/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/220428.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 28, 2022, Vol. 26, No. 117 Headlines 109 JEROME AVE: Voluntary Chapter 11 Case Summary 2999TC ACQUISITIONS: Enters Settlement Agreement with HNGH Turtle 38-36 GREENVILLE AVE: 3d Cir. Affirms Disgorgement of Counsel Fees 5 STAR PROPERTY: $95K Sale of Winter Haven Property to Calvary OK'd 9 RANDALL LANE: Seeks to Hire Pryor & Mandelup as Legal Counsel A TREME MANAGEMENT: Working Capital Base to Fund Plan Payments ACTIVA RESOURCES: Hires J. Randall Patterson as Counsel AE OPCO III: Wins Interim Cash Collateral Access AIRTECH HEATING AND COOLING: Files for Bankruptcy Protection ALTO MAIPO: Hits Snag on Key Contract Assumption in Bankruptcy ALTO MAIPO: Jurisdiction Concerns Need Chapter 11 Complaint ARAS BUSINESS: Seeks to Hire Johnson and Johnson as Legal Counsel AZZ INC: Moody's Assigns Ba3 CFR & Rates Senior Secured Debt Ba3 AZZ INC: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable B D A AND K: Unsecureds Will Get 100% of Claims in Liquidating Plan BAUSCH+ LOMB: Fitch Assigns First-Time Rating 'BB-(EXP)' IDR BELLE CREEK: Moody's Assigns Ba2 Rating to 2022A/B Revenue Bonds BERRY CORP: S&P Affirms 'B-' ICR on Higher Near-Term Oil Prices BIOVENTUS LLC: Moody's Assigns First Time 'B3' Corp. Family Rating BIOVENTUS LLC: S&P Assigns 'B-' ICR, Outlook Stable BLACK NEWS CHANNEL: U.S. Trustee Appoints 3 More Committee Members BLD REALTY: Seeks Approval to Hire Dage Consulting as Accountant BROOKLYN IMMUNOTHERAPEUTICS: Grant Thornton is New Accountant CADIZ INC: Kenneth Lombard Appointed as Director CAMBER ENERGY: Agrees to Settle Suit With Discover Growth, Antilles CAN B CORP: White Hair Acquires 7.69% Equity Stake CARVANA CO: Moody's Cuts CFR to Caa1, Outlook Stable CFN ENTERPRISES: To Buy Colo. Real Property From Kind Roots CHERRY MAN: Seeks to Hire SulmeyerKupetz as Bankruptcy Counsel COOPER'S HAWK: Moody's Affirms Caa1 CFR & Alters Outlook to Stable CYTODYN INC: Macias Gini Replaces Warren Averett as Accountant DCIJ BEE HIVE: Hires Swenson Law Group as Bankruptcy Counsel DIOCESE OF ROCHESTER: Taps Gnarus Advisors as Expert Consultant EL MONTE NATURE PRESERVE: Files for Chapter 11 Bankruptcy ELDAN LLC: Seeks to Hire Omniterra Solutions as Property Manager ELI & ALI: Court Approved Settlement with Capital One Bank ENDLESS POSSIBILITIES: Unsecureds Get Share of Income for 5 Years EYP GROUP: Gets Court Approval to Unveil Ch. 11 Sale Plans Early FIRST BRANDS: Moody's Alters Outlook on 'B2' CFR to Positive FOOTPRINT POWER SALEM: Taps Paul Weiss as Bankruptcy Counsel FOOTPRINT POWER SALEM: Taps Young Conaway as Co-Counsel FOREVER 21: Parent Sues Bolt Financial for Failure to Deliver Tech GIP II BLUE: Moody's Hikes CFR to Ba3, Outlook Stable HECLA MINING: S&P Upgrades ICR to 'B+', Outlook Stable HUMAN HOUSING: Secured Creditor Toorak to Receive $975K for Claim INFOW LLC: Infowar Justifies Small Business Bankruptcy Law Use INFOW LLC: Trial to Set Payments to Sandy Hook Victims Delayed ION GEOPHYSICAL: Upstream Services Appointed as Committee Member J&P FLASH: Seeks to Hire Midwest Land as Real Estate Broker JODY INC: Case Summary & 10 Unsecured Creditors JOHN BARRETT: Seeks to Hire Valmark as Life Settlement Broker LATAM AIRLINES: Amends RCF & Spare Engine Claims Pay Details LEAR CAPITAL: 24 States Say Bankruptcy Not Filed in Good Faith LEAR CAPITAL: Appointment of Official Customers' Committee Sought MAGELLAN HOME-GOODS: Wins Interim Cash Collateral Access MARTIN MIDSTREAM: Posts $11.5 Million Net Income in First Quarter MEDALLION GATHERING: S&P Alters Outlook to Pos., Affirms 'B' ICR MGM GROWTH: Fitch Hikes IDR From 'BB+', Outlook Stable MISSOURI CITY FUNERAL: Taps Pope Law Firm as Bankruptcy Counsel MONTANA RENEWABLES: Moody's Assigns First Time 'B3' CFR MONTAUK CLIFFS: Amends Priority Tax Claim Pay Details MOUNTAIN PROVINCE: Reports Q1 2022 Production and Sales Results NEOVASC INC: To Participate in Bloom Burton Healthcare Conference NN INC: Corre Partners Entities Report 10.92% Equity Stake NORDIC AVIATION: Plans to Exit Bankruptcy in May 2022 O & A ENTERPRISES: Seeks Cash Collateral Access PB 6 LLC: Seeks to Hire KW Beverly Hills as Real Estate Broker PHOENIX PROPERTIES: $2.7MM Sale of Real Properties to Stryder OK'd POWAY PROPERTY: April 29 Status Conference on Poway Property Sale POWAY PROPERTY: Auction of Poway Real Property Set for April 29 POWAY PROPERTY: U.S. Trustee Unable to Appoint Committee RESTORATION HARDWARE: S&P Rates New $1BB Term Loan B-2 Rated 'BB' REWALK ROBOTICS: Board Appoints Joseph Turk as Director ROWLEY SOLAR: Invaleon Objection to Berkowitzes' Claims Sustained SCUOLA VITA: S&P Alters Outlook to Positive, Affirms 'BB+' ICR SOUTH SIDE: Seeks to Hire Lentz Law as Bankruptcy Counsel SPECTRUM GROUP: Moody's Assigns B1 CFR & Rates First Lien Debt B1 SRAK CORP: Case Summary & Eight Unsecured Creditors STONEWAY CAPITAL: U.S. Trustee Opposes Chapter 11 Plan TMK HAWK: Moody's Affirms 'Caa2' CFR & Rates $140MM Term Loan 'B3' TOUCHPOINT GROUP: Secures $247,500 in Funding From Mast Hill TRANSPORTATION DEMAND: Hires Wenokur Riordan as Bankruptcy Counsel TRANSPORTATION DEMAND: Seeks Final Approval of Cash Collateral Use TROIKA MEDIA: Daniel Pappalardo Quits as Director, TDG President TWITTER INC: Moody's Reviews Ba2 CFR, For Downgrade Amid Musk Deal UNITED PF: Moody's Hikes CFR to B3 & First Lien Secured Debt to B2 V.N.D. LIMITED: Hires NAI Hiffman as Commercial Sale Agent WESTERN AUSTRALIAN: Case Summary & Seven Unsecured Creditors WILLIAM TAGG: Promac Buying Interest in Seacrest Property for $3.6M ZAYO GROUP: Moody's Rates $750MM Add-on Loan 'B2', Outlook Neg. ZAYO GROUP: S&P Affirms 'B' Rating on New $750MM Secured Debt [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 109 JEROME AVE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 109 Jerome Ave LLC 109 Jerome Ave Deal, NJ 07723-1356 Business Description: 109 Jerome Ave LLC is the fee simple owner of a real property located at 109 Jerome Ave, Deal, NJ 07723-1356 valued at $10 million (based on Debtor's opinion). Chapter 11 Petition Date: April 27, 2022 Court: United States Bankruptcy Court District of New Jersey Case No.: 22-13417 Debtor's Counsel: Timothy P. Neumann, Esq. BROEGE, NEUMANN, FISCHER & SHAVER LLC 25 Abe Voorhees Dr Manasquan, NJ 08736-3560 Tel: (732) 223-8484 Fax: (732) 223-2416 Email: tneumann@bnfsbankruptcy.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph Safdieh, managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/N4NCK2A/109_Jerome_Ave_LLC__njbke-22-13417__0001.0.pdf?mcid=tGE4TAMA 2999TC ACQUISITIONS: Enters Settlement Agreement with HNGH Turtle ----------------------------------------------------------------- 2999TC Acquisitions, LLC, submitted a First Amended Disclosure Statement descriing Plan of Reorganization dated April 24, 2022. The Plan is a plan of reorganization. The Debtor owned approximately 2.47 acres of land which includes an existing 30,000 square foot luxury office project office, located at 2999 Turtle Creek Blvd. in the City of Dallas, Texas (the "Property"). The Debtor is conveying the Property to a single purpose entity pursuant to the terms of the Plan that will obtain the loan to payoff the creditors under the Plan including HNGH. Since the filing date, the Debtor has negotiated and entered a Settlement Agreement with HNGH requiring certain periodic payments and a final pay-off by March 15, 2022, arranged for Bridge financing, contributed capital to pay the obligations under the Settlement Agreement and other bankruptcy related obligations and is actively pursuing a refinance of the Property and Sale. On or about March 15, 2022 Debtor negotiated an extension of the payoff deadline in the Order to May 30, 2022. These agreements and orders have positioned the Debtor to be able to execute the Plan of Reorganization, and exit bankruptcy. HNGH Turtle Creek, LLC is the largest Claimant in this Case. The Debtor scheduled HNGH with a Secured Claim in the amount of $39,748,171.00. The Debtor and HNGH have reached a settlement for a payoff of HNGH's claim for $41,500,000 which shall release the Note and any Claims against the Deed and HNGH shall be allowed to have an unsecured claim in the amount of $2,000,000. ("Settlement Agreement") to the Plan includes the Agreed Order Modifying Order on Motion to Dismiss and of Relief from Stay that modifies the terms of the prior Agreed Order. The Debtor did pay the $2M by March 25, 2022. This Plan pays 50% to All Allowed Claims, within 12 months of the Effective Date of the Plan. No Insider Claims will be paid under the Plan until all other Claims are paid in accordance with the terms of the Plan. The total liabilities may vary depending on final Allowance of Claims. The Class 2 Allowed Secured Claims of HGNH shall be treated in accordance with the terms of the Order entered by the Court on December 10, 2021 and the Order entered on March 17, 2022 and set forth as follows the dates and deadlines having been changed inthe further order. The amounts now due and owing are less than the amounts in the December 10, 2021 Order. As material consideration for the agreed continuation of the automatic stay from the entry of the Order to the Payoff Deadline, Debtor shall pay or cause to be paid to HNGH $100,000 per month, commencing on the Petition Date through March, 2022, such that the Debtor shall owe to HNGH a total of $500,000, the payment of which shall be applied to reduce the Payoff Amount (the "Consideration Payments"). For the sake of clarity, Debtor shall owe HNGH the Consideration Payments as follows: $100,000 payable not later than December 14, 2021; plus $100,000 on December 31, 2021 and $100,000.00 on January 14, 2022; $100,000 on February 1, 2022; and $100,000 on March 1, 2022. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Class 3 shall consist of Allowed Unsecured Claims, other than the Claims of Insiders. Class 3 Claims shall be paid 50% of such Allowed Claims in 12 equal monthly installments commencing on the first (1st) day of the first calendar month following the Payment in Full of Class 1 and 2 Claims and continuing on the first day of each month thereafter until paid as called for by this Plan. * All Equity Interests in the Debtor shall be retained. The Plan will be funded by the Debtor conveying the Property to a single purpose entity that will pay off HNGH and the creditors by obtaining a loan against the Property. A full-text copy of the First Amended Disclosure Statement dated April 24, 2022, is available at https://bit.ly/3vNo526 from PacerMonitor.com at no charge. Attorneys for the Debtor: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 1412 Main St., Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 Facsimile: (972) 503-4034 About 2999TC Acquisitions Dallas, Texas-based 2999TC Acquisitions, LLC filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Texas Case No. 21-31954) on Oct. 29, 2021, listing up to $100 million in assets and up to $50 million in liabilities. Tim Barton, president of 2999TC Acquisitions, signed the petition. Judge Harlin Dewayne Hale oversees the case. Joyce W. Lindauer, Esq., serves as the Debtor's legal counsel. 38-36 GREENVILLE AVE: 3d Cir. Affirms Disgorgement of Counsel Fees ------------------------------------------------------------------ In March 2016, 38-36 Greenville Ave LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. It did so with the aid of its counsel, Kevin Kerveng Tung, and his law firm, Kevin Kerveng Tung, P.C. The Debtor is a single-member limited liability company wholly owned by Lingyan Quan. Aside from a few thousand dollars in cash and accounts receivable, its only asset is a multi-family dwelling in New Jersey, and its sole creditors are Armando and Melinda Flores, who hold approximately $1.85 million in judgment liens arising out of a state-court judgment. Simultaneous with the Debtor's petition, KKT filed a statement of compensation, pursuant to Section 329(a) of the Bankruptcy Code and Rule 2016(b) of the Federal Rules of Bankruptcy Procedure, disclosing receipt of a $3,000 retainer paid by the Debtor. The Debtor then filed an application under Section 327(a) seeking permission to retain KKT as counsel in the Chapter 11 proceedings. The Retention Application stated that KKT's services were necessary because the Debtor had previously had KKT as its defense counsel in the state-court action brought by the Floreses, so KKT was "fully knowledgeable" of "the debtor's situation." It further represented that KKT had "rich experience in bankruptcy[.]" Additionally, the Retention Application disclosed the parties' compensation arrangement and declared that, other than the $3,000 retainer, no other agreement had been made between KKT and the Debtor, or anyone acting on either party's behalf. It also certified that KKT would comply with applicable bankruptcy laws and court procedures when applying for compensation. Lastly, it stated that KKT was disinterested and neither held nor represented an interest adverse to the Debtor or the Debtor's estate under Section 327(e). The Bankruptcy Court approved the Retention Application and ordered that KKT be paid "in such amounts as may be allowed by the Court upon proper application(s) therefor." Not long after, the Debtor asked the Bankruptcy Court to lift the automatic stay on its appeal of the state-court judgment and, in the meantime, to hold the bankruptcy proceeding in abeyance. The Court denied that request, concluding that the Debtor "was using the bankruptcy case as a substitute for posting a supersedeas bond …, as required under state law[,]" without first "attempt[ing] to pay or obtain a waiver of the bond requirement." A year into the proceeding, the Debtor had yet to file a Chapter 11 disclosure statement and plan, so the Bankruptcy Court sua sponte ordered the parties to show cause why the proceeding should not be dismissed or converted into a Chapter 7 liquidation. The United States Trustee then became involved. The Trustee argued that the proceeding lacked a valid reorganizational purpose and should be dismissed entirely as a bad faith bankruptcy filing. The Floreses argued for conversion into a Chapter 7 liquidation so that they could enforce their judgment liens. The Debtor admitted that "the only reason [it] filed the instant bankruptcy [was] to secure a stay so that [it could] pursue its appeal in State Court without losing the property at issue." Because it had not been successful in securing that relief, it sought dismissal of its Chapter 11 case. At the hearing on the order to show cause, Tung, appearing on behalf of both the Debtor and his firm, KKT, "conceded that the Debtor failed to file a plan and disclosure statement and . . . that it would be futile for the Debtor to do so." The Bankruptcy Court refused to dismiss the case because it believed it was in the best interest of the creditors and the estate to instead convert the case to a Chapter 7 liquidation and appoint a trustee to manage the estate. The Court proceeded to take those steps, and soon the Chapter 7 Trustee moved to sell the Debtor's only known asset, the multi-family house. The Court approved the property's public sale for $725,000 two months later. It was not until after the Chapter 7 conversion, and over a year and half after the Debtor declared bankruptcy, that KKT filed its first and only fee application. KKT sought payment of $31,819 in fees and expenses from the Debtor. Notably, the Fee Application also disclosed that KKT, without Bankruptcy Court approval, had already received payments totaling $19,400 from the "personal bank account" of Quan -- the Debtor's sole shareholder -- as "pre-payment for the legal services rendered" to the Debtor. KKT thus requested that the Court approve its fees so that it could pay Quan back. Both the Chapter 7 Trustee and the Floreses objected to the Fee Application, arguing, among other things, that the previously undisclosed payments violated the Code and the Bankruptcy Rules. At the Fee Application hearing, Tung repeatedly evaded the Bankruptcy Court's questions regarding Quan's undisclosed payments. At first, he attempted to characterize the payments as something other than an unauthorized loan incurred by the Debtor. When pressed, he admitted that the payments were indeed a loan, only to reverse course after the Bankruptcy Court reminded him that any debt incurred by the Debtor had to be pre-approved by the Court. He also conceded that KKT intentionally omitted the payments from the Debtor's Monthly Operating Reports, in violation of Sections 704(a)(8) and 1106(a)(1) of the Code, because, if the Debtor had owed post-petition money for legal fees, then "the monthly operati[ng] report[s] most likely [would have] go[ne] negative[,] [a]nd at the time [they] were talking about reorganization[.]"In other words, KKT intentionally withheld required information and did so to mislead the Court and avoid either the conversion or the dismissal of the case. Rightly concerned, the Bankruptcy Court issued a second order for KKT and Tung, in his individual capacity, to show cause why the Court should not sanction them for violations of the New Jersey Rules of Professional Conduct, the Code, and the Bankruptcy Rules. It also asked, among other things, why it should not deny KKT's fee application in its entirety, require KKT to disgorge attorney's fees previously paid, and find that KKT was not disinterested in its representation. KKT and Tung responded that their conduct had not violated any legal or ethical obligations. KKT also contended, among other things, that acceptance of legal fees from Quan was not a per se violation of Section 327(a), that it made the appropriate disclosures in its Fee Application under Bankruptcy Rule 2016, and that there was no conflict of interest because the interests of Quan and the Debtor are united. At the hearing on the second order to show cause, Tung, again speaking on behalf of both KKT and himself, first argued that the failure to timely disclose the payments was merely a "technical failure to disclose, . . .[which] shouldn't warrant any sanctions." He then changed his tune, saying he did not believe KKT needed to disclose anything about the payments until it filed the Fee Application. Even after he finally agreed that earlier disclosure was required, he gave a series of contradictory responses on how the undisclosed payments should be characterized. The Bankruptcy Court said that Tung "really, really [did not] understand the laws that govern a bankruptcy proceeding," and, rather than show contrition for his mistakes, was "very defensive, flip flopping in [his] statements, . . . and . . . unhelpful[.]" The Court denied with prejudice the Fee Application and ordered the payments to KKT to be disgorged to the estate. It determined that KKT and Tung failed to make timely and adequate disclosures under Rules 2014 and 2016, and had "purposefully and strategically decided to omit pertinent information from the [Monthly Operating Reports.]" The Court thus concluded they had violated their duty of candor under New Jersey Rule of Professional Conduct 3.3. In light of those violations, the Court found it unnecessary to decide whether an actual conflict of interest arose. Lastly, because of the egregiousness of counsel's conduct, the Court referred the case to the Chief Judge of the District Court for potential disciplinary action. KKT appealed to the District Court, arguing that the Bankruptcy Court, as a non-Article III court, lacked jurisdiction to order disgorgement of KKT's fees and, even if it had the authority to do so, that it abused its discretion in issuing the Fee Order. The District Court rejected both arguments. It held that disgorgement was within the Bankruptcy Court's jurisdiction under Stern v. Marshall, 564 U.S. 462 (2011), as "these proceedings were core and flowed directly from the bankruptcy scheme[.]"And because KKT breached its disclosure obligations, the District Court said that the Bankruptcy Court was well within its discretion to order disgorgement and deny the Fee Application. Finally, the District Court struck from the record, as irrelevant and meritless, a supplemental letter filed by KKT alleging that the Bankruptcy Judge was improperly biased in the Debtor's bankruptcy. The basis of the allegation was a photograph taken of the Judge with the Chapter 7 Trustee at a New Jersey Bankruptcy Lawyers Foundation event. KKT raises the same arguments before the United States Court of Appeals for the Third Circuit that have already been rejected. It says that the Bankruptcy Court lacked constitutional authority to order the disgorgement to the estate of fees paid by Quan, that the Bankruptcy Court abused its discretion in issuing the Fee Order, and that the District Court should not have struck KKT's post-briefing filing accusing the Bankruptcy Judge of bias. None of that has the slightest merit. KKT argued for the first time in the District Court that, under Stern, the Bankruptcy Court lacked authority to order disgorgement of the post-petition, unauthorized fee payments, because it is not an Article III court. It stated that the payments underlying the disgorgement were "non-core" because they were made by a third party and are not part of the estate. KKT's reliance on Stern is misplaced, the Third Circuit holds. In Stern, the Supreme Court determined that a bankruptcy court could not adjudicate state-law tort claims that were "in no way derived from or dependent upon bankruptcy law" because they "exist[] without regard to any bankruptcy proceeding." According to the Third Circuit, "Stern made clear that non-Article III bankruptcy judges do not have the constitutional authority to adjudicate a claim that is exclusively based upon a legal right grounded in state law[.] "Unlike the tort claims at issue in Stern, the payment of legal fees is "based on a federal bankruptcy law provision with no common law analogue, so the Stern line of cases is plainly inapposite." Violations thereof are thus appropriately policed through equitable remedies fashioned by the Bankruptcy Court. The fees paid by Quan were to the benefit of the estate and thus were core matters within the Bankruptcy Court's purview, the Third Circuit further holds. KKT next asserts that, even if the Bankruptcy Court possessed authority to order disgorgement, it abused its discretion by entering the Fee Order, which ordered disgorgement and denied KKT's Fee Application. According to the Third Circuit, the word "chutzpah" comes to mind. KKT's repeated violations of the Bankruptcy Rules and the Code, along with counsel's lack of candor, more than justified entry of the Fee Order. The Third Circuit reiterates that the Code and associated Rules impose a rigorous structure of oversight on a debtor, its professionals, and the estate. At the heart of that structure is a baseline presumption -- and an expectation -- of disclosure and candor, the appeals court notes. KKT flouted those obligations, and the Third Circuit determines that it will not disturb the Bankruptcy Court's well-justified response. Lastly, though the Third Circuit thinks it is hardly worthy of response, it disposes of KKT's argument that a photograph of the Bankruptcy Judge and the Chapter 7 Trustee, taken at a New Jersey Bankruptcy Lawyers Foundation event, somehow evidences judicial bias. It does not, and the District Court did not abuse its discretion by striking KKT's supplemental letter as "wholly irrelevant and without merit," the Third Circuit holds, citing Meditz v. City of Newark, 658 F.3d 364, 367 n.1 (3d Cir. 2011). Because there is no reason to question the Bankruptcy Court's handling of the sad situation created by KKT and its principal, Mr. Tung, the Third Circuit affirms the order of the District Court, thus affirming the Fee Order. "This case highlights the famous first law of holes: when you're in one, stop digging. The appellant here, a law firm representing a small, limited liability company in a bankruptcy matter, ignored that law, and a few others, to its shame. The U.S. Bankruptcy Court for the District of New Jersey ordered the disgorgement of fees paid to the firm, denied its request for further payment from the bankrupt debtor's estate, and referred the firm's principal to the District Court for possible disciplinary action. The District Court upheld the Bankruptcy Court's order, and so do we," Circuit Judge Jordan wrote in his opinion dated April 19, 2022, a full-text copy of which is available at https://tinyurl.com/4asx2xcn from Leagle.com. About 38-36 Greenville Ave Based in Jersey City, New Jersey, 38-36 Greenville Ave LLC, filed a Chapter 11 Petition (Bankr. D.N.J., Case No. 16-15598) on March 24, 2016. The case is assigned to Hon. Stacey L. Meisel. The Debtor's counsel is Kevin K. Tung, Esq., in Flushing, New York. The Debtor disclosed total assets of $443,917 and total liabilities of $1.84 million. The petition was signed by Lingyan Quan, president. 5 STAR PROPERTY: $95K Sale of Winter Haven Property to Calvary OK'd ------------------------------------------------------------------- Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida approved the sale of real property located at 751 Ave. B SW, in Winter Haven, Florida 33880, to Calvary Realty Services, LLC, for $95,000. The property is more particularly described as follows: Lot 24, Block 5, Lake Addition to the Town of Winter Haven, Polk County, Florida, as per Deed Book "Q," Page 529, Public Records of Polk County, Florida, and being part of Map of Winter Haven, according to the map or plat thereof, as recorded in Plat Book 1, Page(s) 28, of the Public Records of Polk County, Florida. Tax ID #26-28-29-632000-005240. The sale is "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind. The liens of any secured creditors, including DSRS, LLC, the Polk County Tax Collector, Roger & Jeanie Fitzpatrick, and City of Winter Haven will attach to the proceeds from the sale to the same extent, validity, and priority as existed against the property. The Debtor is authorized to pay all broker's fees, liens, and all ordinary and necessary closing expenses normally attributed to a seller of real estate at closing. The broker's fees, all ordinary and necessary closing costs, and liens of secured creditors will be paid at closing. The Debtor will file a copy of the closing statement from the sale of the property with the Court within seven days of the closing date. The 14-day stay required under Bankruptcy Rule Section 6004(h) is waived. About 5 Star Property Group, Inc. 5 Star Property Group, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-07801) on Oct. 20, 2020, listing under $1 million in both assets and liabilities. Buddy D. Ford, Esq. at BUDDY D. FORD, P.A. represents the Debtor as counsel. 9 RANDALL LANE: Seeks to Hire Pryor & Mandelup as Legal Counsel --------------------------------------------------------------- 9 Randall Lane, LLC filed an amended petition seeking approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ the firm of Pryor & Mandelup, LLP as its legal counsel. The firm will render these legal services: (a) advise the Debtor regarding its powers and duties in the continued management of its business and property; (b) represent the Debtor before the bankruptcy court and at all hearings on matters pertaining to its affairs; (c) advise and assist the Debtor in the preparation and negotiation with its creditors of a plan of reorganization; (d) prepare all necessary legal papers; and (e) perform all other legal services for the Debtor which may be desirable and necessary. The firm will bill its standard billing charges which range from $525 for partners and “of counsel”, $450 per hour for associates, and $150 per hour for paralegals. The firm has been paid $21,738 prior to the petition date. As disclosed in court filings, Pryor & Mandelup is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Mark E. Cohen, Esq. Pryor & Mandelup, LLP 675 Old Country Road Westbury, NY 11590 Telephone: (516) 997-0999 Email: mec@pryormandelup.com About 9 Randall Lane 9 Randall Lane, LLC filed a petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 22-70567) on March 28, 2022, listing up to $1 million in both assets and liabilities. Daryl S. Lynch, sole member, signed the petition. Judge Alan S. Trust oversees the case. Pryor & Mandelup, LLP serves as the Debtor's legal counsel. A TREME MANAGEMENT: Working Capital Base to Fund Plan Payments -------------------------------------------------------------- A Treme Management, LLC filed with the U.S. Bankruptcy Court for the Eastern District of Louisiana a Disclosure Statement for Plan of Reorganization dated April 25, 2022. A Treme Management, LLC is a company organized under the laws of the State of Louisiana. A Treme Management, LLC, whose origins date back to November 2015, operates a single asset real estate leasing company and currently has one uncompensated employee/owner. The Debtor began to experience recurring operating losses and cash flow concerns, attributable to various events and conditions affecting the Debtor's operations, including the Coronavirus pandemic and Hurricane Ida issues. These events and conditions affecting the Debtor's cash flow, among others, resulted in the decline in the Debtor's financial condition and led to the filing of this Bankruptcy Case. The Plan consists of 3 Classes of Claims and Interests. The Plan provides for the continuation of the Debtor's business operations. The Plan provides for the full payment of Administrative Claims on the later of the Effective Date, ten days after the date the Claim is Allowed or the time that the Allowed Claim is due in accordance with terms and conditions of governing documents. Class 1 consists of the Allowed First Bank & Trust Secured Claim. The sole Claimant in Class 2, First Bank & Trust, includes its claim alleged to be approximately $465,350.34, and allegedly secured by the following: * An Act of Multiple Indebtedness Mortgage, executed by A Treme Management, LLC, dated December 27, 2017, by act before Robert J. Bergeron, Notary Public, recorded in the mortgage records of the Parish of Orleans at MIN Instrument no.126462l, which mortgage encumbers the property. In relation to the amount of the Allowed First Bank & Trust, LLC's Secured Claim, the Debtor presents the following analysis and will, if needed, request a determination of the amount of such claim in connection with plan confirmation. The Debtor's position is that the value of the property for purposes of valuating First Bank & Trust's secured claim is $660,000.00. The total priming secured claim held by First Bank & Trust is $465,350.34. Therefore, the Debtor's position is that the amount of First Bank & Trust's allowed secured claim is $465,350.34, of which approximately $25,000.00 is attributable to pre-petition arrearages. $25,000.00 will be paid by Debtor to First Bank & Trust to fully cure any defaults existing on the petition date on Allowed First Bank & Trust's secured claim. Debtor's two loans with First Bank & Trust will be reinstated upon confirmation of debtor's chapter 11 plan and debtor will resume making regular monthly mortgage payments in an aggregate amount of $3,000.00 per month until the two loans are fully paid according to the terms of the original loan documents. First Bank & Trust will receive regular payments in the amount of $3,000 per month and Debtor will pay prepetition arrears over five years. Hirsch International Corporation will receive deferred cash payments for 5 years at interest at the rate of 6.5% per annum, or as such other interest rate fixed by the Court so that the Plan will comply with the requirements of 1129(b)(2)(B)(i); or such other treatment as agreed between the Debtor and the Holder of the Secured Claim. Such treatment would yield a monthly payment due from the Debtor to Hirsch International Corporation in the monthly amount of $1,081.44. Hirsch International Corporation shall retain its lien securing its claim, whether the property subject to its lien is retained by the Debtor or transferred to another entity, to the extent of the allowed amount of its claim. Class 3 consists of Holders of Allowed Unsecured Claims. Each Holder of an Allowed Unsecured Claim will receive from the Debtor, ten (0%) percent of the Holder's Allowed Unsecured Claim payable quarterly over a period of 7 years. The first quarterly payment shall be due and payable at the end of the first Quarter following the Initial Distribution Date. The Debtor estimates that there exist approximately 0 Unsecured Claims in the approximate aggregate amount of $0.00 is owed to creditors holding unsecured nonpriority claims. Such treatment would yield a quarterly payment due from the Debtor to its creditors holding unsecured nonpriority claims in the quarterly amount of $0.00. The Holders of General Unsecured Claims are not deemed impaired under the Plan and are not entitled to vote to accept or reject the Plan. Class 4 consists of the Existing Equity Interests. The Holders of Existing Equity Interests in the Debtor as of the Petition Date shall receive no distributions under the Plan; however, the Holders of said Existing Equity Interests shall retain their Interests in the Debtor, which Interests is not deemed to be impaired. The Existing Equity Interests shall receive nothing under the Plan until all payments are made as prescribed in the Plan. The Claims of Class 4 Interests are not deemed Impaired and are not entitled to vote underthe Plan. On or before the Effective Date, it is expected that the Debtor will have sufficient Cash available to fund payments required to be made at that time under the Plan. The Debtor will have an estimated $12,350.00 cash on hand, that together with a positive cash flow will provide the Debtor sufficient cash to fund Plan payments. Thus, Plan payments will come from the working capital ("Working Capital Base") of the Debtor and any sources of financing that the Debtor may utilize from time to time in the conduct of its business. A full-text copy of the Disclosure Statement dated April 25, 2022, is available at https://bit.ly/3KnIM9S from PacerMonitor.com at no charge. The Debtor is represented by: Derek Terrell Russ, Esq. Bankruptcy Center of Louisiana 700 Camp Street New Orleans, LA 70113 Phone: 504-522-1717 Fax: 504-522-1715 Email: derekruss@russlawfirm.net About A Treme Management A Treme Management, LLC, a company that operates a commercial business, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-11418) on Dec. 9, 2021. Judge Meredith S. Grabill oversees the case. The Debtor is represented by Derek Terrell Russ, Esq., at Bankruptcy Center of Louisiana. ACTIVA RESOURCES: Hires J. Randall Patterson as Counsel ------------------------------------------------------- Activa Resources, LLC and Tiva Resources, LLC seek approval from the U.S. Bankruptcy Court for the Western District of Texas to employ the law firm of J. Randall Patterson as its ordinary course oil and gas counsel. Patterson will receive no more than $3,000 per month for services rendered, which services will be billed at its standard hourly rate of $325 per hour; and will receive reimbursement for any disbursements incurred on behalf of the Debtors without an order of this Court. The firm can be reached through: J. Randall Patterson Attorney at Law 14800 San Pedro Ave # 120 San Antonio, TX 78232 Phone: +1 210-377-3111 Fax: (210) 377-0257 Email: jrp@jrandallpatterson.com About Activa Resources and Tiva Resources Activa Resources, LLC and Tiva Resources, LLC operate in the oil and gas extraction industry. Both companies are based in San Antonio, Texas. On Feb. 3, 2022, Activa Resources and Tiva Resources sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Lead Case No. 22-50117). In the petitions signed by John Hayes, president, Activa Resources disclosed as much as $50 million in both assets and liabilities while Tiva Resources disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Michael M. Parker oversees the cases. The Debtors tapped Bernard R. Given II, Esq., at Loeb and Loeb LLP as legal counsel, and Haynie & Company as accountant and auditor. Donlin, Recano & Company, Inc. is the claims, noticing and solicitation agent. AE OPCO III: Wins Interim Cash Collateral Access ------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized AE OPCO III, LLC to use cash collateral on an interim basis and provide adequate protection. The Debtor is authorized to use cash collateral to pay: (a) amounts expressly authorized by the Court, (b) the current and necessary expenses set forth in the budgets, plus an amount not be exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by California Bank of Commerce. The Debtor is authorized to pay its President, Jack Hall, his salary and benefits pursuant to separate order of the Court. Each creditor or other party with a security interest or other interest in cash collateral shall have a perfected post-petition lien or interest against cash collateral to the same extent and with the same validity and priority as its prepetition lien or interest, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. As adequate protection, the Debtor will provide the Secured Creditor with the following: a. A post-petition replacement lien or interest in cash collateral equal in validity and dignity as it existed pre-petition. b. Proof of insurance upon request of same. c. Commencing on April 5, 2022 and continuing on the 5th day of each month thereafter, interest only payments at the rate specified in the loan documents. A continued preliminary hearing on the matter is scheduled for May 12, 2022 at 2 p.m. A copy of the order and the Debtor's budget for the period from April to September 2022 is available at https://bit.ly/38dNR7g from PacerMonitor.com. The Debtor projects $12,189,000 in total collections and $12,885,250 in total expenses for the period. About AE OPCO III, LLC AE OPCO III, LLC owns and operates an aerospace composite manufacturing facility. AE OPCO III provides design services, testing, assembling and repairs for commercial and governmental customers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01186) on March 25, 2022. In the petition signed by Jack Hall, president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Catherine Peek McEwen oversees the case. Alberto F. Gomez, Jr., Esq. at Johnson, Pope, Bokor, Ruppel and Burns, LLP is the Debtor's counsel. AIRTECH HEATING AND COOLING: Files for Bankruptcy Protection ------------------------------------------------------------ Airtech Heating and Cooling Services LLC filed for chapter 11 protection in the Southern District of Indiana. According to court filings, Airtech Heating estimates between 1 and 49 unsecured creditors. The petition states that funds will be available to unsecured creditors. A teleconference meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for May 20, 2022 at 10:30 A.M. About Airtech Heating Airtech Heating and Cooling Services LLC -- https://myairtechservices.com/ -- is a company that provides air conditioning repair service in Louisville, Kentucky. Airtech Heating and Cooling Services sought chapter 11 protection (Bankr. S.D. Ind. Case No. 22-90290) on April 12, 2022. In the petition filed by Ronnie J. Walker, as president, Airtech Heating estimated assets between $50,000 and $100,000 and estimated liabilities between $500,000 and $1 million. The case is assigned to Honorable Judge Andrea K Mccord. Charity S. Bird, of Kaplan Johnson Abate & Bird, LLP, is the Debtor's counsel. ALTO MAIPO: Hits Snag on Key Contract Assumption in Bankruptcy -------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that a federal judge ruled that Alto Maipo SpA, a bankrupt hydroelectric plant project in Chile, will have to sue a key business partner in bankruptcy court if it wants to retain their power purchasing agreement. Alto Maipo has been asking Judge Karen Owens to bless its assumption of an existing power purchasing agreement with Minera Los Pelambres, a contract that is "core to the business" and "central to reorganization efforts," attorney Luke Barefoot said on behalf of Alto Maipo in a hearing Tuesday, April 26, 2022. But Minera Los Pelambres, a copper mining company, has alleged Alto Maipo breached the contract. About Alto Maipo Alto Maipo owns the Alto Maipo Hydroelectric Project, outside Santiago, Chile, which is currently under construction. The project comprises two run-of-the-river plants with a combined installed capacity of 531 megawatts. The run-of-the-river project is a joint venture between U.S. utility subsidiary AES Gener and Chilean mining company Antofagasta Minerals (AMSA). Alto Maipo Delaware LLC and Alto Maipo SpA sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11507) on Nov. 17, 2021. Javier Dib, board president and chief restructuring officer, signed the petitions. At the time of the filing, Alto Maipo Delaware LLC estimated between $1 billion and $10 billion in both assets and liabilities. The cases are handled by Judge Karen B. Owens. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Cleary Gottlieb Steen & Hamilton LLP as legal counsel; Nelson Contador Abogados & Consultores SpA as local Chilean counsel; AlixPartners, LLP as financial advisor; and Lazard Freres & Co. LLC and Lazard Chile SpA as investment banker. Prime Clerk, LLC, is the claims, noticing and administrative agent. ALTO MAIPO: Jurisdiction Concerns Need Chapter 11 Complaint ----------------------------------------------------------- Vince Sullivan of Law360 reports that a Delaware bankruptcy judge said Tuesday, April 27, 2022, she could not entertain a motion from bankrupt Chilean hydroelectric dam developer Alto Maipo to assume a power purchase agreement with a customer because she did not have jurisdiction to force a ruling on the customer. During a videoconference hearing, U.S. Bankruptcy Judge Karen B. Owens said Alto Maipo Delaware LLC would need to commence an adversary proceeding in order to assume the contract with copper mine Minera Los Pelambres because there was an ongoing dispute about whether the debtor had defaulted on the deal to provide power to the operation. About Alto Maipo Alto Maipo owns the Alto Maipo Hydroelectric Project, outside Santiago, Chile, which is currently under construction. The project comprises two run-of-the-river plants with a combined installed capacity of 531 megawatts. The run-of-the-river project is a joint venture between U.S. utility subsidiary AES Gener and Chilean mining company Antofagasta Minerals (AMSA). Alto Maipo Delaware LLC and Alto Maipo SpA sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11507) on Nov. 17, 2021. Javier Dib, board president and chief restructuring officer, signed the petitions. At the time of the filing, Alto Maipo Delaware LLC estimated between $1 billion and $10 billion in both assets and liabilities. The cases are handled by Judge Karen B. Owens. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Cleary Gottlieb Steen & Hamilton LLP as legal counsel; Nelson Contador Abogados & Consultores SpA as local Chilean counsel; AlixPartners, LLP as financial advisor; and Lazard Freres & Co. LLC and Lazard Chile SpA as investment banker. Prime Clerk, LLC, is the claims, noticing and administrative agent. ARAS BUSINESS: Seeks to Hire Johnson and Johnson as Legal Counsel ----------------------------------------------------------------- Aras Business Group, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Tennessee to hire Johnson and Johnson, P.C. as its counsel. The firm's services include: a. advising the Debtor with respect to its powers and duties as Debtor-in-Possession in the continued operation of its business and management of its property; b. assisting the Debtor in the preparation of its statement of financial affairs, schedules, statement of executory contracts and unexpired leases, and any papers or pleadings, or any amendments thereto that the Debtor is required to file in these cases; c. representing the Debtor in any proceeding that is instituted to reclaim property or obtain relief from the automatic stay imposed by Section 362 of the Bankruptcy Code or that seeks the turnover or recovery of property; d. providing assistance, advice and representation concerning the formulation, negotiation and confirmation of a Plan of Reorganization; e. providing assistance, advice and representation concerning any investigation of the assets, liabilities and financial condition of the Debtor that may be required; f. representing Debtor at hearings or matters pertaining to affairs as Debtor-In-Possession; g. prosecuting and defending litigation matters and such other matters that might arise during and related to these Chapter 11 cases; h. providing counseling and representation with respect to the assumption or rejection of executory contracts and leases and other bankruptcy-related matters arising from these cases; i. representing the Debtor in matters that may arise in connection with its business operations, its financial and legal affairs, its dealings with creditors and other parties-in-interest and any other matters, which may arise during the bankruptcy case; j. rendering advice with respect to the myriad of general corporate and litigation issues relating to these cases, including, but not limited to, health care, ERISA, corporate finance, commercial matters; and assisting Debtor in connection with any necessary application, orders, reports or other legal papers and to appear on behalf of the Debtor in proceedings instituted by or against the Debtor; and k. performing such other legal services as may be necessary and appropriate for the efficient and economical administration of these Chapter 11 cases. The firm will be paid at these rates: Curtis D. Johnson, Jr. $400 per hour Florence M. Johnson $400 per hour Johnson & Johnson and each of its partners and associates is a "disinterested person" within the meaning of the Section 101(4) of the Bankruptcy Code, according to court filings. The firm can be reached through: Curtis D. Johnson, Jr., Esq. Johnson and Johnson, P.C. Suite 1002, 1407 Union Avenue Memphis, Tennessee 38104 Tel: (901) 725-7520 Fax: (901) 725-7570 Email: cjohnson@johnsonandjohnsonattys.com About Aras Business Group Aras Business Group, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-21415) on April 11, 2022. At the time of filing, the Debtor estimated $1,000,001 to $10 million in both assets and liabilities. Judge M Ruthie Hagan presides over the case. Curtis D. Johnson, Jr. at the Law Office Of Johnson And Brown, P.C. represents the Debtor as counsel. AZZ INC: Moody's Assigns Ba3 CFR & Rates Senior Secured Debt Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 Corporate Family Rating to AZZ Inc., a Ba3-PD Probability of Default and a Ba3 rating to the company's senior secured credit facilities including a $400 million secured revolving credit facility and a $1.3 billion term loan. The ratings outlook is stable. The term loan proceeds along with the proceeds from the proposed sale of $240 million of convertible subordinated notes will be used to fund the $1.25 billion cash portion of the acquisition of Precoat Metals, refinance about $227 million of existing AZZ debt and to pay fees and expenses. The subordinated notes will be automatically exchanged into an equal amount of Series A preferred stock upon the company receiving shareholder approval for the ability to issue preferred stock. AZZ has been assigned a Speculative Grade Liquidity rating of SGL-2 reflecting its good liquidity profile. The assigned ratings are subject to review of final documentation and no material changes to the size, terms and conditions of the transaction as communicated to Moody's. "The assignment of a Ba3 corporate family rating reflects AZZ's strong position in the metal coatings market which will be strengthened by its acquisition of Precoat Metals, as well as its moderate pro forma financial leverage assuming the exchange of the subordinated notes to preferred equity. It also incorporates the company's reliance on cyclical end markets and its decision to pursue a mostly debt funded acquisition that will raise its leverage significantly above historical levels," said Michael Corelli, Moody's Senior Vice President and lead analyst for AZZ Inc. Assignments: Issuer: AZZ Inc. Corporate Family Rating, Assigned Ba3 Probability of Default Rating, Assigned Ba3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Secured Term Loan, Assigned Ba3 (LGD3) Senior Secured Revolving Credit Facility, Assigned Ba3 (LGD3) Outlook Actions: Issuer: AZZ Inc. Outlook, Assigned Stable RATINGS RATIONALE AZZ's Ba3 corporate family rating reflects its strong market position and Moody's expectation for continued robust operating results in fiscal 2023 (ends February 2023). AZZ believes it is the leading independent domestic provider of hot-dipped galvanizing of fabricated steel and will become a leading independent provider of protective and decorative coatings of steel and aluminum coil with the addition of Precoat Metals. Moody's anticipate both companies will continue to produce historically robust operating results in fiscal 2023 due to good end market demand. This will enable AZZ to have moderate pro forma financial leverage and ample interest coverage while maintaining strong profit margins. It is also expected to consistently generate free cash flow and sustain a good liquidity profile. Nevertheless, AZZ's rating is constrained by the likelihood its operating performance and credit profile will eventually weaken when market conditions are less robust since it is reliant on cyclical construction and industrial end markets which could be negatively impacted by rising interest rates and inflationary cost pressures. Its rating also incorporates the risk of further debt financed deals considering the company's acquisitive history. AZZ had a strong operating performance in fiscal 2022 (ended February 2022) with Moody's adjusted EBITDA of about $170 million versus $140 million in fiscal 2021 and approached the $175 million generated in fiscal 2020. The improved results were driven by strength in both its Metal Coatings and Infrastructure Solutions segments. The Metal Coatings segment benefitted from increased volumes and its ability to manage higher material and labor costs through value pricing and operational improvement initiatives. The Infrastructure Solutions segment benefitted from improved demand and the divestiture of its unprofitable SMS business during the third quarter of fiscal 2021. Precoat Metals also had a strong operating performance in the year ended December 2021 with adjusted EBITDA of about $140 million. Moody's estimate AZZ's pro forma adjusted EBITDA at about $315 million including the acquisitions of Precoat, Steel Creek and DAAM Galvanizing. AZZ's operating performance will be continue to be supported by solid end market demand in fiscal 2023 (ends February 2023) and the acquisition of Precoat which is expected to close by the end of the fiscal first quarter. Therefore, Moody's anticipate the company will produce adjusted EBITDA of about $300 million and generate meaningful positive free cash flow. Moody's expect the company to use its free cash to pay down debt since it has historically maintained relatively conservative financial policies. Its adjusted leverage ratio was in the range of 1.5x - 2.0x in fiscal years 2019 – 2022 despite its ongoing active bolt-on acquisition program, consistently paying dividends of about $18 million per year and periodic share repurchases. However, the acquisition of Precoat will raise its pro forma adjusted leverage ratio (Debt/EBITDA) to about 5.1x and its interest coverage (EBITA/Interest) will decline to about 2.7x from about 16.0x for the LTM period ended February 2022. The pro forma adjusted leverage ratio will be about 4.3x and interest coverage about 3.3x after the exchange of the subordinated notes to preferred equity, which is more in line with the Ba3 rating and should improve further as AZZ pays down debt. AZZ's Speculative Grade Liquidity rating of SGL-2 reflects Moody's expectation it will maintain a good liquidity profile. The company had $15 million of cash and $313 million of availability on its $400 million unsecured revolving credit facility (unrated) as of February 2022. The company amended this facility in July 2021 and extended the maturity to July 2026. It expects to establish new senior secured credit facilities including a new $400 million 5-year senior secured revolving credit facility and a $1.3 billion term loan. The new credit facilities will have a total net leverage covenant which is expected to initially be set at 6.25x with periodic step downs to 4.50x and provides for a 0.50x step up for qualifying acquisitions if less than or equal to 4.75x on a pro forma basis. The new credit facilities are expected to provide covenant flexibility that if utilized, could negatively impact creditors. Notable terms include an incremental first lien facility not to exceed the greater of $300 million and 100% of consolidated EBITDA, plus an amount, which on a pro forma basis, would not cause the first lien net leverage ratio to exceed 4.5x. No portion of the incremental facility may be incurred with an earlier maturity than the initial term loans. The proposed terms and the final terms of the credit agreement may be materially different. The senior secured credit facilities have been assigned a rating of Ba3 which is commensurate with the corporate family rating since it will account for all of the debt in the company's capital structure after the exchange of the subordinated notes to preferred stock. AZZ has a Credit Impact Score of CIS-3 which reflects the limited credit impact to date from ESG considerations, but also incorporates the potential for carbon transition, social and governance risk factors to cause greater negative credit impact in the future. AZZ has a Governance Issuer Profile Score (IPS) of G-3 since governance risks are considered moderately negative. The company has historically maintained relatively conservative financial policies and has a net leverage target of 2.5x – 3.0x, but has demonstrated a willingness to materially raise its financial leverage to fund the mostly debt financed acquisition of Precoat Metals for $1.28 billion. AZZ has a Social Issuer Profile Score (IPS) of S-3 since it faces moderate social risks. It must comply with stringent compliance and safety standards and is susceptible to disruptions in labor availability and changing labor standards, wage or benefits demands and legal issues associated with its workforce, especially since it has union employees at a few of its facilities and several Precoat Metals locations. AZZ has an Environmental Issuer Profile Score (IPS) of E-3 since it faces moderate environmental risks related to its reliance on zinc as a key ingredient in its galvanizing process, paints as key raw material for Precoat, and copper, aluminum, steel and nickel-based alloys in its Infrastructure Solutions segment. Moody's characterizes the environmental risks as high for the steel sector and very high for the chemicals and mining sectors since these sectors face pressures to limit the damage to natural capital while reducing energy consumption, carbon emissions and water usage and will likely incur additional costs and possibly reduced productivity related to these issues and could attempt to pass these on to its customers including AZZ. Other potential challenges include increased environmental regulation associated with pollution and climate change and carbon transition risks and extreme weather events that can cause production disruptions. The stable ratings outlook reflects Moody's expectation for AZZ to generate historically robust operating results over the next 12 to 18 months and that it will use its free cash flow to pay down debt and maintain metrics that are commensurate with its rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would consider an upgrade of AZZ's ratings if it sustains a leverage ratio below 3.75x, interest coverage (EBITA/Interest) above 5.5x, retained cash flow above 20% of net debt and consistently generates free cash flow. AZZ's ratings could be downgraded if its leverage ratio is sustained above 5.0x, interest coverage below 3.5x and free cash flow below 5% of outstanding debt. AZZ Inc., headquartered in Fort Worth, Texas, is a provider of galvanizing and metal coating solutions, welding solutions, specialty electrical equipment and highly engineered services for maintaining and building critical infrastructure. Its Metal Coatings segment (about 60% of sales) serves the industrial, construction, OEM, renewable/utility, petrochemical and other sectors. This segment will include Precoat Metals when the acquisition closes. Precoat applies protective and decorative coatings and provides other value-added services for steel and aluminum coil in North America. Its Infrastructure Solutions segment (40%) provides electrical products and industrial solutions to a wide range of sectors. AZZ generated revenues of $903 million for the LTM period ended February 2022. Pro forma revenues including the acquisitions of Precoat Metals, Steel Creek and DAAM Galvanizing were about $1.65 billion. The principal methodology used in these ratings was Manufacturing published in September 2021. AZZ INC: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Fort Worth, Texas-based metals coating and infrastructure provider AZZ Inc. with a stable outlook. At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to the proposed $1.3 billion senior secured term loan B. The stable outlook reflects S&P's expectation that the Precoat acquisition will be immediately accretive to EBITDA and cash flows, keeping adjusted debt to EBITDA below 5x for the next 12 months despite a large increase in debt. AZZ has entered into a definitive agreement to purchase Precoat Metals for approximately $1.28 billion. AZZ plans to finance the acquisition with proceeds from a proposed $1.3 billion term loan B and convertible notes of $240 million, with the remainder used to retire senior unsecured notes and drawings under the revolving credit facility (RCF). S&P said, "Our assessment of AZZ's competitive position reflects its expanded scale and scope, geographic, customer, and end market diversity. Upon transaction close, we expect AZZ will generate revenues of $1.7 billion-$2 billion, compared to $800 million-$1 billion previously." The acquisition also expands AZZ's presence along the metals coating value chain, in line with the company's long-term strategy of transforming itself into a predominantly metals coating business. Precoat's prefabrication services, which include prepaint coating, shape correction, embossing, and laminating/printing, complement AZZ's metal coatings segment, which offers hot-dip galvanizing, anodizing, powder coating, and other surface coating applications. Despite the expanded scale and scope from the Precoat acquisition, AZZ still lags highly rated peers such as Valmont Industries Inc. and Steel Dynamics Inc. in size and diversity. The last-12-months revenue at Valmont was $3.5 billion and Steel Dynamics was $18.4 billion. These major integrated steel producers also offer metal coating services, though on a smaller scale than AZZ. AZZ operates 41 galvanizing locations across North America, which represents about 25% of all locations. The addition of Precoat predominantly increases its geographic concentration in North America, though AZZ has limited international presence in Brazil, Poland, and the Netherlands through its infrastructure solutions segment. The combined company will have a diverse customer base of over 3,600 customers with none accounting for more than 4% of sales. The pro forma company is also well diversified by end market--construction; industrial; petrochemical; manufacturing; heating, ventilating, and air conditioning; transportation; and renewable/utility. AZZ's new capital structure includes the most debt in the company's history. It will fund the acquisition of Precoat with a new $1.3 billion term loan B due in 2029 and a proposed sale of $240 million convertible subordinated notes which would be exchanged for preferred equity upon shareholder approval. After the $1.28 billion purchase, it will use remaining proceeds to repay senior unsecured notes of $150 million and $76 million in drawings under the RCF. The company also plans to renew its $400 million RCF and extend the maturity to 2027. S&P said, "As a result of the high debt, we expect adjusted debt to EBITDA to be aggressive but below 5x in 2023. This is a sharp increase from 1.1x estimated for fiscal 2022 (ended Feb. 28). We expect accretive EBITDA and cash flows from Precoat will support the rating. We expect adjusted EBITDA of $300 million-$320 million in fiscal 2023. We do not anticipate any major synergy gains following the integration, though the company expects some opportunities to gain additional business from current clients with the expanded scope of combined offerings after the integration." S&P said, "We expect discretionary cash flows (DCF) of $140 million-$170 million, after capital expenditures (capex) of about $60 million-$70 million and moderate shareholder distributions of $18 million-$20 million. We believe such DCF could support management's deleveraging efforts toward a target leverage of 2.5x-3x in the next 24 months. "We expect some volatility in revenues and earnings from the infrastructure solutions segment, although to a lesser extent pro forma for the integration. We expect revenue contribution from the stable metals coating segment and Precoat to increase to about 75% while infrastructure will account for about 25%, down from about 41%. The infrastructure solutions segment is a diverse portfolio of lower-margin electrical and industrial businesses that provide life cycle extension services critical for power generation, refining, and industrial infrastructure. It is exposed to volatile oil and gas markets, which we expect to continue but partially offset by the integration of the more stable Precoat business. "We expect AZZ will continue to optimize its portfolio of businesses aimed at increasing focus on metals coatings. In line with this strategy, the company divested some of the infrastructure businesses, including AZZ SMS LLC in 2020 and Nuclear Logistics LLC. The company also completed some bolt-on acquisitions in 2021 to boost the metal coatings business, including Steel Creek and DAAM Galvanizing. "We expect AZZ's highly variable cost structure and tolling business model will enable it to weather inflationary pressures and maintain strong EBITDA margins. The company has a highly variable cost structure as about 70%-80% of cost of goods sold is variable. This variability allows the company to mitigate the impact of reduced demand on its bottom line as it can scale down expenses during periods of weak demand. AZZ is not directly exposed to steel and aluminum prices since the customer procures these metals and AZZ only charges fees for its services. Most of the company's contracts, especially within metals coating, are short-term and range from a couple of weeks to months. This enables company to adjust prices and pass input cost increases through to the customer. We expect EBITDA margins to improve to 18%-21% following the integration of the higher-margin Precoat business, although the lower-margin infrastructure segment will partially offset some of the improvement. "The stable outlook reflects our expectation that the Precoat acquisition will be immediately accretive to EBITDA and cash flows, such that adjusted debt to EBITDA will remain below 5x over the next 12 months despite the highest debt balance in the company's history. We expect EBITDA margins will improve to 18%-21%. "We could consider raising our rating on AZZ following significant debt reduction such that we believe adjusted debt to EBITDA will be sustained below 4x. This could happen if the company successfully integrates Precoat and voluntarily accelerates the amortization of its debt using its DCF. "We could lower our rating on AZZ if it faces stiff competition that takes market share and deteriorates profit margins. Such competition could arise from steel mills increasing coating capacity and taking market share from AZZ. In such a scenario, we would expect a significant loss of revenue plus EBITDA margins below 10%." ESG credit indicators: E-2, S-2, G-2 S&P said, "ESG factors are an overall neutral consideration in our credit rating analysis of AZZ. Pro forma the Precoat acquisition, AZZ will provide metal coating services, which includes hot dip galvanizing and prepainting services for steel and aluminum substrates. The company also provides electrical products and various industrial solutions under its infrastructure segment. We consider AZZ's greenhouse gas emissions to be lower compared to steel and aluminum producers. Though we consider AZZ exposed to the general steel industry, it does not participate in the production process and is not subject to substitution risks related to the move to greener steel production." B D A AND K: Unsecureds Will Get 100% of Claims in Liquidating Plan ------------------------------------------------------------------- B D A and K, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey a Small Business Plan of Liquidation dated April 21, 2022. The Debtor is a holding company for a certain Liquor License 1505 33-012-007 which has been utilized in the sale of liquor at a restaurant owned by a non-Debtor entity controlled by the principal of the Debtor, William Muirhead. The Chapter 11 Filing was precipitated by the filing of a Motion To Appoint Special Agent To Market And Sell Liquor License by the largest and only secured creditor, Manasquan Bank, in a related action entitled, Manasquan Bank v. Starparks USA, LLC et al, Superior Court of New Jersey, Law Division, Ocean County. The Debtor has resumed liquor sales on June 2021 after the business ceased operations due to the COVID-19 Pandemic. The Debtor has filed Monthly Operating Reports and Financial Cash-Flow Projections with the Court, but anticipates the satisfaction of the creditor claims from the sale of non-Debtor assets or in the alternative, assets of the Debtor. The Debtor is proposing to satisfy the secured claim of Manasquan Bank in full from the sale of real property identifiable as 140 150 Atlantic City Blvd. Bayville, NJ, which is owned by an affiliated entity of the Debtor, Starparks USA, LLC, which sale shall take place within 6 months post-confirmation. In the event that the claim of Manasquan Bank is not satisfied in full from the sale of the real property owned by Starparks USA, LLC within 6 months post-confirmation, BDA and K, LLC will move to sell its primary asset, the Liquor License, within 6 months thereafter. In the event the Liquor License is not sold within such 6 month period, the Debtor will appoint an auctioneer to sell the Liquor License. It is anticipated that the General Unsecured Creditor Base will be satisfied in full from the sale of real property identifiable as 140-150 Atlantic City Blvd. Bayville, NJ, which is owned by an affiliated entity of the Debtor, Starparks USA, LLC, which sale shall take place within 6 months post-confirmation. In the event that the General Unsecured Creditor Base is not satisfied in full from the sale of the real property owned by Starparks USA, LLC within 6 months post-confirmation, BDA and K, LLC will move to sell its primary asset, the Liquor License, within 6 months thereafter. In the event the Liquor License is not sold within such 6 month period, the Debtor will appoint an auctioneer to sell the Liquor License. Class 1 consists of the Secured Claim of Manasquan Bank. The Debtor is proposing to satisfy the secured claim of Manasquan Bank in full from the sale of real property identifiable as 140-150 Atlantic City Blvd. Bayville, NJ, which is owned by an affiliated entity of the Debtor, Starparks USA, LLC, which sale shall take place within 6 months postconfirmation. Class 2 consists of General Unsecured Claims. Total Amount of General Unsecured Claims shall be $1,261,370.86. The Debtor is proposing to satisfy the General Unsecured Creditors in full from the sale of real property identifiable as 140-150 Atlantic City Blvd. Bayville, NJ, which is owned by an affiliated entity of the Debtor, Starparks USA, LLC, which sale shall take place within 6 months postconfirmation. This Class will receive a distribution of 100% of their allowed claims. Class 3 consists of Equity Interest holders. Paid to the extent available after payment of all other creditor claims. The Debtor is proposing to satisfy all allowed creditor claims in full from the sale of real property identifiable as 140-150 Atlantic City Blvd. Bayville, NJ, which is owned by an affiliated entity of the Debtor, Starparks USA, LLC, which sale shall take place within 6 months post-confirmation. In the event that the claim of Manasquan Bank is not satisfied in full from the sale of the real property owned by Starparks USA, LLC within 6 months post-confirmation, BDA and K, LLC will move to sell its primary asset, the Liquor License, within 6 months thereafter. In the event the Liquor License is not sold within such 6 month period, the Debtor will appoint an auctioneer to sell the Liquor License. A full-text copy of the Liquidating Plan dated April 21, 2022, is available at https://bit.ly/3kwGY4d from PacerMonitor.com at no charge. About B D A and K B D A and K LLC is a privately held company in the liquor store business. B D A and K LLC filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 22-10500) on Jan. 21, 2022. In the petition signed by William Muirhead, sole member, the Debtor disclosed $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Donald F. Campbell, Jr., Esq. of GIORDANO, HALLERAN & CIESLA, P.C., is the Debtor's counsel. BAUSCH+ LOMB: Fitch Assigns First-Time Rating 'BB-(EXP)' IDR ------------------------------------------------------------- Fitch Ratings has assigned a first-time rating of 'BB- (EXP)' Issuer Default Rating (IDR) to Bausch + Lomb Corporation (BLCO) with a Rating Watch Positive (RWP) and a 'BB+(EXP)'/'RR1'/RWP rating to BLCO's $2.5 billion term loan with a RWP. The net proceeds from the offering, new term loans, recent bond issuance and the expected BLCO IPO will refinance Bausch Health Companies Inc's (BHC) existing term loans and its unsecured notes due 2025. KEY RATING DRIVERS BLCO Solid Eye Care Business: BLCO is a leading global eye health company with a portfolio of over 400 products. Fitch expects that it will maintain an investment-grade capitalization upon its separation from BHC and transition from a secured borrowing base to unsecured. Fitch views BLCO as significantly smaller than Boston Scientific Corp. (BBB/Positive), Baxter International (BBB/Stable), Becton, Dickinson & Company (BBB-/Positive) and Zimmer Biomet Holdings, Inc. (BBB/Stable). BLCO also operates in consumer health and prescription pharmaceuticals, providing some additional sector diversification compared to Boston Scientific and Zimmer Biomet. It also presents a moderate degree of regulatory risk regarding drug pricing. BLCO's Ratings Tied to BHC's: The primary driver of BLCO's ratings is that of BHC's IDR (B/Negative) until the completion of the separation. Fitch views the ringfencing and access and control factors to be porous thereby allowing BHC's credit profile to influence BLCO's. Fitch notches BLCO's ratings two notches higher than BHC's and, until separation, any changes in the linkage could lower BLCO's ratings. Moreover, changes to BHC's ratings would influence BLCO's until they are assessed on a stand-alone basis. An investment-grade rating would likely have leverage below 3.5x and an unsecured capital structure. Fitch will assess BLCO's corporate governance and its impact on ratings and ESG Relevance Scores as it relates to the separation. Additional detail on BHC's ratings can be found in the RAC dated Jan. 26, 2022. Coronavirus Impact Moderating: BLCO's business is recovering from the negative impact of COVID-19. Cataract and laser vision correction surgeries faced significant challenges as these procedures are generally considered elective or deferrable. Looking back, the second quarter of 2020 will probably remain the trough in revenues. Fitch believes growth will continue as population immunity increases, more therapeutics and diagnostic tests become available and protocols by providers mitigate the risk and patient concern associated with having these procedures. Nevertheless, the potential emergence of a resistant and more virulent variant could lead to a setback in procedure volumes. Supply Chain/Inflation: Supply chain constraints and inflationary pressures present challenges to many firms in the health care sector. BLCO is generally managing these issues through building stocks of raw materials and API. In addition, the company is adding redundancies in its suppliers. Reliably Increasing Demand: Aging demographics, improved income demographics in emerging markets, increasing digital screen times and the ongoing increase in the incidence of diabetes will likely drive low- to mid-single digit growth in the demand for eye health products and services during the intermediate term. A significant number of BLCO's products enjoy leading market positions and strong brand recognition. Consumables and implantables account for roughly 52% and 28% of BLCO's revenues, respectively. The company's product portfolio has only limited exposure to market exclusivity losses. Pipeline to Support Growth: Innovation is important to remain competitive in the eye health market, Fitch views the company's R&D efforts will help to drive intermediate- and long-term revenue growth while also supporting margins. BLCO makes consistent and significant investments in new product development. Its R&D efforts span all three businesses with intensity geared more towards surgical and ophthalmic pharmaceuticals. Fitch expects the company will also continue to pursue innovation in its Vision Care business with technological advancements being more incremental in nature. Margin Expansion: Fitch expects that margins will improve over the forecast period. Improving sales mix and manufacturing efficiency gains should increase gross margins. SG&A as a percent of sales are forecasted to decline owing to strong management of other operating costs. In addition, increasing revenue should provide additional operating leverage. In addition, Fitch believes only a moderate amount BLCO's revenues are exposed to branded pharmaceuticals pricing issues in the U.S. Consistently Positive FCF: Advancing sales, improving margins, solid working capital management and moderate capital expenditure requirements should support consistently positive and increasing FCF. Fitch does not expect that BLCO will pay dividends or engage in share repurchases during the near term. Capital deployment will focus on internal investment, external collaborations and targeted acquisitions. For a global eye health company that includes medical devices and pharmaceuticals, Fitch believes BLCO has relatively minimal contingent liability risk regarding product liability, intellectual property and other regulatory issues. As such, we forecast BLCO's leverage (total debt/EBITDA) to decline over the forecast period to below 2.5x, primarily through EBITDA growth. The current level of balance sheet debt is generally viewed as a permanent component of the capital structure and maturities are expected to be refinanced. DERIVATION SUMMARY BLCO's 'BB-(EXP)' IDR is based on it being a majority owned subsidiary of BHC until the separation. Fitch views BLCO to be a stronger subsidiary than the weaker parent and notches BLCO's ratings +2 from the consolidated parent's 'B' IDR. The notching is based on Fitch viewing the ringfencing to be porous due to the lack of any restrictive investment or dividend covenants and access and control to be porous due to some overlapping Board of Directors members. Until separation, BLCO's ratings will be influenced by BHC's whose Rating Derivation is described in the RAC dated Jan. 26, 2022. BLCO is significantly smaller than Boston Scientific Corp. (BBB/Positive), Baxter International (BBB/Stable), Becton, Dickinson & Company (BBB-/Positive) and Zimmer Biomet Holdings, Inc. (BBB/Stable). BLCO also operates in consumer health and prescription pharmaceuticals, providing some additional sector diversification compared to Boston Scientific and Zimmer Biomet. It also presents a moderate degree of regulatory risk regarding drug pricing. BLCO is somewhat less diversified than Becton, Dickinson and Baxter. In addition, BLCO is solely focused on eye health, while all of its peers address a number of disease markets, with Zimmer Biomet also being somewhat less diversified than the others. Zimmer Biomet and Becton, Dickinson have a similar financial profile to BLCO, and Fitch expects the company to maintain gross debt/EBITDA between 2.5x-3.0x. Parent Subsidiary Linkage The approach taken is a weak parent (BHC)/strong subsidiary (BLCO). Using Fitch's PSL criteria, we conclude there is porous ring fencing and porous access & control. As such, we rate the parent and subsidiary at the consolidated level while notching the subsidiary's rating up by two. The release of guarantees and the unrestricting of BLCO will occur upon the IPO and the achievement of 7.6x pro forma net leverage at BHC Parent, BLCO will be unrestricted under the Parent debt documents and its capital stock will no longer be pledged. Fitch views imitations on investments, acquisitions and dividends provide a moderate degree of ring fencing. However, the credit facility can be amended. BLCO will have its own Board of Directors (BOD), management and treasury operations. However, some BOD members are also members of BHC's BOD. KEY ASSUMPTIONS -- Mid- to high-single-digit organic revenue growth driven by the uptake of new product commercialization moderate offset by increased competitive pressure for some established products; -- Annual FCF generation greater than $400 million during the forecast period with moderately improving operating EBITDA margins; -- Dividends are not included in the forecast, but if instituted would decrease FCF by the same amount as Fitch defines as CFFO-capex-dividends; -- Cash deployment prioritized for tuck-in acquisitions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: BLCO -- Fitch viewing BLCO on a standalone basis; -- An upgrade of BHC. BHC's Rating Sensitivities are detailed below. Factors that could, individually or collectively, lead to negative rating action/downgrade: BLCO -- Evidence of factors related to ringfencing and access and control that would lead Fitch to rate BLCO on a consolidated basis with BHC or with one notch rather than two notches; -- A downgrade of BHC. BHC's Rating Sensitivities are detailed below. Factors that could, individually or collectively, lead to positive rating action/upgrade: BHC -- An expectation of gross debt leverage (total debt/EBITDA) durably below 6.0x; -- BHC continues to maintain a stable operating profile and refrains from pursuing large, leveraging transactions including acquisitions; -- Forecasted FCF remains significantly positive. Factors that could, individually or collectively, lead to negative rating action/downgrade: BHC -- Gross debt leverage (total debt/EBITDA) durably above 7.0x; -- FCF significantly and durably deteriorates; -- Refinancing risk increases and the prospect for meaningful leverage reduction weakens. 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 BLCO Liquidity: Fitch expects BLCO will have sufficient financial flexibility with an undrawn $500 million revolving credit facility, no debt maturities and $300 of cash pro forma for the financing and dividend paid to BHC. The instrument notching for BLCO's secured debt reflects Fitch's determination that it is a Category 1 first lien as it is a U.S. based borrower, without an ABL or any structurally senior debt, does not have excessive secured leverage nor meet any of the other characteristics of Category 2 first liens. Recovery Analysis Assumptions Fitch applies a generic approach to rate and assign Rating Recoveries (RRs) to instruments for issuers rated 'BB-' or above. BLCO's first-lien security on its term loan receive a rating of 'BB+(EXP)'/'RR1', which is consistent with Fitch's criteria regarding first-lien debt of a 'BB-' issuer. ISSUER PROFILE Bausch + Lomb Corporation (BLCO) is currently a majority-owned subsidiary of Bausch Health Companies Inc (BHC) and a leading global eye health company with a portfolio of over 400 products. The company has a global research, development, manufacturing and commercial footprint of approximately 12,000 employees and a presence in approximately 90 countries. In addition, BLCO has 23 facilities in 10 countries that support the quality, reliability and capacity needs of its global manufacturing operations, supply chain, customer service and technical support. ESG CONSIDERATIONS Bausch + Lomb Corporation has an ESG Relevance Score of '4' for Exposure to Social Impacts due to pressure to contain health care spending growth; highly sensitive political environment, and social pressure to contain costs or restrict pricing, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. It is worth noting that pharmaceuticals account for less than 15% of the firm's total sales. 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. DEBT RATING PRIOR ---- ------ ----- Bausch + Lomb Corporation LT IDR BB-(EXP) Expected Rating senior secured LT BB+(EXP) Expected Rating RR1 BELLE CREEK: Moody's Assigns Ba2 Rating to 2022A/B Revenue Bonds ---------------------------------------------------------------- Moody's Investors Service has assigned Ba2 ratings and a stable outlook to Charter School Refunding Revenue Bonds (Belle Creek Charter School Project) Series 2022A and Federally Taxable Series 2022B. The bonds will be issued in the expected par amounts of $5.8 million and $120,000, respectively. The Colorado Educational and Cultural Facilities Authority will be the conduit issuer. Upon issuance of the Series 2022 A&B bonds, this will be the only outstanding debt for Belle Creek Charter School. RATINGS RATIONALE The Ba2 rating reflects this K-8 school's established operating history since its opening in the fall of 2003 with two successful charter renewals with Adams & Weld Counties S.D. 27J (Brighton) (Issuer Rating Aa3/STA), which serves as the school's authorizer. The rating is also based upon Moody's expectation that enrollment growth will resume following two years of consecutive enrollment declines driven by the coronavirus pandemic, which reduced enrollment from a recent high of 689 in fiscal 2020 to 600 in the current fiscal year. Despite the receipt of substantial federal and state relief funding, this decline, along with the school's decision to retain staff, has led to two consecutive years of operating deficits with less than sum sufficient debt service coverage in fiscals 2021 and 2022. However, liquidity is expected to remain adequate following deficit spending in fiscal 2022 at around 140 days' cash. Following the 2022 refunding, which will extend debt service for 15 years, a return to balanced operations with additions to reserves in fiscal 2023 is expected. Legal covenants, which are weak but typical of the sector, are also factored into the rating. Governance is a key driver of the rating action and considers the district's use of an outside contractor for financial management and budgeting, providing additional expertise. RATING OUTLOOK The stable outlook reflects Moody's expectation that the school's financial performance will return to balanced operations outside of one-time revenues in fiscal 2023 supported by resumed enrollment growth. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS Return to enrollment growth trend Restoration of balanced operations with additions to reserves Sustained improvement in liquidity FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS Continued enrollment losses Operating deficits beyond fiscal 2022 Weakening in academic performance or market position LEGAL SECURITY All of the charter school revenue bonds are payable from payments received pursuant to a Loan Agreement between the Colorado Educational and Cultural Facilities Authority (CECFA) and the Belle Creek Education Center (the Corporation), a nonprofit corporation organized for the purpose of serving as borrower and lessor of the charter school land and property. Under the Loan Agreement, the Corporation will make debt service payments from pledged revenues, which consist of all revenues derived from the charter school facility, most notably lease payments made to the Corporation pursuant to the Lease Agreement with Belle River Charter School as Lessee. The school will make lease payments from Charter School Revenues, defined as all income and revenue of the charter school with the exception of restricted donor gifts or special purpose revenues that are not available for debt service. Under Colorado's intercept mechanism, per pupil revenues will be paid directly to the trustee by the state treasurer. This structure provides additional security and serves to partially offset risks associated with Belle River's lease payments that are subject to annual appropriation. Legal provisions are weak but typical of the sector, with a debt service coverage requirement of 1.1x and a 40 days cash requirement in addition to a 3% emergency reserve required under Colorado's Taxpayer Bill of Rights (TABOR). Should coverage fall below 1.1x, a consultant must be hired. Less than 1.0x coverage constitutes an event of default if cash is less than 90 days. Should days' cash fall below 40 days, a consultant must be hired if the school is directed to do so by a majority of bondholders. Days' cash of less than 40 days for two consecutive years constitutes an event of default. The bonds are additionally secured by a reserve fund equal to maximum annual debt service (MADS) for the Series 2022 bonds and a Deed of Trust in the school property. The Additional Bonds Test (ABT) requirement under the Indenture, 1.1x coverage for the most recent fiscal year and 1.1x coverage of MADS after project completion as determined by a consultant. The structure benefits from the state's Charter Intercept Statute, under which the State Treasurer, on a monthly basis, will pay debt service from the school's per pupil revenue allocation. Monthly payments will be based upon 1/6 principal and 1/12 interest amounts, paid directly to the Trustee from first available state aid payments owed to the school. The intercept provides protection against liquidity issues or administrative error at the school level, but it does not protect against a shortfall in per pupil revenue stemming from a decline in enrollment or the termination of the school's charter. In the event of default, the bonds are additionally secured by a deed of trust on the school property, which is owned by the corporation. USE OF PROCEEDS Bond proceeds will refund $6.1 million in outstanding debt. The refunding structure will extend debt service repayment by fifteen years, with final maturity in 2052, providing around $200,000 in annual cash flow savings through 2037. PROFILE Located in Henderson, Colorado, Belle Creek currently serves 600 students in grades K-8. While the school has an extended operating history since its opening in the fall of 2003, it has experienced two consecutive years of enrollment declines through fiscal 2022, reportedly due to the impact of the coronavirus pandemic, and does not have a waitlist. The school offers a Core Knowledge curriculum with academic performance that generally aligns with that of the district, although scores demonstrate improvement and some out performance at the upper grade levels. The school has successfully renewed its charter twice with its authorizer, Brighton School District No. 27J. Its current charter extends through June 30, 2030. METHODOLOGY The principal methodology used in these ratings was US Charter Schools published in September 2016. BERRY CORP: S&P Affirms 'B-' ICR on Higher Near-Term Oil Prices --------------------------------------------------------------- S&P Global Ratings affirmed the 'B-' issuer credit rating on Dallas-based oil and gas exploration and production (E&P) company Berry Corp. S&P also affirmed its 'B' issue-level and '2' recovery rating on the company's senior unsecured notes. The stable outlook reflects S&P's expectation that Berry will maintain essentially flat production over the next two years, with high oil prices supporting strong credit ratios and positive discretionary cash flow. It estimates leverage will increase significantly in 2024 under its long-term oil price assumptions, including $55 per barrel (bbl) for Brent crude. With oil and natural gas liquids accounting for about 90% of its total production, Berry will benefit from high near-term crude oil prices. In addition, because of the location of its assets, Berry will benefit from the Brent price, which is typically higher than the West Texas Intermediate (WTI) price. However, as an offset, Berry's per-unit operating costs typically run higher than those of peers because of its production methods, which include steam injection. S&P said, "Nevertheless, we expect the company to generate solid revenues and cash flows, leading to FFO to debt over 60% this year and 45%-50% in 2023. We also expect the company to generate positive discretionary cash flow after capital expenditures and dividends." The company recently acquired a well servicing business, although we do not expect this to add to cash flows until 2024. In September 2021, Berry completed the $43 million acquisition of C&J Well Services, a California-focused oilfield services (OFS) company, which will operate as a separate subsidiary. Although S&P does not expect the OFS segment to contribute material cash flow over the next two years, it should benefit longer term from the expected growth of the plugging and abandonment (P&A) market in California for older or idle wells. S&P expects shareholder returns to be a larger near-term use of cash. Late last year, Berry instituted a new shareholder return model under which it will return 60% of its free cash flow (after maintenance capital spending and a fixed dividend) to shareholders as variable dividends. The remaining 40% will be used for organic growth, energy transition initiatives, additional share repurchases, or capital retention. Based on S&P's price assumptions, it estimates total dividends (fixed plus variable) will be about $120 million this year and $60 million in 2023, up from $11.5 million in 2021. S&P still view Berry's exposure to social risks as higher than that of its sector peers. Most of the company's reserves and production are in California, which is generally less supportive of oil and gas drilling activities than other oil producing states. S&P believes the risk of tighter regulations or community opposition to drilling or fracking, which would likely increase Berry's costs or hinder its ability to develop and replace its reserves, is high relative to peers. S&P said, "The stable outlook reflects our expectation that Berry will maintain essentially flat production over the next two years, with high oil prices supporting strong credit ratios and positive discretionary cash flow. We estimate leverage will increase significantly in 2024 under our long-term oil price assumptions, including $55/bbl for Brent." S&P could lower its rating on Berry if: -- Liquidity deteriorates; -- Leverage becomes unsustainable; or -- S&P believes the company has become dependent on favorable business conditions to meet its financial obligations. This would most likely occur if commodity prices weaken and the company does not reduce spending. S&P could raise its rating on Berry if: -- S&P expects FFO to debt to approach 45% for a sustained period, with adequate liquidity, which would most likely occur if commodity prices remain strong and the company maintains or increases production; and -- The company increases production and reserves while broadening its geographic diversity outside of California, or if California's regulatory environment becomes more supportive of oil and gas activities. ESG credit indicators: E-4, S-3, G-2 S&P said, "Environmental factors are a negative consideration in our credit rating analysis of Berry Corp. as the E&P industry contends with an accelerating energy transition and adoption of renewable energy sources. We believe falling demand for fossil fuels will reduce profitability and returns for the industry as it fights to retain and regain investors that seek higher returns. Additionally, social factors are a moderately negative consideration. With about 85% of its production and about 90% of its proved reserves in California, Berry's exposure to the state's more stringent environmental regulations raises the potential for higher costs or more limited drilling locations versus peers in industry-friendly states such as Texas. In 2019, California enacted a moratorium on permits for high-pressure cyclic steam activities, which at the end of 2019 had accounted for about 30% of Berry's future drilling locations. However, the company has since shifted its operations to other drilling methods to maintain production and has multiple years of inventory." BIOVENTUS LLC: Moody's Assigns First Time 'B3' Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned first time ratings to Bioventus LLC (New), including a B3 Corporate Family Rating, a B3-PD Probability of Default Rating, and Caa1 rating to the proposed senior unsecured notes. In addition, Moody's assigned a Speculative Grade Liquidity Rating of SGL-3, signifying adequate liquidity. The outlook is negative. In connection with Bioventus' exercise to acquire the remaining portion of CartiHeal, following pre-market approval of its Agili-C implant product by the U.S. Food and Drug Administration (FDA), Bioventus seeks to raise $415 million in senior unsecured notes. Proceeds from the $415 million in notes would be used to fund the remaining $265 million consideration for CartiHeal, repay $15 million of outstanding revolver and $128 million of existing term loan A, with the remaining $7 million covering estimated fees and expenses. Assignments: Issuer: Bioventus LLC (New) Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Speculative Grade Liquidity Rating, Assigned SGL-3 Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD5) Outlook Actions: Outlook, Negative ESG considerations are material to the ratings assignment. Bioventus faces high social risk exposures including responsible production as well as other social and demographic trends. Risks associated with responsible production include compliance with regulatory requirements for safety of medical devices as well as adverse reputational risks arising from recalls, safety issues or product liability litigation. Among governance considerations, the company's financial policies are aggressive reflected in high financial leverage. RATINGS RATIONALE Bioventus' B3 Corporate Family Rating reflects the company's moderate size and scale with approximately $500 million of revenue and $100 million of EBITDA, pro forma for the recent acquisitions. Bioventus' rating is constrained by high financial leverage of approximately 7 times (on Moody's adjusted basis), which Moody's expects will improve to approximately 6 times in the next 12 to 18 months. The rating also reflects Bioventus' concentration in the niche orthobiologic market segment and its reliance on Durolane, its single-injection hyaluronic acid (HA) product, for a quarter of the company's revenues. Although the company's Durolane product exhibits above-average growth rates, the company is subject to significant competition in this product category with companies that have greater scale and financial resources. Bioventus' rating is constrained by its appetite for M&A and the integration risks arising from the recent acquisitions. Tempering these constraints, Bioventus has a good market position as one of the leading players in both the bone stimulation devices and HA injection market sub-segments. While the bone stimulation devices market sub-segment is mature with low growth rates, Bioventus has significantly reduced its reliance on this product over the past few years as newer products, including the HA injections, bone graft substitutes, and recently-acquired surgical and wound care products, represent good growth opportunities for the company. Moody's views Bioventus product mix positively, as only 25 percent of the company's products are used in elective procedures. Bioventus has good EBITDA margins of approximately 20 percent (on a Moody's adjusted basis) that may be further diluted due to recent acquisitions. The outlook is negative reflecting Bioventus high financial leverage that Moody's expects to improve in the next 12-18 months while maintaining adequate liquidity. However, Moody's believes there is a heightened risk of covenant breach based on the proposed revised terms of the total net leverage ratio covenant following the transaction. Factors such as EBITDA growth and successful integration of the acquisitions will influence Bioventus' credit profile. The Speculative Grade Liquidity Rating of SGL-3 reflects Moody's expectation that Bioventus will maintain adequate liquidity, highlighted by modest cash balances, breakeven free cash flow generation (after mandatory debt repayments) and full availability on the $50 million revolving credit facility. Pro forma for the transaction, Bioventus will have approximately $40 million of cash on hand. Moody's expects Bioventus to generate breakeven free cash flow over the next 12 months. Free cash flow incorporates both capital expenditures and mandatory payments for the term loan. The company has full availability under its $50 million revolving credit facility that expires in 2026. Based on the proposed revisions to the existing covenants, the secured net leverage and interest coverage ratio covenants are expected to have good cushion, but the cushion on the total net leverage ratio covenant is expected to be tight. The rating on the proposed $415 million senior unsecured notes is Caa1, one notch below the B3 CFR. This reflects the senior unsecured notes junior position to approximately $228 million of outstanding senior secured term loan A pro forma for the transaction. ESG CONSIDERATIONS Bioventus' ESG Credit Impact Score is highly negative (CIS-4), reflecting its neutral to low exposure to environmental risks, and highly negative exposure to social risks, notably to responsible production, and highly negative governance profile, in particular its aggressive financial policies evidenced by the recent string of acquisitions resulting in high financial leverage. Environmental risk is neutral to low (E-2), is in line with exposure from the medical products and devices industry. The company has production facilities in Tennessee, New York, California and Israel, reducing its exposure to physical climate risks. Credit exposure to social considerations is highly negative (S-4) and arises from risks associated with responsible production. As a manufacturer of medical devices, the company can have exposure to risks such as product recalls, regulatory actions or product liability litigation. The company has not had material exposures to product liability historically. The company benefits from its products which address the needs of the aging population. Credit exposure to governance considerations is highly negative (G-4), reflecting the company's aggressive financial policies evidenced by its high financial leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Bioventus' ratings could be upgraded if the company successfully integrates its recent acquisitions, demonstrated by a full realization of expected synergies and a track record of strong growth stemming from new products. In addition, ratings could be upgraded if the company further improves its size, scale and business diversity while maintaining a balanced financial policy. Consistent generation of material, positive free cash flow (after mandatory debt repayment) could result in a ratings upgrade. Quantitatively, ratings could be upgraded if gross debt/EBITDA were sustained below 5.5 times using Moody's definitions. Bioventus' ratings could be downgraded if the company experiences a significant increase in competition or pricing pressures in both its new and existing product lines. In addition, if the company fails to integrate and/or maintain strong top-line growth rates from its recent acquisitions, ratings could be downgraded. Regulatory changes, such as a revision in the classification of hyaluronic acid injections to pharmaceuticals instead of medical devices, could result in a ratings downgrade. Similarly, if liquidity weakens, including free cash flow turning negative on a sustained basis or there is expected to be a covenant breach on the total net leverage ratio, ratings could be downgraded. Bioventus, headquartered in Durham, North Carolina, is a medical device manufacturer of orthobiologic products that are aimed at treating patients with cost effective and minimally invasive treatments. The company's three business verticals include pain treatments, restorative therapies and surgical solutions. Bioventus' products are used in physician's offices, clinics, ambulatory surgery centers (ASCs), and hospital settings. Pro forma revenues are approximately $500 million. The principal methodology used in these ratings was Medical Products and Devices published in October 2021. BIOVENTUS LLC: S&P Assigns 'B-' ICR, Outlook Stable --------------------------------------------------- S&P Global Ratings assigned a 'B-' issuer credit rating to Durham, N.C.-based global medical products company Bioventus LLC. S&P said, "At the same time, we assigned a 'CCC+' issue-level rating and '5' recovery rating to the company's senior unsecured notes. "Our stable outlook reflects our expectation for mid- to high-single-digit percentage organic revenue growth, complemented by acquisitions. It also reflects our expectation that the company's aggressive acquisition strategy will likely keep S&P Global Ratings-adjusted leverage over 7.5x for the next 12 months. "Our 'B-' rating on Bioventus reflects our expectation that the company will continue its aggressive debt-financed growth strategy, keeping adjusted leverage above 7.5x. Bioventus has a limited pipeline of new products under development. The company may increase its spending on research and development, but in our view it is more likely to expand its product portfolio by pursuing licensing and distribution agreements or to acquire and invest in new products. Given financial sponsor ownership, we believe the company will continue its debt-financed growth strategy and will likely spend cash flow on acquisitions rather than permanent debt repayment. We expect cash flow to be about $15 million in 2022, increasing to about $20 million to $30 million in 2023 as the company realizes synergies from recent acquisitions. The 'B-' rating also reflects the company's niche therapeutic focus and limited scale with high revenue concentration on select products in the competitive medical device industry. Bioventus focuses almost entirely on the orthobiologics market for musculoskeletal conditions. It generates about 50%-60% of revenues from its top three products (Exogen, Durolane, and BGS). S&P views the product concentration as a key credit risk, especially since Exogen's sales have been flat to declining in recent years due to weakened demand and pricing pressure outside the U.S. The company has grown the past few years, mostly by acquisitions, and expects to reach about $550 million revenue in 2022, but it is still very small compared to the other major players in the medical devices space. It faces competition from much larger competitors with established market dominance such as Medtronic PLC (growth factor and synthetic products), Zimmer Biomet (long-bone stimulation), Johnson & Johnson (hyaluronic acid injections), and Stryker Corp. (synthetic and stem cell products), most of which are significantly bigger with much more financial resources. There is an increased execution risk as the company expanded significantly the past 12 months via acquisitions. It has acquired Bioness (a rehabilitation solutions company that specializes in peripheral nerve stimulation therapy technology) in March 2021, Misonix (a provider of minimally invasive therapeutic ultrasonic technologies and regenerative medicine) in October 2021, and now CartiHeal (an Israel-based company that develops proprietary implants for the treatment of cartilage and osteochondral defects in traumatic and osteoarthritic joints). S&P believes all these acquisitions require significant attention from the management team to drive synergy and create cross-sell opportunity. Favorable industry trends should contribute to mid- to high-single-digit organic revenue growth over the next few years. Bioventus benefits from several favorable industry trends and characteristics, such as an aging population and the shift toward minimally invasive products. These trends, along with cross-selling opportunities from completed acquisitions, should support moderate organic revenue growth over the next few years. In addition, the company does not have material reimbursement risk since most products are sold to the hospitals or covered by private insurance, unlike other health care practices. Moreover, the company has navigated the pandemic relatively well given its limited exposure (about 25% of its revenue) to elective procedures. S&P said, "Our stable outlook reflects our expectation that Bioventus will generate mid- to high-single-digit organic revenue growth, improving free cash flow but adjusted debt leverage will remain above 7.5x over the next 12 months. "We could lower the rating if the company experiences integration issues or intensifying competition in key product markets resulting in consistent free cash flow deficits. "We could consider raising the rating if the company generates free operating cash flow such that it can comfortably cover its mandatory debt amortization and sustain adjusted free cash flow to debt of at least 4%. We also expect adjusted leverage to be below 7.5x." ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of Bioventus LLC. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with our view of the majority of rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and a focus on maximizing shareholder returns." ESG credit indicators: E-2, S-2, G-3 BLACK NEWS CHANNEL: U.S. Trustee Appoints 3 More Committee Members ------------------------------------------------------------------ The U.S. Trustee for Region 21 appointed Rogers Cowan PMK, Liquid Soul Media, LLC and Smith Geiger, LLC as new members of the official committee of unsecured creditors in the Chapter 11 case of Black News Channel, LLC. The committee is now composed of: 1. The News Project, Inc. c/o Merril Brown, CEO 630 West 246th Street Unite 524 Bronx, NY 10471 Phone: (917)-534-3544 Email: Merrill@thenewsproject.net 2. The Associated Press c/o Louis Sarok, Assistant General Counsel 200 Liberty Street New York, NY 10281 Phone: (212)-621-7813 Email: Lsarok@ap.org 3. Rogers & Cowen PMK c/o Bill Rosenthal 1840 Century Park East, Suite 1400 Los Angeles, CA 90067 Phone: (310) 854-4725 Email: Bill.rosenthal@rogerscowanpmk.com 4. Liquid Soul Media, LLC c/o Hamilton Brown 1024 Hemphill Ave NW Suite, B Atlanta, GA 30318 Phone: (404) 892-2836 5. Smith Geiger, LLC c/o Liz Carey 31365 Oak Crest Drive #150 Westlake Village, CA 91361 Phone: (818) 874-2015 Email: liz@smithgeiger.com About Black News Channel Black News Channel, LLC is a news network and the only provider of 24/7 multiplatform programming dedicated to covering the unique perspectives, challenges and successes of Black and Brown communities. Black News Channel sought Chapter 11 bankruptcy protection (Bankr. N.D. Fla. Case No. 22-40087) on March 28, 2022. In the petition signed by Maureen Brown, vice president of finance, the Debtor listed as much as $50 million in both assets and liabilities. Judge Karen K. Specie oversees the case. Richard R. Thames, Esq., at Thames Markey, P.A., serves as the Debtor's counsel. Stretto, Inc. is the claims, noticing and solicitation agent. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on April 12, 2022. BLD REALTY: Seeks Approval to Hire Dage Consulting as Accountant ---------------------------------------------------------------- BLD Realty, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Dage Consulting CPA's, PSC as its accountant. The firm will be paid at these rates: Jose A. Diaz Crespo, CPA $160 per hour Senior Accountant $85 per hour Staff Accountant $65 per hour Jose A. Diaz Crespo, CPA of Dage Consulting disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jose A. Diaz Crespo, CPA Dage Consulting CPA's, PSC 340 Industrial Victor Fernandez Suite 201B San Juan, PR 00926 Tel: 787-428-3388 Email: jdiaz@dageconsulting.com About BLD Realty BLD Realty, Inc. is the fee simple owner of two real properties located at Barrio Espinosa in Vega Alta, P.R., having an aggregate value of $1.34 million. The company is based in Guaynabo, P.R. BLD Realty filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-00802) on March 24, 2022, listing $1,900,571 in assets and $3,834,736 in liabilities. Roberto Santos Ramos serves as Subchapter V trustee. Carmen D. Conde Torres, Esq., at C. Conde & Assoc. serves as the Debtor's legal counsel. BROOKLYN IMMUNOTHERAPEUTICS: Grant Thornton is New Accountant ------------------------------------------------------------- Brooklyn ImmunoTherapeutics, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that Grant Thornton's engagement as the Company's independent registered public accounting firm became effective on April 18, 2022. On Jan. 18, 2022, the Company notified Marcum LLP that it would be dismissed as the Company's independent registered public accounting firm effective after the completion of Marcum's audit of the Company's financial statements for the year ended Dec. 31, 2021; and the Audit Committee of the Company's Board of Directors approved Marcum's dismissal on Jan. 18, 2022. Marcum's dismissal became effective on April 15, 2022. Also on Jan. 18, 2022, the Company notified Grant Thornton LLP that the Audit Committee of the Board had selected the firm to serve as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2022 and related interim periods. During the two years ended Dec. 31, 2021 and from Dec. 31, 2021 through April 19, 2022 (the date of filing of this Current Report on Form 8-K), neither the Company nor anyone acting on its behalf has consulted Grant Thornton regarding either: (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and no written report or oral advice was provided to the Company by Grant Thornton that Grant Thornton concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue; or (ii) any matter that was either subject of a disagreement, as that term is defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a "reportable event," as that term is described in Item 304(a)(1)(v) of Regulation S-K. About Brooklyn ImmunoTherapeutics Brooklyn ImmunoTherapeutics (formerly NTN Buzztime, Inc.) is biopharmaceutical company focused on exploring the role that cytokine, gene editing, and cell therapy can have in treating patients with cancer, blood disorders, and monogenic diseases. Brooklyn ImmunoTherapeutics reported a net loss of $122.31 million for the year ended Dec. 31, 2021, compared to a net loss of $26.53 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $32.43 million in total assets, $25.93 million in total liabilities, and $6.50 million in total stockholders' and members' equity. New York, NY-based Marcum LLP, the Company's former auditor, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. CADIZ INC: Kenneth Lombard Appointed as Director ------------------------------------------------ Cadiz Inc.'s Board of Directors appointed Kenneth T. Lombard as a new member of the Board, filling an existing vacancy on the Board and expanding the Board's size to nine members. Mr. Lombard's three-decade professional career includes extensive experience in management, business development, investment banking, economic development, corporate expansion, and real estate investment. He is best-known for co-founding with Earvin "Magic" Johnson the Johnson Development Corporation, which has created a legacy of economic improvement in underserved communities of color in 65 cities and 17 states. From 1992 to 2004, Mr. Lombard served as President and Partner of Johnson Development Corporation. Mr. Lombard is presently president and CEO of BRIDGE Housing, a leading nonprofit developer, owner, and manager of affordable housing. He joined BRIDGE in November 2021. Previously, from 2018 to 2021, Mr. Lombard held positions at Seritage Growth Properties (NYSE: SRG), most recently as special advisor, and previously as Seritage's EVP and COO. Earlier, from 2016 to 2018, Mr. Lombard was president, vice chairman and partner of MacFarlane Partners, an investment management firm that acquires, develops, and manages real estate assets on behalf of pensions and institutional investors. From 2009 to 2016, Mr. Lombard served as head of investments for Capri Capital Partners, and president of the Capri Urban Fund, which has invested over $1 billion in commercial, residential, and mixed-use development, redevelopment, and repositioning projects in densely populated urban markets of the U.S. From 2004 to 2008, Mr. Lombard served as President of Starbucks Entertainment. In addition to his professional career, Mr. Lombard has held several public service roles on public agency boards and commissions, including the Los Angeles Fire Department Commission, the Los Angeles Charter Reform Commission, the Los Angeles Department of Water and Power Board of Commissioners, and the Metropolitan Water District of Southern California Board of Directors, among others. Concurrently with his appointment to the Board, Mr. Lombard was also appointed to the Board's Audit and Risk Committee. Mr. Lombard has initially been appointed as a director for a term expiring at the Company's 2022 Annual Meeting of Stockholders and will stand for re-election as a director at the 2022 Meeting. Mr. Lombard will be compensated for his service as a director in accordance with the Company's Director Compensation Policy, as described in the Company's most recent Proxy Statement for its Annual Meeting of Stockholders held on June 17, 2021, as filed with the Securities and Exchange Commission on April 28, 2021. About Cadiz Inc. Founded in 1983 and headquartered in Los Angeles, California, Cadiz Inc. -- http://www.cadizinc.com-- is a natural resources development company dedicated to creating sustainable water and agricultural opportunities in California. The Company owns 70 square miles of property with significant water resources in Southern California and are the largest agricultural operation in San Bernardino, California, where we have sustainably farmed since the 1980s. The Company is also partnering with public water agencies to implement the Cadiz Water Project, which was named a Top 10 Infrastructure Project that over two phases will create a new water supply for approximately 400,000 people and make available up to 1 million acre-feet of new groundwater storage capacity for the region. Cadiz reported a net loss and comprehensive loss of $31.25 million for the year ended Dec. 31, 2021, a net loss and comprehensive loss of $37.82 million for the year ended Dec. 31, 2020, a net loss and comprehensive loss applicable to common stock of $29.53 million for the year ended Dec. 31, 2019, and a net loss and comprehensive loss of $26.27 million for the year ended Dec. 31, 2018. As of Dec. 31, 2021, the Company had $112.49 million in total assets, $71.88 million in total liabilities, and $40.61 million in total stockholders' equity. CAMBER ENERGY: Agrees to Settle Suit With Discover Growth, Antilles ------------------------------------------------------------------- Camber Energy, Inc. entered into a settlement agreement with its investors, Discover Growth Fund, LLC and Antilles Family Office, LLC, pursuant to which the company agreed to settle claims asserted by the investors in the verified complaint they filed against the company in the United States District Court for the Southern District of Texas (Case No. 4:22-cv-755) on or about March 9, 2022. The complaint alleged that the company breached its Stock Purchase Agreements with the investors, pursuant to which the investors had purchased shares of Series C Redeemable Convertible Preferred Stock and Series G Redeemable Convertible Preferred Stock of the company, by failing to timely file all reports required to be filed by the Securities Exchange Act of 1934, as amended. Conditioned upon the Court approving the Settlement Agreement, the company and its transfer agent are required to issue "free-trading" shares of company common stock to the investors without restrictive legend pursuant to the conversion terms in the Certificates of the Designation governing the Preferred Stock. The investors and the company are required to jointly request a stipulated order (a) finding that (i) under Section 3(a)(10) of the Securities Act of 1933, as amended that the exchange of Preferred Stock for shares of company common stock provided for in the Settlement Agreement is fair, (ii) the shares of company common stock issued upon conversion of the shares of Preferred Stock previously purchased by the investors are not required to be registered under the Securities Act, and (iii) the investors are not required to register as dealers pursuant to Section 15(b) of the Exchange Act; (b) requiring 500,000,000 shares of company common stock to be reserved for issuance on conversion of all shares Preferred Stock currently held by the investors, or which the investors are entitled to acquire under their purchase agreements; and (c) requiring the immediate issuance of free-trading shares of company common stock on delivery of a conversion request regarding shares of Preferred Stock. On April 18, 2022, the parties submitted that stipulated order to the Court for approval. No payments are due to the investors pursuant to the Settlement Agreement, and the number of shares of common stock to be issued to the investors upon conversion of the Preferred Stock will be calculated pursuant to the terms of the applicable Certificate of Designation, the terms of which have not been modified by the Settlement Agreement. The Stock Purchase Agreements between the investors and the company remain in full force and effect, as do the Promissory Notes executed and delivered by Antilles Family Office, LLC in favor of the company. Among other things, (i) Antilles shall not be entitled to sell or convert any Series G Redeemable Convertible Preferred Stock unless Antilles has paid all amounts owing under the Antilles Notes, and (ii) the company is still entitled to redeem the remaining Series G Redeemable Convertible Preferred Stock pursuant to the terms of the Stock Purchase Agreements and/or Antilles Notes. About Camber Energy Based in Houston, Texas, Camber Energy -- http://www.camber.energy -- is primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including from the Hunton formation in Lincoln, Logan, Payne and Okfuskee Counties, in central Oklahoma; the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas, in connection with its Panhandle acquisition which closed in March 2018. Camber Energy reported a net loss of $8.61 million for the year ended Dec. 31, 2020, compared to a net loss of $10.79 million for the year ended Dec. 31, 2019. As of Sept. 30, 2020, the Company had $11.79 million in total assets, $32.48 million in total liabilities, $38 million in temporary equity, and a total stockholders' deficit of $58.68 million. Dallas, Texas-based Turner, Stone & Company, L.L.P., issued a "going concern" qualification in its report dated Nov. 19, 2021, citing that the Company has incurred significant losses from operations and had an accumulated deficit as of March 31, 2020 and 2019. These factors raise substantial doubt about its ability to continue as a going concern. CAN B CORP: White Hair Acquires 7.69% Equity Stake -------------------------------------------------- White Hair Solutions, LLC disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2021, it beneficially owns 3,639,955 shares of common stock of Can B Corp, representing 7.69% based on statement from TranShare Transfer Agent from Feb. 2, 2022. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1509957/000191121022000002/whitehairsol.htm About Can B Corp Headquartered in Hicksville New York, Canbiola, Inc. (now known as Can B Corp) -- http://www.canbiola.com-- develops, produces, and sells products and delivery devices containing CBD. Cannabidiol ("CBD") is one of nearly 85 naturally occurring compounds (cannabinoids) found in industrial hemp (it is also contained in marijuana). The Company's products contain CBD derived from Hemp and include products such as oils, creams, moisturizers, isolate, and gel caps. In addition to offering white labeled products, Canbiola has developed its own line of proprietary products, as well as seeking synergistic value through acquisitions of products and brands in the Hemp industry. Can B Corp. reported a net loss of $12.17 million for the year ended Dec. 31, 2021, compared to a net loss of $8.88 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $16.47 million in total assets, $10.86 million in total liabilities, and $5.62 million in total stockholders' equity. Lakewood, Colo.-based BF Borgers CPA PC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. CARVANA CO: Moody's Cuts CFR to Caa1, Outlook Stable ---------------------------------------------------- Moody's Investors Service downgraded Carvana Co.'s, corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD. In addition, Moody's confirmed Carvana's senior unsecured notes at Caa2 and assigned a Caa2 to the proposed $2.275 billion proposed senior unsecured notes. Carvana's speculative grade liquidity rating is SGL-4. The outlook is stable. This concludes Moody's review initiated on February 28, 2022. Proceeds from the proposed $2.275 billion of senior unsecured notes along with $1.0 billion of preferred equity and $1.0 billion of common equity will be used to fund the $2.2 billion acquisition of ADESA Inc, as well as for general corporate purposes that include capital expenditures and repaying outstanding floor plan borrowings. Ratings and outlook are subject to the receipt and review of final documentation. The downgrade reflects Carvana's very weak credit metrics, persistent lack of profitability and negative free cash flow generation which Moody's expect to continue as the company embarks on building out, adequately staffing and ramping up acquired sites and existing locations to where they are cash flow positive on a sustained basis. The downgrade also reflects governance considerations particularly Carvana's financial policies which support its external floor plan facilities going current despite the expectation for significant negative free cash flow as well as its decision to finance the ADESA acquisition partially with debt despite its very high leverage. Carvana is acquiring the assets of ADESA Inc which includes 56 properties on which it will build its own Inspection and Refurbishment Centers (IRC) as well as leverage its existing sites and logistics. The stable outlook recognizes Carvana's lack of near dated debt maturities and its historic ability to access the public debt and equity markets to support its cash deficits. Downgrades: Issuer: Carvana Co. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Assignments: Issuer: Carvana Co. Senior Unsecured Regular Bond/Debenture, Assigned Caa2 (LGD5) Confirmations: Issuer: Carvana Co. Senior Unsecured Regular Bond/Debenture, Confirmed at Caa2 (LGD5) Outlook Actions: Issuer: Carvana Co. Outlook, Changed To Stable From Rating Under Review RATINGS RATIONALE Carvana's Caa1 CFR highlights its lack of profitability, negative free cash flow and very weak credit metrics. However, it also recognizes its historic ability to access the public debt and exquity markets, favorable position in the used car retail segment and its unique ordering and delivery models. Liquidity will be enhanced over the near term by the proposed financing which will be used to fund capex requirements and general corporate purposes that could include pay down of outstanding floor plan borrowings. However, Carvana's floor plan facilities expire in March 2023 which leaves it without a longer term vehicle specific committed source of external financing. Moody's views the acquisition of ADESA Inc, as enhancing Carvana's growth objectives although funding the build out of acquired sites as well as leveraging existing locations and logistics will remain a drag on materially improving profitability and cash flows particularly as gross profit per vehicle and staffing remain challenging. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded once EBIT/interest is around 1.0 time and liquidity is adequate on a sustained basis. Ratings could be downgraded if the company was unable to generate positive operating earnings on a sustained basis or liquidity were to weaken for any reason. Carvana's ESG credit impact score (CIS-4) is highly negative and reflects Moody's assessment that ESG attributes overall are considered to have a discernable negative impact on the current rating. Carvana has moderately negative environmental and social risks as well as high governance risk. Carvana's environmental risk is moderately negative (E-3) with an exposure to carbon transition risk given the goal of consumers, industries, and governments to reduce the impact that car and truck emissions are having on the environment. Moody's also view its reliance on a limited number of Inspection and Reconditioning Centers and Car Vending Machines throughout the United States as leaving it susceptible to physical climate risk concerns. Carvana has neutral-to-low exposure to risks associated with water management, natural capital and waste and pollution. Social risk is moderately negative (S-3) and reflects the risks associated with customer relations and the potential for customer data breaches. Responsible production is also viewed as being moderate risk with supply chain and sourcing challenges a concern but not as extensive as auto manufacturers themselves. Carvana has neutral-to-low exposure to risks associated with human capital and its employees health and safety. Moody's also view Carvana as being less exposed to risks related to demographic and societal trends as its largely online business capitalizes on the consumer trend towards online shopping, although it has yet to generate consistent and meaningful profits. Governance risk is high with at (G-4) and a key credit consideration given a financial strategy that supports very high leverage and weak liquidity. Carvana's board of directors is a mix of directors with various backgrounds. However, Carvana is designated a controlled company given that the Garcia family beneficially owns more than 50% of the combined voting power of the company. In addition, the chairman and CEO position are not separate nor are they independent. Carvana Co., is a leading online retailer of used vehicles, with LTM December 2021 revenues of around $12.8 billion and proforma revenue of around $13.3 billion. The principal methodology used in these ratings was Retail published in November 2021. CFN ENTERPRISES: To Buy Colo. Real Property From Kind Roots ----------------------------------------------------------- CFN Real Estate II LLC, a wholly-owned subsidiary of CFN Enterprises Inc., entered into a purchase and sale agreement with Kind Roots Botanicals, LLC, a Colorado limited liability company, for the purchase of property in Wray, Colorado, consisting of a 26,330 square foot retail and commercial building located on a 2.85-acre site, and all fixtures and personal property used in or related to the ownership or development of the Property for the purpose of extraction and the manufacturing of cannabidiol (CBD) crude oil, distillate and isolate, including a certification of compliance with respect to the "Good Manufacturing Practice" regulations promulgated by the U.S. Food and Drug administration, in exchange for an aggregate of one million restricted shares of Company common stock. The Company will use the Property in connection with its CNP Operating cannabidiol (CBD) manufacturing business and expects that this acquisition should increase the overall production of the Company's CNP Operating business by over 50%. The closing is expected to occur on April 29, 2022, subject to satisfaction of customary closing conditions. About CFN CFN Enterprises Inc. owned and operated CAKE and getcake.com, a marketing technology company that provided a proprietary solution for advanced analytics, attribution and campaign optimization for digital marketers, and it sold this business on June 18, 2019. The Company contemporaneously acquired assets from Emerging Growth LLC related to its cannabis industry focused sponsored content and marketing business, or the CFN Business. Its initial ongoing operations will consist primarily of the CFN Business and the Company will continue to pursue strategic transactions and opportunities. The Company reported a net loss of $1.42 million in 2020. As of Sept. 30, 2021, the Company had $16.90 million in total assets, $8.57 million in total liabilities, and $8.33 million in total stockholders' equity. New York-based RBSM LLP, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. This raises substantial doubt about the Company's ability to continue as a going concern. CHERRY MAN: Seeks to Hire SulmeyerKupetz as Bankruptcy Counsel -------------------------------------------------------------- Cherry Man Industries, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire SulmeyerKupetz, A Professional Corporation as its bankruptcy counsel. The firm's services include: (a) preparing any amended bankruptcy schedules and statement of affairs; (b) complying with United States Trustee requirements, including, for example, representation at 341(a) meetings of creditors; (c) examining of claims of creditors in order to determine their validity; (d) giving advice and counsel to the Debtor in connection with legal issues, including, but not necessarily limited to, the use, sale or lease of property of the estate, use of cash collateral, postpetition financing, relief from the automatic stay, special treatment of creditors, payment of prepetition obligations, the rejection or assumption of leases, and related matters; (e) negotiating with creditors holding secured and unsecured claims; (f) preparing and presenting a plan of reorganization and disclosure statement; (g) objecting to claims as may be appropriate; (h) reviewing, analysing, and preparing of documents, correspondence, and other communications with regard to the foregoing matters; (i) prosecuting avoidance actions and other adversary proceedings; and (j) in general, acting as counsel on behalf of the Debtor in any and all bankruptcy law and related matters that are pending and may arise in the course of this case. The firm will charge these hourly rates: David S. Kupetz, Esq. $725 Asa S. Hami, Esq. $610 Attorneys $475 to $750 Paraprofessionals $250 to $275 The firm requires $150,000 as a post-petition retainer. SulmeyerKupetz does not represent or hold any interest adverse to the Estate, and is a disinterested person as that term is defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: David S. Kupetz, Esq. Asa S. Hami, Esq. SulmeyerKupetz A Professional Corporation 333 South Grand Avenue, Suite 3400 Los Angeles, CA 90071 Telephone: 213-626-2311 Facsimile: 213-629-4520 Email: dkupetz@sulmeyerlaw.com ahami@sulmeyerlaw.com About Cherry Man Industries Cherry Man Industries, Inc., a company in El Segundo, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11471) on March 17, 2022, listing $100 million to $500 million in assets and $10 million to $50 million in liabilities. Frank Lin, president of Cherry Man Industries, signed the petition. Cherry Man was started in 2002 by Frank Lin. It is one of the largest nationwide importers and distributors of office furniture case goods. It is headquartered in El Segundo, California, with five distribution centers across the United States. Judge Neil W. Bason oversees the case. The Law Offices of Michael Jay Berger serves as the Debtor's legal counsel. An official committee of unsecured creditors has been appointed in the case. COOPER'S HAWK: Moody's Affirms Caa1 CFR & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service changed Cooper's Hawk Intermediate Holding, LLC's outlook to stable from negative. Moody's also affirmed all ratings, including its Caa1 corporate family rating, Caa2-PD probability of default rating, and Caa1 ratings on its senior secured credit facilities. "The outlook change to stable reflects our expectation for continued improvement in operating performance and credit metrics as the company further recovers from the pandemic-related declines in 2020 and early 2021," stated Moody's Vice President, Mike Zuccaro. "Coopers Hawk's restaurants have shown a solid recovery in same-store sales over the past year, which is expected to continue as restaurant units return closer to normal operating capacity and as its wine club membership continues to grow at a strong pace. The company also plans to open a significant number of new restaurants in 2022, which will drive additional future growth but also result in continued negative free cash flow over the coming year." The change in outlook to stable also reflects governance considerations, particularly Moody's expectation for adequate liquidity, supported by balance sheet cash and support from its financial sponsor, Ares, which has already contributed cash to help fund increased capital expenditures. While company growth plans are aggressive, Moody's views these cash commitments as a favorable governance consideration. The affirmation of the Caa1 CFR reflects Moody's expectation that the company's performance will continue to significantly improve over the next 12 months. While lease adjusted debt/EBITDAR is expected to improve significantly, at over 8 times, it will remain high. While revenue growth is expected to be strong, significant growth-related investments will temper EBITDA growth and free cash flow will be negative. Affirmations: Issuer: Cooper's Hawk Intermediate Holding, LLC Corporate Family Rating, Affirmed Caa1 Probability of Default Rating, Affirmed Caa2-PD Senior Secured 1st Lien Revolving Credit Facility, Affirmed Caa1 (LGD3) Senior Secured 1st Lien Term Loan B, Affirmed Caa1 (LGD3) Outlook Actions: Issuer: Cooper's Hawk Intermediate Holding, LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE Cooper's Hawk's Caa1 CFR reflects its small size relative to its rated restaurant peers, limited geographic diversification, and weak credit metrics. While a recovery from the coronavirus pandemic is underway and financial leverage is expected to significantly improve, it will remain high in 2022, at over 8x as per Moody's lease adjusted calculations. Also reflected are governance considerations, including private equity ownership, which led to high financial leverage before the pandemic, and an aggressive growth strategy. However, its sponsor, Ares, has already demonstrated a commitment to support growth related cash flow needs. The rating is supported by Cooper's Hawk's solid position in the nascent restaurant/wine club space. As one of the first movers with multiple locations, its wine club is the largest in the US. With monthly membership fees accounting for about 25% of the company's total revenue, this business provides a base level of revenue, earnings and cash flow support. The wine club also bolsters restaurant traffic considerably because of the very high rate of customer in-store pickup. Further support is provided by its diverse customer base and broad appeal among varying demographics. Moody's expects continued organic revenue and profitability growth over the next few years, in addition to significant new unit growth. The stable outlook reflects Moody's expectation for continued improvement in operating performance and credit metrics as the company further recovers from the pandemic, and as new restaurant units are opened. The outlook also reflects Moody's expectation for adequate liquidity, supported by balance sheet cash and external support from its financial sponsor. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if operating performance improves such that debt/EBITDA is sustained below 7.5x and EBITA/interest expense approached 1.25x, while maintaining adequate liquidity. Ratings could be downgraded if liquidity weakens or if the probability of default increases for any reason. Quantitatively, ratings could be downgraded if debt/EBITDA remains above 9.0x. Cooper's Hawk Intermediate Holding, LLC ("Cooper's Hawk") is an experiential concept restaurant chain that also features the largest wine club in the US. The company currently operates 49 restaurants, which also serve as the primary pickup location for recurring monthly wine purchases by its wine club members. Cooper's Hawk was established in 2005 by founder and CEO Tim McEnery and was purchased by Ares Private Equity Group in July 2019. Revenue is around $370 million. The principal methodology used in these ratings was Restaurants published in August 2021. CYTODYN INC: Macias Gini Replaces Warren Averett as Accountant -------------------------------------------------------------- CytoDyn Inc. received a letter from the Company's current independent registered public accounting firm, Warren Averett, LLC, informing the Company that, effective April 13, 2022, Warren Averett was resigning as the Company's independent registered public accounting firm. The Company's Audit Committee had not recommended a change in the Company's accountant. On April 18, 2022, the Audit Committee appointed and engaged Macias Gini & O'Connell LLP as the Company's independent registered public accounting firm to perform the audit of the Company's financial statements for the fiscal year ended May 31, 2022, subject to the completion of client acceptance procedures. The audit reports of Warren Averett on the Company's financial statements for the fiscal years ended May 31, 2021 and May 31, 2020, included in its Annual Reports on Form 10-K for the fiscal years ended May 31, 2021, and May 31, 2020, filed on July 30, 2021, and August 14, 2020, respectively, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except for the expression, in Warren Averett's audit reports dated July 30, 2021, and Aug. 14, 2020, that there was substantial doubt as to the Company's ability to continue as a going concern. During the fiscal years ended May 31, 2020 and May 31, 2021, as well as the subsequent interim period through April 13, 2022, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K), between the Company and Warren Averett on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Warren Averett, would have caused Warren Averett to make reference to the subject matter of the disagreements in connection with its reports. Other than the material weakness reported in Part I, Item 4 of the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 2021, filed on Jan. 10, 2022, there were no "reportable events" under Item 304(a)(1)(v) of Regulation S-K that occurred or were identified during the Company's two most recent fiscal years ended May 31, 2020 and May 31, 2021, or during the subsequent interim period through April 13, 2022. The material weakness resulted from an error identified by management during its preparation of the Company's financial statements for the three and six months ended Nov. 30, 2021, which resulted in revisions to additional paid-in capital and non-cash inducement interest expense beginning in fiscal year 2018 through the three months ended Aug. 31, 2021. The material weakness caused the Company's management to conclude that the Company's internal control over financial reporting was not effective as of Nov. 30, 2021. About CytoDyn Inc. Headquartered in Vancouver, Washington, CytoDyn Inc. -- http://www.cytodyn.com-- is a late-stage biotechnology company focused on the clinical development and potential commercialization of leronlimab (PRO 140), a CCR5 antagonist to treat HIV infection, with the potential for multiple therapeutic indications. Cytodyn reported a net loss of $154.67 million for the year ended May 31, 2021, compared to a net loss of $124.40 million for the year ended May 31, 2020. As of Feb. 28, 2022, the Company had $94.08 million in total assets, $116.54 million in total liabilities, and a total stockholders' deficit of $22.46 million. Birmingham, Alabama-based Warren Averett, LLC, the Company's former auditor, issued a "going concern" qualification in its report dated July 30, 2021, citing that the Company incurred a net loss of approximately $154,674,000 for the year ended May 31, 2021 and has an accumulated deficit of approximately $511,294,000 through May 31, 2021, which raises substantial doubt about its ability to continue as a going concern. DCIJ BEE HIVE: Hires Swenson Law Group as Bankruptcy Counsel ------------------------------------------------------------ DCIJ Bee Hive, LLC received approval from the U.S. Bankruptcy Court for the Western District of Wisconsin to hire Swenson Law Group, LLC as its legal counsel. The firm will render these legal services: (a) prepare schedules, statements, and plan of reorganization; (b) prepare legal papers; (c) attend related hearings; and (d) perform all other necessary legal services in connection with this Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Attorney $300 Paralegal $125 Evan Swenson, Esq., an attorney at the Swenson Law Group, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Evan M. Swenson, Esq. Swenson Law Group, LLC 118 E. Grand Avenue Eau Claire, WI 54701 Telephone: (715) 835-7779 Facsimile: (715) 835-2573 Email: evan@swensonlawgroup.com About DCIJ Bee Hive, LLC DCIJ Bee Hive, LLC is part of the health care industry. DCIJ Bee Hive sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wis. Case No. 22-10427) on March 25, 2022. In the petition signed by Daniel Peko, managing member, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Catherine J. Furay oversees the case. Evan M. Swenson, Esq., at Swenson Law Group, LLC, is the Debtor's counsel. DIOCESE OF ROCHESTER: Taps Gnarus Advisors as Expert Consultant --------------------------------------------------------------- The Diocese of Rochester seeks approval from the U.S. Bankruptcy Court for the Western District of New York to hire Gnarus Advisors LLC as its expert consultant to provide claim valuation services with respect to the claims asserting liability for child sexual abuse (CVA Claims). The firm's services include: a) performing due diligence and analysis regarding the Diocese's present and future CVA Claim liability; b) estimating the value of, and producing analysis with respect to, present and future CVA Claims against the Diocese; c) advising the Diocese and assisting the Diocese's restructuring counsel with respect to the negotiation and formulation of a compensation trust, including but not limited to formulation of the appropriate per-claim values for the CVA Claims; d) rendering expert testimony and reports related to the foregoing and assisting the Diocese in preparing and evaluating reports as required by the Diocese and as necessary in this Chapter 11 Case; and e) such other advisory and consulting services as may be requested by the Diocese. The firm will be paid at these current standard hourly rates: Steve Sellick $725 Jessica Horewitz $675 Dan Maloney $450 Brandon Kivler $425 Susan Annis $410 Staff $250 - $400 Gnarus Advisors does not hold any interest adverse to the Diocese’s estate; and is a "disinterested person" as defined by section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Jessica Horewitz Gnarus Advisors LLC 2029 Century Park East, Suite 1080 Los Angeles, CA 90067 Phone: 703-679-8616 Email: jhorewitz@gnarusllc.com About The Diocese of Rochester The Diocese of Rochester in upstate New York provides support to 86 Roman catholic parishes across 12 counties in upstate New York. It also operates a middle school, Siena Catholic Academy. The diocese has 86 full-time employees and six part-time employees and provides medical and dental benefits to an additional 68 retired priests and two former priests. The diocese generated $21.88 million of gross revenue for the fiscal year ending June 30, 2019, compared with a gross revenue of $24.25 million in fiscal year 2018. The Diocese of Rochester filed for Chapter 11 bankruptcy protection (Bankr. W.D.N.Y. Case No. 19-20905) on Sept. 12, 2019, amid a wave of lawsuits over alleged sexual abuse of children. In the petition, the diocese was estimated to have $50 million to $100 million in assets and at least $100 million in liabilities. Bond, Schoenec & King, PLLC and Bonadio & Co. serve as the diocese's legal counsel and accountant, respectively. Stretto is the claims and noticing agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the diocese's Chapter 11 case. Pachulski Stang Ziehl & Jones, LLP and Berkeley Research Group, LLC serve as the committee's legal counsel and financial advisor, respectively. EL MONTE NATURE PRESERVE: Files for Chapter 11 Bankruptcy --------------------------------------------------------- Single Asset Real Estate El Monte Nature Preserve, LLC filed for chapter 11 protection in the Southern District of California. According to court filings, El Monte Nature Preserve LLC estimates between 1 and 49 unsecured creditors, The petition states that funds will be available to unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) to be held on May 17, 2022 at 01:00 p.m. About El Monte Nature Preserve El Monte Nature Preserve LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). El Monte Nature Preserve filed for chapter 11 protection (Bankr. S.D. Cal. Case No. 22-00971) on April 12, 2022. In the petition filed by William B. Adams, as manager, El Monte Nature Preserve estimated assets between $10 million and $50 million and liabilities between $10 million and $50 million. Michael D. Breslauer, of Solomon Ward Seidenwurm & Smith, LLP, is the Debtor's counsel. ELDAN LLC: Seeks to Hire Omniterra Solutions as Property Manager ---------------------------------------------------------------- Eldan, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Omniterra Solutions, LLC as its property manager. Omniterra Solutions is located in an office suite on the premises of 5875 S. Rainbow and collects the properties rental payment while managing the property. Omniterra Solutions believes it is a disinterested person within the meaning of 11 U.S.C. Sec. 101, according to court filings. The firm can be reached through: Tomer Itzhaki OMNI-TERRA SOLUTIONS, LLC 5875 S Rainbow Blvd # 204 Las Vegas, NV 89118 Phone: +1 702-220-7587 About Eldan LLC Eldan, LLC is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner of a commercial property located at 5875 S. Rainbow, Las Vegas, having an appraised value of $7 million. Eldan filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 22-10589) on Feb. 21, 2022, listing $7,392,463 in assets and $3,623,919 in liabilities. Daniel Itzhaki, managing member, signed the petition. Judge August B. Landis oversees the case. Christopher P. Burke, Esq., at The Law Office of Christopher P. Burke serves as the Debtor's legal counsel. ELI & ALI: Court Approved Settlement with Capital One Bank ---------------------------------------------------------- Eli & Ali, LLC, submitted Second Amended Disclosure Statement for the Amended Plan of Reorganization dated April 21, 2022. The Debtor has continued to operate is business and has operated profitably during the Chapter 11 Case. The Debtor has a post-petition agreement with the Landlord to continue the occupancy from July 2022 until December 2022 at a slightly higher rent. Prior to its termination in December 2022 the Debtor will have to either negotiate a further extension of the use and occupancy agreement or relocate. In the event the Debtor is unable to extend its use and occupancy agreement and has to relocate, the expense and disruption may have a negative impact on the Debtor's operations. The Debtor believes the past extensions of its use and occupancy agreements with the Landlord, were done in the ordinary course of its business and did not/does not require any court approval. Class 2 consists of the partially secured claim of Capital One Bank. The Debtor has a pending settlement with Capital One Bank which will result in Capital One accepting a lump sum of $200,000.00 in full satisfaction of its outstanding secured claim in an amount of $492,020.60. A motion for court approval of this settlement is scheduled to be heard on March 23, 2022. The settlement with Cap One also provides for a mutual release of all claims between Jeffrey Ornstein and Mark Ross and discontinuance of the State Court litigation. The settlement was approved by the Court and settlement transaction should close prior to the hearing on confirmation. There will no members on this Class. Class 3 consists of one secured claim held by T.D. Bank in the outstanding principal amount of $149,353.77. The Debtor will pay this amount, plus accrued interest of $7,696.01 and legal fees of $10,000.00. To secure the payment, Jeffrey Ornstein will give a full personal guaranty and his spouse, Susan Ornstein, will secure $75,000.00 of the balance with a mortgage on their residence. The Debtor will pay approximately $3,200.00 in costs to record the mortgage. Like in the prior iteration of the Plan, Class 5 consist of 24 holders of Allowed General Unsecured Claims. This class totals approximately $576,363. This class includes the partially unsecured claim of the Small Business Administration in the amount of $90,289.33. This class will be paid $80,000 or 14.7% of its Allowed Claims with quarterly payments commencing within 30 days of the Effective Date of the Plan. The Plan shall be effectuated from a new value contribution of $50,000.00 by Jeffrey Ornstein to be used for the settlement with Capital One and a mortgage on Jeffrey Ornstein and Susan Ornstein's residence in the amount of $75,000.00 to partially secure the Class 3 Claim of TD Bank, N.A. The balance of the payments are to be funded from ongoing business operations. Projections indicate the Debtor will have sufficient income to meet all of its payment obligations under the Plan. The payments to be paid under the Plan to Class 3 will be $1,922.45 a month and the payments for Class 4 will be $1,189.68. The payments to be paid under the Plan to Class 5 will be $4,000.00 per quarter for twenty consecutive quarters (equal to $1,333.33 per month). Accordingly, the monthly payments will be $4,445.46. A full-text copy of the Second Amended Disclosure Statement dated April 21, 2022, is available at https://bit.ly/3rS2NiE from PacerMonitor.com at no charge. Counsel to the Debtor: Heath S. Berger, Esq. BERGER, FISCHOFF, SHUMER, WEXLER & GOODMAN, LLP 6901 Jericho Turnpike, Suite 230 Syosset, NY 11791 Tel: (516) 747-1136 E-mail: hberger@bfslawfirm.com About Eli & Ali Saying that it faced financial difficulties caused by the shutdown of restaurants during the first wave of the Covid 19 pandemic, Eli & Ali LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 21-40920) on April 7, 2021. In the petition signed by Jeffrey Ornstein, managing member, the Debtor disclosed $270,150 in assets and $1,427,375 in liabilities. Judge Jil Mazer-Marino oversees the case. Heath S. Berger, Esq., at Berger, Fischoff, Shumer, Wexler & Goodman, LLP, is the Debtor's counsel. Capital One, National Association, the prepetition lender, is represented by Troutman Pepper Hamilton Sanders LLP. ENDLESS POSSIBILITIES: Unsecureds Get Share of Income for 5 Years ----------------------------------------------------------------- Endless Possibilities, LLC, d/b/a Regymen Fitness, filed with the U.S. Bankruptcy Court for the Middle District of Florida a Plan of Reorganization for Small Business under Subchapter V dated April 21, 2022. The Debtor had 300 customers which it opened its doors in November of 2020. The enrollment was increasing until March of 2020 when all fitness studios throughout the State of Florida were required to close because of COVID. After evaluating alternatives, the Debtor determined that a subchapter v chapter 11 filing provided a forum to effectively address its current debts and best serve the interests of its creditors, customers, and employees. The Debtor will utilize the Chapter 11 process to reorganize its business and make distributions to creditors efficiently and effectively. The Debtor's financial projections show that the Debtor will be able to distribute projected disposable income to the holders of allowed administrative, priority tax, secured, and unsecured creditors. The Debtor will make payments to holders of priority tax claims and secured claims beginning on the 15th day of the month following the Effective Date and payments will continue on the 15th day of each month. Unsecured creditors holding allowed unsecured claims (Class 6) shall receive their pro-rata share of the Quarterly Unsecured Creditor Payment, which shall be made on a quarterly basis over a period of 5 years or 20 quarters, commencing 30 days after the Effective Date. The Plan also provides for projected disposable income to be distributed by the Debtor on a quarterly basis. The Debtor anticipates that the Plan will be confirmed in June of 2022. If the Plan is confirmed in June of 2022, the first Quarterly Unsecured Payment to unsecured creditors will be made on July 15, 2022, and the final Quarterly Unsecured Payment to unsecured creditors will be made on July 15, 2027. The distributions under the Plan will be derived from (i) existing cash on hand on the Effective Date, and (ii) revenues generated by continued business operations. Class 6 consists of all non-priority unsecured claims. Claims in Class 6 in the amount of $1,269,493.85 have been scheduled or filed, although some of the unsecured claims are disputed. Holders of allowed non-priority unsecured claims shall receive their pro rata share of the Excess Cash Distribution. Class 6 is impaired by the Plan. Class 7 is comprised of all equity interests in the Debtor, which are owned by Gretchen Mitchell. Ms. Mitchell will retain her equity interests in the Debtor. No distributions will be made to Ms. Mitchell until the distributions to Class 6 have been made. Class 7 is unimpaired by the Plan. Payments required under the Plan will be funded from (i) existing cash on hand on the Effective Date, and (ii) revenues generated by continued operations. A full-text copy of the Small Business Plan of Reorganization dated April 21, 2022, is available at https://bit.ly/3rShUbN from PacerMonitor.com at no charge. Attorneys for Debtor: Scott A. Stichter, Esq. Edward J. Peterson Stichter Riedel Blain & Postler, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Email: sstichter@srbp.com About Endless Possibilities Endless Possibilities, LLC, d/b/a Regymen Fitness, operates a boutique fitness facility that provides users with personalized instruction. Endless Possibilities is a Florida corporation that was established in 2019. Endless Possibilities sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00259) on Jan. 21, 2022. In the petition signed by Gretchen Mitchell, managing member, the Debtor disclosed up to $500 in assets and up to $10 million in liabilities. Judge Catherine Peek McEwen oversees the case. Scott A. Stichter, Esq., at Stichter, Riedl, Blain and Poster, P.A., is the Debtor's counsel. EYP GROUP: Gets Court Approval to Unveil Ch. 11 Sale Plans Early ---------------------------------------------------------------- Rick Archer of Law360 reports that a Delaware bankruptcy judge on Tuesday, April 26, 2022, gave New York-based architectural and design firm EYP Group Holdings permission to start on an accelerated schedule toward a credit bid sale to a secured lender and to tap into $5 million in bankruptcy financing. At a virtual hearing, U.S. Bankruptcy Judge Mary Walrath gave EYP the go-ahead to hold a hearing to set the procedures for its proposed asset auction in two weeks, as opposed to 21 days under Delaware local bankruptcy rules, after hearing counsel for the company say it needs to maintain momentum in the case after spending five years in default. About EYP Group Holdings EYP Group Holdings is an integrated design firm specializing in higher education, healthcare, government and science & technology. EYP Group Holdings and affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 22-10367) on April 24, 2022. In the petition filed by Kefalari Mason, as authorized officer, EYP Group Holdings listed estimated assets between $50 million to $100 million and estimated liabilities between $100 million to $500 million. The case is assigned to Honorable Bankruptcy Judge Mary F. Walrath. The Debtor's counsels are Richard A. Chesley, Esq., Oksana Koltko Rosaluk, Esq. and R. Craig Martin, Esq. and Aaron S. Applebaum, Esq. of DLA PIPER LLP (US). HOLLINGSWORTH LLP is the Debtor's is the Debtor's special counsel. CARL MARKS ADVISORY GROUP LLC is its investment banker, BERKLEY RESEARCH GROUP, LLC is the financial advisor, and BERKLEY RESEARCH GROUP, LLC is the claims agent. FIRST BRANDS: Moody's Alters Outlook on 'B2' CFR to Positive ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of First Brands Group, LLC including its corporate family rating at B2, probability of default rating at B2-PD, first lien secured debt rating at B1, and second lien secured debt rating at Caa1. The rating outlook has been revised to positive from stable. The change in the outlook to positive reflects Moody's expectation that cost savings will continue to materialize over the course of 2022. These initiatives will help offset higher input costs (including raw materials and freight) and keep the company's adjusted EBITA margin near 20% and improve adjusted debt to EBITDA between 4x – 4.5x by the end of 2022 from around 5x (pro forma for LTM December 2021). First Brands has grown earnings during 2021 through the implementation and realization of many cost saving initiatives related to prior acquisitions. While the proposed $300 million fungible add-on to First Brands' first lien term loan will increase leverage, it will also bolster the company's liquidity, which Moody's views as very good. Moody's expects First Brands to use the excess liquidity, resulting from this and a previous debt raise, over the next twelve months to support both organic growth investments and the opportunistic pursuit of tuck-in acquisitions. Moody's also expects First Brands to effectively respond to Ford Motor Company's April 2022 recall relating to failing wiper systems and remediate any issues in a timely manner. First Brands' wiper business tied to new vehicle production is minimal on a consolidated basis, and Moody's expects any remediation costs to be manageable. Affirmations: Issuer: First Brands Group, LLC Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured 1st Lien Term Loan, Affirmed B1 (LGD3) Senior Secured 2nd Lien Term Loan, Affirmed Caa1 (LGD5) Outlook Actions: Issuer: First Brands Group, LLC Outlook, Changed To Positive From Stable RATINGS RATIONALE First Brands' ratings reflect the company's large scale as a predominately automotive aftermarket parts supplier, good margin profile and history of debt funded acquisitions. Over a two year period ending 2020, First Brands executed six fully debt funded acquisitions of relatively underperforming assets which have increased the company's revenue more than four-fold. Moody's believes that First Brands currently has a sizeable enough position as a manufacturer of largely non-discretionary products (brakes, wipers, filters, etc.) to focus on organic growth and cross selling opportunities. Further, any acquisitions in the near-term will be smaller in scale and will likely be funded by the company's significant cash balance. First Brands' good margin has been largely supported by substantial cost saving initiatives following acquisitions, primarily through facilities consolidation, product insourcing and procurement efficiencies. Moody's expects First Brands to maintain efficiencies as a significantly larger company, which should preserve the company's margins in the face of higher raw material and labor costs. Moody's views First Brands' liquidity as very good. The company's liquidity is supported by a sizable cash position following recent incremental debt raises totaling $550 million. In addition, First Brands maintains a $250 million asset-based facility (ABL) that is expected to remain undrawn and for the borrowing base to support full availability. Moody's expects the company to generate at least $150 million in free cash flow in 2022 and 2023. However, the company's working capital needs could become much greater should it win substantial new business over the next twelve months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if First Brands maintains a less aggressive financial policy of debt funded acquisitions and sustains its realized cost savings such that EBITA margins exceed 20%. The ratings could also be upgraded if debt/EBITDA approaches 4x and good liquidity is maintained with free cash flow to debt in the high single digit range. The ratings could be downgraded if Moody's anticipates inability for the company to maintain realized cost savings and expects a material deterioration in EBITA margin. Metrics that could indicate pressure on the rating include free cash flow to debt below 3% or debt/EBITDA sustained above 6x. First Brands Group, LLC, headquartered in Cleveland, OH, is a leading manufacturer and distributor of primarily aftermarket component parts for the automotive and other industrial equipment markets. The company's products include wipers, air and oil filters, water and fuel pumps, brake drums and rotors, spark plugs and gas springs. The principal methodology used in these ratings was Automotive Suppliers published in May 2021. FOOTPRINT POWER SALEM: Taps Paul Weiss as Bankruptcy Counsel ------------------------------------------------------------ Footprint Power Salem Harbor Development, LP and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Paul, Weiss, Rifkind, Wharton & Garrison, LLP to serve as legal counsel in their Chapter 11 cases. The firm's services include: (a) providing legal advice with respect to the Debtors' powers and duties in the continued operation of their business and management of their properties; (b) attending meetings and negotiating with representatives of creditors and other parties in interest, and advising the Debtors on the conduct of the cases, including the legal and administrative requirements of operating in Chapter 11; (c) taking action necessary to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which they are involved, including objections to claims filed against the Debtors' estates; (d) preparing legal papers; (e) advising the Debtors on financing and transactional matters; (f) representing the Debtors in connection with obtaining authority to use cash collateral and post-petition financing; (g) negotiating, preparing and seeking approval of a disclosure statement and confirmation of a Chapter 11 plan; (h) appearing in court; (i) advising the Debtors regarding tax matters; and (j) performing all other legal services for the Debtors. The standard hourly rates range from $1,530 to $2,025 for partners, $1,525 for counsel, $550 to $1,280 for associates and staff attorneys, and $135 to $435 for paraprofessionals. The attorneys expected to have primary responsibility for representing the Debtors are: Brian Hermann $2,025 John Weber $1,560 Alice Nofzinger $1,210 Leslie Liberman $1,135 Martin Salvucci $1,040 In addition, the firm will seek reimbursement for work-related expenses. Brian Hermann, Esq., a partner at Paul, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Hermann also made the following disclosures in response to the request for additional information set forth in Paragraph D.1 of the Revised U.S. Trustee Guidelines: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: Paul has not agreed to any variations from, or alternatives to, its standard billing arrangements for this engagement. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the pre-petition engagement, including any adjustments or discounts offered during the 12 months pre-petition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Response: Paul typically adjusts its billing rates on an annual basis and implemented its most recent rate increase effective Oct. 1, 2021. Accordingly, Paul's rates for timekeepers for its pre-petition engagement on this matter were, for the period of Oct. 20, 2021 to March 22, 2022, $1,530 to $2,025 for partners, $1,525 for counsel, $550 to $1,280 for associates and staff attorneys, and $135 to $435 for paraprofessionals. Question: Has your client approved your prospective budget and staffing plan, and, if so, for what budget period? Response: Yes, from the petition date through to June 30, 2022. The firm can be reached at: Brian S. Hermann, Esq. John T. Weber, Esq. Alice Nofzinger, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 Tel: (212) 373-3000 Fax: (212) 757-3990 Email: bhermann@paulweiss.com jweber@paulweiss.com anofzinger@paulweiss.com About Footprint Power Salem Footprint Power Salem Development LP, now known as Salem Harbor Power Development LP, is a natural gas company based in Salem, Mass. Footprint Power and five affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 22-10239) on March 23, 2022. In the petition filed by CRO John R. Castellano, Footprint Power listed $500 million to $1 billion in both assets and liabilities. Judge Mary F. Walrath oversees the cases. Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Young Conaway Stargatt & Taylor, LLP serve as the Debtors' bankruptcy counsels; Morgan, Lewis & Bockius, LLP as special counsel; Houlihan Lokey Capital, Inc. as investment banker; and AP Services, LLC as restructuring advisor. John R. Castellano of AP Services is the Debtors' chief restructuring officer. Kroll Restructuring Administration LLC, formerly known as Prime Clerk, LLC is the claims and noticing agent and administrative advisor. FOOTPRINT POWER SALEM: Taps Young Conaway as Co-Counsel ------------------------------------------------------- Footprint Power Salem Harbor Development, LP and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Young Conaway Stargatt & Taylor, LLP to serve as co-counsel with Paul, Weiss, Rifkind, Wharton & Garrison, LLP. The firm's services include: a. providing legal advice regarding local rules, practices, and procedures, and providing substantive and strategic advice on how to accomplish the Debtors' goals in connection with the prosecution of the Debtors' Chapter 11 cases; b. reviewing, commenting or preparing drafts of documents to be filed with the court as co-counsel; c. appearing in court and attending meetings with the U.S. Trustee for the District of Delaware and creditors; d. performing various services in connection with the administration of the cases, including, without limitation: (i) preparing agenda letters, certificates of no objection, certifications of counsel, notices of fee applications and hearings, and hearing binders of documents and pleadings; (ii) monitoring the docket for filings and coordinating with Paul on pending matters that need responses; (iii) preparing and maintaining critical dates memoranda to monitor pending applications, motions, hearing dates, and other matters; (iv) handling inquiries and calls from creditors and counsel to interested parties regarding pending matters and the general status of the cases; and (v) coordinating with Paul on any necessary responses; and e. performing all other legal services assigned by the Debtors in consultation with Paul. The principal attorneys and paralegal designated to represent the Debtors and their standard hourly rates are as follows: Pauline Morgan $1,160 per hour Andrew Magaziner $780 per hour Katelin Morales $535 per hour Timothy Powell $500 per hour Troy Bollman, Paralegal $325 per hour In addition, the firm will seek reimbursement for work-related expenses. Andrew Magaziner, Esq., a partner at Young Conaway, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Magaziner made the following disclosures: a. Young Conaway has not agreed to a variation of its standard or customary billing arrangements for this engagement. b. No Young Conaway professional included in this engagement has varied his rate based on the geographic location of the Debtors' cases. c. Young Conaway was retained by the Debtors for restructuring work pursuant to an engagement agreement dated Nov. 9, 2021. The firm was separately retained by an independent special committee, which is comprised of two independent members of the Debtors' boards of managers, to provide advice in connection with its investigation on or about Nov. 22, 2021. The billing rates and material terms of the pre-bankruptcy engagement are the same as the rates and terms proposed by the firm. d. The Debtors have approved or will be approving a prospective budget and staffing plan for Young Conaway's engagement for the post-petition period as appropriate. In accordance with the U.S. Trustee Guidelines, the budget may be amended as necessary to reflect changed or unanticipated developments. Young Conaway can be reached at: Pauline K. Morgan, Esq. Andrew L. Magaziner, Esq. Katelin A. Morales, Esq. Timothy R. Powell, Esq. Young Conaway Stargatt & Taylor, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Email: pmorgan@ycst.com amagaziner@ycst.com kmorales@ycst.com tpowell@ycst.com About Footprint Power Salem Footprint Power Salem Development LP, now known as Salem Harbor Power Development LP, is a natural gas company based in Salem, Mass. Footprint Power and five affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 22-10239) on March 23, 2022. In the petition filed by CRO John R. Castellano, Footprint Power listed $500 million to $1 billion in both assets and liabilities. Judge Mary F. Walrath oversees the cases. Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Young Conaway Stargatt & Taylor, LLP serve as the Debtors' bankruptcy counsels; Morgan, Lewis & Bockius, LLP as special counsel; Houlihan Lokey Capital, Inc. as investment banker; and AP Services, LLC as restructuring advisor. John R. Castellano of AP Services is the Debtors' chief restructuring officer. Kroll Restructuring Administration LLC, formerly known as Prime Clerk, LLC is the claims and noticing agent and administrative advisor. FOREVER 21: Parent Sues Bolt Financial for Failure to Deliver Tech ------------------------------------------------------------------ Lizette Chapman of Bloomberg News reports that Bolt Financial Inc., the payments startup known for its founder's inflammatory Twitter threads claiming Silicon Valley is run by "mob bosses," is being sued by its most prominent customer. The complaint by Authentic Brands Group alleges that Bolt not only failed to deliver promised technology but that during Bolt's integration with Forever 21, the clothier lost out on more than $150 million in online sales. The complaint also states that Bolt raised funding at increasingly high valuations by "consistently overstating" the nature of its integration with ABG's brands to suggest it had more customers than it did and to convince investors to bankroll additional growth for the startup. About Forever 21 Inc. Founded in 1984 by South Korean husband and wife team Do Won Chang and Jin Sook Chang and headquartered in Los Angeles, Calif., Forever 21, Inc. -- http://www.forever21.com/-- is a fast-fashion retailer of women's, men's and kids clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. Forever 21 delivers a curated assortment of new merchandise brought in daily. Forever 21, Inc. and seven of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12122) on Sept. 29, 2019. According to the petition, Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion against assets of the same range. As of the bankruptcy filing, the Debtors operated 534 stores under the Forever 21 brand in the U.S. and 15 stores under beauty and wellness brand, Riley Rose. The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez & Marsal as restructuring advisor; and Lazard as investment banker; and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. Prime Clerk is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Oct. 11, 2019. The committee is represented by Kramer Levin Naftalis & Frankel LLP and Saul Ewing Arnstein & Lehr LLP. Counsel to the administrative agent under the Debtors' prepetition revolving credit facility and the Debtors' DIP ABL financing facility are Morgan, Lewis & Bockius LLP and Richards, Layton & Finger, PA. Counsel to the administrative agent under the Debtors' DIP term loan facility is Schulte Roth & Zabel LLP. * * * In February 2020, the company was purchased by a consortium that includes Authentic Brands Group, Simon Property Group and Brookfield Property Partners for $81.1 million. As part of the deal, ABG and Simon will each own 37.5% of the fast-fashion retailer, while Brookfield controls the remaining 25% of Forever 21's operating and intellectual property businesses. GIP II BLUE: Moody's Hikes CFR to Ba3, Outlook Stable ----------------------------------------------------- Moody's Investors Service upgraded GIP II Blue Holding, L.P.'s (HESM Holdco) Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD and its senior secured term loan rating to Ba3 from B1. The ratings outlook remains stable. HESM Holdco is a subsidiary of sponsor Global Infrastructure Partners (GIP, unrated) that holds equity ownership interests in Hess Midstream LP (HESM, unrated) and its operating subsidiary, Hess Midstream Operations LP (HESM Opco, Ba1 stable). "The upgrade of HESM Holdco to Ba3 reflects the improved credit profile of HESM Opco, the entity which it relies on for distributions to cover its debt-service obligations," commented Pete Speer, Moody's Senior Vice President. "While HESM Holdco has sold down some of its equity units that back its term loan, the company did also repay some of the term loan with those sales proceeds and therefore its stand-alone metrics are largely unchanged." Upgrades: Issuer: GIP II Blue Holding, L.P. Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD4) from B1 (LGD4) Outlook Actions: Issuer: GIP II Blue Holding, L.P. Outlook, Remains Stable RATINGS RATIONALE HESM Holdco's upgrade to a Ba3 CFR is driven by the recent upgrade of HESM Opco to Ba1 CFR. HESM Holdco's Ba3 CFR reflects the stable nature of its cash flow derived from its roughly 41% equity ownership in HESM and HESM Opco on a consolidated basis. HESM Opco is the operating subsidiary of HESM and owns all of the entity's operating assets and issues all of its debt. Hess Corporation (Hess, Ba1 positive) and HESM Holdco each own 50% of HESM's non-economic general partner and around 41% each the equity ownership in HESM and HESM Opco on a consolidated basis, with about 18% owned by the public following a secondary offering and equity repurchase by HESM that closed in April 2022. HESM provides natural gas and crude oil gathering and pipelines, processing and storage, terminals and rail connectivity, and water gathering and disposal services to its primary customer, Hess, in its Bakken Shale operations. Due to the nature of HESM's contracts and reduced capital investment requirements, Moody's expects HESM to continue to comfortably cover its distributions, including those made to HESM Holdco. Midstream services are fully contracted and 100% fee-based and structured to minimize commodity price and volume risk, supporting long term cash flow and distribution visibility. HESM Holdco's term loan debt service is reliant on HESM's distributions and the term loan debt is subordinated to HESM Opco's existing and future potential indebtedness. The term loan has a structural enhancement in the form of an excess cash flow sweep, which prescribes certain percentages of excess cash flow be applied to term loan repayment based on financial leverage and steps up those percentages from 2025 through 2028 as detailed in the agreement. HESM Holdco's standalone financial leverage (Debt/EBITDA) was around 3.4x based on pro forma distributions received and partial prepayment of the term loan with proceeds from recent equity unit sales, and should decline going forward based on HESM's distribution growth guidance. Stand-alone interest coverage is above 5x while the current loan to value of the underlying equity units pledged is around 23%. The stable outlook is consistent with the stable outlook at HESM Opco and reflects Moody's expectation that the projected volume and earnings growth of HESM will result in rising cash flow and declining leverage at both HESM Opco and HESM Holdco. HESM Holdco has adequate liquidity. The company's sole source of cash flow is the distributions received from its equity ownership in HESM and HESM Opco. These distributions comfortably cover HESM Holdco's debt service requirements, which includes interest payments and 1% mandatory amortization per annum. Per the term loan credit agreement, the company is required to maintain a debt service coverage ratio in excess of 1.05x. The company will remain well in compliance with this covenant through 2023. HESM Holdco's senior secured term loan has a current balance of $673 million and is rated Ba3, the same as the CFR reflecting the fact that it is the only debt in the holding company's capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS HESM Holdco's ratings could be upgraded if HESM Opco was upgraded and HESM Holdco maintained stand-alone leverage and coverage metrics consistent with present levels. The ratings could be downgraded if HESM Opco is downgraded. HESM Holdco could also be downgraded if its stand-alone financial leverage were to rise above 4x, or if its liquidity weakens. The principal methodology used in these ratings was Midstream Energy published in February 2022. GIP II Blue Holding, L.P. is an entity owned by Global Infrastructure Partners that owns general partner and equity unit ownership interests in Hess Midstream LP and its operating subsidiary, Hess Midstream Operations LP. HECLA MINING: S&P Upgrades ICR to 'B+', Outlook Stable ------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on U.S.-based silver and gold producer Hecla Mining Co. to 'B+' from 'B'. Concurrently, S&P also raised its issue-level rating on the company's senior unsecured notes to 'B+' from 'B'. The '3' recovery rating remains unchanged. The stable outlook reflects S&P's expectation that Hecla will continue to generate robust operating results supported by the low-cost profile of its silver producing assets such that adjusted leverage will remain within the 2x-3x range over the next 12 months. Hecla has maintained leverage below 3x over the past two years on the back of robust earnings and controlled levels of debt. EBITDA increased by 39% year on year in 2020 and by 20% in 2021 following growth in top-line revenue and a significant reduction in cash cost per silver ounce. The growth in revenue was driven by strong gold and silver prices and improvement in lead and zinc production. This was partly offset by lower gold production. S&P said, "We expect gold and silver prices to remain strong in 2022, but potential interest rate hikes by the U.S. Federal Reserve could exert some downward pressure on gold prices. Nevertheless, the price of gold currently remains elevated beyond our assumption of $1,800 per ounce in 2022, providing further cushion for the current metrics. On the other hand, the cash cost per silver ounce decreased significantly by about 76% to $1.37 in 2021 following significant by-product credits. We expect this favorable trend to continue in 2022 and 2023, along with improving silver production." Hecla has also controlled its funded debt levels since the completion of the senior unsecured note refinancing in 2020. Due to the strong financial performance, the company has not borrowed under its revolving credit facility and S&P expects this trend to continue over the next 12 months. S&P Global Ratings-adjusted debt as of Dec. 31, 2021, was $628 million, including asset-retirement obligations of $89.5 million and reported lease liabilities of $25.8 million. S&P said, "We expect improved silver production and lower cash costs following ramped-up operations at the Lucky Friday mine will more than offset lower gold production. Hecla successfully implemented the newer underhand closed bench (UCB) mining method at its Lucky Friday mine in 2021. This mining method allows for a notable increase in productivity by better management of seismicity and using bulk mining techniques. The deployment of the UCB method and more favorable mine geology led to a 77% increase in silver production to 3.6 million ounces from 2 million ounces in the previous year. We expect production to increase to 4.5 million ounces in 2022, which will more than offset the 5% decline in production from Greens Creek due to expected lower grades at the latter mine. The company expects annual production at Lucky Friday to increase to 5 million ounces because it expects higher grades at depth. We also expect an about 80% reduction in cash costs at Lucky Friday in 2022 due to higher production and by-products credits. "We anticipate an about 5% decline in gold production at Casa Berardi that should be partly offset by higher gold prices in 2022. However, costs have increased due to higher underground maintenance and contractor costs as well as greater mined volumes. Overall, we expect the higher production and expanded contribution margin from the silver mines will compensate for the decline in gold. "Hecla's concentrated mine portfolio and small scale (revenue less than $1 billion) exposes the company to increased volatility relative to larger gold producing peers. The company derived about 47% of its 2021 revenue from Greens Creek, and we expect this contribution level to continue. Though Lucky Friday accounted for 16% of 2021 revenue, we expect its contribution to increase significantly to about 20%-25% in 2022 following improved production volumes. Casa Berardi will account for the remaining 20%-28% of revenue. The concentration of production from these three assets makes Hecla susceptible to operational disruptions such as the labor union strike at Lucky Friday in 2018 that lasted more than a year. Partially mitigating this risk is Hecla's position as the leading U.S. producer of silver, low cost profile of its silver producing assets, and its product diversity, which is aided by significant zinc and lead production. "We expect FOCF to remain positive and support Hecla's flexible shareholder distributions.Hecla has no major capital expenditure (capex) plans over the next three years. We expect $135 million of capex in 2022, which includes $35 million that is earmarked for new equipment to optimize production under the UCB method at Lucky Friday. We expect capex to decrease to about $90 million-$100 million in 2023. We anticipate the strong price environment and robust demand will continue to boost operating performance to support these moderate levels of capital spending relative to some peers. For example, Coeur Mining Inc. expects its capex to be in the range of $320 million-$390 million in 2022 due to major expansion work at its Rochester mine. Hecla's dividend policy, which is linked to silver prices, provides additional flexibility in managing cash flows. We do not expect any drawings under its revolving credit facility to fund such distributions or cash flow deficits from capex. "The stable outlook reflects our expectation that Hecla will continue to generate solid operating results supported by the low-cost profile of its silver producing assets and improving production at the Lucky Friday mine. We expect free cash flows will remain positive and adjusted leverage will remain within the 2x-3x range over the next 12 months. "Although unlikely, we could raise our ratings on Hecla in the next 12 months if the company significantly increases its scale and production through the leverage neutral acquisition of additional mining assets beyond its 3 producing mines. Alternatively, we could also raise the rating if the company is able maintain adjusted debt within the 2x-3x range in a lower silver and gold price environment or it establishes a track record of maintaining adjusted leverage below 2x." S&P could downgrade Hecla if leverage is sustained above 3x and free operating cash flows to debt deteriorated below 5%. This could happen if: -- Silver prices decreased below $19 per ounce and -- Cash costs per silver ounce increased beyond $6 and/or; -- Gold and silver production declines following an operational disruption at any of its mines. ESG credit indicators: E-3, S-3, G-2 S&P said, "Environmental factors are a moderately negative consideration in our credit rating analysis of Hecla Mining. Hecla produces silver, gold, lead, and zinc from three mines (two are in the U.S., one is in Canada) and several exploration projects in Mexico and other areas of North America. The company must adhere to stringent environmental and safety regulations governed by the U.S. Mining Safety and Health Administration, the U.S. Environmental Protection Agency, and other agencies. Hecla partially offsets its limited operating scale and scope with the sustainability framework focused on reducing the environmental impact like pioneering dry stack tailings management at the Greens Creek mine and increasing efficiencies. Social factors are a moderately negative consideration, because Hecla's Lucky Friday mine labor force in Idaho is unionized and the mine experienced a nearly three-year labor strike that disrupted operations in the past. The strike was resolved in early 2020, and the mine was successfully ramped up to full production capacity in the fourth quarter of 2020." HUMAN HOUSING: Secured Creditor Toorak to Receive $975K for Claim ----------------------------------------------------------------- Judge Alan C. Stout of the U.S. Bankruptcy Court for the Western District of Kentucky entered Secured Creditor Toorak Repo Seller I Trust and Human Housing Henrietta Hyatt, LLC's agreed order settling and resolving their differences, including the Secured Creditor's motion for relief from stay and the Debtor's sale to Develco-Louisville, LLC, for $700,000 of the following real properties to commonly referred to by the following addresses: A. 818 Forrest Street, Louisville, Kentucky, 40217; B. 819 Forrest Street, Louisville, Kentucky, 40217; C. 820 Forrest Street, Louisville, Kentucky, 40217; D. 825 Forrest Street, Louisville, Kentucky, 40217; E. 827 Forrest Street, Louisville, Kentucky, 40217; F. 1007 Forrest Street, Louisville, Kentucky, 40217; G. 1601 Shelby Street, Louisville, Kentucky, 40217; H. 1147 Clay Street, Louisville, Kentucky, 40217; and I. 701 E. Hill Street, Louisville, Kentucky, 40217. The Creditor will receive $975,000 in certified funds for its claim, with all co-guarantors released, contingent upon the Debtor obtaining such funds. The Debtor will have 60 days to tender payment. It may pay to the estate, care of the Sub V Trustee, an additional $25,000 to obtain a one-time 30-day extension. Payment of $975,000 will be treated as payment in full for any and all outstanding obligations due and owing by the Debtor and all co-guarantors. Further, upon payment of $975,000 to the Creditor, the Debtor, its principals, co-guarantors, their heirs and assigns, will receive a full release of liability for any and all claims, allegations, causes of action that were brought, or could be brought, by Creditor against same. The Debtor will also pay $10,000 to be allocated for administrative expenses, care of the Sub V Trustee, within seven days of the entry of the agreed order. The Debtor will also pay an additional $40,000 to be allocated for administrative expenses, care of the Sub V Trustee, within 37 days of the entry of the agreed order. If the contingency fails and the Debtor is unable to tender full payment of $975,000 to Creditor, then the guarantors are not released and the Creditor's collateral will be sold at market rate through a non-consensual plan that provides for the Sub V Trustee obtaining a real estate broker, marketing, and selling all the properties for a market rate price. The Broker's fees and costs will come from the sale of Creditor's collateral. Sale proceeds will be disbursed by the Sub V Trustee though the terms of a confirmed non-consensual plan. The Debtor will continue paying monthly adequate protection payments until the $975,000 is paid to the Creditor or until the sale proceeds are disbursed by the Sub V Trustee. Should the Debtors obtain financing and pay the $975,000 to the Creditor, then the first $6,000 received by the Creditor is purely adequate protection. Subsequent adequate protection payments received will be credited towards the $975,000 settlement amount. Should the Debtors fail to obtain financing and do not pay Creditor the $975,000, then all adequate protection payments will be treated as purely adequate protection, not subject to offset or reduction of the value of Creditor's collateral. About Human Housing Henrietta Hyatt Human Housing Henrietta Hyatt, LLC, a company in Louisville, Ky., sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case No. 21-31099) on May 17, 2021, listing up to $1 million in both assets and liabilities. Judge Charles R Merrill presides over the case. Guilfoyle Law Office, LLP serves as the Debtor's legal counsel. INFOW LLC: Infowar Justifies Small Business Bankruptcy Law Use -------------------------------------------------------------- James Nani of Bloomberg Law reports that Infowars justifies the use of Congress' small business bankruptcy law. Congress meant for family-owned companies like the ones tied to far-right radio host Alex Jones to take advantage of special bankruptcy rules for small business owners, the debtors told a bankruptcy court. The three corporate entities linked to Jones and his website Infowars told the Texas bankruptcy court in a filing Monday that they are suited to use small-business bankruptcy rules passed in 2019, called Subchapter V of Chapter 11 of the bankruptcy code. Their arguments attempt to allay concerns from creditors, the U.S. Trustee, and U.S. Bankruptcy Judge Christopher Lopez. About InfoW LLC InfoW LLC, also known as InfoWars, is an American far-right conspiracy theory and fake news website that is owned by Alex Jones. InfoW LLC sought Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 22-60020) on April 18, 2022 together with affiliates, IWHealth, LLC and Prison Planet TV LLC. In the petition filed by W. Marc Scwartz, as chief restructuring officer, InfoW LLC listed estimated assets between $0 and $50,000 and estimated liabilities between $1 million and $10 million. The case is assigned to Honorable Bankruptcy Judge Christopher M. Lopez. Kyung Shik Lee, of Parkins Lee & Rubio LLP, is the Debtor's counsel. INFOW LLC: Trial to Set Payments to Sandy Hook Victims Delayed -------------------------------------------------------------- The Associated Press reports that a Texas judge on Wednesday, April 20, 2022, pushed back the first jury trial over how much conspiracy theorist Alex Jones should pay the families of Sandy Hook victims after his Infowars company sought bankruptcy protection this week. The delay ordered by state District Judge Maya Guerra Gamble comes days after Infowars and two other companies tied to Jones filed for Chapter 11 bankruptcy protection in Texas. Jones has lost defamation lawsuits in Texas and Connecticut over his comments that the 2012 Sandy Hook Elementary School massacre was a hoax. The first trial over how much he should pay the families had been scheduled to begin Monday in Austin, where Infowars is headquartered. A new trial date has not been set. A judge in Connecticut also paused all proceedings surrounding defamation lawsuits against Jones in that state after the bankruptcy filing. Attorneys for Sandy Hook families have accused Jones of trying to hide millions of dollars in assets. Creditors listed in Infowars' bankruptcy filing include relatives of some of the 20 children and six educators killed in the 2012 school massacre in Connecticut. About InfoW LLC InfoW LLC, also known as InfoWars, is an American far-right conspiracy theory and fake news website that is owned by Alex Jones. InfoW LLC sought Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 22-60020) on April 18, 2022 together with affiliates, IWHealth, LLC and Prison Planet TV LLC. In the petition filed by W. Marc Scwartz, as chief restructuring officer, InfoW LLC estimated assets between $0 and $50,000 and estimated liabilities between $1 million and $10 million. The case is assigned to Honorable Bankruptcy Judge Christopher M. Lopez. Kyung Shik Lee, of Parkins Lee & Rubio LLP, is the Debtor's counsel. ION GEOPHYSICAL: Upstream Services Appointed as Committee Member ---------------------------------------------------------------- The U.S. Trustee for Region 7 appointed Upstream Services S.A. as new member of the official committee of unsecured creditors in the Chapter 11 cases of ION Geophysical Corporation and its affiliates. The committee is now composed of: 1. Cobra Acquisition Services S.A. 5555 San Felipe, Suite 2100 Houston, TX 77056 Attention: Marcus Pullicino Phone: 713-728-6266 Email: Marcus.Pullicino@cobracorp.com 2. Wilmington Savings Fund Society, FSB 500 Delaware Avenue Wilmington, DE 19801 Attention: Patrick J. Healy Phone: 302-888-7420 Email: phealy@wsfsbank.com 3. Shearwater GeoServices LTD 2 City Place, Beehive Ring Road Gatwick, West Sussex Attention: Gunnvor Dyrdi Remoy Email: gremoy@shearwatergeo.com 4. Upstream Services S.A Pinto 4679, 4 B Floor, Buenos Aires, Argentina C1429AQC Attention: Roberto R.I. Aguirre Phone: +54 9 11 44257573 Email: r_aguirre@upstream.com.ar About ION Geophysical Corporation ION Geophysical Corporation is a global technology company that delivers data-driven decision-making offerings to offshore energy and maritime operations markets. It is based in Houston, Texas. ION Geophysical Corporation and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-30987) on April 12, 2022. At the time of the filing, ION Geophysical listed $10 million to $50 million in assets and $100 million to $500 million in liabilities. Judge Marvin Isgur oversees the cases. The Debtors tapped Winston & Strawn, LLP as legal counsel; FTI Consulting, Inc. as financial consultant; and Perella Weinberg Partners, LP as investment banker. Epiq Corporate Restructuring, LLC is the Debtors' notice and claims agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors on April 18, 2022. J&P FLASH: Seeks to Hire Midwest Land as Real Estate Broker ----------------------------------------------------------- J&P Flash, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Tennessee to employ Midwest Land Group, LLC as its real estate brokers. The firm will sell the Debtor's property of approximately 28.34 acres of raw land located in Sharp County, Arkansas. The firm will receive a commission of 7 percent of the gross sales price of the property. Lindsey J. Martin, real estate broker and Arkansas principal of Midwest Land Group, assured the court that neither she nor the firm represent any creditor, party in interest, or any other interest adverse to the Debtor in matters for which she is to be engaged, and is a disinterested party. The firm can be reached through: Lindsey J. Martin Midwest Land Group, LLC 14105 Overbrook Rd, Ste D Leawood, KS 66224 Phone: 913-674-8010 About J&P Flash J&P Flash, Inc., a company in West Memphis, Ariz., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 21-23968) on Dec. 1, 2021, listing up to $50,000 in assets and up to $10 million in liabilities. Dwayne Jones, vice president of J&P Flash, signed the petition. Judge Denise E. Barnett oversees the case. Glankler Brown, PLLC serves as the Debtor's legal counsel. JODY INC: Case Summary & 10 Unsecured Creditors ----------------------------------------------- Debtor: Jody, Inc. 464 Lincoln Highway West Jeannette, PA 15644 Chapter 11 Petition Date: April 27, 2022 Court: United States Bankruptcy Court Western District of Pennsylvania Case No.: 22-20805 Debtor's Counsel: David Z. Valencik, Esq. CALAIARO VALENCIK 938 Penn Avenue, 5th Fl. Suite 501 Pittsburgh, PA 15222 Tel: 412-232-0930 Fax: 412-232-3858 E-mail: dvalencik@c-vlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by John P. Oliver as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BVKU5OY/Jody_Inc__pawbke-22-20805__0001.0.pdf?mcid=tGE4TAMA JOHN BARRETT: Seeks to Hire Valmark as Life Settlement Broker ------------------------------------------------------------- John Barrett Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Valmark Securities Inc. as its life settlement broker. JBI is the owner of a "key man" life insurance policy with Principal Life Insurance Policy. The Policy is a $10 million term policy that can be converted to permanent, thereby making the Policy saleable on the open market. John Barrett (the individual) is the beneficiary. The compensation will be in the form of a commission which is the lesser of the following: a. 5 percent of face amount of policy b. 30 percent of the gross offer for the policy sold c. 1/3 of the amount the gross offer exceeds the policy cash surrender value on the date of sale Valmark intends to retain Mike Dranoff at New Jersey Life and Casualty Associates, LLC as its representative. Mr. Dranoff and Valmark are "disinterested persons" within the meaning of Sec. 101(14) of the Bankruptcy Code, as required by Sec. 327(a) of the Bankruptcy Code, and does not hold or represent an interest adverse to the Debtors' estates and has no connection to Debtors, its creditors, or other parties-in-interest, according to court filings. The firm can be reached through: Mike Dranoff Valmark Securities Inc. 130 Springside Drive, Suite 300 Akron, OH 44333-2431 Phone: 800-765-5201 About Mezz57th and John Barrett Mezz57th, LLC is a New York-based provider of luxury beauty salon, spa and related services. Mezz57th and John Barrett Inc. filed Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 20-11316) on May 29, 2020. John Barrett, president and managing member, signed the petitions. In their petitions, Mezz57th listed as much as $10 million in both assets and liabilities while John Barrett Inc. disclosed up to $10 million in assets and up to $50,000 in liabilities. Judge Sean H. Lane oversees the cases. Ballon Stoll Bader & Nadler, P.C. and Mandelbaum Barrett P.C. serve as the Debtors' bankruptcy counsels. LATAM AIRLINES: Amends RCF & Spare Engine Claims Pay Details ------------------------------------------------------------ LATAM Airlines Group S.A. ("LATAM Parent") and certain of its debtor affiliates submitted a Sixth Revised Joint Plan of Reorganization and Disclosure Statement dated April 24, 2022. The Sixth Revised Plan reflects revisions based on, among other things, changes to the treatment of Class 1 Claims. Class 1 consists of RCF Claims against each RCF Obligor. The RCF Claims are Allowed as Secured Claims in an aggregate amount calculated as follows: (x) $600 million plus (y) accrued and unpaid interest up to and including the Effective Date at the rate required under the RCF Adequate Protection Stipulation plus (z) fees, costs, expenses, and other amounts accrued under and in accordance with the RCF Documents, in each case, excluding any interest that the Debtors are not required to pay on a current basis under the RCF Adequate Protection Stipulation. The Allowed RCF Claims and any payments under the RCF Adequate Protection Stipulation shall not be subject to any avoidance, reduction, setoff, recoupment, recharacterization, subordination (equitable, contractual, or otherwise), counterclaim, defense, disallowance, objection, or any challenges under applicable law or regulation. On the Effective Date each Holder of an Allowed Class 1 Claim shall receive in full satisfaction, settlement, discharge, and release of its Allowed Class 1 Claim a distribution pursuant to Class 1b Treatment, unless (x) such Holder elects Class 1a Treatment or (y) agrees to such other less favorable treatment as to which the Debtors and the Holder of such Allowed Class 1 Claim shall have agreed upon in writing: * Class 1a Treatment. If a Holder of an Allowed Class 1 Claim elects to receive Class 1a Treatment pursuant to the procedures set forth in the Disclosure Statement Supplemental Order, such Holder of such Allowed Class 1 Claim(s) shall receive (a) a distribution in Cash equal to the Allowed amount of such Claim(s) (solely to the extent not otherwise paid by the Debtors prior to the Effective Date) and (b) its Pro Rata share of the RCF Tranche A Exit Loans. * Class 1b Treatment. If a Holder of an Allowed Class 1 Claim elects to receive Class 1b Treatment pursuant to the procedures set forth in the Disclosure Statement Supplemental Order or does not make any election regarding Class 1a Treatment or Class 1b Treatment, such Holder of such Allowed Class 1 Claim(s) shall receive (a) a distribution in Cash equal to the amount of all interest, fees, costs, and expenses that have been Allowed on account of such Allowed Claim(s) (solely to the extent not otherwise paid by the Debtors prior to the Effective Date) and (b) its Pro Rata share of the RCF Tranche B Exit Loans. For the avoidance of doubt, the Debtors shall continue to pay all amounts that may come due on or before the Effective Date in accordance with the RCF Adequate Protection Stipulation. Class 2 consists of Spare Engine Facility Claims against the Spare Engine Facility Borrower. The Spare Engine Facility Claims are Allowed as Secured Claims in the aggregate principal amount of no less than $[273.2 million], plus (x)(i) accrued and unpaid interest up to and including the Effective Date at the rate required under the Spare Engine Facility Adequate Protection Stipulation, plus (ii) interest calculated at the Post-Default Rate (as defined in the Spare Engine Facility Agreement) from and after June 29, 2021 (less any amounts paid under the preceding clause (x)(i)), plus (iii) $2 million, and (y) fees, costs, expenses, and other amounts accrued under and in accordance with the Spare Engine Facility Documents. On the Effective Date an Allowed Class 2 Claim shall receive in full satisfaction, settlement, discharge, and release of its Allowed Class 2 Claim (x) Cash equal to the amount of such Allowed Class 2 Claim in connection with the refinancing of the Spare Engine Facility Claims pursuant to the terms of the Revised Spare Engine Facility Agreement or such other less favorable treatment as to which the Debtors and the Holder of such Allowed Class 2 Claim shall have agreed upon in writing. For the avoidance of doubt, the Debtors shall continue to pay all amounts that may come due on or before the Effective Date in accordance with the Spare Engine Facility Adequate Protection Stipulation. The Debtors and Reorganized Debtors, as applicable, shall fund distributions under the Plan with: (i) Cash on hand, including Cash from operations or asset dispositions; (ii) Cash proceeds from the subscription of ERO New Common Stock pursuant to the ERO Rights Offering Procedures (including the subscription of ERO New Common Stock by Eligible Equity Holders during the ERO Preemptive Rights Offering Period), (iii) the New Convertible Notes Class A (and the Cash proceeds from the sale by the Sales Agent of the New Convertible Notes Class A that would otherwise be distributed to Ineligible Holders of General Unsecured Claims against LATAM Parent), (iv) the New Convertible Notes Class C, (v) the Cash proceeds from the subscription of the New Convertible Notes (including any Cash proceeds from the subscription of the New Convertible Notes Class A and New Convertible Notes Class C by Eligible Equity Holders during the New Convertible Notes Preemptive Rights Offering Period above the Allowed Class 5a Treatment Cash Amount), (vi) the RCF Tranche B Exit Loans and (vii) the proceeds of the Exit Financing. Counsel for the Debtors: CLEARY GOTTLIEB STEEN & HAMILTON LLP Richard J. Cooper Lisa M. Schweitzer Luke A. Barefoot Thomas S. Kessler One Liberty Plaza New York, New York 10006 Telephone: (212) 225-2000 Facsimile: (212) 225-3999 About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. LEAR CAPITAL: 24 States Say Bankruptcy Not Filed in Good Faith -------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that a group of state attorneys general urged a court to toss Lear Capital's Chapter 11 case, arguing that the coin dealer filed it improperly to litigate possible business-related claims through bankruptcy. "Lear's bankruptcy filing does not serve a valid bankruptcy purpose and was filed to obtain a tactical litigation advantage against state governmental entities that have been coordinating investigations into Lear's actions over the last two years," according to a filing in the U.S. Bankruptcy Court for the District of Delaware by 24 states, Washington D.C., and the Commonwealth of Puerto Rico. About Lear Capital Lear Capital Inc. is a silver and gold coin dealer based in Los Angeles, Calif. Lear Capital filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10165) on March 2, 2022, to weather possible future legal claims associated with its sales practices as well as customer disclosures. Jami B. Nimeroff serves as Subchapter V trustee. As of Feb. 28, 2022, Lear Capital had assets of $34,449,619 against liabilities of $22,355,066. Judge Brendan Linehan Shannon oversees the case. The Debtor tapped Shulman Bastian Friedman & Bui, LLP as general bankruptcy counsel; Morris James, LLP as local counsel; Mitchell Silberberg & Knupp, LLP as special litigation and corporate counsel; Paladin Management Group as financial advisor; and Baker Tilly US, LLP as accountant. BMC Group, Inc. is the claims, noticing and administrative agent. LEAR CAPITAL: Appointment of Official Customers' Committee Sought ----------------------------------------------------------------- A group of customers of Lear Capital, Inc. has filed a motion with the U.S. Bankruptcy Court for the District of Delaware seeking the appointment of a committee that will represent customers in the company's Chapter 11 case. The customers, which are represented by R. Stephen McNeill, Esq., at Potter Anderson & Corroon, LLP, were allegedly duped into bad precious metal investments by the company. Mr. McNeill said an official committee is "necessary to assure that the customers' interests are adequately represented and maximize the distribution to the class." "The official committee, if appointed, intends to investigate additional assets that can be liquidated, and [Lear Capital's] business operations and actions, to increase the pool available for creditors," Mr. McNeill said. Mr. McNeill believes the company may have thousands of customers and that it may have unencumbered assets worth approximately $18 million, which are enough to pay valid customer claims. Mr. McNeill can be reached at: R. Stephen McNeill, Esq. Potter Anderson & Corroon, LLP 1313 N. Market Street, 6th Floor Wilmington, DE 19801 Telephone: (302) 984-6000 Facsimile: (302) 658-1192 Email: rmcneill@potteranderson.com About Lear Capital Lear Capital Inc. is a silver and gold coin dealer based in Los Angeles, Calif. Lear Capital filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10165) on March 2, 2022, to weather possible future legal claims associated with its sales practices as well as customer disclosures. Jami B. Nimeroff serves as Subchapter V trustee. As of Feb. 28, 2022, Lear Capital had assets of $34,449,619 against liabilities of $22,355,066. Judge Brendan Linehan Shannon oversees the case. The Debtor tapped Shulman Bastian Friedman & Bui, LLP as general bankruptcy counsel; Morris James, LLP as local counsel; Mitchell Silberberg & Knupp, LLP and The Cook Law Firm, P.C. as special counsels; Paladin Management Group as financial advisor; and Baker Tilly US, LLP as accountant. BMC Group, Inc. is the claims, noticing and administrative agent. MAGELLAN HOME-GOODS: Wins Interim Cash Collateral Access -------------------------------------------------------- Judge Marc Barreca of the U.S. Bankruptcy Court for the Western District of Washington authorized Magellan Home-Goods Ltd to use cash collateral on an interim basis pursuant to a Sixth Budget, pending a final hearing on the request. The Debtor requires the use of cash collateral to continue its ongoing operations in the ordinary course of business, and avoid disruption of operations. The Debtor owed First Savings Bank under two prepetition loans in the principal amounts of $998,000 and $150,000, secured by perfected security interests in certain of the Debtor's property consisting of inventory, equipment, chattel paper, accounts, instruments and general intangibles. As partial adequate protection for the diminution of its interest in the Prepetition Collateral, FSB is granted a replacement lien in the Debtor's postpetition assets of the same kind, type, and nature as the Prepetition Collateral in which FSB held a lien. FSB will retain its rights under Section 507(b) of the Bankruptcy Code to the extent of any diminution in interest not otherwise protected by the postpetition lien. As additional adequate protection to FSB, the Debtor will: a. continue to maintain insurance on its assets as the same existed as of the Petition Date; b. provide the following to FSB, on or before the 15th day of each month: (i) a report reflecting actual revenues and expenses, as well as inventory and account receivable balances for the prior month, as compared to the Fifth Budget for that month, (ii) a borrowing base certificate for the prior month within 45 days of the end of such month, and (iii) the Debtor will confer with FSB, to the extent requested, regarding any material variances; c. with advance written notice to the Debtor of at least seven business days, FSB will have the right to audit and inspect its respective collateral; d. during the Sixth Interim Cash Collateral Period, on or before June 1, 2022, the Debtor will pay to FSB the outstanding principal payments for the months of December 2021 and the outstanding principal and interest payments at the non-default rate designated in the applicable loan documents for the months of March, April, and May 2022; notwithstanding payment of the non-default rate of interest, such payment will not affect or waive the rights of FSB to seek recovery of default interest; e. provide to FSB the additional following financial information, if not previously provided: (i) monthly financial statements on or before the 30th day of the following month; (ii) thirteen week cash flow projections to be updated by the 30th day of the end of each month; and (iii) confer with FSB, if requested, regarding material variances; f. limit any salary paid to the Debtor's President, Mr. Andre Cloutier, and Vice President, Ms. Debra Sasken-Duff, unless or until FSB receives loan payments; and g. limit any reimbursement of short-term loans made to the Debtor or payment of deferred salary to Mr. Cloutier and Ms. Sasken-Duff unless or until FSB receives loan payments. FSB's consent to the use of its cash collateral will terminate in the event of a dismissal of these proceedings, or a conversion of the case to one proceeding under Chapter 7. A final hearing on the matter is scheduled for June 2 at 9:30 a.m. A copy of the sixth agreed order is available for free at https://bit.ly/3k4Fn5m from PacerMonitor.com. About Magellan Home-Goods Ltd Magellan Home-Goods Ltd, doing business as Magellan Home Goods, sells patented home goods and small appliances manufactured off-shore to retail consumers located in the U.S. Magellan Home-Goods sought protection under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-11413) on July 24, 2021, listing $2,324,758 in total assets and $2,063,752 in total liabilities. Judge Marc Barreca oversees the Debtor's bankruptcy case. Neeleman Law Group, P.C. serves as the Debtor's legal counsel. Cairncross & Hempelmann, P.S. is counsel for First Savings Bank, the secured creditor. Geoffrey Groshong is the Subchapter V trustee appointed in the case. MARTIN MIDSTREAM: Posts $11.5 Million Net Income in First Quarter ----------------------------------------------------------------- Martin Midstream Partners L.P. reported net income of $11.48 million on $279.20 million of total revenues for the three months ended March 31, 2022, compared to net income of $2.51 million on $200.97 million of total revenues for the three months ended March 31, 2021. As of March 31, 2022, the Partnership had $574.11 million in total assets, $612.09 million in total liabilities, and a total partners' deficit of $37.98 million. At March 31, 2022, the Partnership had $489 million of total debt outstanding, including $143 million drawn on its $275 million revolving credit facility, $54 million of senior secured 1.5 lien notes due 2024 and $292 million of senior secured second lien notes due 2025. At March 31, 2022, the Partnership had liquidity of approximately $107 million from available capacity under its revolving credit facility, an increase of $14 million from Dec. 31, 2021. The Partnership's adjusted leverage ratio, as calculated under the revolving credit facility, was 3.9 times and 4.2 times on March 31, 2022 and Dec. 31, 2021, respectively. The Partnership was in compliance with all debt covenants as of March 31, 2022. Bob Bondurant, president and chief executive officer of Martin Midstream GP LLC, the general partner of the Partnership stated, "The Partnership experienced an exceptional quarter benefiting from increased refinery utilization and strong demand for our products and services. For the period, we generated $40.0 million in adjusted EBITDA which exceeded the high end of our first quarter guidance by approximately $10.0 million. During the quarter, we successfully managed supply chain challenges, labor availability and fluctuating commodity prices as the Russian invasion of Ukraine created global market instability. Looking forward, the outlook remains solid for our refinery services business model and as a result we are increasing our 2022 adjusted EBITDA guidance range to $110 - $120 million. "On March 31 2022, the Partnership's adjusted leverage ratio was 3.87 times compared to 4.19 times on December 31, 2021. For the past few years we have been focused on reducing leverage to enhance the balance sheet and return value to our unitholders. During that time, we have made significant progress toward our adjusted leverage goal of 3.75 times and believe the Partnership is in an excellent position as we look to improve our capital structure this year." A full-text copy of the press release is available for free at: https://www.sec.gov/Archives/edgar/data/1176334/000117633422000088/exhibit991earningspressrel.htm About Martin Midstream Martin Midstream Partners L.P. is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution and transportation services. Martin Midstream Partners L.P. reported a net loss of $211,000 for the year ended Dec. 31, 2021, compared to a net loss of $6.77 million on $672.14 million of total revenues for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $579.86 million in total assets, $627.90 million in total liabilities, and a total partners' deficit of $48.04 million. * * * As reported by the TCR on Aug. 17, 2020, Moody's Investors Service upgraded Martin Midstream Partners L.P.'s Corporate Family Rating to Caa1 from Caa3. "The upgrade of MMLP's ratings reflect the extended debt maturity profile and improved liquidity," Jonathan Teitel, a Moody's analyst, said. MEDALLION GATHERING: S&P Alters Outlook to Pos., Affirms 'B' ICR ---------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit rating on Medallion Gathering & Processing LLC, a Texas-based crude gathering and transportation company, and revised the outlook to positive from stable. S&P said, "At the same, time we affirmed our 'B' issue-level rating on Medallion's term loan B. Our '3' recovery rating remains unchanged, indicating our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a default. "The positive outlook reflects our expectation that Medallion will continue to increase its throughput volumes and generate strong free cash flow while reducing its leverage to 4.5x in 2022 and around 4.3x in 2023. "We anticipate Medallion will continue increasing its throughput volumes given the favorable commodity price environment." The company's throughput volumes increased 12% to 579 million barrels per day (bbl/d), while its EBITDA grew 25% to $156 million in 2021 compared with the previous year. These improvements were driven by recovery in global demand for oil coupled with muted supply, which consequently enabled the price recovery. Currently, there are 26 rigs operating on Medallion's dedicated acreage, which is close to the pre-pandemic number. S&P said, "We recently raised our forecast for West Texas Intermediate (WTI) crude oil prices to $80/bbl for the remainder of 2022 and $65/bbl in 2023. As such, we anticipate drilling activity on Medallion's dedicated acreage will continue to increase, enabling it to increase EBITDA by the low-double-digits this year." Medallion's credit metrics will improve during the next 24 months. Medallion's strong performance in 2021 significantly improved its credit ratios. Its S&P Global Ratings-adjusted debt to EBITDA declined to 4.9x in 2021 from 6.2x in 2020. S&P said, "We expect its leverage to decline to about 4.5x in 2022 and 4.0x-4.3x in 2023, supported by volume growth and relatively low capital expenditures (capex) funded with internally generated cash. We expect the company to spend $70 million-$75 million on capital projects and pay no distributions this year, resulting in about $50 million of discretionary cash. We also expect the company's liquidity sources to be more than 3x its uses in 2022 and 2023." Medallion operates a sizable asset base, though it is relatively small as measured by EBITDA. While the company operates one of the largest crude gathering and transportation systems in the Permian basin (based on total capacity and dedicated acreage), it is relatively small given S&P's expectation for EBITDA of $175 million in 2022. Medallion is also exposed to volumetric risk given that its portfolio of acreage dedication contracts contains minimal minimum volume commitments, and it derives about half of its volumes from producers with weaker credit quality. S&P said, "The positive outlook reflects our view that Medallion will increase its throughput volumes and EBITDA given the supportive commodity price environment and more rigs on its dedicated acreage. We expect Medallion to reduce its leverage from 4.9x in 2021 to 4.5x in 2022, and about 4x in the next year, while generating strong free cash flows and liquidity. "We could revise the outlook to stable if we expect Medallion to maintain leverage at 4.5x or higher. This could happen due to lower-than-forecast production on its dedicated acreage or debt-financed distributions or growth projects. "We could raise our rating on Medallion if it reduces its adjusted leverage to below 4.5x while increasing the size and scale of its operations." ESG credit indicators: E-3, S-2, G-2 Environmental factors are a moderately negative consideration in S&P's credit rating analysis of Medallion. Like other midstream peers, Medallion may face longer-term volume risks related to reduced drilling activity or demand due to the transition to renewable energy sources. Another risk factor relates to a potential crude oil leakage in its system. MGM GROWTH: Fitch Hikes IDR From 'BB+', Outlook Stable ------------------------------------------------------ Fitch Ratings has upgraded the Issuer Default Ratings (IDRs) of MGM Growth Properties LLC and its subsidiary, MGM Growth Properties Operating Partnership (collectively, MGP) to 'BBB-' from 'BB+'. Fitch has also upgraded MGP's unsecured debt to 'BBB-' from 'BB+'/'RR4', and MGP's senior secured revolver to 'BBB' from 'BBB-'/'RR1'. The ratings were removed from Positive Watch and assigned a Stable Outlook. The upgrade reflects Fitch's increased confidence that the pending acquisition by VICI Properties (VICI) MGP will close. The combined company's strengthened credit profile, and 5.0x-5.5x net leverage target, is consistent with a 'BBB-' IDR. Fitch will withdraw MGP's IDRs upon close of the acquisition, given they will no longer be issuing entities, and VICI will assume MGP's unsecured notes, which will remain rated 'BBB-'. Fitch will also withdraw the rating on MGP's senior secured revolver once it is terminated at transaction close. KEY RATING DRIVERS Strategically Sound Merger: Fitch views the merger as strategically sound, in that it alleviates some considerations that were previously restraining the two companies' standalone credit profiles, such as tenant and asset diversification. The combination should also improve pro forma VICI's relative access to the capital markets, and has limited integration risk given the triple-net leased nature of the portfolios. Achievable Deleveraging Plan: Fitch expects VICI's leverage will return to its long-term financial policy (5.0x-5.5x net debt / operating EBITDA) despite the modest increase in leverage (estimated at 5.7x at close). The pro forma 'BBB-' IDR has some tolerance to exceed Fitch's 5.5x downgrade sensitivity for strategic acquisitions, coupled with a credible de-levering plan. Deleveraging will result from a combination of annual contractual increases in rental income (all fixed), and whether post-merger retained cash flow is directed towards acquisitions. Fitch's base case assumes $3 billion per year of additional acquisitions will be funded with 50% equity. This yields a de-levering path back to 5.5x net leverage by YE 2024. When excluding this assumption, VICI de-levers at a much faster pace and declines well inside 5.5x net leverage by YE 2023. Improved Capital Markets Access: Fitch expects the combined company will be one of the largest REITs in terms of enterprise value, EBITDA generation, and outstanding unsecured debt, which should enhance the company's credit profile via improved capital access and pricing. Larger REITs are usually more important banking customers by virtue of their size, and as a result, are often able to negotiate lower credit facility fees. Greater Financial Flexibility: The combined company's portfolio will be fully unencumbered following the repayment of the secured debt at VICI in September 2021, and once MGP's existing senior secured revolver is terminated at transaction closing, assuming VICI's bridge facility is not utilized. Pro forma, VICI will have significantly more financial flexibility given the sizeable pool of unencumbered assets, which includes a number of assets in Las Vegas (e.g. Venetian, Caesars Palace, Mirage, Excalibur, Luxor). Historically, gaming REIT's contingent liquidity, in the form of mortgage debt or asset sales, is not as robust as more traditional CRE property types, such as apartments, office, industrial and retail properties. Casinos are a specialty property type that appeals to a smaller, but growing, universe of institutional real estate investors and lenders. Some gaming companies have accessed debt via public bonds that were secured by specific assets in a time of stress. There are also gaming assets in some CMBS transactions, but Fitch views the through-the-cycle availability of capital from this avenue as less reliable than secured mortgages from balance sheet lenders, including life insurance companies, and to a lesser extent, banks. Positively, non-traditional owners have increasingly purchased Las Vegas real estate (e.g. private equity), which has led to cap rate compression, and is a longer-term positive, as it reflects the attractiveness of Las Vegas gaming real estate. Regional gaming outperformed many of the other hard-hit sectors during the pandemic, which should also be a longer-term positive, as it reflects the attractiveness of regional gaming real estate. Parent Subsidiary Linkage: Fitch rates the IDRs of the parent REIT and subsidiary operating partnership on a consolidated basis, using the weak parent/strong subsidiary approach under its Parent and Subsidiary Linkage Criteria. Fitch believes open access and control factors are strong, based on the entities operating as a single enterprise with strong legal and operational ties. DERIVATION SUMMARY MGP and VICI's most direct peer is GLPI (BBB-/Stable), another gaming REIT. Both pro forma VICI and GLPI operate with a net leverage target of 5.0x-5.5x, with fully unencumbered capital structures and well-laddered maturity schedules. Following the MGP transaction closing, VICI will have better tenant diversification than GLPI but with higher exposure to the more cyclical Las Vegas Strip (GLPI is primarily regional gaming focused). MGM and Caesars will comprise approximately 78% of VICI's total rent, versus 68% range for Penn National as a tenant to GLPI. VICI's more cyclically sensitive operator tenant mix is partially offset by recent improvements in institutional debt and equity investor interest in Las Vegas gaming properties. GLPI has greater clarity surrounding lease-level coverage and has historically displayed more conservative lease underwriting. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- The MGP transaction closes by mid-2022; -- The VICI and MGP portfolios realize contractual rental increases with no lease restructurings; -- No material voluntary debt repayments; -- VICI remains acquisitive, with $3 billion of assumed acquisitions annually through 2024 at a 7% cap rate. This is funded with a mix of equity, debt and retained cash flow; -- 80% dividend payout ratio, which allows some degree of retained FCF to be allocated toward assumed acquisitions; -- Proportional consolidation of Blackstone Real Estate Income Trust JV's EBITDA and debt into leverage metrics. RATING SENSITIVITIES No longer relevant on a standalone basis given pending acquisition by VICI. The pro forma company's rating sensitivities at the 'BBB-' IDR level are as such: Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Net debt/EBITDA sustaining below 4.5x; -- Longer-term, positive rating momentum could also result from more examples of gaming REITs accessing a broader array of capital markets, particularly under distressed circumstances, and/or continued diversification of the tenant base. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Net debt/EBITDA sustaining above 5.5x for a prolonged period either due to a failure to deleverage quickly following an acquisition or a reset in rents. The latter is deemed to be an extreme scenario and is not expected by Fitch to occur in a more normal recessionary environment; -- A weakening in the company's contingent liquidity profile, including Fitch's expectation that VICI will not have through- the-cycle secured debt capital access. 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 MGP's standalone liquidity and liability management characteristics relative to investment-grade U.S. equity REITs has and is expected to improve further upon the combination. MGP repaid its senior secured term loan in early 2020 and its wholly owned recourse debt is mostly unsecured now except for a $1.35 billion senior secured revolver. ISSUER PROFILE MGM Growth Properties is a gaming-oriented REIT with MGM Resorts International as its sole tenant. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch proportional consolidates the BREIT JV's EBITDA and debt into leverage metrics. 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. MISSOURI CITY FUNERAL: Taps Pope Law Firm as Bankruptcy Counsel --------------------------------------------------------------- Missouri City Funeral Directors at Glenn Park Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire The Pope Law Firm as its legal counsel. The firm's services include: a) analysis of the financial situation, and rendering advice and assistance to the Debtor; Advising the Debtor with respect to its duties as a debtor; b) preparation and Filing of all appropriate petitions, schedules of assets and liabilities, statements of affairs, answers, motions and other legal papers; c) representation of the Debtor at the first meeting of creditors and such other services as may be required during the course of the bankruptcy proceedings; d) representation of the Debtor in all proceedings before the Court and in any other judicial or administrative proceeding where the rights of the Debtor may be litigated or otherwise affected; e) preparation and filing of a Disclosure Statement and Chapter 11 Plan of Reorganization; and f) assistance to the Debtor in any matters relating to or arising out of the captioned case. The current hourly rate for services rendered by Pope is $400. Pope received retainer payments of $7,500 from the Debtor on March 22, 2022 and $7,500 from the Debtor on March 31, 2022 for a total amount of $15,000.00 from the Debtor. James Pope, Esq., at The Pope Law Firm, disclosed in court filings that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The attorney can be reached at: James Q. Pope, Esq. The Pope Law Firm 5151 Katy Freeway 306 Houston, TX 77007 Telephone: (713) 449-4481 Email: jamesp@thepopelawfirm.com About Missouri City Funeral Directors Missouri City Funeral Directors at Glenn Park Inc., doing business as Missouri City Funeral or Missouri City Funeral Directors, is a corporation that operates as a funeral home based in Missouri City, Texas. Missouri City Funeral Directors previously filed bankruptcy protection (Bankr. S.D. Tex. Case No. 17-36178) on Nov. 6, 2017. Missouri City Funeral Directors again filed for chapter 11 protection (Bankr. S.D. Tex. Case No. 22-30884) on April 4, 2022. In the petition filed by Michael Brock, as chief executive officer, Missouri City Funeral Directors listed estimated assets between $500,000 and $1 million and estimated liabilities between $100,000 and $500,000. This case is assigned to Honorable Judge David R Jones. James Q. Pope, of The Pope Law Firm, is the Debtor's counsel. MONTANA RENEWABLES: Moody's Assigns First Time 'B3' CFR ------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Montana Renewables, LLC (MRL), including a B3 Corporate Family Rating, B3-PD Probability of Default Rating, and a B3 rating on the company's proposed term loan B. The rating outlook is stable. The proceeds from MRL's debt issuance will be used to repay its existing convertible term loan, pay fees and finance the remaining capital expenditures for its 15,000 bpd renewable diesel plant, which is under construction and expected to enter service in the fourth quarter 2022. "We expect Montana Renewables, LLC to benefit from robust demand for its renewable diesel, positive free cash flow and modest financial leverage," said James Wilkins, Moody's Vice President. "However, there is execution risk for MRL entering the renewable diesel market and ongoing risks to profitability since renewable diesel economics are underpinned by government mandates and incentives." Assignments: Issuer: Montana Renewables, LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured Term Loan B, Assigned B3 (LGD3) Outlook Actions: Issuer: Montana Renewables, LLC Outlook, Assigned Stable RATINGS RATIONALE MRL's B3 CFR reflects the company's modest scale, lack of asset diversification, competition from industry participants with much greater resources, lack of operating track record, as well as execution risks associated with entering into renewable diesel production and marketing. The company expects to complete construction of its new Great Falls, Montana, renewable diesel plant and start production in the fourth quarter 2022. MRL's parent, Calumet Specialty Products Partners, L.P. (Calumet, B3 stable), has ample experience in the refining industry, but is a new entrant to the renewable diesel market. Moody's expects the renewable diesel industry to experience substantial growth in capacity and demand during which feedstock costs, product prices and margins may vary from historical norms. The profitability of renewable diesel depends on certain federal and state government programs, including a blenders tax credit that is subject to ongoing renewal requirements, prices of D4 RINs (which support compliance with the renewable fuels standard) and prices of Low Carbon Fuel Standard (LCFS) credits offered under US state and Canadian provincial programs. Any loss or reduction in support for renewable diesel from government programs could decrease or eliminate the profitability of renewable diesel production. The company expects to enjoy high margins, steady free cash flow and have low leverage after starting operations. The plant will have the ability to process a range of feedstocks and the site location provides advantaged access to certain feedstocks. MRL has transportation cost advantages over US Gulf Coast refineries when selling renewable diesel to West Coast markets. Calumet could expand the Great Falls plant after completion and may use MRL as a platform to grow further in the renewable diesel business. The company's Great Falls plant is a conversion project using existing on-site infrastructure that will require relatively low capital expenditures per gallon of capacity. MRL's term loan B is rated at the same level as the B3 CFR since the term loan comprises the significant majority of the third-party debt in the capital structure. The stable outlook reflects Moody's expectation that MRL will seamlessly complete the construction of its renewable diesel plant and meet its projected sales volumes. Moody's expects MRL will have adequate liquidity through 2023, supported by cash flow from operations, existing cash balances and a supply and offtake agreement. Following the term loan issuance, the company will have over $200 million of cash as of year-end 2021, pro forma for the transaction, and an estimated $34 million of cash as of year-end 2022, after starting up the new plant in the fourth quarter 2022. The company expects to generate positive cash flow from operations every quarter during 2023. The company will have a supply and offtake agreement that reduces its working capital liquidity requirements. Under the terms of the agreement, the counterparty will carry both feedstock and finished product inventory on its books. MRL does not have a revolving credit facility. Moody's does not consider uncommitted sources of liquidity when assessing MRL's liquidity, but note that support from its parent, Calumet, could be a source of funding. The term loan agreement has one financial covenant – a maximum Net Total Leverage Ratio ( less than or equal to 4.5x starting Q4 2023 through Q3 2024, then stepping down to less than or equal to 4.0x through Q3 2025, and finally stepping down to less than or equal to 3.5x). The term loan also includes a waterfall outlining the priority application of cash payments (so long as the Net Total leverage Ratio greater than 3.0x) and a 50% excess cash flow sweep (so long as the Net Total leverage Ratio greater than or equal to 2.5x) that will limit MRL's ability to accumulate high cash balances that could support liquidity during potential periods of stress and a debt service reserve account (so long as the Net Total leverage Ratio is greater than or equal to 3.0x) with an amount equal to six months of scheduled principal and interest payments. The company has no near-term debt maturities; the term loan amortizes one percent per year and matures in 2027. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The CFR is unlikely to be upgraded in the near-term given the single plant site and modest scale. However, the rating could be upgraded if the company materially increases its scale, establishes a successful operating track record, the parent's credit profile supports a higher rating, and it maintains Debt to EBITDA below 2x and Retained Cash Flow (RCF) to Debt above 30%. The ratings could be downgraded if MRL is unable to start up its new renewable diesel plant on schedule and produce volumes as forecasted, EBITDA margins are materially lower than forecasted, free cash flow generation is inconsistent or liquidity declines. Montana Renewables, LLC (MRL) was established in 2021 by its parent, Calumet Specialty Products Partners, L.P., to enter into the production and marketing of renewable diesel. It is constructing one renewable diesel facility with a capacity of 15,000 bpd that will enter service in the fourth quarter 2022. The principal methodology used in these ratings was Refining and Marketing published in August 2021. MONTAUK CLIFFS: Amends Priority Tax Claim Pay Details ----------------------------------------------------- Montauk Cliffs, LLC, submitted a Second Amended Disclosure Statement for Second Amended Chapter 11 Plan of Liquidation dated April 21, 2022. As of the Petition Date, all actions and proceedings against the Debtor and acts to obtain property from the Debtor were stayed under section 362 of the Bankruptcy Code. During the administration of the Chapter 11 Case, the Debtor is managing the Property and its affairs as a debtor-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code, subject to the control and supervision of the Court. The Plan is premised upon a Sale of the Property free and clear of all liens, claims and encumbrances. The Debtor, through a broker to be retained in the Chapter 11 Case, shall market the Property from entry of the order authorizing the broker's retention until the broker issues a call for offers. The Sale Expenses will be paid from the proceeds of the Sale. Any Allowed Secured Real Estate Tax Claims shall also be paid at the closing of the Sale. Pursuant to section 1146(a) of the Bankruptcy Code, the Sale of the Property shall not be subject to any stamp, transfer or similar tax. A Priority Tax Claim is defined as a Claim entitled to priority pursuant to section 507(a)(8) of the Bankruptcy Code. Each holder of an Allowed Priority Tax Claim shall be paid 100% of the Allowed amount of such Claim, or funds sufficient to pay such Claims in full upon Allowance shall be escrowed with Debtor's counsel, from the Creditor Carve Out on or as soon as reasonably practicable after the Distribution Date, or shall receive such other less favorable treatment as may be agreed upon by the Claimant and the Debtor. The Internal Revenue Service has filed a Claim in the sum of $2,500. Although the Bar Date for governmental entities is not until August 22, 2022, it is anticipated that Priority Tax Claims will be de minimus. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Each holder of Class 4 General Unsecured Claim shall be paid pro rata from the Creditor Carve Out and pro rata from the Excess Debtor Proceeds, up to the full amount of their Claims. Creditors will recover 10% to 100% of their claims. * Class 5 includes the holders of Equity Interests in the Debtor. Such holders shall receive the remainder of the Sale proceeds after payment of all Allowed Claims. The Plan will be funded from the proceeds of the Sale. It is anticipated that all creditors will receive a distribution from the Sale proceeds. A full-text copy of the Second Amended Disclosure Statement dated April 21, 2022, is available at https://bit.ly/3MvEHSv from PacerMonitor.com at no charge. Attorneys for the Montauk Cliffs, LLC: Matthew G. Roseman, Esq. Bonnie L. Pollack, Esq. Michael Traison, Esq. CULLEN & DYKMAN LLP 100 Quentin Roosevelt Boulevard Garden City, NY11530 Tel: (516) 357-3700 About Montauk Cliffs Montauk Cliffs LLC is a real estate company that owns the Montauk Mansion in Montauk, New York. Montauk Cliffs sought Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 70312) on Feb. 23, 2022. In the petition filed by Eli Wilner as manager, Montauk CLiffs estimated assets between $10 million and $50 million and estimated liabilities between $10 million and $50 million. The case is handled by Honorable Judge Robert E. Grossman. Matthew G. Roseman, Esq., CULLEN AND DYKMAN LLP, is the Debtor's counsel. MOUNTAIN PROVINCE: Reports Q1 2022 Production and Sales Results --------------------------------------------------------------- Mountain Province Diamonds Inc. announced production and sales results for the first quarter ended March 31, 2022 from the Gahcho Kue Diamond Mine. All figures are expressed in Canadian dollars unless otherwise noted. Q1 Production Takeaways (all figures reported on a 100% basis unless otherwise stated) * 1,018,722 ore tonnes mined, a 98% increase relative to last year's comparable quarter (Q1 2021: 515,002 ore tonnes mined) * 707,553 ore tonnes treated, a 13% increase relative last year's comparable quarter (Q1 2021: 625,582 tonnes treated; Q4 2021, 813,308 tonnes treated) * 1,185,156 carats recovered, 15% lower than last year's comparable quarter (Q1 2021: 1,392,128 carats) * Average grade of 1.68 carats per tonne, a 25% decrease relative to Q1 2021 (2.23 carats per tonne) As previously disclosed along with the Company's year-end filings, during the first quarter of 2022 additional unmodeled resource was encountered, carrying a lower grade than planned mining areas. The incremental, previously unmodeled Kimberlite will be incorporated into the stockpile strategy throughout 2022, with the net effect of increasing Life-of-Mine ore tonnes and cash-flow while also decreasing processed grade. It is seen as a positive by Mountain Province that more diamond bearing ore is being mined than was previously included in the mine plan. Additionally, recovered grade in the quarter was impacted by higher-than-planned mining dilution. Initiatives are underway to correct this going forward. Q1 Sales Results As previously disclosed, during the quarter, 506,567 carats were sold for total proceeds of $84.7 million (US$66.7 million) resulting in an average value of $167 per carat (US$132 per carat). This is a 52% increase relative to the average value per carat in Q4 2021 of $110 per carat (US$86 per carat). The increase in average values in Q1 reflected the increase in demand across the rough diamond market, and the fact that upstream stock levels are now believed to reflect operating inventories only. Mark Wall, the Company's president and chief executive officer, commented: "The discovery of incremental, previously unmodeled Kimberlite ore is a positive for the operation and reflects the significant opportunities for additional diamonds to be discovered at the Gahcho Kue mine. Additionally, I'm pleased to say that the operational effects of the late-2021/early 2022 Omicron outbreak at site are now largely behind us and the unplanned failure at the primary crusher is repaired, with additional crusher optimization opportunities identified. After a slower than expected Q1 we are working with our joint venture partner to make the necessary improvements." About Mountain Province Mountain Province is a Canadian-based resource company listed on the Toronto Stock Exchange under the symbol 'MPVD'. The Company's registered office and its principal place of business is 161 Bay Street, Suite 1410, P.O. Box 216, Toronto, ON, Canada, M5J 2S1. The Company, through its wholly owned subsidiaries 2435572 Ontario Inc. and 2435386 Ontario Inc., holds a 49% interest in the Gahcho Kue diamond mine, located in the Northwest Territories of Canada. De Beers Canada Inc. holds the remaining 51% interest. The Joint Arrangement between the Company and De Beers is governed by the 2009 amended and restated Joint Venture Agreement. Mountain Province reported net income of C$276.17 million for the year ended Dec. 31, 2021, compared to a net loss of C$263.43 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had C$877.50 million in total assets, C$413.31 million in total current liabilities, C$336,000 in lease obligations, C$92.39 million in decommissioning and restoration liability, C$20.72 million in deferred income tax liabilities, and C$350.74 million in total shareholders' equity. Toronto, Canada-based KPMG LLP, the Company's auditor since 1999, issued a "going concern" qualification in its report dated March 28, 2022, citing that the Company faces liquidity challenges as a result of liabilities with maturity dates through December 2022 and short-term financial liquidity needs that raises substantial doubt about its ability to continue as a going concern. NEOVASC INC: To Participate in Bloom Burton Healthcare Conference ----------------------------------------------------------------- Neovasc Inc.'s management team will be participating in the 2022 Bloom Burton & Co. Healthcare Investment Conference to be held May 2-3, 2022. Fred Colen, Neovasc's chief executive officer, will be presenting at 4:00 pm ET on Monday, May 2. A recording of the presentation will be available on the conference website, and will be archived for 90 days. About Neovasc Inc. Neovasc -- www.neovasc.com -- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. The Company develops minimally invasive transcatheter mitral valve replacement technologies, and minimally invasive devices for the treatment of refractory angina. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently commercially available in the United States (2 U.S. patients have been treated under Compassionate Use) and has been commercially available in Europe since 2015, and Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada, Israel and Europe. Neovasc reported a net loss of $24.89 million for the year ended Dec. 31, 2021, following a net loss of $28.70 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $66.22 million in total assets, $14 million in total liabilities, and $52.23 million in total equity. Vancouver, Canada-based Grant Thornton LLP, the Company's auditor since 2002, issued a "going concern" qualification in its report dated March 9, 2022, citing that the Company incurred a comprehensive loss of $25.2 million during the year ended Dec. 31, 2021. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern as at Dec. 31, 2021. NN INC: Corre Partners Entities Report 10.92% Equity Stake ---------------------------------------------------------- In a Schedule 13D/A filed with the Securities and Exchange Commission, these entities and individuals reported beneficial ownership of shares of common stock of NN, Inc. as of April 18, 2022: Shares Percent Beneficially of Reporting Person Owned Class ---------------- ------------ ------- Corre Opportunities Qualified 4,172,246 9.51% Master Fund, LP Corre Partners Advisors, LLC 4,792,981 10.92% Corre Partners Management, LLC 4,792,981 10.92% John Barrett 4,792,981 10.92% Eric Soderlund 4,792,981 10.92% Mr. Barrett and Mr. Soderlund are the co-owners and managing members of the General Partner and the Investment Adviser. The business address of each of Mr. Barrett and Mr. Soderlund is 12 East 49th Street, 40th Floor, New York, NY 10017. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/0000918541/000091957422002830/d9474620_13d-a.htm About NN Inc. NN, Inc. -- www.nninc.com -- is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies primarily for the electrical, automotive, general industrial, aerospace and defense, and medical markets. Headquartered in Charlotte, North Carolina, NN has 31 facilities in North America, Europe, South America, and China. NN, Inc. reported a net loss of $13.23 million for the year ended Dec. 31, 2021, a net loss of $100.59 million for the year ended Dec. 31, 2020, a net loss of $46.74 million for the year ended Dec. 31, 2019, and a net loss of $262.99 million for the year ended Dec. 31, 2018. As of Dec. 31, 2021, the Company had $579.10 million in total assets, $301.11 million in total liabilities, $53.81 million in series D perpetual preferred stock, and $224.19 million in total stockholders' equity. NORDIC AVIATION: Plans to Exit Bankruptcy in May 2022 ----------------------------------------------------- Ong Jeng Yang of Smart Aviation Asia-Pacific reports that aircraft lessor Nordic Aviation Capital (NAC) has received approvals from the US Bankruptcy Court on its restructuring plan, which will reduce its debt by US$4.1 billion, as it seeks to exit bankruptcy proceedings in May 2022. NAC says in a statement the US Bankruptcy Court for the eastern district of Virginia has approved the company’s restructuring plan that will allow it to emerge from Chapter 11 bankruptcy before the end of May. The company says the restructuring plan received overwhelming support, with existing equity holders and over 99% of voting creditors voting in favor, reflecting broad a consensus among the company’s stakeholders. NAC adds that the plan will take effect upon emergence, and reduce the company’s total outstanding debt by US$4.1 billion, pursuant to various equitization, sale, and recapitalization transactions. NAC says the restructuring plan also involves an infusion of nearly US$540 million in new capital, through approximately US$337 million in new equity financing and US$200 million in new revolving credit loans. This will give NAC significant financial flexibility to support continued investment in the long-term growth of the company, it says. It will also extend existing funded debt maturities and see the orderly exit of certain creditor groups from the restructured NAC, the company says. NAC adds that through the restructuring plan, it will preserve the strength of the platform and the long-standing relationships with its customers and suppliers. The company will maintain its position as one of the largest lessors globally, with over 350 aircraft on lease to a diverse customer base, it adds. Justin Bickle, vice chairman of NAC and chairman of its restructuring committee, says the plan marks a critical milestone for the company and thanked all parties involved for their efforts. Norman Liu, NAC president and CEO, says: "With the court's approval of our plan and a committed new investor group, we are poised to exit Chapter 11 by the end of next month as a well-capitalized company, with the flexibility and resources to position ourselves for rebound and growth." Smart Aviation Asia Pacific previously reported that NAC went into US bankruptcy protection after declaring debts totaling US$6.3 billion which it says includes US$5.4 billion in secured debt. NAC earlier announced that the company's existing owners no longer wish to invest in the company and have agreed to let creditors exchange debt obligations for equity in the company. The existing owners are: Swedish private equity firm EQT (39.94%), the Singapore Government's investment arm GIC (34.05%) and Martin Moller Nielsen's Axiom Partners 10. Nielsen is NAC’s founder. New York investment funds Silver Point Capital and Sculptor Capital Management have reportedly acquired much of NAC's secured debt -- from banks and other financial institutions -- and will gain control of the company after it emerges from bankruptcy. About Nordic Aviation Capital Nordic Aviation Capital is the leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. Its fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft. On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation 17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital A/S each filed petitions seeking relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va.). On Dec. 19, 2021, Nordic Aviation Capital Designated Activity Company and 112 affiliated companies also filed petitions seeking Chapter 11 relief. The lead case is In re Nordic Aviation Capital Designated Activity Company (Bankr. E.D. Va. Lead Case No. 21-33693). Judge Kevin R. Huennekens oversees the cases. The Debtors tapped Kirkland & Ellis and Kutak Rock, LLP as bankruptcy counsels and the law firms of Clifford Chance, LLP, William Fry, LLP and Gorrissen Federspiel as corporate counsels. N.M. Rothschild & Sons Limited, Ernst & Young, LLP and PricewaterhouseCoopers, LLP serve as the Debtors' financial advisor, restructuring advisor and tax advisor, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. O & A ENTERPRISES: Seeks Cash Collateral Access ----------------------------------------------- O & A Enterprises, LLC asks the U.S. Bankruptcy Court for the Southern District of Iowa for entry of an order authorizing the use of cash collateral and setting a preliminary telephonic hearing on the matter at its earliest convenience. The Debtor requires the use of cash collateral, in which City State Bank, the U.S. Small Business Administration, The Fundworks, LLC, and ODK Capital LLC have interests, to pay pay necessary operating expenses and keep the business operational. The Debtor proposes to use cash collateral over the next few months until a sale of its funeral home can be completed, and the Plan of Reorganization can be satisfactorily implemented. The cash collateral involved consists of two sources. The first is an initial deposit of $7,687 into the Debtor-in-Possession account held at Wells Fargo Account ending #6558. The second is the accounts receivable located to-date in the amount of $35,888. The Debtor asserts that funds from the DIP Account were used on April 14, 2022, to pay insurance to Federated Insurance. The insurance was set to be cancelled on the funeral home due to non-payment of premiums. The monthly insurance payment is $1,126. To protect the Secured Creditors' rights, the Debtor proposes the following: a. The Debtor will maintain adequate insurance coverage on all assets and adequately insure against any potential loss. b. The Debtor will provide the Secured Creditors with a copy of the reports filed with the United States Trustee as required by the Bankruptcy Code. c. The Debtor will maintain in good condition and repair all collateral in which the Secured Creditors have an interest. d. The Debtor will use its best endeavors to sell the funeral home at a price that will result in the Secured Creditors being paid as much as possible. A copy of the motion is available at https://bit.ly/3xM5rdr from PacerMonitor.com. About O & A Enterprises O & A Enterprises, LLC is a company in Norwalk, Iowa, offering funeral and cremation services. O & A Enterprises filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Iowa Case No. 22-00295) on March 27, 2022, listing up to $10 million in both assets and liabilities. Robert Gainer serves as Subchapter V trustee. Judge Anita L. Shodeen oversees the case. Joseph A. Peiffer, Esq., at Ag & Business Legal Strategies is the Debtor's legal counsel. PB 6 LLC: Seeks to Hire KW Beverly Hills as Real Estate Broker -------------------------------------------------------------- PB 6, LLC, seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire KW Beverly Hills as its real estate agent. The firm will list, market and assist the Debtor in selling the real property commonly known as 5137-5149 1/2 Colfax Avenue, Los Angeles, California, which constitutes of all of the Debtor's real property assets. The broker shall receive a commission of 4 percent of the sale price. Dario Svidler, broker with KW Beverly Hills, owns 11 percent of the equity in the Debtor, however his interests are aligned with the Debtor and its constituents to realize the highest value for the Project. The firm can be reached through: Dario Svidler KW BEVERLY HILLS 439 N Canon Dr. Bevelry Hills, CA Tel: (310) 432-6400 Email: dario@svidlercre.com About PB 6 LLC PB 6, LLC, a privately held company in Newbury Park, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-10293) on Feb. 23, 2021. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Maureen Tighe oversees the case. Jeffrey S. Shinbrot, APLC is the Debtor's counsel. PHOENIX PROPERTIES: $2.7MM Sale of Real Properties to Stryder OK'd ------------------------------------------------------------------ Judge Edward J. Coleman, III, of the U.S. Bankruptcy Court for the Southern District of Georgia, Savannah Division, approved Phoenix Properties of Savannah, LLC's sale of the 20 parcels of real property listed in Exhibits A and B to Stryder Capital, LLC, for $2,732,800, cash, free and clear of liens, with valid liens only to attach to the proceeds of the sale. If for any reason Stryder did not close on April 8, 2022, its offer will be null and void, and the Debtor will be free to accept the offer from H.I. Savannah Properties, LLC, and proceed to closing without the need for further Order from the Court. Any funds owing to the Tax Commissioner of Chatham County, Georgia, any funds owing to the Georgetown Community Services Association, Inc., and any amounts due the City of Savannah Department of Revenue related to these properties will be paid in full at closing. At closing, Julie Brawn of Seaport Real Estate Group will be paid a real estate sales commission in the amount of $71,052.80 (2.6% x $2,732,800). Should the sale to Stryder not close and the Debtor accept the offer from H.I. Savannah Properties, LLC, and that sale close, the commission to be paid to Brawn at closing will be $140,000 (5% x $2.8 million). The Order will be final and effective immediately upon entry and will not be stayed by Rule 6004(h) of the Federal Rules of Bankruptcy Procedure. A copy of Exhibits A and B is available at https://tinyurl.com/4hz33nbs from PacerMonitor.com free of charge. About Phoenix Properties of Savannah Phoenix Properties of Savannah, LLC is a Savannah, Ga.-based company engaged in renting and leasing real estate properties. Phoenix Properties of Savannah filed a petition for Chapter 11 protection (Bankr. S.D. Ga. Case No. 21-40785) on Dec. 2, 2021, listing as much as $10 million in both assets and liabilities. Judge Edward J. Coleman, III oversees the case. James L. Drake, Jr., PC serves as the Debtor's legal counsel. POWAY PROPERTY: April 29 Status Conference on Poway Property Sale ----------------------------------------------------------------- Judge Christopher B. Latham of the U.S. Bankruptcy Court for the Southern District of California continued the status conference on Poway Property, LP's sale of the real property commonly known as 13247-13255 Poway Road, in Poway, California, to Ghassan Kassab for $15.5 million cash pursuant to the terms of the Commercial Property Purchase and Joint Escrow Agreement dated Feb. 11, 2022, cash, subject to overbid, to April 29, 2022, at 10:30 a.m. If the auction does not go forward on April 29, 2022, as noted, then status conference will be continued to May 2, 2022, at 2:00 p.m., Dept. 5 to be heard alongside UST's motion to dismiss and other matters currently calendared to be heard on May 2, 2022, at 2:00 p.m. At the request of Atty. Shewry, both Atlas Construction Supply Inc. matters (re Debtor's Objection to Proof of Claim 4 of Atlas Construction Supply Inc. and Atlas Construction Supply Inc.'s Motion to Assume or Reject Executory Contract) currently calendared for May 2, 2022 at 2:00 p.m. to be renoticed by the Court to May 19, 2022 at 2:00 p.m., Dept. 5 due to a trial scheduling conflict that counsel now has in another court. The Court heard extensive oral argument on the Debtor's sale motion. It made findings of fact and conclusions of law on the record. On that basis, the Court approved the sale motion as augmented and amended. Court scheduled a sale & auction, if there are overbids, for April 29, 2022, at 10:30 a.m., Dept. 5. In addition, the Court directs Debtor to promptly submit an employment application for the Debtor's real estate broker, Ms. Soraya Pizzey. The sale notice document is to clarify that there is shoring equipment maintaining the physical integrity of the project now, and that the buyer will need to enter into lease agreements or contracts otherwise with third parties to be able to continue to use that equipment. The Court clarified that UC Poway Post Holder LLC can credit bid to $11,722,756, if the case makes it to auction on April 29, 2022. The sale notice must require that all overbidders must qualify no later than April 25, 2022, that by formal notice to Atty. Speckman and presentation of guaranteed funds of $250,000, w/proof of other good funds on hand. The sale notice must also state that the property is subject to a special assessment which the buyer will be responsible for taking over. Finally, the Court noted that there is a notice of sale by non-judicial foreclosure set for April 11, 2022. Attorney Fennell confirmed that if the sale is not enjoined, his client intends to foreclose that day. If that happens, the Court will look for a notice on the case docket and would then take the auction set for April 29, 2022, off calendar. About Poway Property LP Poway, Calif.-based Poway Property, LP filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Calif. Case No. 21-03654) on Sept. 13, 2021, listing up to $50,000 in assets and up to $50 million in liabilities. David Hall, director, signed the petition. Judge Christopher B. Latham oversees the case. David L. Speckman, Esq., at Speckman Law Firm represents the Debtor as legal counsel. POWAY PROPERTY: Auction of Poway Real Property Set for April 29 --------------------------------------------------------------- Judge Christopher B. Latham of the U.S. Bankruptcy Court for the Southern District of California authorized Poway Property, LP's sale of the real property commonly known as 13247-13255 Poway Road, Poway, California, APN 317-473-0700, 317-473-0800, through an overbid auction sale to be conducted on April 29, 2022, at 10:30 a.m. in Department 5, Room 318, of the Court. The Overbid Auction Procedures set forth in Exhibit 1 will govern the overbid auction sale. The stalking horse buyer will be Ghassan Kassab, who submitted a $15.5 million offer to purchase the Property on the terms and conditions set forth in the Commercial Purchase Agreement and Joint Escrow Instructions ("CPA"). The terms of the CPA were modified on the record at the time of hearing. The deadline for prospective buyers to qualify to bid at the auction will be 5:00 p.m., April 25, 2022. Qualification requirements are set forth in the Overbid Auction Procedures attached hereto as Exhibit 1 and include providing notice to the Debtor's Counsel, presentation of guaranteed funds of $250,000 and proof of other funds on hand to complete the purchase. The counsel for the Debtor will provide notice of the overbid auction date and a copy of the Overbid Auction Procedures to all interested parties. The sale notice document will state that the Property is subject to a special property tax assessment which runs with the Property and that the buyer will be responsible for taking over this obligation. UC Poway Post Holder, LLC will be permitted to credit bid at the Overbid Auction Sale up to the amount of $11,722,756 towards the initial "Minimum Overbid" as provided in the attached Overbid Auction Procedures of $15,750,000. A guarantee of funds in the amount of $250,000 to serve as a deposit towards the total purchase price. Each subsequent bid will be in increments of at least $100,000. The Debtor's sale of the Property to the buyer will be free and clear of all liens, claims and encumstrances with exception to the California Statewide Community Development Authority (e.g. PACE Program) obligation, which will remain an encumbrance on the Property following the sale. The Debtor is authorized to pay the following amounts directly out of escrow: (i) $100,000 breakup fee to Ghassan Kassab if he is not the Winning Bidder; (ii) any court approved real estate broker's commission (which will be subject to a separate order); (iii) all past and current real property taxes; and (iv) any customary escrow fee and cost of sale. All remaining sale proceeds will be paid to Debtor and maintained in a designated DIP depository account for the benefit of the bankruptcy estate and lien holders listed in the Lien Schedule, each of whom will have the same lien rights in the sale proceeds as each had in the Property, subject to further order of the Court as to any disputed amount and/or the priority of any such liens as provided under applicable California law, based upon either its ruling oU the ruling oI any state court that may determine the amount and/or priority, or the stipulation of the parties claiming such lien rights in the proceeds from the sale of the Property. Notwithstanding Federal Rules of Bankruptcy Procedure 6004(h), the Order will take effect immediately upon entry. In the event the sale of the Property to the Winning Bidder fails to close for any reason, the Debtor is authorized to sell the Property to the next highest bidder ("Back-up Bidder") for the amount of the Back-up Bidder's last bid. In the event that the Property is sold to the Back-up Bidder, the Back-up Bidder will be considered a good faith purchaser entitled to the protection afforded by section 363(m) of the Bankruptcy Code in the event of a reversal or modification on appeal of this Order. If Ghassan Kassab purchases the Property as the Back-up Bidder, he will not be entitled to a breakup fee. A copy of the Exhibit 1 is available at https://tinyurl.com/2p88fdj5 from PacerMonitor.com free of charge. About Poway Property LP Poway, Calif.-based Poway Property, LP filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Calif. Case No. 21-03654) on Sept. 13, 2021, listing up to $50,000 in assets and up to $50 million in liabilities. David Hall, director, signed the petition. Judge Christopher B. Latham oversees the case. David L. Speckman, Esq., at Speckman Law Firm represents the Debtor as legal counsel. POWAY PROPERTY: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The U.S. Trustee for Region 15 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Poway Property, LP. About Poway Property LP Poway, Calif.-based Poway Property, LP filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Calif. Case No. 21-03654) on Sept. 13, 2021, listing up to $50,000 in assets and up to $50 million in liabilities. David Hall, director, signed the petition. Judge Christopher B. Latham oversees the case. David L. Speckman, Esq., at Speckman Law Firm represents the Debtor as legal counsel. RESTORATION HARDWARE: S&P Rates New $1BB Term Loan B-2 Rated 'BB' ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level and '3' recovery rating to Corte Madera, Calif.-based Restoration Hardware Inc. (RH)'s proposed $1 billion term loan B-2. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a default. The rating on the proposed term loan issuance is equal to the rating on the company's existing $2 billion term loan because of its equal security ranking in the capital structure. The issue-level and recovery ratings are unchanged despite the increase in debt because S&P believes the additional interest burden would result in a shorter path to default and a higher default valuation than under its existing capital structure. S&P said, "In our view, current stock prices (down about 50% since Sept. 30, 2021) have provided incentive for management to pursue share repurchases, and we anticipate the company will use at least a portion of the term loan proceeds for this purpose. We note that our existing ratings support the additional debt burden, and we expect management to maintain elevated levels of cash to support its operations and ambitious growth initiatives while the broader environment remains highly uncertain. The company ended the 2021 fiscal year with about $2.2 billion of cash and subsequently reported convertible bond and related warrant redemptions, which are expected to cost it about $490 million. Meanwhile, we expect the company to generate over $500 million of free operating cash flow annually. We believe S&P Global Ratings' adjusted debt-to-EBITDA will be sustained below 3.0x, as the company maintains a healthy cash balance, which we net against debt." ISSUE RATINGS-_RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario contemplates a default occurring in 2027 because of a steep decline in EBITDA amid weak consumer discretionary spending and declining economic activity. This, coupled with margin pressure from cost inflation as well as merchandising and strategy missteps limits RH's ability to meet its financial commitments. -- S&P's recovery analysis assumes the company will emerge as a going concern following bankruptcy to maximize lenders' recovery prospects. -- Therefore, S&P values RH as a going concern using a 5x EBITDA multiple applied to its projected emergence EBITDA, which is in line with the multiples it uses for comparably rated peers. -- S&P also assumes that about $340 million of borrowings under the asset-based lending (ABL) revolving credit facility will be outstanding by the time the company defaults, which reflects 60% utilization of the $600 million commitment less outstanding letters of credit. Simulated default assumptions -- Simulated year of default: 2027 -- EBITDA at emergence: $385 -- Implied enterprise value (EV) multiple: 5x -- Estimated gross EV at emergence: About $1.9 billion Simplified waterfall -- Net EV after 5% administrative costs: About $1.8 billion -- Valuation split (obligors/nonobligors): 100%/0% -- ABL credit facility claims: $350 million -- Senior secured term loan claims: $2.9 billion --Recovery expectations: 50%-70% (rounded estimate: 50%) *Debt amounts include six months prepetition interest. REWALK ROBOTICS: Board Appoints Joseph Turk as Director ------------------------------------------------------- The board of directors of ReWalk Robotics Ltd. increased its size from eight to nine members, and appointed Joseph Turk as a Class I Director of the Company to serve until the 2024 annual general meeting of shareholders. Mr. Turk has not yet been appointed to any committees of the Board. Joseph Turk, 54, has served as the executive vice president of Fresenius Medical Care North America since 2019, during which he has served as the president of its Renal Therapies group since July 2021 and as the president of its Home and Critical Care Therapies group from February 2019 until July 2021. Previously he served in a number of roles at NxStageMedical, Inc. from 2000 to 2019, including president, senior vice president, and vice president of Marketing. Mr. Turk holds a B.A. from Wabash College and an M.A from the Kellogg Graduate School of Management. As compensation for his services as director, Mr. Turk will be entitled to standard compensation available to non-employee directors of the Company as disclosed under "Director Compensation" in the Company's most recent definitive proxy statement on Schedule 14A, filed with the Securities and Exchange Commission on April 12, 2021. Additionally, in connection with his appointment, Mr. Turk has entered into the Company's standard form of indemnification agreement and will receive coverage under the Company's directors' and officers' liability insurance policy. About ReWalk Robotics ReWalk Robotics Ltd. -- http://www.rewalk.com-- develops, manufactures, and markets wearable robotic exoskeletons for individuals with lower limb disabilities as a result of spinal cord injury or stroke. ReWalk's mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies. Founded in 2001, ReWalk has headquarters in the U.S., Israel and Germany. ReWalk Robotics reported a net loss of $12.74 million for the year ended Dec. 31, 2021, a net loss of $12.98 million for the year ended Dec. 31, 2020, a net loss of $15.55 million for the year ended Dec. 31, 2019, a net loss of $21.67 million for the year ended Dec. 31, 2018, and a net loss of $24.72 million for the year ended Dec. 31, 2017. As of Dec. 31, 2021, the Company had $94.75 million in total assets, $5.37 million in total liabilities, and $89.38 million in total shareholders' equity. ROWLEY SOLAR: Invaleon Objection to Berkowitzes' Claims Sustained ----------------------------------------------------------------- Shortly after Rowley Solar LLC filed its petition for relief under Chapter 11 of the Bankruptcy Code, Invaleon Technologies Corporation moved to dismiss the case on the basis that the filing had not been duly authorized. The controversy was resolved by a settlement agreement among the Debtor, Bonni Berkowitz and Barbara Berkowitz, and Invaleon, which, upon motion of the Debtor, the United States Bankruptcy Court for the District of Massachusetts approved. The Settlement obligated the Debtor to conduct a sale in bankruptcy of substantially all of its assets, provided for a distribution of the lion's share of the proceeds to Invaleon, and obligated Invaleon to satisfy from its proceeds all allowed claims in this bankruptcy case. Invaleon objected to the proofs of claim filed by the Berkowitzes and a realty trust of which the Berkowitzes are trustees, Maven Revocable Trust on the basis the claims have been released. Maven denies it gave a release. The Berkowitzes contend their releases were given as part of a settlement agreement that should be rescinded because Invaleon induced them to enter into it by fraud; and, in the alternative, they further contend that Invaleon should be compelled to pay their released claims as damages for breach of the settlement agreement. After an evidentiary hearing, Bankruptcy Judge Frank J. Bailey sustained the objections to the Berkowitzes' claims but overruled the objection to the Maven claim. Invaleon objected to each of the claims in issue on the basis that, through the Stipulation, the claim has been released. Though the Berkowitzes do not dispute that they released their claims, Maven argued it was not a party to the Stipulation and gave no release through it. Invaleon has not replied to this. Judge Bailey finds Maven is correct as to the facts: Maven was not a party to the Stipulation. The Berkowitzes gave releases through the Stipulation, but Maven did not. According to Judge Bailey, Maven's proof of claim No. 8 was filed in accordance with the Federal Rules of Bankruptcy Procedure and therefore enjoys prima facie validity. Release is an affirmative defense; the burden of proving it accordingly falls on the party asserting the defense, here Invaleon. The judge says Invaleon failed to adduce evidence that Maven has released the claim it asserts in Proof of Claim No. 8. Invaleon also failed even to adduce argument to support its contention that Maven has released this claim. Thus, Judge Bailey concludes no release by Maven has been established. Invaleon's objection must accordingly be overruled as to Maven's Proof of Claim No. 8. The Berkowitzes concede that through the Stipulation, they released their claims remaining in issue, Bonni's Proofs of Claim Nos. 10 and 11 and Barbara's Proof of Claim No. 12. As to each of these, however, the Berkowitzes contend the Stipulation, including the releases given through it, should be rescinded for fraud in the inducement and given no effect; and, in the alternative, the Berkowitzes argue Invaleon has breached the Stipulation and, although the claims themselves have been released, Invaleon should be compelled to pay the amounts of their claims as damages for the breach. According to Judge Bailey, the Berkowitzes' argument that the Stipulation, including especially their releases, should be rescinded for fraud in the inducement, is an affirmative defense. Accordingly, the burden is on the Berkowitzes to prove the fraud. The Stipulation was negotiated in Massachusetts among Massachusetts-based parties. The Court and parties are in agreement that it is governed by Massachusetts law. Under Massachusetts law, "[t]o establish fraud in the inducement, and thereby be relieved of the effect of" the Stipulation, the Berkowitz Parties must "establish the elements of common law deceit." Those elements include "misrepresentation of a material fact, made to induce action, and reasonable reliance on the false statement to the detriment of the person relying." Though the Berkowitzes adduced a very lengthy statement of the misrepresentations that form the basis of their charge of fraud in the inducement, most of the alleged misrepresentations occurred before the negotiation of the Settlement, Judge Bailey notes. They had nothing to do with the Berkowitzes' decision to enter into the Stipulation, except that on the basis of them they had learned over and over again that Wu and Invaleon were not credible and were not to be trusted. During closing arguments, the Berkowitzes identified only one allegation of fraud on which they are relying: their allegation that they were induced to enter into the Settlement by a false promise by Wu, on behalf of Invaleon, that Invaleon would never again set foot on the project site. Judge Bailey finds the Settlement included no such promise or agreement by Invaleon. Accordingly, this basis for fraudulent inducement comes to nothing, the judge concludes. Though they did not identify a second alleged misrepresentation during closing arguments, the Berkowitzes have repeatedly alleged a second misrepresentation: that during the negotiation of the Settlement, Wu represented that the project was mechanically complete and essentially ready to be turned on, that this was false, and that in reliance on this representation they agreed to the terms of the Settlement, the Court notes. Judge Bailey finds that the evidence fails to establish that the project was not mechanically complete or ready to be turned on when the Settlement was being negotiated. Judge Bailey further finds that the Berkowitzes have failed to establish that they relied on these representations in entering into the Settlement. For failure to establish that the alleged representation was false and that they relied on it, this basis for fraud in the inducement, too, comes to nothing, the judge says. The Berkowitzes have accordingly failed to show fraud in the inducement, Judge Bailey concludes. In the alternative the Berkowitzes argue Invaleon has breached the Stipulation, specifically its alleged requirement that Invaleon not ever enter onto the project site again, and that, although their claims have been released, Invaleon should be compelled to pay the amounts of the released claims as damages for the breach. Judge Bailey concludes the Settlement included no term requiring that Invaleon never set foot on the property again. It follows that whatever offence may have been caused by Invaleon's coming onto the property at the request of PowerFund, that conduct was not a breach of the Settlement, the judge says. A full-text copy of Judge Bailey's Memorandum of Decision dated April 18, 2022, is available at https://tinyurl.com/49ucp4pt from Leagle.com. About Rowley Solar LLC Rowley Solar, LLC is a privately held company that conducts energy research to develop new products or processes. Rowley Solar sought Chapter 11 protection (Bankr. D. Mass. Case No. 19-12419) on July 17, 2019. The Debtor estimated assets and liabilities in the range of $1 million to $10 million. Judge Frank J. Bailey is assigned to the case. The Debtor tapped Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, as its legal counsel. SCUOLA VITA: S&P Alters Outlook to Positive, Affirms 'BB+' ICR -------------------------------------------------------------- S&P Global Ratings revised the outlook on its issuer credit rating (ICR) on Scuola Vita Nuova Charter School (SVN), Mo. to positive from stable and affirmed its 'BB+' rating. "The positive outlook is based on SVN's continued enrollment growth following the school's successful expansion of its campus in fall 2021, supporting revenue growth that has translated to solid maximum annual debt service (MADS) coverage and a very healthy cash position for the current rating level," said S&P Global Ratings credit analyst Mikayla Mahan. It also reflects S&P's expectation that the school will likely continue expanding its enrollment, sustaining its operations and liquidity at supportive of a higher rating. As of fiscal year-end 2021, SVN had nearly $8.9 million in total debt outstanding, consisting solely of a loan issued by the Equitable Facilities Fund (EFF) for the expansion of the school's sole campus. Construction of the campus was completed on time and on budget, allowing the school to exceed its budgeted number of seats for the 2021-2022 school year. An ICR reflects the obligor's general creditworthiness, focusing on its capacity and willingness to meet financial commitments when they come due. It does not apply to any specific financial obligation because it does not consider an obligation's nature and provisions, bankruptcy-or-liquidation standing, statutory preferences, or legality and enforceability. SVN's demand profile and finances have remained steady amid the pandemic. The school continued to meet its budgeted enrollment targets in fall 2020 and 2021, while producing consistent operating surpluses as in years past. After a year of blended learning, SVN has maintained 100% in-person learning for all its grade levels throughout the 2021-2022 school year. The school is budgeting for more growth in fall 2022, reaching just over 400 students, which S&P believes it should meet given its successful track record during recent seasons of expansion. "The rating reflects SVN's adequate enterprise profile, characterized by its historically excellent academics relative to state and local peers, its ability to meet budgeted enrollment targets, seasoned management, and favorable charter standing," said Ms. Mahan. S&P said, "In our opinion, its overall small enrollment size leaves financial operations highly susceptible to potential enrollment fluctuations, which somewhat offsets these strengths. We assessed SVN's financial profile as adequate, demonstrated by its continued robust operating margins, healthy lease-adjusted MADS coverage, and ample liquidity. A high debt-per-student ratio balances these strengths. We think that, combined, these credit factors lead to an anchor rating of 'bbb-'. As our criteria indicate, the final rating can be within one notch of the anchor. In our view, SVN's low levels of enrollment support an ICR of 'BB+' at this time." S&P said, "We view the risks posed by COVID-19 to public health and safety as an elevated social risk for the charter school sector under our environmental, social, and governance (ESG) factors due to potential effects on enrollment amid the emergence of COVID-19 variants and shifts in per-pupil funding beyond the near-term support provided by additional federal relief, which could affect school operations over time. For SVN, these risks are mitigated by the school's strong community standing, which has allowed it to grow enrollment amid the pandemic. Despite the elevated social risk, we consider the school's environmental and governance risks in line with our view of the sector as a whole." SOUTH SIDE: Seeks to Hire Lentz Law as Bankruptcy Counsel --------------------------------------------------------- South Side Convenient Care, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Nebraska to hire Lentz Law, PC, LLO, as its counsel. The firm will render these services: a. give legal advice with respect to the powers and duties of the Debtor in the reorganization of the business/farm; b. meet with and negotiate with Creditors as to this estate and its affairs and business, including both Secured, Unsecured Creditors and Priority Creditors; c. take any necessary actions to set aside preferences of transfers which may qualify to be avoided or set aside under the Bankruptcy Code; d. take such other necessary and required actions which are deemed by such counsel as ordinary and necessary in the course of these proceedings; e. provide representation in connection with any adversary proceedings filed in Court by various Creditors and/or adversary proceedings required to be filed for the protection and preservation of property of the estate; f. prepare necessary applications, motions, answers, responses, orders, reports, and other legal papers; and g. perform any and all other legal services which may be necessary herein, including, but not limited to the appeal of any Order deemed necessary to the success of this liquidation proceeding. The firm received a retainer in the amount of $6,000. Lentz Law represents no interest or interests adverse to the Debtor or its estate or the partnership in the matters upon which it is being engaged, according to court filings. The firm can be reached through: John A. Lentz, Esq. Lentz Law, PC, LLO 650 J St Ste 215B Lincoln, NE 68508 Phone: +1 402-421-9676 E-mail: john@johnlentz.com About South Side Convenient Care South Side Convenient Care, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No. 22-80201) on March 21, 2022, listing $100,001 to $500,000 in both assets and liabilities. John A. Lentz, Esq. at Lentz Law, PC, LLLC serves as the Debtor's counsel. SPECTRUM GROUP: Moody's Assigns B1 CFR & Rates First Lien Debt B1 ----------------------------------------------------------------- Moody's Investors Service assigned a B1 CFR and B1-PD PDR to Spectrum Group Buyer, Inc. Moody's also assigned a B1 rating to the first lien credit facilities, including a $60 million senior secured revolving credit facility due in 2027 and a $507 million senior secured term loan due in 2029. Funds affiliated with H.I.G. Capital will use the net proceeds of the term loan issuance and an equity contribution to acquire Pixelle Specialty Solutions, LLC from Lindsay Goldberg LLC. The acquisition is expected to close in May 2022. Moody's will withdraw Pixelle Specialty Solutions, LLC ratings after the transaction closes. "Higher pro forma leverage as a result of the increased balance sheet debt should return below 4.0x by the end of the year on expected earnings improvement, supporting the B1 rating," said Anastasija Johnson, senior analyst at Moody's Investors Service. Assignments: Issuer: Spectrum Group Buyer, Inc. Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured First Lien Term Loan, Assigned B1 (LGD4) Senior Secured First Lien Multi Currency Revolving Credit Facility, Assigned B1 (LGD4) Outlook Actions: Issuer: Spectrum Group Buyer, Inc. Outlook, Assigned Stable RATINGS RATIONALE The B1 corporate family rating of Spectrum Group Buyer, Inc., which is operating through Pixelle Specialty Solutions, reflects increased leverage pro forma for the acquisition by H.I.G. Capital. The rating also reflects Moody's expectations of earnings and credit metrics improvement in 2022 due to the announced price increases which will offset ongoing raw material cost inflation. Pro forma for the leveraged buyout by funds affiliated with H.I.G. Capital, balance sheet debt increases by approximately $100 million and Moody's adjusted debt to EBITDA increases to 4.5x from 4.0x in the twelve months ended December 2021. Moody's expects leverage to fall below 4.0x in 2022 as price increases announced in 2021 and recently in January and March 2022 will offset higher costs. In addition, Moody's expect volume will rise on new business wins, product introductions (e.g., fluorochemical free sandwich wrap) and completed acquisitions in 2021, supporting earnings improvement and deleveraging in 2022. The credit profile benefits from the company's scale and leading market position in niche specialty paper markets with good growth prospects, including exposure to e-commerce (approximately 37% of volume and 45% of sales are generated by product lines related to e-commerce). Roughly 70% of sales are generated by label technologies, food packaging, industrial and commercial specialties, such as high-speed digital inkjet paper used in advertising and publishing (hardcover books). Specialty paper producers are benefiting from substitution to paper from plastic and from e-commerce growth. Nevertheless, Pixelle continues to have exposure (roughly 30% of sales) to the graphic and carbonless paper markets, which are in secular decline. Pixelle is the 3rd largest producer of uncoated freesheet (UFS) paper behind Domtar and Sylvamo. The company needs to continue to invest and grow volume in other segments to offset declines in the graphic and carbonless paper markets. Tight supply and demand conditions supported commodity paper prices in 2021 and early 2022. Moody's expect North American UFS prices to increase 10% in 2022 before falling back toward long-term averages as secular declines for most grades of commodity paper return in the second half of 2022. A planned restart of a paper machine at the company's Ohio mill in 2023 should support volume growth in specialties in 2023, but Moody's expects weaker prices and, as a result, slow earnings improvement with leverage remaining around 4.0x. The credit profile is also constrained by low operating margins and a concentrated customer base with top 10 representing 43% of sales and top 5 representing 28%. As a not fully integrated paper producer, Pixelle is also exposed to volatile pulp prices. Moody's expect the company to have good liquidity over the next 12 months, supported by expected cash flow generation and full availability under the proposed $60 million revolver due in 2027. Moody's expect the company to be free cash flow generative in 2022 despite an increase in capex to restart an idled paper machine at the Ohio mill and a line upgrade at the Chillicothe mill. The proposed term loan will have annual amortization payments of 1% or about $5.07 million. The proposed revolver is expected to have a springing first lien net leverage covenant which is expected to be set with a 35% cushion if the revolver is more than 35% drawn. There are no covenants on the term loan. All assets are encumbered by the credit facilities leaving no sources of alternative liquidity. Moody's view Pixelle like other companies in the paper and forest industry as having moderately negative environmental risks. Moody's believes Pixelle has established expertise in complying with environmental and business risks and has incorporated procedures to address them in its operational planning and business models. The company currently does not have any large environmental liabilities at its mills. Moody's view Pixelle and other companies with exposure to commodity printing and writing paper as having highly negative social risks related to the need to substitute lost volume with specialty grades and eventually repurpose assets that produce commodity paper. Moody's recognize that Pixelle's exposure to specialty papers and growth in paper packaging as a result of plastic substitution mitigates some of the risk from commodity paper exposure. Governance risks are heightened given Pixelle's private-equity ownership, which carries the risk of an aggressive financial policy, including debt-funded acquisitions or dividends, and reduced financial disclosure requirements. The new sponsor, H.I.G. Capital, has experience in acquiring, combining and running paper assets and the existing management, who oversaw previous acquisitions, will remain with the company. The credit facility allows for incremental debt and distributions of 50% EBITDA. The B1 rating on the senior secured credit facility is in line with the B1 CFR and reflects the preponderance of secured debt in the capital structure. As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. The credit agreement allows for incremental debt capacity up to the greater of the equivalent amount to be set in the credit agreement or 100% EBITDA plus the unused portion of the general debt basket, plus unlimited amount as long as the first lien leverage ratio does not exceed the level at the closing date. The credit agreement allows for unlimited amount secured by liens on the collateral that are junior to the first lien debt subject to a secured leverage ratio (calculated on a net basis) not greater than 0.5x than the secured ratio on the closing date and subject to the interest coverage ratio of 1.75x. The credit agreement also allows for unlimited unsecured amount subject to the total leverage ratio not more than 1.0x higher than at close and subject to the interest coverage ratio of 1.75x. Amounts up to the equivalent amount to be set in the credit agreement or 100% EBITDA may be incurred with an earlier maturity date than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries up to the investment capacity under the negative covenants, subject to blocker provisions which prohibit contribution or transfer of material intellectual property. In addition, the credit agreement prohibits designation of subsidiaries that hold material intellectual property as unrestricted subsidiaries. Non-wholly owned subsidiaries are not required to provide guarantees under the credit agreement. Dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees subject to protective provisions which only permit guarantee releases if such release is approved by lenders, a restricted subsidiary becomes a non-wholly owned restricted subsidiary pursuant to a bona fide transaction such as that the subsidiary became a bona fide joint venture with a non-affiliate of the borrower, the release of the subsidiary shall constitute an investment in the amount equal to the fair market value of the net asset of such non-wholly owned restricted subsidiary attributable to the borrower's equity interest therein. The credit agreement provides some limitations on up-tiering transactions, including a requirement that each directly affected lender consents to amendments to reductions of any of the voting percentages, modifications to the pro rata sharing and payment provisions or the waterfall provisions, releases of all or substantially all of the collateral and releases of all or substantially all of the value of the guaranty and subordinating the obligations under the credit facilities to any other indebtedness or subordinating the liens securing such obligations to any other liens securing any other indebtedness. The proposed terms and the final terms of the credit agreement may be materially different. The stable outlook reflects Moody's expectations that the company will improve credit metrics in 2022 on the back of announced price increases despite higher balance sheet debt. FACTORS THAT COULD LEAD TO AN UPDATE AND DOWNGRADE Moody's could upgrade the rating if the company continues to grow and increase operational diversity, improving EBITDA margins to above 15%, while still maintaining strong credit metrics with debt/EBITDA below 3.5x, (retained cash flow - capex)/debt above 10% and continued good liquidity. Moody's could downgrade the rating with expectations for adjusted financial leverage sustained above 4.0x, negative free cash flow, or a substantive deterioration in liquidity. Further, distributions to the sponsor or step-out acquisitions could be viewed as credit negative. The principal methodology used in these ratings was Paper and Forest Products published in December 2021. Spectrum Group Buyer, Inc. is operating through Pixelle Specialty Solutions LLC, a manufacturer of specialty papers for diverse end markets. The company operates 4 mills and 11 paper machines, a coating and converting facility in Ohio and additional wood yards in the Midwest and Mid-Atlantic regions. Funds affiliated with H.I.G. Capital are in the process of acquiring the company from Lindsay Goldberg LLC. Pixelle Specialty Solutions is a combination of specialty paper assets which Lindsay Goldberg acquired from P.H. Glatfelter in 2018 and Verso Corporation in 2020. The company generated revenue of $1.5 billion in the twelve months ended December 31, 2021. SRAK CORP: Case Summary & Eight Unsecured Creditors --------------------------------------------------- Debtor: SRAK Corporation D/B/A Toms EZN 9225 Crowley Rd Fort Worth, TX 76134 Business Description: SRAK Corporation is a privately held company in the gasoline stations business. Chapter 11 Petition Date: April 27, 2022 Court: United States Bankruptcy Court Northern District of Texas Case No.: 22-40931 Debtor's Counsel: Brandon Tittle, Esq. TITTLE LAW GROUP, PLLC 5550 Granite Pkwy Suite 290 Plano, TX 75024 Tel: 972-987-5094 Email: btittle@tittlelawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Rajeev Gupta, owner and president. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MQIIYSA/SRAK_Corporation__txnbke-22-40931__0001.0.pdf?mcid=tGE4TAMA STONEWAY CAPITAL: U.S. Trustee Opposes Chapter 11 Plan ------------------------------------------------------ Jeff Montgomery of Law360 reports that the Office of the U.S. Trustee has urged a New York bankruptcy judge to reject Argentine power plant owner Stoneway Capital Corp.'s Chapter 11 plan unless it obtains consent to third-party liability releases and more stringently determines who is ineligible for such releases. Stoneway, a holding company whose interests include building and operating power plants in Argentina, is scheduled for a May 5, 2022 confirmation hearing on its Chapter 11 plan, under terms that include the sale of its plants and other assets. The trustee objection, filed on Monday, April 25, 2022, by trial attorney Brian S. Masumoto. About Stoneway Capital Corp. Stoneway Capital Corporation is a limited corporation incorporated in New Brunswick, Canada, formed for the purpose of owning and operating, through its Argentine subsidiaries, power generation projects that will provide electricity to the wholesale electricity markets in Argentina. The Argentine subsidiaries operate four power-generating plants in Argentina that provide electricity to the wholesale electricity market in Argentina. Stoneway is 100% owned by GRM Energy Investment Limited. On Oct. 8, 2020, Stoneway commenced proceedings under the Canada Business Corporations Act (the "CBCA"). The Debtors were well on the way toward closing the consensual restructuring when on Dec. 4, 2020, the Argentine Supreme Court issued a decision in a noise discharge dispute involving one of the Generation Facilities located in Pilar, Argentina. The Argentine Supreme Court decision created significant uncertainty as it overturned a ruling by the federal appeals court in San Martin, Buenos Aires. As a result of the looming expiration of a informal standstill arrangement, the Debtors commenced chapter 11 cases in the U.S. to put the automatic stay in place, maintain the status quo pending resolution of the various issues in Argentina, and ensure that neither the Indenture Trustee nor the Argentine Trustee takes any action that could be detrimental or value destructive to the Company. Stoneway Capital Ltd. and five related entities, including Stoneway Capital Corp., sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 21-10646) on April 7, 2021. Stoneway estimated liabilities of $1 billion to $10 billion and assets of $500 million to $1 billion. Judge James L. Garrity, Jr. oversees the cases. The Debtors tapped Shearman & Sterling LLP as bankruptcy counsel, Bennett Jones LLP as Canadian counsel, Lazard Freres & Co. LLC as investment banker, and RSM Canada LLP as tax services provider. Prime Clerk, LLC is the claims agent and administrative advisor. On Feb. 10, 2022, the Debtors filed their proposed joint Chapter 11 plan and disclosure statement with the court. TMK HAWK: Moody's Affirms 'Caa2' CFR & Rates $140MM Term Loan 'B3' ------------------------------------------------------------------ Moody's Investors Service assigned new ratings to TMK Hawk Parent, Corp.'s (dba "TriMark") super senior priority term loans, including a B3 rating to the $140 million Tranche A first out term loan that matures in May 2024 and a Caa2 rating to the $565 million Tranche B second out term loan that matures in August 2024. At the same time, Moody's affirmed all the existing ratings of the company, including TriMark's Corporate Family Rating at Caa2, its Probability of Default Rating at Caa2-PD, and its senior secured second lien term loan due August 2025 at C. The outlook remains negative. The B3 rating of the company's first out super priority term loan (Tranche A), two notches above the CFR, reflects the facility's priority lien relative to the $235 million second lien term loan and the pari passu lien but priority position with respect to collateral proceeds relative to the second out Tranche B term loan. The $565 million second out term loan (Tranche B) is rated Caa2, same as the Caa2 CFR, reflecting that the facility represents the preponderant of debt in the capital structure. The Tranche B term loan has a priority lien on the collateral relative to the second lien term loan and a pari passu lien but second out position with respect to collateral proceeds relative to the first out Tranche A term loan. The super senior priority Tranche A and Tranche B term loans were originally issued in a September 2020 exchange offer that Moody's viewed as a distressed exchange default. An additional $258 million of Tranche B term loans were issued in February 2022 in exchange for senior secured first lien term loans as part of a settlement related to the 2020 recapitalization. TriMark also issued an additional $20 million of Tranche A term loans in April 2022 to bolster liquidity. The ratings affirmation reflects that TriMark's revenue and earnings are recovering as a result of improving demand from foodservice customers as consumers continue to resume more away-from-home activities. Nevertheless, Moody's views that the company's risk of a debt restructuring remains very high with debt-to EBITDA expected at around 12x in 2022 even with meaningful earnings rebound. Moody's also projects over $100 million negative free cash flow in 2022 due to higher capital spending, elevated working capital to support business growth, and an approximate $48 million litigation settlement on government contracts. As a result, Moody's expects TriMark will have weak liquidity, and debt will increase with the company heavily reliant on revolver borrowings in the next 12-18 months. TriMark does not have significant maturities until the revolver expires in April 2024, which provides the company with some runway to improve operating results and cash flow generation. The following ratings/assessments are affected by the action: New Assignments: Issuer: TMK Hawk Parent, Corp. Senior Secured Super Priority Term Loan A, Assigned B3 (LGD2) Senior Secured Super Priority Term Loan B, Assigned Caa2 (LGD4) Ratings Affirmed: Issuer: TMK Hawk Parent, Corp. Corporate Family Rating, Affirmed Caa2 Probability of Default Rating, Affirmed Caa2-PD Senior Secured 2nd Lien Bank Credit Facility, Affirmed C (LGD6) Outlook Actions: Issuer: TMK Hawk Parent, Corp. Outlook, Remains Negative RATINGS RATIONALE TriMark's Caa2 CFR reflects Moody's view that TriMark's capital structure remains unsustainable given its very high financial leverage with debt/EBITDA expected to be around 12x and over $100 million negative free cash flow in 2022 despite a meaningful projected earnings rebound. The negative free cash flow is in part due to higher capital spending, elevated working capital to support business growth, and an approximate $48 million litigation settlement on government contracts and these cash needs will likely be much smaller in 2023. Moody's believes a further significant earnings rebound will be necessary in 2023 to reduce leverage and address the 2024 maturity of the bulk of the debt structure, creating elevated risk of a distressed exchange or other default. TriMark has end market concentration in the foodservice/restaurant sector and the majority of its revenue relates to cyclical equipment sales. However, the credit profile also reflects the company's strong market position in the foodservice equipment and supplies distribution industry, its relatively recurring revenue stream from supply replenishment and equipment replacement, and modest capital expenditure requirement. The credit profile also reflects the company's improving revenue and earnings from recovering demand from foodservice customers as consumers continue to resume more away-from-home activities. Moody's expects TriMark will have weak liquidity and burn over $100 million free cash flow in the next 12 to 18 months due to high interest expense, litigation payments and higher capex and working capital to support business growth. TriMark has a moderate cash balance of $5 million and about $104 million availability on its $250 million ABL revolver as of December 31, 2021. Moody's expects the borrowing base on the ABL to improve amid higher accounts receivable and inventory. The coronavirus outbreak and the government measures put in place to contain it continue to disrupt economies and credit markets across sectors and regions. Although an economic recovery is underway, the continuation will be closely tied to containment of the virus. As a result, a degree of uncertainty around Moody's forecasts remains. Moody's regard the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. Environmental risks include emissions from delivery trucks and factors such as responsible sourcing. Effectively managing such risks would help protect the company's market position. The company leases the bulk of its delivery trucks, but must manage the environmental impact of truck emissions and would indirectly bear the cost of converting to lower-emission delivery trucks through adjustments to lease payments over time. Governance risk factors include the company's aggressive financial policies under majority ownership by private equity sponsors, including the 2020 recapitalization transaction that subordinated existing senior secured term loan lenders, the very high financial leverage, and its debt-financed growth through acquisition strategy. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects Moody's view that TriMark's capital structure remains unsustainable owing to high leverage and significant negative free cash flow, and the likelihood of a restructuring remains high in the next two years. The ratings could be upgraded if leverage materially declines driven by improved operating results and less reliance on external sources of liquidity. The company would also need to improve liquidity including cash generation and the maturity profile to be upgraded. The ratings could be downgraded if there is a deterioration in liquidity, highlighted by increasing revolver reliance, the probability of a debt restructuring or event of default increases for any reason, or recovery prospects decline. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. TMK Hawk Parent, Corp. (TriMark) is a distributor of foodservice equipment and supplies in North America, providing all non-food products used by restaurants and other foodservice operators. In addition, the company offers value-added services, which include design, procurement, and installation of commercial kitchens for foodservice operations. TriMark was acquired by Centerbridge Partners, L.P. in 2017. The company is private and does not publicly disclose its financials. The company generated approximately $1.7 billion of revenue for the twelve months ended December 31, 2021. TOUCHPOINT GROUP: Secures $247,500 in Funding From Mast Hill ------------------------------------------------------------ Touchpoint Group Holdings Inc. received the funds consummating a Securities Purchase Agreement with Mast Hill Fund, L.P., whereby in consideration of $247,500 the Company issued to Mast Hill a senior secured convertible promissory note in the principal amount of $275,000 and common stock purchase warrants to purchase 75,000,000 shares of the Company's common stock and 105,000,000 shares of its common stock, respectively. The principal amount of the Note and all interest accrued thereon is payable on April 11, 2023. The Note provides for interest at the rate of 12% per annum, payable at maturity, and is convertible into shares of the Company's common stock at a price of $0.002 per share, subject to anti-dilution adjustments in the event of certain corporate events as set forth in the Note. In addition, subject to certain limited exceptions, if at any time while the Note remains outstanding, the Company grants any option to purchase, sell or grant any right to reprice, or otherwise dispose of, issue or sell any shares of its common stock or securities or rights convertible into or exercisable for shares of the Company's common stock, at a price below the then conversion price of the Note, the holder of the Note shall have the right to reduce the conversion price to such lower price. Further, if the Company or one of its subsidiaries issues any security or amends any security outstanding upon issuance of the Note and Mast Hill reasonably believes that such security contains a term in favor of the holder thereof which is more favorable than the terms contained in the Note, such as provisions relating to prepayment, original issue discounts and interest rates, then upon request of Mast Hill, such term shall become part of the transaction documents exchanged with Mast Hill in connection with the sale of the Note. In addition to the obligation to repay the Note at maturity, the Note provides that if at any time prior to repayment or full conversion of the Note the Company receives cash proceeds from various sources, including payments from customers, Mast Hill has the right to demand that up to 50% of the amount received be applied to the payment of amounts due under the Note. The Note also grants to Mast Hill a right of first refusal to provide financing to the Company on such terms as might be offered by a third party. Payment of all amounts due under the Note is secured by a lien on substantially all of the Company's assets and those of its subsidiaries in accordance with the terms of the Security Agreement entered into concurrently with the Note. The First Warrant is exercisable until April 11, 2027, at a price of $0.004 per share, subject to customary anti-dilution adjustments. In addition, subject to certain limited exceptions, if at any time while the First Warrant remains outstanding, the Company grants any option to purchase, sell or grant any right to reprice, or otherwise dispose of, issue or sell any shares of the Company's common stock or securities or rights convertible into or exercisable for shares of the Company's common stock, at a price below the then exercise price of the First Warrant, the holder of the First Warrant shall have the right to reduce the exercise price to such lower price. The First Warrant may also be exercised by means of a "cashless exercise" in accordance with the formula provided in the Warrant. The Second Warrant only becomes exercisable upon the occurrence of an Event of Default (as defined in the Note) and, upon such occurrence, remains exercisable for a period of five years and will be cancelled if the Note is satisfied by its maturity date and prior to an Event of Default. The price payable upon exercise of the Second Warrant is $0.002 per share, subject to customary anti-dilution adjustments. The Second Warrant may also be exercised by means of a "cashless exercise" in accordance with the formula provided in the Warrant. Each of the Note, the First Warrant and the Second Warrant contains a "blocker" limiting the number of shares which may be acquired at any time to such amount as would not cause the holder of the Note and Warrants, and its affiliates as defined in the Note, to be deemed to hold more than 4.99% of the number of shares of common stock outstanding as of the date of the proposed acquisition. About Touchpoint Group Headquartered in Miami, Florida, Touchpoint Group Holdings Inc. -- http://touchpointgh.com-- is engaged in media and digital technology, primarily in sports entertainment and related technologies that bring fans closer to athletes and celebrities. Touchpoint Group reported a net loss of $3.54 million for the year ended Dec. 31, 2020, compared to a net loss of $6.63 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $1.77 million in total assets, $3.52 million in total liabilities, $605,000 in temporary equity, and a total stockholders' deficit of $2.36 million. Tampa, Florida-based Cherry Bekaert, LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 9, 2021, citing that the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. TRANSPORTATION DEMAND: Hires Wenokur Riordan as Bankruptcy Counsel ------------------------------------------------------------------ Transportation Demand Management, LLC and Transportation Demand Management Holdings, LLC seek approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Wenokur Riordan PLLC to serve as their Chapter 11 counsel. The firm will render these services: a. take all actions necessary to protect and preserve Debtors’ bankruptcy estate, including the prosecution of any actions on Debtors’ behalf, defense of any action commenced against Debtors, negotiations concerning litigation in which Debtors are involved, objections to claims filed against Debtors in this bankruptcy case, and the compromise or settlement of claims; b. prepare the necessary applications, motions, memoranda, responses, complaints, answers, orders, notices, reports and other papers required from Debtors as Debtors-in-possession in connection with administration of this case; c. negotiate with creditors concerning a Chapter 11 plan, to prepare a Chapter 11 plan and any disclosure statement and related documents, and to take the steps necessary to confirm and implement the proposed plan of reorganization; and d. provide such other legal advice or services as may be required in connection with the Chapter 11 cases. The firm's current hourly rates are: Alan J. Wenokur, attorney $550 Nathan Riordan, attorney $550 Catherine Reny, attorney $400 Faye Rasch, of counsel, at a billing rate $450 Travis Escame, paralegal, at a billing rate $150 The firm can be reached through: Nathan T. Riordan, Esq. Wenokur Riordan PLLC 600 Stewart St #1300 Seattle, WA 98101 Phone: +1 206-724-0846 About Transportation Demand Management Transportation Demand Management, LLC is a motorcoach and minibus operator in the Pacific Northwest with a fleet of over 90 motorcoaches and mini buses of varying size generating more than $15M in annual sales. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10482-MLB) on March 26, 2022. In the petition signed by Gladys Gillis, chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Marc Barreca oversees the case. Nathan T. Riordan, Esq., at Wenokur Riordan PLLC is the Debtor's counsel. TRANSPORTATION DEMAND: Seeks Final Approval of Cash Collateral Use ------------------------------------------------------------------ Transportation Demand Management, LLC asks the U.S. Bankruptcy Court for the Western District of Washington, for authority, on a final basis, to use cash collateral in accordance with the budget, with a 15% variance. The Debtor needs access to cash collateral to continue operating its motorcoach business. Since the filing of the case, the Debtor has significantly exceeded its revenue projections for March 2022 and is on track to exceed its projections for April 2022 by approximately $250,000. The Debtors have further reached an agreement with First Security Bank as to the continued use of cash collateral for the later of (i) 90 days or (ii)confirmation of the Debtors' plan of reorganization. As adequate protection and for the Debtor's use of the cash collateral, the Secured Creditor will be granted replacement liens in the Debtor's post-petition cash, accounts receivable, rents, and the proceeds of each of the foregoing, to the same extent and priority as any duly perfected and unavoidable liens in cash collateral held by the Secured Creditor as of the Petition Date, limited to the amount of any cash collateral of the Secured Creditor as of the Petition Date, to the extent that any cash collateral of the Secured Creditor is actually used by the Debtor. As additional adequate protection, the Debtor proposes to make monthly interest payments to the Secured Creditor, calculated at the non-default rate, commencing on or about May 1, 2022, and continuing monthly thereafter. The Adequate Protection Payments total approximately $75,534 each month. These payments are comprised of principal (amortized on a five-year schedule) and interest at the rate of 4.1%. The Secured Creditor will be protected by a significant equity cushion. The Debtor currently has at least $7,510,000 in assets. Of these assets, FSB holds a security interest in assets totaling $6,150,000. Accordingly, the value of the Debtor's assets exceeds FSB's security interest by more than $2 million ($2,390,333.44). The Debtor contends FSB has an equity cushion of almost 58% which is certainly sufficient to establish that it is adequately protected. A copy of the motion is available at https://bit.ly/3MnOmdN from PacerMonitor.com. About Transportation Demand Management, LLC Transportation Demand Management, LLC is a motorcoach and minibus operator in the Pacific Northwest with a fleet of over 90 motorcoaches and mini buses of varying size generating more than $15 million in annual sales. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10482-MLB) on March 26, 2022. In the petition signed by Gladys Gillis, chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Marc L. Barreca oversees the case. Nathan T. Riordan, Esq., at Wenokur Riordan PLLC is the Debtor's counsel. TROIKA MEDIA: Daniel Pappalardo Quits as Director, TDG President ---------------------------------------------------------------- Daniel Pappalardo, president of Troika Design Group and a member of Troika Media Group, Inc.'s Board of Directors, resigned for personal reasons. He had maintained those positions since the Company's June 13, 2017 merger with Troika Design Group, which he founded some 21 years ago. Mr. Pappalardo's departure follows Troika Media's recent acquisition of Converge Direct. The Company will fulfill the remainder of Mr. Pappalardo's employment agreement dated June 9, 2017, which was set to expire on June 17, 2022. Pursuant to his employment agreement, the Company will pay Mr. Pappalardo a severance payment equal to one year of his current base salary of $347,287.92 in semi-annual installments unless he chooses to continue to be paid bi-monthly. All other terms of his contract will be honored. Mr. Pappalardo will be replaced by Mr. Kevin Aratari, Troika Design Group's current Head of Business Development. Mr. Aratari, 55, has worked for Troika Design for over seven years. He is passionate about introducing new clients to the opportunities offered by the evolving industry and consistently keeps one eye on the changing landscape to lead both clients and Troika Design forward into the future. Mr. Aratari oversaw all of Troika Design's sales and marketing functions, crafts the Company's business development strategy, leads its thought-leadership initiatives, and collaborates with Account Directors to service all aspects of its clients' needs. Mr. Aratari possesses deep industry expertise in entertainment and sports brand-building and marketing for top global brands. He has over 25 years' experience in building and managing creative, production and account teams and growing creative agencies. Mr. Aratari began his career in entertainment marketing as a producer at industry giant Pittard Sullivan and went on to create the broadcast and streaming business at mOcean in Venice Beach, which he led for over 13 years as managing director and later CMO. He holds a degree from California State and UCLA, and the Company is looking forward to unleashing his experience, imagination and fresh leadership qualities on Troika Design. Mr. Aratari's experience made him a sought-after guest speaker on entertainment marketing, branding, and the creative process at the UCLA Anderson School of Business, Seoul National University, Loyola Marymount University, Promax Europe (Spain, Amsterdam), Promax Asia (Singapore, Mumbai), Promax North America (New York, Los Angeles), and the Muovo Creative Conference (Czech Republic), as well as many corporate events in the United States and Asia. Consistent with Troika Media's vision to transform the Company and make changes to bring innovation and value to the newly envigored Troika Group, Mr. Aratari will also work closely with, and report directly to, the Company's newly appointed President, Sid Toama, who came onboard as part of the Company's March 21, 2022 Converge Direct acquisition. Mr. Aratari and Mr. Toama will work to create further opportunities for the Troika Group as a whole and generate cross business unit opportunities for the enterprise as a whole. About Troika Troika Media Group (fka M2 nGage Group, Inc.) -- www.thetmgrp.com -- is an end-to-end brand solutions company that creates both near-term and long-term value for global brands in entertainment, sports and consumer products. Applying emerging technology, data science, and world-class creative, TMG helps brands deepen engagement with audiences and fans throughout the consumer journey and builds brand equity. Clients include Apple, Hulu, Riot Games, Belvedere Vodka, Unilever, UFC, Peloton, CNN, HBO, ESPN, Wynn Resorts and Casinos, Tiffany & Co., IMAX, Netflix, Sony and Coca-Cola. For the six months ended Dec. 31, 2021, the Company reported a net loss attributable to common stockholders of $6.25 million. Troika Media reported a net loss of $16 million for the year ended June 30, 2021, followed by a net loss of $14.45 million for the year ended June 30, 2020. As of Sept. 30, 2021, the Company had $42.05 million in total assets, $24.44 million in total liabilities, and $17.61 million in total stockholders' equity. TWITTER INC: Moody's Reviews Ba2 CFR, For Downgrade Amid Musk Deal ------------------------------------------------------------------ Moody's Investors Service placed Twitter, Inc.'s credit ratings on review for downgrade following the agreement to be acquired by Elon Musk for $54.20 per share or about $44 billion in total value, in a leveraged buyout financed with a combination of cash and debt. The review impacts the company's Ba2 rated senior unsecured notes, its Ba2 Corporate Family Rating, and its Ba2-PD Probability of Default Rating. The review is based upon the plan for the funded debt portion of the acquisition which includes $12.5 billion of new debt which would result in a material weakening of credit metrics, as well as governance considerations. The review will focus on the new capital structure and its impact on credit metrics and cash flow, and it will also focus on strategic changes to the social media platform and the company's financial flexibility to invest for growth in the future. The current SGL-1 speculative grade liquidity rating is unchanged. On Review for Downgrade: Issuer: Twitter, Inc. Corporate Family Rating, Placed on Review for Downgrade, currently Ba2 Probability of Default Rating, Placed on Review for Downgrade, currently Ba2-PD Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently Ba2 (LGD4) Outlook Actions: Issuer: Twitter, Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Twitter has a strong niche position and brand in social networking, with a user base of 217 million monetizable daily active users worldwide. The company benefits from global reach and an ability to target audiences across demographics and interests, offering advertisers a compelling platform as they further shift ad dollars to digital and mobile platforms and services and away from traditional advertising. On April 25, 2022, Twitter's board of directors agreed to be acquired by Elon Musk for the $54.20 per share he had previously offered on April 14th, when Musk made an unsolicited offer to acquire Twitter and to take the social media company private. Musk, the chief executive of electric car manufacturer Tesla, Inc. (Ba1 positive) and reportedly the world's richest person, already acquired 9.2% of Twitter. The offer for the remaining 90.8% of Twitter shares, which Musk said is his "best and final" proposal, represented a 54% premium to the share price before he began investing in the company, according to his Securities and Exchange Commission filing. As he already purchased 9.2% of Twitter, it will cost Musk about $39 billion to acquire the rest of the shares plus closing costs, plus there would be a strong chance he would have to repay or refinance the company's existing senior unsecured notes and convertible debt due to change in control provisions. Twitter's year-end 2021 cash and short-term investments balance was $8.4 billion proforma for the $1 billion proceeds from the sale of MoPub in January and its $1 billion notes issuance in March. That balance excludes year-to-date cash flows and share repurchase activity under its $2 billion accelerated share repurchase program. Musk has stated in a filing that as part of the acquisition financing there would be new debt of $12.5 billion, which will add considerable leverage as it is materially higher than the $5.29 billion of reported debt as of December 31, 2021 proforma for the $1 billion of new notes issued in Q1 '22. Current proforma gross Moody's adjusted leverage is already high for the Ba2 rating level at about 5.8x. Twitter's senior unsecured Ba2-rated debt -- $700 million due 2027 and $1 billion due 2030 – are high-yield covenant-lite - meaning that not only do they not have financial maintenance covenants, there are also no covenants on restricted payments or unsecured debt incurrence. However, they do have change of control protections that are triggered when an investor acquires more than half the company's shares and if both Moody's and S&P lower the company's credit ratings no later than 60 days after the change of control event. It requires the company to offer to repurchase the notes at 101% of their face value. The company also has convertible senior unsecured notes which Moody's does not rate, of which $1.15 billion mature in 2024 and also have change of control provisions. Therefore, Moody's believe that the $12.5 billion represents the entirety of the proposed new funded debt structure for the company at closing. When considering the company's current net cash position, it is likely that the agreed transaction would also materially reduce the amount of cash on hand, essentially using much of it to fund the transaction. Musk's planned financing for the transaction includes $13 billion in financing as follows: (a) a senior secured term loan facility in an aggregate principal amount of $6.5 billion, (b) a senior secured revolving facility in an aggregate committed amount of $500 million (Moody's presumes it is unfunded at close), (c) a senior secured bridge loan facility in an aggregate principal amount of up to $3 billion and (d) a senior unsecured bridge loan facility in an aggregate principal amount of up to $3 billion. Musk also intends to raise another $12.5 billion to help fund his equity contribution in the form of a margin loan. Assuming this loan has no recourse to Twitter, but only to securities owned by Musk, it likely would not be considered as part of the credit analysis of Twitter. Musk cited strategic objectives as part of his offer, including: "global free speech as a societal imperative for a functioning democracy;" "platform health and improving the signal-to noise ratio;" and "revamping Twitter Blue and exploring other non-advertising initiatives." Moody's believes that any success in improving the company's operations and diversifying the company beyond its heavy reliance on advertising, from which it generates about 89% of revenue, would be credit positive. Twitter's governance risk is moderately negative (G-3). The company's present management and board of directors have a track record of sustaining moderately conservative financial policies. However, the company faces challenging regulatory and political relationships, exhibits weak transparency and has no stated credit metric targets. Elon Musk plans to acquire all of Twitter and take the company private, making Musk the only shareholder. It is unclear what impact, if any, this will have on Twitter's operating policies, but given the committed financing package, the company's financial policies will be more aggressive and with a single shareholder, there is greater risk associated with a controlled board. Like its social media competitors, Twitter faces risk from potential legislative changes to third-party content liability protection and data privacy laws that could hurt its business. There is a complex and evolving regulatory landscape around social media in both the US and abroad, with governments trying to protect personal data and block manipulation of social networks by bad actors. Concerns over censorship could also affect use or lead to political pressure. Twitter is also highly exposed to social risks stemming from data breaches and platform manipulation by bad actors. To prevent manipulation of its platform, Twitter is investing heavily in removing spam accounts, fake news and other manipulative or abusive content. The review will focus on the new capital structure and its impact on credit metrics and cash flow, and it will also focus on strategic changes to the social media platform and the company's financial flexibility to invest for growth in the future. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. UNITED PF: Moody's Hikes CFR to B3 & First Lien Secured Debt to B2 ------------------------------------------------------------------ Moody's Investors Service upgraded United PF Holdings, LLC's Corporate Family Rating to B3 from Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. Concurrently, Moody's upgraded the ratings for the company's first lien senior secured credit facilities (revolver and term loan) to B2 from B3, and upgraded the rating for its second lien term loan to Caa2 from Caa3. The outlook is stable. The CFR upgrade to B3 reflects Moody's expectation that operating performance including membership trends will continue to recover in 2022 as the threat of the coronavirus pandemic subsides. At year-end 2021, the total active dues paying member count is trending at a high 90% of the pre-coronavirus level, and in the low 90% of the pre-coronavirus range for mature clubs (opened in 2018 and prior), which shows the resiliency of Planet Fitness' high-value low-price point concept during the pandemic. United PF's lease adjusted debt-to-EBITDA leverage was in the mid 9x for the fiscal year ended December 31, 2021 and Moody's expects leverage will decline to below 8x over the next 12 to 18 months because of the continued projected revenue and EBITDA recovery. Moody's also expects United PF to maintain adequate liquidity over the next year with an approximate $81 million cash balance at calendar year end 2021 and access to an undrawn $40 million revolver due 2024 ($38 million net of letters of credit). Due to an increase in planned growth capex in FY22 for 18 new club openings, Moody's expects free cash flow to be negative in the range of $30 million for FY22. However, this will be funded with its ample cash and Moody's expects the company will end 2022 with about $40 to $50 million cash (after mandatory amortization for first lien term loan) and an undrawn revolver. Moody's took the following rating actions: Issuer: United PF Holdings, LLC Corporate Family Rating, upgraded to B3 from Caa1 Probability of Default Rating, upgraded to B3-PD from Caa1-PD Existing Senior Secured First Lien Revolving Credit Facilities (revolver and term loans), upgraded to B2 (LGD3) from B3 (LGD3) Existing Senior Secured Second Lien Term Loan, upgraded to Caa2 (LGD6) from Caa3 (LGD6) Outlook Actions: Issuer: United PF Holdings, LLC Outlook, remains Stable RATINGS RATIONALE United PF's B3 CFR broadly reflects its very high leverage with Moody's lease adjusted debt/EBITDA in the mid 9x for the trailing twelve months ended December 31, 2021. Moody's expects debt-to-EBITDA leverage will decline below 8x over the next 12 to 18 months because of a continued membership and earnings recovery at existing clubs and earnings growth from newly opened clubs. The rating is also constrained by the company's small scale in terms of revenue as well as the high business risk of the fragmented and competitive fitness club industry given its low barriers to entry, exposure to cyclical shifts in discretionary consumer spending, and high attrition rates. In addition, the rating reflects the event and financial policy risk due to private equity ownership. United PF's capital spending is high and restricts free cash flow to meet the new club opening and equipment purchase obligations under its agreements with Planet Fitness. However, the ratings are supported by the company's franchise relationship with Planet Fitness, which has a well-recognized national brand name. United PF is the largest franchise operator within the Planet Fitness system. The rating also benefits from longer term favorable demographic trends such as the increased focus on health and fitness. Given the company is a budget operator, Moody's believes its business would fare better during a recession than higher-priced facilities given its low price point as well as people trading down from more expensive gyms. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. Although an economic recovery is underway, its continuation will be closely tied to containment of the virus. As a result, there is uncertainty around Moody's forecasts. Fitness clubs have sensitive customer data including information related to health, workout schedules, and credit cards. Protecting data security is thus important to attracting and retaining customers and increases operating costs. Rising labor costs are credit negative issue that could raise operating costs and weaken service levels by limiting club staffing. Demographic and societal trends toward health and wellness are positive social factors supporting demand growth, but growing competition from technology-oriented workouts is likely to weaken membership for facilities-based fitness providers unless they invest to broaden their service offerings. Governance concerns reflect private equity ownership. Given this, Moody's expects an aggressive financial and acquisition strategy that tends to favor shareholders. United PF's board of directors consists of the management team and representatives from its sponsor. Financial disclosures are also more limited than for public companies. Moody's views environmental risks as low, but the company must meet environmental regulations when locating and constructing new clubs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's view that debt-to-EBITDA leverage will decline to below 8x over the next 12 to 18 months because memberships and earnings continue to recover. The stable outlook also reflects Moody's expectation for adequate liquidity over the next year including an approximate $81 million cash balance at year end 2021, access to an undrawn $40 million revolver and no meaningful maturities until the revolver expires in 2024. The existing liquidity should help fund the negative free cash flow expected for FY22 due to planned growth capex and Moody's expects the company will end 2022 with about $40 million to $50 million of cash. Ratings could be upgraded if the company delivers sustained comparable club revenue growth while executing on its growth strategy, along with consistent positive free cash flow generation. An upgrade would also require operating performance and financial policies that support debt/EBITDA sustained below 6.0x with at least good liquidity. The ratings could be downgraded if operating performance does not improve as expected, there is renewed decline in membership levels, or rising labor or other operating costs weaken the EBITDA margin. A downgrade could also occur if liquidity deteriorates or the company is unable to reduce and sustain debt-to-EBITDA leverage below 8x. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Headquartered in Austin, TX, United PF is the US's largest Planet Fitness franchisee. As of December 31, 2021, United PF owns and operates 175 Planet Fitness clubs serving about 1.05 million members in 14 different states. FY2021 actual revenue was about $242 million. The company was acquired for $1.2 billion by American Securities LLC in December 2019. V.N.D. LIMITED: Hires NAI Hiffman as Commercial Sale Agent ---------------------------------------------------------- V.N.D. Limited Liability Company seeks approval from the U.S. Bankruptcy Court for the District of North Dakota to hire Hiffman Shaffer Associates, Inc. d/b/a NAI Hiffman and NAI Legacy as its commercial sale agents. The firms will assist the Debtor with marketing and selling the commercial real estate involved in this case, namely that certain strip mall located at 410 10th Street SE, Jamestown, ND 58401. The firms shall be paid a commission equal to 4 percent of the gross purchase price for a direct sale, and 5 percent when an outside broker brings the buyer to the transaction. NA represents no interest or interests adverse to the Debtor or its estate or the partnership in the matters upon which it is being engaged, according to court filings. The firm can be reached through: Michael Flynn Hiffman Shaffer Associates, Inc. d/b/a NAI Hiffman One Oakbrook Terrace, Ste. 400 Oakbrook Terrace, IL 60181 Phone: (630) 932-1234 About V.N.D. Limited Liability V.N.D. Limited Liability Company filed a petition for Chapter 11 protection (Bankr. D. N.D. Case No. 21-30511) on Dec. 21, 2021, listing as much as $10 million in both assets and liabilities. Dorothy Flisk, president, signed the petition. The Debtor is represented by Michael L. Gust, Esq., at Anderson, Bottrell, Sanden & Thompson and Sara E. Diaz, Esq., at Bulie Diaz Law Office. WESTERN AUSTRALIAN: Case Summary & Seven Unsecured Creditors ------------------------------------------------------------ Debtor: Western Australian Holdings, LLC d/b/a Majors Estate 1610 Perth Road Clyde, NC 28721 Business Description: Western Australian Holdings is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor owns approximately 200 acres of land located at 1610 Perth Road, Clyde, NC containing seven cabins, residential property, a chapel, a bar, reception hall, barns, tennis court and multiple gazebos. The Property is valued at $7 million. Chapter 11 Petition Date: April 27, 2022 Court: United States Bankruptcy Court Western District of North Carolina Case No.: 22-10058 Judge: Hon. George R. Hodges Debtor's Counsel: Jason L. Hendren, Esq. HENDREN, REDWINE & MALONE, PLLC 4600 Marriott Drive Suite 150 Raleigh, NC 27612 Tel: (919) 420-7867 Fax: (919) 420-0475 Email: jhendren@hendrenmalone.com Total Assets: $8,553,000 Total Liabilities: $13,159,695 The petition was signed by Timothy F. Majors, manager. A full-text copy of the petition containing, among other items, a list of the Debtor's seven unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KDMBY6A/Western_Australian_Holdings_LLC__ncwbke-22-10058__0001.0.pdf?mcid=tGE4TAMA WILLIAM TAGG: Promac Buying Interest in Seacrest Property for $3.6M ------------------------------------------------------------------- Craig M. Geno, the Subchapter V Trustee of William Tagg, asks the U.S. Bankruptcy Court for the Western District of Tennessee to authorize the sale of his 8% interest in Charleston Builders II, Inc.'s real property located at 8718 East County Highway 30a, Unit A, in Seacrest, Walton County, Florida 32461, to Promac Engineering, LLC, for $3.6 million. The Debtor was engaged in the construction business and, specifically, home construction, for a number of years prior to the filing of the Petition. He constructed, or caused to be constructed, a three-floor condominium project located on the beach in Seacrest, Florida. Title to the condominium was held in the name of Charleston II Builders, Inc. The public authorities granted a Certificate of Occupancy in 2008. The Debtor has, from time to time, rented, on a short term basis, the bottom floor of the three-floor condominium complex (sometimes referred to as "Unit 1" or "Unit A") to vacationers. The second floor has been sold, at least twice, in what appear to be arms-length transactions. The Debtor occupies the third floor of the condominium as his residence. The Debtor previously owned all of the equity security interests in Charleston, a Tennessee corporation. Charleston has been administratively dissolved by the Tennessee Secretary of State, although the Debtor asserts that the dissolution is in error. A number of years prior to the filing of the Petition, the Debtor transferred ownership of his equity security interests in Charleston to his sister, his son, his daughter and a "family friend," with each of those individuals owning 23% of the equity security interests and the Debtor retaining 8%. The Debtor has stated, under oath, that he was advised, by his accountant, to claim, individually, the income generated by Charleston from rentals and to deduct, individually, on his personal income tax returns, the costs and overhead of operating Charleston, including depreciation of the structures that are actually titled to Charleston. The Trustee is in the process of verifying this advice. In any event, the Debtor has, routinely, claimed the rental income from the rental of Unit 1 and, occasionally, the third floor unit (sometimes known as "Unit 3" or "Unit C"), on his personal, individual income tax returns and he has deducted, on his personal, individual income tax returns the costs of operating Charleston, including a deduction for depreciation of the remaining structures that are titled to Charleston. The Debtor has been in litigation with the first lienholder in connection with Unit 1 (and Unit 3 for that matter) for many years prior to the filing of the Petition. He contends that the holder of the original promissory note (and perhaps underlying mortgage/deed of trust) must produce the original promissory note giving rise to the transaction before it can foreclose. The Trustee is investigating that claim with pre-petition counsel for the Debtor. The Debtor obtained a contract for the sale of Unit 1 of Charleston, and filed a Motion to Approve Sale and Disposition of Real Property in Which Debtor has Interest ("Original Sale Motion") to have that approved. The Original Sale Motion drew a number of responses and objections. The Debtor proposed, in the Original Sale Motion, to use the sales proceeds in this individual case. he original sale contract (and the Original Sale Motion) did not timely close because the purchaser thereunder requested additional time to close so that other property it owned could also close and generate sales proceeds to be used to purchase Unit 1. The Debtor obtained a written extension agreement, along with an additional $60,000 in earnest money for granting the extension to close, now scheduled to occur by May 31, 2022. The original contract called for $40,000 in earnest money, and with the second extension deposit, the total amount of earnest money held in escrow is $100,000. The Trustee, in the exercise of his business judgment, is of the opinion that there is no doubt that the contract in connection with Unit 1 should be approved by the Court, and the sale of Unit 1, free and clear of liens, claims and interests should also be approved, with certain conditions. The Debtor has produced a document, executed by all the equity security interest holders, authorizing the sale of Unit 1. The Trustee believes that all of the equity security interests should be held by the Debtor, but that remains to be seen. Consistent with Exhibits A and C, real estate taxes are to be prorated as of the date of closing (although perhaps they should be prorated as of the date the original contract should have closed, an issue the Trustee is reviewing). Accordingly, in the event the Court sees fit to grant the Motion, and the Original Sale Motion, the order granting both those motions should provide that real estate taxes should be paid from the sales proceeds, along with such other documentary stamps (if any) and related tax costs of closing that are normal and customary under the circumstances. Further, the Trustee respectfully submits that the order approving both motions should also provide for the payment of customary, ordinary and reasonably costs of closing consistent with the division of those costs as set forth in Exhibit A. Once all costs of closing, real estate taxes and related documentary stamp costs have been paid, the remaining proceeds should be remitted to the Trustee to be held pending further order of the Court. The Trustee anticipates that the holder of the first lien upon the property will request that it receive the payoff of its indebtedness and, if the Court sees fit to grant that request, either the closing attorney, or the Trustee, will pay and satisfy that claim. The order should further direct that shareholders of Charleston execute their agreement transferring title, and then direct Charleston to also execute title transfer documents, along with the Debtor and the Trustee. The Trustee alleges that the value of the real property (and accompanying amenities) is reasonably equivalent to the purchase price of the real property as set forth in Exhibits A and C. The terms, conditions and provisions of Exhibits A and C are fair, reasonable and are normal and customary for the sales of similarly situated real property in and around the Seacrest, Florida, area. based on the foregoing, the Trustee respectfully prays that upon a hearing of the Motion, the Court will enter its order granting the Motion. The Trustee prays for general relief. A copy of Exhibits A and C is available at https://tinyurl.com/5n8ce7ey from PacerMonitor.com free of charge. William Tagg sought Chapter 11 protection (Bankr. W.D. Tenn. Case No. 21-23424) on Oct. 18, 2021. The Debtor tapped Ted Jones, Esq., as counsel. ZAYO GROUP: Moody's Rates $750MM Add-on Loan 'B2', Outlook Neg. --------------------------------------------------------------- Moody's Investors Service affirmed Zayo Group Holdings, Inc.'s B2 corporate family rating, B2-PD probability of default rating and Caa1 rating on its $1.08 billion senior unsecured notes. Moody's also assigned a B2 to Zayo's proposed $750 million sustainability-linked add-on first lien term loan and changed the company's rating outlook to negative from stable. Net proceeds from the first lien term loan add-on are expected to be utilized for general corporate purposes, including fully paying down the company's revolver and funding a recently announced tuck-in acquisition. At the same time, Moody's also downgraded the rating on the company's existing first lien credit facilities, comprised of its $1.05 billion revolver and aggregate $5.3 billion of USD and Eurodollar term loans, and $1.5 billion first lien secured notes to B2 from B1 reflecting a significant increase in the amount of first lien debt in Zayo's capital structure since the March 2020 leveraged buyout (LBO) acquisition by EQT Infrastructure IV Investments S.A R.L., Digital Colony Acquisitions, LLC and others. The change of outlook to negative from stable reflects Moody's expectation that Zayo will operate with elevated debt leverage (Moody's adjusted) for a prolonged period outside of prior financial policy expectations at the time of the LBO as the company continues to execute on its go-to-market plan for sustaining and growing net install growth in a post-Covid environment. Moody's believes that Zayo may be unable to achieve credit metrics consistent with its ratings over the next 12-24 months, including steadily driving debt leverage (Moody's adjusted) towards 6x and lower through 2023. While the company's key performance indicators showed solid improvement during the fourth quarter of 2021, Moody's would need to see evidence of sequential and steadily improving bookings, churn and net installs trends over at least the next four quarters to potentially help support a return to a stable outlook. Moody's currently expects Zayo's debt leverage (Moody's adjusted) to peak at around 7.5x at year-end 2022 before declining in 2023 based on continued strong sales and operational execution. The affirmation of Zayo's B2 CFR is supported by the company's scale, recurring revenue and good liquidity profile, with a cash balance of around $750 million and full access to its $1.05 billion revolving credit facility pro forma for the term loan add-on as of December 31, 2021. Affirmations: Issuer: Zayo Group Holdings, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 to (LGD6) from (LGD5) Assignments: Issuer: Zayo Group Holdings, Inc. Senior Secured 1st Lien Term Loan B, Assigned B2 (LGD3) Downgrades: Issuer: Zayo Group Holdings, Inc. Senior Secured 1st Lien Bank Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Senior Secured 1st Lien Regular Bond/Debenture, Downgraded to B2 (LGD3) from B1 (LGD3) Outlook Actions: Issuer: Zayo Group Holdings, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Zayo B2 CFR reflects its stable base of contracted recurring revenue and valuable fiber optic network assets which comprise the majority of the company's revenue and EBITDA. The company has a strong competitive position due to the extensive reach of its metro, regional and long distance networks which span both North America and Europe. Zayo's addressable end markets continue to grow with customers' increasing bandwidth needs which is driven, in part, by wireless network densification and cloud services adoption by enterprises, and future bandwidth needs of 5G network deployments and potential associated emerging technologies, products and services. Zayo is constrained by elevated leverage of around 6.7x (Moody's adjusted) for the fiscal year-ending December 31, 2021, which is expected to rise to a peak level of around 7.5x by year-end 2022 – this remains well above debt leverage levels of around 5.2x prior to the company's 2020 LBO. Moody's had expected sustained leverage near or below 6.0x within about two years of the company's LBO, but the company's growth has been thwarted during Covid and its costs have increased due to critical investments in network, sales and improvements in operational processes. While the company's divestment of its zColo retail colocation business on a credit neutral basis in December 2020 reduced strategic complexity, weak revenue growth and EBITDA pressures, in combination with sizable capital investment requirements to drive bookings, have depressed free cash flow generation. Moody's believes the operational investments the company is currently making, while depressing margins in the near term, will strengthen its network, support stronger growth and improve automation, all of which should benefit future margin expansion with solid execution. The potential for sustained net install growth in Zayo's core Networks segment is gaining traction after a multi-year effort to improve sales strategies and operational efficiencies. Strong and sustained bookings trends are critical to Zayo's organic growth efforts. As the bulk of capital investments are success-based with reasonable payback periods, even slight improvements in capital efficiency and lower churn can drive free cash flow growth. Moody's believes the company's long term churn potential has a floor of around 1.1%, or where it stood in Q4 2021. Zayo is further solidifying its focus on short payback, success-based capital investments to win carrier and web-centric customers, large enterprises in industry verticals and, especially, regional businesses on or near existing network infrastructure to lessen the risks embedded in its capital intensity and to drive towards sustained positive free cash flow in 2024 and beyond. As a private entity Zayo has taken a methodical and longer term approach to bolstering the foundation of its business model strengths to better capture the end market growth potential of its Networks segment. Moody's expects Zayo will have good liquidity over the next 12 months. The company is expected to generate modestly negative free cash flow in 2022 and 2023 given its largely success-based capital intensity levels. Should capital intensity expand to higher levels, free cash flow could become further constrained but such investment, if financed in a more balanced manner that includes equity, should lead to higher EBITDA over time. Moody's expects Zayo to maintain around $135 million of balance sheet cash and benefit from full availability under its recently upsized $1.05 billion secured revolving credit facility. The instrument ratings reflect both the probability of default of Zayo, as reflected in the B2-PD probability of default rating, an average expected family recovery rate of 50% at default given the mix secured and unsecured debt in the capital structure, and the loss given default (LGD) assessment of the debt instruments in the capital structure based on a priority of claims. The senior secured credit facilities, which include the company's first lien revolver and USD and Eurodollar first lien term loans (including the currently proposed add-on first lien term loan), and first lien secured notes are rated B2, in line with the company's B2 CFR given both the level of first lien debt in the capital structure and the loss absorption from the company's senior unsecured notes. The senior unsecured notes are rated Caa1, two notches below the CFR, reflecting their junior rank within the capital structure. Zayo's negative outlook reflects Moody's view that the company will continue to operate at elevated debt leverage (Moody's adjusted) for the next 12-18 months with nominally negative free cash flow generation over the same time period. Sustained improvement in EBITDA growth would lead to declining debt leverage trends beginning in 2023, but any return to a stable outlook would require evidence of sequential and steadily improving bookings, churn and net installs trends over at least the next four quarters in combination with steady deleveraging progress towards 6x (Moody's adjusted). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Zayo's B2 rating if debt leverage is sustained below 4.5x and free cash flow/debt is sustained around 10%, both on a Moody's adjusted basis. The rating could be downgraded if leverage does not progress steadily towards 6x (Moody's adjusted) in 2023, if execution falters, if liquidity deteriorates or if capital intensity increases such that Zayo is unable to generate sustainable positive free cash flow. The revolving credit facility is subject to a springing maximum first lien net leverage test of the greater of 7.75x or 35% cushion to the most recent four quarters, with respect to the revolving credit facility only, which will be tested if borrowings exceed 35% of total revolver availability. The first lien credit facility contains covenant flexibility for transactions that could adversely affect creditors. Headquartered in Boulder, Colorado, Zayo Group Holdings, Inc. is a leading global provider of bandwidth infrastructure, with significant networks in the US, Canada and Europe. Zayo's products and offerings enable high-bandwidth applications, such as cloud-based computing, video, mobile, social media, machine-to-machine connectivity, and other bandwidth-intensive applications. The company's over 7,000 customers include wireless and wireline carriers, media, tech, content, finance, healthcare and other large enterprises. Zayo's 126,000-plus route mile global network includes 400 metro markets and connectivity to over 40,000 buildings. The company's primary products include high-capacity dark and lit fiber solutions, wavelength, ethernet, IP transit, WAN and other connectivity solutions, as well as data and voice solutions to small and medium-sized businesses through its Allstream segment. The principal methodology used in these ratings was Communications Infrastructure published in February 2022. ZAYO GROUP: S&P Affirms 'B' Rating on New $750MM Secured Debt ------------------------------------------------------------- S&P Global Ratings revised its recovery rating on Zayo Group Holdings Inc.'s senior secured debt to '4' (30%-50%; rounded estimate: 45%) from '3' and affirmed its 'B' issue-level rating. S&P also assigned its 'B' issue-level and '4' recovery ratings to the company's proposed $750 million senior secured term loan due on 2027. Zayo will use net proceeds from the transaction to fund the $310 million Education Networks of America (ENA) acquisition, add $220 million of cash to the balance sheet, pay down $200 million of revolver borrowings, and pay related fees and expenses. The lower recovery rating reflects the increase in first-lien debt in Zayo's capital structure, which reduces recovery prospects for the company's secured lenders under S&P's hypothetical default scenario. Its issue-level rating on the first-lien secured term loan is unchanged because recovery prospects are not impaired enough to warrant a lower rating. S&P said, "As part of our recovery analysis, we include a discounted value of the EBITDA contributions from recent acquisitions--QOS Networks and ENA--to arrive at our gross default valuation of $4.4 billion. The higher valuation is not sufficient to offset the increase in secured debt, which results in a lower recovery rating. "Our 'B' issuer credit rating and negative outlook are unchanged by the transaction because our previous base-case forecast assumed Zayo funded free operating cash flow deficits and acquisitions with revolver borrowings. The new term loan improves Zayo's liquidity position because the company will have full access to the revolver. We still expect S&P Global Ratings-adjusted debt to EBITDA to exceed 7x over the next 12 months. We could lower the rating if leverage remains above 7x through 2023 because of execution missteps from the company's aggressive expansion strategy or debt-financed acquisitions." Issue Ratings--Recovery Analysis Key analytical factors -- S&P's simulated scenario contemplates a default because of speculative capital spending for expansion, margin compression due to higher costs, and increased customer churn. It believes this decline in operating results would result in a payment default when the company's liquidity and cash flow is insufficient to cover cash interest expenses, mandatory debt amortization, and maintenance-level capital spending requirements. -- S&P has valued Zayo on a going-concern basis using a 6x multiple of its projected emergence-level EBITDA of $727 million. The 6x multiple (at the high end of the 5x-6x range S&P ascribes to telecommunications companies) reflects that if Zayo were to default, there would still be a viable business model, reflecting the company's good scale and nationwide network that allow it to compete for multi-region opportunities. Zayo also benefits from its recurring revenue business model, with solid margins, multiyear contracts, and sizable contractual revenue backlog, which collectively provide good cash flow visibility. As a result, lenders would achieve the greatest recovery value through reorganization rather than liquidation. -- Other default assumptions include the $1.05 billion revolver being 85% drawn and that all debt includes six months of prepetition interest. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $727 million -- EBITDA multiple: 6x -- Gross enterprise value: $4.4 billion Simplified waterfall -- Net enterprise value (after 5% administrative costs): $4.1 billion -- Valuation split (obligors/nonobligors): 85%/15% -- Collateral value available to secured creditors: $3.9 billion -- Secured debt: $8.5 billion --Recovery expectations: 30%-50% (rounded estimate: 45%) -- Collateral value available to unsecured claims: $218 million -- Senior unsecured debt and pari passu claims: $5.6 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re SPG Hospice, LLC Bankr. D. Ariz. Case No. 22-02385 Chapter 11 Petition filed April 19, 2022 See https://www.pacermonitor.com/view/Q3NXVHY/SPG_Hospice_LLC__azbke-22-02385__0001.0.pdf?mcid=tGE4TAMA represented by: Jonathan Philip Ibsen, Esq. 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Case No. 22-10547 Chapter 11 Petition filed April 25, 2022 See https://www.pacermonitor.com/view/CIE4X5I/ATL_Municipal_Sales_LLC__mabke-22-10547__0001.0.pdf?mcid=tGE4TAMA represented by: Joseph S.U. Bodoff, Esq. RUBIN AND RUDMAN LLP E-mail: jbodoff@rubinrudman.com In re 1280 Middlesex Street, LLC Bankr. D. Mass. Case No. 22-40303 Chapter 11 Petition filed April 25, 2022 See https://www.pacermonitor.com/view/P6QRFIY/1280_Middlesex_Street_LLC__mabke-22-40303__0001.0.pdf?mcid=tGE4TAMA represented by: Richard A. Mestone, Esq. MESTONE & ASSOCIATES LLC E-mail: richard.mestone@mestonehogan.com In re Memory Lane Music Group LLC Bankr. E.D.N.Y. Case No. 22-70838 Chapter 11 Petition filed April 25, 2022 See https://www.pacermonitor.com/view/JRCTLQA/Memory_Lane_Music_Group_LLC__nyebke-22-70838__0001.0.pdf?mcid=tGE4TAMA represented by: Howard P. Magaliff, Esq. RICH MICHAELSON MAGALIFF, LLP E-mail: hmagaliff@r3mlaw.com In re Mountain View Vacations, LLC Bankr. D. Wyo. Case No. 22-20118 Chapter 11 Petition filed April 25, 2022 See https://www.pacermonitor.com/view/MOEBOSI/Mountain_View_Vacations_LLC__wybke-22-20118__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se ********* 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. 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