/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/220525.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 25, 2022, Vol. 26, No. 144 Headlines 78-80 ST. MARKS: UST Appoints O'Toole as Chapter 11 Trustee ACER THERAPEUTICS: Incurs $9.2 Million Net Loss in First Quarter AFIQ CORPORATION: Case Summary & Nine Unsecured Creditors ALCON CONTRACTORS: Seeks Bankruptcy Protection ALLEGIANT TRAVEL: Fitch Alters Outlook on 'BB-' IDR to Stable ALLEN & HANDY: Files Emergency Bid to Use Cash Collateral ALLIANCE MECHANICAL: Files Emergency Bid to Use Cash Collateral ALLSPRING BUYER: S&P Rates $250MM Senior Secured Term Loan 'BB-' ALUMINUM SHAPES: June 16 Hearing on Disclosure Statement AMERICAN ROCK: Moody's Lowers CFR to B3, Outlook Stable ANTICANCER INC: Wins Cash Collateral Access Thru June 2 APHEX BIOCLEANSE: Files Chapter 11 Subchapter V Case AR TEXTILES: Sale Proceeds to Pay Creditors Under Plan ARCHDIOCESE OF SANTA FE: Hires Rep for 'Unknown' Tort Claimants ARRAY TECH: Moody's Lowers CFR to B3, Outlook Remains Stable ARRAY TECHNOLOGIES: S&P Downgrades ICR to 'B', Outlook Negative ARTERA SERVICES: S&P Alters Outlook to Negative, Affirms 'B-' ICR ATIS HOLDINGS: Gets Interim Cash Collateral Access BAMC DEVELOPMENT: Gets Access to MTGLQ Cash Collateral BDS MARKETING: Status Conference Continued to Sept. 27 BROOKFIELD WEC: Fitch Affirms 'B' IDRs Amid BHI Energy Deal BUSY BEES: Wins Cash Collateral Access on Final Basis CAN B CORP: Incurs $3.5 Million Net Loss in First Quarter CAPETE CORPORATION: Seeks to Tap Lugo Mender Group as Legal Counsel CARL MILLER: Wins Interim Cash Collateral Access CENTENNIAL RESOURCE: Colgate Deal No Impact on Moody's B1 Rating CHILDREN'S CHARITY: Voluntary Chapter 11 Case Summary COLGATE ENERGY III: Moody's Puts B2 CFR Under Review for Upgrade COLON VENTURE: Court Approves Disclosure Statement CONDADO ROYAL: Taps MAM Group as Real Estate Consultant CONSOLIDATED WEALTH: Ordinary Unsecureds to be Paid in Full in Plan CRC INVESTMENTS: Wins Cash Collateral Access Thru June 2 CRYPTO CO: Incurs $2.5 Million Net Loss in First Quarter CUENTAS INC: Incurs $3.6 Million Net Loss in First Quarter DAVIDZON MEDIA: Unsecureds to Receive 40% Under Plan DEALER TIRE: S&P Assigns 'B-' ICR on Structural Reorganization DELEK LOGISTICS: Fitch Alters Outlook on 'BB-' IDR to Stable DELEK US HOLDINGS: Fitch Alters Outlook on 'BB-' IDR to Stable DIEBOLD NIXDORF: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. DIOCESE OF ROCHESTER: Loses Bid to Shield Parishes From Abuse Suits DONEGAN ENGINEERING: Unsecureds Will Get 1.3% of Claims in 5 Years ECTOR COUNTY: Seeks to Hire Crowell & Moring as Special Counsel EL CASTILLO RETIREMENT+: Fitch Affirms 'BB+' IDR, Outlook Stable ELEVATE TEXTILES: S&P Affirms 'CCC+' ICR, Outlook Positive ELITE INVESTORS: Files for Chapter 11 Bankruptcy EMERALD X INC: Moody's Affirms 'B2' CFR & Alters Outlook to Stable ENRAMADA PROPERTIES: Unsecureds to Get At Least 60% Under Plan FLEXIBLE FUNDING: June 28 Hearing on Plan and Disclosures FRONT SIGHT: Case Summary & 20 Largest Unsecured Creditors GALAXY NEXT: Incurs $1.1 Million Net Loss in Third Quarter GARUDA HOTELS: Wins Interim Cash Collateral Access Thru June 2 GATA HF: Taps Andrew Johnson of Valuation Source as Appraiser GENESIS DEVELOPMENT: Files for Chapter 11 Bankruptcy GRATA CAFE: Wins Cash Collateral Access Thru June 7 GULFPORT ENERGY: Fitch Raises LongTerm IDR to 'B+', Outlook Stable GULFSLOPE ENERGY: Incurs $3.9 Million Net Loss in Second Quarter H. I. D. INTERIORS: Starts Chapter 11 Subchapter V Case HAMON HOLDINGS: Seeks to Hire 'Ordinary Course' Professionals HAMON HOLDINGS: Seeks to Hire PHJ Consulting Services as Consultant HOUSTON BLUEBONNET: Unsecured Claims Unimpaired in Plan INDIE BREWING: In Chapter 11 Bankruptcy After Buyer Backs Out INPIXON: Incurs $11.6 Million Net Loss in First Quarter INTERPACE BIOSCIENCES: Incurs $2.25 Million Net Loss in 1st Quarter INVEPA INTERNATIONAL: Taps Virtual Realty USA as Realtor IRONSTONE PROPERTIES: Incurs $146K Net Operating Loss in 1st Qtr JJS LOGISTICS: Files Emergency Bid to Use Cash Collateral LARRY BARBER: Case Summary & 16 Unsecured Creditors LEAFBUYER TECHNOLOGIES: Incurs $271K Net Loss in Third Quarter LINCOLN PARK, MI: S&P Affirms 'BB+ Underlying Rating on GO Debt LOGOS INCORPORATED: Files for Chapter 11 Bankruptcy LTL MANAGEMENT: DOJ Balks on Plan to Hire Katyal at $2,500-an-Hour MAGNOLIA OFFICE: Case Summary & 19 Unsecured Creditors MALLINCKRODT PLC: To Raise $650M From Bond Deal as Loan Struggles MAM CORPORATION: Files for Chapter 11 Bankruptcy MAM CORPORATION: Seeks to Hire Lugo Mender Group as Legal Counsel MATHESON FLIGHT: Has Deal on Cash Collateral Access Thru June 17 MAUNESHA RIVER: Amends BMO & FMUB Secured Claims Pay Details MAUNESHA RIVER: Seeks Cash Collateral Access MGA MANAGEMENT: Starts Chapter 11 Subchapter V Case MRO HOLDINGS: Moody's Withdraws B3 CFR & B3 Rating on Term Loan NANO MAGIC: Incurs $1.1 Million Net Loss in First Quarter NEOVASC INC: Regains Compliance with Nasdaq Minimum Bid Price Rule ODYSSEY LOGISTICS: S&P Alters Outlook to Pos., Affirms 'B-' ICR OMNIQ CORP: Awarded $4 Million Project From Major Logistics Firm OMNIQ CORP: Incurs $2.6 Million Net Loss in First Quarter OWN VRP LLC: Files for Bankruptcy Protection in Florida PALACE THEATER: Creditor Says Debtor Unprofitable PALACE THEATER: Disclosure Has Conflicting Information, UST Says PBJAK LLC: Seeks to Hire Berken Cloyes as Bankruptcy Counsel PENN HILLS SD: Moody's Upgrades Issuer & GOLT Ratings to B3 PLH GROUP: S&P Downgrades ICR to 'B-', Outlook Negative PREMISE HEALTH: Moody's Lowers CFR to B3, Outlook Remains Stable PREMISE HEALTH: S&P Affirms 'B' ICR on Debt-Financed Dividend PROFESSIONAL TECHNICAL: Taps GlassRatner as Financial Advisor QUEST PATENT: Incurs $163K Net Loss in First Quarter RATTLER MIDSTREAM: Fitch Puts 'BB+' IDR on Watch Positive SIERRA ENTERPRISES: Moody's Cuts CFR to B3, Outlook Negative SILVER STATE: Affiliate Seeks to Hire Robert W. Mahlman as Broker SOUTHERN BLOOMS: Seeks Approval to Hire C-Suite Now as Accountant SPICER MANSION: Owner Brian Gates Files for Chapter 11 Bankruptcy SUMMER AVE: Gets Court Nod to Use Cash Collateral SUNGARD AS: Seeks Approval to Hire Akin Gump as Bankruptcy Counsel SUNGARD AS: Seeks Approval to Hire Jackson Walker as Local Counsel SUNGARD AS: Seeks to Hire FTI Consulting as Financial Advisor SUNGARD AS: Taps DH Capital as Technology Investment Banker SUNGARD AS: Taps Houlihan Lokey as Restructuring Investment Banker TAB RESTAURANT: Unsecureds to Split $12K in Consensual Plan TERRA MANAGEMENT: July 6 Hearing on Disclosure Statement TOTAL ENERGY: Seeks Cash Collateral Access TPC GROUP INC: Extends Forbearance Deal Until June 1, 2022 US VIRGIN ISLANDS WAPA: Fitch Retains CCC Issuer Default Rating VARSITY BRANDS: S&P Upgrades ICR to 'B-' on Continued Improvement VCH RANCH: Wins Interim Cash Collateral Access VPR BRANDS: Incurs $147K Net Loss in First Quarter WC SOUTH CONGRESS: Seeks to Employ Marcus & Millichap as Realtor WHISPER LAKE: Unsecureds to Get What's Left of Sale Proceeds XENIA HOTELS: S&P Upgrades ICR to 'B' on Leverage Improvement ********* 78-80 ST. MARKS: UST Appoints O'Toole as Chapter 11 Trustee ----------------------------------------------------------- At the behest of William K. Harrington, the United States Trustee for Region 2, the U.S. Bankruptcy Court for the Southern District of New York approved the appointment of Marianne T. O'Toole, Esq. as the Chapter 11 Trustee of the estates of 78-80 St. Mark's Place, LLC, Lead Case No. 21-12139 (MG). In support thereof, the United States Trustee states: * On December 29, 2021, 78-80 St. Mark's Place, LLC commenced a voluntary case under Chapter 11 of the Bankruptcy Code. The Debtor continues to operate its business and manages its property as a Debtor-in-Possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. * To the best of the United States Trustee's knowledge, Ms. O'Toole's experience as well her connections with the Debtor, creditor, any other parties-in-interest, their respective attorneys and accountants, the United States Trustee, and persons employed in the Office of the United States Trustee are set forth in the affidavit. On March 4, 2022, St. Marks Mixed Use LLC filed an Application for Appointment of Chapter 11 Trustee , or in the alternative, Motion to Convert Chapter 11 Case to Chapter 7. By Order dated May 17, 2022, the Court entered an Order Directing the Appointment of a Chapter 11 Trustee. In the course of making his appointment, the United States Trustee has consulted with: (a) Andrew R. Gottesman, Esq. of Mintz & Gold, LLP, counsel to the Debtor; and (b) Steven H. Newman, Esq. of Katsky Korins LLP, counsel to St. Marks Mixed Use LLC. St. Mark's Mixed Use LLC is the Debtor's sole senior secured creditor. It is a single purpose entity owned and created by Maverick Real Estate Partners, which the Debtor calls a notoriously aggressive "loan to own" lender. The Secured Creditor is an assignee of a loan made by 80 St. Marks Funding, LLC, to the Debtor on or about November 12, 2019, in the principal amount of $6,100,000. The 2019 Loan was assigned to the Secured Creditor without the Debtor's knowledge or consent. A copy of the application is available for free at https://bit.ly/3yWJVDj from PacerMonitor.com. About 78-80 St. Marks Place 78-80 St. Marks Place LLC is the owner of a historic Manhattan property that houses a gangster museum, a tavern, and Theatre 80. 78-80 St. Marks Place LLC sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 21-12139) on Dec. 29, 2021. In the petition filed by Lawrence V. Otway, sole member, 78-80 St. Marks Place LLC estimated assets between $10 million and $50 million and liabilities between $1 million and $10 million. The case is assigned to Honorable Judge Martin Glenn. Andrew R. Gottesman, of Mintz & Gold, LLP, is the Debtor's counsel. ACER THERAPEUTICS: Incurs $9.2 Million Net Loss in First Quarter ---------------------------------------------------------------- Acer Therapeutics Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $9.18 million on zero revenue for the three months ended March 31, 2022, compared to a net loss of $4.61 million on $900,000 of revenue for the three months ended March 31, 2021. "Progress in Q1 2022 was marked by a transformative debt financing in March, with continued advancement toward potential commercial launch of ACER-001 for UCDs and further development of our other pipeline programs," said Chris Schelling, CEO and founder of Acer. "Our advances to date have positioned Acer for potential achievement of a number of important planned milestones through the rest of 2022, including an FDA decision on our ACER-001 New Drug Application in June, the planned initiation of our EDSIVO pivotal Phase 3 trial in vascular Ehlers-Danlos Syndrome under our SPA agreement with FDA by end of Q2 2022, and ACER-801 Phase 2a trial results in Vasomotor Symptoms in H2 2022." As of March 31, 2022, the Company had $31.47 million in total assets, $41.57 million in total liabilities, and a total stockholders' deficit of $10.10 million. Cash and cash equivalents were $20.8 million as of March 31, 2022, compared to $12.7 million as of Dec. 31, 2021. Acer believes its cash and cash equivalents available as of March 31, 2022 will be sufficient to fund its currently anticipated operating and capital requirements into Q3 2022. Acer Therapeutics said "We have never been profitable and have incurred operating losses in each year since inception. From inception to March 31, 2022, we have raised net cash proceeds of $106.6 million, primarily from common stock offerings, private placements of convertible preferred stock, debt instruments, and convertible debt instruments. In addition, from inception to March 31, 2022, we have raised cash proceeds of $35.0 million from collaboration agreements. As of March 31, 2022, we had $20.8 million in cash and cash equivalents, and current liabilities aggregating to $27.6 million, which include $17.2 million associated with deferred collaboration funding, as well as a $0.8 million liability related to the securities class action and stockholder derivative actions legal costs, for which we have also recorded an asset of an equal amount representing the recovery from our insurance carriers. As of March 31, 2022, we had an accumulated deficit of $123.7 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. "If we are unable to raise additional funds through public or private equity or debt financings or other sources, such as non-dilutive funding or strategic collaborations, when needed, we may be required to delay, limit, reduce or terminate our product development or pursuit of regulatory approval efforts or provide rights to develop and market product candidates to third parties that we would otherwise prefer to develop and, if applicable, market ourselves. Further, if we are unable to obtain additional funding to support our current or proposed activities and operations, we may not be able to continue our operations as proposed, which may require us to suspend or terminate any ongoing development activities, modify our business plan, curtail various aspects of our operations, cease operations, or seek relief under applicable bankruptcy laws. In such event, our stockholders may lose a substantial portion or even all of their investment." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1069308/000156459022020405/acer-10q_20220331.htm Acer Therapeutics Acer Therapeutics -- http://www.acertx.com-- is a pharmaceutical company focused on the acquisition, development and commercialization of therapies for serious rare and life-threatening diseases with significant unmet medical needs. Acer's pipeline includes four clinical-stage candidates: emetine hydrochloride for the treatment of patients with COVID-19; EDSIVO (celiprolol) for the treatment of vascular Ehlers-Danlos syndrome (vEDS) in patients with a confirmed type III collagen (COL3A1) mutation; ACER-001 (a taste-masked, immediate release formulation of sodium phenylbutyrate) for the treatment of various inborn errors of metabolism, including urea cycle disorders (UCDs) and Maple Syrup Urine Disease (MSUD); and osanetant for the treatment of induced Vasomotor Symptoms (iVMS) where Hormone Replacement Therapy (HRT) is likely contraindicated. Each of Acer's product candidates is believed to present a comparatively de-risked profile, having one or more of a favorable safety profile, clinical proof-of-concept data, mechanistic differentiation or accelerated paths for development through specific programs and procedures established by the FDA. Acer Therapeutics reported a net loss of $15.37 million for the year ended Dec. 31, 2021, compared to a net loss of $22.89 million for the year ended Dec. 31, 2020. Boston, MA-based BDO USA, LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 2, 2022, 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. AFIQ CORPORATION: Case Summary & Nine Unsecured Creditors --------------------------------------------------------- Debtor: Afiq Corporation 125-26 50th Street Woodside, NY 11377 Business Description: The Debtor is the fee simple owner of two properties located in Flushing and Queens, New York having an aggregate current estimated value of $2.04 million. Chapter 11 Petition Date: May 24, 2022 Court: United States Bankruptcy Court Eastern District of New York Case No.: 22-41122 Debtor's Counsel: Jeb Singer, Esq. J. SINGER LAW GROUP, PLLC 165 Broadway 23rd Floor New York, NY 10006 Tel: 917-806-5832 Email: jsinger@singerlawgroup.com Total Assets: $2,040,100 Total Liabilities: $1,497,759 The petition was signed by Syed Mursalien as president. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LBIQBVI/Afiq_Corporation__nyebke-22-41122__0001.0.pdf?mcid=tGE4TAMA ALCON CONTRACTORS: Seeks Bankruptcy Protection ---------------------------------------------- Alcon Contractors LLC filed for chapter 11 protection in the Western District of Texas. According to court filing, Alcon Contractors 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) is slated for June 3, 2022 at 12:00 p.m. About Alcon Contractors Alcon Contractors -- https://www.alconcontractorstx.com/ -- is a leader in the field for quality construction. Alcon Contractors LLC sought Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No. 22-50498) on May 9, 2022. In the petition filed by Mark Garcia, as manager, Alcon Contractors estimated assets up to $50,000 and estimated liabilities between $1 million and $10 million. The case is overseen by Chief Bankruptcy Judge Craig A Gargotta. Morris E. "Trey" White III, Esq., of VILLA & WHITE LLP, is the Debtor's counsel. ALLEGIANT TRAVEL: Fitch Alters Outlook on 'BB-' IDR to Stable ------------------------------------------------------------- Fitch Ratings has affirmed Allegiant Travel Company's Long-Term Issuer Default Rating (IDR) at 'BB-', and has revised its Rating Outlook to Stable from Positive. In addition, Fitch has affirmed the company's first lien instruments at 'BB+'/'RR2'. The ratings and Outlook revision are driven by higher than expected leverage, driven by slower near-term growth, inflationary wage pressures, and fuel increases. Additionally, Allegiant's updated fleet strategy represents a material increase in cash spend throughout the rating horizon, which will pressure free cash flow. Nonetheless, Fitch expects profitability to continue to improve as yields rise and costs stabilize. KEY RATING DRIVERS Higher Than Anticipated Leverage: Fitch expects adjusted leverage (Total Adjusted Debt/ EBITDAR) to be in the mid 5x for 2022, higher than Fitch's prior forecast due to updated fleet planning and inflationary cost pressures. Fitch notes that Allegiant is one of the only carriers to refuse any CAREs act loan support, which signifies its ability to flex its business model and maintain its liquidity in stressed scenarios. Strong Demand Offset By Cost Pressures: Fitch anticipates strong top line growth over the rating horizon; however, rising wages and fuel prices have led to lower forecast operating margins compared to prior expectations. In 2022, revenue performance is expected to outpace 2019 by nearly a quarter, resulting from strong domestic leisure demand. Although topline growth will likely be robust, Fitch expects EBITDAR margins in the mid to upper teens over the short term. In comparison, the airline commanded nearly ~30% margins prior to the pandemic. As wages and fuel costs normalize, margins will likely trend back to the mid to upper 20s. Elevated Capital Spend: Allegiant's recent 737 MAX order announcement has increased capital spend and reduced FCF expectations over the medium term. The 737-7 and 737-8-200 MAX aircraft orders consist of 50 firm commitments and 50 additional options. Historically, the airline's strategy has been to purchase and operate used airbus types to minimize ownership costs. Fitch believes favorable terms from Boeing, engine similarity to current fleet types, and fuel efficiencies, will likely offset concerns related to ramp up costs and the moderate shift from this strategy. Additionally, management indicates that the new aircraft does not signal a divergence from its low utilization business model. Resilient Business Model: Fitch believes Allegiant has significant operational flexibility relative to other ultra-low cost and mainline carriers. This is evidenced by the company's ability to decrease capacity by 19% in 2020 and maintain positive EBITDA margins. The company estimates it operates 75% of routes with no competition, which provides some supplier power in niche markets. Additionally, with the Viva Aerobus partnership announcement, the company will extend its route map to Mexican leisure destinations, which is expected to partially offset the cyclicality of Allegiant's revenue generation. Fitch notes Allegiant has seen some smaller airline competition from startups such as Avelo and Breeze airlines, which were founded by former Allegiant and Jetblue executives. Fitch does not anticipate any material impacts from these new entrants, as only a limited amount of routes overlap, and pilot availability continue to limit growth. Strong Profitability: Allegiant was one of the only profitable airlines throughout the pandemic, driving mid-high single digit EBITDAR margins in 2020. Comparatively, other ULCCs such as Spirit Airlines experienced EBITDAR margins in the high negative teens. Fitch believes the differential is due the company's focus on domestic leisure routes, ability to flex capacity towards key markets, and its heightened share of non-competitive routes. Fitch expects the company to continue its strong performance; however, inflationary costs pressures will limit margin improvement. Sunseeker Resort: Fitch believes the Sunseeker resort represents a short-term risk to the rating while construction is ongoing. The resort, started in 2018 and slated for completion in early 2023, will likely provide limited revenue generation for the company in the 1st and 2nd quarter of 2023. Fitch has assumed a moderate increase in forecast spend of the project in light of higher material input costs. The construction represents a cash headwind in the near term; however, it can potentially become a profitable income stream for the airline. KEY ASSUMPTIONS -- Available seat miles increased by 15% in 2022 and in the low double digits thereafter; -- 2022 load factors increase to 79% throughout the year and slowly improve to low 80s over the rating horizon; -- Jet fuel prices rise to $3.00/gallon in 2022 ,subsequently normalizing within the $2.5-2.8 range throughout the forecast; -- CASM-ex increases to above 7 cents in 2022 and increases to the mid 7 cent range in 2023 and beyond; -- Yields are expected to improve in the low single digits throughout the forecast, with relatively flat growth in 2023; -- Capex averages ~30% of revenues throughout the forecast; -- Leverage falls to the low 3x range by 2024/2025; -- Sunseeker is finished in 2023 and contributes $70-$90 million of incremental revenue. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Total adjusted debt/operating EBITDAR sustained below 3.5x; -- FCF positive through the cycle; -- Successful completion of the Sunseeker resort and execution on growth strategy; -- Increased confidence in a sustainable recovery for leisure travel; -- Demonstrated ability to maintain RASM ahead of total CASM driving improving operating margins. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total adjusted debt/operating EBITDAR sustained above 4.50x; -- EBIT Margins falling in the mid-high single digits; -- FCF Margins neutral or negative across the cycle; -- Total liquidity falling below 15% of LTM revenue. 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 As of March. 31, 2022, the company held $1.26 billion of liquidity, encompassing $1.21 billion in cash and cash equivalents and full availability on its $50 million revolver due in 2023. Liquidity was bolstered in 2020 and 2021 via $211 million of net debt issuances, $357 million of CAREs act payroll support programs, and $301 million of net equity issuances. The company has $140 million of current debt, with larger maturities in 2024, including a $550 million Term Loan B and $150 million of senior secured notes. 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. ALLEN & HANDY: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- Allen & Handy Investments LLC asks the U.S. Bankruptcy Court for the District of Massachusetts for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to fund its ongoing operations. On July 18, 2018, the Debtor, to fund capital improvements to the Property, gave a mortgage to Stonington Capital LLC in the face amount of $575,000. The mortgage is recorded at Suffolk County Registry of Deeds in Book 59902 Page 67. The promissory note has matured and the Lender pursued its power of sale rights under the Mortgage. The Debtor filed the case on the eve of foreclosure. The Debtor has been actively pursuing refinance efforts with a more traditional lender terms. The Debtor believes it is a month or so away with a refinance. Alternatively, the Debtor will sell the Property. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, the Debtor proposes that the Lienholder is granted post-petition replacement lien(s) and security interests in the Debtor's property. The Replacement Liens will be recognized only to the extent of diminution in the value of the Lienholder's prepetition collateral constituting cash collateral resulting from the Debtor's use thereof in operation of the Debtor's ongoing operations. The Replacement Lien will maintain the same priority, validity, and enforceability as the Lienholder's liens on their pre-petition collateral. Since it continues to generative revenue, the Debtor believes granting the Replacement Lien suffices as adequate protection entitling the Debtor to use cash collateral. A copy of the motion and the Debtor's budget for the period from June to September 2022 is available at https://bit.ly/3MCStDk from PacerMonitor.com. The Debtor projects $5,500 in total income and $1,675 in total expenses. About Allen & Handy Investments LLC Allen & Handy Investments LLC owns a three-unit residential property known and numbered as 84 Esmond Street, Dorchester, Massachusetts. Based on a 2022 appraisal, the property is estimated to be worth $1,040,000. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-10681) on May 17, 2022. In the petition signed by Peter Handy, manager, the Debtor disclosed up to $1 million in both assets and liabilities. Michael Van Dam, Esq., at Van Dam Law LLP is the Debtor's counsel. ALLIANCE MECHANICAL: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------------- Alliance Mechanical, LLC asks the U.S. Bankruptcy Court for the Western District of Oklahoma for authority to use cash collateral and provide post-petition liens. The Debtor contends it has an urgent need for the immediate use of cash collateral pending a final hearing on the Motion as it lacks sufficient cash to operate. The Debtor alleges Arvest Bank and the Internal Revenue Service may hold validly perfected and enforceable liens on and security interests in, among other things, the Debtor's accounts, inventory, equipment, machinery and general intangibles, and all proceeds thereof, all as more particularly described and evidenced by those several security agreements executed by the Debtor on various dates and perfected by various financing statements filed with the Oklahoma Secretary of State on various dates, respectively, and the various liens filed by the IRS. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, the Debtor proposes to grant the Secured Creditors a validly perfected first priority lien on and security interests in the Debtor's post-petition Collateral subject to existing valid, perfected and superior liens in the Collateral held by other creditors, if any, and the Carve-Out. The post-petition security interests and liens proposed to be granted will be valid, perfected and enforceable and shall be deemed effective and automatically perfected as of the Petition Date without the necessity of the Secured Creditors taking any further action. A copy of the motion is available at https://bit.ly/38CT0qm from PacerMonitor.com. About Alliance Mechanical, LLC Alliance Mechanical, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 22-11002) on May 16, 2022. In the petition filed by Keith Trout, Jr., president, the Debtor disclosed $100,000 in assets and up to $500,000 in liabilities. Gary D. Hammond, Esq., at Mitchell & Hammond oversees the case. ALLSPRING BUYER: S&P Rates $250MM Senior Secured Term Loan 'BB-' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' debt rating to Allspring Buyer LLC's incremental $250 million senior secured term loan due 2028. The recovery rating on the senior secured debt remains '4', indicating S&P's expectation for an average (40%) recovery. The issuance will bring the company's total gross debt to $1.35 billion. Allspring will use the proceeds to finance a distribution to shareholders. With the additional debt, S&P expects Allspring's leverage to rise slightly to the mid- to high-4x range. Its base case calls for leverage to remain below 5.0x during the next 12 months, while the company's investment performance, profitability and AUM levels remain largely stable. S&P's issuer credit rating on Allspring is unchanged and the outlook remains stable. Issue Ratings--Recovery Analysis Key analytical factors -- S&P's recovery analysis includes the company's $170 million senior unsecured revolving credit facility due 2026, its $1.1 billion senior secured term loan due 2028 and its new $250 million senior secured term loan due 2028. -- S&P applies a 5.0x multiple for all asset managers because it believes this represents an average multiple for asset managers emerging from a default. -- S&P's simulated default includes poor investment performance or market depreciation leading to a substantial reduction of AUM and a decline in EBITDA sufficient to trigger a payment default. Simplified waterfall -- Emergence EBITDA: $132 million -- Multiple: 5.0x -- Gross recovery value: $660 million -- Net recovery value for waterfall after 5% administrative expenses: $627 million -- Obligor/nonobligor valuation split: 100%/0% -- Estimated priority claims: None -- Remaining recovery value: $627 million -- Estimated first-lien claim: $1,472 million -- Value available for first-lien claim: $627 million -- Recovery range: 40% ALUMINUM SHAPES: June 16 Hearing on Disclosure Statement -------------------------------------------------------- The Honorable Jerrold N. Poslusny, Jr., will convene a hearing on the adequacy of the Disclosure Statement of Aluminum Shapes, L.L.C. will be held on June 16, 2022 at 10:00AM in Courtroom 4C, 400 Cooper Street, Camden, NJ 08101. Written objections to the adequacy of the Disclosure Statement must be filed and served upon no later than 14 days prior to the hearing before the Court, unless otherwise directed by the court. Notice of said hearing must be sent by the Clerk of the Bankruptcy Court in accordance with the provisions of Bankruptcy Rule 3017 (a) at least 28 days prior to the hearing date. About Aluminum Shapes Aluminum Shapes, L.L.C., is presently engaged in the business of fabrication and processing of aluminum by extrusion and is the owner of certain commercial/industrial real estate located at 9000 River Road, Delair, New Jersey. Jacky Cheung, an Australian national and resident of Vietnam, owns 100% of the membership interests and is the sole member of the Company. Aluminum Shapes filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 21-16520) on August 15, 2021, with a deal to sell the business to Reich Brothers, LLC. The Debtor estimated $10 million to $50 million in assets and liabilities as of the bankruptcy filing. Obermayer Rebmann Maxwell & Hippel LLP, led by Edmond M. George, is the Debtor's bankruptcy counsel. Riveron Consulting's Winter Harbor, LLC, is the interim management provider. Cowen and Company, LLC, is the investment banker. Berwyn Capital Interests is the restructuring agent. AMERICAN ROCK: Moody's Lowers CFR to B3, Outlook Stable ------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of American Rock Salt Company LLC (ARS) to B3 from B2, the probability of default rating to B3-PD from B2-PD, the rating of a first lien secured term loan to B3 from B2 and the rating of a second lien secured term loan to Caa2 from Caa1. The ratings outlook is stable. Downgrades: Issuer: American Rock Salt Company LLC Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured First Lien Term Loan, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured Second Lien Term Loan, Downgraded to Caa2 (LGD6) from Caa1 (LGD6) Outlook Actions: Issuer: American Rock Salt Company LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE The ratings downgrade reflects a material increase in financial leverage which was driven by a debt- financed recapitalization undertaken by the company in 2021 which constrained its ability to withstand high variability in winter conditions and maintain a credit profile appropriate for the B2 rating during mild winters. The rating action also reflects a substantial increase in ARS's operating and transportation costs over the last 12 months, mild 2021-2022 winter season that resulted in a relatively low demand for deicing salt and aggressive bidding behavior by a key competitor that forced the company to defend its market share which impacted its profitability. The B3 CFR reflects ARS's limited scale with a single mine, lack of business diversity and weather-dependent business model that results in volatile credit metrics and cash flow generation. The rating is supported by the company's sector leading operating margins, highly variable cost structure, typically strong cash flow from operations and low capital expenditures partially offset by a dividend policy that has historically led to significant shareholder distributions. Factors that further support the rating are high barriers to entry in rock salt mining industry and cost advantages in the company's primary markets in western and central New York and Pennsylvania due to favorable access to truck and rail transportation and operating one of the lowest cost and the newest salt mines in the United States. The rating also reflects ARS's adequate liquidity and expectations that the owners would support the company during periods of exceptionally weak snowfall (e.g., two or more consecutive warm winters). Moody's estimates that ARS's FY2022 EBITDA, as adjusted by Moody's, will be modestly lower on y-o-y basis, with FY2022 adjusted Debt/EBITDA relatively unchanged at 8.5x. Assuming average 2022-2023 winter conditions, rational bidding season behavior by the industry participants, price increases to offset the inflationary pressures and that ARS will use the majority of anticipated free cash flow for debt repayment, Moody's expects adjusted debt/EBITDA to decline to around 7.5x by the end of FY2023. However, should the markets the company serves experience below-average winter conditions, if operating and transportation costs continue to increase above and beyond the implemented price increases or if competition continues to follow aggressive bidding practices, leverage could remain well in excess of 8x in FY2023. The company is expected to remain modestly free cash flow positive during mild winters. The stable outlook reflects Moody's expectation that the company continues to generate free cash flow through mild winters. The stable outlook also assumes the company does not perform another dividend recapitalization and continues to reduce gross debt. By the nature of its business, i.e., deriving nearly 100% of its revenues from underground mining of rock salt deposits, American Rock Salt faces a number of ESG risks typical for a company in the mining industry including compliance with stringent health, safety and environmental regulations. The company is subject to many and varied environmental laws and regulations in the areas where it operates. However, the ESG risks for ARS are generally lower than those of base and precious metals producers because salt mining is considered less hazardous and requires less processing (crushing and grinding). The company needs to maintain social relationships with the community surrounding its mine. The governance risk is above average given the company's private ownership has shown to support an aggressive dividend policy with a significant amount of cash flows that had historically been distributed to shareholders. American Rock Salt's is expected to have adequate liquidity for at least the next 12 months. Moody's anticipate positive free cash flow on an annual basis but expect significant quarterly variation due to the seasonality of the salt business and need to build up inventories in advance of the selling season. The company builds cash on the balance sheet in the first and second fiscal quarters (fourth and first calendar quarters) as it collects accounts receivable from the snow season and uses most of its cash in the third and fourth fiscal quarters. Moody's expect the company will rely on its $70 million asset-based revolving credit facility (unrated) to fund inventory build before collecting significant cash in the first calendar quarter of the year. As of December 31, 2021, ARS had $8 million in cash on hand and $39.8 million drawn under the revolving credit facility. The revolver is subject to borrowing base and will expire in 2026. The revolver commitment steps down to $35 million from March to August each year and contains a springing fixed charge coverage ratio test of 1.1x if revolver excess availability is less than 10% of the borrowing base. Moody's do not expect the covenant will be triggered over the next four quarters. The senior secured first lien term loan due 2028 is rated B3, on par with the B3 CFR, reflecting its large proportion of the overall debt. It has a first priority lien on all fixed domestic assets, salt reserves and minerals rights. The senior secured second lien term loan due 2029 is rated Caa2, reflecting its subordinate position in the capital structure relative to the first lien term loan and the $70 million asset-based revolver (unrated) due 2026 that has a first priority lien on current assets. The term loans are guaranteed by all material domestic subsidiaries of the borrower American Rock Salt Company LLC. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is unlikely in the near term given high gross debt levels and history of re-levering the company. However, Moody's would consider an upgrade if the company pays down debt so that in mild (trough) winter conditions leverage does not exceed 6x, interest coverage remains above 2x on a sustained basis, the company generates positive free cash flow and maintains good liquidity and a conservative financial policy (i.e., does not continually dividend out excess cash or lever up to take advantage of improved earnings). Moody's could downgrade the rating if in mild (trough) winter conditions leverage exceeds 8x on a sustained basis, interest coverage falls and remains below 1.25x and liquidity (cash plus revolver availability) declines below $30 million. Moody's could also downgrade the rating if the company undertakes a large debt-financed acquisition or another dividend recapitalization. American Rock Salt Company LLC produces highway deicing rock salt. The company operates a single mine in upstate New York and sells primarily to state and local government agencies in the northeastern United States. The firm is a wholly owned subsidiary of American Rock Salt Holdings LLC, which is closely held by private investors including some members of management. The company does not publicly disclose its financial statements. Headquartered in Retsof, NY, American Rock Salt generated approximately $220 million in revenue for the twelve months ended December 31, 2021. The principal methodology used in these ratings was Chemical Industry published in March 2019. ANTICANCER INC: Wins Cash Collateral Access Thru June 2 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized Anticancer, Inc. to use cash collateral on an interim basis in accordance with the budget until the continued hearing, including the one-time set aside of $3,000 for the benefit of San Diego Gas & Electric, but excluding the payment of taxes. As adequate protection, parties possessing a lien in the Debtor's cash collateral on the petition date will possess a valid, perfected, continuing replacement lien in the Debtor's post-petition inventory and accounts receivable in an amount equal to their allowed interest, if any, in the cash collateral existing as of the petition date in the order of the Secured Parties' relative priorities. The Replacement Lien will be a valid, continuing, and perfected lien without the need for any execution, filing or recordation of any mortgage, deed or trust, security agreement, pledge agreement, or financing statement of any kind. The continued hearing on the matter is scheduled for June 2, 2022 at 9:30 a.m. A copy of the order and the Debtor's six-month budget is available at https://bit.ly/3sONOq6 from PacerMonitor.com. The Debtor projects $38,600 in total cash income and $35,379 in total expenses for the first month. About Anticancer, Inc. Anticancer, Inc. produces a treatment designed to block the effects of the amino acid methionine in the body. When successful, the treatment can lead to the destruction of cancer cells, which appear to be addicted to methionine. Anticancer also specializes in the production and use of what are referred to in the scientific community as athymic "nude" mice, which are specially bred mice capable of growing a human tumor for the purpose of experimentation. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No. 22-01058) on April 21, 2022. In the petition signed by Robert M. Hoffman, president, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Laura S. Taylor oversees the case. Kit J. Gardner, Esq., at the Law Offices of Kit J. Gardner is the Debtor's counsel. APHEX BIOCLEANSE: Files Chapter 11 Subchapter V Case ---------------------------------------------------- Aphex BioCleanse Systems, Inc. (OTCPK: SNST) has filed a voluntary petition in Tampa, Florida, under Chapter 11, Subchapter V, of the Bankruptcy Code . The filing was precipitated by the litigatory actions of certain former Directors and Officers that while unfounded have damaged the business integrity of the Company and endangered the Company's shareholders as well as inhibiting the ability of the Company to raise working capital and market its products. The actions of these persons have included illegal and unfounded filings in Nevada, and numerous erroneous and illegal emails and communications designed to misinform Company Shareholders and Distributors. This includes the Former CEO and Chairman executing false documents impersonating the CEO and other Officer Titles of the Company MONTHS after being terminated for cause. This former CEO is now instrumental in leading the attempts to damage and take over the company. Aphex plans to submit a timely reorganization plan and seek Debtor in Possession Financing to drive the marketing of its unique sanitizing water known as Hy-IQ and related products. About Aphex BioCleanse Systems Aphex BioCleanse Systems Inc. is the developer of the world's first proprietary non-alcohol, non-toxic, hydrogen-based cleaning technology, and has been producing germ killing solutions for over 10 years. The technology, called Hy-IQ Water, has a unique method of sanitizing that uses hydrogen ions traveling nearly at the speed of light to breach the cell walls of exoskeleton germs. Aphex BioCleanse Systems filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01917) on May 12, 2022. In the petition filed by David Olund,as president, Aphex BioCleanse Systems Inc. listed total assets amounting to $450,093 and total liabilities of $1,213,865. Laurie L. Blanton, Esq., of HOLLAND LAW GROUP, P.A., is the Debtor's counsel. AR TEXTILES: Sale Proceeds to Pay Creditors Under Plan ------------------------------------------------------ AR Textiles, Ltd., submitted a Second Amended Disclosure Statement. The Plan contemplates a reorganization of the Debtor's liabilities and obligations, including those to both secured creditors and unsecured creditors. In accordance with the Plan, the Debtor intends to sell its assets and liquidate the insurance claims that the Debtor has under certain insurance policies that were issued by the Cincinnati Insurance Group for loss revenue, business interruption and property damage sustained to the real property and personal property utilized in its textile manufacturing operations, with the proceeds generated therefrom being utilized to satisfy the claims of secured creditors and unsecured creditors. Subject to approval of the Court under Section 363 of the Bankruptcy Code and Bankruptcy Rule 6004, the sales proceeds will be distributed as follows: * First, to payment of the DLUSA Secured Claim in Class 5 and, if the Facility is included within the Assets purchased, the EMC Secured Claim in Class 6, in accordance with the treatments set forth in this Plan; * Second, payment of the Allowed Claims contained in Classes 1, 2, and 3 of the Plan, in accordance with the treatments set forth in this Plan; * Third, and provided that the Allowed Claims contained in Classes 1, 2, and 3 of the Plan are paid, in full, the sum of $110,000, to the Allowed General Unsecured Claims in Classes 8 and 9, in accordance with the treatments set forth in the Plan; and * Fourth, and provided that the Allowed General Unsecured Claims totaling $124,980.77 contained in Classes 8 and 9 are paid, in full and in accordance with the treatment set forth in this Plan, to the ARI Secured Claim contained in Class 4. Classes 8 and 9 are impaired. Sources of revenue/income are from proceeds generated from sale of assets and recovery in insurance litigation. Counsel for the Debtor AR Textiles, Ltd.: Joseph Z. Frost, Esq. BUCKMILLER, BOYETTE & FROST, PLLC 4700 Six Forks Road, Suite 150 Raleigh, North Carolina 27609 Tel: (919) 296-5040 Fax: (919) 977-7101 E-mail: jfrost@bbflawfirm.com A copy of the Disclosure Statement dated May 18, 2022, is available at https://bit.ly/3MzYwZl from PacerMonitor.com. About AR Textiles Robersonville, N.C.-based AR Textiles Ltd. filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 21-01441) on June 28, 2021. In the petition signed by Pasqual Alles, vice president, the Debtor disclosed $5,744,986 in assets and $22,227,509 in liabilities. Judge David M. Warren oversees the case. Joseph Z. Frost, Esq., at Buckmiller, Boyette & Frost, PLLC is the Debtor's legal counsel. ARCHDIOCESE OF SANTA FE: Hires Rep for 'Unknown' Tort Claimants --------------------------------------------------------------- The Roman Catholic Church of the Archdiocese of Santa Fe seeks approval from the U.S. Bankruptcy Court for the District of New Mexico to employ Michael Hogan, Esq., a principal at Hogan Mediation, as representative for persons holding unknown tort claims. Mr. Hogan's services include: a. undertaking an investigation and analysis to assist the court in determining the estimated number and amount of unknown tort claims; b. filing proofs of claim on behalf of all unknown tort claimants; c. negotiating with the Debtor and other appropriate parties the plan provisions for the evaluation, determination and amounts of unknown tort claims, and the number of unknown tort claimants; d. advocating the legal position of the unknown tort claimants before the court, and if necessary, filing pleadings and presenting evidence on any issue affecting unknown tort claims; e. taking all other legal actions necessary to represent the interests of unknown tort claimants; and f. serving as an independent fiduciary acting on behalf of all unknown tort claimants. Mr. Hogan will charge $560 per hour for his services. In court filings, Mr. Hogan disclosed that he is a disinterested person with regard to the Debtor's Chapter 11 case. Mr. Hogan can be reached at: Michael R. Hogan Hogan Mediation P.O. Box 1375 Eugene, OR 97440 About Roman Catholic Church of The Archdiocese of Santa Fe The Roman Catholic Church of the Archdiocese of Santa Fe -- https://www.archdiosf.org/ -- is an ecclesiastical territory or diocese of the southwestern region of the United States in the state of New Mexico. At present, the Archdiocese of Santa Fe covers an area of 61,142 square miles. There are 93 parish seats and 226 active missions throughout this area. The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr. D.N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse claims. It reported total assets of $49,184,579 and total liabilities of $3,700,000 as of the bankruptcy filing. Judge David T. Thuma oversees the case. The archdiocese tapped Elsaesser Anderson, Chtd. and Walker & Associates, P.C., as bankruptcy counsel; Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A as special counsel; and REDW, LLC as accountant. ARRAY TECH: Moody's Lowers CFR to B3, Outlook Remains Stable ------------------------------------------------------------ Moody's Investors Service downgraded the CFR and PDR of Array Tech, Inc. to B3 and B3-PD, respectively from B2 and B2-PD. Concurrently, Moody's affirmed Array's first lien senior secured bank debt ratings at B1. The company's Speculative Grade Liquidity (SGL) rating remains unchanged at SGL-3, reflecting adequate liquidity. The ratings outlook is stable. The rating downgrades were driven by continued macroeconomic-related supply chain and inflationary cost pressures, accentuated by the negative impact of an ongoing investigation related to the circumvention of antidumping and countervailing duties on Chinese imports that is delaying solar project related work. Due to the aforementioned, Moody's expects that meaningful near-term deleveraging will be challenging, particularly after the increase in debt used to finance the January 2022 acquisition of Spain-based, Soluciones Tecnicas Integrales Norland S.L. (STI). Downgrades: Issuer: Array Tech, Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Affirmations: Issuer: Array Tech, Inc. Senior Secured 1st Lien Bank Credit Facilities (Term Loan and Revolver), Affirmed at B1 (LGD2 from LGD3) Outlook Actions: Issuer: Array Tech, Inc. Outlook, Remains Stable RATINGS RATIONALE Array's B3 CFR reflects very high financial leverage (debt/EBITDA over 10x for the last twelve months ended 3/31/22) and negative free cash flow. The company's business is also characterized by inherent earnings and free cash flow volatility due to the project nature of the company's work. The January 2022 STI acquisition -- while it will increase scale and geographic diversity – also results in higher financial leverage, and adds integration and execution risk as it enters into new international markets. The aforementioned considerations are balanced against adequate liquidity, a strong market position, patent protection and a healthy backlog that will support revenue growth in 2022 and 2023. Moody's expects that financial leverage will gradually decline as earnings improve, over the next 12-18 months, stemming from backlog conversion and the company's actions to mitigate the impact of steel price increases, logistics, supply chain and other inflationary cost pressures. The ratings outlook is stable, reflecting Moody's expectation that the company's financial leverage and liquidity will improve by 2022 year-end as the company converts its backlog into sales and the benefits of higher pricing in new contracts replaces lower margin legacy contract work. The SGL-3 reflects Moody's expectation that the company will maintain adequate liquidity. Near-term Moody's expects continued negative free cash flow with improvement occurring in the second half of the year. Liquidity is supported by the company's $50 million cash balances, access to $100 million of preferred shares and a modest amount under its $200 million revolver, constrained by the company's springing financial covenant but expected to increase through the year. The company has no near term debt maturities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The company's ratings could be downgraded if the company's liquidity weakens including free cash flow remaining negative beyond 2022 year-end and financial leverage does not improve to the mid 6 times range. More aggressive financial policies, including use of cash towards another meaningful acquisition or dividends rather than debt repayment would also exert downward ratings pressure. The ratings could be upgraded if Array successfully integrates the STI acquisition without any material operating disruption and restores its own profitability such that debt-to-EBITDA meaningfully improves to and is sustained below 5.5x and free cash flow to debt is sustained in the double digits. The ratings could also be upgraded if the nature of Array's business changes such that the company demonstrates reduced quarterly earnings and cash flow variability. Headquartered in Albuquerque, New Mexico, Array Technologies, Inc., the parent company of Array Tech, Inc., manufactures ground-mounting systems used in solar energy projects. The company generated revenues of approximately $906 million for the last twelve months ended March 31, 2022. The principal methodology used in these ratings was Manufacturing published in September 2021. ARRAY TECHNOLOGIES: S&P Downgrades ICR to 'B', Outlook Negative --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Array Technologies Inc. to 'B' from 'B+'. At the same time, S&P lowered the issue-level rating on Array's senior secured debt to 'B+' from 'BB-'. The recovery rating remains '2'. The convertible notes are not rated. S&P said, "The negative outlook reflects an at least one-in-three chance we could lower the rating if Array were unable to improve its gross margin in the next few quarters, which would lead to reduced operating cash flow prospects, potential liquidity pressure, and adjusted leverage remaining high for longer than we currently anticipate. This could occur if projects were delayed beyond our base case scenario or incremental projects were delayed or cancelled because of module supply uncertainty or because of incremental supply chain challenges. "The downgrade reflects our forecast for adjusted leverage to remain high--at about 10x--through 2022. Our 2022 adjusted EBITDA forecast is now meaningfully lower than our previous forecast because of the loss of revenue and associated EBITDA from project delays and because of greater-than-anticipated expenses in the first quarter of 2022 associated with certain projects at Soluciones Tecnicas Integrales Norland S.L. (STI), which we do not expect to recur. This lower EBITDA translates to S&P Global Ratings--adjusted leverage remaining at about 10x through 2022, which is significantly higher than our previous assumption that Array would meaningfully deleverage by the end of this year. Industry disruptions will negatively affect operating performance this year and potentially into 2023. Array expects 2022 revenue to be about $225 million-$250 million lower this year because of the impact of U.S. solar project delays stemming from uncertainty around module supply. This follows the initiation by the U.S. Department of Commerce of an anti-dumping and countervailing duties investigation around solar panel imports from Asia. Almost three-fourths of the Solar Energy Industries Association survey respondents have already been told their shipments are delayed or cancelled due to the investigation. S&P believes the investigation will likely lead to tariffs on module imports and may have a modestly negative impact on industry spend over the next year. Furthermore, domestic module manufacturing is not adequate, and it would take years to build the supply chain needed. In addition, uncertainty around module supply has increased the complexity of managing the supply chain and logistics, which may contribute to further margin pressure. S&P said, "Notwithstanding continued supply chain challenges, we believe Array will improve its EBITDA margin through 2022. Although we expect Array to continue to face heightened commodity and logistics costs through the year, we anticipate that, by the third quarter, the company will have addressed many of the drivers that pressured EBITDA in the previous few quarters. Beginning in the third quarter, revenue should be composed largely of contracts that incorporate improved pricing dynamics, compared with most of the contracts that were in the backlog and executed through the beginning of 2022. For the full year, we expect the company to achieve adjusted EBITDA margins of between 7% and 8%, driven by its performance in the second half of 2022." Nevertheless, if Array is unable to offset input cost increases sufficiently, or if further projects are delayed, this may hamper the company's ability to improve its EBITDA and cash flow prospects. S&P said, "Despite near-term challenges, we believe demand for solar as a form of energy will support longer-term growth prospects for Array. This is evidenced by the company's orderbook, which increased over 100% organically by the end of fiscal 2021 compared with the previous year. Including STI, the company's orderbook expanded to $2 billion, mostly related to increased volume versus price increases. Overall, the solar industry continues to point to long-term growth despite the current headwinds related to the U.S. Commerce Department investigation and previously mentioned issues. We expect the solar industry to continue to outgrow other energy industries and to grow to 6% of the total global energy generation mix, from 3% currently. "The negative outlook reflects an at least one-in-three chance we could lower the rating if Array were unable to improve its gross margin in the next few quarters, which would lead to reduced operating cash flow prospects, potential liquidity pressure, and adjusted leverage remaining high for longer than we currently anticipate. This could occur if projects were delayed beyond our base case scenario or incremental projects were delayed or cancelled because of module supply uncertainty or because of incremental supply chain challenges. "We may lower our ratings on Array over the next 12 months if the company's adjusted debt leverage remained above 7x with weak free operating cash flow." This could occur if: -- Project delays continued and postponed the realization of revenue and earnings beyond the next year, -- Gross margin did not improve meaningfully in the next few quarters, or -- It became apparent that the company were unable to generate consistent positive free cash flow. S&P may revise its rating outlook on Array to stable over the next 12 months if: -- Operating conditions rebounded rapidly such that S&P believed -- Array could maintain adjusted debt leverage of less than 7x, -- Gross margin improved meaningfully by the second half of this year, and -- Array established a record of generating consistent operating profitability and positive operating cash flow. ESG credit indicators: E-1, S-2, G2 S&P said, "Environmental credit factors are a positive consideration in our credit rating analysis of Array Technologies Inc. The company's position as a leading provider of tracker systems used in commercial-scale solar energy generation projects will allow it to benefit from customers' and investors' increased focus on ESG and climate transition. The scope of its business is tied to favorable trends in this transition. As such, and notwithstanding the short-term impact from the ongoing U.S. Department of Commerce investigation, we expect Array will benefit from the favorable secular demand for renewable energy, which will support increasing earnings and cash flow over time." ARTERA SERVICES: S&P Alters Outlook to Negative, Affirms 'B-' ICR ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on U.S.-based gas utility service provider Artera Services LLC and revised our outlook to negative from stable. S&P said, "At the same time, we affirmed our 'B-' issue-level ratings on the company's first-lien term loan, revolving line of credit, and senior secured notes. The recovery rating is '3', indicating our expectation of meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a default. "In addition, we affirmed our 'CCC' rating on the company's second-lien term loan. The recovery rating is '6', indicating our expectation of negligible (0%-10%; rounded estimate: 0%) recovery in the event of a default. "The negative outlook reflects higher-than-expected debt leverage entering 2022. We assume free cash flow will turn positive at year end, but believe the company faces increased risk of sustained negative free operating cash flow (FOCF). "Debt to EBITDA increased compared with our previous forecast, however we assume leverage will begin to improve in the second half of this year. Pro forma for the debt-financed acquisitions completed in 2021, Artera entered 2022 with adjusted debt to EBITDA around 9x, higher than our previous expectations. The company is facing inflationary cost pressures, which have resulted in weaker-than-expected operating performance. In addition, volumes have declined in the company's transmission segment, with fewer large projects booked as previous projects have completed. However, mandates to maintain gas utility infrastructure in the U.S. underpins 2022 demand. The company has exited its electric business and plans to focus investments in its gas businesses. We anticipate better pricing on its contracts will somewhat mitigate the ongoing impact of inflation. "We assume incremental improvements in FOCF in 2022. We assume cash flows improve in the second half of 2022, with improving earnings. In our view, due to the company's direct labor workforce, Artera has ability to adjust its cost structure based on customer demand. Additionally, we assume some working capital benefits later this year. This improvement in cash flow is despite an increase in capital expenditure (capex) spending for 2022 compared with 2021. The rating on Artera reflects its position in the highly fragmented and competitive utility services industry. Artera's recent acquisitions expanded the company's geographic footprint and coverage network throughout the U.S. S&P siad, "However, we believe its geographic reach is limited compared with larger global industry peers, as its focus is on providing gas distribution and gas transmission services in the U.S. It derives a large portion of revenues from a limited number of large public utilities entities, although no single customer represents more than 5% of revenue. Overall, we believe demand in the company's end markets will remain healthy, reflecting the need for safe and reliable utilities infrastructure in the U.S." The negative outlook reflects higher-than-expected debt leverage entering 2022. S&P assumes free cash flow will turn positive at year end, but believe the company faces higher risk of sustained negative FOCF. S&P said, "We could lower the ratings within the next 12 months if weaker-than-expected operating performance results in sustained negative FOCF or strained liquidity. This could occur if profitability declines further, leading to substantial negative cash flow. Alternatively, we could lower the ratings if we believe Artera depends on favorable business, financial, and economic conditions to meet its financial commitments. We could also do so if we view the company's financial commitments as unsustainable in the long term, even though it may not face a credit or payment crisis within the next 12 months. "We could revise the rating outlook to stable if the company successfully generates positive free cash flow on a sustained basis. We believe this could occur if the company maintains or improves EBITDA margins versus 2021, which would require them to offset inflationary pressures with contract pricing. For a stable outlook we would also look for at least adequate liquidity." ESG credit indicators: E2, S2, G3 ATIS HOLDINGS: Gets Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized Atis Holdings LLC to use cash collateral on an final basis in accordance with the budget. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Bankruptcy Court, including required payments to the Subchapter V Trustee; (b) the current and necessary expenses set forth in the preliminary budget attached to the Motion plus an amount not to exceed 10% for each line item; and (c) additional amounts as may expressly approved in writing by Valley National Bank and Dexter Financial Services, Inc. The Debtor is directed to make, commencing April 1, 2022, and continuing monthly, adequate protection payments in the amount of $500 to Valley National Bank. Each creditor with a security interest in the cash collateral will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the prepetition lien, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. The Debtor will maintain insurance coverage for its real and personal property in accordance with its obligations under any loan and security documents with any secured creditors. A copy of the order https://bit.ly/3MC3sNs from PacerMonitor.com. About Atis Holdings Atis Holdings LLC is an operator of coin-operated laundries and drycleaners located at 16226 Bridgepark Drive Lithia, FL 33547. Atis Holdings LLC filed a petition under Chapter 11 Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00919) on March 9, 2022. In the petition filed by Sandra K. Kainins, as managing member, Atis Holdings estimated total assets between $100,000 and $500,000 and total liabilities between $100,000 and $500,000. Judge Catherine Peek McEwen oversees the case. James W. Elliott is the Debtor's counsel. BAMC DEVELOPMENT: Gets Access to MTGLQ Cash Collateral ------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized BAMC Development Holding, LLC to use cash collateral on an interim basis in accordance with the budget and provide adequate protection. The Debtor is permitted to use cash collateral to pay amounts expressly authorized by the Court, including payments to the U.S. Trustee for quarterly fees, insurance premiums and adequate protection to the secured lender, MTGLQ Investors, L.P. and such additional amounts as may be expressly approved in writing by MTGLQ. The authorization will continue until further Court order. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, the Secured Creditor will be paid monthly adequate protection payments of interest equal to 4.25% per annum of the judgment amount of $206,887, which will be paid by the Debtor in monthly payments in the amount of $733. The first adequate protection payment is due June 1, 2022, and all subsequent payments to be made on the first day of the month thereafter. Each creditor with a security interest in cash collateral will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the prepetition lien, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Secured Creditor. A copy of the order is available at https://bit.ly/3wBRyxD from PacerMonitor.com. About BAMC Development Holding, LLC BAMC Development Holding, LLC is a Florida limited liability company that owns in fee simple a parcel of real property located at 212 South Fremont Ave. in Tampa, Florida. The Property is partially leased to a bar/cafe for parking and is sub-leased for residential purposes. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01487) on April 31, 2022. In the petition signed by Thomas Ortiz, managing member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Catherine Peek McEwen oversees the case. Leon Williamson, Esq., at Law Office of Leon A. Williamson, Jr., P.A. is the Debtor's counsel. BDS MARKETING: Status Conference Continued to Sept. 27 ------------------------------------------------------ Judge Mark Houle has entered an order that the status conference of BDS Marketing, LLC, is continued to Sept. 27, 2022, at 2:00 p.m. in Courtroom 301 of the United States Bankruptcy Court, located at 3420 Twelfth Street, Riverside, California 92501. An updated Chapter 11 status report is due to be filed by the Debtor no later than September 20, 2022. The deadline for Proofs of Claim to be filed is July 15, 2022. Debtor must file and serve its Disclosure Statement and Plan of Reorganization no later than August 15, 2022. The deadline to approve the Debtor's Disclosure Statement is Oct. 15, 2022. The deadline for the Debtor's Chapter 11 Plan to be confirmed is Dec. 15, 2022. Proposed attorneys for BDS Marketing, LLC, a Montana limited liability company: Robert P. Goe, Esq. Brandon J. Iskander, Esq. GOE FORSYTHE & HODGES LLP 18101 Von Karman Avenue, Suite 1200 Irvine, CA 92612 Telephone: (949) 798-2460 Facsimile: (949) 955-9437 E-mail: rgoe@goeforlaw.com About BDS Marketing BDS Marketing, LLC, hosts special events in the City of Palm Springs, Calif. BDS Marketing sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 22-11340) on April 13, 2022. In the petition filed by Steve Hamilton, sole member, BDS Marketing listed up to $50,000 in assets and up to $100,000 in liabilities. Judge Magdalena Reyes Bordeaux oversees the case. Robert P. Goe, Esq., at Goe Forsythe & Hodges, LLP, is the Debtor's legal counsel. BROOKFIELD WEC: Fitch Affirms 'B' IDRs Amid BHI Energy Deal ----------------------------------------------------------- Fitch Ratings has affirmed Brookfield WEC Holdings Inc.'s and Brookfield WEC Holdings Sub-Aggregator LP's (WEC; operating under the name Westinghouse Electric Company) Long-Term Issuer Default Ratings (IDRs) at 'B'. The Rating Outlook is Positive. Fitch has rated the new $550 million senior secured term loan 'B+'/'RR3', in line with the existing senior secured revolving credit facility (RCF) and term loan. Fitch has also affirmed WEC's asset-based lending (ABL) facility at 'BB'/'RR1'. KEY RATING DRIVERS Positive Outlook Retained Post-Announcement: WEC has entered an agreement to acquire BHI Energy (BHI) for around $720 million. Fitch views the transaction as neutral to the ratings, and the Rating Outlook remains Positive. Although Fitch expects debt/EBITDA to rise to about 4.4x in 2023, Fitch continues to expect leverage to improve into the low-4.0x range thereafter. Fitch expects EBITDA interest coverage to remain at or above 4.0x. BHI brings a market leading position, recurring demand profile and flexible cost structure. Fitch expects to resolve the Outlook in the next 18-24 months, as the company executes on organic growth strategies and profitability targets, as well as integrates BHI, achieves stated synergies, and pays down borrowings under its revolving credit facilities, while achieving metrics consistent with 'B+' rating tolerances. Leverage Settles in Low-4.0x: Fitch expects the transaction to be primarily debt funded, and that WEC will utilize $550 million of term loan, about $155 million across its ABL facility and revolver, and $50 million of cash to fund the acquisition and transaction costs. Fitch expects the company to largely repay ABL and revolver borrowings over the 12 months following close. Fitch expects that Debt/EBITDA in 2023, which reflects the full year impact of BHI, will be around 4.4x before improving to the low-4.0x range due to a mix of cost synergies, term loan amortization and legacy cost reduction programs. These expectations are balanced with ongoing M&A and distributions to the private equity sponsor, Brookfield Asset Management. Financial Flexibility Remains a Strength: Fitch expects EBITDA interest coverage to be around 4.0x in 2023, before improving to the mid-4.0x as synergies are realized. WEC's coverage is stronger than the 'B' category midpoint for diversified industrial firms. In addition, Fitch expects capital deployment plans will focus on internal growth investments and acquisitions with residual cash flow to be returned to the sponsor. Financial Profile Risks: Risks to WEC's financial profile include the potential for operational challenges in realizing cost savings associated with synergies and other cost restructuring actions. Incrementally leveraging transactions, whether large M&A or shareholder distributions, could impede WEC's rating progression. The impact of the Ukraine crisis is uncertain in the near-term, and at this point Fitch assumes a temporary and modest loss of business. In the medium term, Fitch sees opportunity for fuel supply market share wins against its Russian peer should Eastern European countries choose to reduce reliance on its Russian backed competitor, although no benefit is included in the forecast. BHI's Model Complements WEC: While WEC intends to acquire BHI's power generation, industrial and other services, and power delivery segments, it has indicated that power delivery is non-core and will likely be divested. BHI's core business is a leader in the maintenance, modification and outage services to nuclear and renewable power generation facilities across the U.S. It has a recurring demand profile and flexible cost structure due to its primarily cost-plus contract structure and labor cost flexibility. The non-core portion of BHI has a degree of fixed-cost contract structures and construction services. DERIVATION SUMMARY WEC's ratings reflect its leading market position servicing the nuclear reactor market, strong technological capabilities, recurring demand-focused offering and prospects of improving profitability. These factors are weighed against its concentration in the nuclear energy market, execution risks associated with its growth strategies and concentrated ownership under a private equity firm. Fitch expects WEC's EBITDA margins to be around 18% after the BHI acquisition. EBITDA interest coverage is strong for the category while leverage is consistent. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer: -- Low-single digit organic revenue growth trajectory through the forecast with some variability largely due to fuel and outage cycles. Declines in legacy plant projects is moderated by acceleration in the environmental services segment. Fitch assumes a modestly negative but temporary impact in 2022 and 2023 due to the Ukraine crisis; -- BHI acquisition is completed by mid-year 2022. No divestitures are assumed in the forecast; -- EBITDA margins decline to around 17% in 2023, after considering the full year impact of BHI, before improving to about 18% as synergies progress; -- Restructuring and non-recurring deal costs are elevated over the next couple years. Catch up pension contributions are made over the next few years; -- WEC's financial policies remain in place, including improving net leverage below 4.0x. Shareholder distributions are balanced with growth investments and managing its leverage profile. RECOVERY ANALYSIS The recovery analysis for a hypothetical future bankruptcy assumes that WEC would be considered a going concern (GC) in bankruptcy, and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. The GC EBITDA estimate of $500 million reflects Fitch's view of a sustainable post-reorganization EBITDA level, upon which the agency bases the valuation of the company. It includes BHI, before any divestitures, as well as 50% of the Tecnatom business. The GC EBITDA reflects the secular challenges facing the industry, including a long-term decline in the nuclear industry without incremental newbuilds, and the potential for significant liabilities arising from nuclear or environment incidents. The estimate also reflects Fitch's assumption that WEC can mitigate adverse conditions with additional cost reductions. The GC EBITDA is about 38% below forecast pro forma 2021 EBITDA. An enterprise value multiple of 6x is used to calculate a post-reorganization valuation and reflects several factors. The recent bankruptcy exit multiple for WEC, based on the $3.8 billion purchase price by Brookfield (including transaction costs) was 9x based on fiscal 2017 EBITDA, and 7x based on fiscal 2018 EBITDA. In addition, the 2018 acquisition of WEC's key competitor, Framatome, was completed at approximately 8x EBITDA. The acquisition of BHI, is planned to be completed at 9.0x EBITDA, before synergies. The ABL facility and first-lien RCF are assumed to be fully drawn upon default. The ABL facility is senior to the first-lien RCF and term loans. The waterfall results in a 'RR1' Recovery Rating for the ABL facility of $200 million, representing outstanding recovery prospects. The waterfall also indicates a 'RR3' for the first-lien RCF of $200 million and term loan of $3.5 billion, corresponding to good recovery prospects. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Maintenance of backlogs and contract renewals that supports earnings and cash flow stability; -- WEC demonstrates sustainably positive organic growth outside of legacy plant projects; -- WEC adheres to a disciplined financial policy supporting debt/EBITDA maintained below 4.5x and EBITDA interest coverage is sustained above 4.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Decline in backlogs and contract renewals that erode earnings and cash flow stability; -- An aggressive financial policy leads to debt/EBITDA maintained above 5.5x and EBITDA interest coverage is sustained below 3.0x; -- Heightened liquidity risk as a result of a 50% reduction in credit line availability. 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 As of March 31, 2022, WEC's liquidity was supported by $251 million of cash and equivalents in addition to availability under its $200 million ABL revolver and $200 million cash flow revolver. The two revolvers had $135 million drawn and there were several LOCs outstanding against these facilities and the $375 million LOC facility. Debt maturities are manageable, with $30 million of annual term loan amortization and the two revolving facilities maturing first in June 2026, with a springing trigger to May 2025. ESG Considerations: Unless otherwise disclosed in this section, the highest level of ESG credit relevance for WEC 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. BUSY BEES: Wins Cash Collateral Access on Final Basis ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern Division of Alabama, Southern Division, authorized Busy Bees Smocks!, LLC to use cash collateral on a final basis in accordance with the budget. The Debtor requires cash collateral use to continue its business without interruption. The Debtor is permitted to use cash collateral for these purposes: a. Maintenance and preservation of its assets; b. Collection of its cash or accounts receivable; and c. Payment of items pursuant to the Budget and the Interim Order. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, SellersFunding Corp. is granted, subject to the Subchapter V Trustee's verification of SellersFunding's lien and perfection in pre-Petition Date Cash Collateral, a replacement lien under sections 361(1) and 361(2) of the Bankruptcy Code to the extent SellersFunding's cash collateral is used by the Debtor in all post-petition assets of the Debtor. The Replacement Liens: (i) are and will be in addition to any valid pre-petition liens; (ii) will have the same priority in the Debtor' post-petition assets, and proceeds thereof, that SellersFunding held in the prepetition collateral; (iii) are and will be first priority liens, subject only to liens permitted under the controlling pre-petition loan agreement that are properly perfected, valid, and enforceable without any further action as of the Petition Date; and (iv) will remain in full force and effect notwithstanding any conversion or dismissal of the Bankruptcy Case. The Replacement Liens granted are automatically deemed perfected upon entry of the Final Order without the necessity of SellersFunding taking possession, filing financing statements, mortgages or other documents. The Debtor will pay SellersFunding $1,000 biweekly until a plan is confirmed. Once the plan is confirmed, the Debtor will pay the balance of the secured portion of SellersFunding's claim. These events constitute an "Event of Default:" (i) The Debtor fails to duly and punctually observe, perform or discharge any obligation or duty imposed upon it by the Final Order; (ii) Conversion of the case to Chapter 7; or (iii) Appointment of an examiner with expanded powers. Upon the occurrence of an Event of Default, unless cured by the Debtor after 10 days written notice by SellersFunding, the Debtor's use of cash collateral will automatically terminate. A copy of the order and the Debtor's budget for the period from April 22 to August 2, 2022 is available at https://bit.ly/3MzQf7K from PacerMonitor.com. The Debtor projects $1,500,000 in gross sales and $1,179,949 in total anticipated expenses. About Busy Bees Smocks!, LLC Busy Bees Smocks!, LLC operates an online children's clothing store. Busy Bees sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 22-00938) on April 22, 2022. In the petition signed by Courtney Burrage, managing member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge D. Sims Crawford oversees the case. Steven D. Altmann, Esq., at Nomberg Law Firm is the Debtor's counsel. CAN B CORP: Incurs $3.5 Million Net Loss in First Quarter --------------------------------------------------------- Can B Corp. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $3.48 million on $1.86 million of total revenues for the three months ended March 31, 2022, compared to a net loss of $2.18 million on $306,940 of total revenues for the three months ended March 31, 2021. As of March 31, 2022, the Company had $17 million in total assets, $10.75 million in total liabilities, and $6.25 million in total stockholders' equity. As of March 31, 2022, the Company had cash and cash equivalents of $114,992 and negative working capital of $1,948,751. For the periods ended March 31, 2022 and 2021, the Company had incurred losses of $3,484,897 and $2,179,882, respectively. The Company said these factors raise substantial doubt as to the Company's ability to continue as a going concern. The Company plans to improve its financial condition by raising capital through the sale of shares of its common stock. Also, the Company plans to expand its operation of CBD products to increase its profitability. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1509957/000149315222014204/form10-q.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. CAPETE CORPORATION: Seeks to Tap Lugo Mender Group as Legal Counsel ------------------------------------------------------------------- Capete Corporation seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Lugo Mender Group, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor with respect to its duties, powers, and responsibilities in this case under the laws of the United States and Puerto Rico in which it conducts its operations, does business, or is involved in litigation; (b) advising the Debtor in connection with its reorganization endeavors, including assisting in the formulation of a Plan of Reorganization to be prepared pursuant to the provisions of 11 U.S.C. Section 1126 and 1129; (c) assisting the Debtor in negotiations with creditors for the purpose of arranging a feasible plan of reorganization; (d) preparing legal papers; (e) appearing before the bankruptcy court or any other court in which the Debtor asserts a claim or defense directly or indirectly related to this bankruptcy case; and (f) performing other legal services required in the proceedings or in connection with the operation of the Debtor's business. The firm's hourly rates are as follows: Wigberto Lugo Mender, Esq. $300 per hour Associate Staff Attorney $200 per hour Legal and Financial Assistants $125 per hour The firm has been paid a retainer in the amount of $4,000 for the legal services rendered in connection with the case. Wigberto Lugo Mender, Esq., principal of Lugo Mender Group, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Wigberto Lugo Mender, Esq. Lugo Mender Group, LLC 100 Carr. 165 Suite 501 Guaynabo, Puerto Rico 00968-8052 and Tel.: (787) 707-0404 Fax: (787) 707-0412 Email: wlugo@lugomender.com About Capete Corporation Capete Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-01314) on May 9, 2022, listing $991,713 in assets and $4,997,599 in liabilities. Margaro Rivera Guzman, president of Capete, signed the petition. Judge Edward A. Godoy oversees the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as legal counsel. CARL MILLER: Wins Interim Cash Collateral Access ------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey approved a stipulation Carl Miller Funeral Home, Inc. entered into with FMM Bushnell, LLC resolving the Debtor's Motion for Authority to Use Cash Collateral on an interim basis. The Court said the Debtor's authority to use cash collateral on an interim basis going forward for three months and incorporating all of the terms and conditions previously set forth in the Stipulation Resolving Debtor's Motion for Authority to Use Cash Collateral on an Interim Basis as filed on February 17, 2022 and the Consent Order Approving Stipulation Resolving Debtor's Motion for Authority to Use Cash Collateral on an Interim Basis as filed with the Court on February 8, 2022 is approved. The final hearing is scheduled for June 23, 2022 at 10 a.m. As previously reported by the Troubled Company Reporter, FMM is the holder of a secured commercial loan made on or about May 22, 2008, by Alternative Business Credit, LLC to the Debtor in the original principal amount of $495,000. The Loan is secured by, among other things, a duly and timely perfected first priority lien and senior security interest in all of the Debtor's assets and property, as well certain assets not owned by the Debtor. The Parties agreed the Debtor is authorized to use cash collateral limited to a weekly variance of not more than 5% in the aggregate and not more than 10% per line item, up to the date of a final hearing in order to maintain and preserve its assets and continue its business. The Parties agreed that, as adequate protection, the Debtor will provide FMM with adequate protection payments in the amount of $4,000 per month for a period of three months. FMM was also granted replacement perfected security interest in and to all of the Debtor's now-existing and hereinafter acquired assets. A copy of the order is available at https://bit.ly/3wE7YUN from PacerMonitor.com. About Carl Miller Funeral Home, Inc. Carl Miller Funeral Home, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 22-10479) on January 20, 2022. In the petition signed by Pamela M. Dabney, shareholder and president, the Debtor disclosed up to $100,000 in assets and up to $10 million in liabilities. Judge Andrew B. Altenburg, Jr. oversees the case. Jenny R. Kasen, Esq., at Kasen & Kasen, P.C. represents the Debtor as counsel. FMM Bushnell, LLC, as lender, is represented by Alana Bartley, Esq. at Drake Loeb PLLC. CENTENNIAL RESOURCE: Colgate Deal No Impact on Moody's B1 Rating ---------------------------------------------------------------- Moody's Investors Service commented that Centennial Resource Production, LLC's (CRP) announced agreement to merge with Colgate Energy Partners III, LLC has not affected its B1 rating or stable outlook. The cash and equity funded merger will establish a larger oil producer, that will carry CRP's and Colgate's existing debt, that will increase in step with the increase in scale. To effect the merger CRP, and its listed holding company Centennial Resource Development, Inc. (CDEV), will issue new common shares to shareholders of Colgate and will also pay $525 million cash consideration to be raised by CRP. Moody's expects that CRP can fund this cash consideration under its committed bank facility or through free cash flow generation, that Moody's expects to remain robust in 2022. The transaction received the approval of both boards of directors at CDEV and Colgate and awaits shareholders' approvals, as well as standard regulatory approvals. The merger will allow CDEV to nearly double its size, measured both by production and reserves, and will create a new sizable oil-focused producer in the Delaware area of the Permian Basin. The company will also more than double its consolidated debt, but Moody's expects CRP to maintain solid credit profile and good liquidity. CRP operating performance is solid and the company has sufficient financial flexibility to manage the merger and risks associated with consolidation of the two businesses. Following the merger, CRP's shareholding structure will include significant share held by private equity investors. The company and CDEV outlined new corporate governance arrangements, negotiated as part of the merger agreement, including the extension of the Board of Directors to 11 members with over half of the new Board to be represented by independent directors. CRP and CDEV signal that CRP will maintain its commitment to maintaining its conservative leverage targets and flexible and balanced shareholder distribution policies. CRP's ratings are materially supported by its recent credit supportive shift in financial policies. CRP's financial policy and governance arrangements will remain important rating considerations following the completion of the proposed merger. Centennial Resource Production, LLC, is a principal operating subsidiary, fully owned and consolidated by publicly listed holding company Centennial Resource Development, Inc. CHILDREN'S CHARITY: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Children's Charity Partners, a Nevada Limited Liability Partnership 70 Wylvale Ave Moss Beach, CA 94038 Chapter 11 Petition Date: May 24, 2022 Court: United States Bankruptcy Court Northern District of California Case No.: 22-30254 Judge: Hon. Hannah L. Blumenstiel Debtor's Counsel: Kevin Tang, Esq. TANG & ASSOCIATES 17011 Beach Blvd Suite 900 Huntington Beach, CA 92647 Tel: (714) 594-7022 Fax: (714) 594-7024 E-mail: kevin@tang-associates.com Total Assets: $2,863,429 Total Liabilities: $907,558 The petition was signed by Les Fields as general partner. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/K4BXJIY/Childrens_Charity_Partners_a_Nevada__canbke-22-30254__0001.0.pdf?mcid=tGE4TAMA COLGATE ENERGY III: Moody's Puts B2 CFR Under Review for Upgrade ---------------------------------------------------------------- Moody's Investors Service placed Colgate Energy Partners III, LLC's ratings on review for upgrade, including the company's B2 Corporate Family Rating, B2-PD Probability of Default Rating and B3 senior unsecured notes rating. This follows Colgate and Centennial Resource Development, Inc. (CDEV) and its principal operating subsidiary, Centennial Resource Production, LLC (CRP, B1 stable) entering into an agreement on May 19, 2022 under which the companies will merge.[1] "The proposed transaction is credit enhancing for Colgate Energy, given Centennial's stronger credit profile," commented Jonathan Teitel, a Moody's analyst. On Review for Upgrade: Issuer: Colgate Energy Partners III, LLC Corporate Family Rating, Placed on Review for Upgrade, currently B2 Probability of Default Rating, Placed on Review for Upgrade, currently B2-PD Senior Unsecured Regular Bond/Debenture, Placed on Review for Upgrade, currently B3 (LGD5) Outlook Actions: Issuer: Colgate Energy Partners III, LLC Outlook, Changed To Rating Under Review From Positive RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Colgate's ratings were placed under review for upgrade based on the likely merger with CRP, which has a stronger credit profile. The combined company will have increased scale and result in a sizable oil producer in the Permian Basin. Upon closing of the transaction, if Centennial legally assumes or guarantees Colgate's bonds, making them pari passu with CRP's existing bonds, then the ratings on Colgate's notes would likely be upgraded to CRP's senior unsecured rating level of B2 depending on the pro forma capital structure. If Colgate were to become an unguaranteed subsidiary of Centennial following the merger and continue to provide separate audited financial statements, then its ratings could be upgraded based on the level of anticipated parental support and any improvements in its stand-alone credit profile. This transaction received the approval of both boards at Centennial and Colgate and awaits shareholders' approvals, as well as regulatory approvals. The principal methodology used in these ratings was Independent Exploration and Production published in August 2021. Colgate, headquartered in Midland, Texas, is a privately owned independent exploration and production company focused on the Delaware Basin. COLON VENTURE: Court Approves Disclosure Statement -------------------------------------------------- Judge Kathryn C. Ferguson has entered an order approving Colon Venture Group, LLC's Disclosure Statement dated May 13, 2022. June 23, 2022 at 2:00 p.m., is fixed as the date and time for the hearing on confirmation of the Plan. Written acceptances, rejections or objections to the Plan must be filed not less than 7 days before the hearing on confirmation of the Plan. About Colon Venture Group 152 S. Irving CG LLC and Colon Venture Group, LLC, are each a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Colon Venture Group, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 22-10023) on Jan. 3, 2022. In the petition signed by Walter Cubero, member, the Debtor disclosed $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. 152 S. Irving CG LLC also filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 22-10294) on Jan. 13, 2022. The Debtor estimated assets of $500,000 to $1 million and debt of $1 million to $10 million. The Hon. Kathryn C. Ferguson is the case judge. The cases are jointly administered under Case No. 22-10294. SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA, LLP, is the Debtors' counsel. CONDADO ROYAL: Taps MAM Group as Real Estate Consultant ------------------------------------------------------- Condado Royal Palm, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire MAM Group, LLC, a real estate brokerage firm in San Juan, P.R. The Debtor requires the services of a brokerage firm in connection with the sale of its commercial real properties located at 1120 and 1122 Ashford Ave., San Juan. A commission of $450,000 from an intended sale price amount of $8.3 million will be apportioned between Michael Redondo Rafuls and Adrian Mendez Olivencia, the firm's real estate consultant and broker, respectively, for their professional services. Mr. Rafuls and Mr. Olivencia disclosed in a court filing that they are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Adrian Mendez Olivencia MAM Group LLC Urb. Los Adoquines, 29 Calle San Sebastian San Juan, PR 00926 Tel: (787) 562-5530 Email: mendezrealestate@gmail.com. -- and -- Michael Redondo Rafuls MAM Group LLC Street B23 Mirador de Boriquen Gardens San Juan, PR 00926 Tel: (787) 413-0414 Email: redondomichael@gmail.com About Condado Royal Palm Condado Royal Palm, Inc. is a company in San Juan, P.R., engaged in renting and leasing real estate properties. Condado Royal Palm filed a petition for Chapter 11 protection (Bankr. D.P.R. Case No. 22-01282) on May 4, 2022, listing $8,300,995 in total assets and $15,493,286 in total liabilities. Jose A. Ramirez de Arellano, president, signed the petition. Judge Mildred Caban Flores oversees the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as legal counsel and MAM Group, LLC as real estate consultant. CONSOLIDATED WEALTH: Ordinary Unsecureds to be Paid in Full in Plan ------------------------------------------------------------------- Consolidated Wealth Holdings, Inc., et al., submitted a Joint Combined Chapter 11 Plan and Disclosure Statement. The Combined Plan and Disclosure Statement has two classes of unsecured creditors: investors in life insurance policies, and the ordinary course creditors. With respect to the Investors, the Combined Plan and Disclosure Statement provides three options for each Investor that is a Current FLS Interest Holder. First, the Investor can cash out its FLS Interest by selling the interest to LOF-II, the plan sponsor. This Cash Out Option will be the default option for an Investor that is a Current FLS Interest should, for example, an Investor take no action related to its FLS Interest as prescribed under the Plan. For any Investor that has a claim against any of the Debtors that is not based on a Current FLS Interest, the exclusive treatment for any such Allowed Claim will be the Cash Out Option. As an alternative to the Cash Out Option, each Current FLS Interest Holder may elect one of the following two treatments: First, the Investors may "swap" their respective interests in the applicable life insurance policies for an interest in a pooled life settlement fund (the "FLS Swap Option"). The major advantage of the FLS Swap Option is that the Investors will no longer need to fund their periodic premium payments associated with the insurance policies. Another advantage is that the FLS Swap Option is proposed to be pooled with many insurance policies, thereby diversifying an Investor's investment across multiple policies. Electing the FLS Swap Option will require the Investor to pay an annual management fee of $500. Investors should review the FLS Swap Option Supplemental Disclosure Document for additional disclosures regarding the FLS Swap Option. The FLS Swap Option Supplemental Disclosure Document will be included in a Plan Supplement. Second, the Investors may elect to retain their existing fractionalized interest in the applicable life insurance policy. Electing this option will require the Investor to pay an annual management fee of $500. With respect to ordinary course creditors, the Combined Plan and Disclosure Statement provides that these claims will be paid in full on the Effective Date or otherwise paid in the ordinary course by the Reorganized Debtor. Class 2A FLS Interest Holder Claims are impaired. Any party holding a FLS Interest Holder Claim shall receive on the Effective Date, unless such holder elects the FLS Swap Option or the Retention Option (each defined and described below), in full satisfaction, settlement, discharge and release of, its FLS Interest, a cash payment in the amount of the Conversion Cash Value multiplied by the FLS Interest Holders' Allowed Claim, plus any cash (if any) that is contributed or that represents prior funding by the FLS Interest Holders of premium calls not yet utilized to pay premiums on Policies, in full satisfaction, settlement, discharge and release of, and disposition and sale of its FLS Interest (the "Cash Out Option"). If a FLS Interest Holder has an Allowed Claim, other than the Allowed Claim on account of its FLS Interest, then such FLS Interest Holder will receive the Cash Out Option for such portion of its Allowed Claim over and above its claim on account of its FLS Interest. For example, if a FLS Interest Holder has an Allowed Claim in the amount of $100,000 that is over and above its claim for its FLS Interest then such $100,000 Allowed Claim will receive the Cash Out Option treatment which means that such FLS Interest Holder will receive the $100,000 Allowed Claim multiplied by the Conversion Cash Value. So if the Conversion Cash Value is 18%, then such holder will receive $18,000. In lieu of the Cash Out Option, a FLS Interest Holder may elect one of the following two options: (i) On the Effective Date, in full satisfaction, settlement, discharge and release of, and in exchange for contributing its FLS Interests, the FLS Interest Holder will receive a limited liability company membership interest (the "New Membership Interests") in the Reorganized Debtor with an initial capital account balance equal to the Assigned Swap Value of the FLS Interest contributed, as set forth in the Subscription and Contribution Agreement and further specified in the Plan Supplement, plus cash (if any) that is contributed or that represents prior funding by FLS Interest Holders of premium calls not yet utilized to pay premiums on the Policies (the "FLS Swap Option"). The FLS Swap Option will require the FLS Interest Holder to become a party to the limited liability company agreement of the Reorganized Debtor, which will include a $500 management fee per FLS Interest Holder per year. Each FLS Interest Holder that elects the FLS Swap Option will be required to execute a Subscription Agreement and a Life Settlement Interest Capital Contribution, Assignment and Transfer Agreement (the "Subscription and Contribution Agreement"). For avoidance of doubt, following the "swap," the FLS Interest Holder will no longer have a direct interest in the original FLS Interest, rather it will hold an equity interest in the Reorganized Debtor who in turn will hold an interest in the LOF-II fund. More information on the FLS Swap Option is set forth in the FLS Swap Option Supplemental Disclosure Document. (ii) On the Effective Date, an FLS Interest Holder may elect to retain the rights and obligations set forth in the existing FLS Interest purchase agreement between such FLS Interest Holder and the applicable Debtor, subject to the terms of a Restated Life Settlement Contract with a manager to be selected by the Reorganized Debtor, which manager may be the Reorganized Debtor, and which will include a $500 management fee per FLS Interest Holder per year (the "Retention Option"). Each FLS Interest Holder that elects or receives the Cash Out Option or elects the FLS Swap Option is referred to as a "Participating FLS Interest Holder." Each FLS Interest Holder that elects the Retention Option is referred to as a "Non-Participating FLS Interest Holder." After the Effective Date, LOF-II will have full ownership of the policies of Non- Participating FLS Interest Holder and will have the right to manage the policies and have the right to sell the policies to another buyer; provided that, in this event, the beneficial interest held by the Non-Participating FLS Interest Holder who elects the Retention Option will be secured via absolute assignment at the securities intermediary and such Non-Participating FLS Interest Holder will receive their full maturity amount from the securities intermediary once insurance proceeds have been received from the insurance company. Therefore, notwithstanding that LOF-II will have the right to manage and sell the Policies, if an FLS Interest Holder elects the Retention Option, then such FLS Interest Holders' FLS Interest will be preserved notwithstanding any sale of the underlying Policy. Non-Participating FLS Interest Holders will execute documents as necessary to implement these provisions. LOF-II, in its sole discretion, will have the option to exclude any policy at closing. This could mean that if a FLS Interest Holder elects the Retention Option, the FLS Interest Holder may end up owning a larger percent interest in the associated life insurance policy and therefore be responsible for a larger portion of the premium associated with such life insurance policy. With respect to Class 2B Ordinary Course Unsecured Claims, each holder thereof shall receive payment in full in cash, or such Allowed Class 2B Claim shall be reinstated and paid by the Reorganized Debtor according to its terms. Class 2B is unimpaired. Pursuant to Section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under this Plan, upon the Effective Date, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims and Equity Interests and controversies resolved pursuant to the Plan, among the Debtors, the Releasing Parties, the Released Parties, and the Holders of Claims and Equity Interests in Classes 1 through 3 of the Plan. Distributions made to Holders of Allowed Claims and Allowed Equity Interests in any Class are intended to be final. On the Effective Date, and subject to the DIP Facility being repaid in accordance with any DIP financing agreement, the Debtors intend to enter into Subscription and Contribution Agreements, pursuant to which the Debtors will contribute to LOF-II (i) the FLS Interests and any other assets contributed by the Participating FLS Interest Holders pursuant to the Subscription and Contribution Agreement and (ii) the underlying life insurance policies owned and controlled by the Debtors (the "CWM Owned Policies"), which were "valued" as of the petition date by the Debtor and LOF-II at $1.38 million. In exchange for the Debtors' contributions pursuant to the Subscription and Contribution Agreements, LOF-II will issue to the Reorganized Debtor a limited partnership interest in LOF-II (a "Fund Interests"). The Confirmation Order shall authorize, among other things, all actions as may be necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan, including the FLS Swap Option and the issuance of all securities, notes, instruments, certificates, operating agreements, and other documents required to be issued pursuant to the restructuring contemplated herein, in each case in a manner acceptable to LOF-II (collectively, the "Restructuring Transactions"). On the Effective Date, the Debtors, as applicable, shall issue all securities, notes, instruments, certificates, operating agreements, and other documents required to be issued pursuant to the Restructuring Transactions. The Restructuring Transactions contemplated by the Plan shall be approved and effective as of the Effective Date, without the need for any further state or local regulatory approvals or approvals by any non-Debtor parties. Proposed Counsel to the Debtors: Lenard M. Parkins, Esq. Charles M. Rubio, Esq. PARKINS & RUBIO LLP Pennzoil Place, 700 Milam Street, Suite 1300 Houston, Texas 77002 Tel: (713) 715-1660 Email: lparkins@parkinsrubio.com crubio@parkinsrubio.com A copy of the Disclosure Statement dated May 18, 2022, is available at https://bit.ly/3G3dRPK from Epiq11, the claims agent. About Consolidated Wealth Consolidated Wealth Holdings Inc. -- https://consolidated-wealth.com/investor-login/ -- is a holding company based in Houston, Texas. The company and its affiliates manage a portfolio of roughly 28 life settlement contracts with 380 investors. Consolidated Wealth is no longer engaged in the sale of new life insurance today. Consolidated Wealth and affiliates filed for Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 22-90013) on April 7, 2022. In the petition filed by Deanna Osborne, owner, Consolidated Wealth listed up to $500,000 in assets and up to $50,000 in liabilities. The case is assigned to Judge David R. Jones. Perkins, Lee and Rubio, LLP is the Debtor's legal counsel. Epiq Bankruptcy Solutions is the claims agent. CRC INVESTMENTS: Wins Cash Collateral Access Thru June 2 -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina, Winston Salem Division, authorized CRC Investments, LLC to use cash collateral on an interim basis for the period through including June 2, 2022, in the amounts and for the purposes set forth in the interim budget, with a 10% variance. Judge Lena Mansori James ruled that secured parties (i) Portfolio Holdings IV-NC, LLC; (ii) the Internal Revenue Service; and (iii) the U.S. Small Business Administration are granted a perfected replacement lien in all post-petition assets of the Debtor to the same extent and priority as existed prepetition for the diminution in value of the Secured Parties' collateral occasioned by the Debtors' use of Cash Collateral. The Debtor is also required to pay all applicable insurance premiums, taxes, and other governmental charges as they come due and make all tax deposits and file all applicable tax returns on a timely basis, as a form of adequate protection. The Secured Parties also appear to be adequately protected by an equity cushion in the Collateral. Portfolio Holdings, through its acquisition of a Bank of America loan, holds a note and deed of trust against the Debtor's real property located at 85 Pine Crest Lane, Tryon, in Polk County, North Carolina. Portfolio Holdings asserts a security interest in rents pursuant to its deed of trust. The Debtor owes taxes, penalties, and interest to the IRS which is now covered with a secured lien by the IRS. In connection with its business operations, the Debtor obtained an Economic Injury Disaster Loan from the SBA, secured by a lien upon the Debtor's personal property and fixtures. As of the Petition Date, the IRS was owed $509,757; the SBA was owed $126,500; and Portfolio Holdings was owed $1,100,000. Notwithstanding any suspension or termination of the right to use cash collateral, the Court ruled that the Debtor will be permitted to carve out from cash collateral or any replacement collateral and use an aggregate amount necessary to pay all permitted trailing expenses. Permitted trailing expenses are, on the termination date, the costs of operating and preserving the estate, including allowed administrative fees, costs, or expenses, to the extent incurred postpetition and prior to such termination date but in the aggregate amount not to exceed 110% of the aggregate amounts set forth in the budget through such termination date. In addition to budgeted amounts, permitted trailing expenses will include court costs and quarterly Chapter 11 fees as allowed by the Court. A copy of the interim order and the Debtor's May to June 2022 budget is available at https://bit.ly/3Gd97XS from PacerMonitor.com at no charge. The budget provided for $71&779 in total income and $55,704 in total expenses. A further hearing on the motion will be held at 2 p.m. (Eastern) on June 2, in the Courtroom located at 601 W. 4th Street, Winston-Salem, North Carolina. About CRC Investments CRC Investments, LLC, d/b/a 1906 Pine Crest Inn and Restaurant, filed a petition under Subchapter V of Chapter 11 (Bankr. M.D.N.C. Case No. 21-80172) on May 6, 2021, estimating between $1,000,000 and $10 million in assets and liabilities. The petition was signed by Carl Ray Caudie, Jr., general manager. Judge Lena Mansori James oversees the case. Joshua H. Bennett, Esq., at Bennett Guthrie PLLC, represents the Debtor as counsel. CRYPTO CO: Incurs $2.5 Million Net Loss in First Quarter -------------------------------------------------------- The Crypto Company filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.48 million on $142,512 of revenue for the three months ended March 31, 2022, compared to a net loss of $153,056 on $1,400 of revenue for the three months ended March 31, 2021. As of March 31, 2022, the Company had $2.53 million in total assets, $4.14 million in total liabilities, and a total stockholders' deficit of $1.61 million. The Company has incurred significant losses and experienced negative cash flows since inception. As of March 31, 2022, the Company had cash of $98,796. The Company's working capital was negative $2,956,178 as of March 31, 2022. As of March 31, 2022, the accumulated deficit amounted to $36,352,694. As a result of the Company's history of losses and financial condition, there is substantial doubt about the ability of the Company to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund the Company's expenses and achieve a level of revenue adequate to support the Company's current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships or collaborations. There can be no assurance that any of these future-funding efforts will be successful, according to the SEC filing. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1688126/000149315222013768/form10-q.htm About Crypto Company Malibu, CA-based The Crypto Company -- www.thecryptocompany.com -- is in engaged in the business of providing consulting services and education for distributed ledger technologies, for the building of technological infrastructure, and enterprise blockchain technology solutions. Crypto Company reported a net loss of $785,630 for the 12 months ended Dec. 31, 2021, compared to a net loss of $2.82 million for the 12 months ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $1.52 million in total assets, $2.54 million in total liabilities, and a total stockholders' deficit of $1.02 million. CUENTAS INC: Incurs $3.6 Million Net Loss in First Quarter ---------------------------------------------------------- Cuentas, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $3.62 million on $394,000 of revenue for the three months ended March 31, 2022, compared to a net loss of $1.68 million on $225,000 of revenue for the three months ended March 31, 2021. As of March 31, 2022, the Company had $9.68 million in total assets, $3.31 million in total liabilities, and $6.36 million in total stockholders' equity. As of March 31, 2022, the Company had total current assets of $4,619,000, including $4,290,000 of cash, accounts receivables of $92,000, and other current assets of $192,000 and total current liabilities of 3,224,000,000 creating a working capital of $1,395,000. As of Dec. 31, 2021, the Company had total current assets of $6,780,000, including $6,607,000 of cash, accounts receivables of $11,000, and other current assets of $162,000 and total current liabilities of $ 2,719,000 creating a working capital of $4,061,000. The decrease in the Company's working capital deficit was mainly attributable to the decrease in the Company' cash and cash equivalents in the amount of $2,272,000 due to its losses. "To date, we have principally financed our operations through the sale of our Common Stock. Nevertheless, management anticipates that our current cash and cash equivalents position and generating revenue from the sales of our General-Purpose Reloadable Cards will provide us limited financial resources for the near future to continue implementing our business strategy of further developing our General Purpose Reloadable Card, enhance our digital products offering and increase our sales and marketing. Therefore, Management plans to secure additional financing sources, including but not limited to the sale of our Common Stock in future financings. This is expected to be used to further support our operations as described above and to complete the acquisition of the SDI’s assets, including the Black011.com domain and its network of approximately 31,600 bodegas. There can be no assurance, however, that the company will be successful in raising additional capital or that the company will have net income from operations to fund the business plan of the company for the near future or long term. "In the event that the Company does not obtain financing, the Company will not consummate the purchase of the SDI assets and may be required to curtail its business plan until financing is available." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1424657/000121390022026681/f10q0322_cuentasinc.htm About Cuentas Headquartered in Miami, Florida, Cuentas, Inc. -- http://www.cuentas.com-- invests in financial technology and engages in use of certain licensed technology to provide innovative telecommunications, mobility, and remittance solutions to unserved, unbanked, and emerging markets. The Company uses proprietary technology and certain licensed technology to provide innovative telecommunications and telecommunications mobility and remittance solutions in emerging markets. The Company also offers wholesale telecommunications minutes and prepaid telecommunications minutes to consumers through its Tel3 division. Cuentas reported a net loss attributable to the company of $10.73 million for the year ended Dec. 31, 2021, a net loss attributable to the company of $8.10 million for the year ended Dec. 31, 2020, a net loss attributable to the company of $1.32 million for the year ended Dec. 31, 2019, and a net loss of $3.56 million for the year ended Dec. 31, 2018. As of Dec. 31, 2021, the Company had $12.26 million in total assets, $2.81 million in total liabilities, and $9.45 million in total stockholders' equity. DAVIDZON MEDIA: Unsecureds to Receive 40% Under Plan ---------------------------------------------------- Davidzon Media, Inc., submitted an Amended Disclosure Statement. The Plan incorporates terms of a Settlement Agreement between Davidzon Radio Inc. Kingsland Development Urban Renewal LLC and Great Elm Capital Corp which was approved by the Bankruptcy Court in Nov. 21, 2021, the said Settlement Agreement has resolved the secured claim of Great Elm Capital Corp., against the Debtor, the debtor's corporate affiliates, and the equity holders. The claim of Great Elm was settled and resolved in the jointly administered case of Davidson Radio Inc., case no. 21-40782-ess. The Plan offers the General Unsecured Claims will receive a distribution of 40% to be paid by equal monthly installment within 24 months commencing from the Effective date. The Plan will be financed from continuing operating income, reorganized business operations of the Debtor, from the timely collections of outstanding receivables, as well as from funds accumulated in the Debtor's in Possession accounts. Under the Plan, Class III General unsecured claims in the Debtor's case total $85,958, to be paid as follows: The general unsecured claim of Capital One Bank (USA), N.A in the amount of $7,321.06, will be paid 40% dividend ($2,928.42) 24 monthly installment payments in the amount of $122,01 commencing on the Effective date of the plan. The general unsecured claim of JPMorgan Chase Bank, N.A.in the amount of $71,217, will be paid 40% dividend ($28,487) 24 monthly installment payments in the amount of $1,187 commencing on the Effective date of the plan. The general unsecured claim of JPMorgan Chase Bank, N.A.in the amount of $5,000.00, will not receive any treatment as the SBA Loan was forgiven. Class III is impaired. Class IV General unsecured claim of S.A.N. Management LLC totals $84,194. This claim was resolved prior to the assumption of the lease, terms of the cure agreement were reached, and incorporated into a court order approving assumption of the lease, entered by the court, and thereafter paid in full. Class IV is impaired. Attorney for the Debtor Davidzon Media, Inc.: Alla Kachan, Esq. 2799 Coney Island Ave, Ste. 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-315 E-mail: alla@kachanlaw.com A copy of the Disclosure Statement dated May 18, 2022, is available at https://bit.ly/3Ly1goR from PacerMonitor.com. About Davidzon Media Brooklyn, N.Y.-based Davidzon Media, Inc. and its affiliates filed voluntary petitions for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-40308) on Feb. 8, 2021. At the time of the filing, Davidzon Media listed up to $500,000 in assets and up to $10 million in liabilities. Judge Elizabeth S. Strong oversees the cases. The Law Offices of Alla Kachan, PC and Wisdom Professional Services, Inc. serve as the Debtors' legal counsel and accountant, respectively. DEALER TIRE: S&P Assigns 'B-' ICR on Structural Reorganization -------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to Dealer Tire Financial LLC, which is consistent with its current issuer credit rating on Dealer Tire LLC. At the same time, S&P discontinued its ratings on Dealer Tire LLC. S&P's 'B-' issue-level rating on the company's first-lien credit facilities, including the revolver, is unchanged. The recovery ratings remain '3', indicating its expectation for meaningful recovery (50%-70%; rounded estimate: 60%). S&P's 'CCC' issue-level and '6' recovery ratings on the company's senior unsecured notes are also unchanged. In 2021, Dealer Tire completed an internal restructuring under which a new entity, Dealer Tire Financial LLC, became the borrower under the company's credit agreement and the issuer of its notes. Dealer Tire LLC, the previous borrower, is now a subsidiary guarantor under all the debt facilities. The restructuring has no effect on the company's cash flows or credit metrics. Therefore, S&P's credit metric expectations are largely unchanged from those in its most recent full analysis on Dealer Tire LLC, published Dec. 1, 2021, on RatingsDirect. S&P said, "Although we assess its liquidity as adequate, the company's leverage remains high and we expect it will continue to pursue acquisitions to expand its business. In 2021, Dealer Tire had debt to EBITDA of 7.4x and free operating cash flow (FOCF) to debt of 4.2%. While we expect the company to reduce its leverage somewhat over the next couple of years as it increases its revenue, its financial sponsor's desire to expand the business through acquisitions will likely preclude any material debt paydowns. "The stable outlook on Dealer Tire Financial LLC reflects our expectation that it will generate a modest amount of free cash flow and maintain its current market share, a sustainable capital structure, and adequate liquidity even as its volumes remain somewhat weaker due to the fallout from the coronavirus pandemic. "We could lower our rating on Dealer Tire Financial LLC if its volumes or margins decline significantly and cause it to generate negative funds from operations for multiple quarters, which would drain its liquidity or increase its leverage to unsustainable levels. This could occur due to the loss of a customer, increased competition, operational difficulties, or another large debt-funded acquisition. "Although unlikely, we could raise our rating on Dealer Tire Financial LLC if it sustainably reduces its debt to EBITDA below 6x while maintaining FOCF to debt of at least 3%-5%. This could occur if the company uses its dealership relationships to grow its dent remover Dent Wizard business at a much faster pace than we currently expect while maintaining its dealer channel share and maintaining margins at or above current levels." ESG credit indicators: E-2; S-2; G-3 DELEK LOGISTICS: Fitch Alters Outlook on 'BB-' IDR to Stable ------------------------------------------------------------ Fitch Ratings has affirmed Delek Logistics Partners, L.P.'s(DKL) Long-Term Issuer Default Rating (IDR) at 'BB-', and the senior unsecured notes at 'BB-'/'RR4'. The notes are co-issued by Delek Logistics Finance Corp. The Rating Outlook has been revised to Stable from Negative. The Outlook revision follows a similar Outlook change at DKL's sponsor and largest counterparty, Delek US Holdings, Inc (Delek Holdings; BB-/Stable) to Stable from Negative, reflecting stronger performance due to improvement in the refining sector and increased demand profile. DKL's rating is supported by fairly stable cash flows underpinned by minimum volume commitments (MVC) from Delek Holdings. Although the recently announced 3Bear Energy (3Bear) transaction will enhance DKL's go-forward EBITDA, Fitch, however believes that the acquisition will not improve credit metrics in the near term. Rating concerns include business risk associated with the new assets, modest size and geographic concentration. KEY RATING DRIVERS 3Bear Acquisition Impacts: DKL recently announced transaction to acquire assets of privately held 3Bear's crude, natural gas and water gathering, processing and disposal business in the Northern Delaware basin. DKL is expected to fund the $624.7 million acquisition price primarily with borrowings under existing revolver and debt financing. This transaction should ultimately improve DKL's business profile in terms of size and scale, adding roughly $80 million-$100 million annual EBITDA based on management estimates, broaden the partnership's product mix into natural gas and water and diversify third-party customer base. Fitch, however, believes that given its status as a new business for DKL, this acquisition still has some integration risk and associated additional business risk when compared to its legacy business which benefited from MVC's. Fitch also notes that while the transaction helps the partnership diversify its cash flows away from Delek Holdings and increases its overall size and scale, the transaction is not leverage accretive in the near term. Leverage Trending Higher: DKL has historically maintained modest leverage and good interest coverage relative to midstream peers. YE 2021 leverage was in line with Fitch expectation at 3.5x. Leverage is expected to tick up at YE 2022 due to the anticipated mid-year closing of the 3Bear transaction. YE 2022 leverage will include the full debt burden of this acquisition with only a portion of the incremental EBITDA. Sustained expected FCF generation is seen reducing leverage to around 4.0x at YE 2023 based on Fitch's assumptions. Fitch continues to assume management's near-term focus will remain on leverage reduction. Fitch believes leverage is critical to DKL's credit profile due to the partnership's limited counterparty and geographic diversity. Counterparty Exposure/Concentration Risk: DKL derives approximately 60% of its revenues and roughly 86% of the contribution margins (for 2021) directly or indirectly from its parent and sponsor, Delek Holdings. Fitch expects Delek Holdings will remain the partnership's largest customer in the near to intermediate term, as DKL provides Delek Holdings with critical logistics assets that are integrated with the sponsor's refining operations. Fitch typically views midstream service providers like DKL with significant single-counterparty concentration as having exposure to outsized event risk, should there be business, operational or financial issues at Delek Holdings whereby throughput volumes at DKL facilities will be significantly reduced, adversely impacting cash flows and distributions. While the 3Bear transaction helps service more third-party customers and provides diverse customer base of both investment grade (IG), non-IG and private operators, the partnership will remain exposed to counterparty risk as it has significant exposure to non-IG and/or unrated counterparties. Limited Geographic Diversity/ Customer Concentration: The partnership's assets and operations are entirely focused in the Petroleum Administration for Defense Districts 3 (PADD 3). Fitch typically views midstream service providers with single-basin, primarily single-counterparty midstream service providers operational concentration, as having exposure to risks should there be any material event or slowdown in the region's refining markets. Cash Flow Assurances: The partnership's current operations are underpinned by long-term contracts with minimum quarterly volume, revenue or throughput commitments from Delek Holdings, representing approximately 63% of 1Q22 gross margins. The services are provided at fixed fee (subject to changes in inflation-based indices). These contracts limit DKL's commodity price sensitivity and provide some volumetric downside protection. DKL, however, is exposed to volatility in commodity and refined products prices where it takes ownership of the products, representing nearly 5% of 2021 EBITDA, but is limited primarily to the West Texas wholesale marketing segment and is largely hedged at all times. Post transaction close, revenues from the 3Bear assets would come from dedicated acreage contracts that provide fixed fee but are subject to volume risk. While natural gas and crude oil prices have thus far been constructive, should customer activity fall and in turn pressure volumes, DKL's throughput on the 3Bear dedicated acreage may be impacted. Sponsor Relationship: Delek Holdings holds 100% of the general partner's and 78.9% of the limited partnership's interest in DKL. As part of Delek Holdings strategy to grow the midstream business, DKL's growth has been supported with drop down transactions since inception. Given that Delek Holdings directly benefits from the sustainable growth of DKL through its ownership, Fitch believes that Delek Holdings will continue to support DKL, although expects the sponsor to partially sell down a portion of its stake in DKL in line with its stated intention to evaluate monetization of the ownership. Parent Subsidiary Relationship: Fitch analyzed the parent-subsidiary relationship between DKL and Delek Holdings, and determined that their respective IDRs are the same based on the companies' standalone credit profiles. DKL maintains a separate board of directors and financing function. Outside of the PSL relationship, as DKL's largest counterparty, Delek Holdings' rating and Outlook have credit implications for DKL. DERIVATION SUMMARY DKL's rating reflects support from long-term, fee-based contracts that provide some protection through minimum volume and/or revenue commitments. This is offset in part by the partnership's limited size and scale. DKL's assets are integrated with the refinery assets of Delek Holdings, which are focused entirely in PADD 3. Although modestly diversifying its cash flows subject to 3Bear transaction close, Fitch believes that the heavy dependence on Delek Holdings could present significant event risk should there be an operating or financial issue at the sponsor. Fitch expects DKL's leverage to be elevated at YE 2022 but reduce to around 4.0x YE 2023, trending lower in outer years. Scale and the significant exposure to Delek Holdings are limiting factors to DKL's ratings. DKL is rated below Holly Energy Partners L.P (HEP; BB+/Stable). Like DKL, HEP's rating is supported by stable cash flows that are largely MVCs from its investment-grade rated sponsor and largest counterparty, HF Sinclair Corporation (BBB-/Stable). Fitch expects HEP's leverage to be below 4.0x by YE 2023. While DKL's leverage is around same as HEP's, its rating is offset by its smaller scale and weaker counterparty. DKL is rated one notch higher than PBF Logistics LP (PBFX; B+/Negative). PBFX is geographically more diversified than DKL and its cash flows are also supported by MVCs from its affiliate PBF Holding Company LLC (PBF; B+/Negative). Fitch expects YE 2022 leverage for PBFX to be between 2.6x-2.8x. While leverage metrics of PBFX are similar to that of DKL, PBFX's rating is limited by that of its primary counterparty, PBF. KEY ASSUMPTIONS -- Fitch price deck for West Texas intermediate oil price of $95/bbl in 2022, $76/bbl in 2023, $57/bbl in 2024 and $50/bbl thereafter; -- Fitch price deck for Henry Hub prices of $4.25/mcf in 2022, $3.25/mcf in 2023, $2.75/mcf in 2024 and $2.50/mcf thereafter; -- Acquisition of 3Bear assets is complete by mid-2022 and funded primarily with debt financing per management guidance; -- Successful completion of a notes offering and extension/ refinancing of revolving credit facility maturing September 2023; -- Capex and distributions for 2022 in line with management guidance; -- Equity issuance in 2023; -- No asset sales, drop downs from sponsor assumed. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Favorable rating action at Delek Holdings may lead to positive ration action for DKL, provided the factors driving the rating change at Delek Holdings have benefits that accrue to the credit profile of DKL; -- Expected leverage (total debt with equity credit/operating EBITDA) at DKL is at or below 3.0x and Distribution Coverage above 1.0x on a sustained basis; provided the rating of Delek Holdings is no longer a constraint on DKL's rating. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Expected leverage (total debt with equity credit/operating EBITDA) above 4.0x and/or Distribution Coverage below 1.0x on a sustained basis; -- Increase in capital spending beyond Fitch's expectation that have negative consequences for credit profile; -- Funding of leveraged acquisitions without a balance of debt and equity such that leverage remains above negative sensitivities for a prolonged period of time; -- Meaningful deterioration in customer quality or an event that has material negative effect on Delek Holdings credit profile or operations, so long as Delek Holdings remains its significant counterparty; -- Material change to contractual arrangement or operating practices with Delek Holdings that negatively affects DKL's cash flow or earnings profile; -- Impairments to liquidity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of March 31, 2022, DKL had approximately $588.6 million in available liquidity. Cash on balance sheet was $2.7 million. The partnership had $585.9 million available under its $850 million senior secured revolver, maturing in September 2023. DKL has the ability to increase the credit facility to $1.0 billion, subject to lenders consent. It is secured by first priority liens on substantially all of the partnership's and its subsidiaries assets. The credit facility includes restrictions on total leverage, senior leverage, and interest coverage which must remain below 5.25x (5.50x for certain acquisitions), 3.75x (4.0x for certain acquisitions), and above 2.0x, respectively. As of March 31, 2022, DKL was in compliance with its covenants and Fitch expects them to remain in compliance with their covenants through the forecast period. DKL also has $650 million in outstanding senior unsecured notes, which are co-issued by Delek Logistics Finance Corp. The notes are guaranteed on a senior unsecured basis by all subsidiaries of DKL. Growth projects are the primary driver of external funding needs. Debt Maturity Profile: DKL has a well spread maturity profile. The revolver matures on Sept. 28, 2023. The unsecured notes are due May 2025 and June 2028. ISSUER PROFILE DKL is an MLP formed by Delek Holdings that owns and operates logistics and marketing assets for crude oil, intermediate and refined products primarily in support of the Delek Holdings refineries in Texas, Tennessee and Arkansas. ESG CONSIDERATIONS Delek Logistics Partners, LP has an ESG Relevance Score of '4' for Group Structure due to material-related party transactions with its sponsor Delek Holdings, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. DELEK US HOLDINGS: Fitch Alters Outlook on 'BB-' IDR to Stable -------------------------------------------------------------- Fitch Ratings has affirmed Delek U.S. Holdings, Inc.'s (Delek) Long-Term Issuer Default Rating (IDR) at 'BB-' and revised the Rating Outlook to Stable from Negative. Fitch has also affirmed Delek's senior secured revolving credit facility at 'BB+'/'RR1' and the senior secured term loans at 'BB+'/'RR2'. Delek's ratings reflect its medium size, material diversification into non-refining businesses and resulting integration, location-advantaged assets near the Permian basin and Gulf of Mexico, strong liquidity, and the improving macro environment for refiners. These strengths are tempered by relatively low asset complexity, small scale, geographic concentration within PADD III, increased leverage following the anticipated closing of the 3Bear acquisition, exposure to volatile commodity pricing and crack spreads, and an unfavorable regulatory environment. The Stable Outlook reflects improved performance due to refining sector improvements and an increased demand profile. The acquisition of 3Bear in mid-year 2022 should improve its size and scale over the medium term. KEY RATING DRIVERS Adequate Liquidity: At 1Q22, Delek exhibited significant liquidity to fund any negative cash flow and capital expenditures with $854.1 million of cash on the balance sheet, and approximately $637.5 million of availability under its $1 billion revolver. The company also benefits from less traditional liquidity levers such as drop downs to Delek Logistics (e.g. 1Q20 Big Spring gathering assets; $100 million cash and 5 million common units) the ability to sell Delek Logistics (DKL) equity in the market, and asset divestitures (2Q20 Bakersfield refinery sale; $40 million cash). Management discontinued common dividends and significantly reduced capex in 2020 to protect liquidity. While the revolver may be subject to energy-price-linked redetermination, Fitch expects Delek to maintain sufficient liquidity to fund necessary maintenance and growth capex. Increasing Leverage: Leverage will increase in 2022 from historical averages due to the anticipated closing of the 3Bear acquisition (6.25x of 2023 EBITDA). This acquisition is expected to be fully funded with debt. 2022 leverage will include the full debt burden of this acquisition with only a portion of the incremental EBITDA. Per Fitch's projections, FCF generation is expected to reduce total leverage to around 4.0x by FYE2023. Fitch assumes the company's focus will remain on leverage reduction. Diversification into Non-Refining Sectors: Delek has continuously grown its logistics and retail segments, which has allowed the company to mitigate volatility in refining. Delek Logistics, an MLP in which the company has an 78.9% limited partner interest, represents the midstream operations of the consolidated entity. The company's strategy is to enhance and grow midstream operations through joint ventures, drop downs and investments to increase existing pipeline capacity, thereby diversifying the earnings stream towards more stable cash flows. The 3Bear acquisition is expected to help Delek to diversify revenue stream to new business lines (i.e. natural gas and water). Through increasing pipeline infrastructure, Delek will continue to grow its integrated platform enhancing feedstock and end market optionality. Additionally, the company operates 248 retail locations that offer fuel and merchandise offerings (food, tobacco beverages). Retail provides additional cash flow diversification as well as synergistic advantages due to approximately 80% integration with existing downstream operations. Fitch views this diversification and integrated platform as a credit positive that helps to stabilize financial performance against the volatility of the refining sector. Relatively Small, Average Quality Asset Base: With 302 mbbl/d of refining capacity, Delek is notably smaller than peers CITGO (about 769 mbbl/d) and PBF Holdings (PBF, about 1,000 mbbl/d) and between HollyFrontier (HFC, about 678 mbbl/d) and CVR (207 mbbl/d). Quality is limited by Delek's lower Nelson Complexity Indexed refineries, ranging from 8.7-10.5 compared with more complex peers (PBF: 12.8-15.5, VLO Gulf Coast: 13.0). This lack of complexity is tempered by Delek's flexibility, given their access to low cost Permian crude and regional crudes, which has recently benefited from stronger differentials. Macro Improving: Macroeconomic conditions for refiners continue to improve albeit with complications from the Russia-Ukraine conflict. According to Energy Information Administration data, aggregate refinery utilization rose to over 92% at the end of March, versus 83% a year ago. Core refined product demand has largely recovered to pre-pandemic levels, and while jet fuel remains off, TSA checkpoint travel numbers have trended higher YTD. Regional crude spreads remain capped in the current low growth world, but global product inventories remain tight, particularly diesel, which should help support Delek's 2022 performance. Challenging Regulatory Environment: U.S. refiners face unfavorable regulatory headwinds that will cap long-term demand for refined product. These include renewable requirements under the RFS program, higher corporate average fuel economy (CAFE) standards, and regulation of greenhouse gas emissions. Fitch expects these regulations to limit growth in domestic product demand and keep the industry reliant on exports to maintain full utilization. Delek's ethanol and biodiesel production is not sufficient to fully meet its renewable fuel obligations. It also has above average uncertainty regarding its RINs exposure, because it has historically received EPA small refinery exemptions (SREs) for all four of its facilities. While the EPA recently lowered renewable blending requirements for all refiners, it also proposed eliminating refinery exemptions. This could result in significant cash outflows in a high RINs price environment. High Volatility Industry: Refining is one of the most cyclical corporate sectors, subject to periods of boom and bust, with abrupt inflection points in crack spreads and feedstock costs over the commodity cycle. Delek's production slate is geared primarily towards gasoline and diesel/jet fuel. DERIVATION SUMMARY Delek (302,000bpd) operates on a smaller scale than Fitch rated peers such as HollyFrontier Corporation (678,000bpd pro forma for recent acquisitions, BBB-/Stable) and PBF Holding Company (1.04mmbpd, B+/Negative), but it has higher nameplate capacity than CVR Energy (206,500bpd, BB-/Stable). Delek benefits from material cash flow diversification from the midstream and retail segments. Similar to other peers, the company has the ability to process discounted regional crudes, with recent benefits from increased crude spreads. Delek has heightened uncertainty in terms of its RINs exposure, given the lack of clarity around SREs and because all four of its refineries have historically been granted SREs. KEY ASSUMPTIONS Fitch's Key Assumptions Within Fitch's Rating Case for the Issuer -- WTI oil prices of $95/bbl in 2022, $76/bbl in 2023, $57/bbl in 2024 and $50/bbl in 2025; -- Crack spreads gradually reduce throughout the rating case from 2022 levels to pre-pandemic, historical averages. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Material increase in size, scale or asset quality as evidenced by an increase in refining capacity and/or asset complexity; -- Standalone Total Debt/EBITDA below 2.5x through the cycle; -- Successful track record as operator of acquired assets. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Erosion of liquidity buffers resulting from prolonged negative cash flow and/or material downward borrowing base redetermination; -- Inability to renew small refinery exemptions leading to significant RINs exposure; -- Standalone Total Debt/EBITDA above 3.5x through the cycle; -- Change in stated financial policy that prioritizes shareholder returns over sustaining the liquidity profile. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: At 1Q2022, Delek had $854.1 million of cash on hand and availability of $1.22 billion under their revolving credit facilities. Delek has exhibited sufficient liquidity buffers, which Fitch expects the company to be able to cover necessary maintenance and growth capex. Limited Near-Term Maturities: The company's debt structure at 1Q2022 consists primarily of a $1.25 billion first lien term loan, $1 billion first lien revolver maturing in 2025 and 2023, respectively, with smaller facilities (Hapoalim $19.1 million term loan and $50 million Reliant revolver) due in 2022. Fitch believes that Delek's location-advantaged (albeit small) asset base and midstream/retail diversification inform a robust business model and reduce refinancing risk. 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. DIEBOLD NIXDORF: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded Diebold Nixdorf, Inc.'s Corporate Family Rating to Caa2 from B2, Probability of Default Rating to Caa2-PD from B2-PD, senior secured rating to Caa2 from B2, and senior unsecured rating to Ca from Caa1. The Speculative Grade Liquidity (SGL) rating was downgraded to SGL-4 from SGL-2. The rating outlook is negative. The rating action follows the company's announcement of substantially weaker than expected first quarter earnings, a downward revision of forward guidance, and risks related to sustainability of the capital structure given near-term debt maturities. Governance considerations are a key driver of the rating action reflecting the company's tolerance for operating with high leverage and significant near term debt maturities. The following rating actions were taken: Downgrades: Issuer: Diebold Nixdorf, Inc. Corporate Family Rating, Downgraded to Caa2 from B2 Probability of Default Rating, Downgraded to Caa2-PD from B2-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD4) from B2 (LGD4) Senior Secured Regular Bond/Debenture, Downgraded to Caa2 (LGD4) from B2 (LGD4) Senior Unsecured Regular Bond/Debenture, Downgraded to Ca (LGD6) from Caa1 (LGD6) Issuer: Diebold Nixdorf Dutch Holding B.V. Senior Secured Regular Bond/Debenture, Downgraded to Caa2 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: Diebold Nixdorf Dutch Holding B.V. Outlook, Changed To Negative From Stable Issuer: Diebold Nixdorf, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Diebold's operating performance has been impacted by pandemic-related supply chain challenges, which were unexpectedly exacerbated in Q1 2022 by social distancing measures in China and the Russia-Ukraine military conflict. The supply chain difficulties resulted in elevated input costs, elevated logistics costs, and component supply delays impacting timing of finished product deliveries. While the company expects these challenges to gradually abate over the course of 2022, in the near-term they are resulting in cost pressures and working capital inefficiencies. Diebold is raising product pricing to sustain margins, but it may have difficulty raising prices on a sufficiently large portion of volumes quickly enough or to the full extent of the cost inflation. While continued strong order bookings and backlog are indicative of the sustained strong demand for Diebold's differentiated solutions, in the near-term the company's profitability and cash flow generation are likely to be affected. The operating dislocation comes at a difficult time for Diebold due to near-term debt maturities. Notably, the company's revolver matures in July 2023, its term loan matures in November 2023, and the unsecured notes mature in 2024. The company has secured a covenant amendment from the bank group and believes that it will remain in compliance with covenants, but further operating volatility could possibly cause non-compliance. The SGL rating of SGL-4 reflects maturity of the revolver within 15 months, a possibility of limited access to the facility, and weak near-term cash flow generation. The Caa2 CFR and Caa2-PD PDR reflect the risk that the debt capital structure may not be sustainable, with a possibility of a transaction involving a portion of the capital structure that could be deemed a distressed exchange under the Moody's definition. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects the company's weak liquidity, impending debt maturities and the possibility of a distressed exchange under Moody's definition. The ratings could be upgraded if Diebold improves liquidity and refinances debt maturities. The ratings could be downgraded if operating performance or liquidity weakens further resulting in an increased assessment of default risk. The principal methodology used in these ratings was Diversified Technology published in Febauary 2022. With revenues of $3.9 billion in 2021, Diebold is a leading global provider of ATM and POS equipment, services and software to financial institutions and enterprise retailers. DIOCESE OF ROCHESTER: Loses Bid to Shield Parishes From Abuse Suits ------------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that the Rochester Diocese loses bid to shield parishes from abuse lawsuits. The Diocese of Rochester can no longer use its bankruptcy proceedings to shield hundreds of parishes and other related entities from sexual abuse lawsuits, a New York bankruptcy judge ruled, as the diocese eyes a nonconsensual Chapter 11 settlement. Despite spending nearly three years in bankruptcy, the diocese doesn't appear to be advancing towards a comprehensive settlement with the 475 abuse victims whose lawsuits led the diocese to file for Chapter 11 in September 2019, Judge Paul R. Warren of the U.S. Bankruptcy Court for the Western District of New York said in a decision Monday, May 23, 2022. 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. DONEGAN ENGINEERING: Unsecureds Will Get 1.3% of Claims in 5 Years ------------------------------------------------------------------ Donegan Engineering, Inc., submitted an Amended Chapter 11 Plan under Subchapter V dated May 19, 2022. The value of the property to be distributed under the Plan during the term of the Plan is not less than the Debtor's projected disposable income for that same period. Unsecured creditors holding allowed claims will receive distributions, which the Debtor has valued at approximately 1.3 cents on the dollar. The Plan also provides for the payment of secured, administrative, and priority claims in accordance with the Bankruptcy Code. The Comptroller has filed a proof of claim asserting a priority claim of $118,478.00. The Debtor, through his counsel, has objected to that claim. Based upon information provided by the Debtor to the Comptroller, the actual claim of the Comptroller should be approximately $1,141.88. The Plan will not become effective unless and until the objection to the Comptroller's claim is resolved in a manner that allows for an effective reorganization. Absent a final resolution of this claim, a proposed payment to the Comptroller of $45,000, the scheduled amount. If the information supplied by the Debtor is inaccurate, and the Comptroller's actual priority claim is in excess of $45,000, the projected income would be insufficient to pay the claim and, by consent, the case will be converted or dismissed upon motion of the Debtor. If the claim of the Comptroller is successfully resolved, and the final priority claim is less than $45,000, the differential will inure to the general unsecured creditors. Class 2 consists of the Priority Tax Claim of the Comptroller in the total amount of $45,000. Monthly distribution of all disposable income unless otherwise agreed. The Comptroller's Proof of Claim exceeds what is provided for in the Plan. The Debtor has filed an Objection to the Proof of Claim, arguing that the POC miscalculates the taxes owed. Claim 2 will be paid in accordance with the disposition of this Objection. In the event the Court determines that the amount owed to the Comptroller is less than $2,000, that amount will be paid in a lump sum. Class 5 consists of General Unsecured Creditors. The General Unsecured Creditors consist of Sandy Spring Bank ($26750.51), the Internal Revenue Service ($181,950.06), and the Comptroller of Maryland ($$92,131.00). After payments of Classes 1, 2, and 4, Class 5 will received a prorata share of all actual disposable income of the Debtor to be received in the five-year period commencing after payment of priority claims. The allowed unsecured claims total $217,931.57. This Class will receive a distribution of 1.3% of their allowed claims. The sole source of funds for the Plan will be revenue from the Debtor's engineering work at D2 Engineering. The Debtor's principal, James Donegan, has committed those revenues to fund the plan for full Plan Term. A full-text copy of the Amended Subchapter V Plan dated May 19, 2022, is available at https://bit.ly/39PagZn from PacerMonitor.com at no charge. Attorney for the Debtor: Michael P. Coyle, Esq. The Coyle Law Group 7061 Deepage Drive, Suite 101B Columbia, MD 21045 Phone: 443-545-1215 Email: mcoyle@thecoylelawgroup.com About Donegan Engineering Inc. Donegan Engineering, Inc., filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-16978) on Nov. 4, 2021, listing up to $50,000 in assets and up to $100,000 in liabilities. Michael Coyle, Esq., at The Coyle Law Group, LLC, is the Debtor's legal counsel. ECTOR COUNTY: Seeks to Hire Crowell & Moring as Special Counsel --------------------------------------------------------------- Ector County Energy Center, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Crowell & Moring, LLP as its special counsel. The firm will represent the Debtor in connection with litigation involving, and negotiations with, Direct Energy Business Marketing, LLC. Crowell & Moring has agreed to provide a 10 percent discount on the rates charged by its attorneys and staff. The discounted hourly rates are as follows: Partners $792 to $1,174.50 Senior Counsel $832.50 to $931.50 Counsel $508.50 to $823.50 Associates $531 to $670.50 Paralegals/Support Staff $243 to $391.50 Larry Eisenstat, Esq., a partner at Crowell & Moring, disclosed in a court filing that his firm neither holds nor represents an interest adverse to the Debtor or its estate. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Eisenstat disclosed that: -- Crowell & Moring has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- No Crowell & Moring professional included in the engagement has varied his rate based on the geographic location of the bankruptcy case; -- Crowell & Moring has represented the Debtor in the 12 months prior to its Chapter 11 filing. The firm's standard billing rates less a 10 percent discount for the professionals who rendered services to the Debtor during the 12 months prior to its bankruptcy filing are as follows: 2021 Rates 2022 Rates Partners $693 to $1,093.50 $792 to $1,174.50 Senior Counsel $828 to $868.50 $832.50 to $931.50 Counsel $598.50 to $765.00 $508.50 to $823.50 Associates $454.50 to $580.50 $531 to $670.50 Paralegals/ Staff $207 to $364.50 $243 to $391.50; and -- Crowell & Moring and the Debtor expect to develop a prospective budget and staffing plan to comply with the U.S. Trustee's request for information and additional disclosures. The firm can be reached through: Larry F. Eisenstat, Esq. Crowell & Moring LLP 1001 Pennsylvania Avenue, NW Washington, DC 20004-2595 Phone: +1 202-624-2500 Fax: +1 202-628-5116 Email: leisenstat@crowell.com About Ector County Energy Center Ector County Energy Center, LLC owns and operates a 330 MW natural gas-fired power generating facility in Ector County, Texas. Ector County Energy Center sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 22-10320) on April 11, 2022. In the petition signed by CRO John D. Baumgartner, the Debtor estimated assets between $50 million and $100 million and estimated liabilities between $500 million and $1 billion. Judge John T. Dorsey oversees the case. The Debtor tapped Holland & Knight, LLP as lead bankruptcy counsel; Polsinelli, PC as local counsel; Locke Lord, LLP and Crowell & Moring, LLP as special counsels; Perella Weinberg Partners, LP and Tudor, Pickering, Holt & Co. as investment bankers; and Grant Thornton, LLP as restructuring advisor. John Baumgartner, managing director at Grant Thornton, serves as the Debtor's chief restructuring officer. Donlin Recano & Company Inc. is the claims agent. EL CASTILLO RETIREMENT+: Fitch Affirms 'BB+' IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed its 'BB+' Issuer Default Rating (IDR) on El Castillo Retirement Residences, NM (El Castillo). Fitch has also affirmed the 'BB+' ratings on the series 2012, 2019A, 2019B-1 and 2019B-2 bonds issued by the City of Santa Fe, NM on behalf of El Castillo. The Rating Outlook is Stable. SECURITY A gross revenue pledge, a mortgage on the community and a debt service reserve fund secure the 2012 2019A, 2019B-1 and 2019B-2 bonds. ANALYTICAL CONCLUSION The 'BB+' rating reflects El Castillo's weak leverage metrics and thin operating performance as measured by net operating margin. The rating is tempered El Castillo's historically strong occupancy which has produced a stronger adjusted net operating margin (NOMA) and Fitch's expectation for successful fill-up of the La Secoya project over the next several months which should allow for improved financial metrics. El Castillo issued $46 million of fixed rate debt in fiscal 2019 and $23 million of temporary debt to fund the project. Construction is completed and the new independent living units (ILUs) are 87% pre-sold, with move ins beginning earlier this month. While severe weather, the coronavirus pandemic and various other issues caused some construction delays, the project was completed on time and on budget. The Stable Outlook reflects Fitch's expectation that balance sheet metrics will improve in the near term as the project is completed and El Castillo pays down its temporary debt. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Mid-Range Revenue Defensibility El Castillo's ILU occupancy is strong as demonstrated by its high 96% occupancy over the last five years and a waitlist of 300 people as of March 31, 2022. Assisted living unit occupancy (ALU; including memory care) and skilled nursing facility (SNF) occupancy have been weak at 73% and 59%, respectively, over the last five years. While this could be a concern, El Castillo's healthcare offerings and staffing levels are structured to primarily support existing residents on campus, and the community is not licensed for Medicare or Medicaid. This removes governmental reimbursement risks as well as operational challenges associated with consistently turning over Medicare rehabilitation admissions. El Castillo's long operating history, favorable location and attractive pricing has led to consistent ILU occupancy and all support its mid-range revenue defensibility. While El Castillo's ALU and SNF occupancy is softer due in part to pandemic-related pressure, its ability to maintain high ILU occupancy and sell new units illustrate its sound demand characteristics. The community's favorable location and service area allows it to draw high net worth residents as indicated by the high median net worth and annual income of the current depositors that is well in excess of the amounts required for admission. Overall, given the limited competition in the service area and strong waiting list for the community, Fitch views entrance fees as reasonable and expects demand for El Castillo's services to remain sound even following the completion of the expansion project. Operating Risk: 'bb' Weak, but Adequate Financial Performance EL Castillo's operating ratio and net operating margin averaged a weak 108% and just under 1% over the past five years. Conversely, consistently strong ILU turnover has produced a strong NOM-adjusted of 24% over the past five years. Given the strong demand for units and above average occupancy Fitch expects that NOM-adjusted will remain close to historical levels as the new campus continues to fill up. Although El Castillo's capital spending has been robust over the past five years, its average age of plant is elevated at 16 years. Fitch toured the existing campus in 2019 and found the ILUs and healthcare units to be attractive, and noted the consistent renovation of turned over ILUs, combination of smaller ILUs to create larger units and recent interior refresh of healthcare service areas. With the completion of La Secoya, capex are expected to moderate significantly with spending expected to average just below depreciation over the next several years. El Castillo's capital related metrics are weak. Based on Fitch's calculations revenue only coverage has on average been below 1.0x. Additionally, debt burden is very high with maximum annual debt service (MADS) at 35% of revenues over as of June 30, 2021, though Fitch expects this to moderate considerably as the new units come online. Financial Profile: 'bb' Sound Liquidity, Weak Debt Metric Unrestricted cash and investments of about $16 million translates into 628 days cash on hand and 18% of outstanding debt. Net entrance fees have contributed to El Castillo's stable liquidity position during the project, and Fitch expects leverage metrics to improve as the project nears completion and temporary debt is paid down. El Castillo's feasibility study shows cash-to-debt strengthening to 44% and cushion ratio to 6.4x in fiscal 2024. Fitch views the projections as reasonable given current pre-sale levels supporting expectations for a 23-month fill period for the new units. According to management, El Castillo is in compliance with its debt service coverage ratio. El Castillo has a very strong history of ILU turnover and conservative projections show the community covering debt at 1.3x in 2024, the first full year after the project has achieved stabilized occupancy at 95% when MADS is projected to be measured. Fitch believes El Castillo's strong demand, sound liquidity and historically steady operating performance provide a cushion to absorb a stressed scenario. Fitch's stressed scenario incorporates both an investment portfolio and cash flow stress that in line with current economic conditions and expectation. El Castillo's investment portfolio stress was moderate given its fairly conservative investment allocation. Fitch assumed that the temporary debt will be paid down in fiscal 2023 and La Secoya will be near full. Asymmetric Additional Risk Considerations No asymmetric risk considerations were relevant to the rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A higher rating is possible over the longer-term if cash to adjusted debt improves to sustained levels of over 50%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Slower than expected fill up of the remaining units at La Secoya; -- A material decline in unrestricted reserves. CREDIT PROFILE El Castillo is a nonprofit corporation organized in 1969 that owns and operates a single site life plan community with 116 ILU apartments, 26 ALUs, 11 memory support units and 23 skilled nursing beds (12 semi-private and 11 private) in downtown Santa Fe, NM. The La Secoya site consist of 68 ILUs and 143 underground parking spaces. El Castillo only offers a fully amortizing type-A residency agreement. Total operating revenues in fiscal 2021 were $10.6 million. Sources of Information In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis. 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. ELEVATE TEXTILES: S&P Affirms 'CCC+' ICR, Outlook Positive ---------------------------------------------------------- S&P Global Ratings affirmed all of its ratings on North Carolina-based Elevate Textiles Inc., including its 'CCC+' issuer credit rating. S&P said, "The positive outlook reflects that we could raise our ratings on Elevate over the next 12 months when we receive more clarity around its ability to address its key maturities, including its asset-based lending (ABL) facility and first-lien term loan, before they become current in early 2023. We believe this would likely occur if it continues to improve its operating performance and reduce its leverage while generating positive free cash flow and the conditions in the credit markets become less challenging. "The company's refinancing risk is high because its ABL revolver will become current in February 2023 and its first lien term loan will become current in May 2023. We view Elevate's capital structure as unsustainable given its high debt burden and weak free operating cash flow (FOCF) relative to its high debt services costs, especially the $14.9 million of required annual amortization on its first-lien term loan. The company was able to extend its ABL revolver's maturity to February 2024 from February 2023 in late 2022, which alleviated some of its near-term refinancing risk. However, Elevate will have to address the ABL maturity because it becomes current in under a year and its $585 first-lien term loan will become current in May 2023. Given the currently elevated level of credit market volatility, we do not believe the company will be able to complete a refinancing in the near term. Therefore, its window for completing a successful refinancing will shrink as the maturity dates for its debt approach. We believe that if current market conditions persist Elevated will be challenged to refinance its debt on favorable terms. Additionally, the company's $125 million second-lien term loan is trading at distressed levels, which increases the likelihood that it will undertake a distressed exchange or balance sheet restructuring to alleviate some of its debt burden. "The company's FOCF generation will remain weak because of necessary investments in its infrastructure. Elevate has delayed some capital improvement projects since the onset of the COVID-19 pandemic in early 2020, first to preserve its liquidity and--in 2021--to opportunistically take advantage of elevated order volumes. The company began reinvesting in its business in late 2021 and we believe its investment spending will increase in 2022. We also expect Elevate to spend $35 million on capital expenditure (capex) in 2022 for capability upgrades and strategic improvements in its supply chain to better meet consumer demand. Therefore, we believe the company's annual FOCF generation will remain at about $10 million for the next two years. This represents a material decline from the approximately $28 million of FOCF it generated in 2020, but an improvement from the marginally negative levels in 2021. "We expect the geopolitical environment to remain volatile in 2022. The company has a globally diversified manufacturing base and can be negatively affected by geopolitical and regional uncertainties. Its Asian facilities weathered the pandemic well and, despite the occasional closure, have continued to operate without experiencing any materially negative effects. Its Burlington plant, located in the U.S., was negatively affected by domestic labor shortages, though Elevate took timely action to revamp its hiring and retention practices, with improved employee incentives and long-term career development opportunities. The company is projecting that the effects of labor disruptions will linger through the first half of 2021 because onboarding new employees takes time. However, we believe the worst of the effects from these shortages are behind it. Despite this setback, Elevate performed in-line with our expectations in 2021. While we continue to expect some unforeseen disruptions to its operations due to increased geopolitical uncertainties, such as those stemming from the Russia-Ukraine conflict, the prolonged COVID-19-related shutdown in Shanghai, or further shutdowns in other parts of China, we believe its current management team has demonstrated a track record of operating amid volatile environments and assume potential disruptions will be manageable. "Input cost increases continue to pressure Elevate's gross margin. Cotton prices have doubled form levels in late 2019, almost tripled from their trough at the end of March 2020, during the onset of the pandemic, and have increased by over 20% from the beginning of the year. We expect they will remain elevated for the remainder of the year on persistent healthy apparel demand. Although we are seeing some early signs of retail weakness, the company's order book remains healthy and above its capacity, which will likely provide it with some buffer amid a declining demand environment. At this time, we do not forecast a sharp decline in apparel demand that leads to falling cotton prices, thus we expect Elevate's gross margins will be lower in the second half of the year due to the lag between the rise in its input costs and the corresponding increase in its prices. We expect that the company's gross margin will be pressured in an inflationary environment, although it is managing the increases in cotton prices better this year than it did during 2018-2019 due to its improved supply chain and vendor management. In addition, Elevate's gross margins are receiving some reprieve from input cost increases because of its better manufacturing fixed-cost absorptions rates while certain plants are running at capacity. Furthermore, the company's profitability is also benefiting from the upcycling of denim because customers are looking for more functionaly from their fabric and are willing to pay a premium for it. Because of this, Elevate is able to shift its mix toward higher-margin products, which is helping to offset some of the inflationary pressure on its input and freight costs. Over the longer term, we believe cotton prices will normalize and the company's capacity utilization will decrease from current levels, enabling it to maintain relatively stable margins. "The positive outlook reflects that we could raise our ratings on Elevate over the next 12 months when we receive more clarity around its ability to address its key maturities, including its ABL facility and first-lien term loan, before they become current in early 2023. We believe this would likely occur if it continues to improve its operating performance and reduce its leverage while generating positive free cash flow and the conditions in the credit markets become less challenging." S&P could raise its ratings on Elevate if it believes it can address its looming maturities and refinance with a new capital structure that is less restrictive on its operations. This could occur if: -- S&P gains greater visibility and clarity around its refinancing plans; -- The conditions in the credit markets are favorable for the company to complete a refinancing; and -- Its operating performance continues to improve, including decreasing leverage and increasing FOCF generation, such that it can more than adequately cover its high annual debt amortization. S&P could revise its outlook on Elevate to stable or lower its ratings if S&P believes a liquidity crisis or restructuring is likely. This could occur if: -- The company does not or cannot address its capital structure ahead of its debt becoming current; or -- Its operating performance deteriorates leading to a liquidity crunch, either from a drop in demand, disruptions to its operations, higher-than-anticipated input costs from a volatile geopolitical environment, further shutdowns in China, or a more competitive landscape. ESG credit indicators: E-2; S-2; G-3 ELITE INVESTORS: Files for Chapter 11 Bankruptcy ------------------------------------------------ Single Asset Real Estate Elite Investors Inc. filed for chapter 11 protection in the District of New Jersey. According to court documents, Elite Investors 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) is slated for June 2, 2022 at 1:00 p.m. About Elite Investors Inc. Elite Investors Inc. is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the fee simple owner of a property located at 2103 River Road, Point Pleasant, NJ valued at $1.58 million. Elite Investors Inc. sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 22-13766) on May 9, 2022. In the petition filed by Thomas Ippolito, as president, Elite Investors estimated assets between $ million and $10 million and estimated liabilities between $500,000 and $1 million. Eugene D. Roth, Esq., of LAW OFFICE OF EUGENE D. ROTH, is the Debtor's counsel. EMERALD X INC: Moody's Affirms 'B2' CFR & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service changed Emerald X, Inc.'s ("Emerald" or "Emerald X") outlook to stable from negative. Concurrently, Moody's affirmed Emerald X's B2 corporate family rating, its B2-PD probability of default rating and its B2 senior secured bank credit facility rating. The Speculative Grade Liquidity rating remains unchanged at SGL-1. The change in outlook to stable from negative reflects the company's operating performance recovery and Moody's expectations for continued deleveraging and positive free cash flow. In-person live events started to return in the second half of 2021, albeit at lower attendance levels, and further ramped up in the first quarter of 2022. Moody's expects financial leverage (excluding event cancellation insurance proceeds) for 2022 to decline but remain high at around 10x as revenues return to normalized levels. Moody's expects financial leverage to decline below 5x in 2023 as a larger portion of events return to, or exceed, pre-pandemic levels, further supported by expectations that international travel restrictions ease over time. All financial metrics cited reflect Moody's standard adjustments. The following ratings/assessments are affected by the action: Ratings Affirmed: Issuer: Emerald X, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) Outlook Actions: Issuer: Emerald X, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Emerald's CFR is constrained by the company's currently weak, but recovering, operating metrics due to event and trade show cancellations and postponements that occurred in 2021 driven by the coronavirus pandemic, resulting in high financial leverage over 10x as of LTM March 31, 2022 (leverage improves to 5.5x when including event cancellation insurance proceeds), and its highly cyclical business model given its reliance on customers' marketing spend and overall macroeconomic activity. Further positive ratings movement is unlikely until the company addresses its $516 million term loan which matures in May 2024. However, the company's revenue is returning to normalized levels as its customers return to live events, and Moody's expects operating metrics to substantially improve in 2022 and further into 2023. Emerald's rating benefits from its position as one of the leading operators of business-to-business events and trade shows held in the US and its very good liquidity profile. Emerald made several modestly sized acquisitions over the past few years and Moody's expect the company will consider additional acquisitions going forward. The company operates in several different industry sectors but, pre-pandemic, its five largest trade shows accounted for approximately 29.8% of revenue in 2019. The stable outlook reflects Moody's expectations that in-person live events will continue returning to normalized levels, Emerald X's financial leverage will decline to around 10x by year-end 2022 and that Emerald X will maintain a very good liquidity profile. The stable outlook also considers an uncertain macroeconomic outlook and expectation for rising interest rates. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Emerald's ratings if the company refinances or extends the maturity of its term loan, free cash flow-to-debt is expected to be sustained at or above 10% and financial leverage is expected to be sustained at or below 4.5x. Moody's could downgrade Emerald's ratings if the company's recovery of its revenue and profitability are negatively impacted by economic weakness or poor operating performance. Sustained negative free cash flow or a weakened liquidity position, including the failure to address its upcoming term loan maturity in a timely manner, would also lead to negative rating pressure. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Emerald X, Inc. (fka Emerald Expositions Holding, Inc.), headquartered in New York City, New York, is a leading operator of business-to-business events and trade shows. The company operates trade shows in several industry sectors (Commerce, Design, Creative & Technology, and Other). Funds managed by Onex and its affiliates owned approximately 86% of the company (which includes common stock issuable upon conversion of preferred stock) as of March 31, 2022, and Emerald is considered a controlled company as defined by the New York Stock Exchange. The company generated $231 million in revenue for the LTM period ended March 31, 2021. ENRAMADA PROPERTIES: Unsecureds to Get At Least 60% Under Plan -------------------------------------------------------------- Enramada Properties, LLC, Oscar Rene Novoa and Sylvia Novoa submitted a Fifth Amended Plan of Reorganization. General Unsecured Creditors (Classes 4(a), 4(b), 4(c) and 4(d)) While the Novoa and Enramada bankruptcy cases have been administratively consolidated, they remain separate cases with separate bankruptcy estates. Claims of Novoa will be paid from Novoa assets, while Enramada's claims will be paid from its assets. Class 4(b) claims, which consists of creditors whose claims are joint obligations of the Novoa and Enramada bankruptcy estates will be paid from both bankruptcy estates. Class 4(a): A creditor whose allowed claim is $2,500 or less or who elects to reduce its allowed claim to $2,500 will receive a single payment equal to 100% of its allowed claim on the Effective Date of the Plan. Class 4(a) claims total $5,516. Virtually all of the Class 4(a) claims belong to Novoa. Novoa will contribute future income to pay the claims of Classes 4(a). Class 4(b): This class consists of general unsecured claims filed in both the Enramada and Novoa bankruptcy cases. Class 4(b) claims total $401,059. Debtors will contribute the full amount of the net proceeds from the sale of the Lanfranco Property, the Pogosian settlement proceeds and future income from both Debtors to pay the claims of Class 4(b). Class 4(b) members will be paid 60% of their allowed claims. Members of this class include but are not limited to the amount of a secured creditor's claim in excess of the secured claim unless the holder of a secured claim makes a timely and valid section 1111(b) election. Should that occur, the claim shall be treated as a secured claim notwithstanding section 506(a). Class 4(c): This class consists of claims by general unsecured creditors of the Enramada bankruptcy case only. There are not presently any Class 4(c) claims. The class is listed in case any such claims are discovered. Enramada will contribute the full amount of the net proceeds from the sale of the Lanfranco Property and future income to pay the claims of Classes 4(c). Members of this class include but are not limited to the amount of a secured creditor's claim in excess of the secured claim unless the holder of a secured claim makes a timely and valid section 1111(b) election. Should that occur, the claim shall be treated as a secured claim notwithstanding section 506(a). Class 4(d): This class consists of claims by general unsecured creditors in the Novoa bankruptcy case only. Class 4(d) claims total $327,189. Novoa will contribute the full amount of the net proceeds from the Pogosian settlement proceeds and future income to pay the claims of Class 4(d). Class 4(d) members will be paid 60% of their allowed claims. Enramada intends to make payments required under the Plan from available cash, sales of assets and future disposable income. Novoa intends to make payments required under the Plan from available cash, future disposable income and other sources of funding. Attorneys for the Debtors: Andrew S. Bisom, Esq. THE BISOM LAW GROUP 300 Spectrum Center Drive, Ste. 1575 Irvine, CA 92618 Telephone: (714) 643-8900 Facsimile: (714) 643-8901 E-mail: abisom@bisomlaw.com Fritz J. Firman, Esq. WEBER FIRMAN 1503 South Coast Dr., Ste. 209 Costa Mesa, CA 92626 Telephone: (714) 433-7185 E-mail: firmanweber@yahoo.com A copy of the Plan dated May 18, 2022, is available at https://bit.ly/3MBbvKg from PacerMonitor.com. About Enramada Properties Enramada Properties, LLC, based in Whittier, California, holds a joint tenancy interest in a property located in Los Angeles, California valued at $325,000. It also owns two real properties in Whittier having an aggregate current value of $1.1 million. Enramada Properties filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 19-19869) on Aug. 22, 2019. In the petition signed by Sylvia Novoa, managing member, the Debtor listed total assets of $1,429,000 against total liabilities of $1,724,414. The Hon. Julia W. Brand oversees the case. Andrew S. Bisom, Esq., at The Bison Law Group, serves as the Debtor's bankruptcy counsel. FLEXIBLE FUNDING: June 28 Hearing on Plan and Disclosures --------------------------------------------------------- Judge Mark X. Mullin has entered an order that the Amended Disclosure Statement for Chapter 11 Amended Joint Plan of Liquidation for Flexible Funding Ltd. Liability Co. and Instapay Flexible is conditionally approved for the purpose of solicitation of votes on the Amended Chapter 11 Joint Plan of Liquidation for Flexible Funding Ltd. Liability Co. and Instapay Flexible, LLC, pending a final approval on the adequacy of the Disclosure Statement at the Combined Hearing. A combined hearing to consider the adequacy and final approval of the Disclosure Statement and confirmation of the Plan will commence before the Honorable Mark X. Mullin, United States Bankruptcy Judge, Room 128, U.S. Courthouse, 501 W. Tenth Street, Fort Worth, Texas 76102, on June 28, 2022, at 1:30 p.m., Central Time. Any objection to (a) the adequacy and final approval of the Disclosure Statement, and/or (b) confirmation of the Plan must be made by written objection and filed with the Clerk of the Court by no later than June 17, 2022. To be counted as votes to accept or reject the Plan, all ballots must be properly executed, completed, and delivered to the following address by no later than 5:00 p.m., Central Time, on June 17, 2022. The Debtors must file a tabulation of ballots with the Clerk of the Court by no later than June 24, 2022, with a copy to be concurrently served upon any party that has filed a timely objection to the Plan. The Debtors shall not be required to serve a Solicitation Package on any holder of a claim in Classes 1 and 2. About Flexible Funding Flexible Funding Ltd. and Instapay Flexible LLC filed petitions for Chapter 11 protection (Bankr. N.D. Texas Lead Case No. 21-42215) on Sept. 19, 2021. Judge Mark X. Mullin oversees the cases. At the time of the filing, Flexible Funding listed $100 million to $500 million in both assets and liabilities while Instapay listed as much as $50 million in both assets and liabilities. Jeff P. Prostok, Esq., and Lynda L. Lankford, Esq., at Forshey & Prostok, LLP are the Debtors' bankruptcy attorneys. FRONT SIGHT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Front Sight Management LLC dba Front Sight Firearms Training Institute aka Front Sight Resorts aka Front Sight 1 Front Sight Road, Pahrump, NV 89061 Business Description: Front Sight Management specializes in providing courses in gun training, self- defense martial arts training, and personal safety—with firearms or without. Chapter 11 Petition Date: May 24, 2022 Court: United States Bankruptcy Court District of Nevada Case No.: 22-11824 Debtor's Counsel: Steven T. Gubner, Esq. BG LAW LLP 300 S. 4th Street, Suite 1550 Las Vegas, NV 89101 Tel: (702) 835-0800 Email: sgubner@bg.law Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Ignatius Piazza as manager. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7YRRU3Y/Front_Sight_Management_LLC__nvbke-22-11824__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. [Confidential Party] Real Estate $350,000 [Address Redacted] 2. Steve Heun Real Estate $165,000 35 Hahnemann Ln Napa, CA 94558-7210 Email: sheun@pacbell.net 3. Gary Cecchi Real Estate $148,000 90 Grey Fox Ln Oroville, CA 95966-9460 Email: gcecchi@comcast.net 4. David Streck Real Estate $106,000 22W330 Spring Valley Dr. Medinah, IL 60157 Email: dstreck1@gmail.com 5. Armscor Precision International Trade $100,000 1731 Village Center Circle Suite 150 Las Vegas, NV 89134 Attn: Kyle Wyany Email: kwyant@shea.law 6. Thomas Fitzgerald Member $96,000 1527 South Ct Obligation Findlay, OH 45840 Email: flstffitz@gmail.com 7. Thomas Donaghy Member $96,000 3346 Woolsey Rd Obligation Windsor, CA 95492 Email: tom@ncva.com 8. Edward Barber Member $96,000 14831 Ronda Drive Obligation San Jose, CA 95124 Email: rondavoo@aol.com 9. Daniel Smith Member $81,003 46006 N 37th Ln Obligation New River, AZ 85087-6963 Email: parzifalus@yahoo.com 10. Call & Jensen Law Legal $78,219 610 Newport Center Drive Suite 700 Newport Beach, CA 92660 Attn: Julie R. Trotter, Managing Shareholder Tel: (949) 717-3000 Email: jtrotter@calljensen.com 11. Preston Arza LLP Legal $72,444 301 North Palm Canyon Drive Suite 103-102 Palm Springs, CA 92262-5672 Attn: Scott Preston Email: scott@prestonarza.com 12. ALM Investments LLC Unsecured Note $55,000 3525 Sage Rd 115 Houston, TX 77056 Tel: (917) 856-8213 13. Allan Paine Member $54,000 888 Twin Creeks Crossing Apt 114 Obligation Central Point, OR 97502 Email: allanpaine57@gmail.com 14. Ronald Genova Member $50,003 3430 N. Mountain Ridge Unit # 14 Obligation Mesa, AZ 85207 Email: rtgenov@aol.com 15. David Wallace Member $48,000 791 Star View Way Obligation Bridgewater, NJ 08807 Email: david.w.wallace@hotmail.com 16. William Feczko Member $48,000 230 Highview Ave Obligation Pittsburgh, PA 15238 Email: marty@chaneyassoc.com 17. Ted Balmforth Member $48,000 133 E 4000 S Obligation Victor, ID 83455-5562 Email: tsbalmforth@silverstar.com 18. Rafael Angel Member $48,000 4240 Whisper Trail Obligation Olive Branch, MS 38654 Email: mazatlan8@live.com 19. James Taylor Member $48,000 2013 Legacy Drive Obligation Faribault, MN 55021 Email: jctm@taylors.xyz 20. Michael Meacher Employment TBD 4770 Santa Luc Street Agreement Mt. Falls, NV 89061 Ex-CFO Email: mike.meacher@gmail.com GALAXY NEXT: Incurs $1.1 Million Net Loss in Third Quarter ---------------------------------------------------------- Galaxy Next Generation, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.08 million on $1.27 million of revenues for the three months ended March 31, 2022, compared to a net loss of $2.89 million on $777,457 of revenues for the three months ended March 31, 2021. For the nine months ended March 31, 2022, the Company reported a net loss of $3.88 million on $3.86 million of revenues compared to a net loss of $23.79 million on $2.75 million of revenues for the same period in 2021. As of March 31, 2022, the Company had $4.92 million in total assets, $5.30 million in total liabilities, and a total stockholders' deficit of $378,250. Galaxy Next said "Although our revenues generated from operations have become more sufficient, in order to support our operational activities our revenues we may still need to be supplemented by the proceeds from the issuance of securities, including equity and debt issuances. At March 31, 2022, we had a working capital deficit of $2,611,332 and an accumulated deficit of $51,809,645. Our ability to continue as a going concern is dependent upon management's ability to raise capital from the sale of its equity and, ultimately, the achievement of sufficient operating revenues. We anticipate that our current cash and revenue generated from operations will be sufficient for day-to-ay operations; however, we anticipate that we will need additional capital for business expansion and new product development. If our revenues continue to be insufficient to support our operational activities, we intend to raise additional capital through the sale of equity securities or borrowings from financial institutions and possibly from related and nonrelated parties who may in fact lend to us on reasonable terms and ultimately generating sufficient revenue from operations. Our operating loss continues to shrink, and investments should allow us to continue for several months until sufficient revenue is met. Management believes that its actions to secure additional funding will allow us to continue as a going concern. We currently do not have any committed sources of financing other than our accounts receivable factoring agreement, which requires us to meet certain requirements to utilize. There can be no assurance that we will meet all or any of the requirements pursuant to our line of credit, or accounts receivable factoring agreement, and therefore those financing options may be unavailable to us. There is no guarantee we will be successful in raising capital outside of our current sources, and if so, that we will be able to do so on favorable terms." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1127993/000109181822000063/gaxy05122022mar10q22.htm About Galaxy Next Generation Headquartered in Toccoa, Georgia, Galaxy Next Generation, Inc. -- http://www.galaxynext.us-- is a manufacturer and distributor of interactive learning technologies and enhanced audio solutions. It develops both hardware and software that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy Next reported a net loss of $24.43 million for the year ended June 30, 2021, compared to a net loss of $14.03 million for the year ended June 30, 2020. As of Sept. 30, 2021, the Company had $7.20 million in total assets, $7.89 million in total liabilities, and a total stockholders' deficit of $697,562. Indianapolis, Indiana-based Somerset CPAs PC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 16, 2021, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. GARUDA HOTELS: Wins Interim Cash Collateral Access Thru June 2 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York authorized Garuda Hotels, Inc. and Welcome Motels II, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance and provide adequate protection. The use of cash collateral is essential to the continued operation of the Debtors' business and the preservation of the Debtors' estates. The Debtors assert RSS Comm 201-LC15 NY GHI LLC holds a duly perfected senior security interest in all of their personal property, including the proceeds thereof, by virtue of a Mortgage Note in the original principal amount of $7,970,000, secured by, among other things, liens on the Debtors' real and personal property pursuant to a Loan Agreement, Mortgage and Assignment of Rents, each dated February 28, 2014 and UCC-1 Financing Statements filed in connection therewith. The Court said that, in addition to the existing rights and interests of RSS and for the purpose of adequately protecting RSS from diminution in value of the Collateral, RSS is granted replacement liens in the cash collateral, to the extent the liens were valid, perfected and enforceable as of the Petition Date and in the continuing order of priority of the Pre-Petition Liens without determination herein as to the nature, extent and validity of said pre-petition liens and claims, and solely to the extent Collateral Diminution occurs during the Bankruptcy Cases. The replacement liens are subject to: (i) any United States Trustee fees incurred by the Debtors pursuant to 28 U.S.C. Section 1930 and interest thereon pursuant to 31 U.S.C. Section 3717 and (ii) estate causes of action and the proceeds of any recoveries of estate causes of action under Chapter 5 of the Bankruptcy Code. No portion of the cash collateral may be used to challenge, attack or otherwise seek to avoid RSS's liens under chapter 5 of the Bankruptcy Code or applicable non-bankruptcy law. As additional adequate protection, the Debtors will pay to RSS monthly payments of interest-only, at the contract (non-default) rate of interest (per diem of $1,056), as set forth in the RSS Loan Documents. To the extent the Replacement Liens fail to adequately protected RSS for the diminution in the cash collateral, RSS reserves all rights to request allowance of a superpriority administrative expense claim to the extent provided in 11 U.S.C. section 07(b), subject only to the Carve-Outs. The Replacement Liens and security interests granted are automatically deemed perfected upon entry of the Order without the necessity of RSS having to take possession, file financing statements, mortgages or other typical security documents. The Debtors' authorization to use cash collateral will immediately terminate without further Order on the earlier of: (a) June 1, 2022, at 5 p.m. EST; (b) the entry of and order granting any party relief from the automatic stay with respect to any property of the Debtors in which RSS claims a lien or security interest, whether pursuant to this Order or otherwise; (c) the entry of an order dismissing the Bankruptcy Cases or converting the proceedings to cases under Chapter 7 of the Bankruptcy Code; (d) the entry of an order confirming a plan or plans of reorganization; or (e) the entry of an order by which the Order is reversed, revoked, stayed, rescinded, modified or amended without the consent of RSS thereto. A further hearing on the matter is scheduled for June 1 at 10 a.m. A copy of the order is available at https://bit.ly/3sQX9hg from PacerMonitor.com. About Garuda Hotels, Inc. Garuda Hotels, Inc. is the operator of a Country Inn and Suites Hotel and owns the real property upon which the hotel is located, 110 Danby Road, Ithaca, NY. Welcome is the operator of an Econolodge Hotel and owns the real property upon which the hotel is located, 2303 Triphammer Road, Ithaca, NY. Garuda sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 22-30296-5-wak) on May 13, 2022. In the petition signed by Jay Bramhandkar, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Wendy A. Kinsella oversees the case. Erica Aisner, Esq., at Kirby Aisner & Curley LLP is the Debtor's counsel. GATA HF: Taps Andrew Johnson of Valuation Source as Appraiser ------------------------------------------------------------- Gata HF, LLC received approval from the U.S. Bankruptcy Court for the District of Nevada to employ Andrew Johnson, a real estate appraiser and valuation expert at Valuation Source. Mr. Johnson's services include an appraisal of the Debtor's property and expert testimony regarding the value of the property. Mr. Johnson will be paid a flat fee of $6,500. As disclosed in court filings, Mr. Johnson is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Johnson can be reached at: Andrew J. Johnson Valuation Source 10170 W Tropicana Ave Las Vegas, NV 89147 Direct: 702.496.9923 Fax: 888.261.3292 Email: andrew@valuationsourcenv.com About Gata HF Gata HF, LLC, a company in Pahrump, Nev., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Nev. Case No. 21-14989) on Oct. 20, 2021, listing as much as $10 million in both assets and liabilities. Brian Shapiro serves as Subchapter V trustee. Judge Natalie M. Cox oversees the case. Matthew C. Zirzow, Esq., and Zachariah Larson, Esq., at Larson & Zirzow, LLC are the Debtor's bankruptcy attorneys. The Debtor filed its proposed Chapter 11 plan of reorganization for small business on Jan. 18, 2022. GENESIS DEVELOPMENT: Files for Chapter 11 Bankruptcy ---------------------------------------------------- Genesis Development Corporation filed for chapter 11 protection in the Northern District of Alabama. According to court filing, Genesis Development Corporation estimates between 1 and 49 unsecured creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for June 7, 2022 at 11:00 A.M. at the Office of the U.S.T. About Genesis Development Corporation Genesis Development Corporation is a real estate developer. Genesis Development Corporation sought Chapter 11 bankruptcy protection (Bankr. N.D. Ala. Case No. 22-01080) on May 9, 2022. In the petition filed by John A. Richard, as president, Genesis Development, estimated assets between $500,000 and $1 million and liabilities between $500,000 and $1 million. The case is assigned to Honorable Bankruptcy Judge Tamara O Mitchell. Frederick Mott Garfield, of Spain & Gillon, LLC, is the Debtor's counsel. GRATA CAFE: Wins Cash Collateral Access Thru June 7 --------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina, Durham Division, authorized Grata Cafe, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance and provide adequate protection. The Debtor requires the use of cash collateral to pay its operational needs. The Debtor entity was formed in early 2021 and entered into a lease agreement for the cafe space in April 2021. Extensive delays in opening the cafe and construction costs, followed by a depressed restaurant environment due to the COVID-19 pandemic, forced the Debtor to incur significant debt, both from institutional lenders and from owner's wife, Rachel Radford's business. Ceremony Salon. Since the filing of the case, business has improved. On June 24, 2021, the Debtor and CFG Merchant Solutions entered into a loan and security agreement. The loan was secured by a blanket lien on all the Debtor's assets "now or hereafter acquired" and perfected by UCC Financing Statement 20210084467h filed with the North Carolina Secretary of State. The Debtor believes the balance of the CFG loan is approximately $12,000. On September 13, 2021, the Debtor and Green Grass Capital entered into a loan and security agreement. The loan was secured by a blanket lien on all the Debtor's "present and future accounts" and perfected by UCC Financing Statement 202I0123874A filed with the North Carolina Secretary of State. The Debtor believes the balance of the Green Grass loan is approximately $3,000. The Debtor is permitted to use the cash collateral in the ordinary course of business pursuant to the Budget through the earliest of (i) the entry of a final order authorizing the use of cash collateral, or (ii) the entry of a further interim order authorizing the use of cash collateral, or (iii) June 7, 2022 or (iv) the entry of an order denying or modifying the use of cash collateral, or (v) the occurrence of a Termination Event. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, the Secured Parties are granted a post-petition replacement lien in the Debtor's post-petition property of the same type which secured the indebtedness of a Secured Party pre-petition, with such liens having the same validity, priority, and enforceability as the Secured Party had against the same type of such collateral as of the Petition Date. A Secured Party's lien is deemed perfected to the extent the pre-petition liens and security interests were valid, perfected, enforceable, and non-avoidable as of the Petition Date; provided however, that nothing in the Order will be deemed to grant the Secured Party a post-petition lien on assets, if any, in which it did not possess a valid, perfected, enforceable, and otherwise unavoidable pre-petition lien. A further hearing on the matter is scheduled for June 7 at 9:30 a.m. A copy of the order and the Debtor's budget for the period from May 11 to June 7, 2022, is available at https://bit.ly/39JmFOv from PacerMonitor.com. The Debtor projects $49,000 in revenue and $46,630 in total expenses for the period. About Grata Cafe, LLC Grata Cafe, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-00494) on March 8, 2022. The case was transferred to the Middle District of North Carolina (Bankr. M.D.N.C. Case No. 22-80071) on March 21, 2022. In the petition filed by Jerome Radford, member-manager, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Lena Mansori James oversees the case. Travis Sasser, Esq., at Sasser Law Firm is the Debtor's counsel. GULFPORT ENERGY: Fitch Raises LongTerm IDR to 'B+', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has upgraded the Long-Term Issuer Default Rating (IDR) of Gulfport Energy Corporation to 'B+' from 'B'. Fitch has also upgraded Gulfport's first lien revolver to 'BB+'/'RR1' from 'BB'/'RR1' and affirmed the senior unsecured notes at 'BB-' and revised the Recovery Rating to 'RR3' from 'RR2'. The Rating Outlook is Stable. Gulfport's ratings reflect the company's low leverage ratios ( GULFSLOPE ENERGY: Incurs $3.9 Million Net Loss in Second Quarter ---------------------------------------------------------------- Gulfslope Energy, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $3.85 million on zero revenue for the three months ended March 31, 2022, compared to a net loss of $1 million on zero revenue for the three months ended March 31, 2021. For the six months ended March 31, 2022, the Company reported a net loss of $4.36 million on $0 of revenues compared to a net loss of $1.36 million on $0 of revenues for the six months ended March 31, 2021. As of March 31, 2022, the Company had $9.84 million in total assets, $14.10 million in total liabilities, and a total stockholders' deficit of $4.27 million. The Company has incurred accumulated losses for the period from inception to March 31, 2021, of approximately $64.6 million, and has a negative working capital of $13.3 million. For the six months ended March 31, 2021, net cash used in operations of approximately $1.0 million. As of March 31, 2022, there was $0.5 million of cash on hand. The Company estimates that it will need to raise a minimum of $10 million to meet its obligations and planned expenditures through May 2023. The $10 million is comprised primarily of capital project expenditures as well as general and administrative expenses. It does not include any amounts due under outstanding debt obligations and accrued interest, which amounted to approximately $12.3 million as of March 31, 2022. The Company plans to finance operations and planned expenditures through the issuance of equity securities, debt financings, farm-out agreements, mergers or other transactions. "Our policy has been to periodically raise funds through the sale of equity on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1341726/000138713122006208/gspe-10q_033122.htm About Gulfslope Headquartered in Houston, Texas, Gulfslope Energy, Inc. -- http://www.gulfslope.com-- is an independent crude oil and natural gas exploration and production company whose interests are concentrated in the United States Gulf of Mexico federal waters. GulfSlope Energy commenced commercial operations in March 2013. Gulfslope reported a net loss of $2.23 million for the year ended Sept. 30, 2021, compared to a net loss of $2.42 million for the year ended Sept. 30, 2020. As of Sept. 30, 2021, the Company had $13.70 million in total assets, $13.64 million in total liabilities, and $59,834 in total stockholders' equity. Houston, Texas-based Pannell Kerr Forster of Texas, P.C., the Company's auditor since 2019, issued a "going concern "qualification in its report dated Dec. 29, 2021, citing that the Company has accumulated losses, and further losses are anticipated in developing the Company's business, which raise substantial doubt about its ability to continue as a going concern. H. I. D. INTERIORS: Starts Chapter 11 Subchapter V Case ------------------------------------------------------- H. I. D. Interiors Inc. filed for chapter 11 protection in the Southern District of California. According to court filings, H. I. D, Interiors Inc. estimates between 1 and 49 unsecured creditors. The petition states that funds will be available to unsecured creditors. The meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for June 7, 2022, at 9:00 a.m. About H. I. D. Interiors H. I. D. Interiors Inc., doing business as H.I.D. Drywall, belongs to the business services industry. It holds a Drywall license according to the California license board. H. I. D. Interiors, Inc., filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 22-01228) on May 9, 2022. In the petition filed by Alma Belen Gastelum, as president and CEO, H. I. D. Interiors listed estimated assets and liabilities between $500,000 and $1 million each. The case is overseen by Honorable Bankruptcy Judge Margaret M. Mann. Barbara R. Gross has been appointed as Subchapter V trustee. Craig E. Dwyer, of Craig E. Dwyer, ESQ., is the Debtor's counsel HAMON HOLDINGS: Seeks to Hire 'Ordinary Course' Professionals ------------------------------------------------------------- Hamon Holdings Corp. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire professionals used in the ordinary course of business. The "ordinary course" professionals include: 1. Gregory D. DeGrazia Miller Canfield 150 West Jefferson, Suite 2500 Detroit, MI 48226-4415 Phone: (313) 496-7656 Fax: (313) 496-7500 Cell: (248) 227-2268 -- IP Legal Services -- Hourly Rate: $500 -- Average Monthly Payment: $2,000 2. Patrick T. Collins, Esq. Norris McLaughlin, P.A. 400 Crossing Blvd., 8th Floor Bridgewater, NJ 08807-5933 Phone: (908) 252-4237 Fax: (908) 722-0755 Email: ptcollins@norris-law.com -- Employment/Legal Services -- Hourly Rate: $500 -- Average Monthly Payment: $1,000 3. Robert A. Recio P.O. Box 403 Morris Plains, NJ 07950 Phone: (732) 310-0021 Email: Robert.recio@outlook.com -- Corporate Legal Services -- Hourly Rate: $250 -- Average Monthly Payment: $15,000 The Debtor also seeks approval to pay, without formal application to the court, 100 percent of fees and disbursements to each OCP. The monthly fee cap for each OCP is $15,000. About Hamon Holdings Corp. Hamon Holdings Corp., a Delaware-based engineering and contracting company, and its affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 22-10375) on April 24, 2022. In the petition filed by Joseph DeMartino, vice-president, Hamon Holdings listed up to $50,000 in assets and up to $50,000 in liabilities. The case is assigned to Judge John T Dorsey. Jarret P. Hitchings, Esq., at Duane Morris, LLP is the Debtor's counsel. HAMON HOLDINGS: Seeks to Hire PHJ Consulting Services as Consultant ------------------------------------------------------------------- Hamon Holdings Corp. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire PHJ Consulting Services Ltd. and designate Peter Howes as senior transformation officer. PHJ, acting through Mr. Howes, will provide consulting and management services in the areas of organizational structure, divestments, and business management as well as such other related services as the Debtors may require in the course of its Chapter 11 case. PHJ will charge a daily fee of EUR1,250, full time basis. The firm will seeks reimbursement of out-of-pocket expenses for all reasonable travel and accommodation expenses incurred. Mr. Howes, director of PHJ Consulting, assured the court that the firm does not hold or represent any interest materially adverse to the Debtors or their estates. The firm can be reached through: Peter Howes PHJ Consulting Services Ltd 9 Thrimley Lane Farnham Bishops Stortford Essex CM23 1HX About Hamon Holdings Corp. Hamon Holdings Corp., a Delaware-based engineering and contracting company, and its affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 22-10375) on April 24, 2022. In the petition filed by Joseph DeMartino, vice-president, Hamon Holdings listed up to $50,000 in assets and up to $50,000 in liabilities. The case is assigned to Judge John T Dorsey. Jarret P. Hitchings, Esq., at Duane Morris, LLP is the Debtor's counsel. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on May 10, 2022. The committee is represented by Marcy J. McLaughlin Smith, Esq. HOUSTON BLUEBONNET: Unsecured Claims Unimpaired in Plan ------------------------------------------------------- Houston Bluebonnet, LLC, submitted an Amended Chapter 11 Disclosure Statement and Plan. The Debtor owns and manages a working interest in two producing oil and gas wells under an operating agreement for an oil, gas and mineral lease covering 20 acres in Brazoria County, Texas. The value of the Debtor's working interest fluctuates with the price of oil. As of the filing of this bankruptcy case, the Debtor valued its working interest at $90,000, based on the tax-assessed value calculated from the sales in 2015. Allyson Davis is the Attorney-In-Fact for Leslie Brinkoeter, the managing member and sole owner of Houston Bluebonnet, L.L.C. As such, Ms. Davis controls and operates the Debtor. The Debtor has never paid any compensation to Ms. Davis. Accordingly, the Debtor has not paid her any compensation before or during the pendency of this chapter 11 case. Since January 2014 and during the Debtor's chapter 11 case, Ms. Davis has been the only person in control of the Debtor and has overseen the day-to-day management of the Debtor. The Debtor does not have any employees. After the effective date of the order confirming the Plan, Ms. Davis will remain in control of the Debtor, and Leslie Brinkoeter will remain the managing member and sole owner of the Debtor. Neither Ms. Davis nor Ms. Brinkoeter willreceive a salary for their services. The Debtor will continue to manage and operate its oil/gas fields, and will utilize the income to fund the plan. Funds will be distributed to allowed claims in an orderly, pro-rata fashion. The Debtor will have sufficient projected disposable income to fund the payments required by this Plan. Under the Plan, holders of Class 3 Non-Priority Unsecured Claims will be paid 100% of the allowed amount of their claim over the term of this plan, a pro rata. The Debtor retains the absolute right to prepay all, or a portion, of the outstanding debt to Class 3 at any time, without penalty. Class 3 will not be paid interest on their claims. Class 3 is unimpaired. A copy of the Disclosure Statement dated May 18, 2022, is available at https://bit.ly/3MxrLw5 from PacerMonitor.com. About Houston Bluebonnet Houston Bluebonnet, LLC is a Texas limited liability company formed Dec. 5, 2007. It owns and manages a working interest in two producing oil and gas wells under an operating agreement for an oil, gas and mineral lease covering 20 acres in Brazoria County, Texas. The value of its working interest fluctuates with the price of oil. As of the filing of its bankruptcy case, Houston Bluebonnet valued its working interest at $90,000, based on the tax-assessed value calculated from the sales in 2015. Houston Bluebonnet filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 16-34850) on Sept. 30, 2016. In the petition signed by Allyson Davis, authorized representative, the Debtor listed as much as $500,000 in both assets and liabilities. Judge Marvin Isgur oversees the case. Johnie Patterson, Esq., at Walker & Patterson, P.C. is the Debtor's bankruptcy counsel. Gary E. Ellison PC, Snelling Law Firm and Cokinos Young serve as special counsel. INDIE BREWING: In Chapter 11 Bankruptcy After Buyer Backs Out ------------------------------------------------------------- Indie Brewing LLC filed for chapter 11 protection in the District of Central California. Indie Brewing immediately filed a motion to reject its keg supply agreements. It explained that on Feb. 28, 2022, due to the devastating effects of the Covid-19 pandemic, the Debtor ceased operating its business to the public, except for a very small and limited distribution of beer cans sold through online media. The Debtor operated a craft brewery and tasting room in the Boyle Heights section of Los Angeles from 2015 through 2022. It was the first craft brewery on the eastside of LA since the 70s. The business had 200 accounts through Los Angeles and was served at Dodger Stadium in 2021. The Debtor said that it has struggled to survive due to the Covid pandemic and a dispute with its landlord, 2301 East 7th Street, LLC. Amid the Covid restrictions, from March 2020 through February 2022 the Debtor was either closed or required to operate at only 50% capacity. Pre-bankruptcy, the Debtor signed a deal for an existing brewery, Los Angeles Ale Works, LLC, to buy the business but issues with the Debtor's landlord prompted the buyer to back out. "The effects of the Covid pandemic, coupled with the realization that there was nothing else to offer the landlord to obtain its consents resulted in the Debtor having no alternative but to file the case. Without the sale proceeds, the Debtor has no ability to pay its creditors other than a liquidation sale would result in likely less than the proceeds of the sale to the buyer. As a result, the Debtor commenced its Chapter 11 bankruptcy case. The Debtor believes that through liquidation of its assets and its claims against the landlord, it will be able to make a significant distribution to its creditors on their claims," Michael S. Kogan of Kogan Law Firm, APC, explains. According to court documents, Indie Brewing estimates between 1 and 49 unsecured creditors. The petition states that funds will be available to unsecured creditors. The meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for June 2, 2022, at 9:30 a.m. About Indie Brewing LLC Indie Brewing LLC -- https://indiebrewco.com/ -- is a California-based brewing company. Indie Brewing sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 22-12633) on May 10, 2022. In the petition filed by Kevin M. O'Malley, as member, Indie Brewing estimated assets between $500,000 and $1 million and estimated liabilities between $500,000 and $1 million. Michael S Kogan, of Kogan Law Firm, APC, is the Debtor's counsel. INPIXON: Incurs $11.6 Million Net Loss in First Quarter ------------------------------------------------------- Inpixon filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $11.56 million on $5.23 million of revenues for the three months ended March 31, 2022, compared to a net loss of $12.54 million on $2.95 million of revenues for the three months ended March 31, 2021. As of March 31, 2022, the Company had $137.23 million in total assets, $16.65 million in total liabilities, $43.17 million in mezzanine equity, and $77.40 million in total stockholders' equity. Management Commentary "I'm pleased to report that we continued our strong revenue growth in the first quarter of 2022, as illustrated by a 77% increase in revenue to $5.2 million as compared to $3.0 million for the same period in 2021," commented Nadir Ali, CEO of Inpixon. "This growth results from Inpixon's ability to continue to add household name-brand enterprise organizations to its Indoor Intelligence customer list. Our enterprise app platforms are designed to meet the needs of the modern organization, providing a smart, innovative and connected space with technologies that provide end-to-end logistics, management tools and analytics for the workplace, events, and customer experience programs. Our customers are choosing us because we can deliver an enterprise-level platform, rich with over 150 workplace features and partnerships that allow for over 75 enterprise software integrations." "We are at the forefront of delivering solutions that are focused on interconnectivity, automation and intelligence driven by better, more reliable data. With our breadth of hardware and software technologies, Inpixon is well positioned to take advantage of not only the market growth in hybrid workplaces, hybrid events and industrial automation but also the metaverse. Inpixon has the foundational technologies and skillsets -- in hardware design, software development, wireless communications, mapping, positioning, augmented reality, computer vision, 3D rendering, advanced visualizations, analytics, and artificial intelligence -- to ride the metaverse wave," Mr. Ali said. "Inpixon technologies are gaining broad recognition as a leader in the market, with numerous industry awards and media coverage. We believe we have a solid foundation for continued growth and look forward to expanding our partnerships with organizations that share a vision for driving change and reimagining workplace experiences," concluded Mr. Ali. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1529113/000162828022014543/inpx-20220331.htm About Inpixon Headquartered in Palo Alto, Calif., Inpixon (Nasdaq: INPX) is an indoor data company and specializes in indoor intelligence. The Company's indoor location data platform and patented technologies ingest and integrate data with indoor maps enabling users to harness the power of indoor data to create actionable intelligence. Inpixon reported a net loss of $70.13 million for the year ended Dec. 31, 2021, a net loss of $29.21 million for the year ended Dec. 31, 2020, a net loss of $33.98 million for the year ended Dec. 31, 2019, and a net loss of $24.56 million for the year ended Dec. 31, 2018. As of Dec. 31, 2021, the Company had $156.67 million in total assets, $28.49 million in total liabilities, $44.70 million in mezzanine equity, and $83.49 million in total stockholders' equity. INTERPACE BIOSCIENCES: Incurs $2.25 Million Net Loss in 1st Quarter ------------------------------------------------------------------- Interpace Biosciences, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.25 million on $10.38 million of net revenue for the three months ended March 31, 2022, compared to a net loss of $4.21 million on $9.83 million of net revenue for the three months ended March 31, 2021. As of March 31, 2022, the Company had $38.36 million in total assets, $36.16 million in total liabilities, $46.54 million in preferred stock, and a total stockholders' deficit of $44.34 million. "We are pleased with our first quarter results and progress toward our Fiscal 2022 goals," said Thomas Burnell, Interpace president and CEO. "Our pharma services experienced a strong first quarter and despite a slow start, clinical services volume has rebounded and remains strong as we progress further into the second quarter. The Company is poised to take advantage of the significant improvements achieved in 2021 and we are targeting higher clinical volume, margin improvement and additional cost reductions in 2022. We have a number of key initiatives underway which we expect will reduce laboratory turnaround time and drive reductions in our cost of revenue, directly benefitting our bottom line results and cash flow." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1054102/000149315222013869/form10-q.htm About Interpace Headquartered in Parsippany, NJ, Interpace Biosciences f/k/a Interpace Diagnostics Group, Inc. -- http://www.interpace.com-- offers specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications. Clinical services, through Interpace Diagnostics, provides clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. Pharma services, through Interpace Pharma Solutions, provides pharmacogenomics testing, genotyping, biorepository and other customized services to the pharmaceutical and biotech industries. Interpace Biosciences reported a net loss of $14.94 million for the year ended Dec. 31, 2021, compared to a net loss of $26.45 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $38.43 million in total assets, $34.31 million in total liabilities, $46.54 million in preferred stock, and a total stockholders' deficit of $42.42 million. Woodbridge, New Jersey-based BDO USA, LLP, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 31, 2022, citing that the Company has suffered operating losses, has negative operating cash flows and is dependent upon its ability to generate profitable operations in the future and/or obtain additional financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These conditions raise substantial doubt about its ability to continue as a going concern. INVEPA INTERNATIONAL: Taps Virtual Realty USA as Realtor -------------------------------------------------------- Invepa International, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Virtual Reality USA LLC and its sales agent, Mitchell Korus, to handle the marketing and sale of its real property. The firm has agreed to any commission determined appropriate by the court. As disclosed in court filings, Virtual Reality USA is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Mitchell P. Korus Virtual Realty Enterprises, LLC 100 S. Brentwood Blvd., Suite 240 St. Louis, MO 63105 Phone: (314) 244-3500 Fax: (314) 244-3519 Email: contact@vrellc.com About Invepa International Invepa International is a Miami-based company engaged in renting and leasing real estate properties. Invepa International filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-12929) on April 15, 2022, listing as much as $10 million in both assets and liabilities. Katiuska Vegas, member, signed the petition. Judge Robert A. Mark presides over the case. Robert C. Meyer, Esq., at Meyer & Nunez, PA serves as the Debtor's counsel. IRONSTONE PROPERTIES: Incurs $146K Net Operating Loss in 1st Qtr ---------------------------------------------------------------- Ironstone Properties, Inc., formerly known as Ironstone Group, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net operating loss of $145,752 for the three months ended March 31, 2022, compared to a net operating loss of $79,398 for the three months ended March 31, 2021. As of March 31, 2022, the Company had $5.48 million in total assets, $3.90 million in total liabilities, and $1.58 million in total stockholders' equity. "The Company may obtain additional equity or working capital through additional bank borrowings, debt conversion to common stock, and public or private sales of equity securities. The Company may also borrow additional funds from Mr. William R. Hambrecht. There can be no assurance, however, that such additional financing will be available on terms favorable to the Company, or at all," Ironstone said. "The attainment of profitable operations is dependent upon future events, including liquidity events in privately held investments in excess of purchase price, and or the profitable sale of publicly traded investments. If necessary, to provide liquidity, the Company may seek to sell additional equity securities, or convert existing privately held debt to equity, providing the debt holders are agreeable to the terms and share conversion price. The Company cannot make assurances that it will be able to complete any financing, liquidity, or debt conversion transaction, that such financing, liquidity, or debt conversion transaction will be adequate for the Company's needs, or that a financing, liquidity or debt conversion transaction will be completed in a timely manner. Furthermore, the Company may seek to sell its marketable securities to meet its operating needs. However, the fair value of these marketable securities fluctuates and may not be adequate for the Company's needs. The Company has extended its line of credit payment terms with the lender with similar terms to the recently expired line of credit," Ironstone said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/723269/000143774922012788/irns20220331_10q.htm About Ironstone Properties Ironstone Properties, Inc.'s main assets are investments in non-marketable securities of TangoMe Inc., and Buoy Health, Inc., and marketable securities of Arcimoto Inc. There can be no assurance that a market will continue to exist for these investments. Ironstone Properties reported a net operating loss of $523,401 for the 12 months ended Dec. 31, 2021, compared to a net operating loss of $301,658 for the 12 months ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $5.60 million in total assets, $3.84 million in total liabilities, and $1.76 million in total stockholders' equity. JJS LOGISTICS: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- JJS Logistics of Florida, Inc. asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, for authority to use cash collateral retroactive to May 10, 2022, and provide adequate protection. The Debtor requires the use of cash collateral to fund the Debtor's costs of administration in the Chapter 11 case and operating expenses pursuant to a budget. The Debtor's actual and potential secured creditors are really comprised of vehicle finance companies), First Citrus Bank and the United States Small Business Administration. In additional several merchant cash advance lenders may take the position they are secured lenders. The MCA lenders are Credibly of Arizona LLC, Forward Financing LLC, Kalamata Capital Group, LLC and Surfside Capital. However, the Debtor contends the lenders' claims should be treated as unsecured for a variety of reasons including the value of the collateral and priority of First Citrus Bank. The value of the Debtor's cash collateral is significantly less than the amount of the debt owed and therefore any other creditor claiming an interest in the cash collateral would be under water and unsecured. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, the Debtor proposes: a. All income derived from the business operations of the Debtor will be deposited in a new debtor-in-possession bank account; b. The Debtor will disburse funds from the Account to pay the customary and reasonable expenses associated with the operation of the Debtor's business in accordance with the budget; c. The Debtor requests that a variance of expense line items of up to 10% per month and cumulatively per month of up to 10% be permitted without the need for further order of this Court. First Citrus Bank may approve a variance of more than 10% without further order of the Court either; d. The Debtor will provide First Citrus Bank with monthly written reporting as to the status of its accounts receivable, collections, disbursements and operations in the same or similar format as has been historically provided by Debtor; e. Furthermore, First Citrus Bank will be granted a replacement lien in any cash collateral acquired by the Debtor subsequent to the Petition Date to the same extent, priority and validity of its respective lien in such cash collateral as of the Petition Date; f. Within 14 days of an Order granting the Motion, the Debtor will provide First Citrus with bank statements for January-April of 2022 and continuing thereafter within the first week of each new month; g. Within 14 days of an Order granting the Motion, the Debtor will provide First Citrus with a balance sheet for the period ending March 31, 2022 and continuing thereafter within the first week of each new quarter; h. Within 14 days of an Order granting the Motion, the Debtor will provide First Citrus proof that all key man insurance premiums for Joshua Smiley have been paid. The Debtor will thereafter immediately notify First Citrus of any lapse in payment which will be an authorized use of cash collateral should Joshua Smiley fail to pay the same; and, the Debtor has sufficient funds on hand to do so; and i. By end of day every Wednesday the Debtor will provide an updated cash collateral budget to First Citrus showing a comparison of the prior week's projections versus actual operations; and, to add the next week's budget such that the bank always has a rolling 13 week forecast. Then, every Thursday the Debtor and its counsel will have an in person meeting with First Citrus and its counsel to discuss the cash collateral position. A copy of the motion is available at https://bit.ly/3afO2jI from PacerMonitor.com. About JJS Logistics of Florida, Inc. JJS Logistics of Florida, Inc. is a Florida profit corporation which provides local FedEx delivery commercial and residential services in western Pasco County. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Court (Bankr. M.D. Fla. Case No. 22-01884) on May 10, 2022. In the petition filed by Andrew Yurasko, III, chief restructuring officer, the Debtor disclosed up to $500,000 in both assets and liabilities. LARRY BARBER: Case Summary & 16 Unsecured Creditors --------------------------------------------------- Debtor: Larry Barber Enterprises, Inc. 38743 Otis Allen Rd. Zephyrhills, FL 33540 Chapter 11 Petition Date: May 24, 2022 Court: United States Bankruptcy Court Middle District of Florida Case No.: 22-02083 Debtor's Counsel: Jake C. Blanchard, Esq. BLANCHARD LAW, P.A. 1501 Belcher Road South Unit 6B Largo, FL 33771 Tel: 727-531-7068 E-mail: jake@jakeblanchardlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Larry Barber as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 16 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JGBNHLY/Larry_Barber_Enterprises_Inc__flmbke-22-02083__0001.0.pdf?mcid=tGE4TAMA LEAFBUYER TECHNOLOGIES: Incurs $271K Net Loss in Third Quarter -------------------------------------------------------------- Leafbuyer Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $271,254 on $984,010 of sales revenue for the three months ended March 31, 2022, compared to a net loss of $1.29 million on $672,149 of sales revenue for the three months ended March 31, 2021. For the nine months ended March 31, 2022, the Company reported net income of $1.31 million on $2.76 million of sales revenue compared to a net loss of $5.49 million on $1.93 million of sales revenue for the same period during the prior year. As of March 31, 2022, the Company had $2.61 million in total assets, $3.70 million in total liabilities, and a total stockholders' deficit of $1.09 million. At March 31, 2022 we had $429,442 in cash and cash equivalents. Leafbuyer said "The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months from the date of the issuance of these unaudited condensed consolidated financial statements with existing cash on hand and/or the private placement of common stock or obtaining debt financing. There is, however, no assurance that the Company will be able to raise any additional capital through any type of offering on terms acceptable to the Company, as existing cash on hand will be insufficient to finance operations over the next twelve months." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1643721/000147793222003487/lbuy_10q.htm About Leafbuyer Leafbuyer Technologies, Inc. is a marketing technology company for the cannabis industry and is an online cannabis resource. Leafbuyer reported a net loss of $5.03 million for the year ended June 30, 2021 compared to net income of $1.30 million for the year ended June 30, 2020. As of June 30, 2021, the Company had $3.40 million in total assets, $10.63 million in total liabilities, and a total deficit of $7.22 million. Lakewood, Colorado-based B F Borgers CPA PC, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Oct. 13, 2021, citing that the Company has suffered recurring losses from operations and has a significant accumulated deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. LINCOLN PARK, MI: S&P Affirms 'BB+ Underlying Rating on GO Debt --------------------------------------------------------------- S&P Global Ratings revised its outlook to stable from negative and affirmed its 'BB+' underlying rating (SPUR) on the City of Lincoln Park, Mich.'s limited-tax general obligation (GO) debt. "The outlook revision reflects our view of a stronger cash and liquidity position that should prevent the city from falling into immediate stress if revenues decline and/or pension costs escalate sharply," said S&P Global Ratings credit analyst Anna Uboytseva. S&P expects that management will continue efforts to enhance Lincoln Park's budget and find a way to fund annual pension costs and continue to fund pensions over the requirement amounts as it has done in the past few years. The city's limited-tax GO pledge is payable from ad valorem taxes levied on all taxable property, subject to statutory limitations. Lincoln Park pledges to annually levy ad valorem taxes within authorized mileages to fund its obligations and, to the extent that taxes are insufficient, all other available revenue sources are pledged for payment. S&P rates the limited-tax GO debt on par with its view of the city's general creditworthiness, given a lack of limitations on the fungibility of resources available for debt service. Lincoln Park's two pension plans, Municipal Employees' Retirement System (MERS) and Police and Fire Pension Plan, are underfunded (22.0% and 43.4%, respectively), meaning that the city's pension systems are at risk of asset depletion. S&P said, "At such low funded levels, we believe there is a high likelihood of cost escalations and some risk that one or both pension systems could enter insolvency in a sustained bear market. Factoring the very high fixed costs that we anticipate will escalate, and the resulting pressure this can place on the budget, we continue to assess management as weak, which caps the rating. We no longer think that the risk of asset depletion is immediate because Lincoln Park accumulated strong cash reserves and received substantial funds from federal and state governments in form of pandemic-related assistance." This liquidity will buy the city some time and should allow it to prepare for what's to come. In S&P's opinion, Lincoln Park faces major ongoing uncertainties, which could lead to inadequate capacity to meet its financial commitment on the obligations, although at the current rating category it thinks the rated obligation is less vulnerable to nonpayment than other speculative-grade issues. The 'BB+' long-term rating reflects the following characteristics: -- Below-average, albeit growing economy, with direct access to economic opportunities in Wayne County; -- High pension and other postemployment benefit (OPEB) costs and underfunded pensions that constrain the rating despite standard financial management practices and policies; -- While performance remains weak, strong budgetary flexibility and liquidity provide a cushion for unexpected events, but capacity to cut costs is limited; and -- Adequate debt profile, poorly funded pensions, and strong institutional framework. S&P could raise the rating if the pension funded ratios continue to improve, all else being equal. If management is not able to appropriately cope with soaring fixed and personnel costs and experiences structural imbalance as a result, S&P could lower the rating. LOGOS INCORPORATED: Files for Chapter 11 Bankruptcy --------------------------------------------------- Logos Incorporated filed for chapter 11 protection in the District of Maryland. According to court filing, Logos Incorporated estimates between 1 and 49 unsecured creditors. The petition states that funds will be available to unsecured creditors. About Logos Inc. Logos Incorporate -- https://logos-development.com -- doing business as 510 Johnnys, is a New York City based multi-disciplinary real estate development & investment advisory company. Logos Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 22-12491) on May 9, 2022. In the petition filed by Mohammed Jadoo, as vice-president, Logos Inc. listed up to $50,000 in assets and up to $1 million in liabilities. Honorable Bankruptcy Judge David E. Rice oversees the case. Robert B. Scarlett, Esq., at Scarlett & Croll, PA serves as the Debtor's legal counsel. LTL MANAGEMENT: DOJ Balks on Plan to Hire Katyal at $2,500-an-Hour ------------------------------------------------------------------ James Nani of Bloomberg Law reports that the Department of Justice's bankruptcy watchdog is opposing a bankrupt Johnson & Johnson unit's proposal to retain former acting solicitor general Neal Katyal at nearly $2,500 an hour to work on its Chapter 11 case. LTL Management LLC, which was created by the healthcare giant to house and limit its liability from its talc products, is proposing to retain Katyal, a partner at Hogan Lovells US LLP, at a rate as high as $2,465 an hour, the US Trustee said in its objection. Hogan Lovells' hourly rates for its partners are "significantly higher" than the rates of the seven other law firms LTL Management has retained, the U.S. U.S. Trustee said. LTL hasn't shown the rates are reasonable or in the best interest of the bankruptcy estate, the Trustee said. Katyal would act as special appellate litigation counsel for LTL, according to LTL's application to hire Katyal. Hogan Lovells didn't immediately reply to a request for comment. Earlier this May 2022, the U.S. Court of Appeals for the Third Circuit agreed to hear several appeals by asbestos victims who are trying to end LTL's bankruptcy. The Third Circuit's review will include the New Jersey bankruptcy court's decision earlier this year denying tort claimants' motion to dismiss the Chapter 11 case. The tort claimants argue LTL's bankruptcy -- which would address lawsuits from its talc product users who allege they developed cancer -- was filed in bad faith. LTL told the bankruptcy court it needs experienced counsel in connection with the appeals. Hogan Lovells "provides exceptional appellate litigation services," LTL said. In light of the appeal's complexity and "anticipated intensity," hiring Hogan Lovells is "appropriate and warranted," LTL said. The US Trustee argued that law firms LTL has already retained, such as Jones Day and Skadden Arps Slate Meager & Flom LLP, have helped the company and are familiar with the case. But their hourly rates are lower, it added. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. About Johnson & Johnson Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world's largest and most broadly based healthcare company. Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. The corporation had worldwide sales of $82.6 billion in 2020. MAGNOLIA OFFICE: Case Summary & 19 Unsecured Creditors ------------------------------------------------------ Debtor: Magnolia Office Investments, LLC 205 Worth Avenue, Suite 102 Palm Beach, FL 33480 Business Description: Magnolia Office is primarily engaged in renting and leasing real estate properties. The Debtor is the fee simple owner of a commercial office building located at 1211 Governors Square Boulevard, Tallahassee, Florida valued at $5.5 million. Chapter 11 Petition Date: May 23, 2022 Court: United States Bankruptcy Court Southern District of Florida Case No.: 22-14044 Judge: Hon. Erik P. Kimball Debtor's Counsel: David L. Merrill, Esq. THE ASSOCIATES HARBOUR FINANCIAL CENTER 2401 PGA Boulevard, Suite 280M Suite B Palm Beach Gardens, FL 33410 Tel: (561) 877-1111 Email: dlm@theassociates.com Total Assets: $5,622,646 Total Liabilities: $4,918,072 The petition was signed by Anand Patel as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 19 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ADKJJAA/Magnolia_Office_Investments_LLC__flsbke-22-14044__0001.0.pdf?mcid=tGE4TAMA MALLINCKRODT PLC: To Raise $650M From Bond Deal as Loan Struggles ----------------------------------------------------------------- Jeannine Amodeo and Gowri Gurumurthy of Bloomberg News report that Mallinckrodt Plc is looking to raise $650 million from a junk-bond deal after struggling to sell a $900 million leveraged loan to help fund its exit from bankruptcy. The pharmaceutical firm is offering a coupon of 11.5% on the first-lien secured notes maturing in 6.5 years, as well as a discounted price of 98 cents on the dollar, according to a Friday, May 20, 2022, filing. The loan portion of the financing, a key part of Mallinckrodt's reorganization, may be reduced or eliminated if the bond is sold, according to people with knowledge of the matter, who asked not to be identified. About Mallinckrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins, LLP and Richards, Layton & Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray, LLP as litigation counsel; Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as investment banker; and AlixPartners, LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley, LLP as its legal counsel; Robinson & Cole, LLP as co-counsel; and Dundon Advisers, LLC as financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid-related claimants. The OCC tapped Akin Gump Strauss Hauer & Feld, LLP as its lead counsel; Cole Schotz as Delaware co-counsel; Province, Inc. as financial advisor; and Jefferies, LLC as investment banker. MAM CORPORATION: Files for Chapter 11 Bankruptcy ------------------------------------------------ MAM Corporation, d/b/a Motel Linda Vista, filed for chapter 11 protection in the District of Puerto Rico. The Debtor disclosed $890,100 in assets against liabilities of $2.433 million in its schedules. The Company had gross revenue of $79,222 during the period Jan. 1, 2022 to May 9, 2022. Revenue was $270,000 in the calendar year 2021, compared with $183,000 in 2020. According to court filings, MAM corporation estimates between 1 and 49 unsecured creditors. The petition states that funds will be available to unsecured creditors. A telephonic conference meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for June 10, 2022 at 10:00 a.m. About MAM Corporation MAM Corporation owns the Motel Linda Vista, a motel located at Pena Pobre Ward, in Naguabo, Puerto Rico. Motel Linda Vista is situated nearby to Quebrada Sonadora, and south of Cerro la Cuchilla. MAM CORPORATION sought Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 22-01315) on May 9, 2022. In the petition filed by Agustin Rivera Guzman, as president, MAM Corporation listed estimated assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. Wigberto Lugo Mender, Esq., of LUGO MENDER GROUP, LLC, is the Debtor's counsel. MAM CORPORATION: Seeks to Hire Lugo Mender Group as Legal Counsel ----------------------------------------------------------------- MAM Corporation seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Lugo Mender Group, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor with respect to its duties, powers, and responsibilities in this case under the laws of the United States and Puerto Rico in which it conducts its operations, does business, or is involved in litigation; (b) advising the Debtor in connection with its reorganization endeavors, including assisting in the formulation of a plan of reorganization; (c) assisting the Debtor in negotiations with creditors for the purpose of arranging a feasible plan of reorganization; (d) preparing legal papers; (e) appearing before the bankruptcy court or any other court in which the Debtor asserts a claim or defense directly or indirectly related to this bankruptcy case; and (f) performing other legal services required in the proceedings or in connection with the operation of the Debtor's business. The firm's hourly rates are as follows: Wigberto Lugo Mender, Esq. $300 per hour Associate Staff Attorney $200 per hour Legal and Financial Assistants $125 per hour The firm has been paid a retainer in the amount of $4,000 for the legal services rendered in connection with the case. Wigberto Lugo Mender, Esq., principal of Lugo Mender Group, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Wigberto Lugo Mender, Esq. Lugo Mender Group, LLC 100 Carr. 165 Suite 501 Guaynabo, Puerto Rico 00968-8052 and Tel.: (787) 707-0404 Fax: (787) 707-0412 Email: wlugo@lugomender.com About MAM Corporation MAM Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-01315) on May 9, 2022, listing up to $1 million in assets and up to $10 million in liabilities. Agustin Rivera Guzman, president of MAM Corporation, signed the petition. Judge Edward A. Godoy oversees the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as legal counsel. MATHESON FLIGHT: Has Deal on Cash Collateral Access Thru June 17 ---------------------------------------------------------------- Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc. advised the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division, that they have reached an agreement with Bank of America, N.A. and its affiliate, Banc of America Leasing & Capital LLC, regarding the use of cash collateral and now desire to memorialize the terms of this agreement into an agreed order. The Cash Collateral Stipulation: a. authorizes MFE to use $4,608,728 in cash collateral on an interim basis through June 17, 2022, and authorizes MPS to use $1,915,376 in cash collateral on an interim basis through June 17, 2022 (subject to permitted variances); b. grants BofA adequate protection in the form of: (i) replacement liens on post-petition collateral (other than avoidance actions) for any diminution in the amount of its secured claim occasioned by use of cash collateral, (ii) allowance of a Bankruptcy Code section 507(b) claim to the extent that the replacement liens are insufficient to provide BofA adequate protection, (iii) payment of adequate protection in respect to the Debtors' use of one piece of equipment financed by BofA; and (iv) a requirement that the Debtors comply with certain financial reporting obligations; and c. grants BofA adequate protection in the same forms with respect to cash collateral the Debtors had to expend on an emergency basis with BofA's consent prior to entry into the Cash Collateral Stipulation. The Debtors are required to pay various ongoing expenses in the ordinary course of business to preserve and enhance the value of its assets for the benefit of creditors and other stakeholders. BofA is the only creditor known by the Debtors to have an interest in cash collateral, and the Debtors believe that BofA is substantially over-secured. The Debtors also request that the Court hold a hearing on the matter on May 25, 2022 at 11 a.m. and schedule a further hearing on June 8. A copy of the motion and the Debtors' budget for the period from May 20 to June 17, 2022 is available at https://bit.ly/3sKilFu from PacerMonitor.com. The Debtors project total cash outflows, on a weekly basis, as follows: $4,408,835 for the week ending May 20, 2022; $4,837,306 for the week ending May 27, 2022; $4,560,322 for the week ending June 3, 2022; $4,357,997 for the week ending June 10, 2022; and $6,524,104 for the week ending June 17, 2022. About Matheson Flight Extenders, Inc. Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc. provide short and long-haul transportation, logistics and ground handling services. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No. 22-21148) on May 5, 2022. In the petition signed by Charles J. Mellor, chief restructuring officer, the Debtors disclosed up to $50 million in both assets and liabilities. Judge Christopher M. Klein oversees the case. Gregory C. Nuti, Esq., at Nuti Hart LLP is the Debtors' counsel. MAUNESHA RIVER: Amends BMO & FMUB Secured Claims Pay Details ------------------------------------------------------------ Maunesha River Dairy, LLC, submitted a First Amended Disclosure Statement describing Plan of Reorganization dated May 19, 2022. The First Amended Disclosure Statement discusses the alterations made with Class One BMO Secured Claim. On or about the Effective Date, BMO will provide Maunesha with a Herd Expansion Loan in the amount of $240,000 in accordance with the terms in the Plan. After providing the Herd Expansion Loan, BMO's Secured Claim will have an outstanding balance of no less than $4,642,394.89, plus interest, attorneys' fees and expenses. The BMO New Notes will be due in full on the first day of the 61st month after the Effective Date. Payments to BMO on the BMO New Notes will be made by milk assignment and will commence in the first full calendar month following the Effective Date, provided that there is no gap in monthly payments between the last adequate protection payment under the Final Cash Collateral Order and the first payment due against the BMO New Notes. BMO shall have a first position lien in the cows purchased with the Herd Expansion Loan under its existing security interests. The priority of BMO's security interests is subject only to properly perfected pre-Petition Date purchase money security interests and any properly perfected purchase money security interests that may accrue post-confirmation. On the Effective Date, Ballweg will grant to BMO mortgages on the Dairy Facility and Sun Prairie Land, and will execute a Modification of Mortgage as to BMO's existing mortgage on the Bare Land to remove any maximum lien limitation therein, with such mortgages to be junior to the existing mortgages in favor of FMUB and SBA, subject to an Intercreditor Agreement between BMO and FMUB discussed in the Plan. Class Two consists of FMUB Secured Claim. On the Effective Date, FMUB's Secured Claim will have an outstanding balance of not less than $4,986,609.66, plus interest, attorneys' fees and expenses. The FMUB balance will be split into the FMUB New Notes to be entered by Maunesha and Ballweg, and paid as follows: * $500,000.00 (Short Term Note). Payable at 4.75% per annum amortized over 10 years with monthly payments of principal and interest of at least $5,242.39; * $1,622,338.93 (Dairy Expansion Note). Payable at 4.75% per annum amortized over 20 years with monthly principal and interest payments of at least $10,483.94; * $2,864,270.73 (Real Estate Note). Payable at 4.75% per annum amortized over 20 years with monthly principal and interest payments of at least $18,509.59. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Allowed Unsecured Claims will not receive any installment payments under the Plan. However, upon completion of the Plan, Maunesha will seek to refinance the Secured Claims, except for any Claims secured by valid purchase money security interests with balances being paid at that time. Maunesha will seek an additional amount of $100,000, over the amounts necessary to pay BMO, FMUB, SBA and any creditors of Ballweg at the time of the refinancing ("Unsecured Pool"). * Class Nine consists of Interest Holders. Dennis Ballweg, in consideration of the new value provided to Maunesha to implement and execute the terms of the Plan, will retain his Interests in the Reorganized Debtor as those Interests existed in the Debtor on the Petition Date. The Reorganized Debtor shall have full authority to operate the Debtor's business pursuant to this Plan. Distributions under the Plan shall be made from the continued operation of the business and in the case of some administrative fees, from the funds escrowed during the Case under the Final Cash Collateral Order. The Allowed Secured Claims will be paid in the ordinary course of business as reflected in the monthly cash flow budgets pursuant to the terms of the Plan. A full-text copy of the First Amended Disclosure Statement dated May 19, 2022, is available at https://bit.ly/3MHdlJV from PacerMonitor.com at no charge. Attorneys for the Maunesha River Dairy: Jane F. (Ginger) Zimmerman, Esq. Nicole L Pellerin, Esq. MURPHY DESMOND S.C. 33 East Main Street, Suite 500, P.O. Box 2038 Madison, WI 53701-2038 Tel: (608) 257-7181 About Maunesha River Dairy Maunesha River Dairy, LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wis. Case. No. 21-11157) on May 27, 2021. In the petition signed by Dennis E. Ballweg, the member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Catherine J. Furay oversees the case. Jane F. Zimmerman, at Murphy Desmond S.C., is the Debtor's counsel. BMO Harris Bank, as creditor, is represented by Joseph D. Brydges, Esq., at Michael Best and Friedrich LLP. MAUNESHA RIVER: Seeks Cash Collateral Access -------------------------------------------- Maunesha River Dairy, LLC asks the U.S. Bankruptcy Court for the Western District of Wisconsin for authority to use cash collateral through the effective date of the plan, but not beyond August 21, 2022, and grant adequate protection to creditors with an interest in cash collateral. The Debtor requires the use of cash collateral to pay reasonable and necessary costs of operating Maunesha's dairy farm. The entities with an interest in the Debtor's cash collateral are BMO Harris Bank, N.A., Farmers & Merchants Union Bank, and Agri-Max Financial Services, LP. The current cash collateral order in effect was to expire at 12:00 a.m. on May 22 and MRD seeks to continue using cash collateral through the effective date of a bankruptcy-exit plan and has submitted an extended budget through August 21. As before, pursuant to the Budget: a. Interest-only payments, based on the principal pre-Petition balance due, will be made to BMO and SBA; b. Contractual payments to secured creditors holding valid and perfected purchase-money security interests shall continue to be made; c. Contractual lease payments shall continue to be made; d. Payments to professionals shall continue to be made; e. Periodic sales and purchases of livestock will be made to maintain and grow the herd; and f. Ordinary and necessary business expenses as outlined in the Budget will continue to be paid as incurred. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, the Debtor proposes to provide BMO, FMUB and AGRI-MAX replacement liens in post-petition collateral, to the extent they each have a perfected pre-Petition lien; payment of interest-only payments on BMO's secured claim; principal and interest payments to FMUB for three months; maintenance of insurance on the Collateral; and payment of any taxes which may become liens on the Collateral. The Debtor further proposes payment to all secured creditors with purchase-money security interests, including AGRI-MAX, to the terms of their respective contracts as adequate protection and as additional adequate protection for BMO and FMUB. The Order further proposes to pay the SBA interest-only payments based upon the principal balance due. A copy of the motion is available at https://bit.ly/3wyFEEz from PacerMonitor.com. About Maunesha River Dairy, LLC Maunesha River Dairy, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wis. Case. No. 21-11157) on May 27, 2021. In the petition signed by Dennis E. Ballweg, the member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Catherine J. Furay oversees the case. Jane F. Zimmerman, Esq., at Murphy Desmond S.C. is the Debtor's counsel. MGA MANAGEMENT: Starts Chapter 11 Subchapter V Case --------------------------------------------------- MGA Management, LLC, filed for chapter 11 protection in the District of Connecticut. The Debtor owns and manages Residential Apartment Buildings in Hartford, Connecticut. The secured creditors are Garden Savings Federal Credit Union and CIO MW LOAN 1, LLC. According to court filings, MGA Management 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) is slated for June 3, 2022 at 10:00 A.M. About MGA Management MGA Management, LLC, is the fee simple owner of a real property located in Hartford, Connecticut having a current value of $3 million. MGA Management filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No. 22-20315) on May 9, 2022. In the petition signed by Michael Ancona, member, the Debtor listed $3,041,461 in total assets and $1,452,000 in total liabilities. Judge James J. Tancredi oversees the case. Joseph J. D'Agostino, Jr., Esq., serves as the Debtor's counsel. MRO HOLDINGS: Moody's Withdraws B3 CFR & B3 Rating on Term Loan --------------------------------------------------------------- Moody's Investors Service withdrew its ratings for MRO Holdings, Inc, including the B3 Corporate Family Rating, the B3-PD Probability of Default Rating and the B3 senior secured term loan. Prior to the withdrawal, the outlook was stable. Issuer: MRO Holdings, Inc: Corporate Family Rating, Withdrawn , previously rated B3 Probability of Default Rating, Withdrawn , previously rated B3-PD Senior Secured Term Loan Rating, Withdrawn , previously rated B3 (LGD3) Outlook Actions: Issuer: MRO Holdings, Inc: Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. MRO Holdings, Inc is a provider of maintenance, repair and overhaul services to airline and freight carrying customers in North America. The company owns and operates two MRO facilities based in El Salvador ("Aeroman") and Florida, US ("Flightstar") and also has rights to capacity at TechOps Mexico's operations (a joint venture between Delta Airlines and Aeromexico). Revenues for the twelve months ended September 2021 were around $540 million. NANO MAGIC: Incurs $1.1 Million Net Loss in First Quarter --------------------------------------------------------- Nano Magic Holdings Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.06 million on $686,258 of total revenues for the three months ended March 31, 2022, compared to net income of $370,397 on $2.31 million of total revenues for the three months ended March 31, 2021. As of March 31, 2022, the Company had $3.91 million in total assets, $2.32 million in total liabilities, and $1.59 million in total stockholders' equity. The Company had working capital of $903,843 and $303,374 of unrestricted cash as of March 31, 2022 and working capital of $1,003,127 and $242,474 of unrestricted cash as of Dec. 31, 2021. The Company had losses from operations and net cash used by operations of $1,054,741 and $752,515 for the quarter ended March 31, 2022 and of $1,765,945 and $1,377,056 for the year ended Dec. 31, 2021. The Company said these factors raise substantial doubt about its ability to continue as a going concern within one year after the date that these unaudited consolidated financial statements are issued. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/891417/000149315222013654/form10-q.htm About Nano Magic Headquartered in Madison Heights, Michigan Nano Magic -- www.nanomagic.com -- develops, commercializes and markets consumer and industrial products powered by nanotechnology that solve everyday problems for customers in the optical, transportation, military, sports and safety industries. Nano Magic reported a net loss of $1.57 million for the year ended Dec. 31, 2021, compared to a net loss of $781,055 for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $4.11 million in total assets, $2.19 million in total liabilities, and $1.92 million in total stockholders' equity. Sterling Heights, Michigan-based UHY LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 30, 2022, citing that the Company has recurring losses from operations, negative cash flow from operations, and an accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. NEOVASC INC: Regains Compliance with Nasdaq Minimum Bid Price Rule ------------------------------------------------------------------ Neovasc Inc. received written notification from the Nasdaq Stock Market LLC informing the Company that it has regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) pursuant to Nasdaq Listing Rule 5810 for continued listing on the Nasdaq. As previously reported, on May 24, 2021, Neovasc received a letter from the Nasdaq notifying the Company that it was not in compliance with the minimum bid price requirement set forth in the Nasdaq Rules for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until Nov. 22, 2021, to regain compliance. In accordance with Nasdaq Listing Rule 5810(c)(3)(A)(i), the Company requested and was granted a second 180-calendar day period, or until May 23, 2022, within which to evidence compliance with the $1.00 bid price requirement. On May 13, 2022, Neovasc received notification from the Nasdaq stating that since the closing bid price of the Company's common shares had been greater than US$1.00 per share for the last 10 consecutive business days, from April 29, 2022 to May 12, 2022, Neovasc was in compliance with Listing Rule 5550(a)(2) and this matter is now closed. The Company is also listed on the Toronto Stock Exchange and regaining compliance on the Nasdaq does not affect the Company's compliance status with such listing. About Neovasc Inc. Neovasc -- http://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. ODYSSEY LOGISTICS: S&P Alters Outlook to Pos., Affirms 'B-' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook to positive from stable and affirmed its 'B-' issuer credit rating on Odyssey Logistics and Technology Corp. S&P also affirmed its 'B' issue-level rating on the company's first-lien term loan and 'CCC' rating on the second-lien term loan. The recovery ratings are unchanged. S&P said, "We expect Odyssey will continue to benefit from generally market conditions over the next 12 months.Odyssey has reported strong revenue growth in recent quarters, benefiting from the macroeconomic recovery following pandemic-related shutdowns in 2020. We currently expect market conditions will remain generally favorable for Odyssey over the next 12 months. The company's intermodal segment (where it arranges for the movement of shipping containers via railroads) should continue to grow in 2022, as high diesel prices lead shippers to more fuel-efficient transportation modes and Class I railroads focus on improving service quality. Its domestic freight forwarding business primarily consists of arranging ocean shipments from the mainland U.S. to other states and territories. This segment experienced lower volumes in 2020 and 2021 due in part to reduced tourism in certain regions. We believe this segment should benefit from more normalized tourism levels in places such as Hawaii and Alaska. Finally, the company's ownership of some transportation, such as specialized trucks and chassis, along with company-employed drivers, should make it less susceptible to equipment and driver shortages than some completely asset-light peers. We also expect revenue will benefit from full-year contribution from recent acquisitions. Therefore, we forecast total revenue will grow at least in the high-single-digit percent area in 2022 before moderating somewhat to the low-single-digit percent area in 2023. We also acknowledge that strong performance in the first quarter of 2022 should support revenue growth above our current expectations assuming stable macroeconomic conditions. "We believe there is some uncertainty regarding industrial demand and macroeconomic activity.Odyssey has historically generated about half of its revenue from industrial end-markets, specifically the metal and chemical industry. Activity in this sector has increased in recent quarters, as factories have reopened, labor availability has improved, and commodity prices remain elevated. However, we believe there is considerable uncertainty regarding industrial demand. S&P Global Ratings lowered our forecast for U.S. GDP growth amid weaker first quarter activity, the ongoing war between Russia and Ukraine, and ongoing inflation. Meanwhile, COVID-related shutdowns of key factories and ports in China could further delay the recovery of supply chains and backlogs at U.S. ports. "As of its December 2021 quarter, S&P Global Ratings' adjusted debt to EBITDA was in the mid-5x area, around 1x below our upside trigger, and we forecast this metric will improve to the low-5x area in 2022. However, we believe it is unclear how current macroeconomic and geopolitical events may contribute to weaker industrial production and what, if any, effect this may have on our forecasted revenue and EBITDA growth for Odyssey. We acknowledge the positive developments in 2021, though given the uncertainty in our forecast, we are cautious in upgrading Odyssey at this time, choosing to change the outlook to positive. Should we come to believe current leverage can be sustained despite potential volatility from the aforementioned items, we could raise the rating. "We believe cost control measures and recent divestitures will support operating efficiency.The company sold its food-grade tank business in late 2021. Although we viewed this business, which primarily involved the movement of beverages between Mexico and the southern U.S., as less volatile than its core industrial business, we believe asset utilization should improve going forward due to its largely seasonal nature. Furthermore, Odyssey recently completed a reorganization of its business, under which it consolidated reporting segments and simplified operating structures. These measures, along with lower spot market pricing for purchased transportation, should support the company's profitability even if volumes decline somewhat over the next 12 months. Thus, we forecast EBITDA margins will remain around 10%-11% through 2023. Lower purchased transportation costs should also support the company's working capital requirements, which we forecast will improve over the next 12 months. "The positive outlook reflects our expectation that Odyssey's revenue and EBITDA should continue to grow despite a normalized demand for its services over the next 12 months. Although we expect spot market transportation pricing should decline somewhat over the next 12 months, we believe Odyssey should benefit from improving intermodal service quality at U.S. railroads and increased labor availability at many of its industrial customers. However, we believe there is some uncertainty regarding industrial demand amid slowing macroeconomic growth and elevated inflation. We forecast credit metrics will improve over the next year with debt to EBITDA declining to the low-5x area in 2022 from the mid-5x area in 2021. We also forecast FFO to debt remains around 12%-13%, consistent with 2021 levels. "We could raise our rating over the next 12 months if we come to believe the macroeconomic environment, lower industrial production, and/or higher inflation will not substantially affect Odyssey's operating performance such that we continue to expect its debt to EBITDA remains below 6.5x and its FFO to debt remains at least in the high-single-digit percent area on a sustained basis. "We could revise our outlook to stable if over the next 12 months if its debt to EBITDA increases above 6.5x or FFO to debt decreases to the mid-single-digit percent area on a sustained basis." ESG credit indicators: E-2 S-2 G-3 S&P said, "Governance factors have a moderately negative influence on our credit rating analysis of Odyssey. We view financial-sponsor-owned companies with highly leveraged financial risk profiles as demonstrating corporate decision-making that prioritizes the controlling owners' interests, typically with finite holding periods and a focus on maximizing shareholder returns." OMNIQ CORP: Awarded $4 Million Project From Major Logistics Firm ---------------------------------------------------------------- OMNIQ Corp received an approximate $4 million project from a major T&L Company, first delivery for $1.2 million is expected to be supplied immediately and the balance of $2.8 million during Q2 and Q3 of 2022. omniQ will supply Android-based rugged data collection, computing and communication equipment to the customer's various locations across the United States. The 3PL (3rd Party Logistics) customer has annual revenue of over $10 billion and more than 10,000 employees. The multi-deploy agreement is valued at approximately $4 million. Shai Lustgarten CEO stated: "Once again we are privileged to enjoy the trust and loyalty of one of the largest T&L companies in the world positioning us as experts in providing Supply Chain solutions. This customer joins leading supermarket and retail chains, large Health care suppliers, Cities, Governments, security agencies and other demanding customers that rely on our solutions using state of the art technologies, proprietary AI based solutions, successfully serving multiple verticals." About omniQ Corp. Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) -- http://www.omniq.com-- provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic and parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. Omniq reported a net loss of $13.14 million for the year ended Dec. 31, 2021, a net loss of $11.50 million for the year ended Dec. 31, 2020, and a net loss attributable to the company's common stockholders $5.31 million. As of Dec. 31, 2021, the Company had $75.08 million in total assets, $72.78 million in total liabilities, and $2.30 million in total equity. OMNIQ CORP: Incurs $2.6 Million Net Loss in First Quarter --------------------------------------------------------- OMNIQ Corp. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.57 million on $26.32 million of total revenues for the three months ended March 31, 2022, compared to a net loss of $3.34 million on $19.75 million of revenues for the three months ended March 31, 2021. As of March 31, 2022, the Company had $76.93 million in total assets, $76.48 million in total liabilities, and $458,000 in total stockholders' equity. Shai Lustgarten, CEO of omniQ commented: "We are experiencing a great start of 2022. Our focus remains on Q Shield's deployments in the Public Safety sector, growing sales of omniQ's AI Parking Solutions, increasing sales of omniQ's Supply Chain automation products, in parallel to making our financial infrastructure stronger. We are facing increased demand for our products in multiple verticals and markets. "Our mission is to improve efficiencies, help to secure public safety and enable better quality of life for people using our systems. Our customer base includes some of the most demanding customers in the world, including Governments, Hospitals, Major Supermarket chains, Security agencies and Municipalities among others. "Following the success of the first installations of our Q Shield turnkey AI based systems we continued our focus on indirect sales channels, partnering with VAR's (Value Added Resellers). We recently signed agreement with a reputable VAR whom we believe will accelerate the sales of Q Shield that we consider as an important growth engine with an endless market potential. "In addition to the strong revenue and gross profit in our Q1 results we note improvement in all financial parameters. These efforts will continue to be in our focus for further improvements in the near future. "Achieving trailing six months sales of over $51M, resulting into annual revenue run rate of $102M we feel stronger and confident while fulfilling our plan to elevate OMNIQ to new spheres." concluded Mr. Lustgarten. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/278165/000149315222013823/form10-q.htm About omniQ Corp. Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) -- http://www.omniq.com-- provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic and parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. Omniq reported a net loss of $13.14 million for the year ended Dec. 31, 2021, a net loss of $11.50 million for the year ended Dec. 31, 2020, and a net loss attributable to the company's common stockholders $5.31 million. As of Dec. 31, 2021, the Company had $75.08 million in total assets, $72.78 million in total liabilities, and $2.30 million in total equity. OWN VRP LLC: Files for Bankruptcy Protection in Florida ------------------------------------------------------- OWN VRP LLC filed for chapter 11 protection in Orlando, Florida. The Debtor disclosed $1.916 million in total assets against $4.800 million in liabilities in a summary schedules attached to the petition. The Debtor has filed a motion seeking an extension until June 2, 2022, of the period in which to complete and file its schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs. According to court documents, OWN VRP LLC estimates between 1 and 49 unsecured creditors. The petition states funds will be available to unsecured creditors. About Own VRP LLC Own VRP LLC is a Florida-based domestic liability company. OWN VRP LLC sought Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 22-01687) on May 9. 2022. In the petition filed by Ben Kaley, as member, Own VRP LLC estimated assets between $1 million and $10 million and liabilities between $1 million and $10 million. R. Scott Shuker, Esq., of SHUKER & DORRIS, P.A., is the Debtor's counsel. PALACE THEATER: Creditor Says Debtor Unprofitable ------------------------------------------------- Creditor, Kraemer Brothers, LLC, objects to Palace Theater LLC's Disclosure Statement Dated April 12, 2022. Kraemer points out that the Disclosure Statement does not disclose the Debtor's substantial losses and unprofitability since the Petition Date: * The Disclosure Statement states that "the Debtor has performed to within $20,000 of projected net revenues (exclusive of grants and loans) to date." This is not an accurate representation of the Debtor's actual financial performance. The Monthly Operating Reports filed by Debtor since the Petition Date show that revenue received by Debtor (and 94 North Productions, LLC) is more than $200,000 less than the Debtor's Projections. * The Disclosure Statement also does not provide information regarding the substantial and ongoing losses the Debtor has incurred since the Petition Date. A hypothetical investor would expect to be provided with information regarding the Debtor's actual performance. * The Debtor's March 2022 Monthly Operating Report, filed on April 25, 2022, shows that the Debtor had a negative net cash flow of $98,912.81 in March 2022 alone, and is projected to have a negative net cash flow of $59,800.00 in April 2022. Kraemer complains that the Disclosure Statement includes inaccurate information regarding the Debtor's cash on hand. Page 14 of the Disclosure Statement indicates that the Debtor has approximately $175,000.00 in the debtor-in-possession checking account. This statement is contradicted by the Debtor's March 2022 Monthly Operating Report filed April 29, 2022, which shows a balance of $3,296.43 in the debtor-in-possession checking account. Kraemer also notes the Liquidation Analysis filed by Debtor on May 5, 2022 omits a number of assets that were identified on Debtor's Balance Sheet filed on April 29, 2022 and contains numerous inconsistencies that must be corrected. Attorneys for the Creditor, Kraemer Brothers, LLC: Rhyan J. Lindley, Esq. VON BRIESEN & ROPER, S.C. 10 East Doty Street, Suite 900 Madison, WI 53703 Telephone: (608) 310-3606 Facsimile: (608) 316-3165 E-mail: rlindley@vonbriesen.com - and - Christopher T. Koehnke, Esq. VON BRIESEN & ROPER, S.C. 411 East Wisconsin Avenue, Suite 1000 Milwaukee, WI 53202 Telephone: (414) 287-1534 Facsimile: (414) 238-6665 E-mail: ckoehnke@vonbriesen.com About Palace Theater Wisconsin-based Palace Theater, LLC, is a privately held company in the performing arts business. The Palace Theater is a theatre destination, producing classic broadway productions, children's theatre shows, comedy and concerts, with both original artists and tribute concerts. Palace Theater filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 21-11714) on Aug. 16, 2021, disclosing total assets of $9,086,225 and total liabilities of $6,449,452. Anthony J. Tomaska, managing member, signed the petition. Judge Rachel M. Blise oversees the case. The Debtor tapped Steinhilber Swanson, LLP as legal counsel and Martin J. Cowie as accountant. PALACE THEATER: Disclosure Has Conflicting Information, UST Says ---------------------------------------------------------------- The United States Trustee, Patrick S. Layng, objects to the Palace Theater, LLC's Disclosure Statement dated April 12, 2022. The United States Trustee points out that the Disclosure Statement and Liquidation Analysis have conflicting information about the assets, and the Disclosure Statement should not be approved until the issues outlined below are addressed. According to The United States Trustee, the Disclosure Statement should be updated to disclose the cash on hand as of a date certain and clarify that the balance on hand may change prior to confirmation. Further, there should be an explanation provided about why the balance in the Disclosure Statement is different than the amount listed on the Liquidation Analysis so creditors are fully informed. The United States Trustee asserts that the Liquidation Analysis references "notes" of a through f, but no notes accompany the Liquidation Analysis and there are no notes of "a through f" in the Assumptions filed with the Disclosure Statement. It is unclear what, if anything, is meant to be attached or referenced with the "notes." The United States Trustee points out that on page 28 of the Disclosure Statement, the accounts receivable listed on the Debtor's schedule A/B of over $1.6 million is mentioned for the first time. It simply states that "the debtor's lease agreement with 94 North will merge upon confirmation and be eliminated along with any account receivable due it for rent." The United States Trustee points out that on page 8 of the Disclosure Statement, the Debtor discusses a building that is adjacent to the Theater and outlines some possible renovation to this building in the future. The Assumptions filed with the Plan and Disclosure Statement do not include the use of this space as renovated, and it appears the future use of this space is not part of the financial projections for the Plan. It is not clear why this information is in the Disclosure Statement if the use of that space is not part of the Debtor's Plan and could be confusing to creditors. The United States Trustee further points out that similarly, on page 8, the Debtor briefly discusses the motel acquired by the principals. However, the Debtor does not elaborate on the details of the business arrangement. The Assumptions filed with the Plan, at page 4, provide a few more details on the hotel including the amount of rent paid to the affiliated entity and that maintenance costs for the hotel are included in the Debtor's budget. A few more details or, at a minimum referring parties to the details in the Assumptions, should be added to the Disclosure Statement so creditors are fully informed. Attorney for the United States Trustee: Tiffany E. Rodriguez, Esq. Office of the United States Trustee 780 Regent St., Suite 304 Madison, WI 53715 Tel: (608) 264-5522 E-mail: Tiffany.Rodriguez@usdoj.gov About Palace Theater Wisconsin-based Palace Theater, LLC, is a privately held company in the performing arts business. The Palace Theater is a theatre destination, producing classic broadway productions, children's theatre shows, comedy and concerts, with both original artists and tribute concerts. Palace Theater filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 21-11714) on Aug. 16, 2021, disclosing total assets of $9,086,225 and total liabilities of $6,449,452. Anthony J. Tomaska, managing member, signed the petition. Judge Rachel M. Blise oversees the case. The Debtor tapped Steinhilber Swanson, LLP as legal counsel and Martin J. Cowie as accountant. PBJAK LLC: Seeks to Hire Berken Cloyes as Bankruptcy Counsel ------------------------------------------------------------ PBJAK, LLC seeks approval from the U.S. Bankruptcy Court for the District of Colorado to hire Berken Cloyes P.C. to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor regarding its powers and duties under the Bankruptcy Code; b. advising the Debtor regarding its responsibilities to comply with the U.S. Trustee's Operating Guidelines and Reporting Requirements as well as the rules of the court; c. preparing legal documents; d. protecting the interests of Debtor in all matters pending before the court; and e. representing the Debtor in negotiation with its creditors to prepare a plan of reorganization or other exit plan. The hourly rates charged by the firm's attorneys and paralegals are as follows: Stephen Berken $425 per hour Sean Cloyes $425 per hour Associate Attorneys $300 per hour Paralegals $165 per hour As disclosed in court filings, Berken Cloyes is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Stephen E. Berken, Esq. Sean Cloyes, Esq. Berken Cloyes PC 1159 Delaware Street Denver, CO 80202 Phone: 303-623-4359 Email: stephenberkenlaw@gmail.com sean@berkencloyes.com About PBJAK LLC PBJAK, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Colo. Case No. 22-11149) on April 5, 2022, disclosing up to $10 million in assets and up to $1 million in liabilities. Harvey Sender serves as Subchapter V trustee. Judge Elizabeth E. Brown oversees the case. Stephen Berken, Esq., and Sean Cloyes, Esq., at Berken Cloyes, PC are the Debtor's bankruptcy attorneys. PENN HILLS SD: Moody's Upgrades Issuer & GOLT Ratings to B3 ----------------------------------------------------------- Moody's Investors Service has upgraded Penn Hills School District, PA's issuer and general obligation limited tax (GOLT) ratings to B3 from Caa2. Moody's maintains A1 (fiscal agent) enhanced and A2 (non-fiscal agent) enhanced ratings on all of the district's outstanding debt. The issuer rating represents the district's ability to repay debt and debt-like obligations without consideration of any pledge, security, or structural features. The district has $173.9 million in net debt outstanding. The outlook was revised to positive from stable. RATINGS RATIONALE The upgrade of the issuer rating to B3 reflects the district's markedly improved financial position that is poised to strengthen further in the near term. The rating is reflective of the district's history of missed debt service payments and designation as distressed by the Pennsylvania Department of Education (PDE). The rating incorporates the district's sharply declining enrollment that is driven in part by significant competition from local charter schools. Further, the rating incorporates the district's moderately elevated leverage with growing debt service requirements. The lack of distinction between the district's issuer rating and the B3 rating on the district's GOLT debt is based on the district's general obligation full faith and credit pledge. The GOLT rating also reflects Pennsylvania school districts' ability to apply for exceptions to the cap on property tax increases for debt service and the Commonwealth's history of granting such exceptions. Governance considerations are material to the district's credit quality. The district was formally admitted to the commonwealth's program for distressed school districts in January 2019. In February 2019, the district was appointed a Chief Recovery Officer. The district's board approved a formal recovery plan in the summer of 2019. Favorably, the district is in close, regular contact with the PDE, and in particular sends monthly cash flows for review by the state. Moody's view the improved coordination with PDE as a strength. In May of 2021, the district formally adopted a fund balance policy. The policy requires fund balance "testing" in the fall and the spring of each year in order to determine the range in which fund balance falls: negative, 0%-5%, 5%-8%, or above 8%. The policy further requires a two year projection to assure that fund balance does not fall within the negative or "low" (0%-5%). The formal adoption of this policy is a credit positive for the district. The district's A1 and A2 enhanced ratings reflect Moody's current assessment of the Pennsylvania School District Intercept Program, which provides that state aid will be allocated to bondholders in the event that the school district cannot meet its scheduled debt service payments. The district's A1 enhanced rating, which applies to its Series of 2021, Series of 2020, Series of 2017, Series A of 2015, and Series of 2015 debt, reflects its direct-pay agreement with the commonwealth, in which the district has directed the treasurer of the commonwealth to automatically appropriate its state aid to the fiscal agent for the benefit of bondholders without any further notice required. For the issuances of debt, the state has agreed to withhold a portion of the commonwealth appropriations due to the district in advance of payments that are due to bondholders. The A2 enhanced rating, which applies to the remainder of the district's rated parity debt, reflects the absence of language in the bond documents that requires the paying agent to trigger the state aid intercept prior to default. Nevertheless, the district has triggered the intercept on its non-fiscal agent enhanced debt in each of the last five fiscal years without issue. As of audited 2021 financial statements, Penn Hills' School District's state aid revenue provides more than sum sufficient debt service coverage. RATING OUTLOOK The positive outlook reflects the district's improved financial trajectory after restoring its fund balance to a positive position. The enhanced rating carries an outlook of stable, which mirrors the outlook of the Commonwealth of Pennsylvania (Aa3 stable). FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS Sustained and material improvements in reserves and liquidity Improved trend in enrollment Materially improved wealth and income levels Upgrade of the commonwealth's rating and state aid intercept program rating (enhanced) FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS Return to structurally imbalanced financial operations leading to draws on reserves and liquidity Additional borrowing that causes outsized growth in leverage or fixed costs Acceleration of trend of declining enrollment Downgrade of the commonwealth's rating and state aid intercept program rating (enhanced) LEGAL SECURITY All of the district's outstanding debt is secured by its general obligation pledge. The district's debt is further enhanced by the Pennsylvania School District Intercept Program. The intercept program is not a general obligation guarantee of the Commonwealth, and in fact, there have been times when the state has not distributed any aid to school districts, as was the case during the 2016 state budget impasse. However, with implementation of Act 85 in 2016, the state has ensured that intercept payments, for the benefit of bond debt service, will be made even in the absence of an appropriation budget. PROFILE Penn Hills School District is located in Allegheny County (Aa3 stable) in southwestern Pennsylvania (Aa3 stable), approximately nine miles west of downtown Pittsburgh (A1 stable). The district's enrollment is 3,069. METHODOLOGY The principal methodology used in these ratings was US K-12 Public School Districts Methodology published in January 2021. PLH GROUP: S&P Downgrades ICR to 'B-', Outlook Negative ------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on PLH Group Inc. to 'B-' from 'B'. The outlook is negative. At the same time, S&P lowered its issue-level rating on its term loan to 'B'. The recovery rating remains '2', indicating its expectation for substantial (70%-90%; rounded estimate: 85%) recovery in an event of default. The negative outlook reflects weaker-than-previously expected performance in recent quarters, weakening cash flows, and S&P's view of the risk of negative free cash flow over the next 12 months. S&P said, "The downgrade reflects upcoming refinancing risk, despite PLH's debt repayment and relatively low leverage. We now assess the company's capital structure as weaker because the first-lien term loan ($107 million outstanding) matures in August 2023. Additionally, the company's ABL expires in May 2023. It has not drawn on the facility in some time, and we do not anticipate ABL borrowings in our forecast. We believe refinancing risk has increased given macroeconomic uncertainties and a challenging business environment. The business is exposed to the volatile energy market and commodity prices since a portion of revenues come from oil and gas customers. Customer spending patterns are inherently cyclical in our view, and project volumes can fluctuate from quarter to quarter. This could result in seasonal swings in revenues, earnings, working capital needs, and cash flow. "We anticipate the company will continue to face margin pressures, with potential cash flow outflows over the next 12 months. PLH's 2021 revenue and earnings were weaker than expected, primarily due to volume declines, project delays and losses, and inflationary pressures. While we anticipate some revenue growth in 2022 as demand has gradually recovered in its end markets and backlog has increased, we expect profitability will continue to face pressure. We believe further cost increases on equipment, fuel, and labor could persist because of inflation, degrading EBITDA margins as well as cash flow from operations. With modest working capital to support ongoing projects and annual capital expenditures (capex) of about $15 million-$20 million for maintenance and growth, free cash flow deficits could continue this year. "We view PLH's liquidity as adequate over the next 12 months. We believe about $51 million cash on hand as of March 2022 and funds from operations (FFO) should provide sufficient liquidity to meet debt obligations in the next 12 months and maintenance capex needs. Its credit facility has a maximum consolidated net leverage ratio covenant of 3.5x. We expect PLH to maintain sufficient headroom in the next 12 months. "The negative outlook reflects weaker-than-previously expected performance in recent quarters, weakening cash flows, and our view of free cash flow deficit risk over the next 12 months." S&P could lower the rating if: -- PLH cannot address its August 2023 term loan maturity in a timely manner; -- The company's liquidity becomes strained. This could occur if its term loan balance becomes current, working capital outflows are significant, or it sustains negative cash free flows; or -- Weaker-than-expected performance due to macroeconomic uncertainties, soft end-market demand, unexpected execution challenges, or project losses sustain high leverage. S&P could revise the outlook on PLH to stable if: -- The company refinances its debt maturities in a timely manner; and -- Operating performance maintains debt to EBITDA below 4x and positive free operating cash flow (FOCF) on a sustained basis. -- This could occur with good execution on its backlog of project work. ESG credit indicators: E2, S2, G3 S&P said, "Governance is a moderately negative consideration in our credit rating analysis of PLH Group, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." PREMISE HEALTH: Moody's Lowers CFR to B3, Outlook Remains Stable ---------------------------------------------------------------- Moody's Investors Service downgraded Premise Health Holding Corp's Corporate Family Rating to B3 from B2, and Probability of Default Rating to B3-PD from B2-PD. At the same time, Moody's also downgraded the first lien senior secured credit facilities to B2 from B1 and assigned a B2 rating to the new incremental term loan and the extended senior secured revolving credit facility. The rating outlook remains stable. The rating actions follow the announced incremental $191 million incremental term loan which will be used to fund a $185 million distribution to shareholders. With this transaction, Premise will also extend the maturity on the revolver to April 2025. The downgrade to B3 reflects the more aggressive nature of Premise's financial policies, a key governance issue. Premise will be meaningfully increasing leverage, roughly 2 turns, to fund the shareholder distribution. Leverage, pro-forma for the distribution rises from 5.8x to 7.8x. Combined with higher initial gross financial leverage, and the use of a significant portion of the cash balances to fund the distribution, there is a greater risk that debt/EBITDA will remain above 6.0x beyond the next 12-18 months. As such, Premise is more weakly positioned to absorb any unexpected operating setbacks or incremental debt. In addition, the company will need to continue to execute at a high level to reduce leverage. Longer-term, Moody's believes that there is the risk that the pandemic will result in a smaller physical footprint for many companies which could lead to contract losses or reductions in scope for Premise. For example, if companies choose to consolidate office space and close down office locations, this would eliminate the need for on-site physicians. The stable outlook reflects Moody's expectation that the company will see leverage improvement following the shareholder distribution given the solid performance. Premise saw an increase in demand for its services relating to the coronavirus pandemic, including performing temperature checks, coronavirus testing and other health screenings as employees returned to work. Premise has good liquidity and has shown the ability to de-lever following its two large acquisitions from 2021 with adjusted debt/EBITDA of 5.8x as of March 31, 2022. The following ratings/assessments are affected by the action: Downgrades: Issuer: Premise Health Holding Corp Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Gtd Senior Secured 1st Lien Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Gtd Senior Secured 1st Lien Revolving Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Gtd Senior Secured Delayed Draw Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Assignments: Issuer: Premise Health Holding Corp Gtd Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD3) Outlook Actions: Issuer: Premise Health Holding Corp Outlook, Remains Stable RATINGS RATIONALE Premise's B3 CFR is constrained by the company's elevated pro forma financial leverage of approximately 7.8x following its shareholder distribution. The rating also incorporates the risk of customer contract losses, either due to changing customer preferences, competition or a customer's own financial challenges. Demand for Premises' services may change as the need for temperature checks and coronavirus testing to enable employees to return to the workplace subsides. Longer-term, there is also the risk that the pandemic results in a smaller physical footprint for many companies which could lead to contract losses or reductions in scope for Premise. For example, if companies choose to consolidate office space and close down office locations, this would eliminate the need for on-site physicians. The rating is supported by the company's blue-chip customer base, good customer diversity and historically high retention rates among both customers and staff. Premise's 2021 acquisitions of CareHere and Sonic Boom further expanded Premise's scale and added reporting and analytical capabilities that have been extended throughout the platform. The company also has low capital expenditure requirements, which Moody's expect will allow the company to continue to generate positive free cash flow aside from the shareholder distribution. Moody's expect that Premise will operate with good liquidity over the next 12 to 18 months. Premise will have roughly $21 million in cash after the dividend, and an undrawn $60 million revolver net of letters of credit that is extended by two years until April 2025. The revolving facility contains a springing 7.5 times first lien leverage covenant. This covenant springs into effect when revolver utilization exceeds 35% of aggregate commitments. Free cash flow is expected to be around $15 to 20 million in 2023. Scheduled annual amortization under the first lien term loan is modest at roughly $5 million paid in equal quarterly installments. There are no financial covenants under the term loans. Moody's expect the company to maintain ample cushion when tested. ESG considerations are material to Premise's credit profile. Premise faces social risks such as the rising concerns around the access and affordability of healthcare services. However, Moody's does not consider Premise to face the same level of social risk as many other healthcare providers because they rely less on government and commercial insurers. From a governance perspective, Moody's expects Premise's financial policies to remain aggressive due to its private equity ownership. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Premise maintains good liquidity, continued growth in earnings through expansion with existing customers and new customer wins, such that adjusted debt/EBITDA is sustained below 6.0x. The ratings could be downgraded if, for any reason, operating performance or liquidity deteriorates. If free cash flow is not expected to be positive or the company pursues more aggressive financial policies that keep leverage elevated. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Premise is one of the leading providers of employer-sponsored on-site health and wellness clinics and pharmacies in the US, operating over 800 clinics, serving over 350 primary care health centers, and 46 pharmacies across 45 states. The company generated $984 million of revenue LTM 3/30/2022. The company is owned by OMERS Private Equity and therefore publicly available financial information is limited. PREMISE HEALTH: S&P Affirms 'B' ICR on Debt-Financed Dividend ------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit rating on Tennessee-based Premise Health Holding Corp. S&P said, "At the same time, we assigned our 'B' issue-level and '3' recovery ratings to the proposed incremental first-lien term loan. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of default. We also affirmed our 'CCC+' rating to the second-lien term loan with a '6' recovery rating, indicating our expectations of negligible recovery (0%-10%; rounded estimate: 0%) in the event of default. "The stable outlook on Premise Health reflects our expectation that it will deliver high-single-digit-percent organic revenue growth and healthy free cash flows of approximately $20 million per year over the next few years, excluding growth capital expenditure (capex) investments. "Adjusted leverage and free operating cash flow (FOCF) will be below our prior expectations due to the impact of the proposed financing and investment in growth initiatives. "We expect the proposed debt-financed transaction will increase leverage to slightly above 7x, which is two turns above our earlier expectations for 2022. Additionally, we now expect EBITDA margin for 2022 to be slightly pressured by wage inflation, possible one-time bonuses to retain staff, new hires, and technology investment costs. We estimate free operating cash flow (cash flow from operations minus capex) will remain lower than our previous expectations resulting in FOCF/debt of 3%-4% in 2022, declining to 1%-2% in 2023. The decline is due to Premise's planned investments in growth capex for near-sites and in technology in order to defend its market position in the direct health care segment and provide enhanced services to its clients. "Though our forecast metrics look a little weaker for 2023 compared with 2022, we believe Premise's strong market position, high retention rate, and recurring, sticky revenue model will help it maintain strong revenue growth as it benefits from growing demand for preventive care and other ancillary solutions." S&P's view on company's business is unchanged. Premise Health operates employer-sponsored health and wellness clinics, maintaining a leading market share of 30%, which far exceeds the market position of its closest pure-play competitor. Premise benefits from its first-mover advantage in the highly competitive and fragmented market for direct health care solutions. The rating is also supported by company's highly diverse blue-chip customer base and high retention rates. Premise is well-positioned to benefit from the growing demand for preventive care and other ancillary solutions. S&P said, "We believe there is ample room for growth in this niche because most self-funded employers don't offer any form of direct health care. We also believe the company's strategy of accessing patient populations through aggregators, in this case employers, is replicable with other large aggregators such as insurers." S&P expects the company to continue to pursue acquisitions. The company experienced an increase in demand for its services due to the pandemic, providing important services such as temperature checks, biometric screenings, and other health screenings as employees returned to work. The recent acquisitions, CareHere (completed in October 2020) and Sonic Boom (completed in February 2021), add corporate wellness technology that contributes to Premise's growing scale and extends its capabilities throughout the platform. Premise also has opportunities to add new services and clinics to its contracts with existing clients as well as to leverage its leading market position and prestigious client list to win new contracts more quickly than its competitors. S&P believes the company will continue to pursue acquisitions either in technology, or to enhance its scale. EBITDA margin and cash flow will be moderately impacted by wage inflation. S&P said, "Despite its leading position in direct health, it is not immune to overall wage inflation trends. We believe selling, general, and administrative expenses will increase as the company takes steps to retain its employees and hire staff amid wage inflation. The company's direct contractual relationships with its clients (employers) provides some margin stability as most of its expenses are passed through to the customer. That stability is also supported by Premise's flat-rate or cost-plus fee contracts, which provides the ability to pass on rising costs to its clients through annual price increases. In addition, Premise' recent investments in technology and addition of product offerings has enabled it to offer multiple access points to its customers, thereby making its customer base stickier. "Our stable outlook on Premise Health Holding Corp. reflects our expectation it will deliver high-single-digit-percent organic revenue growth and healthy free cash flows of approximately $20 million per year over the next few years, excluding growth capex investments. "We could lower our rating on Premise if its free cash flow to debt declines to below 3% with no clear prospects for a recovery. Slower-than-expected revenue growth coupled with an approximately 100 basis point (bp) decline in the company's margin could lead to such a scenario, which would likely be due to wage inflation, heightened competition, an economic downturn, or unforeseen adverse events such as an unfavorable legal ruling. "While unlikely over the next 12 months, we will consider raising our rating on Premise if it sustainably reduces its leverage below 5x, which would likely require a double-digit-percent increase in its revenue and a significant improvement in its margin. However, we would likely view any improvement in the company's credit metrics as temporary given our view that its private-equity owners will support aggressive financial policies. We could also raise our rating if Premise improves its business risk by increasing its scale while maintaining its current solid EBITDA margins." ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance is a moderately negative consideration. 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." PROFESSIONAL TECHNICAL: Taps GlassRatner as Financial Advisor ------------------------------------------------------------- Professional Technical Security Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire GlassRatner Advisory & Capital Group, LLC as financial advisor. The firm's services include: (a) evaluating the Debtor's assets and historical financial statements, including monthly operating reports; (b) preparing an information memorandum for distribution to prospective interested parties; (c) developing a list of potentially interested parties to contact; (d) populating a data room with information whereby interested parties may analyze company information; (e) responding to requests for information from interested parties in coordination with the Debtor and its legal counsel; (f) obtaining indications of interest and engaging in negotiations; (g) assisting the Debtor and its legal counsel in the formulation of sale procedures and preparation of filings; (h) periodically reporting to the Debtor and its legal counsel regarding the marketing and sale process and any areas of concern; (i) providing the court declarations and testimony with respect to marketing efforts and sale process; and (j) performing other services requested by Debtor. The firm's hourly rates are as follows: Seth R. Freeman $550, representing a $50 per hour discount George Demos $450, representing a $50 per hour discount The retainer fee is $25,000. Seth Freeman, managing director at GlassRatner, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Seth R. Freeman GlassRatner Advisory & Capital Group, LLC 19800 MacArthur Blvd., Suite 820 Irvine, CA 92612 Tel: 415-229-4680 About Professional Technical Professional Technical Security Services, Inc. is a company in San Francisco, Calif., that provides professional security staffing. It conducts business under the name Protech Bay Area. Professional Technical sought Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 22-30062) on Feb. 1, 2022, disclosing assets of more than $14 million and liabilities of more than $26 million. Judge Hannah L. Blumenstiel oversees the case. Stephen D. Finestone, Esq., at Finestone Hayes, LLP and Constangy, Brooks, Smith & Prophete, LLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. Bachecki, Crom & Co., LLP is the Debtor's accountant, while GlassRatner Advisory & Capital Group, LLC serves as the Debtor's financial advisor. The U.S. Trustee for Region 17 appointed an official committee of unsecured creditors on May 9, 2022. The committee is represented by Daren Brinkman, Esq., at Brinkman Portillo Ronk, PC. QUEST PATENT: Incurs $163K Net Loss in First Quarter ---------------------------------------------------- Quest Patent Research Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $162,640 on $122,000 of revenues for the three months ended March 31, 2022, compared to a net loss of $5.16 million on zero revenue for the three months ended March 31, 2021. As of March 31, 2022, the Company had $1.59 million in total assets, $9.64 million in total liabilities, and a total stockholders' deficit of $8.05 million. At March 31, 2022, the Company had current assets of approximately $297,000, and current liabilities of approximately $9,296,000. Its current liabilities include funding liabilities of approximately $4,463,000 payable to QFL, a non-interest bearing total monetization proceeds obligation to Intelligent Partners in the amount of $2,805,000 under the Restructure Agreement, both of which are only payable from money generated from the monetization of intellectual property, and loans payable of $138,000 and accrued interest of approximately $578,000. As of March 31, 2022, the Company has an accumulated deficit of approximately $25,599,000 and a negative working capital of approximately $8,899,000. Other than salary and pension benefits to its chief executive officer, the Company does not contemplate any other material operating expense in the near future other than normal general and administrative expenses, including expenses relating to its status as a public company filing reports with the SEC. Quest Patent "We cannot assure you that we will be successful in generating future revenues, in obtaining additional debt or equity financing or that such additional debt or equity financing will be available on terms acceptable to us, if at all, or that we will be able to obtain any third-party funding in connection with any of our intellectual property portfolios. We have no credit facilities. Although our agreement provides for QFL to provide us with funding to acquire intellectual property rights, subject to QFL's approval, it does not provide for financing the litigation necessary for the monetization of the intellectual property rights. We do not have any credit facilities or any arrangements for us to finance the litigation necessary to monetize our intellectual property rights other than contingent fee arrangements with counsel with respect to our pending litigation. If we do not secure contingent representation or obtain litigation financing, we may be unable to monetize our intellectual property. "We cannot assure you that we will be successful in generating future revenues, in obtaining additional debt or equity financing or that such additional debt or equity financing will be available on terms acceptable to us, if at all, or that we will be able to obtain any third-party funding in connection with any of our intellectual property portfolios. We have no credit facilities. "We cannot predict the success of any pending or future litigation. Typically, our agreements with the funding sources provide that the funding sources will participate in any recovery which is generated. We believe that our financial condition, our history of losses and negative cash flow from operations, and our low stock price make it difficult for us to raise funds in the debt or equity markets." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/824416/000121390022027173/f10q0322_questpatent.htm About Quest Patent Rye, New York-based Quest Patent Research Corporation -- http://www.qprc.com-- is an intellectual property asset management company. The Company's principal operations include the development, acquisition, licensing and enforcement of intellectual property rights that are either owned or controlled by the Company or one of its wholly owned subsidiaries. The Company currently owns, controls or manages eleven intellectual property portfolios, which principally consist of patent rights. Quest Patent reported a net loss of $4.15 million for the year ended Dec. 31, 2021, compared to a net loss of $1.31 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $816,626 in total assets, $8.74 million in total liabilities, and a total stockholders' deficit of $7.93 million. Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 31, 2022, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. RATTLER MIDSTREAM: Fitch Puts 'BB+' IDR on Watch Positive --------------------------------------------------------- Fitch Ratings has placed Rattler Midstream, LP's (Rattler) Long-Term Issuer Default Rating (IDR) at 'BB+' on Rating Watch Positive following the announcement that oil and gas producer, Diamondback Energy (BBB/Stable), Rattler's parent company, will acquire all remaining publicly held common units representing the limited partner interests in Rattler not already owned by Diamondback and its subsidiaries. The unsecured notes are affirmed at 'BB+'/'RR4'. The Watch Positive reflects the expected financial and operation benefits from Diamondback following the buy-in, Diamondback's solid track record of operation, low leverage and high-quality Permian Assets. Fitch will resolve the Watch Positive rating action once there is greater clarity on the final parent subsidiary linkage between Rattler and Diamondback. Fitch's key concerns for Rattler which were single basin focus and lack of business line diversity, along with customer concentration which raised the possibility of an outsized event risk should there be operating or financial issues at Diamondback, are somewhat reduced as the two entities are likely to be more closely integrated post the close-out of the merger. KEY RATING DRIVERS Diamondback Acquisition a Credit Positive: Fitch views Diamondback's acquisition of the remaining public Rattler units as being supportive of the business and the positive for credit as it fully aligns the interests of the two entities. In Fitch's view, Rattler will directly benefit from drilling and completion efficiencies at Diamondback. Fitch believes Rattler will also likely benefit from greater business integration, including access to lower cost of capital and greater financing flexibility through its benefit with Diamondback. Limited Size and Line of Business: Rattler is a water midstream/solutions provider that operates in the low-cost Delaware and Midland regions of the Permian basin. While it also provides oil and gas gathering and owns minority shares in long-haul pipelines, Fitch expects the water business to remain Rattler's the main business and growth generator (about 80% of 2020 EBITDA). Typically, from a size perspective Fitch views companies with EBITDA above $500 million as consistent with investment-grade IDRs in the midstream sector. However, through 2022, Fitch expects Rattler to generate annual EBITDA of around $320 million. Production Fundamentals Constrain Volume Growth: Fitch believes oil and gas production in the Permian will remain somewhat flat in the near term driven by restraints in capital expenditure Diamondback in particular but also other E&P producer customers. This will affect throughput revenues at Rattler. Customer Concentration: Rattler has significant customer concentration with approximately 92% of its revenues generated from Diamondback in 2021. Fitch believes that Rattler's midstream operations will remain integral to Diamondback's Permian focused, low-operating cost production profile. Fitch expects Diamondback and Rattler's development to move in lockstep with one another. Rattler's dedicated acres overlay Diamondback's seven core development areas, covering 87% of Diamondback's development acreage. The reduction in drilling activities by Diamondback exposes Rattler to limited volumetric risk as Fitch expects Diamondback's production to remain relatively flat yoy, and Diamondback has demonstrated a strong execution record against production guidance. Fitch expects Diamondback's reduced capital program to target its highest return acreage in Northern Midland Basin, where Rattler has sizable water infrastructure, minimizing near-term growth capital needs. However, management stated that the midstream assets from Diamondback's acquisition of QEP Resources, Inc. and Guidon Energy, once acquired by Rattler, will be fully accretive. Fitch believes this will drive EBITDA growth in 2022. Asset and Contract Profile: Cash flow from Diamondback for Rattler's produced water disposal and source water services is underpinned by long-term, fixed fee contracts. The ratings consider that Rattler generates 90% of its cash flow under fixed fee contracts with a remaining tenor of approximately 14 years, which eliminates direct commodity price risk, but is subject to volumetric risk. These contracts are also backed by acreage dedication from Diamondback but do not have minimum volume commitments. Fitch believes that the Permian will continue to be the cornerstone of growth for Diamondback and Rattler. Low Leverage Provides Flexibility: Rattler's low leverage and interest and distribution coverage is strong relative to midstream peers. Fitch expects near-term leverage of around 2.2x-2.3x through 2022 driven by the throughput from the QEP drop down from Diamondback. Fitch's forecast assumes funding from FCF and borrowings on the revolver and an increase in growth capex for these assets. Leverage is expected to increase slightly to around 2.4x-2.5x in 2023 if capital spending continues to be constrained, resulting in lower throughput from the existing acreage. Going forward, Rattler has modest capital needs as Diamondback focuses production in acreage with existing water infrastructure to preserve its competitive cost structure. Fitch believes leverage is critical to Rattler's credit profile due to the company's concentrated customer exposure and limited geographic diversity. Parent Subsidiary Linkage: Fitch currently rates Rattler on the basis of its standalone credit profile. Fitch considers Diamondback stronger than Rattler under Fitch's Parent Subsidiary Linkage Criteria. Rattler is consolidated into Diamondback's consolidated financial statements, and Diamondback's two classes of ownership securities in the Rattler family effectively give it a 92% stake (including 100% of the general partner). While Rattler derives some benefit from operational and ownership links with Diamondback, Rattler is managed largely on an independent basis. Operational ties are moderate, and legal ties are weak as there are no debt guarantees or cross defaults. Management Commonality is weak, and Fitch expects the independent board members on the conflicts committee to ensure that new contracts (or amendments to old contracts) are properly handled. Strategic and ownership ties between Diamondback and Rattler have strengthened given the current announcement and Fitch will re-assess the linkage once the details of the final corporate structure are made available. DERIVATION SUMMARY Rattler's size as measured by EBITDA supports its rating. Fitch regards an EBITDA level of $500 million as a boundary, for generic midstream companies, between the 'BB' and 'BBB' rating categories. Rattler's run-rate for EBITDA is approximately $300 million-$360 million per annum. Rattler is unusual in the midstream sector in that it is a predominately a water solutions business. Many of its peers are traditional midstream entities engaging in crude oil gathering, or gas gathering and processing. Waterbridge (B-/Stable) provides similar services as Rattler, as a water provider located in the Permian basin, but is smaller than Rattler. Waterbridge only operates in the Delaware portion of the Permian basin. Many of its customers have other areas besides its territory in which to drill for oil. While Waterbridge has a significant amount of dedicated acreage, Fitch believes its counterparty risk is higher than Rattler's, and its expected leverage is much higher at well above 7.0x at YE 2022. DCP Midstream Operating, LP is rated 'BB+'/Positive despite its much larger scale and greater operational diversification. Unlike DCP, Rattler has no direct commodity price risk and had less volumetric risk than DCP for the last five years. Its recent leverage is also lower than DCP's. KEY ASSUMPTIONS -- WTI oil price of $95/bbl in 2022, $76/bbl in 2023, $57/bbl in 2024 and $50/bbl in 2025 and thereafter; -- Fitch expects Diamondback's production will shift to the Midland from the Delaware basin in the Permian following the dropdowns, resulting in flat volumes through 2022; -- Fitch assumes partially debt funded additional dropdowns in 2022 from the QEP acquisition at Diamondback. These cashflows are immediately accretive but also result in a higher debt over the next two years; -- Capital spending to support Diamondback's production focused on the Midland basin; and remaining pipeline joint venture investments are completed; -- Long-haul pipelines volumes ramp-up gradually, contributing modest higher cash flows starting in 2024; -- Merger closes with similar. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Independent acquisitions of midstream businesses that increases size, geographic or business line diversity, with a focus on EBITDA above $500 million per annum and leverage (total debt with equity credit/operating EBITDA) at or below 3.0x on a sustained basis; -- Close-out of the merger leading to expected financial, operational or structural benefits. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Change in Diamondback's financial policies (or execution against same) that may signal potential modifications to the Diamondback-Rattler relationship, that impairs cash flow; -- Leverage (total debt with equity credit/operating EBITDA) at or above 4.0x on a sustained basis; -- A significant change in cash flow stability profile, driven by a move away from current majority of revenue being fee based. If revenue commodity price exposure were to increase above 25%, Fitch would likely take a negative rating action; -- An increase in spending beyond Fitch's current expectations, or acquisitions funded in a manner that pressures the balance sheet. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity in Near Term: As of March 31, 2022, Rattler had approximately $14 million in cash and cash equivalents. Rattler also has a credit facility which provides a $600 million revolver, with $370 million available. The credit facility can be used to fund capital needs of Rattler OpCo. Under the credit facility, OpcCo is required to maintain three financial covenants: (1) consolidated total leverage ratio no greater than 5.0x; (2) senior secured leverage ratio not greater than 3.50x; and (3) consolidated interest coverage ratio not less than 2.50x. As of March 31, 2021, OpCo was in compliance with the covenants, and Fitch expects the company to maintain compliance in the near term. Debt Maturity Profile: The revolver matures in May 2024. The $500 million term loan matures in 2025. ISSUER PROFILE Rattler Midstream LP is a master limited partnership (MLP) water servicer formed by oil and gas producer Diamondback Energy, Inc. to own and operate a network of water pipelines and other water infrastructure assets located in the Midland and Delaware basins within the Permian basin in Texas. ESG CONSIDERATIONS Rattler Midstream LP has an ESG Relevance Score of '4' for Group Structure as the company operates under a somewhat complex group structure as an MLP, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Also, group structure considerations have an elevated scope for RTLR given inter-family/related party transactions with affiliate companies. 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. SIERRA ENTERPRISES: Moody's Cuts CFR to B3, Outlook Negative ------------------------------------------------------------ Moody's Investors Service downgraded Sierra Enterprises LLC's ("Sierra"; owner of Lyons Magnus, LLC) Corporate Family Rating to B3 from B2 and Probability of Default Rating to B3-PD from B2-PD. In addition, Moody's also downgraded the ratings on the company's first lien revolving credit facility and first lien term loan to B3 from B2. The outlook is negative. The downgrade reflects Moody's view that operating performance challenges will keep leverage elevated and liquidity weak over the next year. Moody's projects Sierra's EBITDA will remain relatively weak in the fiscal years ending September 2022 and September 2023 as inflationary headwinds impact margins and price increases lead to reduced volumes. In the first half of fiscal 2022, Sierra's EBITDA declined by over 70% compared to the first half of fiscal 2021. Although management implemented a number of price increases during the period, cost increases outpaced the company's price increases. Raw materials, ingredients, freight, and labor cost increases all contributed to the decline in EBITDA. Moody's is forecasting Sierra's performance to improve in the second half of fiscal 2022, as price increases start to offset the inflationary cost pressures. Liquidity is weak based on $10 million of cash, limited free cash flow, and very low incremental capacity on the revolver because additional borrowings would trigger the springing 6.25x net debt to EBITDA leverage covenant with which Moody's believes the company would be unable to comply. Sierra's debt to LTM EBITDA stood at 7.3x on a Moody's adjusted basis as of March 26, 2022, and Moody's is forecasting it to remain over 7x for the remainder of fiscal 2022. In fiscal 2023, Moody's believes that Sierra should exhibit a slight improvement in performance, resulting in debt-to-EBITDA leverage falling below 7x. Free cash flow in the LTM period ended March 2022, was negative $29 million, and Moody's is forecasting Sierra to generate roughly break-even free cash flow for the balance of fiscal 2022. Of note, Sierra invested $26 million in strategic growth capital projects in the LTM period ended March 2022. Fiscal 2023 free cash flow is likely to be in a $5-10 million range. The following ratings/assessments are affected by the action: Ratings Downgraded: Issuer: Sierra Enterprises LLC Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured Bank Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: Sierra Enterprises LLC Outlook, Remains Negative RATINGS RATIONALE The B3 Corporate Family Rating reflects Sierra's high financial leverage and customer concentration with its three largest customers accounting for over 50% of revenue. The rating also reflects some execution risk in expansion of low-acid aseptic packaging business. Additionally, the majority of Sierra's customers are quick-service-restaurants, which were materially impacted by shutdowns due to the coronavirus outbreak. Financial policies are aggressive under private equity ownership. The company benefits from its well-established market position as a foodservice supplier of beverage syrups, nutritional beverages, and toppings in the U.S. The company also benefits from long-standing customer relationships and low exposure to fluctuations in raw material costs. The rating reflects Moody's expectation that the company's EBITDA generation will improve in fiscal 2023 through price increases and continued recovery in foodservice volume, cost rationalization, growth in the aseptic packaging business and a moderation of cost pressures. This should lead to positive $5-10 million of free cash flow generation. However, rising interest rates will be a headwind that could weaken free cash flow and make it more challenging for the company to address its revolver and term loan 2024 maturities if operating performance does not improve. Sierra has exposure to environmental risks because it is reliant on raw materials such as sweeteners and fruits, and waste and pollution through use of packaging materials that often are not or cannot be recycled. Sierra, like the overall packaged food sector is exposed to social risks related to responsible production and customer relations. The company must cost-effectively manage a supply chain to ensure sufficient flow of raw materials to meet production schedules. In addition, the company's exposure to customer relations reflects risks around proper labeling, contamination, or product recalls. Moody's views Sierra's financial policies as aggressive given its high financial leverage and acquisition strategy under private equity ownership. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects the company's weak liquidity and challenges to quickly improve operating performance. As of March 26, 2022, the company had $10 million in cash and free cash flow is expected to be negative in fiscal 2022. Although the company has a $35 million revolving credit facility, additional availability is limited as the company had approximately $10.7 million drawn on the facility at the end of last quarter, and there is a springing net debt to EBITDA covenant (7.53x at 2Q22) which limits revolver availability to 1/3 of its commitments if net debt to EBITDA exceeds 6.25x. In addition to liquidity, the negative outlook also reflects Moody's concern that leverage will remain over 7x in the next 6 to 12 months. Moody's expects Sierra's operating performance to begin to improve in the second half of fiscal 2022, as price increases begin to offset inflationary headwinds, albeit there are also price elasticity concerns as the price increases could lead to a reduction in volumes. Ratings could be upgraded if the company profitably increases its scale, improves the operating margin, and reduces debt/EBITDA below 6.0x. The company would also need to improve liquidity including sustaining positive free cash flow, increasing effective revolver capacity, and addressing the 2024 maturities. Ratings could be downgraded if operating performance remains weak, the company is unable to restore positive free cash flow, liquidity deteriorates, or the company experiences a material delay or cost overruns from expansion into aseptic packaging. A downgrade can also occur if debt/EBITDA remain above 7.0x. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. Headquartered in Fresno, California, Sierra Enterprises LLC is the owner of Lyons Magnus, LLC. The company produces beverage syrups, toppings, sauces, food ingredients, frozen desserts, and nutritional beverages. Sierra's customers are primarily food manufacturers and food service companies located in the US. The company also has some branded direct-to-retail products such as sauces, juices, and nutritional drinks. Sierra is majority owned and controlled by private equity firm Paine Schwartz Partners since the 2017 acquisition. The company does not publicly disclose financial information. Annual revenue is around $700 million. SILVER STATE: Affiliate Seeks to Hire Robert W. Mahlman as Broker ----------------------------------------------------------------- Golden State Broadcasting, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Robert Mahlman, a broker based in West Venice, Fla. Golden State, an affiliate of Silver State Broadcasting, LLC, requires the services of a broker in connection with the sale of KREV-FM, an FM radio station licensed to Alameda, Calif. The broker will get 5 percent of the first $3 million purchase price, plus 2 percent of any remaining purchase price above $3 million. As disclosed in court filings, Mr. Mahlman is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Mahlman can be reached at: Robert W. Mahlman 919 Posadas West Venice, FL 34285 About Silver State Broadcasting Las Vegas-based Silver State Broadcasting, LLC and its affiliates, Major Market Radio, LLC and Golden State Broadcasting, LLC, filed voluntary petitions for Chapter 11 protection (Bankr. D. Nev. Lead Case No. 21-14978) on Oct. 19, 2021. In its petition, Silver State listed up to $50 million in assets and up to $1 million in liabilities. Judge August B. Landis oversees the cases. Stephen R. Harris, Esq., at Harris Law Practice, LLC is the Debtors' bankruptcy attorney. The Debtors filed their disclosure statement and proposed plan to exit Chapter 11 protection on May 2, 2022. SOUTHERN BLOOMS: Seeks Approval to Hire C-Suite Now as Accountant ----------------------------------------------------------------- Southern Blooms Co., LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Tennessee to employ C-Suite Now as its accountant. The firm's services include the preparation of the Debtor's books and records, tax returns, monthly operating reports, statements and schedules, and other related services. The hourly rates charged by the firm are as follows: Accounting and Bookkeeping $45 per hour Business consulting $100 per hour C-Suite Now also bills for its out-of-pocket expenses. Cole Campbell, a director at C-Suite Now, disclosed in a court filing that the firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Cole Campbell C-Suite Now 5210 Village Parkway Rogers, AR 72758 Phone: 479-696-2998 Email: Cole@c-suitenow.com About Southern Blooms Co. Southern Blooms Co., LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 22-01211) on April 15, 2022, listing up to $100,000 in assets and up to $1 million in liabilities. Michael Geoffrey Abelow serves as Subchapter V trustee. Judge Marian F. Harrison presides over the case. Denis Graham Waldron, Esq., at Dunham Hildebrand, PLLC and C-Suite Now serve as the Debtor's legal counsel and accountant, respectively. SPICER MANSION: Owner Brian Gates Files for Chapter 11 Bankruptcy ----------------------------------------------------------------- Brian Hallenbeck of The Day reports that Brian Gates, the owner of Spicer Mansion, the boutique Mystic hotel that's the subject of ongoing foreclosure proceedings, filed for Chapter 11 bankruptcy Friday, May 20, 2022, forestalling foreclosure sales scheduled Saturday, May 21, of four other properties he owns, including his Stonington residence. Gates disclosed $3.583 million in assets against $5.271 million in liabilities in schedules attached to the petition. The property at 116 Cove Road, in Stonington, Conn., which serves as his single-family home, is valued at $1.2 million. Notice of Gates' bankruptcy petition was filed in New London Superior Court by his attorney, Richard Malafronte. The state's judicial Web site indicated that Saturday's scheduled foreclosure sales, all set to take place at noon, were cancelled. The sales were to include public auctions of Gates' home at 116 Cove Road in Stonington, as well as two Putnam properties, one a commercial building at 18 S. Main St., the other a residence at 118 School St., and a strip shopping center at 32-44 Norwich Road, Plainfield. All four of the properties were used to secure a mortgage loan Chelsea Groton Bank granted Gates on the hotel in 2015. The bank lodged a foreclosure suit against Gates in 2019, alleging he was in default on the loan. The hotel was auctioned at a March 2022 foreclosure sale, with Ross Weingarten, a Gates business associate, submitting a winning bid of $3.52 million. Weingarten subsequently failed to close on the purchase by a court-ordered deadline, risking forfeiture of his $367,000 deposit. Weingarten is contesting the forfeiture. About Spicer Mansion Spicer Mansion is a premier vacation destination owned by Brian Gates. Brian P. Gates filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No. 22-20337) on May 20, 2022 to stop foreclosure of his properties. The case is overseen by Honorable Bankruptcy Judge James J. Tancredi. George C. Tzepos, of Law Offices of George C. Tzepos, is the Debtor's counsel. SUMMER AVE: Gets Court Nod to Use Cash Collateral ------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Western Division, authorized Summer Ave LLC to use cash collateral on an interim basis and in amounts as set forth in the budget through August 2022. The creditors that claim security interests in the Debtors' properties are Community Loan Servicing, LLC and Belvidere Capital, LLC. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, all secured creditors are granted replacement liens and security interest to the same extent, validity, and enforceability of their perfected security interests as of the petition date not subject to avoidance. The Debtor, commencing in the month of June 2022, will make monthly adequate protection payments to Community Loan Servicing in the amount of $2,000, no later than the 15th day of the month, with application of such payments to principal or otherwise subject to further Court order. A hearing on the final use of cash collateral is scheduled for August 11, 2022 at 10 a.m. by Zoom video conference. A copy of the order and the Debtor's budget for the period from May to August 2022 is available at https://bit.ly/3Pwvr2W from PacerMonitor.com. The Debtor projects $7,500 in total revenue and $7,200 in total expenses for May 2022. About Summer Ave, LLC Summer Ave, LLC is a limited liability company who owns commercial property, consisting of three buildings and two parking lots, each on a separate parcel, with building addresses of (i) 431-435 White Street, (ii) 429 White Street and 752 Sumner Avenue, and (iii) 760 Sumner Avenue, Springfield, Massachusetts. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-30140) on April 28, 2022. In the petition signed by Louis Masaschi, manager, the Debtor disclosed $778,100 in assets and $4,058,600 in liabilities. Judge Elizabeth D. Katz oversees the case. Louis S. Robin, Esq. at Law Offices of Louis S. Robin represents the Debtor as counsel. SUNGARD AS: Seeks Approval to Hire Akin Gump as Bankruptcy Counsel ------------------------------------------------------------------ Sungard AS New Holdings, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Akin Gump Strauss Hauer & Feld, LLP to serve as legal counsel in their Chapter 11 cases. The firm's services include: (a) advising the Debtors with respect to their powers and duties in the continued management and operation of their businesses and properties; (b) advising and consulting on the conduct of the cases, including all legal and administrative requirements of operating in Chapter 11; (c) attending meetings and negotiating with representatives of creditors and other parties in interest; (d) taking all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (e) preparing pleadings; (f) representing the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; (g) taking any necessary action on behalf of the Debtors to negotiate, prepare and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto; (h) advising the Debtors in connection with any potential sale of assets; (i) appearing before the bankruptcy court and any appellate courts to represent the interests of the Debtors' estates; (j) advising the Debtors regarding tax matters; (k) advising the Debtors regarding regulatory and any other governmental related matters; and (l) performing all other necessary legal services for the Debtors in connection with the prosecution of the chapter 11 cases. The hourly rates charged by the firm's attorneys and paraprofessionals are as follows: Philip C. Dublin, Partner $1,775 Meredith A. Lahaie, Partner $1,565 Kevin Zuzolo, Counsel $1,225 Zach Lanier, Counsel $1,095 Melanie A. Miller, Associate $1,045 Matthew Friedrick, Associate $965 Amelia Danovitch, Associate $710 Angeline Leggiero, Associate $710 Partners $1,125 - $1,995 Senior Counsel $845 - $1,655 Counsel $990 - $1,225 Associates $605 - $1,045 Paraprofessionals $235 - $475 Akin Gump provided the following responses to the questions set forth in Part D 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: No. The hourly rates are consistent with (a) market rates for comparable services and (b) the rates that Akin Gump charges and will charge other comparable Chapter 11 clients, regardless of the location of the Chapter 11 case. 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 prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Response: Akin Gump has represented the Debtors on various matters since May 2019. During that period, Akin Gump charged the Debtors its standard rates in effect at that time. Except for its standard annual adjustments to billing rates in January of each year, Akin Gump's billing rates did not otherwise change or increase during Akin Gump's engagement. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Akin Gump expects to develop a prospective budget and staffing plan to reasonably comply with the U.S. trustee's request for information and additional disclosures, as to which the firm reserves all rights. The Debtors have approved Akin Gump's proposed hourly billing rates. Philip Dublin, Esq., a partner at Akin Gump, 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: Philip C. Dublin, Esq. Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, NY 10036 Telephone: (212) 872-1000 Facsimile: (212) 872-1002 Email: pdublin@akingump.com About Sungard AS New Holdings Sungard Availability Services is a Wayne, Pa.-based information-technology services provider owned by Angelo Gordon, Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc. It provides disaster recovery services, colocation and network services, cloud and managed services and workplace recovery to customers in North America, Europe and Asia. The company and its affiliates filed for Chapter 11 protection twice in three years. Sungard filed for Chapter 11 bankruptcy in 2019 with a prepackaged plan that was approved by a New York bankruptcy court one day after it was filed. Sungard AS New Holdings, LLC and affiliates, including Sungard Availability Services, LP, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-90018) on April 11, 2022. Judge David R. Jones oversees the case. In the petition signed by Michael K. Robinson, CEO and president, Sungard AS disclosed up to $1 billion in both assets and liabilities. Sungard Availability Services (UK) Limited, an indirect subsidiary of Holdings, entered into administration in the UK on March 25, 2022. Meanwhile, Sungard Canada filed an application for recognition in Canada under the Companies Creditors' Arrangement Act of its Chapter 11 case. Akin Gump Strauss Hauer & Feld LLP and Jackson Walker serve as legal counsel to the Debtors. Cassels Brock & Blackwell LLP, serves as their Canadian legal counsel. DH Capital, LLC and Houlihan Lokey, Inc., act as investment bankers. FTI Consulting, Inc. serves as financial and restructuring advisor. Alvarez & Marsal Canada Inc., serves as Canadian court-appointed information officer and is represented by Bennett Jones, LLP as counsel in connection with the Canadian proceedings. Kroll Restructuring Administration, LLC serves as notice and claims agent. Proskauer Rose, LLP and Gray Reed & McGraw, LLP serve as counsel to Acquiom Agency Services LLC, the Term Loan DIP agent, and Term Loan DIP lenders. PNC Bank, National Association, serves as administrative agent and collateral agent, under the DIP ABL facility. PNC is represented by Thompson Coburn Hahn & Hessen LLP as counsel. SUNGARD AS: Seeks Approval to Hire Jackson Walker as Local Counsel ------------------------------------------------------------------ Sungard AS New Holdings, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Jackson Walker, LLP as their local and conflicts counsel. The firm's services include: -- advising the Debtors regarding local rules, practices and procedures, including Fifth Circuit law; -- preparing agendas, hearing notices, witness and exhibit lists, and hearing binders of documents and pleadings, and providing other services necessary to administer the cases; -- reviewing and commenting on proposed drafts of pleadings to be filed with the court; -- at the request of the Debtors, appearing in court and at any meeting with the U.S. trustee, and any meeting of creditors at any given time on behalf of the Debtors as their local and conflicts bankruptcy co-counsel; -- performing all other services assigned by the Debtors to the firm as local and conflicts bankruptcy co-counsel; and -- providing legal advice on any matter in which Akin Gump Strauss Hauer & Feld, LLP, the Debtors' bankruptcy counsel, may have a conflict. The hourly rates charged by the firm's attorneys and paraprofessionals are as follows: Partners $695 - $985 Associates $435 - $685 Paraprofessionals $195 - $205 The firm received a retainer in the amount of $270,856. Matthew Cavenaugh, Esq., a partner at Jackson Walker, disclosed in a court filing that his firm neither holds nor represents an interest adverse to the Debtors or their estates. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Cavenaugh disclosed that: -- Jackson Walker has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement. -- No Jackson Walker professional included in the engagement has varied his rate based on the geographic location of the bankruptcy case. -- Mr. Cavenaugh's hourly rate is $950. The rates of other restructuring attorneys at the firm range from $435 to $985 per hour while paraprofessional rates range from $195 to $205 per hour; and -- Jackson Walker has not prepared a budget and staffing plan. Jackson Walker can be reached through: Matthew D. Cavenaugh, Esq. Jackson Walker, LLP 1401 McKinney St., Suite 1900 Houston, TX 77010 Phone: (713) 752-4284 Email: mcavenaugh@jw.com About Sungard AS New Holdings Sungard Availability Services is a Wayne, Pa.-based information-technology services provider owned by Angelo Gordon, Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc. It provides disaster recovery services, colocation and network services, cloud and managed services and workplace recovery to customers in North America, Europe and Asia. The company and its affiliates filed for Chapter 11 protection twice in three years. Sungard filed for Chapter 11 bankruptcy in 2019 with a prepackaged plan that was approved by a New York bankruptcy court one day after it was filed. Sungard AS New Holdings, LLC and affiliates, including Sungard Availability Services, LP, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-90018) on April 11, 2022. Judge David R. Jones oversees the case. In the petition signed by Michael K. Robinson, CEO and president, Sungard AS disclosed up to $1 billion in both assets and liabilities. Sungard Availability Services (UK) Limited, an indirect subsidiary of Holdings, entered into administration in the UK on March 25, 2022. Meanwhile, Sungard Canada filed an application for recognition in Canada under the Companies Creditors' Arrangement Act of its Chapter 11 case. Akin Gump Strauss Hauer & Feld LLP and Jackson Walker serve as legal counsel to the Debtors. Cassels Brock & Blackwell LLP, serves as their Canadian legal counsel. DH Capital, LLC and Houlihan Lokey, Inc., act as investment bankers. FTI Consulting, Inc. serves as financial and restructuring advisor. Alvarez & Marsal Canada Inc., serves as Canadian court-appointed information officer and is represented by Bennett Jones, LLP as counsel in connection with the Canadian proceedings. Kroll Restructuring Administration, LLC serves as notice and claims agent. Proskauer Rose, LLP and Gray Reed & McGraw, LLP serve as counsel to Acquiom Agency Services LLC, the Term Loan DIP agent, and Term Loan DIP lenders. PNC Bank, National Association, serves as administrative agent and collateral agent, under the DIP ABL facility. PNC is represented by Thompson Coburn Hahn & Hessen LLP as counsel. SUNGARD AS: Seeks to Hire FTI Consulting as Financial Advisor ------------------------------------------------------------- Sungard AS New Holdings, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire FTI Consulting, Inc. as their financial advisor. The firm will render these services: I. Liquidity Assessment: (a) understand the Debtors' existing cash forecasting tool and develop required enhancements; (b) evaluate and sensitize key drivers of the Debtors' cash flows; (c) develop and/or enhance cash flow variance analysis; (d) understand and evaluate cash management and funding requirements of the Debtors; (e) understand the Debtors' international cash dynamics (cash needs of international operations, ability to repatriate cash); (f) estimate and incorporate restructuring costs (professional fees, deposits, vendor management, severance, separation costs, etc.) into the forecast; and (g) understand proposed timing of asset sales and related impact on cash flows. II. Bankruptcy Readiness/Assessment/Planning: (a) review information gathered for the Debtors' 2019 chapter 11 filing and understand changes to availability or applicability of information; (b) understand financial reporting, consolidation, charts of account, intercompany accounting, etc.; and (c) develop strategies around vendor management and potential critical vendor programs. III. Wind-down Assessment: (a) understand which of the Debtors' assets or business lines may be sold and assist in determination of which assets may remain in one or more remaining entities or otherwise be separately wound down; (b) evaluate restructuring and wind down alternatives for the Debtors; (c) review large dollar expenses and understand the nature of various costs (variable, fixed, step function); (d) determine ability to map (i) contracts and termination clauses (customers and vendors), (ii) people and (iii) non-contract obligations and vendor costs to the Debtors' to understand which assets will be remaining after the phase one sale process; (e) develop a framework for evaluating the costs and benefits associated with either a harvest or liquidation for the assets remaining after the phase one sale process; and (f) understand activities involved with a business exit, timelines and key assumptions (i.e., customer notice period, types of liabilities the Debtors have with customers, critical services being provided). IV. Additional Services: (a) assisting with buyer diligence and data compilation related to potential sales processes; (b) assisting in the development of a stand-alone plan for use in a plan of reorganization or strategic alternatives analysis for the Debtors' as a whole or for certain unsold assets; (c) developing an entity level waterfall recovery model; (d) assisting with the development of an operational wind down plan and strategy; (e) providing operational support for the wind down of operations or data centers that need to be eliminated; (f) supporting ongoing international cash management and liquidity planning and forecasting needs; (g) providing operational planning, program management, readiness and operational support for carving out segments of the businesses to be sold; (h) developing forecasts and information for obtaining bankruptcy court approval of the use of cash collateral or debtor in possession financing and related compliance reporting; (i) assisting in the preparation of financial related disclosures required by the bankruptcy court including, but not limited to, schedules of assets and liabilities, statements of financial affairs, and monthly operating reports; (j) assisting in connection with any mortgage or lien review; (k) assisting in the identification of executory contracts and leases and performing a cost/benefit evaluation with respect to the assumption, assumption and assignment or rejection of each; (l) analyzing creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track such claims; (m) assisting in the preparation of information and analysis necessary for the confirmation of a plan of reorganization or liquidation, including information contained in the plan and disclosure statement; (n) assisting, to the extent applicable, in the analysis and preparation of information necessary to assess the tax attributes related to confirmation of a plan in the chapter 11 cases, including the development of the related tax consequences contained in the disclosure statement; (o) assisting in any negotiations with creditors or other constituents; (p) assisting, to the extent applicable, in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preference actions; (q) assisting, to the extent applicable, with the prosecution of any pleadings to be filed by the Debtors in the chapter 11 cases, including attending depositions and providing expert reports or testimony on case issues as required by Akin Gump or the Debtors; and (r) rendering such other services as Akin Gump or the Debtors as may direct. The firm will charge its customary hourly fees: Senior Managing Directors $975 - $1,325 Directors, Senior Directors and Managing Directors $735 - $960 Consultants and Senior Consultants $395 - $695 Administrative and Paraprofessionals $160 - $300 Steven Simms, senior managing director at FTI, disclosed in a court filing that his firm is a “disinterested person” within the meaning of Bankruptcy Code Section 101(14). The firm can be reached through: Steven D. Simms FTI Consulting, Inc. 1166 Avenue of the Americas, 15th Floor New York, NY 10036 Tel: +1 212 247 1010 Email: steven.simms@fticonsulting.com About Sungard AS New Holdings Sungard Availability Services is a Wayne, Pa.-based information-technology services provider owned by Angelo Gordon, Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc. It provides disaster recovery services, colocation and network services, cloud and managed services and workplace recovery to customers in North America, Europe and Asia. The company and its affiliates filed for Chapter 11 protection twice in three years. Sungard filed for Chapter 11 bankruptcy in 2019 with a prepackaged plan that was approved by a New York bankruptcy court one day after it was filed. Sungard AS New Holdings, LLC and affiliates, including Sungard Availability Services, LP, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-90018) on April 11, 2022. Judge David R. Jones oversees the case. In the petition signed by Michael K. Robinson, CEO and president, Sungard AS disclosed up to $1 billion in both assets and liabilities. Sungard Availability Services (UK) Limited, an indirect subsidiary of Holdings, entered into administration in the UK on March 25, 2022. Meanwhile, Sungard Canada filed an application for recognition in Canada under the Companies Creditors' Arrangement Act of its Chapter 11 case. Akin Gump Strauss Hauer & Feld LLP and Jackson Walker serve as legal counsel to the Debtors. Cassels Brock & Blackwell LLP, serves as their Canadian legal counsel. DH Capital, LLC and Houlihan Lokey, Inc., act as investment bankers. FTI Consulting, Inc. serves as financial and restructuring advisor. Alvarez & Marsal Canada Inc., serves as Canadian court-appointed information officer and is represented by Bennett Jones, LLP as counsel in connection with the Canadian proceedings. Kroll Restructuring Administration, LLC serves as notice and claims agent. Proskauer Rose, LLP and Gray Reed & McGraw, LLP serve as counsel to Acquiom Agency Services LLC, the Term Loan DIP agent, and Term Loan DIP lenders. PNC Bank, National Association, serves as administrative agent and collateral agent, under the DIP ABL facility. PNC is represented by Thompson Coburn Hahn & Hessen LLP as counsel. SUNGARD AS: Taps DH Capital as Technology Investment Banker ----------------------------------------------------------- Sungard AS New Holdings, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire DH Capital, LLC as their specialty technology investment banker. The firm will render these services: (a) monitor, coordinate, review and provide input regarding the formulation, marketing and effectuation of any potential transactions; (b) assist in identifying and evaluating candidates for a potential transaction; (c) assist the Debtors in identifying potential buyers or parties in interest to a transaction; (d) contact potential buyers who may be appropriate for a potential transaction; in rendering such services, DH may meet with representatives of such candidates and provide such representatives with such information about the Assets as may be appropriate and acceptable to the Debtors, subject to customary confidentiality agreements; (e) advise and assist the Debtors in considering the desirability of effecting a transaction and, if the Debtors believe such a transaction to be desirable, in developing and implementing a general strategy for accomplishing such transaction; (f) advise and assist the Debtors in the course of their negotiation of a transaction and participate in such negotiations as requested; (g) participate in hearings before the Court and provide testimony on matters mutually agreed upon in good faith; (h) assist and advise the Debtors concerning the terms, conditions and impact of any proposed transaction; and (i) provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a transaction, as requested by the Debtors and mutually agreed. The firm will be paid as follows: (a) Monthly Fee: A non-refundable monthly advisory fee in the amount of $150,000 per month, through the termination or expiration of the Engagement Letter, payable in advance on the first day of each month, subject to crediting. (b) Transaction Fees: Upon the consummation of any transaction, a fee or multiple fees equal to the following percentage of the asset sale proceeds: (i) Up to $100 million: $1 million; (ii) Greater than $100 million up to $200 million: 1 percent of the asset sale proceeds; (iii) Greater than $200 million up to $285 million: 2.75 percent of the asset sale proceeds; (iv) Greater than $285 million up to $350 million: 3.75 percent of the asset sale proceeds; and (v) Greater than $350 million: 5.25 percent of the asset sale proceeds. The transaction fees will be: (i) earned on the earliest of: (a) consummation of the transaction or (b) in the event that the transaction is implemented by way of a Restructuring by means of a chapter 11 plan, the effective date of a confirmed plan of reorganization under chapter 11 of the Bankruptcy Code and (ii) payable, in immediately available funds, on the earliest of: (a) consummation of the transaction directly out of the gross proceeds of the transaction or (b) five business days immediately following the effective date of a confirmed plan of reorganization under chapter 11 of the Bankruptcy Code, or such other date as such fees are approved by the Court, if applicable. (c) Crediting: Upon execution of the Engagement Letter, the Debtors paid DH $1 million, which payment shall be earned over six months and shall be credited against any transaction fees earned under the Engagement Letter. In the event that aggregate transaction fees payable under the Engagement Letter do not exceed $1 million, DH shall be entitled to retain the difference between the amount of aggregate transaction fees actually paid and the amount of the $1 million advance transaction fee. In addition, beginning with the sixth Monthly Fee, 50 percent of the Monthly Fees paid to DH shall be credited against the transaction fees to which DH becomes entitled hereunder (it being understood and agreed that no Monthly Fee will be credited more than once), except that in no event shall such transaction fee be reduced below zero. Adam Lewis, managing partner at DH Capital, disclosed in a court filing that the firm is a "disinterested person" within the meaning of Bankruptcy Code section 101(14). The firm can be reached through: Adam Lewis DH Capital, LLC 810 7th Ave #2005 New York, NY 10036 Phone: +1 212-774-3720/212-774-3732 About Sungard AS New Holdings Sungard Availability Services is a Wayne, Pa.-based information-technology services provider owned by Angelo Gordon, Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc. It provides disaster recovery services, colocation and network services, cloud and managed services and workplace recovery to customers in North America, Europe and Asia. The company and its affiliates filed for Chapter 11 protection twice in three years. Sungard filed for Chapter 11 bankruptcy in 2019 with a prepackaged plan that was approved by a New York bankruptcy court one day after it was filed. Sungard AS New Holdings, LLC and affiliates, including Sungard Availability Services, LP, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-90018) on April 11, 2022. Judge David R. Jones oversees the case. In the petition signed by Michael K. Robinson, CEO and president, Sungard AS disclosed up to $1 billion in both assets and liabilities. Sungard Availability Services (UK) Limited, an indirect subsidiary of Holdings, entered into administration in the UK on March 25, 2022. Meanwhile, Sungard Canada filed an application for recognition in Canada under the Companies Creditors' Arrangement Act of its Chapter 11 case. Akin Gump Strauss Hauer & Feld LLP and Jackson Walker serve as legal counsel to the Debtors. Cassels Brock & Blackwell LLP, serves as their Canadian legal counsel. DH Capital, LLC and Houlihan Lokey, Inc., act as investment bankers. FTI Consulting, Inc. serves as financial and restructuring advisor. Alvarez & Marsal Canada Inc., serves as Canadian court-appointed information officer and is represented by Bennett Jones, LLP as counsel in connection with the Canadian proceedings. Kroll Restructuring Administration, LLC serves as notice and claims agent. Proskauer Rose, LLP and Gray Reed & McGraw, LLP serve as counsel to Acquiom Agency Services LLC, the Term Loan DIP agent, and Term Loan DIP lenders. PNC Bank, National Association, serves as administrative agent and collateral agent, under the DIP ABL facility. PNC is represented by Thompson Coburn Hahn & Hessen LLP as counsel. SUNGARD AS: Taps Houlihan Lokey as Restructuring Investment Banker ------------------------------------------------------------------ Sungard AS New Holdings, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Houlihan Lokey Capital, Inc. as their restructuring investment banker. The firm's services include: (a) assisting the Debtors in the development and distribution of selected information, documents and other materials relating to all or any portion of the Debtors, including their business, financial condition and prospects; (b) assisting the Debtors in evaluating the liabilities of the Debtors, their debt capacity and their strategic and financial alternatives; (c) assisting the Debtors in evaluating indications of interest and proposals regarding any Transaction(s) from current or potential lenders, equity investors, acquirers or strategic partners; (d) assisting the Debtors with the negotiation of any transactions, including participating in negotiations with creditors and other parties involved in any transactions; (e) providing expert advice and, as relevant, testimony regarding financial matters related to any transactions, if necessary, including with respect to the matters upon which Houlihan Lokey has provided advice; (f) attending meetings of the Debtors' board of directors, creditor groups, official constituencies and other interested parties; (g) assisting the Debtors in developing and implementing strategies relating to seeking approval of one or more transactions, including pursuant to a plan of reorganization or liquidation or otherwise; and (h) providing such other investment banking services as may be agreed upon by Houlihan Lokey and the Debtors. The firm will be paid as follows: (a) Initial Fee: Upon the execution of the Engagement Letter, a nonrefundable cash fee of $150,000. (b) Monthly Fee: On every monthly anniversary of the effective date during the term of the Engagement Letter, a nonrefundable cash fee of $150,000. Beginning with the sixth Monthly Fee, 50 percent of the Monthly Fees paid to Houlihan Lokey on a timely basis shall be credited against the Restructuring Transaction Fee to which Houlihan Lokey becomes entitled hereunder (it being understood and agreed that no Monthly Fee will be credited more than once), except that in no event shall such Restructuring Transaction Fee be reduced below zero. (c) Transaction Fee(s): In addition to the other fees under the Engagement Letter, Houlihan Lokey is entitled to the following transaction fee(s): (i) Restructuring Transaction Fee. Upon the earlier to occur of (i) in the case of an out-of-court Restructuring Transaction, the closing of such Restructuring Transaction and (ii) in the case of an in-court Restructuring Transaction, the earlier of (a) the consummation of a plan of reorganization or liquidation or (b) the closing of a sale, as a going concern, in one or more transactions, of a majority of the operating business of the Debtors under chapter 11 or chapter 7 of the Bankruptcy Code pursuant to an order of the Court, a Restructuring Transaction Fee of $3,000,000; and (ii) Financing Transaction Fee. To be paid immediately and directly from the gross proceeds of each such Financing Transaction, a Financing Transaction Fee that is the greater of (i) $500,000 or (ii) 2 percent of the gross proceeds of any Financing Transaction. Notwithstanding anything to the contrary in the Engagement Letter, in the event a Financing Transaction involves capital provided entirely by existing secured lenders or existing shareholders to the Company, the Financing Transaction Fee shall be equal to the lesser of $350,000 or 2 percent of any new capital provided in such Financing Transaction (for the avoidance of doubt, for the purposes of this calculation, new capital shall exclude any "rolled-up" portion of prepetition debt, if applicable). In the event any new capital is provided in part by existing secured lenders or existing shareholders to the company, and in part by third parties, the Financing Transaction Fee shall be equal to 2 percent of the capital provided by third parties plus the lesser of (i) 2 percent of the new capital provided by existing secured lenders or existing shareholders or (ii) $350,000 (for the avoidance of doubt, for the purposes of this calculation, new capital shall exclude any "rolled-up" portion of prepetition debt, if applicable). If the proceeds of any such Financing Transaction are to be funded in more than one stage, Houlihan Lokey shall be entitled to its applicable compensation upon the closing date of each stage. The Financing Transaction Fee(s) shall be payable in respect of any sale of securities whether such sale has been arranged by Houlihan Lokey, by another agent or directly by the Debtors or any of their affiliates. Saul Burian, managing director at Houlihan, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Saul E. Burian Houlihan Lokey Capital, Inc. 100 Crescent Ct., Suite 900 Dallas, TX 75201 Phone: 212-497-4245 About Sungard AS New Holdings Sungard Availability Services is a Wayne, Pa.-based information-technology services provider owned by Angelo Gordon, Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc. It provides disaster recovery services, colocation and network services, cloud and managed services and workplace recovery to customers in North America, Europe and Asia. The company and its affiliates filed for Chapter 11 protection twice in three years. Sungard filed for Chapter 11 bankruptcy in 2019 with a prepackaged plan that was approved by a New York bankruptcy court one day after it was filed. Sungard AS New Holdings, LLC and affiliates, including Sungard Availability Services, LP, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-90018) on April 11, 2022. Judge David R. Jones oversees the case. In the petition signed by Michael K. Robinson, CEO and president, Sungard AS disclosed up to $1 billion in both assets and liabilities. Sungard Availability Services (UK) Limited, an indirect subsidiary of Holdings, entered into administration in the UK on March 25, 2022. Meanwhile, Sungard Canada filed an application for recognition in Canada under the Companies Creditors' Arrangement Act of its Chapter 11 case. Akin Gump Strauss Hauer & Feld LLP and Jackson Walker serve as legal counsel to the Debtors. Cassels Brock & Blackwell LLP, serves as their Canadian legal counsel. DH Capital, LLC and Houlihan Lokey, Inc., act as investment bankers. FTI Consulting, Inc. serves as financial and restructuring advisor. Alvarez & Marsal Canada Inc., serves as Canadian court-appointed information officer and is represented by Bennett Jones, LLP as counsel in connection with the Canadian proceedings. Kroll Restructuring Administration, LLC serves as notice and claims agent. Proskauer Rose, LLP and Gray Reed & McGraw, LLP serve as counsel to Acquiom Agency Services LLC, the Term Loan DIP agent, and Term Loan DIP lenders. PNC Bank, National Association, serves as administrative agent and collateral agent, under the DIP ABL facility. PNC is represented by Thompson Coburn Hahn & Hessen LLP as counsel. TAB RESTAURANT: Unsecureds to Split $12K in Consensual Plan ----------------------------------------------------------- Tab Restaurant Group, LLC, filed a First Amended Plan of Reorganization. The Plan contemplates that the Reorganized Debtor will continue to operate the Debtor's business. All cash in excess of operating expenses generated from operation until the Effective Date will be used for Plan Payments or Plan implementation. The Debtor's annual gross receipts are approximately $850,000. Consensual Plan shall mean a plan as to which each Class of Claims has voted to accept the plan. Class 2 General Unsecured Claims are impaired. Treatment of general unsecured claims will vary in a consensual plan and in an non-consensual plan: * Consensual Plan Treatment: The liquidation value or amount that unsecured creditors would receive in a hypothetical chapter 7 case is approximately $0.00. Accordingly, the Debtor proposes to pay unsecured creditors a pro rata portion of $12,000. Payments will be made in equal quarterly payments of $1,000. Pursuant to section 1191, the value to be distributed to unsecured creditors is greater than the Debtor's projected disposable income to be received in the 3-year period beginning on the date that the first payment is due under the Plan. * Nonconsensual Plan Treatment: The Debtor proposes to pay unsecured creditors a pro rata portion of its Disposable Income. If the Debtor remains in possession, plan payments shall include the Subchapter V Trustee's administrative fee which will be billed hourly at the Subchapter V Trustee's then current allowable blended rate, which shall not exceed the Disposable Income. Plan Payments shall commence on the fifteenth day of the month, on the first month that is ninety days after the Effective Date and shall continue quarterly for eleven additional quarters. The initial estimated quarterly payment shall be $0.00. Counsel for the Debtor: Jeffrey S. Ainsworth, Esq. Jacob D. Flentke, Esq. BRANSONLAW, PLLC 1501 East Concord Street Orlando, Florida 32803 Telephone: (407) 894-6834 Facsimile: (407) 894-8559 E-mail: jeff@bransonlaw.com jacob@bransonlaw.com A copy of the Disclosure Statement dated May 18, 2022, is available at https://bit.ly/3LuLNGc from PacerMonitor.com. About Tab Restaurant Group Tab Restaurant Group, LLC, operates the Twisted Root Burger Co. restaurant located at 4270 Aloma Avenue, Winter Park, Florida. Tab Restaurant is a limited liability company organized under the laws of the State of Florida and authorized to transact business in Florida since August 14, 2018. Tab Restaurant sought protection under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 6:22-bk-00529) on Feb. 15, 2022. In the petition signed by Glenn O. Pilson, managing member, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Grace E. Robson oversees the case. Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC is the Debtor's counsel. TERRA MANAGEMENT: July 6 Hearing on Disclosure Statement -------------------------------------------------------- Judge Kimberley H. Tyson will convene a hearing to consider the adequacy of and to approve the Disclosure Statement of Terra Management Group, LLC and Littleton Main Street, LLC on Wednesday, July 6, 2022 at 10:00 a.m. Objections to the Disclosure Statement must be filed and served no later than June 29, 2022. The Debtor shall also file with the Court, by May 27, 2022, a certificate of mailing of said Notice, Plan, and Disclosure Statement as ordered. About Terra Management Group and Littleton Main Street Terra Management Group, LLC is an Englewood, Colo.-based company engaged in activities related to real estate. Terra Management Group and Littleton Main Street, LLC filed their voluntary petitions for Chapter 11 protection (Bankr. D. Colo. Lead Case No. 21-15245) on Oct. 15, 2021. J. Marc Hendricks, president and manager of Terra Management Group, signed the petitions. At the time of the filing, Terra Management Group listed up to $100,000 in assets and up to $50 million in liabilities while Littleton listed as much as $50 million in both assets and liabilities. The Hon. Kimberley H. Tyson is the case judge. The Debtors tapped Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP as legal counsel, and Haynie & Company as tax accountant. TOTAL ENERGY: Seeks Cash Collateral Access ------------------------------------------ Total Energy Resources, LLC ask the U.S. Bankruptcy Court for the Western District of Pennsylvania, for authority to use cash collateral and provide adequate protection. The Debtor's obligations consist mostly of secured debts leveraged against business assets along with unsecured debt related to commercial contract obligations. The Huntington National Bank has a lien on certain property of the Debtor by way of a security agreement. The lien was perfected by the filing of a UCC Financing Statement (Filing #: 2019040200964) with the Pennsylvania Secretary of State on April 2, 2019. Huntington has a valid and perfected first priority lien and security interest in the cash collateral pursuant to their UCC Financing Statement. The Debtor proposes that the Court authorize the use of all proceeds, funds, and accounts constituting the Debtor's cash collateral and incoming cash collateral as it arrives on the condition that the Debtor begins adequate protection payments to all Respondents consistent with the Chapter 11 Plan to be filed with the Court. A copy of the motion is available at https://bit.ly/3sKiEA8 from PacerMonitor.com. About Total Energy Resources, LLC Total Energy Resources, LLC is a natural gas supplier & electricity broker, serving businesses in Western Pennsylvania and Eastern Ohio. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. PA. Case No. 22-20950) on May 17, 2022. In the petition signed by Ryan M. Williams, managing member, the Debtor disclosed $1,494,425 in total assets and $0 in liabilities. Brian C. Thompson, Esq., at Thompson Law Group, PC is the Debtor's counsel. TPC GROUP INC: Extends Forbearance Deal Until June 1, 2022 ---------------------------------------------------------- TPC Group said in a May 23, 2022 statement its forbearance agreement was extended through June 1, 2022. As previously disclosed, TPC Group is in ongoing, constructive discussions with a group representing approximately 90% and approximately 80% of the Company's two series of senior secured notes (the "notes") (the "Ad Hoc Group"), respectively, as well as other economic stakeholders, and that the Ad Hoc Group agreed to forbear from exercising remedies relating to certain specified defaults, including those caused by the failure to make the February 2, 2022 and May 1, 2022 interest payments on the notes. The Ad Hoc Group and the Company have agreed to extend the forbearance agreement through June 1, 2022. This additional period will allow TPC Group to continue engaging in constructive discussions with the aim of strengthening the Company's capital structure and positioning the Company to be a stronger, more competitive business. Throughout these discussions and the forbearance period, TPC Group will continue to operate as usual, maintaining its vital focus on EHSS performance, reliable and safe operations and providing customers and vendors with the highest quality products and services. TPC Group has a more than 75-year operating history as a leader in North America across all of its product lines and as the largest independent processor of crude C4. TPC Group is a recognized global leader in producing value-added products and raw materials such as C4 hydrocarbons. Furthermore, TPC Group provides critical infrastructure and logistics services to petrochemical operators along the Gulf Coast. The Company is advised by Moelis & Company LLC, Baker Botts L.L.P., Simpson Thacher & Bartlett LLP, and FTI Consulting, Inc. The Ad Hoc Group is advised by Paul Hastings LLP and Evercore. About TPC Group TPC Group, headquartered in Houston, is a leading producer of value-added products derived from petrochemical raw materials such as C4 hydrocarbons, and provider of critical infrastructure and logistics services along the Gulf Coast. The Company sells its products into a wide range of performance, specialty and intermediate markets, including synthetic rubber, fuels, lubricant additives, plastics and surfactants. With an operating history of over 75 years, TPC Group has a manufacturing facility in the industrial corridor adjacent to the Houston Ship Channel and operates product terminals in Port Neches, Texas and Lake Charles, Louisiana. US VIRGIN ISLANDS WAPA: Fitch Retains CCC Issuer Default Rating --------------------------------------------------------------- Fitch Ratings maintains the following ratings for the U.S. Virgin Islands (USVI) Water and Power Authority (WAPA) on Rating Watch Negative: -- Approximately $90 million electric system revenue bonds, 'CCC'; -- Approximately $85 million electric system subordinate revenue bonds, 'CCC'; -- Issuer Default Rating (IDR), 'CCC'. ANALYTICAL CONCLUSION Maintenance of the Rating Watch reflects Fitch's concerns related to additional governmental oversight of WAPA, that could adversely affect operating performance and increase the authority's vulnerability to default. The U.S. Virgin Islands legislature approved a bill granting the Virgin Islands Public Services Commission greater regulatory and operational oversight of the authority. The scope of the legislative initiative includes the development of a debt consolidation and management plan, but neither a debt restructuring nor distressed debt exchange appear imminent. Fitch expects to resolve the Rating Watch following a review of the authority's latest plan to address operational challenges and maturing debt. The 'CCC' rating continues to reflect heightened default risk as a consequence of WAPA's weak operating fundamentals, cash flow and liquidity. Based on unaudited information provided by the WAPA, the authority maintains modest amounts of cash on hand, and borrowing capacity that is insufficient to service the full amount of scheduled maturities over the long term. External financing remains necessary to meet maturing bond anticipation notes that mature July 1, 2022 and to address the continued deferral of scheduled bank repayments, as well as other obligations. The availability of such financing remains questionable. Additionally, while operating cash flow appears to have stabilized in fiscal years 2021 and 2022, continued challenges related to the travel and tourism sector, rising fuels costs and the demand for electricity throughout the USVI, clouds WAPA's performance further. Fitch currently makes no distinction between the ratings on WAPA's senior lien obligations, subordinate lien obligations and its IDR as the relatively high probability of enterprise default does not support distinction among the ratings. However, given the disparate liens supporting WAPA's rated and unrated debt obligations, distinctions could be made in the event of selective payment default on specific classes of debt. SECURITY Electric system revenue bonds are secured by a pledge of net electric revenues and certain other funds established under the bond resolution. The electric system subordinated revenue bonds are secured by a pledge of net revenues that are subordinate to the pledge securing the electric system revenue bonds. Outstanding senior and subordinate lien bonds are also secured by fully debt service reserve funds. KEY RATING DRIVERS Revenue Defensibility: 'bbb''; Weak Service Area and Regulation Limit Revenue Defensibility The authority's revenue defensibility is constrained by the territory's weak demographics and demand characteristics, as well as limited rate flexibility. WAPA's rates for electric service are extremely high contributing to low affordability. The authority's rates are further regulated by the PSC. Operating Risk: 'bb'; High Operating Cost Burden Operating risk is very high due to an extremely high operating cost burden. Costs are driven largely by the challenges of serving a territory comprised of multiple islands including higher than normal costs for fuel, labor and excess capacity necessary to ensure reliability. Financial Profile: 'bb'; Significant Liquidity Concerns Weak liquidity and very high leverage contribute to WAPA's weak financial profile. At Feb. 28, 2022, the authority reported (unaudited) $11.5 million or 16 days of unrestricted cash on hand, no borrowing capacity under its working capital line of credit and $5 million of short-term overdraft balances. Asymmetric Additional Risk Consideration Asymmetric risks related to WAPA's management and governance, debt profile and the absence of audited information for fiscal years 2020 and 2021 have been factored in the current rating. ESG - Governance: WAPA has an ESG Relevance Score of '5' for Governance Structure due to the proposed legislation that would create and additional oversight committee that would become responsible for the operations of the authority. Increased political influence could pressure WAPA toward a debt restructuring that could increase a distressed debt exchange. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A response to existing legislation that does not heighten the risk of a restructuring of outstanding debt; -- Evidence of sustainable earnings and cash flow stability, as well as an ability to meet ongoing financial obligations; -- Improved liquidity in the form of both cash on hand and future borrowing capacity. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- The inability to refinance, or negotiate a long-term resolution to address, WAPA's scheduled debt maturities; -- Any evidence that a restructuring of outstanding debt is probable, including the passage of enabling legislation. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure 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 three 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. CREDIT PROFILE WAPA is an instrumentality created by the government of United States Virgin Islands (USVI) and is the sole provider of electric and water service to the territory, which includes the separate islands of St. Thomas, St. Croix and St. John. The electric system generates, transmits and sells electric power and energy to residential, commercial and large power customers across USVI, including the USVI government. ESG CONSIDERATIONS Virgin Islands Water & Power Authority (VI) has an ESG Relevance Score of '5' for Governance Structure due to legislative that imposes greater regulatory and operational oversight of the authority, and the potential for the development of a debt consolidation and management plan that includes a distressed debt exchange, which have a negative impact on the credit profile, and are highly relevant to the rating, resulting in the Rating Watch Negative. Virgin Islands Water & Power Authority (VI) has an ESG Relevance Score of '4' for Exposure to Environmental Impacts due to the authority's exposure to extreme weather events, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Virgin Islands Water & Power Authority (VI) has an ESG Relevance Score of '4' for Financial Transparency due to its inability to issue timely audited financial statements, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Virgin Islands Water & Power Authority (VI) has an ESG Relevance Score of '4' for Group Structure due to the authority's relationship with the USVI government and historical challenges to collecting revenue on a timely basis, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. VARSITY BRANDS: S&P Upgrades ICR to 'B-' on Continued Improvement ----------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based Varsity Brands Holding Co. Inc. to 'B-' from 'CCC+'. At the same time, S&P raised its issue-level rating on its senior secured credit facilities to 'B-' from 'CCC+'. The '3' recovery rating is unchanged. S&P said, "The stable outlook reflects our expectation for modestly positive free operating cash flow (FOCF) and S&P Global Ratings-adjusted leverage in the high-7x area over the next 12 months, driven by improving performance across all its business segments. "The upgrade reflects improved credit metrics as COVID-19 pandemic-related hurdles continue to dissipate and our expectation for satisfactory performance over the next year. For the quarter ended March 26, 2022, Varsity's net sales increased 55% compared to the same period in the prior year, primarily driven by a substantial recovery in the BSN Sports segment. This is somewhat inflated because of the return to seasonality in the Varsity Spirit segment (cheerleading competitions usually held in the first quarter were delayed to the second quarter in 2021 but resumed a normal schedule in 2022) and pull forward of orders in the Herff Jones segment. However, we recognize the company has in aggregate recovered most sales lost during the pandemic. "Revenue and order rates for BSN Sports exceeded 2019 levels due to the gradual return of school sports events. We expect this to continue as COVID-19 restrictions ease. In addition, the company will likely increase revenue and market share through tuck-in acquisitions of local dealers that already have established customer relationships. While we expect moderate improvement in Varsity Spirit, we forecast 2022 revenues will remain about 10% below 2019 revenues as participation rates take longer to recover (some All Star clubs went out of business during the pandemic) and competition increases. Although Herff Jones revenue is trending above 2019, we believe that clear risk of a secular decline in this segment remain as target consumers continue to shift to digital-focused products, especially for yearbooks, demand for which already softened before the pandemic. "Nevertheless, we now expect consolidated revenue in 2022 will exceed 2019 levels and the company will benefit from cost-saving initiatives it implemented during the pandemic, resulting in positive FOCF during the year and stronger credit metrics, including EBITDA interest coverage above 1.5x. "We forecast Varsity Brands will remain highly leveraged over the long term. S&P Global Ratings-adjusted leverage improved to about 8.2x for the last 12 months ended Mar. 26, 2022 from about 15.8x at the end of 2020. We now project leverage will reduce further to just below 8x at end of 2022. We do not anticipate significant improvement even when the business fully recovers, reflecting management's consistent merger and acquisition (M&A) activity and our view that financial sponsor-controlled companies will pursue aggressive financial strategies prioritizing shareholder returns or acquisitions over permanent debt reduction. Additionally, our base-case forecast assumes Varsity Brands will refinance its senior secured credit facilities well ahead of its maturity in December 2024. "We expect Varsity Brands to effectively manage input-cost pressures and supply chain constraints. We anticipate commodity, freight, and wage-related inflationary pressures will persist over the near term. However, our base-case forecast assumes Varsity Brands will offset short-term cost pressures via pricing actions and operating leverage. Additionally, we understand the company continues to face supply chain-related disruptions, particularly in Herff Jones and BSN Sports. It has had difficulty fulfilling orders because of global shipping bottlenecks. We expect supply chain constraints will subside over the year. Until then, the company's strategy of requesting that customers order well in advance to avoid delays and pushing its private-label products as an alternative to third-party vendors should help to avoid substantial loss of sales. "Our ratings continue to assume no material unfavorable litigation outcomes. Certain of Varsity Brands' subsidiaries are defendants in three class-action lawsuits alleging it monopolizes the nationwide cheerleading competition and apparel markets. Among anticompetitive behaviors alleged are that the company increased prices on cheerleading events after acquiring its largest competitors and forced teams to stay at company-approved hotels to participate in competitions. The plaintiffs seek monetary damages, restrictions against alleged anticompetitive control, and a breakup of the industry, including the rule-making organizations. Separately, a civil negligence case was filed in connection with the alleged criminal conduct of an individual previously affiliated with the company. Our base-case forecast assumes no adverse outcomes that would impair Varsity Brands' business or credit metrics, though it remains a risk." Environmental, social, and governance (ESG) credit factors for this change in credit rating/outlook and/or CreditWatch status: -- Health and safety S&P said, "The stable outlook reflects our expectation that Varsity Brands will generate positive FOCF and maintain adjusted leverage in the high-7x area over the next 12 months, supported by improving performance. We also assume the company will sustain adequate liquidity to support operations and proactively extend its upcoming debt maturities ahead of them becoming current." S&P could lower the rating over the next 12 months if it believes profitability and FOCF will not rebound in line with its expectations, resulting in EBITDA interest coverage sustained in the low-1x area, or it determined the capital structure is unsustainable. This could occur if: -- The pace of recovery in demand is slower than we anticipated, especially in the higher-margin Varsity Spirit and Herff Jones segments; -- The company cannot manage the supply chain or offset cost inflation with pricing actions; or -- It does not refinance the 2024 debt maturities well in advance of their due dates. S&P will continue to monitor litigation developments and could take a negative rating action if new information becomes available and it expects credit metrics or liquidity to deteriorate beyond its base case. Although unlikely, S&P could raise its ratings over the next 12 months if the company performs better than it expected such that: -- Adjusted leverage is sustained below 7x; and -- FOCF exceeds $50 million. ESG credit indicators: To: E-2, S-2, G-3; From: E-2, S-3, G-3 S&P said, "Social factors are now a neutral consideration in our credit analysis of Varsity Brands because it has recovered a sizable portion of business lost from when schools closed and athletic activities and events were cancelled during the height of the pandemic. We believe the worst of the pandemic is now past and expect related health and safety challenges to subside over the year." VCH RANCH: Wins Interim Cash Collateral Access ---------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Fort Myers Division, authorized VCH Ranch-Florida, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor is permitted 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 Farm Credit of Florida, ACA. The Secured Creditor and any other party with a security interest or other interest in cash collateral will 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 Secured Creditor with the following: a. Quarterly payments of $5,000 each with the first payment being made on June 1, 2022 and every subsequent quarter thereafter until further order of the Court pursuant to the attached budget. b. A post-petition replacement lien or interest in cash collateral equal in validity and dignity as it existed pre-petition. c. The Debtor will timely perform all obligations of a debtor in possession required by the Bankruptcy Code and orders of the Court. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Secured Creditor. The Debtor will provide proof of insurance upon written request. A continued preliminary hearing on the matter is scheduled for June 13, 2022 at 11 a.m. A copy of the order and the Debtor's budget for the period from May to October 2022 is available at https://bit.ly/3LvamCF from PacerMonitor.com. The Debtor projects $80,000 in total income and $44,118 in total expenses for May 2022. About VCH Ranch - Florida VCH Ranch - Florida, LLC owns and operates a cattle ranch in Arcadia, Florida. VCH Ranch sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00129) on Feb. 1, 2022, listing up to $1 million in assets and up to $500,000 in liabilities. Judge Caryl E. Delano oversees the case. Alberto F. Gomez, Jr., Esq., at Johnson Pope Bokor Ruppel & Burns, LLP serves as the Debtor's legal counsel. VPR BRANDS: Incurs $147K Net Loss in First Quarter -------------------------------------------------- VPR Brands, LP filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $147,241 on $1.06 million of revenues for the three months ended March 31, 2022, compared to a net loss of $101,651 on $1.25 million of revenues for the three months ended March 31, 2021. As of March 31, 2022, the Company had $1.14 million in total assets, $3.40 million in total liabilities, and a total partners' deficit of $2.26 million. The Company used cash in operating activities of $130,249 for three months ended March 31, 2022 as compared to $138,245 of cash used in three months ended March 31, 2021. Cash used in operations in 2022 related to the Company's net loss of approximately $147,000 and reduction of accounts payable and accrued expense, offset by decreases in inventory and accounts receivable and an increase in customer deposits. Cash used in operations in 2021 related to the Company's net loss of approximately $102,000, offset by an increase in accounts payable offset by an increase in vendor deposits. During the three months ended March 31, 2022, the Company received $340,004 from the issuance of notes payable to related parties, repaid $111,080 of principal on notes payable to related parties, repaid $78,182 of principal on notes payable, and repaid $17,000 of principal on convertible notes. During the three months ended March 31, 2021, the Company received $180,000 from the issuance of notes payable to related parties, repaid $183,754 of principal on notes payable to related parties, repaid $42,251 of principal on notes payable, and received $190,057 of notes payable proceeds under the Paycheck Protection Program and Economic Injury Disaster Loan program. Both the PPP and EIDL are financial programs under the Coronavirus Aid, Relief and Economic Security Act enacted on March 27, 2020 to provide economic relief to small businesses adversely impacted by COVID-19. The Company has incurred losses since inception, including $147,241 and $101,651 during the three months ended March 31, 2022 and 2021, respectively, resulting in an accumulated deficit of $10,362,240 and negative working capital of $1,954,910 as of March 31, 2022. The Company is in default in certain of its outstanding debt. As of March 31, 2022, the Company had approximately $6,083 in cash and cash equivalents, which will not be sufficient to fund the operations and strategic objectives of the Company over the next twelve months from the date of issuance of these financial statements. The Company said these factors raise substantial doubt regarding the Company's ability to continue as a going concern. VPR said "The Company will be required to obtain additional financing and capital and expects to satisfy its cash needs primarily from the additional issuance of equity securities or indebtedness in order to sustain operations until it can achieve profitability and positive cash flows, if ever. There can be no assurances, however, that adequate additional funding will be available on favorable terms, or at all. If such funds are not available in the future, the Company may be required to delay, significantly modify or terminate its operations, all of which could have a material adverse effect on the Company." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1376231/000121390022027269/f10q0322_vprbrandslp.htm About VPR Brands Headquartered in Ft. Lauderdale, FL, VPR Brands, LP -- http://www.VPRBrands.com-- is company engaged in the electronic cigarette and personal vaporizer business. Los Angeles, California-based Paris Kreit & Chiu CPA's LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company has an accumulated deficit of $10,214,999 and a working capital deficit of $1,834,867 at December 31, 2021. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. WC SOUTH CONGRESS: Seeks to Employ Marcus & Millichap as Realtor ---------------------------------------------------------------- WC South Congress Square, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Marcus & Millichap Real Estate Investment Services to market for sale its real property located at 500 South Congress Ave., Austin, Texas. Upon the closing of the sale, the firm's real estate agent, Kent Myers, will receive a commission of 1 percent of the purchase price of the property. Mr. Myers disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Kent P. Myers Marcus & Millichap Real Estate Investment Services 9600 North Mopac Expressway, Suite 300 Austin, TX 78759 About WC South Congress Square Based in Austin, Texas, WC South Congress Square LLC owns a multi-family apartment community with 115 rental units located at 500 South Congress Avenue in Austin, as well as two adjacent office buildings with a total of over 70,000 square feet of office space. The managing member of WC South Congress Square is World Class Holdings VI, LLC, which is controlled by Natin Paul, a real estate entrepreneur very active in the Austin market. WC South Congress Square sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 20-11107) on Oct. 6, 2020. At the time of the filing, the Debtor had estimated assets of between $50 million and $100 million and liabilities of between $10 million and $50 million. Judge Tony M. Davis oversees the case. Fishman Jackson Ronquillo, PLLC serves as the Debtor's legal counsel and Columbia Consulting Group, PLLC as financial advisor. 510 South Congress Lender LLC, as noteholder, is represented by: Kell C. Mercer, Esq. Kell C. Mercer, PC 1602 E. Cesar Chavez Street Austin, TX 78702 Tel: (512) 627-3512 Fax: (512) 597-0767 Email: kell.mercer@mercer-law-pc.com Kennedy Lewis Investment Management LLC, as DIP Agent, may be reached at: Kennedy Lewis Investment Management, LLC c/o Anthony Pasqua 111 West 33rd Street, Suite 1910 New York, NY 10120 Email: anthony.pasqua@klimllc.com The DIP Agent is represented by: Lucas Charleston, Esq. Akin Gump Strauss Hauer & Feld, LLP One Bryant Park New York, NY 10036 Email: lcharleston@akingump.com WHISPER LAKE: Unsecureds to Get What's Left of Sale Proceeds ------------------------------------------------------------ Whisper Lake Developments, Inc. submitted a Fourth Amended Plan of Liquidation and/or Reorganization. Pursuant to and in accordance with the specific terms of the Plan, proceeds generated from sale of the Debtor's assets will be distributed to Holders of Allowed Claims against the Debtor in accordance with the priorities set forth in the Bankruptcy Code. On April 13, 2022, the Debtor filed a Motion for (1) Order Authorizing Sale of Real Property and (2) Order Approving Bid and Sale Procedures and Setting Hearing on Approval of Sale (the "Sale Motion") seeking approval of a sale to Skagit Highland Homes, LLC pursuant to a purchase and sale agreement in the amount of $5,940,000, plus the assumption of certain surety obligations of the Debtor (the "Skagit Highlands Purchase Agreement"), or to another purchaser submitting a higher and/or better bid pursuant to the bid procedures for which the Sale Motion sought approval. All funds of the Estate (the "Estate Funds") held by the Post-Confirmation Debtor from the Net Proceeds of the liquidation of Estate Property after (a) payment of Claims in Classes 1-13 in accordance with the Plan, or appropriate reserve therefor, and (b) payment of Estate Post-Confirmation Expenses, or appropriate reserve therefor, shall constitute the "Unsecured Creditors Fund." Under the Plan, Class 14 Allowed General Unsecured Claims total $212,188.15. Each Holder of Class 14 Claim will be paid its Pro Rata portion of the Unsecured Creditors Fund. Class 14 is impaired. The distributions under the Plan shall be made from the Estate Property Proceeds, provided, however, that Non-Debtor Funds may be used to make distributions required under the Plan. Attorney for the Debtor: Christine M. Tobin-Presser, Esq. Thomas A. Buford, Esq. BUSH KORNFELD LLP 601 Union Street, Suite 5000 Seattle, WA 98101 Tel: (206) 292-2110 Fax: (206) 292-2104 E-mail: ctobin@bskd.com tbuford@bskd.com A copy of the Plan dated May 18, 2022, is available at https://bit.ly/3wx5gBV from PacerMonitor.com. About Whisper Lake Developments Whisper Lake Developments, Inc., is a Ferndale, Wash.-based company engaged in activities related to real estate. It is the owner of five real properties in Washington having a total current value of $9.53 million. Whisper Lake Developments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-12060) on Nov. 10, 2021, disclosing $9,666,063 in assets and $5,562,777 in liabilities. Judge Timothy W. Dore oversees the case. Thomas A. Buford, Esq., at Bush Kornfield, LLP and Tousley Brain Stephens, PLLC, serve as the Debtor's bankruptcy counsel and special counsel, respectively. Orse & Co. is the Debtor's restructuring advisor. XENIA HOTELS: S&P Upgrades ICR to 'B' on Leverage Improvement ------------------------------------------------------------- S&P Global Ratings raised all ratings on Xenia Hotels & Resorts Inc. by one notch, including the issuer credit rating to 'B' from 'B-'. S&P said, "The stable outlook reflects our forecast for adjusted leverage in the low-6x area in 2022, which represents a very good cushion compared with the downgrade 7.75x threshold to accommodate potential debt-financed acquisitions and macroeconomic uncertainty. "The upgrade is driven by our upwardly revised base case for revenue per available room (RevPAR) and EBITDA and greater certainty about Xenia's ability to reduce leverage. We estimate Xenia's trailing-12-months S&P Global Ratings-adjusted debt to EBITDA was about 7.6x at the end of first-quarter 2022, representing further deleveraging from 9x at year-end 2021. Our updated low-6x leverage forecast for 2022 represents a material cushion compared with the 7.75x downgrade threshold for the 'B' rating. "Leisure demand remained resilient despite the omicron variant, particularly in popular geographies such as Florida, Arizona, and Texas. We believe Xenia benefits from relatively high exposure to the U.S. Sun Belt and non-gateway cities, which outperformed gateway cities according to our internal analysis of first-quarter 2022 STR Inc. occupancy and RevPAR data. Xenia's hotels tend to be in geographies with more leisure and small and medium business travel. Xenia's first-quarter 2022 same-property RevPAR was 19.5% below the same period in 2019, incorporating omicron-related softness in January and February, followed by a rebound in March. We believe leisure demand will remain strong over the next several months because of ongoing pent-up demand combined with some continued remote work arrangements and extended weekend travel. In addition, business transient and group bookings accelerated in March and into April, which will likely continue as large corporations implement return-to-office plans and contribute to more midweek demand. Most U.S. communities may have learned to live with the virus and new variants without adopting constraints that materially disrupt travel. With business and group travel improving, upper-upscale full-service hotels may finally get back to more normal occupancy levels, significantly supporting RevPAR recovery. "In our updated forecast, Xenia's 2022 RevPAR could recover to 5%-10% below 2019, with EBITDA margin near or a few percentage points below 2019. We believe there is potential upside to our forecast depending on the pace of business transient and group demand as well as lodging operators' ability to offset inflation in labor costs to maintain EBITDA margin for asset owners." Xenia's acquisitive appetite contributes to a stable rating outlook despite the possibility of further leverage reduction in 2023. Xenia acquired the W Nashville for $328.7 million in March 2022, which required substantial liquidity and slowed the previously anticipated deleveraging path for 2022 and 2023. The W Nashville's high price per key of $950,000 and estimated EBITDA multiple in the high-teens area based on anticipated 2022 results show Xenia's risk appetite and the increasing competition among hotel companies to favorably position themselves in Sun Belt states, even in markets such as Nashville where hotel supply is increasing. The transaction demonstrates Xenia's willingness to undertake a sizable acquisition as its confidence in the RevPAR recovery increases. S&P said, "We have not assumed additional acquisitions in 2022 and 2023, and leverage could be higher than our base case if Xenia engages in additional debt-financed hotel purchases. Xenia's management has publicly discussed various financing options that could be used in the case of an acquisition, including high-yield debt, equity, and preferred stock issuances as well as asset sales and joint ventures. Some financing options such as debt, preferred stock, or mortgages assumed in JVs could be viewed by us to be leveraging. Our stable outlook reflects negligible cushion compared with the 6.25x upgrade threshold at the 'B' rating in 2022, and the possibility that Xenia could remain acquisitive in 2023 in a manner that keeps leverage cushion modest and unsupportive of an upgrade notwithstanding our forecast." Rating upside would also depend on macroeconomic risks. While S&P assumes 2023 leverage will be below the 6.25x upgrade threshold absent leveraging uses of cash, macroeconomic variables pose risks to its forecast. Given Xenia's exposure to luxury and upper upscale full-service rooms, the spread of other potential COVID-19 variants could cause RevPAR and EBITDA recovery to underperform our base case. New variants could introduce fresh uncertainty into the trajectory of the pandemic, particularly for group and business travel if infections spike and negatively affect return-to-office plans of large companies in the second and third quarters of 2022. Deleveraging could also be slower because of the weakening macroeconomic environment, which could delay the recovery in business transient and group demand particularly among large corporate and group customers. Inflationary or other cost pressures could also slow Xenia's EBITDA recovery. The Russia-Ukraine conflict and its potential to expand could disrupt energy markets further and add to inflationary pressures. The Federal Reserve could frontload interest rate hikes while supply chain disruptions worsen and prices climb, thereby introducing uncertainty to financing plans related to Xenia's potential asset sales and acquisitions. Xenia could also face average daily rate (ADR) competition, particularly if U.S. travel returns to normal over the coming quarters and lodging companies use pricing as a tool to attract or retain occupancy. A number of luxury and upper upscale lodging companies have suggested that the high ADR achieved in April 2022 will likely moderate over the course of the year. Xenia's business has a number of notable strengths. Xenia has a high-quality, geographically diverse portfolio of hotels, notably in Sun Belt states such as Florida, Arizona, and Texas. The company's focus on quality assets and its long-term management contracts with Marriott, Hyatt, and other well-known brands help garner relatively high ADRs. Offsetting considerations include Xenia's smaller scale compared with rated peers that are lodging REITs, as well as its modestly lower EBITDA margin. In S&P's view, competitors Host, Park, and Ryman own some very large and hard-to-replicate assets in locations that are typically attractive to business and group travelers. While the recovery path for these hotels may be slower than for Xenia's portfolio over the next year or two, these qualities normally represent competitive advantages and barriers to entry for competitors in their respective markets and may again in future years if business and group travel recovers sufficiently. The company has an asset base that is mostly unencumbered and could provide the flexibility to monetize individual hotels, even if the timing may be disadvantageous. Leverage could remain high in 2022 even under S&P's current base-case assumptions for RevPAR recovery, and Xenia may need to pursue solutions to reduce its debt burden over the long term, including possible equity issuances or additional asset sales. To the extent Xenia uses the proceeds from asset sales to repay debt, S&P likely would view it as credit positive if the company sells the assets for a higher multiple than its leverage. Xenia has already taken actions to opportunistically sell assets and reduce debt, including two hotel sales in November 2021 and January 2022. The breadth of Xenia's portfolio and its lower room count per property relative to its peers with larger properties could facilitate potential sales. Other business considerations include: -- The cyclical nature of the lodging industry and the high revenue and earnings volatility associated with hotel ownership. -- Xenia's concentration in luxury and upper upscale segments could lead to greater volatility in its EBITDA over the cycle than for hotel owners focused on the economy or midscale segments. This is because pricing tends to compress during an economic downturn, which has the greatest effect on the luxury segment and the least severe effect on the economy segment. As a result, Xenia is more exposed to EBITDA variability over the cycle than hotel owners in lower-price, select-service segments, and lodging managers and franchisers that do not have an owner's fixed cost burden. -- S&P assumes no additional asset sales in its base-case forecast, partly because the timing and transaction size of noncore asset sales are not easily quantifiable. -- S&P said, "We believe Xenia's track record suggests it will reduce its leverage over time. Xenia's measurement of leverage was in the 3.1x to 4.2x range over the past few years and was 4.1x as of year-end 2019. Xenia has also said it targets leverage below 5x over the long term, although we believe there is some uncertainty regarding the timeline to achieve this target." The stable outlook reflects S&P's forecast for adjusted leverage in the low-6x area in 2022, which represents a very good cushion compared with the 7.75x downgrade threshold to accommodate potential debt-financed acquisitions and macroeconomic uncertainty. While unlikely based on S&P's current forecast, S&P could lower ratings if leverage deteriorates to above 7.75x and EBITDA coverage of interest expense below 2x. Such a scenario would likely entail significant declines in RevPAR and EBITDA, in addition to concurrent leveraging transactions. S&P could raise its ratings on the company if it believes it can sustain adjusted debt to EBITDA of less than 6.25x over the volatile lodging cycle and incorporating potential future hotel acquisitions. This scenario would likely entail continued business and group travel recovery and greater clarity on Xenia's timeline to achieve its leverage target of below 5x over an economic cycle. ESG credit indicators: E-2, S-3, G-2 S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of Xenia. This incorporates the unprecedented decline in RevPAR due to the pandemic. Although this was a rare and extreme disruption that probably will not recur at the same magnitude, Xenia is unlikely to recover to 2019 RevPAR until 2023. Xenia has exposure to densely populated U.S. urban markets sensitive to health and safety concerns and cater to business and group travel. It is therefore likely to recover more slowly than the overall lodging industry. In addition, Xenia's hotel ownership business model entails high operating leverage and EBITDA sensitivity to revenue fluctuations. Risk remains around regional health concerns, a slower recovery among upscale and luxury hotels, and uncertainty over long-term disruption to group and business travel." Environmental, social, and governance (ESG) credit factors for this change in credit rating/outlook and/or CreditWatch status: -- Health and safety ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. 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