 700 Denver, CO 80265 Business Description: Sundance Energy Inc. is an onshore independent oil and natural gas company focused on the development, production, and exploration of large, repeatable resource plays in North America. Its operations consist primarily of drilling and production from unconventional horizontal wells targeting the Eagle Ford formation in South Texas. Chapter 11 Petition Date: March 9, 2021 Court: United States Bankruptcy Court Southern District of Texas Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Sundance Energy Inc. (Lead Case) 21-30882 Sundance Energy, Inc. 21-30883 Armadillo E&P, Inc. 21-30884 SEA Eagle Ford, LLC 21-30881 Judge: Hon. David R. Jones Debtors' Counsel: Timothy A. ("Tad") Davidson II, Esq. Ashley L. Harper, Esq. Philip M. Guffy, Esq. HUNTON ANDREWS KURTH LLP 600 Travis Street, Suite 4200 Houston, Texas 77002 Tel: 713-220-4200 Fax: 713-220-4285 Email: taddavidson@HuntonAK.com ashleyharper@HuntonAK.com pguffy@HuntonAK.com - and - George A. Davis, Esq. David A. Hammerman, Esq. Keith A. Simon, Esq. Annemarie V. Reilly, Esq. Jeffrey T. Mispagel, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York, New York 10022 Tel: 212-906-1200 Fax: 212-751-4864 Email: george.davis@lw.com david.hammerman@lw.com keith.simon@lw.com annemarie.reilly@lw.com jeffrey.mispagel@lw.com Debtors' Financial Advisor: FTI CONSULTING, INC. Debtors' Investment Banker: MILLER BUCKFIRE & CO., LLC AND ITS AFFILIATE STIFEL, NICOLAUS & CO., INC. Debtors' Claims, Noticing, & Solicitation Agent: PRIME CLERK LLC https://cases.primeclerk.com/sundanceenergy/Home-DocketInfo Total Assets as of September 30, 2020: $450,346,000 Total Debts as of September 30, 2020: $428,822,000 The petitions were signed by Eric McCrady, president, chief executive officer, and director. A copy of Sundance Energy Inc.'s petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VKYPVYQ/Sundance_Energy_Inc__txsbke-21-30882__0001.0.pdf?mcid=tGE4TAMA List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Step Energy Services Ltd Trade Claim $2,096,171 Bow Valley Square II 1200, 205 5th Ave SW Calgary, AB T2P 2V7 Olen Ponder Tel: 210-355-7573 Email: olen.ponder@stepes.com 2. PPP Cares Act Loan Debt $1,912,000 U.S. Small Business Administration 409 3rd St. SW Washington, DC 20416 Tel: 800-827-5722 Email: answerdesk@sba.gov 3. Refinery Specialties Inc. Trade Claim $629,087 PO Box 577 Hempstead, TX 77445 Laura Trammell Tel: 979-826-4961 Email: laura.trammel@rsichem.com 4. Archrock Partners LP Trade Claim $285,798 PO Box 201160 Dallas, TX 75320-1160 Mike Edison Tel: 281-836-8046 Edison, Mike Email: mike.edison@archrock.com 5. Chesapeake Energy Trade Claim $280,237 Corporation PO Box 207295 Dallas, TX 78320-7295 Steve Armstrong Tel: 918-804-7676 Email: email.armstron@chk.com 6. Texas Fuelling Services Trade Claim $279,814 2500 West, Loop South Suite 518 Houston, TX 77027 Danny Sheena Tel: 713-224-6508 Email: danny@texasfueling.com 7. South Texas Oilfield Trade Claim $271,356 Solutions LLC Drawer 2295 PO Box 5935 Troy, MI 48007-5935 Tara Blackwell Tel: 361-396-1777 X101 Email: tblackwell@stxofs.com 8. Key Energy Services Trade Claim $269,310 PO Box 4649 Houston, TX 77210-4649 Vickie Elkington Tel: 214-546-2086 Email: velkington@keyenergy.com 9. Gulf Coast Trade Claim $259,531 PO Box 732951 Dallas, TX 75373-2951 Gulf Coast Business Credit Tel: 866-577-8867 Email: gcbinfo@gulfbank.com 10. Kodiak Gas Services LLC Trade Claim $256,230 PO Box 732235 Dallas, TX 75373-2235 Christopher Magnoli Tel: 936-539-3300 Email: chris.magnoli@kodiakgas.com 11. Atchafalaya Measurement, Inc. Trade Claim $239,777 PO Box 677208 Dallas, TX 75267-7208 Meloney McNeill Tel: 337-237-7675 Email: meloney@ami.email 12. Anderson Perforating Trade Claim $238,000 Services PO Box 2037 Albany, TX 76430 Tanya Brandon Tel: 325-762-2200 Email: tbrandon@thewirelinegroup.com 13. Don-Nan Pump & Trade Claim $162,697 Supply Co, Inc. PO Box 11367 Midland, TX 79702 Debbie Levario Tel: 432-682-7742 Email: dlevario@don-nan.net 14. Completion Equipment Trade Claim $154,366 Rental 4085 Cibolo Canyons Ste #101 San Antonio, TX 78261 Peter Pfister Tel: 210-462-7132 Email: ar@completionrental.com 15. Wood Group PSN, Inc. Trade Claim $133,963 PO Box 301415 Dallas, TX 75303-1415 Cathy Prince Tel: 361-739-5352 Email: cathy.prince@woodplc.com 16. Trio Equip. Rentals Trade Claim $129,210 & Services, L.L.C. PO Box 2208 Alice, TX 78333-2208 Vince Haigood Tel: 361-227-5123 Email: vincehaigood@yahoo.com 17. Peloton Computer Trade Claim $129,200 Enterprises Inc. 23501 Cinco Ranch Blvd Suite C220 Katy, TX 77494 Devin Iverson Tel: 303-358-9188 Email: devin.iverson@peloton.com 18. Polk Production Trade Claim $126,629 Technologies Inc. PO Box 260778 Corpus Christi, TX 78426-0778 Chealsea Polk Tel: 361-215-2120 Email: cpolk@polkproduction.com 19. Rod and Tubing Trade Claim $116,647 Services, LLC PO Box 4824 Bryan, TX 77805 Daniel Williams Tel: 979-775-5000 Email: dwilliams@rodservices.com 20. OSC Energy LLC Trade Claim $109,778 PO Box 6012 Corpus Christi, TX 78466 Ellie Cavazos Tel: 830-579-4487 Email: ar@oscenergy.com 21. Crescent Consulting LLC Trade Claim $108,037 13212 N MacArthur Blvd Oklahoma, City OK 73142 Brock Knapp Tel: 405-312-2618 Email: knapp@crescentoconsulting.com 22. Green Production Services, LLC Trade Claim $102,495 P.O. Box 782309 San Antonio, TX 78278 Sarah Landry Tel: 337-349-1983 Email: slandry@gpstx.net 23. Revo Testing Trade Claim $95,728 Technologies LLC 650 N Sam Houston Pkwy E Suite 313 Houston, TX 77060 Kelly Ciprick Tel: 832-209-9986 Email: kciprick@revotest.com 24. Wil-Call Services Ltd Trade Claim $92,700 PO Box 473 Buffalo, TX 75831 Charlotte Cooper Tel: 903-322-2911 Email: cooper@jkwilson.com 25. QEP Resources Inc. Trade Claim $83,347 1050 17th Street Suite 800 Denver, CO 80265 Chris Woosley Tel: 303-573-3448 Email: chris.woosley@qepres.com 26. Field Petroleum Trade Claim $82,304 8833 Tradeway Street San Antonio, TX 78217 Reeves Hollimon Tel: 210-829-8822 27. P2ES Holdings, LLC Trade Claim $80,976 1670 Broadway Suite 2800 Denver, CO 80202 Mindy Siskey Tel: 713-775-2516 Email: msiskey@p2energysolutions.com 28. Red-D-Arc Inc. Trade Claim $77,652 PO Box 532618 Atlanta, GA 30353 Candice Tipton Tel: 940-627-0051 Ext 108 Email: candice.tipton@airgas.com 29. Flowco Production Trade Claim $77,521 Solutions, LLC PO Box 660919 Dallas, TX 75266 Robert Thilsted Tel: 713-444-3216 Email: robert.thilsted@flowcosolutions.com 30. Alamo Oilfield Trade Claim $75,588 Services LLC 1045 Central Pkwy N. San Antonio, TX 78232 Lauren Wells Tel: 210-402-6100 Ext 101 Email: lauren@alamooilfield.com SUNDANCE ENERGY: Has $50MM DIP Financing from Morgan Stanley ------------------------------------------------------------ Sundance Energy Inc and its affiliated Debtors ask the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, for authorization to obtain postpetition financing and use cash collateral. Specifically, the Debtors seek to obtain postpetition financing on a secured superpriority basis, consisting of a new money term loan facility in an aggregate principal amount of up to $50 million on these terms: -- a maximum aggregate principal amount of $10 million will be available to Debtor Sundance Energy, Inc. upon entry of the interim approval order; -- At any time following entry of the Interim Order, at the determination of the DIP Lenders holding at least 70% of the commitments under the DIP Facility, the DIP Lenders may make available to the DIP Borrower an aggregate principal amount of up to $5 million, as Case Extension Draws; and -- following entry of the Final Order and only on the effective date of an Approved Plan, an additional amount of $35 million in commitments shall be available to the DIP Borrower. Morgan Stanley Capital Administrators, Inc., serves as the administrative and collateral agent for the DIP Facility. Morgan Stanley Capital Administrators, formerly Morgan Stanley Energy Capital Inc., is also the administrative agent under the Debtors' Prepetition Term Loan Agreement. On April 23, 2018, Debtor SEI entered into a Credit Agreement, as borrower, together with the guarantors party thereto, with Natixis, New York Branch, as administrative agent, and the lenders from time to time party thereto, which provided for a reserve-based revolving credit facility with an initial borrowing base of $87.5 million and a maximum aggregate commitment of $250.0 million. Toronto Dominion (Texas) LLC currently serves as successor administrative agent under the Prepetition RBL Facility. Availability of funds under the Prepetition RBL Facility is subject to a borrowing base, which is redetermined by the Prepetition RBL Lenders at least semi-annually. The most recent redetermination was completed in June 2020. The Prepetition RBL Credit Agreement also requires the Debtors to maintain certain financial ratios. The Prepetition RBL Facility is scheduled to mature on October 23, 2022. The obligations arising under the Prepetition RBL Credit Agreement are secured by senior, first priority interests in, and liens upon, substantially all of the Debtors' tangible and intangible assets, including, among other things, proved reserves. As of the Petition Date, the borrowing base under the Prepetition RBL Facility is $168.6 million. The Debtors estimate that as of the Petition Date, the outstanding amounts under the Prepetition RBL Facility consist of approximately $130.6 million of outstanding principal, plus approximately $16.4 million in outstanding letters of credit, plus accrued but unpaid interest, fees, costs, and expenses. On April 23, 2018, Debtor SEI entered into an Amended and Restated Term Loan Credit Agreement, as borrower, together with the guarantors party thereto, Morgan Stanley Energy Capital as administrative agent under the Debtors' Prepetition Term Loan Agreement, and the lenders from time to time party thereto, providing for a $250.0 million term loan that matures on April 23, 2023. The obligations arising under the Prepetition Term Loan Credit Agreement are secured by second priority interests in, and liens upon, the same collateral that secures the Prepetition RBL Facility. Each of the Debtors, other than Debtor SEI, are guarantors of the Prepetition Term Loan Facility. The Prepetition Term Loan Agent, the Prepetition RBL Agent, the DIP Borrower, and the DIP Guarantors are party to an Intercreditor Agreement, dated as of April 23, 2018, which sets forth the relative lien priorities and other rights and remedies of the Prepetition RBL Secured Parties and the Prepetition Term Loan Secured Parties with respect to, among other things, the Prepetition RBL Collateral and the Prepetition Term Loan Collateral. The Prepetition Intercreditor Agreement gives the lenders under Prepetition RBL Facility priority over the lenders under Prepetition Term Loan Facility on the Collateral. The Debtors contend that they, the DIP Secured Parties and the Prepetition RBL Secured Parties have negotiated two critical provisions in the proposed Interim Order that are designed to mitigate the DIP Lenders' risk while also preserving the rights of the Prepetition RBL Lenders to monitor and protect their interests in Cash Collateral: (1) The Debtors, the DIP Secured Parties and the Prepetition RBL Secured Parties have agreed that if the Debtors trigger a Cash Collateral Termination Event, the DIP Lenders would be entitled to seek equitable relief from the Court directing the Debtors to cure such Cash Collateral Termination Event. If the Court were to grant such relief, the Cash Collateral Termination Event would be deemed cured, and the Debtors would continue toward confirmation of the Approved Plan. If the Court declined to grant such relief, then the Prepetition RBL Secured Parties would be entitled to pursue customary rights and remedies with respect to the Cash Collateral, subject to Court's determination of appropriate remedies. (2) The Debtors, the DIP Secured Parties and the Prepetition RBL Secured Parties have agreed that proceeds of the DIP Facility will initially be disbursed into a separate account, which shall contain no funds other than DIP Facility disbursements—and thus will be completely segregated from the Cash Collateral of the Prepetition RBL Lenders or any other property of the Debtors. Funds will then be transferred from the DIP Proceeds Account into the Debtors' main cash management system as necessary for disbursements during the Chapter 11 Cases. Upon the occurrence of a DIP Termination Event, the DIP Agent shall be entitled to immediately sweep all funds remaining in the DIP Proceeds Account without need for further order of the Court. Any funds already transferred out of the DIP Proceeds Account would not be subject to sweep, and the DIP Lenders would only be permitted to exercise remedies against funds that have been commingled with Cash Collateral (or any other property of the Debtors) after notice and a hearing. The Debtors tell the Court they have a critical need to use the DIP Facility proceeds to operate their business and preserve their going-concern value. They further tell the Court that the Debtors' business is cash intensive and due to their current limited liquidity, the Debtors require immediate access to the DIP Facility to operate their business, preserve value, and avoid irreparable harm pending the Final Hearing. The Debtors contend that the DIP Facility proceeds are needed to: (a) finance transaction fees, costs and expenses related to the Chapter 11 Cases, including Allowed Professional Fees (as defined in the DIP Credit Agreement) and other administrative fees arising in the Chapter 11 Cases; (b) finance ongoing debtor-in-possession working capital, capital expenditures, and for other general corporate purposes of the DIP Loan Parties; (c) make any adequate protection payments to the Prepetition RBL Lenders; (d) repay amounts funded under the Prepetition RBL Facility after January 6, 2021 through the Petition Date, and in accordance with the terms of the Orders; and (e) fund other fees, costs and expenses associated with these Chapter 11 Cases. The proposed DIP Facility has, among others, these material terms: (a) Credit Parties under the DIP Agreements: Borrower: Sundance Energy, Inc. Guarantors: Sundance Energy, Inc., Armadillo E&P, Inc., and SEA Eagle Ford, LLC. DIP Agent: Morgan Stanley Capital Administrators Inc. DIP Lenders: The lenders from time to time party to the DIP Credit Agreement (b) Term: The earliest of (a) June 14, 2021, (b) the effective date of an Approved Plan, and (c) the date all DIP Loans become due and payable under the Loan Documents, whether by acceleration or otherwise. (c) Commitment: An aggregate principal amount of up to $50,000,000 in commitments and loans from the Lenders, which shall consist of (i) subject to, among other conditions, obtaining entry of the Interim Order and the Hedging Order, an initial draw in an amount which shall not exceed an aggregate principal amount of $10,000,000 (the "Interim Period Draw"), (ii) subject to, among other conditions, the entry of the Final Order, a second draw under the DIP Facility in an amount which shall not exceed an aggregate principal amount of $35,000,000 (the "Final Period Draw"), and (iii) subject to certain conditions, additional draws up to $5,000,000 solely in the amount reasonably required by the Debtors and agreed to by the Case Extension Required Lenders in their sole and absolute discretion and not to exceed the Case Extension Commitments (the "Case Extension Draws"). (d) Interest Rates: The DIP Loans shall bear interest at a rate per annum selected by the DIP Borrower equal to the LIBO Rate plus 8.00%, provided that if the LIBO Rate shall be lower than 1.00%, the LIBO Rate will be 1.00%, but in no event to exceed the Highest Lawful Rate. (e) Entities with Interests in Cash Collateral: (1) the DIP Secured Parties; and (2) the Prepetition Secured Parties. (f) Liens and Priorities: DIP Liens shall have the following relative rank and priority: (1) Pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, enforceable, fully perfected first priority senior security interest in and lien upon all of the DIP Loan Parties' right, title and interest in, to, and under the DIP Proceeds Account (including all cash and cash equivalents held therein, and proceeds disbursed in contravention of the DIP Credit Agreement that are identifiable and traceable from Cash Collateral), subject and subordinate only to the Carve Out; (2) Pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, enforceable, fully perfected junior priority security interest in and lien upon all of the DIP Loan Parties' right, title and interest in, to, and under (x) the proceeds of or judgments from all claims and causes of action arising under chapter 5 of the Bankruptcy Code (including section 549 of the Bankruptcy Code), whether pursuant to federal law or applicable state law, of the DIP Loan Parties or their estates, but not the claims and causes of action themselves, and (y) all assets of the Debtors that are not Prepetition Collateral (other than any Excluded Assets), subject and subordinate only to the Carve Out and the RBL Adequate Protection Liens; and (3) Pursuant to section 364(c)(3) of the Bankruptcy Code, a valid, binding, enforceable, fully perfected junior security interest in and lien upon all of the DIP Loan Parties' right, title and interest in, to, and under all Prepetition Collateral (other than any Excluded Assets and the DIP Priority Collateral), whether existing on the Petition Date or thereafter acquired, and wherever located, and the proceeds, products, rents and profits of the foregoing, subject and subordinate only to (i) the Carve Out, (ii) the Permitted Prior Senior Liens, (iii) the Prepetition RBL Liens and (iv) the RBL Adequate Protection Liens; but senior to the Prepetition Term Loan Liens and the Term Loan Adequate Protection Liens. (g) Carve-Out: Consists of certain statutory fees and allowed professional fees of the Debtors and any official committee of unsecured creditors appointed in the Chapter 11 Cases pursuant to section 328 or 1103 of the Bankruptcy Code. (h) Adequate Protection: Prepetition RBL Secured Parties: Subject to the challenge rights set forth in the Interim Order, pursuant to sections 361, 363(e), 364(d) and 507 of the Bankruptcy Code, the Prepetition RBL Secured Parties are entitled to adequate protection of their interests in all Prepetition RBL Collateral, including the Cash Collateral, in an amount equal to the aggregate Diminution in Value of the Prepetition RBL Secured Parties' interests in the Prepetition RBL Collateral (including Cash Collateral) from and after the Petition Date: (1) RBL Adequate Protection Liens. The Prepetition RBL Agent, on behalf the Prepetition RBL Secured Parties, is to be granted a valid, binding, enforceable and automatically perfected postpetition lien on all Other DIP Collateral to the extent of any Diminution in Value of the Prepetition RBL Secured Parties' interests in the Prepetition Collateral (including Cash Collateral), which RBL Adequate Protection Liens shall be subject and subordinate only to (i) the Carve Out and (ii) the Permitted Prior Senior Liens; (2) RBL Adequate Protection Claims. The Prepetition RBL Agent, on behalf of the Prepetition RBL Secured Parties, is to be granted an allowed superpriority administrative expense claim, to the extent of any Diminution in Value of the Prepetition RBL Secured Parties' interests in the Prepetition Collateral (including Cash Collateral), as provided for in section 507(b) of the Bankruptcy Code, in each of the Chapter 11 Cases, with recourse to all DIP Collateral, and which shall be (A) with respect to the Other DIP Collateral, (i) junior to the Carve Out and (ii) otherwise senior to any and all other administrative expenses of the kind specified or ordered pursuant to any provision of the Bankruptcy Code and (B) with respect to the DIP Priority Collateral, (i) junior to the Carve Out and the DIP Superpriority Claims and (ii) otherwise senior to any and all other administrative expenses of the kind specified or ordered pursuant to any provision of the Bankruptcy Code. (3) Fees and Expenses. Pursuant to sections 361, 363(e), 364(d), and 507 of the Bankruptcy Code, as additional adequate protection, the DIP Loan Parties shall pay (A) all reasonable, documented (summary invoices shall suffice) and reimbursable fees, costs and expenses of the Prepetition RBL Agent and the Prepetition RBL Lenders, including the prepetition and postpetition fees and expenses of (i) Haynes & Boone LLP, (ii) Opportune LLP, and (iii) any local legal counsel retained by, or on behalf of, the Prepetition RBL Agent, and (B) the reasonable, documented (summary invoices shall suffice) and reimbursable fees, costs and expenses of up to $10,000 for K&L Gates LLP, as counsel to ABN AMRO Capital USA, LLC and up to $10,000 for Luskin, Stern & Eisler LLP, as counsel to Credit Agricole Corporate and Investment Bank; provided that the aggregate fees, costs and expenses paid or reimbursed to either K&L Gates LLP or Luskin, Stern & Eisler LLP pursuant to the Restructuring Support Agreement, the Plan, the Interim Order, and the Final Order shall not exceed $10,000 for each respective firm, subject to the review procedures set forth in the Interim Order. (4) Financial Reporting. The DIP Loan Parties shall provide the Prepetition RBL Agent, on behalf of the Prepetition RBL Secured Parties, and Opportune LLP with (A) (i) copies of the DIP Reporting and (ii) a copy of Approved Budget, contemporaneously with delivery thereof to the DIP Secured Parties (each, on a confidential basis), and (B) otherwise continue with financial and other reporting substantially in compliance with the Prepetition Loan Documents (only with respect to those requirements that fall due after the Petition Date). Prepetition Term Loan Secured Parties: Subject to the challenge rights set forth in the Interim Order, pursuant to sections 361, 363(e), 364(d), and 507 of the Bankruptcy Code, the Prepetition Term Loan Secured Parties are entitled to adequate protection of their interests in all Prepetition Term Loan Collateral, including Cash Collateral, in an amount equal to the aggregate Diminution in Value of the Prepetition Term Loan Secured Parties' interests in the Prepetition Term Loan Collateral (including Cash Collateral) from and after the Petition Date: (1) Term Loan Adequate Protection Liens. The Prepetition Term Loan Agent, on behalf the Prepetition Term Loan Secured Parties, is to be granted a valid, binding, enforceable and automatically perfected postpetition lien on all DIP Collateral to the extent of any Diminution in Value of the Prepetition Term Loan Secured Parties' interests in the Prepetition Collateral (including Cash Collateral), which Term Loan Adequate Protection Liens shall be (A) with respect to the DIP Priority Collateral, subject and subordinate only to (i) the Carve Out, (ii) the Senior DIP Liens, and (iii) the Permitted Prior Senior Liens and (B) with respect to all Other DIP Collateral, shall be subject and subordinate only to (i) the Carve Out, (ii) the Permitted Prior Senior Liens, (iii) the Prepetition RBL Liens, (iv) the RBL Adequate Protection Liens and (v) the Junior DIP Liens. (2) Term Loan Adequate Protection Claims. The Prepetition Term Loan Agent, on behalf of the Prepetition Term Loan Secured Parties, is to be granted an allowed superpriority administrative expense claim, to the extent of any Diminution in Value of the Prepetition Term Loan Secured Parties' interests in the Prepetition Collateral (including Cash Collateral), as provided for in section 507(b) of the Bankruptcy Code in each of the Chapter 11 Cases, with recourse to all DIP Collateral, and which shall be (A) junior to the Carve Out, DIP Superpriority Claims and RBL Adequate Protection Claims and (B) otherwise senior to any and all other administrative expenses of the kind specified or ordered pursuant to any provision of the Bankruptcy Code. (3) Fees and Expenses. Pursuant to sections 361, 363(e), 364(d), and 507 of the Bankruptcy Code, as additional adequate protection, the DIP Loan Parties shall pay all reasonable, documented (summary invoices shall suffice) and reimbursable fees, costs and expenses of the Prepetition Term Loan Agent and the Prepetition Term Lenders, including the prepetition and postpetition fees and expenses of (i) Simpson Thacher & Bartlett LLP, (ii) Locke Lord LLP, and (iii) Houlihan Lokey Capital, Inc., subject to the review procedures set forth in the Interim Order. (4) Financial Reporting. The DIP Loan Parties shall provide the Prepetition Term Loan Agent, on behalf of the Prepetition Term Loan Secured Parties, and Houlihan Lokey Capital, Inc. with (A) (i) copies of the DIP Reporting, (ii) a copy of Approved Budget, contemporaneously with delivery thereof to the DIP Secured Parties (each, on a confidential basis), and (iii) copies of financial reporting regarding the Debtors' accounts receivable and cash position on a weekly basis, and (B) otherwise continue with financial and other reporting, including monthly borrowing base reporting, substantially in compliance with the Prepetition Loan Documents. A full-text copy of the Emergency Motion, dated March 9, 2021, is available for free at https://tinyurl.com/5x98ff5j from PacerMonitor.com. About Sundance Energy Sundance Energy Inc. -- http://www.sundanceenergy.net/-- is an independent energy exploration and production company located in Denver, Colorado. The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford. On March 9, 2021, Sundance Energy, Inc. and 3 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 21-30882). The Honorable David R. Jones is the case judge. Sundance is represented in this matter by Latham & Watkins LLP, Hunton Andrews Kurth LLP, Miller Buckfire & Co., LLC, and FTI Consulting Inc. Prime Clerk LLC is the claims agent. Haynes & Boone LLP, and Opportune LLP advise Toronto Dominion (Texas) LLC, which currently serves as successor administrative agent under the Prepetition RBL Facility. K&L Gates LLP, is counsel to ABN AMRO Capital USA, LLC. Luskin, Stern & Eisler LLP, is counsel to Credit Agricole Corporate and Investment Bank. Morgan Stanley Capital Administrators, Inc., is advised by Simpson Thacher & Bartlett LLP, Locke Lord LLP, and Houlihan Lokey Capital, Inc. * * * On March 10, 2021, the Debtors filed a joint prepackaged plan of reorganization and a proposed disclosure statement. A combined hearing to consider, among other matters, the adequacy of the Disclosure Statement and confirmation of the Plan will be held on April 19, 2021 at 9:30 a.m., prevailing Central Time, before the Honorable David R. Jones, United States Bankruptcy Court for the Southern District of Texas, Courtroom 400, 4th Floor, 515 Rusk Street, Houston, Texas 77002 via electronic means (audio and video) only. SUNDANCE ENERGY: RSA Milestones Require Confirmation in 45 Days --------------------------------------------------------------- Sundance Energy Inc. and its affiliates have sought Chapter 11 bankruptcy protection. On March 9, 2021, the Debtors entered into a Restructuring Support Agreement with (i) the administrative agent under the Company’s revolving credit facility (the "RBL Facility"); (ii) certain lenders under the RBL Facility party thereto (the "Consenting RBL Lenders"); (iii) the administrative agent under the Company's term loan credit facility (the "Term Loan Facility"); and (iv) certain lenders under the Term Loan Facility party thereto (the "Consenting Term Lenders"). As set forth in the RSA, the parties to the RSA have agreed to the principal terms of a proposed financial restructuring (the "Transaction") of the Company. The Transaction is contemplated to be implemented through a joint prepackaged chapter 11 plan of reorganization (the "Plan") to be implemented through voluntary cases to be commenced by the Company under chapter 11 of title 11 of the United States Code. The RSA and the Plan provide: * Each holder of an Allowed DIP Facility Claim will receive its pro rata share of the New Common Equity Interests DIP Pool, comprising 38.0338% of the New Common Equity Interests (subject to dilution by the MIP Equity). * Each holder of a Prepetition RBL Claim that votes to accept the Plan will receive its pro rata share of the loans under the Exit RBL Facility and the Exit Second Out Term Loan Facility; and the Cash Paydown. * Each Non-Participating RBL Lender will receive loans under the Exit Third Out Term Loan Facility and the Cash Paydown. * Each holder of an Allowed Prepetition Term Loan Claim will receive its pro rata share of 100% of the New Common Equity Interests Term Loan Pool, comprising 61.9662% of the New Common Equity Interests. Milestones The Company has agreed to comply with the following milestones with respect to the Transaction: (a) on or prior to March 10, 2021, the Company shall have commenced solicitation of votes to accept or reject the Plan from the lenders under the RBL Facility and the lenders under the Term Loan Facility (the "Solicitation Commencement Date”); (b) on or prior to the Company commencing the cases (the "Petition Date"), the Exit Debt Commitment Letter shall have been executed and delivered by all parties thereto; (c) within two business days of the Solicitation Commencement Date, the Petition Date shall have occurred; (d) no later than one calendar day after the Petition Date, the Company shall have filed with the Bankruptcy Court (i) a motion seeking entry of the Financing Orders, (ii) the Plan and related disclosure statement, and (iii) a motion seeking approval of the Plan and related disclosure statement and the solicitation materials and procedures set forth therein; (e) no later than three business days after the Petition Date, the Bankruptcy Court shall have entered (i) the Interim Financing Order and (ii) an order scheduling the combined hearing and granting conditional approval of the disclosure statement; (f) no later than 45 calendar days after the Petition Date, the Bankruptcy Court shall have entered the Final Financing Order; (g) no later than 45 calendar days after the Petition Date, the Bankruptcy Court shall have entered an order approving the disclosure statement on a final basis and confirming the Plan (the "Combined Disclosure Statement and Confirmation Order"); and (h) no later than 14 calendar days after the date of entry of the Combined Disclosure Statement and Confirmation Order, all conditions to the effectiveness of the Plan shall have been satisfied or waived in accordance with the terms of the Plan. Forbearance The Consenting RBL Lenders and the Consenting Term Lenders have agreed to forbear from exercising rights and remedies while the RSA remains in full force and effect. · The Governance Term Sheet The Governance Term Sheet summarizes certain material terms in respect of the corporate governance of the reorganized Parent, including without limitation the following: (a) the size of the board of managers of the Parent will be 4 members (the "New Board"); (b) equityholders owning (a) at least 75% of the New Common Equity Interests held on the effective date of the Plan or (b) at least 20% of the outstanding New Common Equity Interests (each, an "Equityholder"), will have the right to appoint a member to the New Board; and (c) Equityholders will be entitled to certain customary rights, including consent rights, information rights, tag-along rights, drag-along rights, preemptive rights and a right of first offer on any transfer. About Sundance Energy Sundance Energy Inc. -- http://www.sundanceenergy.net/-- is an independent energy exploration and production company located in Denver, Colorado. The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford. On March 9, 2021, Sundance Energy, Inc. and 3 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 21-30882). The Honorable David R. Jones is the case judge. Sundance is represented in this matter by Latham & Watkins LLP, Hunton Andrews Kurth LLP, Miller Buckfire & Co., LLC, and FTI Consulting Inc. Prime Clerk LLC is the claims agent. * * * On March 10, 2021, the Debtors filed a joint prepackaged plan of reorganization and a proposed disclosure statement. A combined hearing to consider, among other matters, the adequacy of the Disclosure Statement and confirmation of the Plan will be held on April 19, 2021 at 9:30 a.m., prevailing Central Time, before the Honorable David R. Jones, United States Bankruptcy Court for the Southern District of Texas, Courtroom 400, 4th Floor, 515 Rusk Street, Houston, Texas 77002 via electronic means (audio and video) only. SYNAPTICS INC: S&P Assigns 'BB-' ICR, Outlook Stable ---------------------------------------------------- S&P Global Ratings assigned a 'BB-' issuer credit rating to Synaptics Inc. S&P also assigned a 'BB-' issue-level rating and '4' recovery rating to Synaptics' new senior unsecured notes. S&P said, "The stable outlook reflects our view that Synaptics will resume revenue growth in fiscal 2022 and materially improve profitability, driven by a continued pivot of its internet of things (IoT) business and the realization of operating efficiencies. We also expect it to continue to pursue strategic acquisitions while managing leverage below 4x. "Our 'BB-' rating reflects Synaptics' high customer concentration, relatively modest scale, and acquisitive growth strategy focused on repositioning the business toward the less volatile and more fragmented IoT market segment. It also reflects Synaptics' higher profitability, healthy free cash flow generation, and releveraging potential to fund acquisitions. We estimate pro forma leverage of 3.7x at the end of second fiscal quarter (Dec. 26, 2021) from 3.6x at the end of fiscal 2020. We expect leverage will decrease to the low-3x area by the end of fiscal 2021, primarily from a portfolio mix shift and improved operating efficiency. The company's outstanding $525 million convertible notes mature on June 15, 2022, and we expect new debt proceeds coupled with cash on hand will be used to settle the notes on or before maturity. Absent any large debt-funded acquisitions, Synaptics will reduce leverage to the mid-1x area by the end of fiscal 2022 from organic revenue and further EBITDA expansion." Synaptics is a fabless semiconductor company. It boasts a wide portfolio of technologies and serves an array of end markets. It generates revenues from IoT markets (which include smart devices with voice, speech, video, wireless connectivity, automobile, etc.), smartphones, tablets, PC, and other select consumer electronic devices. The company operates in three segments: PC (about 26% as of Q2 2021 revenues), mobile (31%), and IoT (43%). The PC division consists primarily of touchpad and fingerprint sensor products sold to most major computer manufacturers. The mobile segment comprises touch sensing, display drivers, and integrated touch and display technology used primarily on smartphones. It has underperformed for several years due to the competitive nature of the industry in which companies face pressure to maintain share and margins while the technology gradually becomes commoditized. Synaptics recently reduced its exposure to mobile by selling its commoditized, lower-margin legacy business. While S&P views favorably its transition to the more differentiated and next-generation touch and display technology, material customer concentration and mobile industry cyclicality remain the key concerns during Synaptics' portfolio rotation. Synaptics has a significant customer concentration, with about 50% of sales during fiscal 2020 coming from its three largest customers. While the company's customer diversity is expected to improve as the company repositions its portfolio to the IoT space, S&P expects revenue concentration to remain materially high. The IoT segment consists of technologies used in wireless, auto, video interface, audio, vison, and video artificial intelligence, among others. The sector is highly fragmented and competitive, but it also has high growth and profitability potential based on the accelerated proliferation of IoT technology and the increased use of consumer electronic devices. The company, led by a new management team, expects to expand the IoT business to at least 55% of total sales over the next few years, both organically and through acquisitions. S&P said, "We believe the strategic repositioning to IoT will be Synaptics' primary revenue and profitability expansion driver over the near to medium term. We forecast it will resume top-line growth in fiscal 2022, driven by continued strength in PC and IoT, offset by softness in mobile. Moreover, Synaptics significantly improved operations by exiting low-margin, low-growth businesses and implementing efficiencies that raised gross margins to 42% in the last 12 months ending in the second quarter of 2021, from 36% in the same period last year. The recent tuck-in acquisitions were also very accretive. We anticipate the transition to IoT will drive additional margin expansion. As a result, we project EBITDA margin to increase to about 23% in 2021 from 15.4% in 2020." S&P said, "We calculate pro forma leverage of about 3.7x as of Dec. 31, 2020, and forecast a material decline to the mid-1x area by the end of fiscal 2022. This will be driven by margin expansion and repayment of the convertible notes. We believe the company cannot sustain such leverage and expect it to releverage to support its merger and acquisition (M&A) strategy. We note inorganic growth in IoT remains a strategic focus and expect further leveraging acquisitions in accordance with the company's publicly stated commitment to long-term leverage of approximately 1.5x, with the possibility to flex up to 4x for a strategic opportunity. "A fully fabless operating model and low capital expenditure (capex) requirements support our expectation that the firm will generate robust free cash flows of over $250 million annually. "The stable outlook reflects our view that Synaptics will return to revenue growth in fiscal 2022 while materially improving its profitability. This will be driven by a continued pivot of its IoT business and the realization of operating efficiencies. We also expect the company to continue to pursue strategic acquisitions while managing leverage below 4x." S&P could lower the rating if: -- Key customer losses, declining demand, or operational missteps lead to higher leverage sustained above 4x; or -- Increasingly aggressive debt-funded acquisitions lead to leverage sustained above 4x. Unlikely over the upcoming year, S&P could consider an upgrade if: -- The company achieves a steady pivot toward IoT while returning to sustained revenue growth, reduction in customer concentration, and more robust technological differentiation while operating at leverage in the low-2x area; or -- It demonstrates a consistent financial policy such that leverage falls to the low-2x area on a sustained basis through market cycles and M&A. SYNCHRONOSS TECHNOLOGIES: Reports GAAP Net Loss of $10.9-Mil. in Q4 ------------------------------------------------------------------- Synchronoss Technologies Inc. announced financial results for its fourth quarter and year ended Dec. 31, 2020. Fourth Quarter and Full-Year Highlights: * GAAP revenue for the quarter was $69.4 million. For the full year, GAAP revenue was $291.7 million. * Recurring revenue for the quarter represented 82% of total GAAP revenue. For the full year, recurring revenue represented 78% of total GAAP revenue. * GAAP net loss for the quarter was $10.9 million or $0.26 per share. For the full year, GAAP net loss was $48.7 million or $1.16 per share. * Non-GAAP net loss for the quarter was $8.2 million, or $0.19 per share. For the full year, non-GAAP net loss was $0.2 million, or $0.01 per share. * Adjusted EBITDA for the quarter was $6.4 million. For the full year, adjusted EBITDA was $27.8 million. * Cash and cash equivalent were $33.7 million at year end. * During the fourth quarter, Synchronoss worked in conjunction with Verizon to develop the Unlimited Verizon Cloud offering, and during 2020 renewed Verizon's Cloud Services contract for an additional five years. * During the fourth quarter, Japanese carrier customers exceeded 20 million Rich Communication Services (RCS) downloads. * During the fourth quarter, Synchronoss extended its partnership to provide AT&T Digital Services for an additional three years. Commenting on the results, Jeff Miller, president and CEO of Synchronoss, said: "I'm honored and delighted to be the next CEO of Synchronoss Technologies. I'm grateful for the support of our Board of Directors and the Synchronoss team, who have enabled us to make forward progress over the past six months on refining our strategy and delivering our operating results. We continue to be driven by delivery and execution for our customers, disciplined cost containment, and continued product innovation. Despite what was a challenging year for Synchronoss and indeed the world community, I'm proud of what the Synchronoss team achieved in 2020 and look forward to continuing to execute on our strategy of focused and profitable growth in 2021." David Clark, CFO of Synchronoss, added: "Our fourth quarter and year end results reflect progress with our continued focus on expanding both our gross and adjusted EBITDA margins. We are seeing the benefits of our cost management efforts, which allowed us to deliver comparable year over year adjusted EBITDA results despite top-line revenue pressures. This is in large part due to significant cost savings delivered during 2020, and we are continuing to streamline our operations with a focus on increasing our adjusted EBITDA in 2021." 2021 Adjusted EBITDA Guidance The Company expects its revenue for full year 2021 to be in the range of $275 million to $285 million, and its adjusted EBITDA for the full year 2021 to be in the range $30 million to $35 million, representing adjusted EBITDA growth of 8% to 26%, respectively. About Synchronoss Technologies Synchronoss -- http://www.synchronoss.com-- transforms the way companies create new revenue, reduce costs and delight their subscribers with cloud, messaging, digital and IoT products, supporting hundreds of millions of subscribers across the globe. Synchronoss' secure, scalable and groundbreaking new technologies, trusted partnerships, and talented people change the way TMT customers grow their businesses. Synchronoss reported a net loss attributable to the company of $136.73 million for the year ended Dec. 31, 2019, a net loss attributable to the company of $243.75 million for the year ended Dec. 31, 2018, and a net loss attributable to the company of $109.44 million for the year ended Dec. 31, 2017. THE NEXT PLACE: Directed to File Supplemental Budget ---------------------------------------------------- Judge Melvin S. Hoffman of the U.S. Bankruptcy Court for the District of Massachusetts directed The Next Place, LLC to file a supplemental budget for the Court to consider in determining whether to authorize any continued use of cash collateral. About The Next Place The Next Place, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 20-12249) on Nov. 18, 2020. At the time of the filing, the Debtor disclosed between $500,001 and $1 million in both assets and liabilities. The Debtor is represented by Jordan L. Shapiro, Esq., at Shapiro & Hender. TREEHOUSE FOODS: S&P Rates New Senior Secured Facilities 'BB+' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level and '1' recovery ratings to TreeHouse Foods Inc.'s proposed $750 million senior secured revolving credit facility due 2026, $930 million term loan A-1 due in 2026, and $500 million term loan A due in 2028. The company intends to use the proceeds from the transaction, along with balance sheet cash and some temporary revolver borrowings, to refinance its existing senior secured credit facilities, repay its 2024 senior notes, and pay for fees and expenses. S&P will withdraw its ratings on the existing notes once they are fully repaid. S&P based its ratings on the proposed credit facilities on preliminary terms, which are subject to review upon the receipt of final documentation. The 'BB-' issue-level and '4' recovery ratings on TreeHouse's $500 million 4% senior unsecured notes due 2028 are unchanged. S&P said, "All of our other ratings on TreeHouse, including our 'BB-' issuer credit rating and stable outlook, are unaffected by this transaction, which we expect will be mostly neutral for net leverage. TreeHouse ended 2020 with leverage higher than we previously expected, primarily due to higher restructuring expenses, and modestly slower revenue growth." In addition, the company purchased the Riviana Foods U.S. pasta business for $242.5 million in December 2020, which increased reported leverage temporarily. Nevertheless, the company's overall operating performance improved in 2020: demand rose substantially due to pantry-loading and shelter-in-place orders associated with the COVID-19 pandemic. TreeHouse grew its sales by 1.4%, driven by 2.7% organic net sales growth, which was partially offset by the divestiture of its in-store bakery facilities. S&P said, "While the private-label industry lagged branded players in growth because retailers were focused on keeping shelves stocked, we expect private-label growth to accelerate as retailers refocus on their longer-term strategies. We also expect demand for private-label products to rise if a recession persists and government stimulus dollars go away, resulting in a more stressed consumer who will seek value. These trends bode well for TreeHouse and should drive at least low-single-digit revenue growth. We forecast TreeHouse will improve leverage to the mid- to high-4x area in 2021 due to this organic revenue growth, the full-year contribution of Riviana, and lower net debt from good cash flow generation. We expect de-leveraging despite headwinds from ongong restructuring costs and inflation in input costs such as ingredients, labor, and freight. We believe TreeHouse will be able to offset much of this inflation with price increases and efficiency improvements, although it will be a headwind for at least the next 12 months." TreeHouse recently announced that it entered into a cooperation agreement with activist investor JANA Partners, who amassed a 7% stake in the company and now has two board seats. S&P will continue to monitor the situation to determine if JANA's interests are aligned with the company's current strategy, and whether there will be any changes in the company's portfolio or financial policy. Issue Ratings – Recovery Analysis Key analytical factors: TreeHouse Foods Inc. is the issuer of all of the company's debt. Following this transaction, the company's debt structure will comprise: -- $750 million revolving credit facility due in 2026; -- $930 million term loan A-1 due in 2026; -- $500 million term loan A due in 2028; and -- $500 million 4% senior unsecured notes due in 2028; Simulated default assumptions: -- S&P's simulated default scenario contemplates a default in 2025 stemming from increased competitive pressures from both name brand and private-label products, and the loss of several key customers. At the same time, the company experiences an increase in raw material costs, which hurts margins and profitability. Additional difficulties could result from acquisition-related integration issues or product recall issues. -- S&P said, "We value the company as a going concern, using a 7x multiple of our projected emergence EBITDA, which reflects the company's scale, leading market position in the private-label food manufacturing industry, and long-standing relationships with customers. The emergence EBITDA of $371 million roughly reflects fixed-charge requirements of about $170 million in interest costs (assuming a higher rate because of default and including prepetition interest), $14 million in term loan amortization, and $90 million in capex assumed at default. We also assume an operational adjustment of roughly 35%, reflecting our belief that the company would restore some profitability with cost cutting." Simplified waterfall: -- Emergence EBITDA: $371 million -- Multiple: 7x -- Gross recovery value: $2.6 billion -- Net recovery value for waterfall after 5% administrative expenses: $2.5 billion -- Collateral value available for secured facilities: $2.2 billion -- Estimated senior secured claims: $2.1 billion --Recovery range for secured claims: 90%-100% (rounded estimate: 95%) -- Collateral value available for senior unsecured debt: $178 million -- Estimated senior unsecured claims: $510 million --Recovery range for unsecured claims: 30%-50% (rounded estimate: 30%) TRITON WATER: Moody's Assigns B2 CFR on Nestle Acquisition ---------------------------------------------------------- Moody's Investors Service assigned initial Corporate Family Rating and Probability of Default Ratings of B2 and B2-PD, respectively, to new issuer Triton Water Holdings, Inc., a company newly formed by private equity firm One Rock Capital Partners in partnership with Metropoulos & Co. for the purpose of acquiring Nestle Waters North America from Nestle S.A. (Aa3 stable) for $4.3 billion. Concurrently, Moody's assigned a B1 debt instrument rating to a proposed $1.8 billion seven-year first lien term loan that is being offered to partially fund the acquisition. The company is also offering a $350 million five-year ABL revolving credit facility (undrawn at close) that will not be rated by Moody's. The outlook is stable. The remaining proposed debt capital structure will consist of incremental $750 million secured debt and $670 million unsecured debt instruments to be issued in subsequent offerings. The B1 rating being assigned to the proposed $1.8 billion first-lien term loan is based on Moody's assumption that the proposed incremental $750 million secured debt will be pari passu to the first-lien term loan. New Assignments: Issuer: Triton Water Holdings, Inc. Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3) Outlook Actions: Issuer: Triton Water Holdings, Inc. Outlook, Assigned Stable RATINGS RATIONALE Triton's B2 CFR rating reflects its high financial leverage, low product diversity, and high execution risk related to its plans to transition the acquired carve-out business into a stronger-performing standalone operation. The ratings are supported by Triton's leading market position and leading regional brands in the US retail bottled water category, which is heavily price competitive, but also is a gradually growing, on-trend consumer category. Triton's ReadyRefresh(R) home and office delivery service, about 25% of sales, has weakened due to COVID-related commercial closures, partially offset by strong growth in the residential business. The office delivery business should recover over the next 18 to 24 months as people gradually return to their workplaces and office demand normalizes. Finally, ESG is an important rating factor for the bottled water sector due to growing sustainability concerns related to the environmental and social impacts of water and land usage, as well as plastic pollution. Positively, the steady shift in consumer consumption away from carbonated soft beverages in North America will continue to benefit the bottled water industry. Moody's notes that Triton competes against much larger, more diversified and financially stronger companies in the North America beverages sector that have greater capacity to fund sustainability investments and more negotiating leverage with retailers. Triton also faces heavy price competition from retailer branded and other private label bottled water. ESG CONSIDERATIONS The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody's analysis has considered the effect on the performance of consumer sectors from the current weak U.S. economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safe1ty. Governance risks are higher than average due to Triton's private equity ownership. Moody's expects that financial policies will remain aggressive with high leverage and the potential for debt funded acquisitions and cash distributions. However, Moody's also expects that Triton will benefit from One Rock's operational focus and Metropoulos' strong track record with business transformations. Triton's closing financial leverage will be very high and will remain high over the next 18 months. Moody's estimates that debt/EBITDA will approximate 7.3x at closing, based on Moody's analytic adjustments. The pace of deleveraging will be largely dependent on Triton's ability to right-size and streamline operations, and to return the company to sales growth, which will require heavy cash outlays for restructuring and other investments over the next 18 months. Moody's expects that free cash flow will be somewhat constrained by this activity, but will remain comfortably positive and will rise as transition costs normalize. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that the company will successfully transition its business to a standalone operation, which should allow the company to reduce debt/EBITDA below 7x within 18 months and sustain EBITDA margin of at least 14% with good liquidity. Ratings could be upgraded if Triton successfully completes planned restructuring activity, sustains debt/EBITDA below 6.0x, and maintains good liquidity, including generating annual free cash flow approaching $200 million. Ratings could be downgraded if major operating challenges arise, liquidity erodes, or if the company pursues a major debt-financed acquisition. Quantitatively, if the company fails to reduce debt/EBITDA below 7.0x and generate at least $50 million of free cash flow annually, a downgrade could occur. As proposed, the first lien term facility is expected to provide covenant flexibility that if utilized could negatively impact creditors, including the following: incremental debt capacity up to the greater of closing date EBITDA or 100% of trailing twelve month EBITDA, plus unused capacity reallocated from the general debt basket, plus unlimited amounts subject to (i) closing dating First Lien Net Leverage (if pari passu secured to the first lien loan) and (ii) other ratios for junior or unsecured debt. Alternatively, the ratio tests may be satisfied so long as leverage does not increase on a pro forma basis. Amounts up to (i) the greater of 50% closing date EBITDA or 50% of trailing twelve-month EBITDA or (ii) under the ratios may be incurred with an earlier maturity date than the first lien term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, subject to carve-out capacities, with no explicit "blocker" protections. Only subsidiaries that are wholly-owned must act as subsidiary guarantors; dividends or transfers of partial ownership interests could jeopardize guarantees with no explicit protective provisions limiting such releases. The asset-sale proceeds prepayment requirement has leverage-based step-downs to 50% and 0%, if pro First Lien Net Leverage ratio is 0.50x or 1.00x turns inside closing date First Lien Net Leverage, respectively, subject to reinvestment rights. The principal methodology used in these ratings was Global Soft Beverage Industry published in January 2017. Headquartered in Stamford, Connecticut, Triton Water Holdings, Inc., produces and sells regional spring water and purified national water brands, through retail sales channels and through its ReadyRefresh(R) direct-to-consumer and office delivery services. Triton's key retail brands include Arrowhead, Deer Park, Ice Mountain, Ozarka, Poland Spring, Zephyrhills, Pure Life, and Splash. Net sales in fiscal 2020 ended December 31, totaled approximately $3.5 billion. The company is own by private equity firms One Rock Capital Partners and Metropoulos & Co. TROIANO TRUCKING: Trustee Gets OK to Hire Altus as Collection Agent ------------------------------------------------------------------- Steven Weiss, the trustee appointed in the Chapter 11 cases of Troiano Trucking, Inc. and Troiano Realty, LLC, received approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Altus Receivables Management as collection agent. The trustee requires the services of the firm to collect an account receivable from Industrecycle, LLC in the amount of $398,297.05. Altus will receive 20 percent of the amount recovered. Thomas Kugler, an account manager at Altus, disclosed in a court filing that the members of the firm are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Thomas Kugler Altus Receivables Management 2400 Veterans Memorial Boulevard, Suite 300 Kenner, LA 70062 About Troiano Trucking Troiano Trucking, Inc. -- http://www.troianotrucking.com/-- is a privately held company in Grafton, Mass., in the waste hauling business. The company maintains a fleet of four trucks, which allows it to service its customers with removal of bakery waste, rubbish, demolition materials and recyclables. It serves construction companies, roofing companies, bakeries and individual home owners. Troiano Realty, LLC, is a real estate lessor whose principal assets are located at 109 Creeper Hill Road, North Grafton, Mass. The property is valued at $1.48 million based on tax valuation assessment method. Troiano Trucking and Troiano Realty sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Lead Case No. 19-40656) on April 23, 2019. Mark Troiano, manager, signed the petitions. At the time of the filing, Troiano Trucking was estimated to have assets and liabilities of between $1 million and $10 million. Troiano Realty disclosed $1,485,000 in assets and $4,220,210 in liabilities. Judges Christopher J. Panos and Elizabeth D. Katz oversee the cases. Nickless, Phillips and O'Connor serves as the Debtors' counsel. VALLEY STREAM, NY: Moody's Alters Outlook on Ba1 Rating to Stable ----------------------------------------------------------------- Moody's Investors Service has affirmed the Village of Valley Stream, NY's Ba1 issuer and GOLT ratings and revised the outlook to stable from negative. This action impacts approximately $36 million in debt. The issuer rating is equivalent to the village's hypothetical general obligation unlimited tax (GOULT) rating; there is no debt associated with the GOULT security. RATINGS RATIONALE The Ba1 issuer rating reflects the village's extremely limited financial flexibility. Despite a favorable location in easy commuting distance to New York City (Aa2 negative) and favorable non-financial credit characteristics, the village has had difficulty shoring up its financial position. The village's fund balance turned negative in 2016, and though improved, it remains negative. Also, while the village's cash position remains more favorable than its fund balance, the prospects for a return to broadly healthy finances over the next few years are limited. That said, the village has halted the declines and has regained some measure of structural balance. The village's ability to translate this into an improved reserve position will have a major bearing on its future credit quality. The rating is heavily influenced by governance considerations, which are a key driver of this rating action. Much of the financial distress was caused by budgeting woes and the recent modest improvements can be tied to improved budgeting. Favorably, the ongoing pandemic has had only a limited impact on the village. Taxes have been largely unaffected and most pandemic-related costs have been covered by CARES Act funding. Moody's consider the outstanding debt to be GOLT because of limitations under New York State (Aa2 stable) law on property tax levy increases. The absence of distinction between the GOLT rating and the Issuer rating reflects the village council's ability to override the property tax cap and the faith and credit pledge in support of debt service. RATING OUTLOOK The stable outlook reflects Moody's expectation that, despite the recent improvements in budgeting, the village's finances will remain pressured. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS Sustained improvements to cash and reserves Upgrade of issuer rating (GOLT) FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS Return to declines in reserves and liquidity Failure to structurally balance operating budget Downgrade of issuer rating (GOLT) LEGAL SECURITY Debt service on the bonds and notes is secured by the village's full faith and credit supported by its pledge to levy ad valorem property taxes to pay debt service as limited by New York State's Property Tax Cap-Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011). PROFILE Valley Stream is located within the Town of Hempstead (Aa1 stable) in the southwestern portion of Nassau County (A2 stable), immediately east of New York City. The village encompasses a land area of approximately 3.5 square miles and has a population of just under 38,000. METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in January 2021. VERTEX ENERGY: Incurs $12 Million Net Loss in 2020 -------------------------------------------------- Vertex Energy, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss attributable to the company of $12.04 million on $135.03 million of revenues for the year ended Dec. 31, 2020, compared to a net loss attributable to the company of $5.05 million on $163.36 million of revenues for the year ended Dec. 31, 2019. For the three months ended Dec. 31, 2020, the Company reported a net loss attributable to Vertex Energy of ($3.4) million, versus net income of $1.4 million in the fourth quarter 2019. Vertex reported Adjusted EBITDA of ($0.4) million for the fourth quarter 2020, versus $6.1 million in the prior-year period. During the fourth quarter 2020, a combination of lower throughputs at the Company's Marrero, Louisiana refinery and less favorable refined product margins contributed to a year-over-year decline in profitability. Throughput volumes at the Marrero refinery declined 25% on a year-over-year basis in the fourth quarter, resulting in a $2.5 million negative impact to operating income and EBITDA at Marrero. As of November 2020, Marrero returned to full rates with adequate feedstock supply, together with improving product margins. The Company's Heartland refinery in Columbus, Ohio operated at peak capacity during the fourth quarter, as total throughputs increased 6% on a year-over-year basis. At Heartland, base oil prices increased 15% sequentially in the fourth quarter, when compared to the third quarter 2020. The Company currently anticipates that its base oil prices will increase at a rate in excess of the fourth quarter levels during the first half of 2021. As of Dec. 31, 2020, the Company had $122.10 million in total assets, $60.81 million in total liabilities, $55.37 million in total temporary equity, and $5.92 million in total equity. As of Dec. 31, 2020, the Company had total cash and availability on its lending facility of $11.0 million and $1.3 million, respectively. Total cash and availability as of Dec. 31, 2020 included $10.1 million of total cash limited to use by the two SPVs. Vertex had total term debt outstanding of $11.1 million as of Dec. 31, 2020, which included $4.2 million related to funds received under the Paycheck Protection Program which is part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act. Under the terms of the PPP, the entire balance of the loan may be forgiven to the extent that cash proceeds are used for qualifying expenses. As of March 9, 2021, the Company believes it has allocated the entirety of PPP funds received toward qualifying expenses. Vertex applied for loan forgiveness during the fourth quarter and is awaiting approval on its application. Management Commentary "While our full-year 2020 performance was below our initial expectations due to the pandemic, we are excited by the opportunities for growth entering 2021, supported by an ongoing recovery in refined product margins, improved asset utilization and contributions from new business lines," stated Benjamin P. Cowart, president and CEO of Vertex. "At the Heartland refinery, base oil refined product margins are currently near record levels, while at our Marrero refinery, distillate margins have improved materially as crude oil prices have increased, when compared to fourth quarter levels," continued Cowart. "For the full-year 2021, we expect to generate positive free cash flow, net income and Adjusted EBITDA. The first quarter is off to a good start, positioning us for our strongest single-quarter performance since the fourth quarter 2019." "Total direct collections increased 9% on a year-over-year basis in 2020, driven by growth in new customer accounts," continued Cowart. "As we grow our collections fleet and expand market share in the regions we serve, we continue to realize improved economies of scale, spreading operating costs across a larger volume of collected gallons." "Vertex remains committed to developing high-purity products from alternative feedstocks that support the global transition toward low-carbon energy solutions," continued Cowart. "By year-end 2022, we expect our oil reclamation and recycling operation at Myrtle Grove will be able to process more than 7 million gallons of residual oil annually, resulting in more than $3 million of annualized incremental EBITDA improvement by year-end 2022." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/890447/000162828021004184/vtnr-20201231.htm About Vertex Energy Houston-based Vertex Energy, Inc. (NASDAQ: VTNR) is a specialty refiner of alternative feedstocks and marketer of petroleum products. Vertex is one of the largest processors of used motor oil in the U.S., with operations located in Houston and Port Arthur (TX), Marrero (LA) and Heartland (OH). Vertex also co-owns a facility, Myrtle Grove, located on a 41-acre industrial complex along the Gulf Coast in Belle Chasse, LA, with existing hydro-processing and plant infrastructure assets, that include nine million gallons of storage. The Company has built a reputation as a key supplier of Group II+ and Group III base oils to the lubricant manufacturing industry throughout North America. VILLAS OF WINDMILL: Allowed to Use Cash Collateral Until March 31 ----------------------------------------------------------------- Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, authorized Leslie S. Osborne, the Chapter 11 Trustee for Villas of Windmill Point II Property Owners Association, Inc., to use cash collateral on an interim basis until the March 31, 2021, the date of the final hearing. The Trustee was authorized to use up to $100,000 of the cash collateral to pay: (1) the current unpaid expenses related to the maintenance and/or preservation of units/common areas in the Debtor's community, including the expenses detailed in the Motion; (2) fund any shortfall in the Budget; (3) any and all Court fees, including the quarterly US Trustee fees, regardless of budgeted amount; and (4) any unanticipated expenses related to the maintenance or preservation of the units/common areas in the Debtor's community. Defendants Thomas Lesko, McDonald Storey, and Steven Goldfarb were granted a post-petition security interest and lien in, to and against the assessments, fines, or penalties collected by the Trustee which are or have been acquired by the Trustee subsequent to February 18, 2021, to the same extent and priority that the Defendants held a properly prefected pre-petition security interest in the cash collateral. These adequate protection liens will be subject to the Carve Out. The Carve Out consists of: (1) all fees owed by the Trustee to the Office of the United States Trustee; and (2) all fees owed to the Clerk of the Bankruptcy Court. A final hearing on the use of cash collateral is scheduled for March 31, 2021 at 10:00 a.m. A full-text copy of the Interim Order, dated March 9, 2021, is available for free at https://tinyurl.com/erza4vze from PacerMonitor.com. About Villas of Windmill Point II Property Based in Port Saint Lucie, Fla., Villas of Windmill Point II Property Owners Association, Inc., is a non-profit corporation with volunteers that self manages 89 separately deeded, single-family residential villa units that are attached in four and five-unit clusters within a Planned Unit Development (PUD). Villas of Windmill filed a Chapter 11 petition (Bankr. S.D. Fla. 19-20400) on Aug. 2, 2019. At the time of filing, the Debtor was estimated to have $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Debtor is represented by Brian K. McMahon, Esq., in West Palm Beach, Fla. Leslie S. Osborne was appointed as the Debtor's Chapter 11 trustee. The Trustee is represented by Rappaport Osborne Rappaport. VOLUNTEER MOTORSPORTS: Case Summary & 4 Unsecured Creditors ----------------------------------------------------------- Debtor: Volunteer Motorsports, LLC 14095 W. Andrew Johnson Highway Bulls Gap, TN 37711 Business Description: Volunteer Motorsports, LLC -- http://volunteerspeedway.com-- owns 64.3 more or less acre tract improved by a 4/10 mile dirt race track, spectator grandstands, 3 concessions buildings, bathroom building, office/ shop building, shop building, fan indoor suite building, & officials tower. The properties are valued at $2.5 million. Chapter 11 Petition Date: March 9, 2021 Court: United States Bankruptcy Court Eastern District of Tennessee Case No.: 21-50272 Judge: Hon. Shelley D. Rucker Debtor's Counsel: Dean Greer, Esq. DEAN GREER & ASSOCIATES 2809 East Center Street P.O. Box 3708 Kingsport, TN 37664 Tel: 423-246-1988 E-mail: bankruptcy@deangreer.com Total Assets: $2,606,702 Total Liabilities: $1,808,173 The petition was signed by Landon Stallard, managing member. A copy of the Debtor's list of four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/3F2PW2Q/Volunteer_Motorsports_LLC__tnebke-21-50272__0004.0.pdf?mcid=tGE4TAMA A copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2SSOV4A/Volunteer_Motorsports_LLC__tnebke-21-50272__0001.0.pdf?mcid=tGE4TAMA WILDBRAIN LTD: S&P Rates New US$280MM Senior Secured Debt 'B-' -------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level and '3' recovery ratings to WildBrain Ltd.'s proposed US$280 million term loan B due 2028. The '3' recovery rating reflects its expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in a default scenario. The company plans to use the proceeds to refinance borrowings under the existing US$280 million term loan B due December 2023. As a result, S&P views the proposed transaction as leverage neutral and therefore its 'B-' issuer credit rating and stable outlook on WildBrain are unchanged. The proposed transaction extends WildBrain's debt maturities and improves liquidity by US$5 million, supporting the company's ability to focus on its growth strategy. S&P expects the company will prudently increase investment in strategies that provide WildBrain with guaranteed returns through its focus on content development for a select few brands in its portfolio, distribute the produced content through various channels (linear, subscription video on demand, and ad-based video on demand [AVOD]), and generate additional revenues from the merchandise segment. At the same time, the company's growing focus on production, strong data capability (viewership statistics) from its AVOD platform (WildBrain Spark), and ability to collaborate with content distributors could support cash flow visibility for production and distribution over the next 12 months. As a result, WildBrain's conservative investment allocation policy, along with modest free operating cash flow generation of about C$15 million, will lead to an adjusted debt to EBITDA ratio of 7.5x-8.0x over the next 12 months, which is commensurate with the current rating. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors: -- S&P said, "We are assigning our 'B-' issue-level rating and '3' recovery rating to WildBrain's proposed US$280 million senior secured term loan. Our '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a default." -- S&P's simulated default scenario incorporates the assumption of a default in 2023, following a prolonged period of weak macroeconomic conditions, increased competition, lower pricing power, or significant decline in demand. -- In the event of a default, S&P assumes the company would reorganize or be sold as a going concern as opposed to being liquidated because WildBrain would likely retain greater value as an ongoing entity. -- The default year minimum capital expenditure is C$1 million as opposed to the standard 2.0% of sales, due to the lower capital-intensive nature of the business. -- S&P values WildBrain using a 6.5x multiple of its emergence EBITDA estimate, which corresponds to the company's fixed charges in the simulated default year. Simulated default assumptions: -- Simulated year of default: 2023 -- EBITDA at emergence: About C$44.7 million -- EBITDA multiple: 6.5x Simplified waterfall: -- Gross recovery value: About C$290.5 million -- Net enterprise value (after 5% administrative costs): About C$276 million -- Senior secured term loan: About C$421 million -- Value available for first-lien claim: About C$276 million --Recovery expectations: 50%-70% (rounded estimate: 65%) WILSON DUMORNAY: Seeks to Hire Hoffman Larin as Bankruptcy Counsel ------------------------------------------------------------------ Wilson DuMornay MD, PA, seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Hoffman, Larin & Agnetti, P.A., as its general bankruptcy counsel. The firm will render these services: a. advise the Debtor with respect to its duty as a debtor-in-possession; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the Court; c. prepare motions and file, pleadings, orders, applications, adversary proceedings and other documents necessary for the advancement of the Debtor's case; d. protect the interest of the Debtor in all matters pending before the Court; e. represent the Debtor in negotiations with creditors; and f. propose and seek confirmation of a plan of reorganization. The Debtor paid the firm a fee and cost retainer of $16,738. The firm billed prepetition fees of $3,840, leaving a balance of $12,898. Michael S. Hoffman, Esq., partner at Hoffman Larin, assures the court that the firm is a "disinterested person" within the meaning of 11 U.S.C. 101(14). The firm can be reached through: Michael S. Hoffman, Esq. Hoffman, Larin & Agnetti, P.A. 6750 North Andrews Ave., Ste 200 Fort Lauderdale, FL - 33309 Phone: (954) 958-0314 About Wilson DuMornay MD, PA Wilson DuMornay MD, PA, is wholly owned by Dr. Wilson DuMornay, a licensed otolaryngologist. Wilson DuMornay, MD, PA, sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-11727) on Feb. 23, 2021, listing under $1 million in both assets and liabilities. Michael Hoffman, Esq. at Hoffman, Larin & Agnetti, P.A., serves as the Debtor's counsel. WOOF HOLDINGS: Moody's Completes Review, Retains B3 CFR ------------------------------------------------------- Moody's Investors Service has completed a periodic review of the ratings of Woof Holdings, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on March 1, 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since January 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. Key rating considerations Woof Holdings, Inc.'s, B3 CFR reflects its 1) high financial leverage of roughly 7.3x debt-to-EBITDA pro forma for the acquisition by Clearlake Capital Group, 2) small size (as measured by annual revenue of less than $500 million), 3) limited product diversity, and high sales concentration through pet specialty channels, which will continue to experience long-term traffic declines. The rating is also constrained by financial policy risks associated with private equity ownership, including aggressive use of financial leverage. Positively, the Wellness pet food brand has an established and growing presence in e-commerce channels, where pet food sales have grown consistently at double digit rates. In addition, the rating also is supported by the company's high EBITDA margin, good liquidity, and the attractive long-term growth prospects of the US pet food and treats category. The principal methodology used for this review was Consumer Packaged Goods Methodology published in February 2020. WR GRACE: Fitch Puts 'BB+' LongTerm IDR on Watch Negative --------------------------------------------------------- Fitch Ratings has placed the 'BB+' Long-Term Issuer Default Ratings (IDRs) of W.R. Grace & Co. and W.R. Grace & Co. - Conn on Rating Watch Negative following the announcement of the company's intention to acquire Albemarle Corporation's (BBB/Stable) Fine Chemistry Services business for approximately $570 million, consisting of $300 million in cash and $270 million in preferred equity issued to Albemarle. The Negative Rating Watch reflects the potential for heightened financial risk associated with the transaction. The $300 million cash portion of the transaction will require some level of debt funding. The amount of permanent debt used to fund the cash portion of the transaction, alongside the level of equity credit assigned to the preferred shares once terms are finalized, will determine the speed with which Grace can de-lever. Fitch believes that if the preferred shares receive 50%-100% equity credit, and the company funds a material share of the $300 million cash portion with balance sheet cash or revolver drawings, then Grace will likely be able to reach to below 3.5x total debt with equity credit/operating EBITDA within 18-24 months of the transaction closing. The Rating Watch will be resolved upon close of the transaction, which is currently expected in 2Q21. Albemarle's Fine Chemistry Services business provides small molecule contract manufacturing services for pharmaceuticals and will bolster Grace's Materials Technologies segment. Fitch believes that the acquisition makes strategic sense, and that the company is likely to continue to direct cash flows toward building out its Materials Technologies offerings. Fitch notes that the use of preferred shares in lieu of debt or common equity allows for the company to complete the transaction without adding too much additional debt to the balance sheet or diluting the existing common equity through a new equity issuance. KEY RATING DRIVERS Leveraging Transaction, Deleveraging Capacity: The acquisition of Albemarle's Fine Chemistry Services business, while strategically sound, adds a material amount of financial risk to the company. Fitch believes that total debt with equity credit/operating EBITDA is likely to be between 3.5x-4.0x within 18-24 months, with the level of equity credit awarded to the preferred shares and the level of debt issued to fund the $300 million cash portion determining the ease with which the company can return to credit metrics consistent with a 'BB+' rating. Specialized Chemical Portfolio: Grace's two business segments offer highly specialized products with high margins and pricing power. Grace has been able to pass through costs to customers, and the Catalysts Technologies has consistently generated EBITDA margins in the mid 30s, while the material technologies business is in the low 20% range. These margins are on the high end for specialty chemical companies and, although somewhat volatile, are partially insulated by way of solid pass-through rates. In the medium term, Fitch believes that the company will continue to deploy capital in order to build out the Materials Technologies segment. Refinery Production Drives Growth: Growth in the Refining Technologies sub-segment, which accounts for roughly 38% of Grace's revenue, is determined primarily by refinery production utilization levels. Products in this sub-segment have various uses, including cracking hydrocarbon chains in distilled crude oil to produce transportation fuels, maximizing propylene production, and converting methanol into petrochemical feeds. These are valuable inputs to a refinery's operations that support the optimization of crack spreads; as such, Fitch expects volumes to track refinery production utilization levels, with high pass-through rates keeping gross margins relatively stable. DERIVATION SUMMARY On the spectrum of basic to specialty chemicals, EBITDA margins consistently above 25% put Grace firmly within the 'specialty manufacturer' group. The company is smaller than direct competitor Albemarle Corporation (BBB/Stable), which also produces lithium and bromine to go alongside its catalysts. Like NewMarket Corp. (BBB/Stable), Grace is a leader in a highly specialized industry, but has a greater appetite for debt funded M&A and operates with total debt to EBITDA at or around 3.5x versus Newmarket, which is generally at or below 2.0x. Like many chemicals peers, Fitch anticipates growth at Grace to roughly track economic activity. Fitch projects Grace to generate consistent free cash flow margins in the mid-single digits over the forecasted period, given low maintenance capex requirements and relatively stable earnings, which is consistent with Fitch's views on Newmarket. Fitch projects Albemarle to generate neutral to negative free cash flow throughout the forecasted period, given committed large scale capital projects. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Sharp near-term recovery in Catalyst Technologies, with a more modest, longer-dated recovery in Materials Technologies; -- EBITDA margins roughly flat throughout the forecast; -- Albemarle FCS transaction closes in 2021, with the cash portion funded fully with debt and 0% equity credit awarded; -- Maintenance of a steady dividend and bolt-on M&A in Specialty Catalysts and Materials Technologies prioritized, with the majority of excess cash going toward share repurchases. Solidly positive FCF throughout the forecast period; -- Total debt with equity credit/operating EBITDA peaks around 4.9x in 2021, falling sharply thereafter as the normalization of refinery output and voluntary debt reduction drives leverage to around 3.6x by 2024. RATING SENSITIVITIES Fitch anticipates resolving the Rating Watch upon close of the transaction. The level of debt funding related to the $300 million cash portion of the transaction and the amount of equity credit assigned to the preferred shares will influence the rating and Outlook level upon the resolution of the Watch. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A shift to a more conservative capital deployment strategy coupled with continued cash generation and earnings stability, leading to Total Debt with Equity Credit/Operating EBITDA durably below 2.5x and/or FFO Adjusted Leverage durably below 3.0x; -- Successful completion of Materials Technologies and Specialty Catalysts buildout, resulting in a more conservative capital deployment strategy and a move towards an unsecured capital structure; Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Loss of leading market positions, particularly in the Catalysts segment, leading to Total Debt with Equity Credit/Operating EBITDA durably above 3.5x and/or FFO Adjusted Leverage durably above 4.0x; -- Reduced ability to pass through costs to customers, leading to less stable margins and heightened cash flow risk; -- More aggressive than anticipated M&A activity, including transformative, credit-unfriendly acquisitions, or shareholder return strategy otherwise incompatible with management's articulated capital deployment policy. 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 Strong Liquidity: Following the June 2020 refinancing, the company will face limited maturities throughout the ratings horizon, with full availability on the company's $400 million revolving credit facility due 2023. Additionally, Fitch anticipates solid free cash flow generation upon the normalization of the company's sales volumes as refinery volumes return to historical levels. ESG Considerations: Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3' - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. WYNTHROP PARTNERS: April 20 Hearing on Disclosure Statement ----------------------------------------------------------- Judge Henry W. Van Eck will convene a hearing to consider approval of the amended disclosure statement of Wynthrop Partners, LP, telephonically, using CourtCall, on April 20, 2021 at 9:30 a.m. Please contact Courtcall at 866−582−6878, no later than 24 hours, before your hearing. April 12, 2021, is fixed as the last day for filing and serving written objections to the amended disclosure statement. A copy of the Amended Plan and Disclosure Statement filed March 5, 2021, is available at https://bit.ly/3eqMUK4 About Wynthrop Partners Wynthrop Partners, LP, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It owns three real estate properties located in Windsor Borough, Pennsylvania, having a total current value of $2.25 million. Wynthrop Partners sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 19-00197) on Jan. 17, 2019. At the time of the filing, the Debtor disclosed $2,345,811 in assets and $640,696 in liabilities. The case is assigned to Judge Henry W. Van Eck. The Debtor tapped CGA Law Firm as its legal counsel. On July 19, 2019, the Court appointed ROCK Commercial Real Estate Broker. YACHT CLUB: Plan Confirmation Hearing Slated for April 6 -------------------------------------------------------- The Hon. Brian T. Fenimore of the U.S. Bankruptcy Court for the Western District of Missouri will hold a hearing on April 6, 2021, at 2:00 p.m., (by telephone) to confirm the Subchapter V Plan of Reorganization of Yacht Club Vacation Owners Association Inc. To call into this hearing, contact conference line: 888-251-2909; access code 2333227. Objections to the plan and confirmation, if any, must be filed by April 2, 2021. About Yacht Club Vacation Owners Association Yacht Club Vacation Owners Association, Inc. filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-41555) on Aug. 28, 2020, listing under $1 million in both assets and liabilities. Judge Brian T. Fenimore oversees the case. Daniel D. Doyle, Esq., at Lashly & Baer, P.C., Attorneys at Law, serves as Debtor's legal counsel. [*] Chapter 11 Bankruptcy: The Ultimate Corporate Finance Tool -------------------------------------------------------------- Michael Fletcher and Danny Newman of Tonkon Torp LLP wrote an article on JDSupra titled "Chapter 11 Bankruptcy: The Ultimate Corporate Finance Tool." COVID-19 ushered in a volatile economic climate that has made it difficult for many companies to meet their debt obligations. These companies may soon face a lender demanding repayment of debt that the company cannot pay. Refinancing with a replacement lender may be unavailable or cost prohibitive. Although a company may be experiencing financial difficulties, and unable to meet upcoming debt obligations, it may have a significant going concern value which would be lost if the company is liquidated. In such cases, pursuing a Chapter 11 "reorganization" bankruptcy may be the best, and perhaps only, option to save the company. Under a Chapter 11 bankruptcy, a debtor remains operating while it "reorganizes" its business (eliminates and/or restructures its debt). Often times, a Chapter 11 bankruptcy can help a struggling business become a thriving business. Due to Chapter 11's great flexibility, the range of restructuring alternatives is extremely broad. Below we discuss just a few of the possible debt restructuring alternatives available to a company in a Chapter 11 bankruptcy. Restructure of existing debt with existing lender One of the most powerful tools a company utilizes in Chapter 11 is restructuring its existing secured debt, which allows the company to emerge from bankruptcy with greater cash flow, improved profitability, and a strengthened balance sheet. The "cram down" provision, outlined in Section 1129(b) of the Bankruptcy Code, allows a bankruptcy court to deny the objections of a secured creditor and approve a debtor's reorganization plan as long as it is "fair and equitable." Because of this "cram down" power, a debtor in a Chapter 11 has leverage over its lender that the debtor does not have outside of bankruptcy. Facing a potential "cram down" of its debt on unfavorable terms, an existing lender will often work cooperatively with the debtor to restructure the existing debt on terms the lender would not agree to outside of the bankruptcy. This often includes lowering interest rates, eliminating personal guarantees, extending the maturity date, eliminating financial covenants, and reducing reporting requirements. Replace existing secured debt with new lender In a Chapter 11 bankruptcy, the debtor has numerous tools to strengthen its balance sheet and increase profitability (e.g., by eliminating or greatly reducing its unsecured debt and rejecting unfavorable contracts). Given this improved position, a debtor often is in position to attract exit financers that were not available to the debtor pre-bankruptcy. The result is exiting the Chapter 11 with replacement (or "exit") financing that takes out the existing secured debt, on much improved terms, furthering the company’s chance for long-term success. Debt-to-equity swap While loans remain the most common form of exit financing in a Chapter 11, another form of financing the company is issuing stock in the reorganized debtor in exchange for cancellation of existing debt. In a debt-to-equity swap, the company first cancels its existing stock shares. Next, the company issues new equity shares. It then swaps these new shares for the existing debt held by bondholders and other creditors. This "debt-to-equity" swap can serve to eliminate the company's existing debt, greatly improving the company's balance sheet and cash flow. It also puts the company in a much improved position to obtain financing post-bankruptcy (like a line of credit) that the company could not obtain prior to bankruptcy. Combination of the above In many Chapter 11 plans, the debtor will often use a combination of the above (debt and equity) to finance its plan obligations and continuing operations. Although no company is excited about the prospect of filing for bankruptcy, a Chapter 11 reorganization may be the most powerful tool a struggling company can use to ensure its survival and long-term success. Oregon bankruptcy courts can be efficient and cost-effective venues for struggling businesses to rebound. [*] Deighan Agrees to Return $300K, 6-Year Practice Ban ------------------------------------------------------- The Department of Justice's U.S. Trustee Program (USTP) announced March 10, 2021, it has entered into a settlement with national consumer bankruptcy law firm Deighan Law LLC, previously known as Law Solutions Chicago and doing business as UpRight Law. The settlement is set forth in a consent order entered by the Bankruptcy Court for the District of Montana on March 9 and resolves enforcement actions filed by the USTP over allegations of misconduct relating to UpRight's representation of Montana consumers as debtors or prospective debtors in bankruptcy cases. As stipulated in the settlement, UpRight has paid or will pay more than $300,000 in monetary relief and will be barred from representing bankruptcy clients in Montana for six years. As a result of dozens of USTP actions filed since 2016, UpRight has paid or been ordered to pay almost $900,000 in monetary relief, including returning fees to over 500 impacted consumers and paying court-ordered sanctions, attorney's fees, and costs. Additionally, bankruptcy courts have imposed practice bans against UpRight in at least four jurisdictions. "Lawyers who misrepresent their services to vulnerable clients and fail to perform as promised harm debtors, creditors, and the integrity of the bankruptcy system," said USTP Director Cliff White. "This settlement shows that the USTP will continue to hold accountable attorneys who fail to adequately and honestly represent their clients." In the current matter, the USTP alleged that UpRight engaged in misconduct and misrepresentations impacting hundreds of Montana consumers, which came to light due to investigations by the USTP in two bankruptcy cases. In one case, UpRight substantially delayed filing its client's bankruptcy case for almost a year after it misrepresented that it had a local attorney who was licensed in Montana available to file the case. UpRight's delay resulted in a creditor garnishing more than $6,000 of the debtor's wages. In the other case, UpRight obtained payment of its attorney's fees by advising the debtors to participate in an improper scheme whereby they surrendered their vehicle to an out-of-state towing company. Another bankruptcy court previously sanctioned UpRight for implementing the towing program -- which it used in more than 200 cases across the country -- describing it as a "scam from the start," and the towing company's owners were indicted for their role in the scheme. UpRight's advice resulted in the debtors being sued by their automobile lender for conversion of its collateral. In the settlement, UpRight does not contest the USTP's allegations that it engaged in misconduct in the course of its dealings with Montana consumers, including misrepresenting that it had a sufficient number of local Montana-licensed attorneys available to provide adequate bankruptcy representation, misrepresenting to clients the scope of legal services to be provided and the cost of those services, failing to timely provide its clients with written retainer agreements that clearly and conspicuously explained the legal services to be provided and the cost of those services, failing to discuss non-bankruptcy alternatives, failing to adequately supervise the firm's non-attorney staff (some of whom engaged in the unauthorized practice of law), providing erroneous legal advice, and failing to adequately supervise its Montana "partner" attorneys. This misconduct contributed to UpRight's substantial delay in filing bankruptcy cases for Montana consumers. In addition, UpRight filed bankruptcy cases for only 109 of the 473 Montana clients from whom the firm collected at least a partial fee. To resolve the USTP's allegations of misconduct, UpRight has refunded or will refund more than $300,000 in fees paid by Montana consumers for whom UpRight never filed a bankruptcy case. UpRight also agreed to pay a civil penalty of $10,309 and to return all fees, totaling $3,770, to the debtors in the two cases in which the USTP brought its enforcement actions. Additionally, UpRight will be barred from accepting bankruptcy clients or providing bankruptcy services to consumers in Montana, effective July 2, 2018, through July 2, 2024. While the agreement resolves disputes with the USTP in the two underlying bankruptcy cases, it does not impact the rights of the debtors in those cases or any other parties or government agencies not participating in the settlement, including other Montana consumers, nor does it impact the USTP's rights to litigate enforcement actions against UpRight in other jurisdictions or to seek redress in other Montana cases. The two underlying cases are captioned In re Dailey, Case No. 15-61088-7 (Bankr. D. Mont.), and In re Emerson, Case No. 16-60056-7 (Bankr. D. Mont.). The U.S. Trustee Program -- https://www.justice.gov/ust -- is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ---------------------------------------------------------- Grounded: Frank Lorenzo and the Destruction of Eastern Airlines Author: Aaron Bernstein Publisher: Beard Books Softcover: 272 Pages List Price: $34.95 Order a copy today at http://www.beardbooks.com/beardbooks/grounded.html Barbara Walters once referred to Frank Lorenzo as "the most hated man in America." Since 1990, when this work was first published and Eastern Airlines' troubles were front-page news, there have been many worthy contenders for the title. Nonetheless, readers sensitive to labor-management concerns, particularly in the context of corporate restructurings, will find in this book much to support Barbara Walters' characterization. To recap: For a few brief and discordant years, Frank Lorenzo was boss of the biggest airline conglomerate in the free world (Aeroflot was larger), combining Eastern, Continental, Frontier, and People Express into Texas Air Corporation, financing his empire with junk bonds. TAC ultimately comprised a fleet of 451 planes and 50,000 employees, with revenues of $7 billion. But Lorenzo was lousy on people issues, famously saying, "I'm not paid to be a candy ass." The mid-1980s were a bad time to take that approach. Those were the years when the so-called Japanese model of management, which emphasized cooperation between management and labor, was creating a stir. The Lorenzo model was old school: If the unions give you any trouble, break 'em. That strategy had worked for him at Continental, where he'd filed Chapter 11 despite the airline's $60 million in cash reserves, in order to exploit a provision in Bankruptcy Code allowing him to abrogate his contracts with the unions. But Congress plugged that loophole by the time Lorenzo went to the mat with Charles Bryan, I AM chapter president. Lorenzo might have succeeded in breaking the machinists alone, but when flight attendants and pilots honored the picket lines, he should have known it was time to deal. He didn't. Instead he tried again for a strategic advantage through the bankruptcy courts, by filing Chapter 11 in the Southern District of New York where bankruptcy judges were believed to be more favorably disposed toward management than in Miami where Eastern was headquartered. Eastern had to hide behind the skirts of its subsidiary, Ionosphere Clubs, Inc., a New York corporation, in order to get into SDNY. Six minutes later, Eastern itself filed in the same court as a related proceeding. The case was assigned to Judge Burton Lifland, whom Eastern's bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was mistaken if he believed that serendipitous lottery assignment would be his salvation. Judge Lifland a year later declared Lorenzo unfit to run the airline and appointed Martin Shugrue as trustee. Most hated man or not, one wonders whether the debacle was all Lorenzo's fault. Eastern's unions, in particular the notoriously militant machinists, were perpetual malcontents, and Charlie Bryan was an anti-management zealot, to the point of exasperating even other IAM officers. The book provides a detailed account of the three-and-a-half-year period between Lorenzo's acquisition of Eastern in the autumn of 1986 and Judge Lifland's appointment of the trustee in April 1990. It includes the history of Eastern's pre-Lorenzo management, from World War I flying ace Eddie Rickenbacker to astronaut Frank Borman. Aaron Bernstein won numerous awards during his 20-year career as a professional journalist. He is an associated editor for Business Week. Aaron Bernstein is the editor of Global Proxy Watch, a corporate governance newsletter for institutional investors. He is also a non-resident Senior Research Fellow at the Pensions and Capital Stewardship Project at Harvard Law School. He left BusinessWeek magazine in 2006 after a 23-year career as an editor and senior writer covering workplace and social issues. ********* 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 2021. 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 ***