/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/220822.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, August 22, 2022, Vol. 26, No. 233 Headlines 332 A'BANTU REALTY: Claims to Be Paid from Sale or Refinancing A.G. DILLARD: Wins Cash Collateral Access Thru Sept 21 ACCURIDE CORP: Moody's Alters Outlook on 'Caa2' CFR to Neg. ACER THERAPEUTICS: Incurs $2.7 Million Net Loss in Second Quarter ACRO BIOMEDICAL: Posts $4 Million Net Loss in Second Quarter AIKIDO PHARMA: Incurs $5.1 Million Net Loss in Second Quarter ALLEGIANT TRAVEL: Fitch Affirms 'BB-' IDR, Outlook Stable ALLEN & HANDY: Bid to Use Cash Collateral Denied ALTERA INFRASTRUCTURE: $50 Million DIP Loan Wins Interim OK ALTERA INFRASTRUCTURE: Norton Rose Represents CoCom Lenders ALTERA INFRASTRUCTURE: Vinson, Wachtell Represent TopCo Noteholders ANDREWS REAL ESTATE: Has Until Aug. 31 to File Plan ARIAN MOWLAVI: U.S. Trustee Appoints Karen Sue Naylor as Examiner AVISON YOUNG: S&P Assigns 'B-' ICR, Outlook Stable B&G FOODS: S&P Downgrades ICR to 'B-', Outlook Stable BLACK CREEK: Unsecureds to Get 100% Under Plan BOLDFACE PROPERTIES: Case Summary & Five Unsecured Creditors BOY SCOUTS: Modifies Latter Day Treatment Under Plan CAMMAND MACHINING: Seeks to Access $252,780 in Cash CAPITAL POWER: S&P Assigns 'BB' Rating on C$350MM Sub Notes CAREVIEW COMMUNICATIONS: Incurs $2.5M Net Loss in Second Quarter CEL-SCI CORP: Posts $9.6 Million Net Loss in Third Quarter CELSIUS NETWORK: Togut Firm Advise on Custodial Account Holders CELSIUS NETWORK: U.S. Trustee Seeks Appointment of Examiner CINEWORLD GROUP: Regal Cinemas Plan Chapter 11 Filing CIP 1106 11TH ST: Voluntary Chapter 11 Case Summary CORE & MAIN: Moody's Affirms Ba3 CFR & Cuts Secured Term Loan to B1 COUNTRYWIDE INSURANCE: A.M. Best Affirms 'b+' LongTerm ICR CREATD INC: Incurs $8.7 Million Net Loss in Second Quarter CROSBY US: Moody's Affirms 'B3' CFR & Alters Outlook to Stable CS GROUP: Wins Cash Collateral Access on Final Basis CTI BIOPHARMA: BVF Partners Reports 27.83% Equity Stake CUREPOINT LLC: Case Summary & Five Unsecured Creditors CYTODYN INC: Incurs $210.8 Million Net Loss in FY Ended May 31 DCP MIDSTREAM: Moody's Affirms Ba1 CFR & Alters Outlook to Positive DGS REALTY: Wins Cash Collateral Access Thru Oct 31 DIFFUSION PHARMACEUTICALS: Posts $4.2M Net Loss in Second Quarter DOLPHIN ENTERTAINMENT: Posts $612K Net Income in Second Quarter DOUBLE J PLAYSCAPES: Court OKs Deal on Cash Collateral EAST WILLIAMSBURG: Case Summary & 19 Unsecured Creditors EASTGATE WHITEHOUSE: Case Summary & 12 Unsecured Creditors EDUCATIONAL TRAVEL: Wins Interim Cash Collateral Access ELECTROMEDICAL TECHNOLOGIES: Posts $536K Net Loss in 2nd Quarter EMILY VETS: Case Summary & Five Unsecured Creditors ENDO INTERNATIONAL: Gibson Dunn Represents First Lien Group ENDO INTERNATIONAL: Paul Weiss Represents Cross-Holder Group ENDO INTERNATIONAL: S&L, Keller Represent Putative Claimants FIRST TO THE FINISH: Voluntary Chapter 11 Case Summary FOG INC: Debtor Has Not Filed Financial Information, Says FORD MOTOR: Fitch Rates New Unsecured Notes Due 2062 'BB+' FORUM ENERGY: S&P Alters Outlook to Positive, Affirms 'CCC+' ICR FREIRE CHARTER SCHOOL: S&P Assigns 'BB' ICR, Outlook Stable GEO GROUP: S&P Assigns Prelim 'BB-' Rating on New Sr. Secured Debt GISSING NORTH AMERICA: Cash Collateral Access, DIP Loan OK'd GOEASY LTD: S&P Affirms 'BB-' Issuer Credit Rating, Outlook Stable GOLDMAKER INC: Seeks January 2023 Extension of Plan Deadline GOVERNORS GUN: Files Emergency Bid to Use Cash Collateral HANESBRANDS INC: S&P Alters Outlook to Negative, Affirms 'BB' ICR HELIUS MEDICAL: Incurs $3.8 Million Net Loss in Second Quarter HIGHLAND PROPERTY: Sept. 8 Hearing on Amended Disclosures and Plan HOLLEY INC: S&P Alters Outlook to Stable, Affirms 'B' ICR HOLY REDEEMER: Moody's Affirms 'Ba2' Revenue Bond Rating HOME DECOR: Wins Cash Collateral Access Thru Aug 29 HOMELIBERTY INC: Seeks Continued Cash Collateral Access HRNI HOLDINGS: Fitch Affirms 'B' IDR, Outlook Stable INNOVATIVE BUILDING: Unsecureds to 100% in 60 Months IRI HOLDINGS: Fitch Withdraws 'B' LongTerm IDR JA SEEKINS: Seeks Interim Cash Collateral Access JOYCARE THERAPY: Files Emergency Bid to Use Cash Collateral KAR AUCTION: Moody's Upgrades CFR to B1 & Alters Outlook to Stable KEYWAY APARTMENT: Court OKs Appointment of Miller as Examiner KUN PENG: Incurs $690K Net Loss in Third Quarter LD HOLDINGS: S&P Lowers ICR to 'B-', Outlook Negative LIBRA LLC: Involuntary Chapter 11 Case Summary LIVEONE INC: Incurs $1.35 Million Net Income in First Quarter LONGVIEW POWER: Moody's Hikes Rating on $40MM Sec. Term Loan to B3 M6 MIDSTREAM: Fitch Assigns 'B+' First Time IDR, Outlook Stable MARTINEZ QUALITY: Poyner Spruill Represents NorSouth, 2 Others MID SOUTH RECYCLING: Case Summary & Six Unsecured Creditors MONTICELLO HORIZON: Unsecureds Owed $147K Unimpaired Under Plan MY SIZE: Incurs $1.7 Million Net Loss in Second Quarter NP LEHI: Voluntary Chapter 11 Case Summary ORIGINCLEAR INC: Posts $1.3 Million Net Loss in Second Quarter P&L DEVELOPMENT: Fitch Lowers IDR to CCC+, Outlook Stable PACWEST BANCORP: Fitch Lowers Subordinated Debt Rating to BB+ PANACEA LIFE: Incurs $2 Million Net Loss in Second Quarter PAVERS INC: Wins Cash Collateral Access Thru Jan 2023 PECO ELECTRIC: Wins Interim Cash Collateral Access POST OAK TX: Aug. 30 Hearing for Plan Confirmation POST OAK TX: Unsecureds Unimpaired Under Settlement Plan PRESS ON HOLDINGS: Files for Chapter 11 to Stop Foreclosure PRESSURE BIOSCIENCES: Posts $2.9 Million Net Loss in Second Quarter PRIME SECURITY: Moody's Affirms 'B1' CFR, Outlook Remains Stable PROFESSIONAL DIVERSITY: Posts $91K Net Income in Second Quarter PWM PROPERTY: Administrative Bar Dates Unworkable, Says UST PWM PROPERTY: Unsecureds Owed $4M Unimpaired Under Plan PWM PROPERTY: Wells Fargo Says Disclosures Have Same Infirmities PWP INVESTMENTS: Wins Cash Collateral Access Thru Nov 30 QUEST PATENT: Incurs $220K Net Loss in Second Quarter RENNOVA HEALTH: Posts $504K Net Loss in Second Quarter S3 SPA: Files Emergency Bid to Use Cash Collateral SALEM HARBOR: Unsecured Creditors to Split $175K in Plan SANDY ROAD FARMS: Court OKs Deal on Cash Collateral Access SANUWAVE HEALTH: Posts $2.7 Million Net Income in Second Quarter SEAWORLD PARKS: Moody's Ups CFR to B1 & Sr. Unsecured Notes to B3 SEDAMSVILLE HISTORICAL: Case Summary & Five Unsecured Creditors SIGYN THERAPEUTICS: Posts $666K Net Loss in Second Quarter SINTX TECHNOLOGIES: Posts $2.5 Million Net Loss in Second Quarter SOUTHWESTERN ENERGY: Fitch Hikes IDR to 'BB+', Outlook Stable STANFORD CHOPPING: UST Appoints Holder as Subchapter V Trustee STONE CLINICAL: Unsecureds Owed $7M Paid From Cash Fund STONEMOR INC: Incurs $17.3 Million Net Loss in Second Quarter STRATHCONA RESOURCES: Fitch Rates CAD700MM First Lien Loan 'BB+' TALLGRASS ENERGY: Fitch Affirms BB- LongTerm IDR, Outlook Stable TBC COMPANIES: Oct. 4 Confirmation of the Plan TOUCHPOINT GROUP: Posts Second Quarter Loss of $1.5 Million TPC GROUP: Disclosures Inadequate, Says Creditors Committee TREES CORP: Incurs $183K Net Loss in Second Quarter TRINITI DME: Seeks Cash Collateral Access TRINITY HEALTH: S&P Lowers 2017C Revenue Bonds Rating to 'BB+' TWO'S COMPANY: Unsecureds Owed $458K to Get 3 Cents on Dollar VANTAGE DRILLING: Posts $48.3 Million Net Income in Second Quarter VENUS CONCEPT: Posts $10.5 Million Net Loss in Second Quarter VERITAS FARMS: Incurs $606K Net Loss in Second Quarter VIRGINIA WILLIAMSBURG: Case Summary & Five Unsecured Creditors VOYAGER DIGITAL: Has Aug. 29 Auction for Alternative Offers WALL007 LLC: Case Summary & 20 Largest Unsecured Creditors WEIRD VENDING: Wins Cash Collateral Access Thru Sept 1 WIRECO WORLDGROUP: Moody's Ups CFR & Sr. Secured Term Loan to B1 WP REALTY: Sept. 15 Hearing on Plan & Disclosures [^] BOND PRICING: For the Week from August 15 to 19, 2022 ********* 332 A'BANTU REALTY: Claims to Be Paid from Sale or Refinancing -------------------------------------------------------------- 332 A'Bantu Realty, Inc., submitted a Plan and a Disclosure Statement. The holders of all allowed prepetition secured, priority and general unsecured claims will receive a distribution of 100% of their allowed claims, to be distributed upon or after the Debtor's sale or refinance of its real property known as 332 Myrtle Avenue, Brooklyn, NY. The Debtor's real property is its only asset. The Debtor believes that the property has a market value of at least $3,400,000, based on the principal’s understanding of the property and its location. Class 1 secured claim of Brooklyn Atlantic Servicing, LLC, in the amount of $2,745,500 will be paid in full upon the closing of the sale or refinance of the Debtor's real property (estimated to occur within 90 days of the effective date of the plan). Class 5 All General Unsecured Claims, currently estimated to total $0, will be paid in full upon the closing of the sale or refinance of the Debtor's real property. Class 5 is impaired. Payments and distributions required on the effective date of the plan will be funded by contributions from the Debtor's principal. Payments and distributions required on the date of the closing of the sale or refinance of the Debtor's property will be funded with the proceeds from such sale or refinance. In the event that the proceeds from the sale or refinance are insufficient, the Debtor's principals will make additional contributions. Counsel to 332 A'Bantu Realty, Inc.: Brian G. Hannon, Esq. NORGAARD O'BOYLE & HANNON 184 Grand Avenue Englewood, NJ 07631 A copy of the Disclosure Statement dated August 10, 2022, is available at https://bit.ly/3QdcbaF from PacerMonitor.com. About 332 A'Bantu Realty 332 A'Bantu Realty Inc. owns the real property known as 332 Myrtle Avenue, Brooklyn, NY. 332 A'Bantu Realty Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 22-40664) on March 30, 2022, disclosing as much as $1 million in both assets and liabilities. Judge Elizabeth S. Stong oversees the case. Brian G. Hannon, Esq., at Norgaard, O'Boyle & Hannon is the Debtor's bankruptcy attorney. A.G. DILLARD: Wins Cash Collateral Access Thru Sept 21 ------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Virginia, Lynchburg Division, authorized A.G. Dillard, Inc. to use cash collateral on an interim basis and provide adequate protection to Blue Ridge Bank. The Court said the aggregate use of cash collateral during the Seventh Interim Period will not exceed $522,991 as set forth in the Budget. Should the Debtor's use of cash collateral exceed the said amount, the Debtor's right to use cash collateral will terminate absent the express written consent of the Bank or further Court order. The Debtor is indebted to the Bank and the Bank is secured in connection with or pursuant to (i) a Business Loan Agreement dated December 18, 2019, by and between the Debtor and the Bank; (ii) a Promissory Note dated December 18, 2019, made by the Debtor, payable to the order of the Bank in the original principal amount of $4,000,000; (iii) a Loan Agreement dated September 25, 2020 by and between the Debtor and the Bank; (iv) a U.S. Small Business Administration Note made by the Debtor, payable to the order of the Bank in the original principal amount of $5,000,000; and (v) a Commercial Security Agreement dated March 12, 2018, granted by the Debtor in favor of the Bank. The Debtor is in default under the Loan Documents. As adequate protection, the Bank will have valid, enforceable and perfected replacement liens on all of the Bank's post-petition date collateral securing the obligations. The Replacement Liens will remain effective and enforceable unless or until otherwise modified by the Court. The Replacement Liens will be perfected, enforceable, choate, and effective without the necessity of the Bank taking any other action to validate or perfect the security interests and Replacement Liens granted to the Bank. As further adequate protection to the Bank, the Debtor continue to pay the Bank an amount equal to $4,000 per week. Only to the extent the Adequate Protection is deemed to be insufficient adequate protection under section 361 of the Bankruptcy Code, the Bank will have a superpriority administrative claim pursuant to sections 361 and 507(b) of the Bankruptcy Code, for which the Bank has the burden of proof. The final hearing on the matter is scheduled for September 21 at 11 a.m. A copy of the order and the Debtor's budget for the period from August 12 to September, 2022 is available at https://bit.ly/3dBM3rD from PacerMonitor.com. The budget provides for total operating expenses, on a weekly basis, as follows: $77,385 for the week ending August 12, 2022; $68,106 for the week ending August 19, 2022; $42,730 for the week ending August 26, 2022; $15,330 for the week ending September 2, 2022; $17,530 for the week ending September 9, 2022; $15,330 for the week ending September 16, 2022; and $46,830 for the week ending September 21, 2022. About A.G. Dillard, Inc. A.G. Dillard, Inc. is an excavating contractor in Troy, Virginia. It provides a wide variety of site construction services, including site remodeling, clearing and demolition, pond repair/conversion, excavating and grading, site concrete, and paving. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Va. Case No. 22-60115) on February 9, 2022. In the petition signed by Alan G. Dillard, III, president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Rebecca B. Connelly oversees the case. Robert S. Westermann, Esq., at Hirschler Fleischer, PC is the Debtor's counsel. Blue Ridge Bank, as lender, is represented by Michael D. Mueller, Esq. at Williams Mullen. ACCURIDE CORP: Moody's Alters Outlook on 'Caa2' CFR to Neg. ----------------------------------------------------------- Moody's Investors Service affirmed Accuride Corporation's ratings, including its corporate family rating at Caa2, probability of default rating at Caa2-PD and senior secured first lien term loan rating at Caa2. The outlook was changed to negative from positive. The negative outlook reflects Accuride's significant refinancing risk and weak liquidity with the company's entire capital structure coming due in the next 12 to 15 months. Moody's expects financial leverage will remain high and free cash flow will be negative even though Accuride's operating performance will improve through 2023 from steady commercial vehicle production and completed restructuring of its European operations. Therefore, Moody's believes a successful refinancing of the company's asset-based lending facility ("ABL") expiring August 2023 and first lien term loan due November 2023 may be difficult, and the risk of a potential debt restructuring or distressed exchange is elevated.. Affirmations: Issuer: Accuride Corporation Corporate Family Rating, Affirmed Caa2 Probability of Default Rating, Affirmed Caa2-PD Senior Secured 1st Lien Term Loan B, Affirmed Caa2 (LGD4) Outlook Actions: Issuer: Accuride Corporation Outlook, Changed To Negative From Positive RATINGS RATIONALE Accuride's ratings reflect the company's very high financial leverage, low earnings margin with a history of operating losses and weak liquidity. Accuride does maintain a good competitive position as a supplier of steel and aluminum wheels and wheel-ends for new commercial vehicle production globally as well as a supplier to the aftermarket. Revenue growth for Accuride has been robust since 2021 as commercial vehicle production and pricing have increased. Moody's expects Accuride's revenue to increase at least 25% in 2022 following over 40% growth in 2021. Demand for new commercial vehicles, particularly in North America, should remain favorable in 2023, thus contributing to Moody's expectation for Accuride's revenues to grow around 5% next year. Despite very strong top line growth, Accuride's profitability and cash generation, while improved from recent years, remain pressured by higher material, supply chain and energy costs. Moody's expects Accuride to work with customers to recover costs such that the company's EBITDA margin will remain around 6% to 7% through 2023. Moody's expects Accuride's liquidity to remain weak through 2023 with limited cash on the balance sheet and expectations for negative free cash flow to persist. Accuride heavily utilizes its $168.3 million ABL to support its operations, and Moody's expects the company to maintain modest availability on its ABL, which expires in August 2023. The company's first lien term loan includes a maximum net leverage and minimum interest coverage ratio requirements. Moody's expects Accuride may have difficulty meeting its net leverage covenant over the next several quarters unless earnings materially improve. Further, the company may rely on additional equity contributions or sale-leaseback transactions to support its liquidity over the next twelve months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Accuride is able to successfully address its 2023 debt maturities. In addition, Accuride would need to demonstrate a pathway to at least breakeven free cash flow and reduce its reliance on external capital sources in order to achieve a higher rating. The ratings could be downgraded if Accuride's earnings fail to improve and the likelihood of default increases, including the potential for a debt restructuring which Moody's may view as a distressed exchange. Also, a downgrade could occur if Moody's recovery expectations decrease over the next twelve months. Accuride Corporation, headquartered in Livonia, Michigan, is a North American, European and Asian manufacturer and supplier of commercial vehicle and light vehicle components including wheels and wheel-end components. Crestview Partners is the majority owner of Accuride since October 2016. Revenue for the twelve months ended June 2022 was approximately $1.2 billion. The principal methodology used in these ratings was Automotive Suppliers published in May 2021. ACER THERAPEUTICS: Incurs $2.7 Million Net Loss in Second Quarter ----------------------------------------------------------------- Acer Therapeutics Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $2.67 million on zero revenue for the three months ended June 30, 2022, compared to a net loss of $3.07 million on zero revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $11.85 million on zero revenue compared to a net loss of $7.68 million on $900,000 of revenue for the same period a year ago. As of June 30, 2022, the Company had $23.24 million in total assets, $32.03 million in total liabilities, and a total stockholders' deficit of $8.78 million. Cash and cash equivalents were $14.5 million as of June 30, 2022, compared to $12.7 million as of Dec. 31, 2021. Acer believes its cash and cash equivalents available as of June 30, 2022 will be sufficient to fund its currently anticipated operating and capital requirements through Q3 2022. Acer said, "We have never been profitable and have incurred operating losses in each year since inception. From inception to June 30, 2022, we have raised net cash proceeds of $110.1 million, primarily from common stock offerings, private placements of convertible preferred stock, debt instruments, and convertible debt instruments. In addition, from inception to June 30, 2022, we have raised cash proceeds of $35.0 million from collaboration agreements. As of June 30, 2022, we had $14.5 million in cash and cash equivalents, and current liabilities aggregating to $17.5 million, which include $6.3 million associated with deferred collaboration funding. Our net loss for the three months ended June 30, 2022 and 2021 was $2.7 million and $3.1 million, respectively. As of June 30, 2022, we had an accumulated deficit of $126.4 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." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001069308/000156459022029495/acer-10q_20220630.htm Acer Therapeutics Acer Therapeutics Inc. -- 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 investigational programs: ACER-001 (sodium phenylbutyrate) for treatment of various inborn errors of metabolism, including urea cycle disorders (UCDs) and Maple Syrup Urine Disease (MSUD); ACER-801 (osanetant) for treatment of induced Vasomotor Symptoms (iVMS); EDSIVO (celiprolol) for treatment of vascular Ehlers-Danlos syndrome (vEDS) in patients with a confirmed type III collagen (COL3A1) mutation; and ACER-2820 (emetine), a host-directed therapy against a variety of viruses, including cytomegalovirus, zika, dengue, ebola and COVID-19. 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. 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. 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. ACRO BIOMEDICAL: Posts $4 Million Net Loss in Second Quarter ------------------------------------------------------------ Acro Biomedical Co., Ltd. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $4 million on zero revenue for the three months ended June 30, 2022, compared to a net loss of $794,687 on $500,000 of revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company recorded a net loss of $7.93 million on $298,500 of revenues compared to a net loss of $854,181 on $599,500 of revenues for the six months ended June 30, 2021. As of June 30, 2022, the Company had $669,331 in total assets, $94,444 in total liabilities, and $574,887 in total stockholders' equity. Acro Biomedical stated, "We had limited gross profit and incurred a loss from operations for the six months ended June 30, 2022. During the past few years we did not generate revenue during a number of quarters, including the three months ended June 30, 2022. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. "We propose to fund operations through sales of products and equity financing arrangements. However, because of the lack of sales and the absence of any active trading market for our common stock, our financial condition and our lack of an operating history, including our dependence upon a limited number of customers, we may not be able to raise funds for capital expenditures, working capital and other cash requirements and will have to rely on advances from a minority stockholder, who is also an unpaid consultant, and our officer. If we cannot generate revenue from our products, we may not be able to continue in our business." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1622996/000164033422001752/acro_10q.htm About Acro Biomedical Acro Biomedical Co., Ltd. has been engaged in the business of developing and marketing nutritional products that promote wellness and a healthy lifestyle. The Company's business to date has involved the purchase of products from three suppliers in the Republic of China. The Company sells product in bulk to companies who may use its products as ingredients in their products or sell the products they purchase from the Company to their own customers. Acro Biomedical reported net loss of $7.70 million for the year ended Dec. 31, 2021, compared to a net loss of $117,453 for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $761,077 in total assets, $117,370 in total liabilities, and $643,707 in total stockholders' equity. Hackensack, New Jersey-based Prager Metis CPAs, LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company had limited cash as of Dec. 31, 2021, had limited gross profit and incurred a loss from its operations for the year ended Dec. 31, 2021 and past few years. These circumstances, among others, raise substantial doubt about the Company's ability to continue as a going concern. AIKIDO PHARMA: Incurs $5.1 Million Net Loss in Second Quarter ------------------------------------------------------------- Aikido Pharma Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $5.08 million for the three months ended June 30, 2022, compared to a net loss of $1.35 million for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company recorded a net loss of $8.61 million compared to a net loss of $5.31 million for the same period in 2021. As of June 30, 2022, the Company had $88.30 million in total assets, $829,000 in total liabilities, and $87.47 million in total stockholders' equity. Aikido said, "The Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue. While the Company continues to implement its business strategy, it intends to finance its activities through managing current cash on hand from the Company's past debt and equity offerings. "Based upon projected cash flow requirements, the Company has adequate cash to fund its operations for at least the next twelve months from the date of the issuance of these consolidated financial statements." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/12239/000121390022047493/f10q0622_aikidopharma.htm About AIkido Pharma Headquartered in New York, NY, AIkido Pharma Inc. fka Spherix Incorporated -- http://www.spherix.com-- was initially formed in 1967 and is currently a biotechnology company seeking to develop small-molecule anti-cancer therapeutics. The Company's activities generally include the acquisition and development of technology through internal or external research and development. In addition, the Company seeks to acquire existing rights to intellectual property through the acquisition of already issued patents and pending patent applications, both in the United States and abroad. The Company may alone, or in conjunction with others, develop products and processes associated with technology development. Recently, the Company has invested in and helped develop technology with Hoth Therapeutics, Inc., DatChat, Inc. and with its recent asset acquisition with CBM BioPharma, Inc. in December 2019. Aikido reported a net loss of $7.17 million for the year ended Dec. 31, 2021, compared to a net loss of $12.34 million for the year ended Dec. 31, 2020. As of March 31, 2022, the Company had $117.95 million in total assets, $895,000 in total liabilities, $11 million in Series O redeemable convertible preferred stock, $11 million in Series P redeemable convertible preferred stock, and $95.05 million in total stockholders' equity. ALLEGIANT TRAVEL: Fitch Affirms 'BB-' IDR, Outlook Stable --------------------------------------------------------- Fitch Rating has affirmed Allegiant Travel Company's Long-Term Issuer Default Rating (IDR) at 'BB-' and existing secured debt ratings at 'BB+'/'RR2'. The Rating Outlook is Stable. In addition, Fitch has assigned 'BB+'/'RR2' instrument ratings to Allegiant's proposed $500 million high-yield notes and $75 million revolving credit facility, as well as its new $100 million revolving credit facility due in 2024. KEY RATING DRIVERS Refinancing Transaction: The 'BB+/'RR2' ratings on the company's proposed $500 million high-yield note and $75 million revolving credit facility (RCF), reflect Allegiant's 'BB-' Long-Term IDR and the pledged collateral; namely, all non-aircraft assets, inclusive of loyalty programs, IP, fleet equity, spare parts, and equipment, which is the same as the collateral assigned to its existing term loan and notes. A majority of the collateral's value is derived from the airline's loyalty program and brand intellectual property, which Fitch views as necessary to the company's ability to operate as a going concern. Nonetheless, the value of this collateral is subject to change, and in a liquidation scenario, would likely experience material value degradation. The 'BB+'/'RR2' rating assigned to the company's new $100 million MUFG RCF, as well as the outstanding rating on the company's $50 million Credit Agricole RCF, incorporates the strong nature of the aircraft and engine collateral, yet elevated gross adjusted secured leverage (Secured Debt/ EBITDAR). As per Fitch's criteria, adjusted gross secured leverage threshold for an 'RR1' rating on secured debt is ~4.95x, which is 50% above the 'BB' rating midpoint specified in Fitch's rating navigator. Allegiant's current adjusted secured leverage is above 5x, thus limiting the secured ratings to 'RR2'. Fitch notes that if secured adjusted leverage declines within the applicable threshold, the instruments' recovery ratings may be upgraded to 'RR1'from 'RR2'. Smoothing Maturities: Allegiant's refinancing transaction is slightly beneficial to the company's leverage profile, as it will pay down the $533 million outstanding on its term loan with the proceeds from the $500 million note and $33 million of cash on hand. The transaction mitigates refinancing risk with respect to the company's $824 million maturity wall in 2024, and provides some flexibility as the company faces a heavy aircraft delivery schedule from its recent 737 MAX order. Fitch continues to expect leverage to remain in the mid 5x leverage in 2022, as the company finances the bulk of pre-delivery payments on (PDP) aircraft payments and funds the Sunseeker build. Robust Liquidity; Elevated Capex: Fitch estimates pro forma liquidity to be $1.43 billion, inclusive of ~$396 million cash and cash equivalents, ~$813 of short-term investments as of June 30, 2022, and $225 million in aggregate revolver capacity. As of June 2022, this represents more than 70% of LTM revenue. Fitch expects the company will use excess liquidity for aircraft purchases and contractual debt maturities throughout the medium term. Cash flow expectations over the rating horizon remain pressured by the MAX aircraft slated for delivery from 2023-2025. Strong Revenue Mitigates Costs: Allegiant's TRASM for the first half of 2022 exceeded expectations, in part due to strong ancillary revenues and elevated ticket prices. Furthermore, the use of vouchers and credits were up 200% in 2Q22, signifying a solid rebound in travel from the existing customer base. Yields continue to be elevated as demand outpaces operational capacity; however, uncertainty related to further consumer spending may cause yields to fall in the latter half of the year. Load factors came in high for the 2nd quarter at 87%, up from 79% in the prior quarter due to capacity limitations. Inflationary cost pressures including wages, marketing, and fuel will limit margin accretion in the latter portion of 2022 and 2023. Slower Relative Growth Expected: Fitch expects Allegiant to grow through 2022 and 2023 given its fleet and resort investments and solid demand; however, staffing constraints will likely be a limiting factor. The ability to ramp up pilots hiring and new markets will be a key factor in the pace of growth in 2023, and may lengthen the timeline to return to pre-pandemic profitability. However, through the rest of 2022, revenues should remain in the mid to upper teens above 2019 levels. Fitch forecasts a stronger rebound in load factors, with ASMs increasing at a slower rate than previously expected in 2023. Sunseeker Resort: Fitch believes the Sunseeker resort represents a short-term risk to the rating while construction is ongoing. Project competition is still expected to be in the first half of 2023; however, despite strong reported booking ADRs, revenue generation will be likely be limited until it is fully opened. As of June 30, 2022, the company spent $346 million, of which $158 million was debt funded and $188 million was provided by Allegiant. In the second quarter approximately $74 million of capital expenditures were attributed to the project. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer: -- Available seat miles increase to 18.9k, up from 17.5k in 2021, representing a 8% increase; -- 2022 load factors increase to 81% throughout the year and slowly improve to 83% over the rating horizon; -- Previous forecast assumed 79% over the short term; -- Jet fuel prices rise to $3.65/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 28% of revenues throughout the forecast; -- Leverage falls to the mid 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. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total adjusted debt/operating EBITDAR sustained above 4.5x; -- 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. LIQUIDITY AND DEBT STRUCTURE As of June 2022, the company held ~$1.26 billion of liquidity on the balance sheet, inclusive of ~$396 million cash and cash equivalents, ~$813 of short-term investments, and $50 million of availability on the company's revolver maturing in 2023. In August, the company secured another $100 million revolving credit facility with a two-year maturity and secured by A320, B737 MAXs, and spare engines. The company's additional $100 million and $75 million revolvers increase pro forma liquidity to ~$1.43 billion; however, the company will likely use excess liquidity to purchase new aircraft or pay down debt in the medium term. Considering the additional revolver capacity, Fitch estimates YE 2022 liquidity to be around $1.3 billion, and will be reduced as the company takes on aircraft deliveries from 2023-2025. 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. RATING ACTIONS ENTITY/DEBT RATING RECOVERY PRIOR ----------- ------ -------- ----- Allegiant Travel LT IDR BB- Affirmed BB- Company senior secured LT BB+ New Rating RR2 senior secured LT BB+ Affirmed RR2 BB+ ALLEN & HANDY: Bid to Use Cash Collateral Denied ------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts denied the motion to use cash collateral filed by Allen & Handy Investments LLC. The Court denied the Debtor's request for the reasons set forth on the record. The Debtor is prohibited from using any cash collateral absent a further Court order. If the Debtor violates the order, the Court may seek appropriate sanctions against the Debtor and the Debtor's principal. A copy of the order is available at https://bit.ly/3PzKo2Y from PacerMonitor.com. 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. Judge Janet E. Bostwick oversees the case. Michael Van Dam, Esq., at Van Dam Law LLP is the Debtor's counsel. ALTERA INFRASTRUCTURE: $50 Million DIP Loan Wins Interim OK ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Altera Infrastructure L.P. to, among other things, use cash collateral and obtain postpetition financing on an interim basis in accordance with the budget. The Debtors are parties to a Superpriority Senior Secured Debtor-in-Possession Credit Agreement, by and among Altera Infrastructure Holdings, L.L.C., as borrower, each of the Debtors party thereto as guarantors, U.S. Bank Trust Company, National Association, as administrative agent and collateral agent, and the lenders party thereto. The DIP facility consists of a senior secured superpriority new money term loan facility in the aggregate principal amount, including upfront fee, of $50 million, plus a roll-up and conversion into DIP Loans of $20 million of the outstanding principal balance under a Prepetition IntermediateCo Credit Agreement. Approximately $32 million is outstanding under the IntermediateCo Credit Agreement as of the Petition Date. About $25 million of the DIP Loan proceeds will be made available and funded within five business days following the entry of the Interim Order, and the remaining DIP Loans will be available and funded within five Business Days following entry of the Final Order. The Debtors have a need to use cash collateral on an interim basis and obtain credit in an amount equal to the Interim Amount pursuant to the DIP Facility in order to, among other things, enable the orderly continuation of their operations and to administer and preserve the value of their estates. Upon the entry of the Interim Order, $20 million of the outstanding Prepetition IntermediateCo Credit Agreement Debt will be converted into DIP Loans in accordance with the Interim Order and the DIP Credit Agreement. As adequate protection, each of the Prepetition Agents, for the benefit of their applicable Prepetition Secured Parties, is granted a valid, perfected replacement security interest in and lien on the applicable Prepetition Collateral, Encumbered Collateral and the Unencumbered Collateral. As further adequate protection, each of the Prepetition Agents, for the benefit of the applicable Prepetition Secured Parties, is granted an allowed administrative expense claim against the applicable Prepetition Loan Parties on a joint and several basis with priority over all other administrative claims in the Chapter 11 Cases. A copy of the order and the Debtor's 13-week budget is available at https://bit.ly/3AxixfL from PacerMonitor.com. The budget provides for total cash flow, on a weekly basis, as follows: $22 million for the week ending August 21, 2022; $2.6 million for the week ending August 28, 2022; $7 million for the week ending September 4, 2022; $9.9 million for the week ending September 11, 2022; $10.2 million for the week ending September 18, 2022; $2.5 million for the week ending September 25, 2022; $19 million for the week ending September 30, 2022; $6.7 million for the week ending October 9, 2022; $5.6 million for the week ending October 16, 2022; $0.8 million for the week ending October 23, 2022; $15.1 million for the week ending October 30, 2022; $9.8 million for the week ending November 6, 2022; and $0.3 million for the week ending November 13, 2022. About Altera Infrastructure Westhill, United Kingdom-based Altera Infrastructure L.P. (NYSE: ALIN-A) is a global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $3.8 billion comprised of 44 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera's fleet is employed on medium-term, stable contracts. After agreeing to a debt-for-equity plan with bank lenders and owner Brookfield, Altera Infrastructure L.P. and 37 affiliate sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 22-90130) on Aug. 12, 2022. As of the Petition Date, the Debtors were liable for approximately $1.6 billion in aggregate principal amount of funded debt. Kirkland & Ellis LLP and Jackson Walker LLP serve as the Debtors' counsel. Stretto is the claims agent. David Rush, Senior Managing Director of FTI Consulting, Inc., serves as restructuring advisor to the Debtors. The DIP Lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP, as counsel to the DIP Lenders, Ducera Partners LLC, as financial advisor, and Porter & Hedges LLP, as their Texas counsel. A Committee of Coordinators was appointed under and as defined in the appointment letter originally dated May 6, 2022, among Altera Infrastructure L.P. and each member of the CoCom (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time). The CoCom is represented by Norton Rose Fulbright US LLP and Norton Rose Fulbright LLP, as counsel, and PJT Partners (UK) Ltd., as financial advisor. ALTERA INFRASTRUCTURE: Norton Rose Represents CoCom Lenders ----------------------------------------------------------- In the Chapter 11 cases of Altera Infrastructure L.P., et al., the law firm of Norton Rose Fulbright US LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the Coordinating Committee of Secured Lenders and Agents. The CoCom is made up of six financial institutions: ABN AMRO Bank N.V.; Citibank N.A., London Branch; Credit Agricole Corporate and Investment Bank; DNB Capital LLC; National Australia Bank Limited; and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt Am Main; and two public-sector enterprises, Eksportfinansiering Norge / Export Credit Norway and The Export-Import Bank of Korea. The members of the CoCom hold financial indebtedness under the following facilities (each as defined in the Declaration of Jan Rune Steinsland, Chief Financial Officer of Altera Infrastructure Group Ltd., In Support of the Debtors' Chapter 11 Petitions and First Day Motion, ECF No. 17): (i) the Knarr Facility; (ii) the Petrojarl I Facility; (iii) the Gina Krog Facility; (iv) the Suksan Salamander Facility; and (v) the Arendal Facility. CACIB serves as agent and security trustee under the Knarr Facility, Citi London serves as Eksfin agent and security trustee under the Arendal Facility, and an affiliate of DNB serves as agent and security trustee under the Petrojarl I Facility and the Suksan Salamander Facility. As of Aug. 15, 2022, members of the CoCom and their disclosable economic interests are: ABN AMRO Bank N.V. Financial Restructuring & Recovery (PAC AA3515) P.O. Box 283 1000 EA Amsterdam The Netherlands * Knarr Facility: $44,999,999.98 Citibank Centre 25 Canada Square London E14 5LB United Kingdom * Arendal Facility: $7,083,333.33 * Petrojarl I Facility: $16,843,750.02 * Knarr Facility: $37,145,939.07 Credit Agricole Corporate and Investment Bank 12 Place des Etats-Unis 92547 Montrouge France * Knarr Facility: $41,249,999.98 DNB Capital LLC 30 Hudson Yards, 81st Floor 500 West 33rd Street New York, NY 10001 * Petrojarl I Facility: $26,906,250.03 * Suksan Salamander Facility: $6,250,000.00 DZ Bank AG Deutsche Zentral-Genossenschaftsbank Frankfurt Am Main Platz der Republik 6 60325 Frankfurt Germany * Gina Krog Facility: $5,655,093.99 Eksportfinansiering Norge Export Credit Norway Stoperigata 1 0250, Oslo, Norway * Knarr Facility: $30,000,000.00 * Arendal Spirit Facility: $6,600,000.00 National Australia Bank Limited 12 Marina View #20-02 Asia Square, Tower 2 Singapore 018961 * Gina Krog Facility: $10,179,169.16 The Export-Import Bank of Korea BIFC 20th Floor Munhyeongeumyung-ro 40, Namgu, Busan South Korea * Knarr Facility: $71,968,697.15 in its capacity as Consenting Bank Lender * $43,333,333.27 in its capacity as ECA NRF does not own any claims against or interests in the Debtors, except for claims for services rendered to the CoCom. NRF, the CoCom, and the members thereof reserve the right to revise, supplement and/or amend this Verified Statement as necessary in accordance with the requirements set forth in Bankruptcy Rule 2019. Counsel to the Coordinating Committee of Secured Lenders and Agents can be reached at: NORTON ROSE FULBRIGHT US LLP Kristian Gluck, Esq. Julie G. Harrison, Esq. Jason Blanchard, Esq. Michael Berthiaume, Esq. 1301 McKinney Street, Suite 5100 Houston, TX 77010 Telephone: (713) 651-5151 Facsimile: (713) 651-5246 E-mail: kristian.gluck@nortonrosefulbright.com julie.harrison@nortonrosefulbright.com jason.blanchard@nortonrosefulbright.com michael.berthiaume@nortonrosefulbright.com - and – David Rosenzweig, Esq. Francisco Vazquez, Esq. 1301 Avenue of the Americas New York, NY 10019-6022 Telephone: (212) 318-3000 Facsimile: (212) 318-3400 E-mail: david.rosenzweig@nortonrosefulbright.com francisco.vazquez@nortonrosefulbright.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3PDzM3g About Altera Infrastructure Westhill, United Kingdom-based Altera Infrastructure L.P. (NYSE: ALIN-A) is a global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $3.8 billion comprised of 44 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera's fleet is employed on medium-term, stable contracts. After agreeing to a debt-for-equity plan with bank lenders and owner Brookfield, Altera Infrastructure L.P. and 37 affiliate sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 22-90130) on Aug. 12, 2022. As of the Petition Date, the Debtors were liable for approximately $1.6 billion in aggregate principal amount of funded debt. Kirkland & Ellis LLP and Jackson Walker LLP serve as the Debtors' counsel. Stretto is the claims agent. ALTERA INFRASTRUCTURE: Vinson, Wachtell Represent TopCo Noteholders ------------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Vinson & Elkins LLP and Wachtell, Lipton, Rosen & Katz submitted a verified statement to disclose that they are representing the Ad Hoc Group of TopCo Noteholders in the Chapter 11 cases of Altera Infrastructure L.P., et al. On August 12, 2021, certain members of the Ad Hoc Group of TopCo Noteholders retained Wachtell, Lipton, Rosen & Katz to represent them in connection with a potential financial restructuring of the above-captioned debtors and debtors-in-possession. From time to time thereafter, certain additional holders of 8.50% Senior Notes joined the Ad Hoc Group of TopCo Noteholders. In connection with a potential filing in this jurisdiction, certain members of the Ad Hoc Group of TopCo Noteholders retained Vinson & Elkins LLP. As of Aug. 11, 2022, members of the Ad Hoc Group of TopCo Noteholders and their disclosable economic interests are: 8.500% Senior Notes due 2023 ------------------- BlackRock Financial Management, Inc. $20,766,000.00 40 East 52nd Street New York, NY 10022 Capital Research and Management Company $55,575,000.00 333 South Hope Street, 55th floor Los Angeles, CA 90071 CastleKnight Management LP $21,663,000.00 810 Seventh Avenue, Suite 803 New York, NY 10019 CI Investments Inc. $37,500,000.00 15 York Street 2nd Floor Toronto, Ontario M5J 0A3 Canada Manulife Investment Management $26,322,000.00 197 Clarendon Street, 4th Floor Boston, MA 02116 Mesirow Financial Investment $16,729,000.00 Management, Inc. 820 Manhattan Ave, Suite 200 Manhattan Beach, CA 90266 State Street Global Advisors Fixed Income $19,343,000 1 Iron Street 6th Floor Boston MA 02210 Counsel To The Ad Hoc Group of Topco Noteholders can be reached at: VINSON & ELKINS LLP Paul E. Heath, Esq. Matthew W. Moran, Esq. Trevor G. Spears, Esq. 845 Texas Tower, Suite 4700 Houston, TX 77002 Tel: (713) 758-2222 E-mail: pheath@velaw.com mmoran@velaw.com tspears@velaw.com - and - WACHTELL, LIPTON, ROSEN & KATZ Emil A. Kleinhaus, Esq. Michael S. Benn, Esq. Benjamin S. Arfa, Esq. Michael H. Cassel, Esq. Stephanie A. Marshak, Esq. 51 West 52nd Street New York, NY 10019 Tel: (212) 403-1000 E-mail: eakleinhaus@wlrk.com msbenn@wlrk.com bsarfa@wlrk.com mhcassel@wlrk.com samarshak@wlrk.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3T3C5PP About Altera Infrastructure Westhill, United Kingdom-based Altera Infrastructure L.P. (NYSE: ALIN-A) is a global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $3.8 billion comprised of 44 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera's fleet is employed on medium-term, stable contracts. After agreeing to a debt-for-equity plan with bank lenders and owner Brookfield, Altera Infrastructure L.P. and 37 affiliate sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 22-90130) on Aug. 12, 2022. As of the Petition Date, the Debtors were liable for approximately $1.6 billion in aggregate principal amount of funded debt. Kirkland & Ellis LLP and Jackson Walker LLP serve as the Debtors' counsel. Stretto is the claims agent. ANDREWS REAL ESTATE: Has Until Aug. 31 to File Plan --------------------------------------------------- Judge David D. Cleary has entered an order that the deadline for filing the Chapter 11 Plan of Andrews Real Estate Investments, LLC, is extended to Aug. 31, 2022. In seeking an extension of the July 27 deadline, the Debtor explained that he has yet to receive the funds he will use to fund the Plan but expects to receive them within 30 days. Attorney for the Debtor: Ben Schneider, Esq. SCHNEIDER & STONE 8424 Skokie Blvd., Suite 200 Skokie, IL 60077 Tel: (847) 933-0300 E-mail: ben@windycitylawgroup.com About Andrews Real Estate Investments Andrews Real Estate Investments, LLC is the fee simple owner of six real estate properties valued at $2 million. Andrews Real Estate Investments filed for bankruptcy protection under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-04861) on April 28, 2022, listing total assets of $2,000,031 and total liabilities of $115,182. Neema T. Varghese serves as Subchapter V trustee. Judge David D. Cleary oversees the case. Ben Schneider, Esq. and Matthew Stone, Esq., at Schneider & Stone, serve as the Debtor's counsel. ARIAN MOWLAVI: U.S. Trustee Appoints Karen Sue Naylor as Examiner ----------------------------------------------------------------- Peter C. Anderson, the United States Trustee for Region 16, appoints Karen Sue Naylor to serve as the examiner in the Arian Mowlavi case. The appointment was made pursuant to the order of the U.S. Bankruptcy Court for the Central District of California on August 19, 2022 directing the United States Trustee to appoint an examiner. The examiner is authorized to employ, at the expense of the estate, a medical business appraiser. The examiner's report must be filed no later than October 20, 2022. Any party in interest may file a response to the examiner's report by or before November 3, 2022. About Arian Mowlavi Arian Mowlavi is a medical doctor specializing in reconstructive and cosmetic surgery. Mowlavi conducts business through his wholly owned medical corporation known as A.M. Cosmetic Surgery Clinics, Inc., a California Corporation. Mowlavi filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 22-10296) on February 21, 2022. AVISON YOUNG: S&P Assigns 'B-' ICR, Outlook Stable -------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on Avison Young (Canada) Inc. The outlook remains stable. S&P said, "At the same time, we assigned our 'B-' issue rating to Avison Young's proposed US$50 million term loan due 2026. We also affirmed the debt rating on Avison Young's existing term loan due 2026 at 'B-'. The recovery rating on the new and existing term loan is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a hypothetical default." The rating affirmation follows Avison Young's plan to issue a US$50 million first-lien senior secured term loan due 2026. The proposed issuance will be pari passu with the company's existing senior secured loan and does not include financial covenants. For rolling 12 months ended June 30, 2022, Avison Young's EBITDA cash interest coverage was 2.0x, and pro forma S&P expects the company to operate with EBITDA cash interest coverage between 1.0x-2.0x over the next 12 months. The company can only use the net proceeds from the new issuance to fund current and future acquisitions, which could be accretive to the company's earnings. A portion of the proposed US$50 million issuance will be used to fund upfront cash payments related to current acquisitions that are expected to close in the second half of 2022, with the remaining balance expected to fund future acquisitions. The company cannot use the proceeds for any working capital needs. The recovery rating on the new and existing term loan is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a hypothetical default. If the company were to raise additional debt without associated commensurate expected EBITDA growth we could lower our recovery rating to 4 from the existing 3. As of June 30, 2022, the company's year-to-date adjusted EBITDA was C$25 million, compared with C$21 million in the same period in 2021, driven by improved brokerage performance partly offset by higher variable compensation and higher other operating expenses. Unlike lender-adjusted EBITDA, S&P Global Ratings' adjusted EBITDA does not give credit for cost savings, growth investments, IT system enhancements, and the amortization of the company's deferred recruiting expenses. S&P said, "In our view, majority of the company's adjusted EBITDA comes from numerous add-backs, which we view as lower quality compared with core earnings. We treat noncash stock compensation expense as an add-back to EBITDA, which tends to be meaningful for Avison Young. For the rolling 12 months ended June 30, the company's adjusted EBITDA was $87 million, of which $22 million (25%) was from noncash stock compensation that we view as lower quality compared with core earnings." S&P Global economists now expect U.S. GDP growth of 1.8% (versus 2.4% in June 2022) and assess the risk of recession in the next 12 months as 45% (within a 40%-50% range). They predict risks will increase as we head into 2023. Our base-case expectation is that the company's operating performance will likely weaken in 2022 compared with last year as macroeconomic headwinds could lead to lower fee revenue from leasing and capital markets activities. For the six months ended June 30, 2022, gross revenue increased by 31.2% on a year-over-year basis to C$620 million, mostly driven by higher commission revenue. Total commission revenue, which is higher margin but less stable, was C$362.5 million, or approximately 58% of gross revenue. Over the same period, the company's net loss based on International Financial Reporting Standards (IFRS) increased to C$111.7 million from C$58.5 million last year due to higher variable compensation and other operating expenses, as well as foreign exchange loss, partly offset by higher commission revenue. S&P expects Avison Young to maintain adequate liquidity. In August 2022, the company upsized its revolving facility to US$80 million from US$60 million, of which, around US$39 million was outstanding as of June 30, 2022. In connection with the upsizing of the revolving facility, the company also terminated the C$50 million facility from CDPQ. As of June 30, 2022, Avison Young had cash on balance sheet of about C$14 million. The company's revolving facility has a maximum total leverage ratio covenant of 5.25x and is applicable only if the amount outstanding under the revolver exceeds 35% of the commitment. This covenant will remain unchanged pro forma the proposed US$50 million term loan issuance. As of June 30, 2022, the company is in compliance with the covenant. There are no financial covenants under the company's existing senior secured term loan. S&P said, "The stable outlook over the next 12 months reflects S&P Global Ratings' expectation of EBITDA cash interest coverage between 1.0x-2.0x. The outlook also considers Avison Young's nominal market position, adequate liquidity, and leverage covenant cushion. "We could lower the rating over the next 12 months, if EBITDA cash interest coverage declines below 1.0x, liquidity deteriorates, or the company's covenant cushion becomes very tight and we are less confident that it will be able to obtain a waiver. "The rating upgrade is unlikely over the next 12 months. Over the longer term, we could raise the ratings if the company reports operating profitability on a sustained basis, leverage declines well below 5.0x, and EBITDA cash interest coverage remains between 2.0x-3.0x." B&G FOODS: S&P Downgrades ICR to 'B-', Outlook Stable ----------------------------------------------------- S&P Global Rating lowered its issuer credit rating on Parsippany, N.J.-based packaged food company B&G Foods Inc. to 'B-' from 'B'. At the same time, S&P lowered its issue-level ratings on the company's senior secured credit facilities to 'B+' from 'BB-' and on its senior unsecured notes to 'CCC+' from 'B-'. The recovery ratings remain '1' and '5', respectively. S&P said "The stable outlook reflects our expectation that B&G will gradually restore EBITDA and decrease leverage to the 7.5x to 8x range through additional price increases to offset further inflationary pressures. We also expect the company to pay down some of its revolver borrowings as it heads into its seasonally stronger cash flow quarters in the back half of the year. "The downgrade reflects our expectation that B&G will not reduce leverage to below 7x until fiscal 2024. For the quarter-ended July 2, 2022, organic revenues grew 3.2%, driven by 4.4% price/mix, partially offset by a 1% volume decline and negative foreign currency. S&P Global Ratings'-adjusted EBITDA for the quarter dropped more than 35% versus 2021 and EBITDA margin declined 13.6% from 17.8% in 2021, because of higher input costs, including raw materials and transportation. As a result, leverage increased to 8.3x from 6.8x in the same period in 2021. We previously expected the company to maintain at least $320 million in adjusted EBITDA to maintain leverage around 7x or below. We now forecast adjusted EBITDA around $300 million, with leverage exceeding 7.5x for fiscal 2022. We expect sequential improvements in profitability through the back half of 2022 as the company realizes its price increases, but we do not expect meaningfully better margins and leverage to decline below 7x until fiscal 2024. "B&G's portfolio is highly exposed to rising input costs and large private-label competitors. B&G's portfolio is highly exposed to soybean oil, corn, and wheat, commodities that have risen substantially since the Russia-Ukraine conflict began. Its largest cost increases remain in freight, fuel, and oils. The company's pricing actions have lagged input cost and fuel increases, mostly in its Crisco oils business, diminishing profits. We believe B&G was cautious in its pricing actions given the high degree of private-label penetration in the category, at more than 30% dollar market share (according to Euromonitor)." Additionally, the company attempted to implement price increases with reduced packaging sizes, but that took longer than expected due to supply chain constraints. The company has implemented about $200 million in price increases for 2022, but realized only about $57 million through the first half. B&G's largest brand is Green Giant, which also faces a high degree of private-label competition, at more than 40% dollar share in the frozen aisle (per Euromonitor). A large portion of B&G's remaining portfolio faces competition from dominant competitors with stronger brands, which we believe limits its pricing power. The Green Giant and Crisco acquisitions have resulted in greater cash flow volatility, which may no longer support the company's high dividend payout. B&G has historically generated good free operating cash flow (FOCF) to support its high dividend payout. However, since acquiring Green Giant, cash flows have been inconsistent because of the business' intensive working capital requirements (agricultural commodities) and high seasonality. S&P said, "We believe Crisco added another highly commodity driven business that adds greater cash flow volatility. We believe management has yet to demonstrate consistency in managing both businesses. Due to this volatility, we believe the company's longstanding dividend payout of roughly $130 million a year is no longer sustainable and limits its ability to meaningfully reduce leverage. With the full dividend payout, we forecast negative discretionary cash flow (FOCF less dividends and share repurchases) for fiscal 2022 and 2023, leaving little cash for sizable debt reduction." B&G's depressed stock price limits the likelihood it would issue additional sizable equity to repay debt. Since August 2021, the company has issued equity through an at-the-market (ATM) equity program. The company generated $112.5 million in proceeds in fiscal 2021. Through the first half of 2022, B&G has generated $66.5 million in gross proceeds. The company used proceeds to pay down revolver borrowings and has about 1 million shares remaining under the program. While this program helped modestly reduce leverage, given B&G's relatively weaker stock price performance recently and its high leverage, we believe another large equity offering is unlikely. Historically, B&G was a frequent issuer in the equity markets to help fund acquisitions, which limited its leverage from rising well above 5.5x, keeping it in line with its long-term leverage target. S&P said, "The company sought covenant amendment relief from the second quarter of 2022 through the first quarter of 2024. While we view this proactive relief as prudent, we also believe it indicates a likelihood that leverage will remain elevated well into 2023. On June 28, 2022, the company received an amendment to its credit agreement to temporarily increase its consolidated leverage ratio under its revolving credit facility. The amendment allows the company to reach up to 7.5x for the second quarter of 2022 and 8x leverage from 7x, starting in the third quarter of 2022 through September 2023. Although the company was in compliance with the leverage covenant at the end of the second quarter, EBITDA cushion was thin at about 6%. We project cushion to remain under 10% over the next several quarters. "We believe the company's recent segment realignment announcement signals a closer look at its portfolio. Under its new CEO, Casey Keller, the company announced four business units and senior leadership appointments to establish a business unit structure. The new business units include spices and seasonings, meals, frozen and vegetables, and specialty. The company expects to announce expected performance targets for each unit in the coming months. We believe this realignment could drive greater efficiencies. However, it could also result in potential divestitures, high organizational realignment costs, a review of its M&A strategy, and possibly revised financial policies. "The stable outlook reflects our expectation over the next 12 months that B&G will successfully implement price increases to offset further inflationary pressures, with S&P Global Ratings'-adjusted leverage between 7x and 8x over the next year. "We could lower the ratings if B&G's leverage increases due to weak operating performance or more aggressive financial policies resulting in liquidity constraints or an unsustainable capital structure." This could occur if: -- B&G's profits deteriorate further because of continued high inflation and the company cannot offset it with pricing actions and cost savings; -- The company maintains its high dividend payout ratio while operating results remain depressed, resulting in negative discretionary cash flow that further limits cash available for debt repayment; -- Covenant cushion remains tight or we believe the company could breach its leverage covenant without a waiver or amendment; or -- The company does not proactively repay debt and instead pursues additional large, debt-financed acquisitions, or shareholder returns. S&P could raise the ratings if operating performance improves, and it believes B&G will sustain S&P Global Ratings'-adjusted leverage below 7x. This could occur if the company: -- Takes actions to mitigate inflationary pressures and improve EBITDA; -- Repays debt with excess cash flow, potentially by lowering its dividend payout; and -- Demonstrates less aggressive financial policies by reducing its dividend payout or does not undergo large, debt-financed acquisitions while leverage is elevated. ESG credit indicators: E-2, S-2, G-2 BLACK CREEK: Unsecureds to Get 100% Under Plan ---------------------------------------------- Black Creek Condos LLC, et al., submitted a Second Amended Disclosure Statement explaining their Chapter 11 Plan. The Debtors seek to accomplish payments under the Plan from (i) cash on hand on the Effective Date, including (a) cash on hand in the Hook & Fatovich, LLC Attorney Trust Account representing capital contributions previously made to the Debtors by NMR Associates, LLC ("NMR"), a non-Debtor entity wholly owned by the Debtors' sole principal, and (b) a capital contribution from Moshe Rudich; and (ii) revenue from the Debtors' continued business operations. The Effective Date of the proposed Plan is the date on which a Confirmation Order becomes a final order. Under the Plan, Class 5 General Unsecured Claim of Pender East Credit 1 REIT, LLC pursuant to its Law Division Judgment totaling $742,163 (includes interest at the current post-judgment rate of $2.25% over 5 years and takes into account on-going payments make over the 60-month Plan payment period). Amount due as of Effective Date shall be calculated by taking the amount due Pender pursuant to its Law Division Judgment as of the Effective date, and deducting the Class 1 Claim payment to Pender on the Effective Date. Pender East Credit 1 REIT, LLC shall receive 100% payment of its Class 5 General Unsecured Claim, with post-judgment rate of interest pursuant to N.J. Rule 4:42-11(a)(iii). The interest rate is currently 2.25% and will be adjusted as necessary as the annual rate is set pursuant to N.J. Rule 4:42-11(a)(iii). Payment shall be made in equal semi-annual installments over a period of 60 months commencing 6 months after the Effective Date. Class 5 is impaired. Class 6 General Unsecured Claims totaling $4,857.45 will each receive 100% payment of its claim. Payment shall be made in equal semi-annual installments over a period of 60 months commencing 6 months after the Effective Date. Class 6 is impaired. Pender's General Unsecured Claim is being treated in a separate class because it is dissimilar to the Class 6 Claimants for the following reasons: (i) Pender is the only General Unsecured Creditor that reduced its pre-petition claim to a judgment prior to the Petition Dates and is therefore entitled to post-judgment interest pursuant to N.J. Rule 4:42-11(a)(iii); and (ii) Pender has a third-party to attempt to collect from, specifically, Moshe Rudich, who personally guaranteed the Debtors’ obligations to Pender. The Plan will be funded by (i) cash on hand on the Effective Date, including (a) cash on hand in the Hook & Fatovich, LLC Attorney Trust Account representing capital contribution(s) previously made by NMR Associates, LLC ("NMR"), a non-Debtor entity wholly owned by the Debtors' sole principal and (b) a capital contribution from Moshe Rudich; and (ii) revenue from the Debtors' continued business operations. Counsel for Jointly Administered Debtors: Ilissa Churgin Hook, Esq. Milica A. Fatovich, Esq. HOOK & FATOVICH, LLC 1044 Route 23 North, Suite 100 Wayne, NJ 07470 Tel: (973) 686-3800 Fax: (973) 686-3801 A copy of the Second Amended Disclosure Statement dated August 10, 2022, is available at https://bit.ly/3QlRNUW from PacerMonitor.com. About Black Creek Condos Black Creek Condos LLC, et al., own a combined total of 23 condominium units in the Black Creek Sanctuary Condominium Association development known as the Black Creek Sanctuary located in the Township of Vernon, New Jersey. Black Creek Condos LLC filed a Chapter 11 petition (Bankr. D.N.J. Lead Case No. 21-15192) on June 24, 2021, together with its two affiliates, Black Creek Condos 57592 LLC and Black Creek Condos 57593 LLC. A third affiliate, Camp Monte LLC, sought Chapter 11 protection (Bankr. D.N.J. Case No. 21-15195) the next day. In the petitions signed by Moshe Rudich, managing member, each Debtor estimated $1 million to $10 million in both assets and liabilities. The cases are jointly administered under Black Creek Condos LLC's case. Judge Stacey L. Meisel oversees the cases. Hook & Fatovich, LLC, serves as counsel for the Debtors. BOLDFACE PROPERTIES: Case Summary & Five Unsecured Creditors ------------------------------------------------------------ Debtor: Boldface Properties LLC 5615 Sidney Rd Cincinnati, OH 45238 Case No.: 22-11381 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Southern District of Ohio Debtor's Counsel: J. Christian A. Dennery, Esq. DENNERY, PLLC 7310 Turfway Rd, Ste 550 Florence, KY 41042 Tel: 859-692-3685 Fax: 859-286-6726 Email: jcdennery@dennerypllc.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by John C. Klosterman as corporate reprentative. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UADF53Y/Boldface_Properties_LLC__ohsbke-22-11381__0001.0.pdf?mcid=tGE4TAMA BOY SCOUTS: Modifies Latter Day Treatment Under Plan ---------------------------------------------------- Following the Court's Opinion issued on July 29, 2022, that addressed objections to their Plan, the Boy Scouts of America and Delaware BSA, LLC submitted a Third Modified Fifth Amended Chapter 11 Plan of Reorganization. The Debtors have conducted a detailed review of the Confirmation Opinion and have modified the Plan and Confirmation Order in a manner consistent with the Court's rulings. The Debtors submit that, with these modifications, all objections have been adjudicated or otherwise resolved in accordance with the Confirmation Opinion. Because the Court declined to approve the TCJC Settlement and therefore the Church of Jesus Christ of Latter-day Saints' inclusion in the Plan as a Contributing Chartered Organization, the Debtors and the supporting parties to the Plan, including TCJC, have agreed that TCJC shall be treated as a Participating Chartered Organization under the Plan. As the Court is aware, treatment as a Participating Chartered Organization is the default treatment for all Chartered Organizations that do not "opt-out" of such treatment or become Contributing Chartered Organizations. A copy of the Third Modified Fifth Amended Chapter 11 Plan of Reorganization dated August 12, 2022, is available at https://bit.ly/3PCfmYx from PacerMonitor.com. Attorneys for the Debtors and Debtors: Jessica C. Lauria, Esq. WHITE & CASE LLP 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 819-8200 E-mail: jessica.lauria@whitecase.com - and - Michael C. Andolina, Esq. Matthew E. Linder, Esq. Laura E. Baccash, Esq. Blair M. Warner, Esq. WHITE & CASE LLP 111 South Wacker Drive Chicago, IL 60606 Telephone: (312) 881-5400 E-mail: mandolina@whitecase.com mlinder@whitecase.com laura.baccash@whitecase.com blair.warner@whitecase.com - and - Derek C. Abbott, Esq. Andrew R. Remming, Esq. Paige N. Topper, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market St., 16th Floor, P.O. Box 1347 Wilmington, DE 19899-1347 Telephone: (302) 658-9200 E-mail: dabbott@morrisnichols.com aremming@morrisnichols.com ptopper@morrisnichols.com About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC, as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. CAMMAND MACHINING: Seeks to Access $252,780 in Cash --------------------------------------------------- Cammand Machining LLC asks the U.S Bankruptcy Court for the Eastern District of Michigan, Southern Division, for authority to use cash collateral or obtain credit on an interim basis, and pending a final hearing on the matter. The Debtor requires the use of cash collateral to fund debt service and related payments to the Huntington National Bank and the U.S. Small Business Administration, and to pay ordinary and necessary costs and expenses of operating the Debtor's business and preserving the value of HNB and SBA collateral and operating the Debtor's collateral in the amounts set forth in the Budget. Use of cash collateral is also needed to pay costs of the Debtor's professionals as may be approved by the Court. HNB holds a first secured lien on all assets of the Debtor. HNB and the Debtor entered in three notes with a balance as of June 30, 2022 as follows: Note 1, $769,313, Note 2, $634,088, Note 3 $63,496. The SBA has a second lien on all assets of the Debtor for a unforgiven PPP loan in the amount of $118,192. The Debtor is a service shop to the mold and die industry. The Debtor specializes in 3-D contour machining, gun drilling, and 2-D work. At its peak, the Debtor had 18 employees running two shifts with limited hours on the weekend. The Debtor's main sources of work are automotive, aircraft, and aerospace. The majority of the Debtor's customers are in Michigan, Ohio, and Canada. The global COVID-19 pandemic has had a long lasting impact on the Debtor's operations. The Debtor currently has approximately six employees and grosses approximately $92,000 per month. Prior to COVID-19 global pandemic, the Debtor had been able to satisfactorily cover its monthly operating expenses. However, the Debtor negotiated two forbearance agreements with HNB. However, due to the inability to run a second shift and the increased expenses associated with the global supply chain issues operational costs have increased and the Debtor was faced with an imminent closure of the company. During the first three months of the case, the Debtor projects to spend $252,780 to avoid immediate and irreparable harm. The Debtor requests authority to spend these amounts in accordance with the budget, with a 10% variance for each line item in total. On the Petition Date, the Debtor believes that the cash collateral, as defined in 11 U.S.C. 363 consists of: a. Accounts Receivable totaling: $329,132 of which $285,971 are less than 90 days old. b. Available funds held in bank accounts: $13,241 c. Cash on hand: $0 As adequate protection, replacement liens will be provided to HNB and the SBA. HNB also will receive adequate protection payment of $11,000 per month beginning September 5, 2022. The replacement liens will be liens on the Debtor's assets which are created, acquired, or arise after the Petition Date, but limited to only those types and descriptions of collateral in which HNB and SBA held a prepetition lien or security interest. The replacement liens will have the same priority and validity as SBA and HNB respective pre-petition security interests and liens. A copy of the motion and the Debtor's three-month budget is available at https://bit.ly/3zYGsTP from PacerMonitor.com. The budget provides for total expenses, on a monthly basis, as follows: $84,260 for Month #1; $84,260 for Month #2; and $84,260 for Month #3. About Cammand Machining LLC Cammand Machining LLC specializes in CNC machining, gun drilling, and surfacing & design. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-46398) on August 16, 2022. In the petition signed by Clarence Meltzer, managing member, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Scott M. Kwiatkowski, Esq., at Goldstein Bershad & Fried PC is the Debtor's counsel. CAPITAL POWER: S&P Assigns 'BB' Rating on C$350MM Sub Notes ----------------------------------------------------------- S&P Global Ratings assigned its 'BB' rating to Capital Power Corp.'s C$350 million fixed-to-fixed rate subordinated notes series 1 due 2082. The company intends to allocate an amount equal to the net proceeds to finance green assets. Pending such allocation, the company expects to use the proceeds to redeem its series 9 preferred shares, repay amounts drawn on the credit facility, and for other general corporate purposes. S&P said, "We classify the notes as having intermediate equity content because of their subordination, permanence, and optional deferability features, in line with our hybrid capital criteria. As a result, the proposed notes will receive 50% equity treatment for the calculation of credit metrics. "Although the subordinated notes are due in 60 years, the interest margins will increase by 25 basis points (bps) in 2032 (year 10) and a further 75 bps (total of 100 bps from initial spread) in 2052 (year 30). We consider this cumulative 100 bps increase as a material step-up, which, in our opinion, could provide an incentive for Capital Power to redeem the instruments on that call date. Therefore, we consider 2052 as the effective maturity date for the notes. "In line with our criteria, the notes will receive minimal equity content after the first call date in 2032 because the remaining period until their effective maturity will be less than 20 years." The issuer credit rating on Capital Power is 'BBB-', and the outlook is stable. CAREVIEW COMMUNICATIONS: Incurs $2.5M Net Loss in Second Quarter ---------------------------------------------------------------- Careview Communications, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.50 million on $1.70 million of total revenue for the three months ended June 30, 2022, compared to a net loss of $3.02 million on $1.55 million of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $4.85 million on $4.02 million of total revenue compared to a net loss of $5.51 million on $3.91 million of total revenue for the same period in 2021. As of June 30, 2022, the Company had $4.39 million in total assets, $121.58 million in total liabilities, and a total stockholders' deficit of $117.19 million. The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years. As of the six months ended June 30, 2022, the Company had an accumulated deficit of $202,736,963, loss from operations of $856,520, net cash used in operating activities of $79,208, and an ending cash balance of $503,080. As of June 30, 2022, the Company had an operating net working capital of $644,862, which is accounts receivable plus inventory minus accounts payable. Careview said, "Management has evaluated the significance of the conditions described above in relation to the Company's ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the condensed consolidated financial statements were issued. While management will look to continue funding operations by increased sales volumes and raising additional capital from sources such as sales of its debt or equity securities or loans to meet operating cash requirements, there is no assurance that management's plans will be successful." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1377149/000138713122008711/crvw-10q_063022.htm About CareView Communications CareView Communications, Inc. -- http://www.care-view.com-- is a provider of products and on-demand application services for the healthcare industry, specializing in bedside video monitoring, software tools to improve hospital communications and operations, and patient education and entertainment packages. Its proprietary, high-speed data network system is the next generation of patient care monitoring that allows real-time bedside and point-of-care video monitoring designed to improve patient safety and overall hospital costs. The entertainment packages and patient education enhance the patient's quality of stay. CareView is dedicated to working with all types of hospitals, nursing homes, adult living centers and selected outpatient care facilities domestically and internationally. The Company's corporate offices are located at 405 State Highway 121 Bypass, Suite B-240, Lewisville, TX 75067. Careview Communications reported a net loss of $10.08 million for the year ended Dec. 31, 2021, compared to a net loss of $11.68 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $5.08 million in total assets, $117.78 million in total liabilities, and a total stockholders' deficit of $112.70 million. Dallas, Texas-based BDO USA, LLP, the Company's auditor since 2010, issued a "going concern" qualification in its report dated March 31, 2022, citing that the Company has suffered recurring losses from operations and has accumulated losses since inception that raise substantial doubt about its ability to continue as a going concern. CEL-SCI CORP: Posts $9.6 Million Net Loss in Third Quarter ---------------------------------------------------------- CEL-SCI Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $9.63 million for the three months ended June 30, 2022, compared to a net loss of $8.94 million for the three months ended June 30, 2021. For the nine months ended June 30, 2022, the Company reported a net loss of $28.24 million compared to a net loss of $28.16 million for the nine months ended June 30, 2021. As of June 30, 2022, the Company had $56.89 million in total assets, $18.16 million in total liabilities, and $38.73 million in total stockholders' equity. CEL-SCI stated, "Since inception, the Company has financed its operations through the sale of equity securities, convertible notes, loans and certain research grants. The Company's expenses will continue to exceed its revenues as it continues the development of Multikine and brings other drug candidates into clinical trials. Until the Company becomes profitable, any or all of these financing vehicles or others may be utilized to assist in funding the Company's capital requirements. "Capital raised by the Company has been expended primarily for patent applications, research and development, administrative costs, and the construction and upgrade of the Company's manufacturing and laboratory facilities. The Company does not anticipate realizing significant revenues until entering into licensing arrangements for its technology and know-how or until it receives regulatory approval to sell its products (which could take several years). Thus, the Company has been dependent upon the proceeds from the sale of its securities to meet all of the Company's liquidity and capital requirements and anticipates having to do so in the future. "The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts. The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/725363/000165495422011196/cvm_10q.htm About CEL-SCI Corporation CEL-SCI Corporation -- http://www.cel-sci.com-- is a clinical-stage biotechnology company focused on finding the best way to activate the immune system to fight cancer and infectious diseases. The Company's lead investigational therapy Multikine is currently in a pivotal Phase 3 clinical trial involving head and neck cancer, for which the Company has received Orphan Drug Status from the FDA. The Company has operations in Vienna, Va., and near Baltimore, Md. CEL-SCI reported a net loss of $36.36 million for the year ended Sept. 30, 2021, a net loss of $30.26 million for the year ended Sept. 30, 2020, and a net loss of $22.13 million for the year ended Sept. 30, 2019. As of March 31, 2022, the Company had $64.16 million in total assets, $19.03 million in total liabilities, and $45.13 million in total stockholders' equity. CELSIUS NETWORK: Togut Firm Advise on Custodial Account Holders --------------------------------------------------------------- In the Chapter 11 cases of Celsius Network LLC, et al., the law firm of Togut, Segal & Segal LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the Ad Hoc Group of Custodial Account Holders. As of Aug. 19, 2022, members of the Ad Hoc Group of Custodial Account Holders and their disclosable economic interests are: Custody Wallet Earn -------------- ---- William Saunders $290,985.47 $26,637.46 David Little $1,850,000 $1,20 Jonandre Dimetros $59,150 $48.95 Stephen Dreikosen $258,901.94 $443.14 Yanxing Ralbovsky $15,500 $2,000 Cheryl Bierbaum $143,955.37 $6,783.44 Elvin R. Turner $155,220.33 Frank Crespo $117,426.79 Ashley Mansour $87,150.26 $82.94 Craig Robinson $56,397.89 $63.83 Karen McLain $47,113.64 $40.37 Julius Gasso $126,088.14 $767.93 Ghassan Haddad $301,743 $89.00 Aaron Stearns $38,162 $0.50 Ravi Abuvala $1,558,813 $1,162 Anthony Calderone $47,701.43 $16,714.70 Rishi Rav Yadav $1,484,101.17 $2,278,538.21 Frank Malcom Bradley $135,071.63 Edward W Champigny $4,000,000 $1,000 Ramzi Audeh $54,102.30 $100.80 Thomas Dean Fikar $438,017.56 $621.23 Ilene Benator $209,987.35 $7,816.37 Gilbert Castillo $501,277.78 $19,540.89 Robert Christiansen $320,727.99 $3,769,521.06 Adrien Guillo $100,600 $100.00 On or about August 1, 2022, the initial members of the Ad Hoc Group of Custodial Account Holders retained the Togut Firm to represent it in connection with the above-captioned Chapter 11 Cases. Additional members continue to join the Ad Hoc Group of Custodial Account Holders on an ongoing basis, and the Togut Firm will file additional Statements as necessary to comply with Bankruptcy Rule 2019. Each member of the Ad Hoc Group of Custodial Account Holders has consented to the Togut Firm's representation of the group. The Togut Firm does not represent any member of the Ad Hoc Group of Custodial Account Holders in its individual capacity or with respect to any property interests other than in connection with the Celsius Custody Service. Counsel to Ad Hoc Group of Custodial Account Holders can be reached at: TOGUT, SEGAL & SEGAL LLP Kyle J. Ortiz, Esq. Bryan M. Kotliar, Esq. One Penn Plaza, Suite 3335 New York, NY 10119 (212) 594-5000 E-mail: kortiz@teamtogut.com bkotliar@teamtogut.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3weTdbN and https://bit.ly/3ABcg2v About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtor estimated assets and liabilities between $1 billion and $10 billion. Joshua A. Sussberg, of Kirkland & Ellis LLP, is serving as legal counsel, Centerview Partners is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor. Kirkland & Ellis LLP is serving as legal counsel, Centerview Partners is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to Celsius. Stretto, the claims agent, maintain the page https://cases.stretto.com/celsius CELSIUS NETWORK: U.S. Trustee Seeks Appointment of Examiner ----------------------------------------------------------- William K. Harrington, United States Trustee for Region 2, filed with the U.S. Bankruptcy Court for the Southern District of New York a motion for the entry of an order directing the appointment of an examiner in the case of Celsius Network LLC, et al. The Debtors operate a crypto asset-based finance platform that provides financial services to institutional, corporate, and retail clients across more than 100 countries. The market for cryptocurrency is relatively new, purposefully opaque, and, at best, loosely regulated. The U.S. Trustee cites that it lacks transparency, which has resulted in widespread confusion among the Debtors' customers and other parties in interest, requiring the immediate appointment of an examiner under 1 U.S.C. section 1104(c)(1). This lack of visibility didn't start with the bankruptcy filing; it has been ongoing and is evidenced by the sudden changes in types of customer accounts and extensive customer confusion about the status of individual assets. There is no real understanding among customers, parties in interest, and the public as to the type or actual value of crypto held by the Debtors or where it is held. The U.S. Trustee believes that an independent examiner is necessary to investigate and report in a clear and understandable way on the Debtors' business model, their operations, their investments, their lending transactions, and the nature of the customer accounts to ensure public confidence in the integrity of the bankruptcy system and to neutralize the inherent distrust creditors and parties in interest have in the Debtors. The U.S. Trustee asserts that there are numerous questions in this case as to the Debtors' management and their role in creating the Debtors' current illiquidity (i.e., the prepetition failure of the Debtors and their affiliates to adequately collateralize their loans on an institutional level and the Debtors' repayment of hundreds of millions of dollars in loans during the ninety days prepetition) that require investigation by an impartial third party. Based on the limited facts provided, the Debtors' capital structure includes unsecured debt in excess of the $5 million hreshold of Bankruptcy Code section 1104(c)(2). Thus, the appointment of an examiner is not only necessary and in the best interest of creditors and parties in interest, but it is also mandatory. Accordingly, an examiner should be appointed to provide the Court, the United States Trustee, creditors, and other parties in interest with transparency and clarity as to the business structure, practices, and liquidity of the Debtors. A copy of the motion is available at https://bit.ly/3ClNdBK from Stretto, the claims agent. About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Netork, Three Arrows Capital and Voyager Digital. Celsius Network LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtor estimated assets and liabilities between $1 billion and $10 billion. Kirkland & Ellis LLP is serving as legal counsel, Centerview Partners is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to Celsius. Stretto, the claims agent, maintains the page https://cases.stretto.com/celsius An official committee of unsecured creditors has been appointed in the case. Each of the committee members holds crypto (or digital) assets through the Celsius platform. The Committee has engaged White & Case LLP as its counsel; M3 Partners as restructuring advisor; Elementus as blockchain consultant; Perella Weinberg Partners as investment banker; and Kroll Inc. to establish a website and call center to provide information regarding the bankruptcy process. CINEWORLD GROUP: Regal Cinemas Plan Chapter 11 Filing ----------------------------------------------------- Cineworld Group PLC, the world's second largest cinema chain operator, is preparing to file for Chapter 11 bankruptcy in the U.S., the Wall Street Journal reported, citing people familiar with the matter. The London-based cinema company has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, The Journal's sources said. Cineworld is expected to file a chapter 11 petition in the U.S. and is also considering filing an insolvency proceeding in the U.K., the sources said. Cineworld, which operates under Cinema City, Picturehouse, Regal and Yes Planet brands, declined to comment on the WSJ report. Cineworld in an Aug. 17 statement that it remains in active discussions with various stakeholders and is evaluating various strategic options to both obtain additional liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction. It added that any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld. "Despite a gradual recovery of demand since re-opening in April 2021, recent admission levels have been below expectations. These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the Group's liquidity position in the near term," Cineworld said Aug. 17. "Consequently, the Group has been taking proactive steps to ensure it has the balance sheet strength and flexibility to adapt to market conditions. This includes significant previously disclosed operational and financial initiatives to manage costs and enhance liquidity. The Group believes these steps are required to optimize its ability to maximize enterprise value as part of the recovery in the cinema industry." Reuters recounts that in 2020, when the world was combating the pandemic, Cineworld battled to survive a coronavirus collapse in film-making and cinema-going as the lockdown kept viewers away from stepping out. After that, the company has seen a shortage of big-budget films which cut the chances of a bounce back from the pandemic-lows. Cinema chain operators have seen a downfall as audiences have become addicted to streaming movies at home. "We don't have anything to add beyond the statement we made on Wednesday," a spokesperson for the company said. Net debt stood at $8.9 billion, including lease liabilities of $4.84 million, at the end of 2021, with cash and restricted cash of $354.3 million. Reuters notes that Cineworld is also facing payment obligations to former shareholders of its U.S. division Regal and a potential multimillion-dollar fine in a dispute with Canada's Cineplex (CGX.TO). Refinitiv calculations assign Cineworld a combined credit score of 1, indicating it is highly likely to default in the next year. Shares in the London-listed company slumped more than 81% to a record low of 1.8 pence after the WSJ said Cineworld is expected to file a Chapter 11 petition in the United States and is also considering insolvency proceedings in the UK. About Cineworld Group PLC Cineworld Group PLC was founded in 1995 and is now one of the leading cinema groups in Europe. The Company offers a range of venues for corporate or private events where its digital projection facilities can display any type of media, from powerpoint presentations to feature films. Cineworld Group serves customers in the United Kingdom. CIP 1106 11TH ST: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: CIP 1106 11th St, LLC 4910 W. 1st Street Los Angeles, CA 90004 Business Description: The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Central District of California Case No.: 22-14521 Judge: Hon. Vincent P. Zurzolo Debtor's Counsel: Mathew D. Resnick, Esq. RHM LAW, LLP 17609 Ventura Blvd. Ste 314 Encino, CA 91316 Tel: (818) 285-0100 Fax: (818) 855-7013 Email: matt@rhmfirm.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert W. Clippinger, managing member of CIP Capital Cathedral LLC, which is the sole managing member of CIP 1106 11th St, LLC. The Debtor did not file a list of its 20 largest unsecured creditors together with the petition. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/D356LAI/CIP_1106_11th_St_LLC__cacbke-22-14521__0001.0.pdf?mcid=tGE4TAMA CORE & MAIN: Moody's Affirms Ba3 CFR & Cuts Secured Term Loan to B1 ------------------------------------------------------------------- Moody's Investors Service affirmed Core & Main LP's Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating. Moody's downgraded the senior secured first lien term loan rating of Core & Main to B1 from Ba3. The company's speculative grade liquidity rating is unchanged at SGL-1. The rating outlook is stable. "The downgrade of the term loan reflects weakened recovery for that class of debt, which now comprises a lower share of the overall capital structure following an upsize of the ABL revolver (unrated) to $1.25 billion," said Griselda Bisono, Moody's Vice President – Senior Analyst. "The B1 rating of the company's $1.5 billion term loan is one notch below the CFR, despite the term loan's first lien on substantially all assets not pledged to the revolver, because the ABL has a first lien priority on the relatively more liquid ABL collateral, including accounts receivable, inventory, deposit accounts and cash, resulting in the subordination of the term loan creditors," added Bisono. The affirmation of the CFR reflects Moody's expectations of continued strong credit metrics through fiscal 2023, including debt / EBITDA trending to 2.1x. The stable outlook reflects Moody's expectations that Core & Main will continue to grow both organically as well as through tack-on acquisitions while maintaining solid operating margins above 7.5%. The stable outlook also reflects maintenance of very good liquidity. Affirmations: Issuer: Core & Main LP Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Downgrades: Issuer: Core & Main LP Senior Secured Bank Credit Facility, Downgraded to B1 (LGD4) from Ba3 (LGD4) Outlook Actions: Issuer: Core & Main LP Outlook, Remains Stable RATINGS RATIONALE The Ba3 CFR reflects Core & Main's position as one of the top water products distributors in the US with a diversified product offering, large customer base and strong end market fundamentals. Moody's expects solid revenue growth over the next two years as the municipal end market and, to a lesser extent, the non-residential end market benefit from the recently passed Infrastructure Investment and Jobs Act, which will provide long-term federal financing for infrastructure projects in the US. The residential end market will experience slower growth over the next two years after stronger than normal performance following COVID pandemic lockdowns. Moody's expects operating margins will remain strong between 9-10%, bolstered by the company's private label offerings, better pricing initiatives and driving SG&A productivity. These factors are counterbalanced by the cyclical nature of Core & Main's end markets as well as the company's exposure to commodity pricing, specifically those used to produce PVC pipe and ductile iron pipe products, which can create cash flow volatility. Furthermore, the rating is constrained due to ownership concentration by private equity firm CD&R, which controls about 70% of the total voting power. Concentrated decision making creates the potential for event risk and decisions that favor shareholders over creditors. Core & Main's SGL-1 rating reflects Moody's expectation of very good liquidity over the next 12 to 18 months and considers strong positive free cash flow between $400-500 million annually in both fiscal 2022 and fiscal 2023. Liquidity is supported by a $1.25 million ABL facility due 2026 that is expected to remain largely available. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade would require improved governance through the reduction in CD&R's ownership and influence over Core & Main. In addition, upward ratings movement would reflect debt-to-EBITDA below 3.0x and RCF-to-debt closer to 18% while maintaining of very good liquidity. A ratings downgrade could result should the company experience a meaningful deterioration in credit metrics, including debt-to-EBITDA sustained above 4.0x, a significant contraction in EBITDA margin and low or negative free cash flow. The engagement in debt-funded acquisitions or shareholder distributions could also lead to a ratings downgrade. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. Core & Main LP, headquartered in Saint Louis, Missouri, is a US based distributor of water, sewage, drainage, storm water, and fire protection products. Revenue for the twelve month period ended May 1, 2022 was $5.5 billion. COUNTRYWIDE INSURANCE: A.M. Best Affirms 'b+' LongTerm ICR ---------------------------------------------------------- AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of C++ (Marginal) and the Long-Term Issuer Credit Rating of "b+" (Marginal) of Country-Wide Insurance Company (Country-Wide) (New York, NY). The Credit Ratings (ratings) reflect Country-Wide's balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM). The outlook revisions for Country-Wide reflect a change in its risk-adjusted capitalization assessment level to adequate from very strong, as measured by Best's Capital Adequacy Ratio (BCAR), mainly due to significant surplus erosion that led to a capital decline, as well as ongoing difficulty in adequately setting reserves. Reserves, which continue to develop adversely, were strengthened by $10 million in 2021, leading to the 25% surplus erosion. Additionally, Country-Wide has elevated net and gross underwriting leverage measures, reflective of high reinsurance dependence. Surplus erosion continued through the first quarter of 2022 due to the termination of the company's 15% quota share treaty. Country-Wide continues to refine their risk appetite by removing unprofitable and non-standard business. Management has implemented a number of corrective actions to improve performance, including rate increases and non-renewal of undesirable risks that impact profitability. To offset the exit of undesirable business, Country-Wide is generating more business from their core brokers that generate better loss results with lower average loss costs. Production from these brokers continues to increase year over year. Prior to 2021, results were showing signs of improvement due to a formalized and continually evolving ERM. CREATD INC: Incurs $8.7 Million Net Loss in Second Quarter ---------------------------------------------------------- Creatd, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $8.70 million on $1.63 million of net revenue for the three months ended June 30, 2022, compared to a net loss of $8.56 million on $970,857 of net revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $15.59 million on $2.97 million of net revenue compared to a net loss of $15.21 million on $1.71 million of net revenue for the same period during the prior year. As of June 30, 2022, the Company had $10.13 million in total assets, $11.63 million in total liabilities, and a total stockholders' deficit of $1.50 million. At June 30, 2022, the Company had a working capital deficit of $6,896,184 as compared to a working capital deficit of $945,773 at Dec. 31, 2021, an increase in working capital deficit of $5,950,411. The increase is primarily attributable to a reduction in cash, prepaid expenses and other current assets, an increase in accounts payable and notes payable, as well as an increase in deferred revenue resulting primarily from an increase in Vocal+ customers opting for annual subscriptions, whose revenues are amortized over a 12-month period. This was offset by an increase in accounts receivable. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001357671/000121390022048219/f10q0622_creatdinc.htm About Creatd Inc. Headquartered in Fort Lee, NJ, Creatd, Inc. -- https://creatd.com -- is a company whose mission is to provide economic opportunities to creators by multiplying the impact of platforms, people, and technology. The Company operates four main business segments: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Creatd reported a net loss of $37.38 million for the year ended Dec. 31, 2021, a net loss of $24.21 million for the year ended Dec. 31, 2020, and a net loss of $8.04 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $9.34 million in total assets, $6.23 million in total liabilities, and $3.11 million in total stockholders' equity. CROSBY US: Moody's Affirms 'B3' CFR & Alters Outlook to Stable -------------------------------------------------------------- Moody's Investors Service affirmed Crosby US Acquisition Corp.'s corporate family rating at B3 and probability of default rating at B3-PD. Moody's also affirmed the rating on the company's senior secured first lien credit facilities at B2 and second lien term debt at Caa2. At the same time, Moody's changed the outlook to stable from negative. The revision of the outlook to stable reflects the company's improving prospects going into 2023 given the stabilization in most of the company's end markets, including oil & gas and the infrastructure and construction sectors that represents about 42% of revenue. Additionally, Moody's expects the acquisition of Kito Corporation ("Kito") announced on May 16th, to both reduce leverage and broaden Crosby's portfolio mix and geographic reach. Moody's further expects leverage to decline from about 8.5x as of June 30, 2022 to 6.0x by year end 2022. Moody's took the following actions on Crosby US Acquisition Corp.: Affirmations: Issuer: Crosby US Acquisition Corp. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Gtd Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3) Gtd Senior Secured 1st Lien Revolving Credit Facility, Affirmed B2 (LGD3) Gtd Senior Secured 2nd Lien Term Loan, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: Crosby US Acquisition Corp. Outlook, Changed To Stable From Negative RATINGS RATIONALE Crosby's credit profile reflects its high financial leverage for its business risk that considers its exposure to highly cyclical and capital intensive end markets and a competitive operating landscape. For fiscal 2022, Moody's expects debt-to-EBITDA to be about 6.0x (Moody's adjusted) pro forma for the pending acquisition of Kito, headquartered in Yamanashi, Japan. Kito is a manufacturer of manual and electric chain hoists, lever hoists, wire rope hoists, chain slings and other below-the-hook devices. The combination will significantly increase Crosby's scale as pro forma revenue and EBITDA will approximate $1.0 billion and over $175 million (Moody's adjusted), respectively, for the year ending December 31, 2022. Nevertheless, the leverage profile has improved owing to an industrial end market recovery and increased production efficiencies. Moody's expects that positive end market fundamentals will continue to support demand for Crosby's products into 2023 due to the backlog and the recent infrastructure spending bill. This should lead to moderately better credit metrics over the next year, with leverage falling to about 5.6x in 2023 and EBITA margin sustained at a healthy 14.6%, aided by synergies and cross sell opportunities with Kito. However, Moody's does assume that Crosby could face margin pressures from labor inflation and commodity headwinds. Furthermore, the fragmented and competitive landscape for Crosby's products makes bolt-on acquisitions a potential. However, Moody's expects any acquisitions to be remote at this time until the company has completed the integration of Kito. The company's adequate liquidity, as well as its well-recognized brands, diversification by customers, product and end market and global presence that will be enhanced by the acquisition, support the credit profile. Moody's believes that Crosby will maintain adequate liquidity over the next 12 to 18 months. The company had about $45 million of cash at June 30, 2022 and is projected to have about $100 million by year end 2022. Moody's anticipates breakeven to modestly positive free cash flow of about $25 million over the next 24 months. The company's current $70 million revolver was fully available as of June 30, 2022 and expected to remain undrawn. The company has a favorable maturity profile, with the revolver expiring in 2024 and no other maturities ahead of that. In terms of corporate governance, the company's high leverage in part reflects its private equity ownership. Event risk is high for potential dividends to the sponsor or debt funded acquisitions that would further increase the leverage, weaken liquidity or bring integration risks. Moody's also notes that the integration of Kito Corporation, an Asian manufacturer of lifting products, is occurring amid a broader slowdown in the general economy, which could impact the pace in achieving the company's targeted acquisition synergies. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded with deteriorating liquidity, including weaker than expected free cash flow or a reliance on revolver borrowings. The ratings could also be downgraded with business conditions worsening that lead to deterioration in credit metrics. A more aggressive financial policy, including debt fund shareholder distributions or acquisitions that increase leverage, could also result in a downgrade. The ratings could be upgraded should market conditions improve along with the broader macroeconomic environment. Over time, the ratings could be upgraded with sustained improvement in operating performance such that Moody's expects debt-to-EBITDA to be sustained below 5.0x, EBITA-to-interest above 1.5x. Further, Moody's would expect maintenance of good liquidity, including free cash flow to debt in the high single-digit range, for a rating upgrade. The principal methodology used in these ratings was Manufacturing published in September 2021. Crosby US Acquisition Corp, based in Richardson, Texas, a subsidiary of Crosby Worldwide Ltd, is a manufacturer of highly engineered lifting and rigging equipment, as well as customized material handling solutions. Revenue was about $413 million for the LTM period ended June 30, 2022. Crosby is owned by affiliates of Kohlberg Kravis Roberts & Co. L.P. (KKR). CS GROUP: Wins Cash Collateral Access on Final Basis ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Galveston Division, authorized CS Group LLC to use cash collateral on a final, in accordance with the budget, with a 10% variance. The Debtor is permitted to use cash collateral to pay the expenses shown on the budget. The Debtor reserves all rights with respect to further use of cash collateral including the right to modify the Order. The Court said the Order may be modified by agreement between the Debtor and its secured lenders, Alecs Young, Rodolpho Ruiz, Ryan Kasemeyer, Walter Alvarez, and Jet Lending, LLC. As previously reported by the Troubled Company Reporter, CS Group argued it is essential to the continued operation of its businesses to have the ability to utilize cash collateral to maintain insurance, clean and maintain its properties, and otherwise repair individual units to relet them. The Debtor believes adequate protection will be provided through the maintenance of existing collateral levels or otherwise. The proposed utilization of cash collateral will not, in any event, impair the Lenders' position. The Debtor believes the Lenders' interests are adequately protected by equity cushions in the Properties and the continued insurance maintenance, repair and insurance of the collateral. A copy of the order and the Debtor's final budget is available at https://bit.ly/3T3BLRa from PacerMonitor.com. The budget provides for total disbursements, on a monthly basis, as follows: $19,270 for the month of August 2022; $35,022 for the month of September 2022; $25,535 for the month of October 2022; and $25,535 for the month of November 2022. About CS Group LLC CS Group LLC owns three rental properties in Galveston County, Texas: a. 912 Church St., Galveston, Texas; b. 918 Winnie St., Galveston, Texas; and c. 732 1st Ave. N., Texas City, Texas. CS Group LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-80112) on June 6, 2022. In the petition signed by Carolina Dupuis, managing member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. Vianey Garza, Esq., at Dore Rothberg McKay, PC is the Debtor's counsel. CTI BIOPHARMA: BVF Partners Reports 27.83% Equity Stake ------------------------------------------------------- BVF Partners L.P., on behalf of itself and its affiliates, filed a Schedule 13D/A with respect to its current ownership of shares of CTI BioPharma Corp. As reported by BVF in its Schedule 13D/A filing, the Reporting Persons hold as of Aug. 9, 2022 an aggregate (on an as-converted basis) of 45,283,021 shares of common stock of the Company, par value $0.001 per share or 27.83% of the Company's issued and outstanding shares of Common Stock (including, on an as-converted basis, all shares of the Company's preferred stock). The aggregate of 45,283,021 shares of Common Stock includes, as of Aug. 9, 2022: * 8,813,021 shares of Common Stock; * 3,047 shares of Series X Preferred Stock, convertible into an aggregate of 30,470,000 shares of Common Stock; provided, however, the Series X Preferred Stock may not be converted if, after such conversion, the Reporting Persons would beneficially own, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, more than 19.99% of the shares of Common Stock outstanding immediately after giving effect to such conversion; and * 600 shares of Series X1 Preferred Stock, convertible into an aggregate of 6,000,000 shares of Common Stock; provided, however, the Series X1 Preferred Stock may not be converted if, after such conversion, the Reporting Persons would beneficially own, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, more than 19.99% of the shares of Common Stock outstanding immediately after giving effect to such conversion. About CTI BioPharma Headquartered in Seattle, Washington, CTI BioPharma Corp. is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies for blood-related cancers that offer a unique benefit to patients and their healthcare providers. The Company concentrates its efforts on treatments that target blood-related cancers where there is an unmet medical need. In particular, the Company is focused on evaluating pacritinib, its sole product candidate currently in active development, for the treatment of adult patients with myelofibrosis. In addition, the Company has recently started developing pacritinib for use in hospitalized patients with severe COVID-19, in response to the COVID-19 pandemic. CTI Biopharma reported a net loss of $97.91 million for the year ended Dec. 31, 2021, compared to a net loss of $52.45 million for the year ended Dec. 31, 2020. As of June 30, 2022, the Company had $134.53 million in total assets, $139.81 million in total liabilities, and a total stockholders' deficit of $5.27 million. Seattle, Washington-based Ernst & Young LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 31, 2022, citing that the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. CUREPOINT LLC: Case Summary & Five Unsecured Creditors ------------------------------------------------------ Debtor: Curepoint, LLC 11175 Cicero Drive Suite 100 Alpharetta, GA 30022 Business Description: The Debtor offers a full-service radiation therapy program for a broad range of cancers. Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 22-56501 Debtor's Counsel: Will Geer, Esq. ROUNTREE, LEITMAN, KLEIN & GEER, LLC 2987 Clairmont Road Suite 350 Atlanta, GA 30329 Tel: 678-587-8740 Email: wgeer@rlkglaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Phillip Miles as designated officer. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at: https://www.pacermonitor.com/view/HGJ2GSA/Curepoint_LLC__ganbke-22-56501__0001.0.pdf?mcid=tGE4TAMA CYTODYN INC: Incurs $210.8 Million Net Loss in FY Ended May 31 -------------------------------------------------------------- Cytodyn Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $210.82 million on $266,000 of revenue for the year ended May 31, 2022, compared to a net loss of $176.47 million on zero revenue for the year ended May 31, 2021. As of May 31, 2022, the Company had $29.19 million in total assets, $123.58 million in total liabilities, and a total stockholders' deficit of $94.40 million. The Company incurred net losses for the years ended May 31, 2022, 2021, and 2020, respectively, and has an accumulated deficit of $766.1 million as of May 31, 2022. The Company said these factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. As of May 31, 2022, the Company had a total of approximately $4.2 million in cash and approximately $123.2 million in short-term liabilities consisting primarily of approximately $42.2 million representing the current portion and accrued interest of convertible notes payable and approximately $76.8 million in accounts payable and accrued liabilities and compensation. The Company will continue to incur operating losses and the Company will require a significant amount of additional capital in the future as it continues to seek approval to commercialize leronlimab. "Despite the Company's negative working capital position, vendor relations remain accommodative and we do not currently anticipate significant delays in our business initiatives schedule due to liquidity constraints. We cannot be certain, however, that future funding will be available to us when needed on terms that are acceptable to us, or at all. We sell securities and incur debt when the terms of such agreements are deemed favorable to both parties under then current circumstances and as necessary to fund our current and projected cash needs." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001175680/000155837022013680/cydy-20220531x10k.htm About CytoDyn Inc. Headquartered in Vancouver, Washington, CytoDyn Inc. -- http://www.cytodyn.com-- is a late-stage biotechnology company focused on the clinical development and potential commercialization of leronlimab (PRO 140), a CCR5 antagonist to treat HIV infection, with the potential for multiple therapeutic indications. DCP MIDSTREAM: Moody's Affirms Ba1 CFR & Alters Outlook to Positive ------------------------------------------------------------------- Moody's Investors Service changed the rating outlook for DCP Midstream, LP (DCP) and DCP Midstream Operating LP to positive from stable. Moody's also affirmed the ratings at DCP, including the Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, Ba3 rating on the perpetual preferred units. The SGL-2 Speculative Grade Liquidity (SGL) Rating remains unchanged. Additionally, the Ba1 ratings on the senior unsecured notes and the Ba2 rating on the junior subordinated notes, which are obligations of DCP Midstream Operating LP, were affirmed. "The move to a positive outlook reflects DCP's strong operating performance and Moody's expectations that earnings will continue to grow, improving credit metrics," stated James Wilkins, Moody's Vice President. The following summarizes the ratings activity: Issuer: DCP Midstream, LP Corporate Family Rating, Affirmed Ba1 Probability of Default Rating, Affirmed Ba1-PD Pref. Stock Preferred Stock, Affirmed Ba3 (LGD6) Affirmations: Issuer: DCP Midstream Operating LP Gtd. Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD4 from LGD3) Gtd. Senior Unsecured Shelf, Affirmed (P)Ba1 Issuer: DCP Midstream, LLC Gtd. Junior Subordinated Regular Bond/Debenture, Affirmed Ba2 (LGD6) (assumed by DCP Midstream Operating LP) Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD4 from LGD3) (assumed by DCP Midstream Operating LP) Outlook Actions: Issuer: DCP Midstream Operating LP Outlook, Changed To Positive From Stable Issuer: DCP Midstream, LLC Outlook, Changed To Positive From Stable Issuer: DCP Midstream, LP Outlook, Changed To Positive From Stable RATINGS RATIONALE The positive outlook reflects DCP's strong operating performance supported by strong oil & gas industry fundamentals, Moody's expectation that its credit metrics will continue to improve and be supportive of an investment grade rating as free cash flow continues to be applied towards debt reduction, and financial policies supportive of an investment grade rating. High oil & gas commodity prices has resulted in higher spending by exploration and production companies, leading to increased oil & gas processing through DCP's assets and improving free cash flow. DCP generated record earnings in the second quarter 2022 and Moody's expects the company to continue to grow earnings. Free cash flow has benefited from rebounding processed volumes as well as cuts to the distribution rate in 2020 and lower capital spending in 2020-2021 compared to 2018-2019. The recent James Lake bolt-on acquisition for $160 million will provide a modest boost to earnings. The company has adopted conservative financial policies aimed at reducing debt and supporting an investment grade credit profile with a mid-cycle leverage target of less than 3.5x. DCP has reduced its balance sheet debt by $800 million since year-end 2019. It was recently announced that Phillips 66 (A3 stable) has acquired additional ownership interests in DCP Midstream, LLC, which owns a 57 percent common LP interest in DCP, from its joint venture partner, Enbridge Inc. (Baa1 stable). Additionally, Phillips 66 plans to acquire the 43 percent of common units of DCP Midstream, LP held by the public. If successful, Phillips 66 will own 87% of DCP. Moody's expects DCP's financial policies to continue to target lower financial leverage and support an investment grade credit profile with Phillips 66's increased ownership and control of the entity. DCP has relatively stable cash flow associated with fee-based businesses, meaningful scale in the US gathering and processing sector and basin diversification. The stability of its cash flow results from a combination of fee-based and hedged revenue that accounts for a large majority of its gross margin and long-term contractual arrangements with minimum volume commitments or life of lease or acreage dedications. DCP enjoys economies of scale as a large processor of natural gas and natural gas liquids (NGLs) with integrated gathering & processing as well as logistics assets that transport and process hydrocarbons from the wellhead to markets. It has a diversified portfolio with critical mass in three key areas - the DJ Basin, Midcontinent region and Permian Basin - that offers growth opportunities and helps offset regulatory risk in Colorado. The rating and business profile are tempered by inherent commodity price risk as well as MLP model risks which typically have high payouts and the reliance on debt and equity markets when funding large growth projects. However, the 50% reduction in distributions in March 2020 and lower growth spending has resulted in DCP generating positive free cash flow and the flexibility to repay debt or internally fund larger growth projects. The rating also considers the support that the parents - Phillips 66 and Enbridge Inc. - have historically provided. DCP has good liquidity as indicated by its SGL-2 Speculative Grade Liquidity Rating. Its liquidity is supported by funds from operations and $1.38 billion of availability under its $1.4 billion revolving credit facility (net of $20 million of letters of credit and no borrowings as of June 30, 2022) that matures March 18, 2027. The revolver has a maximum 5.0x leverage covenant (debt/EBITDA is adjusted for partial year EBITDA for capital projects and acquisitions). Moody's expects DCP will remain in compliance with its financial covenant at least through 2023. The company also borrows under an accounts receivable securitization facility that had $1.293 billion of receivables that secured $305 million of borrowings as of June 30, 2022. The next debt maturity will be the $500 million of senior notes due March 2023. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if DCP's EBITDA continues to grow, debt to EBITDA remains below 4.0x on a sustained basis and distribution coverage remains above 1.3x. When calculating credit metrics for purposes of assessing the potential of a ratings upgrade, a portion of DCP's subordinated debt and preferred equity will be included in Moody's adjusted debt. The CFR could be downgraded if leverage exceeds 4.5x or it does not maintain a distribution coverage ratio greater than 1x. The principal methodology used in these ratings was Midstream Energy published in February 2022. DCP Midstream, LP, headquartered in Denver, Colorado, is a publicly traded, gathering and processing MLP. The DCP Midstream, LP common LP units are owned by the public (43%) and the balance of the common units and General Partner interest is owned by DCP Midstream, LLC, which is owned by Phillips 66 and Enbridge Inc. DGS REALTY: Wins Cash Collateral Access Thru Oct 31 --------------------------------------------------- The U.S. Bankruptcy Court for the District of New Hampshire authorized DGS Realty, LLC to use the cash collateral of PHH Mortgage Services, acting as servicer for U.S. Bank National Trust Association, as Trustee for Lehman Brothers Small Balance Commercial Mortgage Pass Through Certificates, Series 2006-3. The Debtor is permitted to use and expend the proceeds of cash collateral to pay the costs and expenses incurred in the ordinary course of its business during the period from September 1 through October 31, 2022, or the date on which the Court enters an order revoking the Debtor's right to use cash collateral in accordance with the budget. The Debtor will pay PHH Mortgage its monthly payment of $6,750, plus real estate tax escrow in the amount of $2,802, each month commencing February 1, 2022. These payments will be the normal payments going forward. These payments will continue pending further Court order. Absent the Court's entry of a further order extending authorization, the Debtor's access to use cash collateral will terminate upon the earliest of: a. the last day of the Use Period; b. the earliest date on which a final hearing on cash collateral requirements can be held under the notice and service requirements of Bankruptcy Rules 4001(b) and (d) and 7004(h); c. appointment of a Trustee pursuant to Bankruptcy Code Section 1104; d. conversion of the Debtor's case to one under Chapter 7 of the Bankruptcy Code; e. dismissal of the Debtor's case; or f. entry of an order granting a Motion for Relief from Automatic Stay with respect to any property that is PHH Mortgage's collateral. A hearing on the Debtor's further use of cash collateral is scheduled for November 2 at 11 a.m. A full-text copy of the order and the Debtor's budget for the period from September to October 31, 2022, is available at https://bit.ly/3wcMxuB from PacerMonitor.com. The Debtor projects $97,266 in total income and $10,066 in total expenses for September 2022. About DGS Realty Based in Concord, New Hampshire, DGS Realty, LLC, is a real estate limited liability company. Formed around May 10, 2017, the company is owned by David H. Booth, Manager, Stephen W. Booth, and Gregory A. Booth, each having a 1/3 interest. DGS Realty filed a Chapter 11 petition (Bankr. D.N.H. Case No. 22-10028) on January 24, 2022. In the petition signed by David H. Booth, the manager, the Debtor estimated assets and debts between $1 million and $10 million. Judge Bruce A. Harwood oversees the case. Representing the Debtor as counsel is Eleanor Wm Dahar, Esq., at Victor W. Dahar Professional Association. DIFFUSION PHARMACEUTICALS: Posts $4.2M Net Loss in Second Quarter ----------------------------------------------------------------- Diffusion Pharmaceuticals Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $4.19 million for the three months ended June 30, 2022, compared to a net loss of $3.78 million for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $8.72 million compared to a net loss of $8.42 million for the six months ended June 30, 2021. As of June 30, 2022, the Company had $29.18 million in total assets, $2.52 million in total current liabilities, and $26.67 million in total stockholders' equity. Diffusion stated, "We currently expect to continue to incur substantial expenses and generate significant operating losses as we continue to pursue our business strategy of developing TSC. Our operations have consumed substantial amounts of cash since inception and we currently expect to continue to spend substantial amounts of cash to advance the clinical development of TSC and any other product candidates we may in-license or acquire in the future. As of the date of this Quarterly Report, most of our cash resources for clinical development are dedicated to our ongoing and planned clinical trials. While we currently believe we have adequate cash resources to continue operations into the first quarter of 2024 (without giving effect to any business development activities we may undertake), we anticipate that we will need additional funding in order to complete development of TSC and any other assets we may in-license or acquire which, if available, could be obtained through additional capital raising transactions, entry into strategic partnerships or collaborations, or alternative financing arrangements." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1053691/000143774922020219/dffn20220630_10q.htm About Diffusion Pharmaceuticals Diffusion Pharmaceuticals Inc. is an innovative biotechnology company developing new treatments that improve the body's ability to bring oxygen to the areas where it is needed most, offering new hope for the treatment of life-threatening medical conditions. Diffusion's lead drug TSC was originally developed in conjunction with the Office of Naval Research, which was seeking a way to treat hemorrhagic shock caused by massive blood loss on the battlefield. Diffusion reported a net loss of $24.09 million in 2021, a net loss of $14.18 million in 2020, and a net loss of $11.80 million in 2019. As of March 31, 2022, the Company had $33.57 million in total assets, $2.96 million in total current liabilities, and $30.62 million in total stockholders' equity. DOLPHIN ENTERTAINMENT: Posts $612K Net Income in Second Quarter --------------------------------------------------------------- Dolphin Entertainment, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $612,008 on $10.29 million of revenues for the three months ended June 30, 2022, compared to net income of $1.35 million on $8.64 million of revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $180,473 on $19.47 million of revenues compared to a net loss of $3.92 million on $15.82 million of revenues for the six months ended June 30, 2021. As of June 30, 2022, the Company had $52.54 million in total assets, $23.76 million in total liabilities, and $28.78 million in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1282224/000155335022000684/dlpn_10q.htm About Dolphin Entertainment Headquartered in Coral Gables, Florida, Dolphin Entertainment, Inc. -- http://www.dolphinentertainment.com-- is an independent entertainment marketing and premium content development company. Through its subsidiaries, 42West LLC, The Door Marketing Group LLC and Shore Fire Media, Ltd, the Company provides expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the entertainment, hospitality and music industries. Dolphin Entertainment reported a net loss of $6.46 million for the year ended Dec. 31, 2021, a net loss of $1.94 million for the year ended Dec. 31, 2020, and net loss of $2.33 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $54.14 million in total assets, $29.43 million in total liabilities, and $24.72 million in total stockholders' equity. DOUBLE J PLAYSCAPES: Court OKs Deal on Cash Collateral ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, authorized Double J Playscapes & Construction Inc. to use cash collateral in accordance with its stipulation with the Internal Revenue Service. The Debtor requires immediate authority to use the Pre-and Post-Petition Collateral in order to continue its business operations without interruption. The IRS asserts, and the Debtor concedes, the IRS has a perfected security interest in the assets of the Debtor and notices of the IRS' liens were filed with both the Genesee County Register of Deeds and the Michigan Department of State Uniform Commercial Code Unit in Lansing on March 2, 2020 and May 9, 2022. The Debtor's acknowledgment of the validity of IRS liens is not binding on any subsequently appointed trustee in the case, whether in Chapter 11 or Chapter 7. The Debtor believes the value of the assets securing the IRS liens totals $102,500. The IRS's secured claim, currently valued at $42,835 is fully secured. The IRS's pre-petition liens are retained. Any assets acquired by the Debtor after the Petition Date -- including without limitation, all of account receivables, inventory, chattel paper, general intangibles, and all related replacements, accessions, products, and proceeds therefrom acquired after the Petition Date or hereafter acquired -- are subject to the IRS's pre-petition federal tax liens and constitute cash collateral of the IRS. Prior to the entry of the order, the Debtor used $6,794 in cash collateral. These funds were replaced by $20,000 in receivables collected by the Debtor during the same period. The IRS consents to the use of the $6,794 of prepetition collateral by the Debtor to the extent such was used for ordinary and necessary business expenses that were necessary to maintain operations. The Debtor does not have sufficient unencumbered assets with which to continue to operate its business. As adequate protection, the IRS is granted valid replacement liens in the Post-Petition Collateral and the liens will be of the same priority as the liens as to the Post-Petition Collateral as they were with respect with the Pre-Petition Collateral. The Replacement Liens will not (i) be subject to any lien or security interest that is avoided and preserved for the benefit of the Debtor's estate under Code Section 551, (ii) subject to any inter-company claim, whether secured or unsecured, of the Debtor or any affiliate of the Debtor, or(iii) hereafter be subordinated to or made pari passu with any other lien or security interest under Code Sections 361, 363 or 364 or otherwise. As further adequate protection for the Debtor's use of the Collateral, IRS will receive, without limitation, the following adequate protection payments from the Debtor: effective September 1, 2022, and continuing until the Court orders otherwise, the Debtor will pay IRS the sum of $800 per month. The Debtor will also continue to maintain general property and liability coverage consistent with its Pre-Petition coverage. These events constitute an "Event of Default:" a. The Order is stayed, reversed, vacated or modified on appeal or will cease to be in full force and effect; b. The Debtor's material failure to perform any of its obligations under the Order and failure to cure the default within 10 days after delivery of written notice of the default; c. The conversion of the Debtor's Chapter 11 case to a case under Chapter 7 of the Code; or d. The dismissal of the Debtor's bankruptcy case. The Debtor's authorization to use cash collateral will terminate on the earlier of (i) the entry of a Court order vacating or reversing the Order; (ii) the Effective Date under the Plan of Reorganization to be proposed by the Debtor and confirmed by final order of the Bankruptcy Court, (iii) the occurrence of an event of default therein; or (iv) the conversion of the case to one under Chapter 7. A copy of the order is available at https://bit.ly/3AtBS1b from PacerMonitor.com. About Double J Playscapes & Construction Double J Playscapes & Construction, Inc. is a landscaping services provider. Double J Playscapes & Construction filed a petition for relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-31013) on July 8, 2022, listing up to $50,000 in assets and up to $100,000 in liabilities. Kimberly Ross Clayson serves as Subchapter V trustee. Judge Joel D. Applebaum oversees the case. George E. Jacobs, Esq., at the Bankruptcy Law Offices, is the Debtor's counsel. EAST WILLIAMSBURG: Case Summary & 19 Unsecured Creditors -------------------------------------------------------- Debtor: East Williamsburg Affordable Housing Initiative LLC 525 Myrtle Avenue Suite C-1 Brooklyn, NY 11205 Business Description: The Debtor is engaged in activities related to real estate. Chapter 11 Petition Date: August 18, 2022 Court: United States Bankruptcy Court Eastern District of New York Case No.: 22-41991 Judge: Hon. Nancy Hershey Lord Debtor's Counsel: Joshua R. Bronstein, Esq. JOSHUA R. BRONSTEIN & ASSOCIATES, PLLC 114 Soundview Drive Port Washington, NY 11050 Tel: 516-698-0202 Email: jbrons5@yahoo.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jonathan Marcus as managing member. A copy of the Debtor's list of 19 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5YDNNII/East_Williamsburg_Affordable_Housing__nyebke-22-41991__0001.4.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5LC7BHA/East_Williamsburg_Affordable_Housing__nyebke-22-41991__0001.0.pdf?mcid=tGE4TAMA EASTGATE WHITEHOUSE: Case Summary & 12 Unsecured Creditors ---------------------------------------------------------- Debtor: Eastgate Whitehouse LLC 6 Puritan Road Rye, NY 10580 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Southern District of New York Case No.: 22-22635 Judge: Hon. Sean H. Lane Debtor's Counsel: Joel M. Shafferman, Esq. SHAFFERMAN & FELDMAN LLP 137 Fifth Avenue 9th Floor New York, NY 10016 Tel: (212) 509-1802 Email: shaffermanjoel@gmail.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by William W. Koeppel as managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LULUCGA/Eastgate_Whitehouse_LLC__nysbke-22-22635__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 12 Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. American Public Adjusters, LLC Fee $14,486 134 Maple Street Great Neck, NY 11023 2. Leech Tishman Robinson Brog Legal Fees $200,000 875 Third Ave 9th Floor New York, NY 10022 3. NYC Dept of Finance DOB Fines $15,000 66 John Street Room 104 New York, NY 10038 4. NYC Water Board $22,000 59-17 Junction Blvd Elmhurst, NY 11373 5. Povol & Company CPA, P.C. Accounting $46,000 1981 Marcus Services Avenue Suite C100 New Hyde Park, NY 11042 6. Pyramid Restoration NY, LLC Boom Truck $7,500 52-02 11th Street Rental Long Island City, NY 11101 7. Rosenberg & Estis, P.C. Legal Fees $350,000 733 Third Avenue New York, NY 10017 8. SEIU 32BJ Settlement $100,000 25 West 18th Street Agreement New York, NY 10011 9. V.C. Drywall & $50,000 Remodeling, LLC C/O Smith, Buss & Jacobs, LLC 733 Yonkers Avenue, Suite 200 Yonkers, NY 10704 10. WFCM 2018-C46 $32,000,000 c/o Holland & Knight, LLC 900 Third Avenue 20th Floor New York, NY 10022 11. William W. Koeppel Loan $3,400,000 6 Puritan Road Rye, NY 10580 12. WWK 140 Bay Loan $2,000,000 Ridge, LLC 6 Puritan Road Rye, NY 10580 EDUCATIONAL TRAVEL: Wins Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized Educational Travel Services, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. The Debtor had approximately $513,153 in bank accounts and receivables on the Petition Date, along with post-petition receivables. The cash collateral is the proceeds of the operation of Debtor's business. Columbia State Bank appears to have a security interest/lien upon the cash collateral as of the Petition Date pursuant to a Commercial Security Agreement dated January 2011 by and between the Debtor and Columbia Bank. Columbia Bank appears to have perfected its security interest in the Cash Collateral by filing a financing statement with the Oregon Secretary of State, January 5, 2011 as thereafter continued by filing 8692405-1, 8692405-2 and 8692405-3. The US Small Business Administration also appears to have a junior security interest in the cash collateral based upon filing 92346368 filed on June 5, 2020. As adequate protection, each creditor with a security interest in cash collateral will be granted adequate protection in the form of a replacement lien, dollar for dollar, in post-petition accounts and accounts receivable to replace their security interest in liens in collateral to the extent of pre-petition cash collateral utilized by the Debtors during the pendency of this bankruptcy proceeding. The Court's order provides that the automatic Stay of section 362 of the Bankruptcy Code is modified as necessary to permit the Secured Creditors to perfect the adequate protection lien granted to them; provided, however, that the Secured Creditors will not be required to record any document with any filing officer or take any other action to perfect such lien, such lien being deemed to be perfected without any such further action. A final hearing on the matter is scheduled for August 30 at 11 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/3SZ1s5i from PacerMonitor.com. The budget provides for $11,261 in total expenses through August 30, 2022. About Educational Travel Gladstone, Ore.-based Educational Travel Services, Inc. sought Chapter 11 protection (Bankr. D. Ore. Case No. 22-31272) on August 5, 2022. The Debtor disclosed $516,453 in assets and $1,419,136 in liabilities. Judge David W. Hercher oversees the case. Ted A. Troutman, Esq., at Troutman Law Firm P.C. is the Debtor's counsel. ELECTROMEDICAL TECHNOLOGIES: Posts $536K Net Loss in 2nd Quarter ---------------------------------------------------------------- Electromedical Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $535,931 on $225,251 of net sales for the three months ended June 30, 2022, compared to a net loss of $774,532 on $202,954 of net sales for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $1.68 million on $447,145 of net sales compared to a net loss of $3.33 million on $369,394 of net sales for the six months ended June 30, 2021. As of June 30, 2022, the Company had $998,553 in total assets, $2.31 million in total liabilities, and a total stockholders' deficit of $1.31 million. Electromedical said, "Since inception, the Company has incurred approximately $19.3 million of accumulated net losses. In addition, during the six months ended June 30, 2022, the Company used $415,765 in operations, and as of June 30, 2022, the Company had a working capital deficit of $1,361,177. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The Company expects to obtain funding through additional debt and equity placement offerings until it consistently achieves positive cash flows from operations. If the Company is unable to obtain additional funding, it may not be able to meet all of its obligations as they come due for the next 12 months. The continuing viability of the entity and its ability to continue as a going concern is dependent upon the entity being successful in its continuing efforts in growing its revenue base and/or accessing additional sources of capital, and/or selling assets. "As a result, there is significant uncertainty whether the Company will continue as a going concern and, therefore, whether it will realize its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial statements. "Accordingly, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the entity not continue as a going concern. At this time, management is of the opinion that no asset is likely to be realized for an amount less than the amount at which it is recorded in the financial statements as of June 30, 2022." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001715819/000141057822002628/elcq-20220630x10q.htm About Electromedical Technologies Scottsdale, AZ-based Electromedical Technologies, Inc. is a bioelectronics manufacturing and marketing company. The Company offers U.S. Food and Drug Administration (FDA) cleared medical devices for pain management. Bioelectronics is a developing field of "electronic" medicine, which uses electrical impulses over the body's neural circuitry to try to alleviate pain, without drugs. Electromedical reported a net loss of $8.48 million for the year ended Dec. 31, 2021, a net loss of $3.87 million for the year ended Dec. 31, 2020, compared to a net loss of $1.74 million for the year ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had $1.40 million in total assets, $2.12 million in total liabilities, and a total stockholders' deficit of $722,503. San Diego, California-based dbbmckennon, the Company's auditor since 2018, 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 negative working capital balance, which raises substantial doubt about its ability to continue as a going concern. EMILY VETS: Case Summary & Five Unsecured Creditors --------------------------------------------------- Debtor: Emily Vets LLC 5615 Sidney Rd Cincinnati, OH 45238 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Southern District of Ohio Case No.: 22-11382 Debtor's Counsel: J. Christian A. Dennery, Esq. DENNERY, PLLC 7310 Turfway Rd, Ste 550 Florence, KY 41042 Tel: 859-692-3685 Fax: 859-286-6726 Email: jcdennery@dennerypllc.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by John C. Klosterman as corporate representative. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UMPNHJY/Emily_Vets_LLC__ohsbke-22-11382__0001.0.pdf?mcid=tGE4TAMA ENDO INTERNATIONAL: Gibson Dunn Represents First Lien Group ----------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Gibson, Dunn & Crutcher LLP submitted a verified statement to disclose that it is representing the Ad Hoc First Lien Group in the Chapter 11 cases of Endo International PLC, et al. In or around April 2021, the Ad Hoc First Lien Group was formed and retained attorneys currently affiliated with Gibson, Dunn & Crutcher LLP to represent them as counsel in connection with a potential restructuring of the outstanding debt obligations of the above-captioned debtors and certain of their subsidiaries and affiliates. Gibson Dunn represents the Ad Hoc First Lien Group, comprised of the beneficial holders or the investment advisors or managers for certain beneficial holders that are identified on Exhibit A hereto in their capacities as: * lenders under that certain Credit Agreement, dated as of April 27, 2017 among Endo International plc, Endo Luxembourg Finance Company I S.à r.l., Endo LLC, JPMorgan Chase Bank, N.A., as administrative agent, issuing bank, and swingline lender, and the lenders from time to time party thereto; * holders of senior secured notes issued under that certain Indenture, dated as of April 27, 2017, by and among Endo Designated Activity Company, Endo Finance LLC, and Endo Finco Inc., as issuers, each of the guarantors party thereto, and Computershare Trust Company, National Association, as trustee; * holders of senior secured notes issued under that certain Indenture, dated as of March 28, 2019, by and among Par Pharmaceuticals, Inc., as issuer, each of the guarantors party thereto, and Computershare, as trustee; and/or * holders of senior secured notes issued under that certain Indenture, dated as of March 28, 2019, by and among Par Pharmaceuticals, Inc., as issuer, each of the guarantors party thereto, and Computershare, as trustee; and/or holders of senior secured notes issued under that certain Indenture, dated as of March 25, 2021, among the Lux Borrower and Endo U.S. Inc., as issuers, each of the guarantors party thereto, and Computershare, as trustee. Gibson Dunn does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Gibson Dunn does not represent the Ad Hoc First Lien Group as a "committee" and does not undertake to represent the interests of, and is not a fiduciary for, any creditor, party in interest, or other entity that has not signed a retention agreement with Gibson Dunn. In addition, the Ad Hoc First Lien Group does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Upon information and belief formed after due inquiry, Gibson Dunn does not hold any disclosable economic interests in relation to the Debtors. As of Aug. 17, 2022, members of the Ad Hoc First Lien Group and their disclosable economic interests are: 140 Summer Partners Master Fund L.P. 1450 Broadway, 28th Floor New York, NY 10018 * Term Loans: $6,000,000 * 7.500% First Lien Notes due 2027: $22,000,000 Aegon USA Investment Management, LLC 222 West Adams Street, Suite 2050 Chicago, IL 60606 * 5.875% First Lien Notes due 2024: $1,500,000 * 7.500% First Lien Notes due 2027: $27,977,000 * 6.125% First Lien Notes due 2029: $18,845,000 Amundi Asset Management US, Inc. 60 State Street Boston MA 02109 * Term Loans: $5,848,538 * 5.875% First Lien Notes due 2024: $18,152,000 * 7.500% First Lien Notes due 2027: $27,005,000 * 9.500% Second Lien Notes due 2027: $1,746,000 Arena Capital Advisors, LLC 12121 Wilshire Boulevard, Ste 1010 Los Angeles, CA 90025 * 5.875% First Lien Notes due 2024: $28,615,000 Aristeia Capital, L.L.C. One Greenwich Plaza, 3rd Floor Greenwich, CT 06830 * 6.125% First Lien Notes due 2029: $22,800,000 * 9.500% Second Lien Notes due 2027: ($18,500,000) (short) * Equity Interests: (3,841,100 shares) (short) Assured Investment Management, LLC, and BlueMountain Fuji, LLC 1633 Broadway, 25th Floor New York, NY 10019 * Term Loans: $27,436,891 Aurelius Capital Management, LP 3825 PGA Boulevard, Suite 205 Palm Beach Gardens, FL 33410 * Term Loans: $1,000,000 Bain Capital Credit, LP 200 Clarendon Street Boston, MA 02116 * Term Loans: $127,207,101 * 7.500% First Lien Notes due 2027: $768,000 * 6.125% First Lien Notes due 2029: $10,198,000 Atlas Macro Master Fund, Ltd. 444 West Lake Street, 50th Floor Chicago, IL 60606 * Term Loans: $29,924,242.41 Bardin Hill Loan Management LLC 299 Park Ave., 24th Floor New York, NY 10171 * Term Loans: $8,062,582.69 BlackRock Financial Management, Inc. 40 East 52nd Street New York, NY 10022 * Term Loans: $4,949,875 * 6.125% First Lien Notes due 2029: $3,219,000 Brevan Howard Alpha Strategies Master Fund Limited c/o Brevan Howard Asset Management LLP 55 Baker Street London W1U 8EW United Kingdom * 7.500% First Lien Notes due 2027: $4,000,000 * 6.125% First Lien Notes due 2029: $3,000,000 Cetus Capital VI, L.P. 8 Sound Shore Drive, Suite 303 Greenwich, CT 06830 * Term Loans: $24,936,868 CIFC Asset Management LLC 875 Third Avenue, 24th Floor New York, NY 10022 * Term Loans: $72,582,280 * 9.500% Second Lien Notes due 2027: $8,000,000 Credit Suisse Loan Funding LLC Credit Suisse Securities (USA) LLC 11 Madison Avenue, 4th Floor New York, NY 10010 * Term Loans: $1,348,153.62 * 7.500% First Lien Notes due 2027: $25,700,000 * 6.125% First Lien Notes due 2029: ($3,239,000) (short) * 9.500% Second Lien Notes due 2027: $2,000,000 * 5.375% Unsecured Notes due 2023:6 $5,099,000 * 6.000% Unsecured Notes due 2023:7 $9,000,000 * 6.000% Unsecured Notes due 2028:8 ($5,237,000) (short) Credit Suisse Asset Management, LLC 11 Madison Avenue New York, NY 10010 * Term Loans: $97,024,478.41 * 5.875% First Lien Notes due 2024: $2,250,000 * 6.125% First Lien Notes due 2029: $4,655,000 Davidson Kempner Capital Management LP 520 Madison Avenue, 30th Fl. New York, NY 10022 * Term Loans: $79,883,065 * 6.125% First Lien Notes due 2029: $20,000,000 D.E. Shaw Galvanic Portfolios, L.L.C. DESALKIV Portfolios, L.L.C. 1166 Avenue of the Americas, 9th Floor New York, NY 10036 * 5.875% First Lien Notes due 2024: $10,663,000 * 7.500% First Lien Notes due 2027: $115,000,000 * 6.125% First Lien Notes due 2029: $35,000,000 * 9.500% Second Lien Notes due 2027: $27,000,000 Counsel to the Ad Hoc First Lien Group can be reached at: GIBSON, DUNN & CRUTCHER LLP Michael J. Cohen, Esq. Joshua K. Brody, Esq. Jason Zachary Goldstein, Esq. Christina M. Brown, Esq. 200 Park Avenue New York, NY 10166 Telephone: (212) 351-4000 Facsimile: (212) 351-4035 E-mail: sgreenberg@gibsondunn.com mcohen@gibsondunn.com jbrody@gibsondunn.com jgoldstein@gibsondunn.com christina.brown@gibsondunn.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3T3i4Jl About Endo International Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical company committed to helping everyone they serve live their best life through the delivery of quality, life-enhancing therapies. On the Web: http://www.endo.com/ On Aug. 16, 2022, Endo International plc and certain of its subsidiaries initiated voluntary prearranged Chapter 11 proceedings (Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are pending before the Honorable James L. Garrity, Jr. The Company has put up a Web site dedicated to its restructuring: http://www.endotomorrow.com/ Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel, PJT Partners LP is serving as investment banker, and Alvarez & Marsal is serving as financial advisor to Endo. Kroll is the claims agent. ENDO INTERNATIONAL: Paul Weiss Represents Cross-Holder Group ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP submitted a verified statement to disclose that it is representing the Ad Hoc Cross–Holder Group in the Chapter 11 cases of Endo International PLC, et al. The ad hoc group of certain unaffiliated holders of loans, notes, or other indebtedness issued under (a) that certain Credit Agreement, dated as of April 27, 2017, by and among Endo International plc, Endo Luxembourg Finance Company I S.à r.l., and Endo LLC, as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto from time to time; (b) that certain Indenture, dated as of March 25, 2021, by and among Lux Borrower and Endo U.S. Inc., as issuers, Computershare Trust Company, National Association, as trustee, and the guarantors party thereto; (c) that certain Indenture, dated March 28, 2019, by and among Par Pharmaceuticals, Inc., as issuer, Computershare, as trustee, and the guarantors party thereto; (d) that certain Indenture, dated as of April 27, 2017, by and among Endo Designated Activity Company, Endo Finance LLC and Endo Finco Inc., as issuers, Computershare, as trustee, and the guarantors party thereto; (e) that certain Indenture, dated as of June 16, 2020, by and among Endo DAC, Endo Finance, and Endo Finco, as issuers, Wilmington Savings Fund Society, FSB, as trustee, and the guarantors party thereto; (f) that certain Indenture, dated as of January 27, 2015, by and among Endo DAC, Endo Finance, and Endo Finco, as issuers, UMB Bank, National Association, as trustee, and the guarantors party thereto; (g) that certain Indenture, dated as of July 9, 2015, by and among Endo DAC, Endo Finance, and Endo Finco, as issuers, UMB Bank, as trustee, and the guarantors party thereto; and (h) that certain Indenture, dated as of June 16, 2020, by and among Endo DAC, Endo Finance, and Endo Finco, as issuers, U.S. Bank Trust Company, National Association, as trustee, and the guarantors party thereto hereby submits this verified statement and in support thereof state as follows: In April 2021, certain members of the Ad Hoc Cross–Holder Group retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent them in connection with a potential restructuring involving the above–captioned debtors and debtors–in– possession. From time to time thereafter, certain additional holders of Obligations joined the Ad Hoc Cross–Holder Group. As of Aug. 11, 2022, members of the Ad Hoc Cross-Holder Group and their disclosable economic interests are: American International Group 28 Liberty St., 47th Floor New York, NY 10005 * 6.125% Notes Obligations: $4,964,000 * 7.500% Notes Obligations: $21,348,000 * 2L Notes Obligations: $17,687,00 Bank of America, N.A. 900 W Trade St. NC1–026–05–41 Charlotte, NC 28255 * Term Loan Obligations: $ 23,281,854.58 BofA Securities, Inc 900 W Trade St. NC1–026–05–41 Charlotte, NC 28255 * 6.125% Notes Obligations: $5,253,000 * 7.500% Notes Obligations: $1,137,000 * 5.875% Notes Obligations: $(1,069,000) (short) * 2L Notes Obligations: $23,840,000 * 2028 6.000% Obligations: $112,922,000 * Common Stock: Banc of America Credit Products, Inc. 900 W Trade St. NC1–026–05–41 Charlotte, NC 28255 * Revolving Credit Facility Obligations: $30,000,000 Brigade Capital Management, LP 399 Park Avenue, 16th Floor New York, NY 10022 * Term Loan Obligations: $14,673,520.35 * 6.125% Notes Obligations: $13,845,000 * 7.500% Notes Obligations: $27,497,000 * 5.875% Notes Obligations: $6,090,000 * 2L Notes Obligations: $45,404,000 * 2028 6.000% Obligations: $44,125,000 Canyon Capital Advisors LLC 2728 N. Harwood Street, 2nd Floor Dallas, TX 75201 * Revolving Credit Facility Obligations: $38,000,000 * Term Loan Obligations: $86,536,471.14 * 6.125% Notes Obligations: $92,500,000 * 7.500% Notes Obligations: $37,797,000 * 2L Notes Obligations: $162,545,000 * 2028 6.000% Obligations: $99,851,000 Capital Research and Management Company 333 South Hope St., 55th Floor Los Angeles, CA 90071 * 6.125% Notes Obligations: $23,340,000 * 7.500% Notes Obligations: $170,426,000 * 5.875% Notes Obligations: $11,744,000 * 2L Notes Obligations: $6,560,000 * 2028 6.000% Obligations: $60,506,000 Citadel Equity Fund Ltd. The Corporation Trust Company Corporation Trust Center 1209 Orange St. Wilmington, DE 19801 * 6.125% Notes Obligations: $10,000,000 * 7.500% Notes Obligations: $10,000,000 * 2L Notes Obligations: $110,000,000 * Common Stock: 640,541 shares Deutsche Bank Securities Inc. One Columbus Circle, 7th Floor New York, NY 10019 * Term Loan Obligations: $12,902,000 * 6.125% Notes Obligations: $(3,843,000) (short) * 7.500% Notes Obligations: $(1,000,000) (short) * 5.875% Notes Obligations: $2,422,000 * 2L Notes Obligations: $2,794,000 * 2028 6.000% Obligations: $15,506,000 Franklin Advisers Inc. 1 Franklin Pkwy. San Mateo, CA 94403 * 6.125% Notes Obligations: $72,980,000 * 7.500% Notes Obligations: $222,294,000 * 5.875% Notes Obligations: $62,516,000 * 2L Notes Obligations: $120,757,000 * 2028 6.000% Obligations: $6,393,000 * Common Stock: Glenview Capital Management, LLC 767 Fifth Avenue, 44th Floor New York, NY 10153 * 6.125% Notes Obligations: $41,186,000 * 7.500% Notes Obligations: $8,000,000 * 2L Notes Obligations: $10,977,000 * 2028 6.000% Obligations: $75,927,000 Invictus Global Management, LLC 310 Comal Street Building A, Suite 229 Austin, Texas 78702 * Term Loan Obligations: $5,000,000 * 2L Notes Obligations: $8,000,000 * 2025 6.000% Obligations: $135,000 * 2028 6.000% Obligations: $12,500,000 J.P. Morgan Investment Management Inc. 1 East Ohio Street, 6th Floor Indianapolis, IN 46204 * Term Loan Obligations: $3,806,339.40 * 6.125% Notes Obligations: $32,915,000 * 7.500% Notes Obligations: $105,032,000 * 5.875% Notes Obligations: $13,957,000 * 2L Notes Obligations: $33,180,000 * 2028 6.000% Obligations: $ 22,977,000 Marathon Asset Management LP One Bryant Park, 38th Floor New York, NY 10036 * Term Loan Obligations: $86,381,928 * 6.125% Notes Obligations: $87,514,000 * 7.500% Notes Obligations: $54,979,000 * 2L Notes Obligations: $ 55,400,000 * 2028 6.000% Obligations: $133,041,000 Nomura Corporate Research and Asset Management 309 W 49th St. 9th Floor New York, NY 10019 * 6.125% Notes Obligations: $20,568,000 * 7.500% Notes Obligations: $39,642,000 * 5.875% Notes Obligations: $1,250,000 * 2L Notes Obligations: $32,829,000 * 2025 6.000% Obligations: $2,000 * 2028 6.000% Obligations: $35,820,000 Oaktree Capital Management, L.P. 333 South Grand Ave, 28th Floor Los Angeles, CA 90071 * Term Loan Obligations: $92,669,214 * 7.500% Notes Obligations: $23,000,000 * 2L Notes Obligations: $81,585,000 * 2028 6.000% Obligations: $108,489,000 Two Seas Global (Master) Fund LP 32 Elm Place Rye NY 10580 * 2028 6.000% Obligations: $23,000,000 Western Asset Management Company, LLC 385 East Colorado Boulevard Pasadena, CA 91101 * 6.125% Notes Obligations: $550,000 * 7.500% Notes Obligations: $38,470,000 Whitebox Advisors LLC 3033 Excelsior Blvd., Suite 500 Minneapolis, MN 54416 * Term Loan Obligations: $3,465,250 * 6.125% Notes Obligations: $9,000,000 * 7.500% Notes Obligations: $24,739,000 * 2023 6.000% Obligations: $1,000,000 * 2028 6.000% Obligations: $10,000,000 Counsel for the Ad Hoc Cross–Holder Group can be reached at: PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Andrew N. Rosenberg, Esq. Alice Belisle Eaton, Esq. Andrew M. Parlen, Esq. Alexander Woolverton, Esq. 1285 Avenue of the Americas New York, NY 10019–6064 E-mail: arosenberg@paulweiss.com aeaton@paulweiss.com aparlen@paulweiss.com awoolverton@paulweiss.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3ClmwgL About Endo International Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical company committed to helping everyone they serve live their best life through the delivery of quality, life-enhancing therapies. On the Web: http://www.endo.com/ On August 16, 2022, Endo International plc and certain of its subsidiaries initiated voluntary prearranged Chapter 11 proceedings (Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are pending before the Honorable James L. Garrity, Jr. The Company has put up a Web site dedicated to its restructuring: http://www.endotomorrow.com/ Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel, PJT Partners LP is serving as investment banker, and Alvarez & Marsal is serving as financial advisor to Endo. Kroll is the claims agent. ENDO INTERNATIONAL: S&L, Keller Represent Putative Claimants ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Stevens & Lee, P.C. and Keller Postman LLC submitted a verified statement to disclose that they are representing Eric Hestrup and the Private Insurance Class Claimants in the Chapter 11 cases of Endo International PLC, et al. S&L and Keller Postman represent Dr. Eric Hestrup, in his individual capacity and as a representative of the putative classes of purchasers of health insurance in the actions listed herein. All of the Private Insurance Class Actions have been and remain stayed in connection with In re National Prescription Opiate Litigation, No. 1:17-md-2804. Dr. Hestrup is the lead class claimant in a nationwide class action complaint in the United States District Court for the Northern District of Illinois, Hestrup v. Mallinckrodt PLC, et al., Case No. 19-cv-08453. The Hestrup Complaint was subsequently transferred to the MDL and all proceedings in connection therewith are currently stayed. Generally, the Private Insurance Class Actions seek to hold manufacturers and distributors of opioids, as well as pharmacies, liable for their role in creating the opioid epidemic. Dr. Hestrup has named Endo Health Solutions Inc. and Endo Pharmaceuticals Inc. in the Hestrup Complaint. As a result, Dr. Hestrup will be asserting claims herein on behalf of the Private Insurance Class Claimants. The direct and proximate consequence of the misconduct of Opioid Defendants, including the Defendant-Debtors, is that every purchaser of private health insurance in the United States paid higher premiums, co-payments, and deductibles. Insurance companies have considerable market power and pass onto their insureds the expected cost of future care—including opioid-related coverage. Accordingly, insurance companies factored in the unwarranted and exorbitant healthcare costs of opioid-related coverage caused by Defendant-Debtors and other Opioid Defendants and passed all or virtually all of these increased costs through to insureds in the form of higher premiums, deductibles and co-payment. Neither Dr. Hestrup nor any of the Private Insurance Class Claimants has any "disclosable economic interest" other than as disclosed in the preceding paragraphs. Other than as disclosed herein, S&L does not currently represent or claim to represent any other entity with respect to the Debtors' cases, and does not hold any claim against or interest in the Debtors or their respective estates. Keller Postman has filed the following actions against Opioid Defendants: Case No: 1:19-cv-00086 2:18-cv-02646 18-cv-2576 2:18-cv-00719 3:18-cv-01425 0:18-cv-61960 19-cv-5354 1:18-cv-00369 1:18-cv-03116 19-cv-08453 1:18-cv-02778 19-cv-2596 2:19-cv-01048 S&L reserves its right to revise or supplement this verified statement as may be necessary or appropriate. This statement is provided without prejudice to the right of S&L and its clients to file any further statements, claims, adversary complaints, documents, notices or pleadings in these chapter 11 cases. Counsel for Eric Hestrup and the Putative Class can be reached at: Nicholas F. Kajon, Esq. Constantine D. Pourakis, Esq. Andreas D. Milliaressis, Esq. Stevens & Lee, P.C. 485 Madison Avenue, 20th Floor New York, NY 10022 Telephone: (212) 319-8500 E-mail: Nicholas.Kajon@stevenslee.com Constantine.Pourakis@stevenslee.com Andreas.Milliaressis@stevenslee.com - and - Ashley Keller, Esq. Seth Meyer, Esq. Alex Dravillas, Esq. Keller Postman LLC 150 North Riverside Plaza, Suite 4100 Chicago, IL 60606 Telephone: (312) 741-5220 E-mail: ack@kellerpostman.com sam@kellerpostman.com ajd@kellerpostman.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3K98BMn About Endo International Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical company committed to helping everyone they serve live their best life through the delivery of quality, life-enhancing therapies. On the Web: http://www.endo.com/ On Aug. 16, 2022, Endo International plc and certain of its subsidiaries initiated voluntary prearranged Chapter 11 proceedings (Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are pending before the Honorable James L. Garrity, Jr. The Company has put up a Web site dedicated to its restructuring: http://www.endotomorrow.com/ Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel, PJT Partners LP is serving as investment banker, and Alvarez & Marsal is serving as financial advisor to Endo. Kroll is the claims agent. FIRST TO THE FINISH: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: First to the Finish Real Estate, LLC 2341 Plum Street Edwardsville, IL 62025 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Southern District of Illinois Case No.: 22-30513 Judge: Hon. Laura K. Grandy Debtor's Counsel: Michael J. Benson, Esq. A BANKRUPTCY LAW FIRM, LLC 815 Lincoln Highway, Suite 107 Fairview Heights, IL 62208 Tel: 618-207-6500 E-mail: mike@bensonlawfirms.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Viano, member/manager. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/I2UD4DQ/First_to_the_Finish_Real_Estate__ilsbke-22-30513__0001.0.pdf?mcid=tGE4TAMA FOG INC: Debtor Has Not Filed Financial Information, Says --------------------------------------------------------- John P. Fitzgerald, III, Acting United States Trustee for Region Four, filed his objection to the Amended Plan of Reorganization filed by F.O.G., Inc. The United States Trustee points out that the Debtor has not filed financial information required by the Operating Order. While the Debtor filed a balance sheet and profit and loss statement shortly after filing its petition, those documents contain intermingled financial information for the Debtor and its principles, Mouwaka Ghannan and Hanan Ghannan. Therefore, the documents of record do not accurately reflect the financial status of the debtor on the date of filing, and consequently do not meet the requirement set forth in the operating order and 11 U.S.C. Sec. 1187 that a recent balance sheet, statement of operations and cash flow statement for the debtor be appended to the petition. The United States Trustee further points out that the Debtor has not filed Monthly Operating Reports. F.O.G., Inc. filed an initial operating report on May 10, 2022, but has not filed a single Monthly operating report since filing this case. Under 11 U.S.C. section 1112, failure to file monthly operating reports is a basis to convert or dismiss a case pending under Chapter 11. Moreover, the United States Trustee asserts that the Debtor has not Provided Accurate and Complete Financial Information Needed Determine Whether or not the Amended Plan is feasible. Since the debtor has not filed monthly operating reports, nor has the debtor filed an accurate balance sheet, cash-flow statement and/or profit and loss statement with the Court, it is not possible to determine the financial status of the debtor in terms of whether the debtor has a sufficient inflow of cash to continue its operations until the property sales proposed by the debtor in the amended plan can be accomplished. By Counsel: Shari Collias, Esq. Trial Attorney, Office of U.S. Trustee United States Courthouse, Room 2025 300 Virginia Street East Charleston, WV 25301 Tel: (304)347-3400 E-mail: Shari.Collias@usdoj.gov About FOG, Inc. FOG, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. W.Va. Case No. 22-20073) on May 4, 2022. In the petition signed by Mouwafak Ghannam, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge B. Mckay Mignault oversees the case. Joseph W. Caldwell, Esq., at Caldwell & Riffee is the Debtor's counsel. FORD MOTOR: Fitch Rates New Unsecured Notes Due 2062 'BB+' ---------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR4' rating to Ford Motor Company's (Ford) proposed issuance of senior unsecured notes due 2062. Proceeds from the proposed notes will be used for general corporate purposes. Ford's Long-Term Issuer Default Rating (IDR) is 'BB+'. The Rating Outlook is Positive. Ford's ratings and Outlook reflect expected improvements in the company's profitability and core FCF, which will likely lead to margins and credit protection metrics that are in line with Fitch's positive rating sensitivities for the company over the intermediate term. Although supply chain and inflationary pressures are likely to continue for much of 2022, Fitch expects Ford's profitability to improve as it benefits from ongoing redesign activities, as well as execution on its Ford+ plan. KEY RATING DRIVERS Rating Considerations: Near-term rating considerations include ongoing production difficulties stemming from supply-chain related challenges and the coronavirus pandemic, elevated commodity and logistics costs, rising interest rates, and the impacts of inflation and a slowing macroeconomic environment on consumer confidence. Other considerations include tightening emissions regulations in various global regions, as well as substantial investments that the company is making in both electrification and vehicle autonomy. All of these factors will weigh on profitability and FCF generation over the next several years. Despite these headwinds, vehicle demand remains strong, and it has outpaced supply in the major global regions for the past two years. Fitch expects Ford will continue to experience a strong pricing environment, which will help to mitigate some of the inflationary pressure on the company's margins. That said, Fitch expects the combination of inflation and technology-related investment spending to result in some margin dilution over the next several years, although overall profitability is likely to improve relative to the period leading up to the pandemic. Improving FCF: Fitch expects Ford's automotive FCF (based on Fitch's methodology) to remain under pressure over the next couple of years as the company continues to work through its global redesign, with a relatively modest cash outflow expected in 2022 as the company spends $1.0 billion-$1.5 billion on redesign work. However, excluding the redesign initiatives, Fitch expects the company's FCF to be solidly positive over the next several years with a more benign market backdrop, although the pandemic and ongoing supply-chain challenges remain near-term concerns. Increasing EV investments will also weigh on FCF over the next several years. Fitch expects Ford's automotive FCF margins, according to Fitch's calculations and excluding the redesign initiatives, to run near 2.0% over the intermediate term. Actual automotive FCF (based on Fitch's methodology) in 2021 was $3.1 billion when excluding $1.9 billion in cash costs associated with the redesign, equivalent to a 2.5% FCF margin. However, automotive FCF in 2021 was supported by $7.5 billion in Ford Credit distributions, which was more than double the typical level of recent years. Fitch expects those distributions to run at more normalized levels over the next few years. Low Automotive Leverage: Fitch expects Ford's automotive EBITDA gross leverage (according to Fitch's calculations) to remain low and generally in line with pre-pandemic levels over the next several years. Leverage declined significantly in 2021 due to a combination of debt reduction and higher EBITDA. In 2021, Ford reduced automotive debt by $3.9 billion, leaving it with about $20 billion of automotive debt outstanding at YE 2021. The EBITDA increase was partially due to the increased distributions from Ford Credit. (Fitch adds affiliate dividends to EBITDA in its calculation of leverage.) Looking ahead, Fitch expects EBITDA gross leverage to rise slightly, toward the upper-1x range by YE 2022, largely due to lower Ford Credit dividends, as Fitch expects debt to decline a bit and EBITDA excluding Ford Credit dividends to rise on higher production levels. Over the longer term. Fitch expects leverage to decline back toward the low-1x range, largely due to higher levels of EBITDA. DERIVATION SUMMARY Ford's business profile is similar to other large global volume auto manufacturers. From an automotive revenue perspective, it is larger than General Motors Company (GM) (BBB-/Positive) but smaller than Stellantis N.V. (Stellantis) (BBB/Stable). Compared with GM, Ford's operations are more globally diversified, with significant operations in most major auto markets. However, from a brand perspective, Ford is less diversified than Volkswagen AG (VW) (A-/Stable), Stellantis or GM, focusing primarily on its global Ford brand and, to a much lesser extent, its Lincoln luxury brand, which is only available in North America and China. However, the company sells a wide range of vehicles under the Ford brand globally, ranging from small economy passenger cars to heavy trucks in certain markets. Ford has a particularly strong market share in the highly profitable North American pickup and European light commercial vehicle segments. For the past several years, Ford's credit profile has been weaker than that of many of its global mass-market peers in the 'BBB' category, such as GM, Stellantis and VW. Ford's EBIT and FCF margins have been lower and gross leverage has been a little higher than these other global auto manufacturers. Partially offsetting the credit profile effect of lower FCF and higher leverage, Ford has one of the global auto industry's strongest liquidity positions, providing it with significant financial flexibility. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer: -- Global industry light vehicle production rises by 3% in 2022, including an 11% increase in North America, with continued effects from the global supply chain challenges. Beyond 2022, U.S. and global industry production increases but does not rise back to the 2019 level until 2024; -- Capex runs near 4%-5% of revenue over the next several years, with capex in 2022 running at the higher end of the range; -- Working capital is a source of cash in 2022 on increased wholesale volumes and a more normalized production environment in the latter half of the year. Working capital remains a source of cash in later years on higher production levels; -- The post-dividend FCF margin excluding redesign cash expenses runs at about 1% in 2022, then increases toward 2% in later years; -- The company maintains automotive cash above $20 billion over the forecast horizon, with total liquidity, including credit facility capacity, above $30 billion; -- Ford Credit continues to distribute dividends to Ford, although at a lower level than in 2021, which is included in Fitch's FCF calculations. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a positive rating action/upgrade: -- Fitch does not expect to upgrade Ford's ratings until the global auto production environment has stabilized; -- Sustained North American automotive EBIT margin of 6.0%; -- Sustained global automotive EBIT margin near 3.0%; -- Sustained FCF margin near 1.5%, excluding restructuring costs; -- Sustained EBITDA leverage (total debt/operating EBITDA) below 2.0x. Factors that could, individually or collectively, lead to a negative rating action/downgrade: -- An extended decline in automotive cash below $15 billion; -- Sustained breakeven global automotive EBIT margin; -- Sustained negative FCF, excluding restructuring costs; -- Sustained EBITDA leverage above 3.0x. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity Position: Ford had about $28 billion in automotive cash and marketable securities as of June 30, 2022 (excluding Fitch's adjustments for not readily available cash). Marketable securities included $2.0 billion of stock in Rivian Automotive, Inc. In addition to its cash and marketable securities, as of June 30, 2022, Ford had nearly full availability on its $13.5 billion primary revolver (after accounting for $25 million in LOCs), $1.0 billion in availability on its new 364-day $1.75 billion revolver and full availability on its $2.0 billion supplemental revolver. Ford also had a total of about $400 million available on various local credit facilities around the world. About $3.4 billion of the primary revolver commitments mature in 2025 and $10.1 billion matures in 2027. The supplemental revolver has about $100 million in commitments that mature in 2024, with the remainder maturing in 2025. As part of its captive finance adjustment, Fitch's Non-Bank Financial Institutions team has calculated an allowable debt-to-equity ratio of 4.0x for Ford Credit. This is lower than the actual 9.5x ratio, as calculated by Fitch at YE 2021. As a result of its analysis, Fitch has assumed that Ford makes a theoretical $13.6 billion equity injection into Ford Credit, funded with balance sheet cash, to bring Ford Credit's debt-to-equity ratio down to 4.0x. Fitch has included the adjustment in its calculation of Ford's not readily available cash. The resulting adjustment reduces Fitch's calculation of Ford's readily available automotive cash, but the company's metrics remain supportive of its 'BB+' IDR and Positive Outlook. In addition to the captive-finance adjustment, according to its criteria, Fitch has treated an additional $3.2 billion of Ford's automotive cash as "not readily available" for purposes of calculating net metrics. This is based on Fitch's estimate of the amount of cash needed to cover typical seasonality in Ford's automotive business. However, even after excluding the amounts noted above from its liquidity calculations, Fitch views Ford's automotive liquidity position as strong. Debt Structure: As of June 30, 2022, Ford's automotive debt structure consisted primarily of about $16 billion of senior unsecured notes, $750 million of borrowings on the 364-day revolver and about $1.7 million of borrowings outstanding under a U.K. export finance program, along with about $1.4 billion of various other long- and short-term borrowings. ISSUER PROFILE Ford is a global automotive manufacturer that builds and sells light vehicles primarily under the Ford and Lincoln brands, as well as Ford-brand commercial vehicles. Ford also offers financial services to dealers and customers through Ford Motor Credit Company LLC. FORUM ENERGY: S&P Alters Outlook to Positive, Affirms 'CCC+' ICR ---------------------------------------------------------------- S&P Global Ratings revised its outlook to positive from stable and affirmed the 'CCC+' issuer credit rating on Forum Energy Technologies Inc. S&P said, "We also affirmed our 'CCC+' issue-level on Forum's 9% convertible secured notes due in 2025. The '4' recovery rating is unchanged and reflects our expectation of average (30%-50%; rounded estimate: 45%) recovery of principal to creditors in a payment default. "The positive outlook reflects our view that Forum's credit measures will continue to improve over the next 12 months, based on more supportive sector conditions, with funds from operations (FFO) to debt of about 12% in 2022. "The positive outlook reflects our view that credit measures will improve to more sustainable levels over the next 12 months." Forum's activity is highly correlated to the active rig count in the U.S., given its broad suite of products used in the drilling and completion process. S&P said, "The U.S. rig count has increased more than 50% in the past 12 months, and we expect it to continue to rise at least through 2023 based on our commodity price outlook and commentary from land rig operators. We anticipate Forum's revenues will increase 25%-30% in 2022 from a combination of increased activity and net pricing gains. We expect cost inflation will be passed through to customers where possible, although it will likely slow the pace of the company's margin improvement. We now anticipate average FFO to debt in the 12%-16% range in 2022 and 2023 and average debt to EBITDA of about 4.5x." Land rig and pressure pumping activity support an improved outlook for Forum. S&P believes the super-spec land rig and pressure pumping fleet utilization rates are at multiyear highs and performing higher intensity drilling and completion jobs, placing greater wear and tear on equipment and the need for replacement parts, in addition to downhole consumables. Leverage metrics could benefit from the equity conversion feature on Forum's convertible secured notes due in 2025. Forum had about $257 million of its notes outstanding as of June 30, 2022, of which $123 million (48%) is mandatorily convertible into equity if certain conditions are met. The conversion would be triggered if the daily volume weighted average trading price exceeds $30 per share for 20 consecutive days. Forum's share price is currently about $26 per share, although S&P notes it has traded with high volatility. S&P said, "The positive outlook reflects our view that we could raise our ratings on Forum over the next 12 months if its credit measures continue to improve, such that we expect FFO to debt comfortably above 12% on a sustained basis and the company maintains adequate liquidity. "We could revise our outlook to stable if we no longer anticipate improvement in credit measures at more sustainable levels. This would most likely result from a decrease in commodity prices that reduces drilling and completion activity as well as demand for products and services that Forum offers. "We could raise our ratings on Forum if credit measures improve, such that FFO to debt is comfortably above 12% on a sustained basis and the company maintains adequate liquidity. This would most likely result from continued strong drilling and completion activity, supported by higher commodity prices and leading to higher demand for Forum's products and services. In addition, the conversion of a portion of Forum's convertible notes into equity would also support improving financing measures." ESG credit indicators: E-4, S-2, G-2 S&P said, "Environmental factors are a negative consideration in our credit rating analysis on Forum due to our expectation that the energy transition will decrease demand for oil field services and equipment as accelerating adoption of renewable energy sources lowers demand for fossil fuels. Additionally, the industry faces an increasingly challenging regulatory environment, both domestically and internationally, that has included limits on fracking activity in certain jurisdictions, as well as the pace of new and existing well permits. This is likely to have a negative impact on Forum's profitability, with the bulk of its revenues tied to new drilling and completions. Despite accounting for a small portion of its total revenues, Forum also provides a suite of products that will support companies through the energy transition, including valves to prevent methane leakage at producing wells and methane capture units." FREIRE CHARTER SCHOOL: S&P Assigns 'BB' ICR, Outlook Stable ----------------------------------------------------------- S&P Global Ratings has assigned its 'BB' issuer credit rating to Freire Charter School Wilmington Inc. (FCSW or the school), a Delaware not-for-profit corporation. The outlook is stable. In July 2022, FCSW entered into a $11 million loan agreement with the Equitable Facilities Fund (EFF) to finance the acquisition and renovation of its previously leased existing facility, to acquire an adjacent building for parking purposes as well as future use as either a gymnasium and/or additional classroom space, and to refinance some existing private loans that financed earlier improvements to its existing facility. Pro forma debt will consist entirely of the EFF loan, which is ultimately secured by a first lien on gross revenues of FCSW and a first-lien mortgage on both the acquired properties. Debt service is level beginning in fiscal 2024 at $689,000 over the life of the 30-year loan. "The rating reflects our view of FCSW's comparatively short operating history, relatively small but stable enrollment base with improving student retention rates, and modest, yet sufficient, historical financial performance and liquidity," said S&P Global Ratings credit analyst Jesse Brady. The EFF loan does lower the school's debt service burden to a manageable level from a budgetary standpoint, though pro forma debt nonetheless remains high on a per student and debt-to-capitalization basis and there are additional, though preliminary, plans to issue a modest amount of additional debt within the next three-five-years to build out a possible gymnasium. S&P said, "In our view, there is some capacity for additional debt at the current rating level. We assessed the enterprise profile as adequate and the financial profile as vulnerable; combined, these support an anchor of 'bb' and a final rating of 'BB'." S&P analyzed the school's environmental, social, and governance (ESG) risks and consider them neutral in our credit rating analysis. S&P said "The stable outlook reflects our expectation that enrollment will remain steady, supporting stable operations and financial metrics consistent with the rating. Given the school's liquidity that is somewhat weak relative to that of similarly rated peers and rating category medians, the outlook reflects our view that FCSW's liquidity will not deteriorate materially from fiscal 2021 levels over our outlook horizon. "We could consider a negative rating action during our outlook period if lease-adjusted MADS coverage and liquidity decline to levels inconsistent with the rating, or if the school's demand profile weakens such that full-accrual financial performance displays a sustained trend of negative operations. "We could consider a positive rating action if FCSW were to sustain healthy operating margins and improved pro forma MADS coverage, incorporating any future plans for additional debt, while maintaining its enrollment and demand, and increasing liquidity to a level more commensurate with that of higher-rated peers." GEO GROUP: S&P Assigns Prelim 'BB-' Rating on New Sr. Secured Debt ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary 'BB-' issue-level rating and '1' recovery rating to The GEO Group Inc.'s new senior secured facilities and its preliminary 'B' issue-level rating and '3' recovery rating to the new second-lien notes and second-lien private exchange notes. The '1' recovery rating indicates its expectation for very high recovery (90%-100%; rounded estimate: 95%) in the event of a default. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a default. S&P expects to finalize these ratings in the days following the close of the transaction after it confirms that the final terms of the exchange are in line with its expectations. On Aug. 17, 2022, The GEO Group announced that it had received the required consents to implement its proposed debt restructuring. S&P said, "In the coming days, we expect the company will exchange most of its obligations under its existing debt for longer-dated credit facilities, including a secured exchange revolver due 2027, two tranches of a secured exchange term loan maturing in 2027, a secured stub term loan maturing in 2024, new secured second-lien notes due 2028, and secured second-lien private exchange notes due 2028. "Our existing issuer credit rating and issue-level ratings on GEO are unchanged. We expect to lower our issuer credit rating on the company to 'SD' (selective default) and our issue-level ratings on its existing rated credit facilities to 'D' when the transaction closes. Subsequently, we expect to raise our issuer credit rating on GEO to 'B'. "The preliminary ratings reflect that we expect to raise our issuer credit rating on GEO to 'B' shortly after it completes the exchange transaction. The company has secured the required lender participation to execute its proposed debt restructuring and we expect the transaction will close on Aug. 19, 2022. If the transaction closes in the anticipated timeline with no material revisions to the announced terms, we expect to lower our issuer credit rating on GEO to 'SD' and all of our issue-level ratings on its debt to 'D' because the exchange contains features that we deem distressed. These include the maturity extensions and the alteration of the non-participating creditors' ranking on the collateral. "Shortly thereafter, we plan to raise our issuer credit rating on GEO to 'B' to reflect its much improved liquidity position due to its new capital structure and extended debt maturity profile. If executed, the exchange will reduce the company's near-term debt burden over the next 24 months to about $300 million from more than $2 billion. This will provide GEO with sufficient financial flexibility to execute its key strategic initiatives, which include contract renewals, asset dispositions, and the development of detention alternatives. "We forecast GEO will generate sufficient free operating cash flow (FOCF) to repay its remaining near-term debt maturities without needing to access the capital markets. Despite our expectation for modest earnings declines and rising interest costs under the new credit facilities, we expect the company will generate sufficient cash flow to repay its near-term maturities while maintaining a healthy liquidity buffer. Under our updated base-case forecast, we assume GEO will generate about $100 million of annual reported FOCF." This should support reduction in S&P Global Ratings-adjusted gross leverage to the high-4x area by 2024, from the low-5x area as of the close of the transaction, as it repays the amounts outstanding under the remaining credit facilities at maturity. GEO will be significantly limited in its ability to return cash to its shareholders following the transaction and the anti-cash hoarding and excess cash flow sweep provisions under its new capital structure could lead to a further reduction in its gross leverage. The key risks to our forecast include the persistence of industry headwinds, including delays in the repeal of the Title 42 immigration regulation, ongoing pandemic-related capacity limitations, the nonrenewal of federal detention contracts under the January 2021 executive ban, rising wages, difficulty in executing asset sales, and a potential downward revision in the number of U.S. Immigration and Customs Enforcement (ICE)-contracted beds due to reduced volumes. That said, the amount of GEO's upcoming revenue that is at risk for non-renewal under the executive ban is modest and we believe the repeal of Title 42 will likely support increased volumes in 2023. The company's services are critical to its government customers, which rely on the sector for more flexible and efficient services. S&P said, "We expect to lower our issuer credit rating on GEO and our issue-level ratings on the company's existing capital structure once the distressed debt exchange transaction closes on August 19, 2022 and to raise them shortly after. We expect to finalize our preliminary issue-level ratings on GEO's debt after the transaction closes on Aug. 19, 2022. Under the terms of the new credit facilities, the participating first-lien lenders will receive additional collateral, which includes increased mortgaged domestic real properties (up from about 55% of net book value to 90%). The new second-lien noteholders will receive a second-lien on that collateral and will rank senior to the non-participating (both secured and unsecured) lenders on the new collateral. Therefore, we expect the non-participating noteholders will see a reduction in their recovery value in the event of a hypothetical default given the seniority of the new collateral awarded to the participating noteholders. Nevertheless, we expect very high (rounded estimate: 95%) recovery for all of the secured lenders and meaningful recovery (rounded estimate: 60%) for the second-lien noteholders in the event of a default." GISSING NORTH AMERICA: Cash Collateral Access, DIP Loan OK'd ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, authorized Gissing North America LLC and affiliates to use cash collateral and obtain secured postpetition financing on an interim basis. A final hearing on the matter is scheduled for August 24 at 10 a.m. A consortium of lenders have committed to provide postpetition financing, consisting of a revolving loan and the sum of advances on the DIP loan plus advances outstanding on the prepetition revolver that will not exceed $30 million, in the aggregate. Prior to entry of a Final Order, the DIP Lenders agreed to provide up to $8.8 million of interim financing. The Huntington National Bank, a national banking association and a lender under the DIP Credit Facility, and together with any other entities that are a lender, advised the Court the lenders are willing to advance monies to the Debtors, and the Prepetition Lenders are willing to consent to the use of cash collateral, only upon the terms and conditions contained in the Interim Order. General Motors LLC and Tesla, Inc. have agreed to purchase subordinated participations in the DIP Credit Facility in accordance with the terms of the Subordinated Participation Agreements. The Debtors, Huntington in its capacity as agent and collateral agent, the Prepetition Lenders, and General Motors, Toyota Motor Engineering & Manufacturing North America, Inc., and BMW SLP S.A. de C.V. are parties to the Accommodation Agreement dated July 18, 2022 as modified by Tesla's Joinder to Accommodation Agreement and Access Agreement dated as of July 29, 2022, by and among, the Prepetition Borrowers, Agent, the Prepetition Lenders, GM, Toyota, BMW, and Tesla and related Access and Security Agreement dated July 18, 2022 pursuant to which the parties outlined the terms of the financial accommodations to be provided by certain customers of the Debtors. It is a condition precedent to the DIP Financing Documents that the Accommodation Agreement and Access Agreement be approved by the Court as requested in the Motion and constitute DIP Financing Documents under the Interim Order. As previously reported by the Troubled Company Reporter, the salient terms of the DIP Credit Facility include: a. Maturity Date and Events of Default: The earlier of (i) October 31, 2022 and (ii) the occurrence of a Termination Event, which includes: (i) any of the Cases are either dismissed or converted to a case under chapter 7 of the Bankruptcy Code or if venue of any of the Cases is transferred to another district; (ii) a trustee or an examiner with expanded powers is appointed in any of the Cases; (iii) any plan(s) of reorganization of the Debtors is filed entered an order confirming, a plan of reorganization, which plan is not in form and substance acceptable to the DIP Lenders or the Prepetition Lenders; (xii) the Sale Milestones, attached to the Motion as Exhibit 6c, will not have been met within the period specified therefor, as the same may be extended in the sole discretion of the Lenders; or (xiii) the termination of the Term of the Accommodation Agreement. b. As adequate protection to the prepetition lenders, Debtors will continue to pay accrued interest on the prepetition loans monthly, as well as continued monthly principal payments on the prepetition term loans. The prepetition lenders will also receive replacement liens on all assets of Debtors (e.g., newly generated accounts and newly acquired inventory), which will be junior to the liens securing the DIP loan and a section 507(b) priority claim. As adequate protection to Tesla, Tesla will also receive replacement liens and a section 507(b) priority claim which will be junior to the prepetition lenders' replacement liens and 507(b) claim. Tesla has agreed to this form of adequate protection. c. A $300,000 commitment fee (1% of commitment amount) deemed fully earned and nonrefundable on receipt. The Debtor requires the use of cash collateral and postpetition financing to maintain liquidity sufficient to continue operating the Debtors' businesses during the period prior to the asset sales, which are to be completed by October 31, 2022. The Debtors and non-debtors, Conform Automotive, LLC, a Michigan limited liability company, and DTI Molded Products, Inc., a Michigan corporation, are borrowers under a Fifth Amended and Restated Credit Agreement dated June 18, 2019. The Credit Agreement is secured by a first priority lien on substantially all of the Debtors' assets as more particularly described in the Credit Agreement and the related loan documents Under the Credit Agreement, the Debtors had access to revolving credit and term loan facilities evidenced by these notes: (a) Eighth Amended and Restated Revolving Note, (b) Second Amended and Restated Equipment Term Loan Note, (c) Second Amended and Restated Real Estate Term Loan Note, (d) Second Amended and Restated CapEx Note, and (e) Amended and Restated Second Amendment CapEx Note, in each case, dated October 29, 2021. As of the Petition Date, the outstanding unpaid balance under the Revolving Facility was at least $13.6 million, which includes an Over-Formula Advance Amount funded by GM and Tesla in the amount of $9.7 million. Also pursuant to the Prepetition Credit Agreement, the Prepetition Lenders provided the Prepetition Borrowers with an equipment term loan on October 29, 2021 in the amount of $5.3 million. As of the Petition Date, the outstanding unpaid balance under the Equipment Term Facility was at least $4.3 million. Also pursuant to the Prepetition Credit Agreement, the Prepetition Lenders provided the Prepetition Borrowers with a real estate term loan on October 29, 2021 in the amount of $6.4 million. As of the Petition Date, the outstanding balance under the Real Estate Term Facility was at least $5.9 million. Also pursuant to the Prepetition Credit Agreement, the Prepetition Lenders provided the Prepetition Borrowers with a capital expenditure loan (the "CapEx Loan") on October 29, 2021 in the amount of $515,349. As of the Petition Date, the outstanding balance under the CapEx Loan was at least $439,562. Also pursuant to the Prepetition Credit Agreement, the Prepetition Lenders provided the Prepetition Borrowers with a second capital expenditure loan on October 29, 2021 in the amount of $784,954. As of the Petition Date, the outstanding balance under the Second CapEx Loan was at least $686,835. The Debtors defaulted under the Loan Documents, which led to a Forbearance Agreement dated November 30, 2021. The Debtors also obtained loans from Tesla prior to the Petition Date, $5.7 million of which loans are secured by liens on substantially all assets of Debtors, as set forth in that certain Second Lien Security Agreement dated as of July 29, 2022, and (ii) the Tesla Liens are subordinated to the Prepetition Liens granted to the Prepetition Agent and to the DIP Liens under the terms of a Subordination Agreement dated as of July 29, 2022. A copy of the order is available at https://bit.ly/3dvEZwq from PacerMonitor.com. About Gissing North America Gissing North America LLC, f/k/a Conform Gissing International, LLC, and its affiliates are innovative and technology-driven suppliers of acoustic systems and weight reduction solutions for the automotive industry. They provide customers products that minimize noise, vibration, and harshness throughout a vehicle and reduce vehicle weight by using proprietary technology. On Aug. 8, 2022, Gissing North America LLC and its affiliates sought Chapter 11 protection (Bankr. E.D. Mich. Lead Case No. 22-46160). Gissing North America reported assets of $50 million to $100 million and liabilities of $50 million to $100 million as of the bankruptcy filing. The Debtors tapped Wolfson Bolton PLLC as bankruptcy counsel. Riveron Management Services' Steven R. Wybo is serving as CRO of the Debtors. Investment banking firm Livingstone Partners LLC was retained to advise on a potential sale. GOEASY LTD: S&P Affirms 'BB-' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings affirmed its ratings on goeasy Ltd. (GSY), including its 'BB-' issuer credit and senior unsecured debt ratings. The outlook remains stable. GSY's leverage was 3.83x debt to ATE as of June 30, 2022, up from 3.07x at year-end 2021 and above our previous base-case expectations of under 3.25x.The rise was largely due to three factors: drawdowns on financing facilities to support record originations, volatility in Affirm stock, and share repurchases. We expect leverage to decrease over the next 12 months to below 3.5x. S&P said, "In our view, healthy earnings and stable credit performance offset the rise in leverage. Credit quality began normalizing in the second half of 2021 after government aid to consumers for the COVID-19 pandemic expired. Annualized net charge-offs were 8.9% of average gross receivables for the first half of 2022, up from 8.0% for the first half of 2021. We expect net charge-offs to remain within management's stated target range of 8.5%-10.5%. Excluding fair value adjustments in Affirm stock, net income was about $85.5 million for the first half of 2022, up from about $59.2 million for the first half of 2021, though part of the increase was due to the LendCare acquisition in April 2021. We also believe that LendCare is now well-integrated in GSY, with minimal likelihood of significant integration issues." The increase in leverage led to tightening covenant cushions.GSY's revolving credit facility has four financial covenants, one of which is a maximum consolidated leverage ratio of under 4.5x. As of June 30, 2022, the company's covenant leverage was 4.27x, but we expect it to fall below 4.0x by year-end 2022. Liquidity remains sufficient to support originations and operations. As of June 30, 2022, the company had over $1 billion of unrestricted cash and available capacity under its financing facilities. S&P estimates GSY had more than $900 million of unencumbered assets to pledge to its financing facilities, if needed. S&P said, "The stable outlook reflects our expectation that, over the next 12 months, GSY will reduce leverage to 3.0x-3.5x debt to ATE. We also expect the company will continue to generate healthy earnings and maintain net charge-offs below 12%. Over the longer term, we think the company could lower leverage back below 3.0x owing to less aggressive levels of origination. "We could lower the ratings over the next 12 months if leverage approaches 4.0x debt to ATE or if covenant cushions erode. We could also lower the ratings if the company's operating performance materially deteriorates or if credit quality weakens, particularly if net charge-offs approach 12%. "An upgrade is unlikely over the next 12 months. Over the longer term, we could raise the ratings if the company maintains stable credit and operating performance, successfully addresses its funding concentration, and sustains leverage under 2.75x debt to ATE." GOLDMAKER INC: Seeks January 2023 Extension of Plan Deadline ------------------------------------------------------------ Sunshine Goldmaker, Inc. d/b/a Estelle, Corp., filed a motion for an extension of the time by which a Plan of Reorganization should be confirmed for an additional 120 days, through and including Jan. 21, 2023. The Debtors says this first requested extension of the time period for confirmation is warranted and necessary to afford the Debtor a meaningful opportunity to pursue the chapter 11 reorganization process and build a consensus among economic stakeholders, all as contemplated by chapter 11 of the Bankruptcy Code. An extension is necessary due to the fact, that the time to confirm a plan is set to expire on Sept. 23, 2022, but the hearing on the Debtor's Disclosure Statement, filed on August 9, 2022, is scheduled on September 28, 2022, and in the event the filed Chapter 11 Small Business Disclosure statement and/or plan of reorganization are needed to be amended, the Debtor will need an additional time in order to comply with the provisions of the Bankruptcy Code. Attorney for the Debtor: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347)342-3156 E-mail: alla@kachanlaw.com About Goldmaker Inc. Goldmaker Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 21-41309) on May 14, 2021, listing up to $50,000 in assets and up to $500,000 in liabilities. Judge Jil Mazer-Marino oversees the case. Alla Kachan, Esq., at the The Law Offices of Alla Kachan, PC, is serving as the Debtor's legal counsel. GOVERNORS GUN: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- Governors Gun Club Kennesaw, LLC asks the U.S. Bankruptcy Court for the Northern District of Georgia, Gainesville Division, for authority to use cash collateral on emergency basis to continue its operations in accordance with the proposed budget. Like so many other small businesses, the Debtor suffered a series of setbacks at the hands of the COVID-19 pandemic. The Debtor is a membership-based business that offers its members a luxury experience for indoor shooting facilities, including an indoor shooting range, professional firearms training, concerts, and a situational training simulator. The Debtor also offers packages for corporate and social events at its club. South State Bank, N.A asserts a first priority interest in all the Debtor's assets, including cash collateral. National Bank of Commerce, a predecessor in interest to South State, has filed a UCC-1 Financing Statement on November 28, 2017 that includes all fixtures, accounts, and intangibles related to real property located at 1005 Cobb Place Boulevard NW, Kennesaw, Georgia, 30144, which is owned by co-debtor Web IV, LLC. South State asserts the principal balance of the loan is $8,619,776. To the extent that any interest that the Lenders may have in the cash collateral is diminished, the Debtor proposes to grant the Lenders a replacement lien in post-petition collateral of the same kind, extent, and priority as the liens existing pre-petition, except that the Adequate Protection Lien will not extend to the proceeds of any avoidance actions received by the Debtor or the estate pursuant to chapter 5 of the Bankruptcy Code. The Debtor further requests that the court schedule a final hearing on cash collateral use, and following such hearing, enter a final order authorizing cash collateral use. A copy of the motion and the Debtor's budget for August 2022 is available at https://bit.ly/3PzTixw from PacerMonitor.com. The budget provides for total expenses, on a weekly basis, as follows: $151,712 for the week beginning August 17, 2022; $93,655 for the week beginning August 24, 2022; and $229,879 for the week beginning August 31, 2022. About Governors Gun Club Kennesaw, LLC Governors Gun Club Kennesaw, LLC r is a membership based business that offers its members a luxury experience for indoor shooting facilities, including an indoor shooting range, professional firearms training, concerts, and a situational training simulator. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-20787) on August 17, 2022. In the petition filed by William E Brown, president, the Debtor disclosed up to $10 million in both assets and liabilities. William Rountree, Esq., at Rountree, Leitman, Klein & Geer, LLC is the Debtor's counsel. HANESBRANDS INC: S&P Alters Outlook to Negative, Affirms 'BB' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook to negative, affirmed its 'BB' issuer credit rating on U.S.-based Hanesbrands Inc., and 'BB' issue-level rating on its senior unsecured debt. The negative outlook reflects that S&P can lower ratings over the next 12 months if the company does not reduce leverage below 4x. S&P said, "The negative outlook reflects operating performance below our previous expectations and our view that credit metrics may remain deteriorated over the next 12 months. We project leverage will be about 4.6x for the fiscal year ended 2022, which is above our prior expectation of 3x-3.5x and above our 4x downgrade threshold. Given the current macroenvironment and the company's recent performance we believe there is risk that leverage can remain elevated above 4x through the first half of fiscal 2023. Additionally, we now expect free operating cash flow to be negative for fiscal 2022, below our prior expectation of $375 million." This is largely due to the company's increased inventory levels due to prior pandemic-induced supply chain challenges and more recently due to a shift in demand for its products. Despite the change in cash flow generation, the company is not pulling back on its $150 million capital expenditures (capex) for its Full Potential Plan. The company's plan involves significant capital for automation and to increase capacity to reduce lead time and lower operating costs. It will also expand its U.S. West Coast fulfillment center to reach customers more efficiently. Speed to market is a competitive differentiator for the direct to consumer (DTC) channel and younger consumers, all necessary for Hanesbrands to achieve its long-term plan and why capex is not being changed at this time. The weaker than expected operating performance is primarily because of lower demand; less so from a cyberattack Hanesbrands reported a 13.6% net revenue decline for the second quarter of 2022 compared to 2021 driven by double-digit declines in all of its reporting segments. Reported operating income and EBITDA for the same periods fell by $80 million. While 5% of the revenue decline and $35 million of the operating income decline can be attributed to a cyberattack in the spring, the remaining weakness in results reflects declining demand for its products, including its strongest activewear brand, Champion. The cyberattack shut down parts of its global supply chain and left the company unable to fulfil orders for three weeks. This combined with an already challenged supply chain as well as inflation limiting consumers' ability and willingness to spend on discretionary products leading to the company's earnings miss. S&P said, "Furthermore, we believe this year will hurt the company's ability to hit its 2024 $8 billion revenue target laid out on its end of 2021 investor day. The increase in sales is largely driven by Champion reaching $3.2 billion in global revenues by 2024, but the brand's segment declined 18% in the second quarter, derailing its progress. We believe the brand still has brand equity, pricing power, and the ability to enter into new product categories and expand its geographic reach, making its targets still achievable." S&P said, "We expect share buybacks to be minimal over the next 12 months and mergers & acquisitions (M&A) to take a pause given negative cash flow generation. The company's recent performance does not change our expectation for a balanced capital allocation over the next 12 months with a preference to dispositions over acquisitions. Hanesbrands announced the authorization of a $600 million three-year share buyback program in early 2022 and repurchased $25 million worth of shares in 2022. Given we do not forecast the company to generate free operating cash flow in 2022, we do not expect further cash usage to buy back shares. This is consistent with our opinion that the company will buy back fewer shares in years in which there is macroeconomic uncertainty or any operating headwinds, which is currently the case for fiscal 2022. Therefore, we expect the company to maintain a balanced capital-allocation policy. In fact, management reiterated its financial goal to manage net leverage in the 2x-3x range. Investment activity should remain muted given these goals. Although the company spent $100 million in the second quarter of 2022 to acquire the Champion trademark from Wolverine World Wide, with plans to release innovations in the category, M&A is not likely in the near-term. The company is currently leveraged at 3.5x on a covenant-defined basis, and will use any cash flow generated to repay debt to ensure compliance and restore leverage to its publicly stated targets. We would view raising debt to pursue M&A over the next 12-18 months as a shift in financial policy." The trend toward casual clothing will continue to support Champion's growth over the long-term, but near-term demand will be pressured by a slowing economy. The activewear segment led by Champion and Hanes has been the company's growth engine. The innerwear segment, which accounts for about one-third of total sales, has declined the past few years due to the challenging U.S. retail environment, weak consumer traffic at retail locations, lean inventory management by wholesale partners, and retail store closures. Although we expect the casualization and health and fitness trends to continue to support growth for activewear longer term, the segment will likely continue faces near-term volume pressure as the economy slows and inflation persists. Sales volumes also face difficult year-over-year comparisons as active wear demand last year had benefitted from more remote working and stronger consumer discretionary income. Hanesbrands plans to continue investing in Champion and diversify its products into footwear, socks, and innerwear. It is allocating a significant portion of its investment budget to continue Champion's growth trajectory toward a $3.2 billion brand by 2024. However, given recent performance and an uncertain operating outlook these goals may not be achievable. Recent performance likely delays 2024 financial targets, leading us to view management and governance less favorably. Hanesbrands has a relatively new management team, having announced the appointment of new CFO Michael Dastugue in May 2021 and later announced its long-term financial targets. Given recent performance, S&P believes the company will be delayed from hitting its 2024 performance targets and view management's planning process, consistency of strategy with organizational capabilities, and ability to control execution of strategy less favorably. The negative outlook reflects that S&P could lower the ratings over the next 12 months. S&P could lower ratings if Hanesbrands sustained leverage above 4x. This could occur if: -- Innerwear sales decline further due to consumers trading down or the company is not successful with expanding the Champion brand globally, possibly because of lower demand as inflation reduces consumers' purchasing power or increased competition. -- Demand decreases substantially and the company continues to hold onto higher levels of inventory leading to sustained negative free operating cash flow. -- Performance deteriorates and puts pressure on the company's ability to comply with its net leverage financial covenant of 4.5x. -- The company adopts more aggressive financial policies, including pursuing a debt-financed acquisition, share buybacks, or dividends before restoring credit measures to its target. -- S&P could revise the outlook to stable if the company sustains leverage below 4x. This could occur if the company: -- Returns to revenue growth, primarily from increased demand of its Champion brand and makes progress toward restoring its adjusted EBITDA margin towards 15%. -- Demand for its products improves, leading to normalized inventory levels and positive free operating cash flow. ESG credit indicators: E-2,S-2,G-2 HELIUS MEDICAL: Incurs $3.8 Million Net Loss in Second Quarter -------------------------------------------------------------- Helius Medical Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $3.81 million on $119,000 of total operating revenue for the three months ended June 30, 2022, compared to a net loss of $5.98 million on $71,000 of total operating revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $8.16 million on $309,000 of total operating revenue compared to a net loss of $9.34 million on $155,000 of total operating revenue for the six months ended June 30, 2021. As of June 30, 2022, the Company had $6.55 million in total assets, $2.04 million in total liabilities, and $4.50 million in total stockholders' equity. "The second quarter saw the start of PoNS commercial sales in the United States, and we have already received several hundred inquiries. Though revenue during the quarter increased on a year-over-year basis, we did not have the sequential growth we'd expected. As a result, we've implemented several programs to eliminate the impediments to prescription fulfillment. First, we introduced an online training module so physical therapists can be trained in three hours or less, at the therapist's own pace, instead of through an in-person, multi-day course. This module, which became available in mid-July, is already proving effective in onboarding physical therapists and clinics speedily and more efficiently, without added cost, allowing patients and physicians to spend less time waiting for a qualified and available therapist," said Dane Andreeff, president and chief executive officer of Helius. "On June 1st, we also announced the launch of the Patient Therapy Access Program, which provides patients suffering from MS access to on-label PoNS Therapy at a greatly reduced price and, later this year, we will roll out our online pharmacy initiative. Through a network of fully licensed providers with e-prescribing capabilities, our upcoming direct-to-consumer e-platform will streamline access to PoNS Therapy, and further reduce the time it takes for a patient to get the treatment they need." "We are excited to build on this momentum going into the second half of the year, and our recently announced public offering gives us the runway to focus on getting PoNS Therapy to as many patients as possible," concluded Mr. Andreeff. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001610853/000155837022013668/tmb-20220630x10q.htm About Helius Medical Helius Medical Technologies -- http://www.heliusmedical.com-- is a neurotech company focused on neurological wellness. Its purpose is to develop, license or acquire non-invasive technologies targeted at reducing symptoms of neurological disease or trauma. Helius Medical reported a net loss of $18.13 million for the year ended Dec. 31, 2021, compared to a net loss of $14.13 million for the year ended Dec. 31, 2020. As of March 31, 2022, the Company had $9.62 million in total assets, $2.49 million in total liabilities, and $7.13 million in total stockholders' equity. Philadelphia, Pennsylvania-based BDO USA, LLP, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 14, 2022, citing that the Company has incurred substantial net losses since its inception, has an accumulated deficit of $137.0 million as of Dec. 31, 2021 and the Company expects to incur further net losses in the development of its business. These conditions raise substantial doubt about its ability to continue as a going concern. HIGHLAND PROPERTY: Sept. 8 Hearing on Amended Disclosures and Plan ------------------------------------------------------------------ Judge Thomas P. Agresti has entered an order conditionally approving the Second Amended Disclosure Statement of Highland Property, LLC. On Sept. 8, 2022 at 10:00 A.M., via https://www.zoomgov.com/j/16021303488 is the hearing to consider final approval of the Disclosure Statement and confirmation of the Plan confirmation On or before Sept. 1, 2022, all ballots accepting or rejecting the Second Amended Plan must be served on the attorney for the Debtor. The Debtor must file a Summary of the balloting no later than 7 days before the Plan confirmation hearing. On or before Sept. 1, 2022, all objections to the Second Amended Disclosure Statement must be filed pursuant to FRBP Rule 3017.1(c)(2) and/or to Second Amended Plan confirmation pursuant to FRBP Rule 3020 (b)(1). About Highland Property Highland Property, LLC, filed a voluntary petition for Chapter 11 protection (Bankr. W.D. Pa. Case No. 21-22083) on Sept. 22, 2021. Judge Thomas P. Agresti oversees the case. Dennis J. Spyra, Esq., serves as the Debtor's legal counsel. HOLLEY INC: S&P Alters Outlook to Stable, Affirms 'B' ICR --------------------------------------------------------- S&P Global Ratings revised its outlook on Holley Inc. to stable from positive and affirmed its 'B' issuer credit rating. The stable outlook reflects S&P's expectation that Holley will maintain EBITDA margins in the mid- to upper-teens, despite slower sales growth and while maintaining debt to EBITDA below 6.5x. S&P said, "The outlook revision to stable reflects our view that Holley's credit metrics will remain weaker than previously expected as growth slows due to supply chain issues and inventory destocking at certain customers. Holley's second-quarter results were somewhat weaker, and the company lowered its guidance. Supply chain disruptions have resulted in extended lead times for products in high-demand categories combined with challenges in sourcing products that require automotive-grade semiconductor chips used for heat applications, particularly under the hood of internal combustion engines, such as electronic fuel injectors. Warehouse distributor customers have also de-stocked inventory and submitted fewer orders for purchases in 2022 amid macroeconomic concerns and potential slowdown in discretionary consumer spending. "We expect these factors will likely reduce Holley's sales volumes during 2022, and S&P Global Ratings now forecasts margins to be sustained at lower levels. While the company has instituted some pricing actions, administrative and marketing spend will remain elevated relative to the lower topline sales. We now expect debt to EBITDA to be in the range of 5.5x-6x for 2022 and remaining closer to 5x in 2023 compared to our previous forecast of around 4x. We also see weaker free operating cash flow (FOCF) to debt of only 3%-5% in 2022 compared to our previous expectations of nearly 10%. In addition to lower margins, weaker FOCF in 2022 is due to higher working capital requirements associated with the inventory destocking from warehouse customers, supply chain delays, as well as some strategic inventory replenishment. Still, we expect these supply chain and destocking issues to improve in 2023, and that FOCF will improve thereafter. "We continue to believe demand for highly discretionary auto parts will decline in a more protracted recession. S&P Global economists now assess recession risk at 45% (40%-50% range) for the next 12 months. If the U.S. were to enter a longer recession, this would reduce discretionary consumer spending and demand for Holley's products more than our base case. In this scenario, a steeper decline in revenues would increase leverage, but we think the company could manage to still generate modest free cash flows as Holley has a fairly variable cost structure, and relatively low capital spending requirements." The company's special purpose public listing in mid-2021 has reduced Holley's private equity ownership with its primary financial sponsor, Sentinel Capital Partners LLC, now owning a 46% stake, down from the 57% level cited in our Oct. 1, 2021, research update on Holley as it seeks to realize on its investment. S&P views this degree of ownership as significant and continue to monitor Holley's track record operating as a public company and tolerance for managing its debt to EBITDA to be in line with its financial policy. Holley maintains adequate liquidity and has no near-term debt maturities. Liquidity consisted of balance sheet cash of $30.6 million and $123.8 million of net revolver availability as of June 30, 2022. Moreover, Holley's capital structure comprises facilities that expire in November 2026 at the earliest, governed by a single 5x maximum total leverage ratio, and we forecast it has sufficient covenant headroom to maintain this ratio. The stable outlook reflects S&P's expectation that Holley will maintain EBITDA margins in the mid- to upper-teens, despite slower sales growth and while maintaining debt to EBITDA below 6.5x. S&P could lower its rating on Holley if: -- Debt to EBITDA remains above 6.5x on a sustained basis; or -- FOCF to debt remains below 3% for consistent quarters. This could occur if order fill rates lead to further decline in sales volumes, which further reduces its margins. A downgrade would also be considered if Holley were to pursue debt-financed mergers and acquisitions (M&A) or similar activities that lead to substantially higher leverage. S&P could increase its rating on Holley if: -- Debt to EBITDA approaches 4x and remains at this level on a sustained basis; and -- FOCF to debt sustainably remains above 10%. This could occur if demand for Holley's products remains solid, margins improve, and the company continues to efficiently integrate recent acquisitions and expansion into new product categories. Similarly, S&P would also evaluate Holley's track record as a public company and its tolerance for completing additional acquisitions and managing leverage. ESG credit indicators: E-2, S-2, G-3 S&P said, "Environmental factors have an overall neutral influence on our credit rating analysis of Holley Inc. While many of its products, like electronic fuel injection kits and custom carburetors, are dependent on the combustion engine, the parts are sold in the aftermarket, demand is driven primarily by enthusiasts, and we expect it will take many years to change to a material amount of fully electric vehicles on the road, particularly in North America. Governance is a moderately negative consideration. Our assessment of the company's financial risk profile as aggressive 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. The company recently transitioned to a public company, but private equity sponsor Sentinel still holds a 46% stake and exerts a strong influence on the board. We could reassess the governance score upward should the stake and influence fall materially." HOLY REDEEMER: Moody's Affirms 'Ba2' Revenue Bond Rating -------------------------------------------------------- Moody's Investors Service has affirmed Holy Redeemer Health System (PA) (HRHS) Ba2 revenue bond rating and revised the outlook to negative from stable. The system had approximately $132 million of debt at fiscal year end 2021. RATINGS RATIONALE The outlook change to negative reflects a decline in operating performance through fiscal 2022 and expectations that margin recovery will be challenged by labor pressures in both the acute care and non-acute care side of the business. While long-term care, which accounts for approximately 14% of total revenue, provides revenue diversification, HRHS will be challenged to improve volumes with occupancy rates well below pre-pandemic levels given COVID disruptions, as well as shortages in permanent staff and elevated costs for temporary labor. Favorably, acute care volumes have mostly returned to pre-pandemic levels and the organizations growing relationships, including a recently-formed partnership with MD Anderson Cancer Center at Cooper for cancer services, will provide opportunity for service line growth. HRHS will continue to face challenges to grow revenue and volumes in this highly consolidated greater Philadelphia market with commercial insurer concentration. However, the organizations participation in value based contracts which has resulted in financial gains will continue to be a benefit. Although cash measures will likely remain adequate, liquidity risk will be elevated by a relatively high percentage of alternative investments. Covenant cushions will remain somewhat limited although concerns regarding covenant breaches will be mitigated by options to use alternative calculations of debt service in the MTI and other bank documents. While too early to incorporate into the rating, HRHS recently announced plans to explore a strategic partnership for its Health Care Division, which includes the hospital and the physicians and ambulatory services. Additionally, HRHS, as part of an alliance with Temple Health and Philadelphia College of Osteopathic Medicine (PCOM) has signed a definitive agreement to acquire Chestnut Hill Hospital from Tower Health, pending approval from regulators. These two potential developments reflect a fundamental change in management's strategies and are expected to provide greater access to resources, improve talent acquisition, and enhance population health initiatives. RATING OUTLOOK The negative outlook reflects a decline in operating performance in 2022. The severity of labor challenges combined with volume degradation, particularly in the non-acute care side, could continue to stall its recovery. Inability to show traction toward achieving pre-pandemic margins could result in rating pressure. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING Significant and sustained improvement in operating margins Increase in absolute investments and the liquidity of investments Material reduction in leverage FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING Inability to show improvement in operating cash flow margin in 2023 and/or reduction in days cash or cash to debt levels Additional debt that results in higher leverage measures Increasing competitive or payor pressure LEGAL SECURITY Bonds are secured by a gross receipts pledge and a mortgage pledge of the hospital land and buildings. The obligated group currently includes Holy Redeemer Health System and Holy Redeemer Physician Services. In fiscal 2021, the obligated group represented approximately 81% of system revenue. PROFILE HRHS is a Catholic health care system comprised of a medical surgical hospital with 239 licensed acute care beds and 21 long term care beds (located in Meadowbrook, PA, north of Philadelphia), a physician services company, a freestanding ambulatory surgery center, and non-acute care facilities and services provided throughout southeastern Pennsylvania and eleven New Jersey (NJ) counties. These include one standalone skilled nursing facility, one facility with skilled nursing care and assisted care, one retirement community with independent, assisted and skilled nursing care, and five home health agencies along with Medicare certified hospices. METHODOLOGY The principal methodology used in this rating was Not-For-Profit Healthcare published in December 2018. HOME DECOR: Wins Cash Collateral Access Thru Aug 29 --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, authorized Home Decor Liquidators, LLC on an interim basis in accordance with the budget, with a 10% variance through August 29, 2022. As previously reported by the Troubled Company Reporter, the Debtor believes Crossroads Financing, LLC and Newtek Small Business Finance may assert a claim that is purportedly secured by the Debtor's assets. Documentation available to the Debtor indicates Crossroads' secured interest in the Debtor's assets is subordinated to the interest of Newtek. In addition to Newtek and Crossroads, several other parties assert liens in certain property of the Debtor. For example, certain merchant advance companies may also assert claims in the assets of the Debtor, including IRM Ventures Capital, Spartan Business Solutions LLC, Spin Capital LLC, TYH Funding LLC and Unique Funding Solutions LLC. A copy of the order is available at https://bit.ly/3A7scIq from PacerMonitor.com. About Home Decor Liquidators, LLC Home Decor Liquidators, LLC is a business in the furniture store industry that is directed, managed, controlled and coordinated by management located in Georgia. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-51278 on February 15, 2022. In the petition signed by Christopher I. Prescott, president, manager, and member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Barbara Ellis-Monro oversees the case. Henry F. Sewell, Jr., Esq., at Law Offices of Henry F. Sewell, LLC, is the Debtor's counsel. HOMELIBERTY INC: Seeks Continued Cash Collateral Access ------------------------------------------------------- HomeLiberty, Inc. asks the U.S. Bankruptcy Court for the District of Minnesota for authority to continue using cash collateral in accordance with the budget and provide adequate protection. The Debtor needs to use cash collateral to meet its operating expenses. The Debtor explains it filed for Chapter 11 filing after one of its borrowers commenced litigation in the Hennepin County District Court and as a result of the associated costs with pursuing that litigation. The Debtor believes it will be able to reorganize under bankruptcy protection. Since filing of the original cash collateral motion on April 14, 2022, the Debtor has reviewed its records and searched filings within the State of Delaware and the State of Minnesota and has now concluded that it mistakenly indicated to the Court that certain of the Debtor's creditors held a lien on cash collateral. The Debtor currently believes that no creditor holds a lien on the Debtor's cash collateral. This Motion is filed to clarify for the Court and for the Debtor's creditors, that none of the Debtors' creditors has an interest in the cash collateral generated by the Debtor's business. A hearing on the matter is set for September 8, 2022 at 2 p.m. A copy of the motion and the Debtor's monthly operating budget is available at https://bit.ly/3CiNky2 from PacerMonitor.com. The Debtor projects $3,578 in total operating and debt service expense. About HomeLiberty Inc. HomeLiberty Inc. -- https://www.home-liberty.com/ -- provides financial products to qualified homeowners with severe negative equity. HomeLiberty, Inc. sought Chapter 11 protection (Bankr. D. Minn. Case No. 22-30548) on April 12, 2022. In the petition filed by Patricia Hanratty, as chief executive officer (CEO), HomeLiberty Inc. listed estimated assets between $1 million and $10 mllion and estimated liabilities between $1 million and $10 million. The case is assigned to Honorable Judge Kesha L Tanabe. Steven B Nosek, Esq., at Steven Nosek PA, is the Debtor's counsel. HRNI HOLDINGS: Fitch Affirms 'B' IDR, Outlook Stable ---------------------------------------------------- Fitch Ratings has affirmed HRNI Holdings, LLC's (HRNI) Issuer Default Rating (IDR) at 'B' and its senior secured term loan B at 'B+'/'RR3'. The Rating Outlook is Stable. HRNI's IDR reflects its 'b-' Standalone Credit Profile (SCP) with a one-notch uplift related to its relationship with Seminole Hard Rock Entertainment, Inc. (BBB/Stable) and Seminole Hard Rock International, LLC (BBB/Stable, collectively SHRE). HRNI's SCP reflects its single-site nature and conservative gross leverage. However, Fitch expects gross leverage to increase to 5.0x-5.5x due to multiple competitive openings in the Chicagoland market. The one-notch uplift to the IDR from HRNI's SCP is pursuant to Fitch's Parent and Subsidiary Linkage Rating Criteria and reflects the entity's linkage to SHRE, which Fitch considers to be a stronger parent. SHRE indirectly owns 76% of HRNI. KEY RATING DRIVERS Moderate Leverage to Increase: Gross leverage (total debt/EBITDA) was 3.9x as of June 30, 2022 and Fitch expects HRNI to remain below 4.0x in the near term given solid current performance at the property and term loan amortization. This is strong in the context of the SCP, but will increase in the medium term due to cannibalization from nearby competitive openings. Fitch expects HRNI to generate strong FCF in the near term due to good EBITDA generation, manageable interest expense and minimal required maintenance capex. This should also help near-term delevering. Competitive Pressure: HRNI will be subject to multiple new competitive properties, including a casino in Chicago's south suburban area estimated by 2024 and in downtown Chicago estimated by 2026. Both proposals are being completed by well-capitalized and established operators - PCI Gaming Authority (BBB-/Stable) and Bally's Corp. (B+/Negative). The additional supply will affect existing properties in Chicagoland, including HRNI, given the close proximity to Gary, IN. Fitch expects the south suburban and downtown licenses to negatively impact HRNI's cash flow and leverage, although this should be manageable. Fitch forecasts a high-teen percentage revenue decline in 2024 following the opening of the south suburban casino. Fitch's base case does not forecast this casino to meaningfully expand the total addressable gaming market due to Chicagoland's existing casinos and video lottery terminals. Pro forma leverage is likely to approach 5.0x, assuming a roughly 50% flow-through to EBITDA, which is more consistent with a 'b-' SCP for the standalone property. Longer-Term Risk from Downtown Opening: Fitch looks through this competitive opening to evaluate the long-term credit risk for HRNI, due to the likely impact it will have on the marketplace and on HRNI's credit metrics. Similar to the south suburban license, Fitch's base case does not contemplate meaningful growth to the overall addressable market and assumes significant cannibalization from all Chicagoland casinos. Fitch forecasts HRNI's leverage to remain in the 5.0x-5.5x range, assuming a mid-teens percentage revenue cannibalization for HRNI and similar flowthrough as the south suburban competitive opening. Lack of Diversification: HRNI operates a single property in a competitive market that is subject to new supply risk, limiting rating upside as future cash flow generation will be challenged. Most single-site operators are rated in the single 'B' category unless there are unique end-market dynamics. These include monopolistic positions, being a clear market leader, or having a conservative balance sheet. HRNI's geographic concentration offsets decent leverage and credit metrics. Good Initial Performance: The property opened in May 2021 and has taken incremental market share away from nearby competitors in addition to the legacy Majestic Star share. HRNI has a roughly 20% market share in the Chicagoland market YTD in 2022, compared to 5% share the prior Majestic Star licenses commanded in 2019. Hard Rock is the newest property opening in nearly a decade and has benefited from its proximity to the highway, brand recognition, and favorable regional gaming trends. Current win-per-day metrics are trending above area averages, at over $400 and $3,000 for slots and tables, respectively. Tepid Regional Gaming Outlook: Fitch anticipates a pullback in broader regional gaming demand in the back half of 2022 and into 2023, due both to tough yoy comparisons from an exceptionally strong 2021 and concerns on the current macroeconomic backdrop. The impressive gaming performance in domestic markets seen in 2021 and to-date in 2022 should subside, especially as levels of discretionary spend become more pressured amid the current inflationary environment. Chicagoland casino gross gaming revenue grew 2% over 2019 levels in 2021. Fitch is forecasting a mid-single-digit revenue decline to most regional gaming operators in the second-half 2022 and 2023. Current revenues continue to outpace pre-pandemic performance, so declines will generally be manageable for operators. The strong and sustained level of profitability post-pandemic will also help to offset top-line declines for regional gaming operators across the board. SHRE Relationship Positive: Fitch believes HRNI's association with SHRE warrants a one-notch uplift from HRNI's SCP due to management and brand overlap. Fitch considers SHRE as a stronger parent based on its underlying SCP, which is consistent with 'b+' pro forma for SHRE's purchase of the Mirage from MGM Resorts. SHRE's 'BBB' IDR is attributed to the guarantee of its debt by Seminole Tribe of Florida (STOF; BBB/Stable). However, Fitch believes SHRE has weak legal and strategic incentives to support HRNI, as there is no downstream guarantee and HRNI make a low financial contribution relative to SHRE's broader complex. Fitch's assessment of moderate operational incentives recognizes that HRNI shares common executive management with SHRE, is part of SHRE's broader 'Unity' player rewards program, and that its property is part of SHRE's regional gaming expansion strategy. SHRE owns 76% of HRNI and controls a majority of its board of directors. SHRE has also supported the entity through equity injections in 2021 when it took majority control following the prior majority owner's (Spectacle Entertainment Group) licensing issues with state regulators. DERIVATION SUMMARY HRNI's SCP is consistent with most other single-site gaming operators, including Empire Resorts Inc. (B+/Stable; SCP: b-) and Enterprise Development Authority (EDA; B+/Stable). HRNI has similar end-market dynamics as the two peers, including competitive operating environments with new supply risk, single-site properties, and similar cash flow generation. HRNI's leverage and profitability is weaker than its similar Hard Rock branded peer in Sacramento, EDA, especially given the pending casino openings in Chicagoland through 2026. HRNI is considered weaker than its larger, more geographically diversified regional gaming peers, including Bally's Corporation (B+/Negative) and Great Canadian Gaming Corporation (B+/Stable). These peers have similar-to-slightly higher leverage profiles, and/or much stronger FCF generation and better diversified. KEY ASSUMPTIONS -- Fitch assumes the positive market share gains HRNI has seen in Chicagoland to continue through 2022, with decelerating growth during the second half of the year. Fitch assumes a modest pullback in regional gaming, and at the Hard Rock property in 2023 amid macroeconomic uncertainty, inflationary pressures, and challenging yoy comparisons; -- A competitive south suburban Chicago casino opens in 2024, negatively affecting HRNI. Fitch expects a high-teens cannibalization to revenue with a roughly 50% flowthrough to EBITDA; -- A second competitive casino opens in 2026 in downtown Chicago. Fitch expects an additional 15% decline in gaming revenue over the first two years of this property opening, and a similar flowthrough; -- EBITDA margin to decline over the long term from the strong initial performance due to competitive openings, expiration of tax holidays and increasing management fees; -- Delevering ahead of the competitive openings to be driven through amortization (10% this year and next, then 5% thereafter) and some degree of voluntary debt paydown (potentially through an excess cash flow sweep), but Fitch expects leverage to rise from 2024 due to cannibalization; -- Capex limited to maintenance through the forecast; -- No shareholder distributions or acquisitions assumed. RECOVERY ANALYSIS The recovery analysis assumes HRNI would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim and full draw on the $35 million revolver. Going-concern EBITDA of $55 million reflects a sustainable level of operating performance following a restructuring scenario stemming from severe competitive pressures due to new competitive openings. Though Fitch already expects some level of cannibalization in its base case, Fitch recovery scenario envisions a greater degree of cannibalization and outsized impact to gaming metric performance. Going-concern EBITDA assumes a level of win-per-unit-per-day of slots and tables of $300 and $2,000, respectively, which is well below the current average in the Chicagoland market and below where the casino is trending; about $430 and $3,000. Fitch expects non-gaming revenues to remain around 10% of total property revenue. Fitch applies a 6.0x enterprise value/EBITDA multiple, which reflects the competitiveness of the Chicagoland market and new supply risk, and the property's limited operating record. It also reflects the single-site limitations of the credit. The 6.0x multiple is in line with comparable regional gaming peers. The quality of the property and healthy initial performance help to offset these concerns. Fitch forecasts a post-reorganization enterprise value of roughly $330 million. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Greater degree of confidence that gross debt/EBITDA will remain below 5.0x and the FCF margin will exceed 10% amid the competitive pressures in the greater Chicago area; -- An increase in rating linkage with SHRE; -- Geographical diversification away from the Chicagoland market. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Gross debt/EBITDA sustaining above 7.0x; -- FCF approaching breakeven; -- Decrease in rating linkage with SHRE or weakening of SHRE's SCP. LIQUIDITY AND DEBT STRUCTURE Liquidity is adequate between operational cash and availability on its $35 million revolver. Cash flow generation is sufficient to cover debt service and a small amount of maintenance capex annually. Fitch expects FCF margins to be in the mid-teen range in 2022 and 2023, prior to the competitive openings, and to fall to a single-digit percent longer term. ISSUER PROFILE HRNI is the owner and operator of Hard Rock Casino Northern Indiana. SHRE indirectly owns 76% of HRNI and is, in turn, fully owned by STOF. RATING ACTIONS ENTITY/DEBT RATING RECOVERY PRIOR ----------- ------ -------- ----- HRNI Holdings, LLC LT IDR B Affirmed B senior secured LT B+ Affirmed RR3 B+ INNOVATIVE BUILDING: Unsecureds to 100% in 60 Months ---------------------------------------------------- Innovative Building & Remodeling submitted a Subchapter V Amended Plan of Reorganization. With respect to Class 5 General Unsecured Claims against the Debtor: * Biz Fund Capital will receive monthly payment of $1,360.64 for 60 months and will recover 100% of claims. * Global Funding Experts will receive monthly payment of $1,647.35 for 60 months and will recover 100% of claims. * New Co Capital Group will receive monthly payment of $871.50 for 60 months and will recover 100% of claims. * White Road Capital dba GFE will receive monthly payment of $355.10 for 60 months and will recover 100% of claims. * 84 Lumber will receive monthly payment of $297.23 for 60 months and will recover 100% of claims. * Amazon will receive monthly payment of $110.71 for 60 months and will recover 100% of claims. * Bentley Door Company will receive monthly payment of $140.31 for 60 months and will recover 100% of claims. * Big City Insulation of Idaho will receive monthly payment of $10.48 for 60 months and will recover 100% of claims. * Builders FirstSource will receive monthly payment of $19.52 for 60 months and will recover 100% of claims. * Capital Cleaning will receive monthly payment of $29.29 for 60 months and will recover 100% of claims. * Cellco dba Verizon Wireless will receive monthly payment of $24.29 for 60 months and will recover 100% of claims. * Ferguson will receive monthly payment of $63.29 for 60 months and will recover 100% of claims. * Floor Coverings International will receive monthly payment of $47.77 for 60 months and will recover 100% of claims. * Florida Tile will receive monthly payment of $34.76 for 60 months and will recover 100% of claims. * Fox Capital Group will receive monthly payment of $482.95 for 60 months and will recover 100% of claims. * Fundbox will receive monthly payment of $1,171.45 for 60 months and will recover 100% of claims. * IDI Distributors will receive monthly payment of $5.22 for 60 months and will recover 100% of claims. * Innovative Mechanical Solutions LLC will receive monthly payment of $411.84 for 60 months and will recover 100% of claims. * LKL Associates will receive monthly payment of $38.83 for 60 months and will recover 100% of claims. * McCall Rentals Inc. will receive monthly payment of $76.33 for 60 months and will recover 100% of claims. * Morell's Cuonerete Pumping will receive monthly payment of $37.93 for 60 months and will recover 100% of claims. * O.K Gravel Works will receive monthly payment of $29.56 for 60 months and will recover 100% of claims. * Patrick Millwork Inc. will receive monthly payment of $82.37 for 60 months and will recover 100% of claims. * Power House Electric will receive monthly payment of $241.37 for 60 months and will recover 100% of claims. * Premier Plumbing will receive monthly payment of $136.46 for 60 months and will recover 100% of claims. * Rocky Mountain Portables will receive monthly payment of $3.02 for 60 months and will recover 100% of claims. * Sawtooth Garage Doors will receive monthly payment of $54.91 for 60 months and will recover 100% of claims. * Sherwin Williams will receive monthly payment of $33.88 for 60 months and will recover 100% of claims. * Superior Gutter Company will receive monthly payment of $9.23 for 60 months and will recover 100% of claims. * Tates Rents will receive monthly payment of $64.10 for 60 months and will recover 100% of claims. * The Masonry Center will receive monthly payment of $10.57 for 60 months and will recover 100% of claims. * The Master's Construction Inc. will receive monthly payment of $67.50 for 60 months and will recover 100% of claims. * Valley Glass will receive monthly payment of $230.26 for 60 months and will recover 100% of claims. Class 5 is impaired. The Plan payments shall be paid from income generated in the ordinary course of business. Attorneys for the Debtors: Luke Gordon, Esq. Damir Delic, Esq. GORDON, DELIC & ASSOCIATES 950 W. Bannock St. Ste 600 Boise, ID 83702 Telephone: (208) 900-9509 Facsimile: (208) 900-9510 A copy of the Amended Plan of Reorganization dated August 12, 2022, is available at https://bit.ly/3AhZyph from PacerMonitor.com. About Innovative Building & Remodeling Innovative Building & Remodeling is a family owned and operated construction company in Meridian, Idaho, that specializes in custom design and build projects. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Idaho Case No. 22-00071) on March 4, 2022. In the petition signed by Dustin Collins, its managing member, the Debtor disclosed $496,400 in assets and $1,218,331 in liabilities. Judge Noah G. Hillen oversees the case. Luke Gordon, Esq., at Gordon, Delic and Associates is the Debtor's counsel. IRI HOLDINGS: Fitch Withdraws 'B' LongTerm IDR ---------------------------------------------- Fitch Ratings has withdrawn IRI Holdings, Inc.'s (IRI) Long-Term Issuer Default Rating (LT IDR) of 'B'. Fitch withdrew the ratings for IRI's debt on Aug. 3, 2022 since it was fully repaid. Fitch has withdrawn IRI's ratings following the closing of its acquisition by the private equity firm Hellman & Friedman and merger with the NPD Group. Fitch will not have sufficient information to rate IRI as a standalone entity going forward. Accordingly, Fitch will no longer provide ratings or analytical coverage of IRI Holdings. The ratings have been withdrawn due to lack of sufficient information to rate IRI as a standalone entity. KEY RATING DRIVERS Key Rating Drivers are not applicable as the ratings have been withdrawn. RATING SENSITIVITIES Rating sensitivities are not applicable as the ratings have been withdrawn. JA SEEKINS: Seeks Interim Cash Collateral Access ------------------------------------------------ JA Seekins Painting, Inc. asks the U.S. Bankruptcy Court for the Western District of Washington, for authority to pay the August 19, 2022, payroll for hours worked from August 8, 2022, through August 12, 2022, which includes hours worked prior to the petition date and for use of cash collateral for payment of other operating expenses, including future payroll as proposed in the projected budget. The Debtor seeks authorization for the use of cash collateral for the period from the petition date through February 28, 2022, or until the effective date of the Plan, whichever is earlier. Based on a UCC search performed on August 15, 2022, the Debtor has identified 1 secured creditor with a potential interest in personal property of the Debtor, more specifically CHTD Company also known as Loan Builder/Swift Capital. Based on the filing dates, CHTD Company appears to be the senior creditor. The Debtor's cash on hand of approximately $28; accounts receivable of $2,000; and equipment valued at approximately $2,500. Accordingly, on the date of the petition, the total value of the Debtor's tangible personal property of the Debtor was approximately $4,528. In exchange for the use of cash collateral, if appropriate, the Debtor may grant replacement liens on new income, to ensure a creditor is adequately protected. A copy of the motion is available at https://bit.ly/3QRq6De from PacerMonitor.com. About JA Seekins Painting, Inc. JA Seekins Painting, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-11316-CMA) on August 14, 2022. In the petition signed by David Seekins, president, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C. is the Debtor's counsel. JOYCARE THERAPY: Files Emergency Bid to Use Cash Collateral ----------------------------------------------------------- Joycare Therapy, LLC dba Pediatric Day Health Center asks the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, for authority to use cash collateral to pay its necessary expenses of its business in the ordinary course for August 2022. The creditors that purport to hold deeds of trust liens or security interests in inventory, equipment, and accounts are JP Morgan Chase Bank NA, U.S. Bank Equipment Finance, U.S. Small Business Administration, and Huan Le. The Lenders may have interests in the cash collateral of the Debtor. The Debtor proposes to adequately protect the Lenders' interests in the collateral in a number of ways. The Debtor proposes to grant to the Lenders, post-petition replacement liens in the same assets of the Debtor that such entities had prior to the filing of the chapter 11 bankruptcy case. In addition, the Debtor will provide the Lenders, with information relating to projected revenues and expenses, actual revenue and expenses, and variances from the interim budget. This information will enable the Lenders to monitor the interests in the cash collateral. The Debtor also requests the Court to set a hearing on the matter. A copy of the motion is available at https://bit.ly/3dywUY1 from PacerMonitor.com. About Joycare Therapy, LLC Joycare Therapy, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-32351) on August 17, 2022. In the petition filed by Huan Le, manager, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Eduardo V. Rodriguez oversees the case. Reese W. Baker, Esq., at Baker and Associates is the Debtor's counsel. KAR AUCTION: Moody's Upgrades CFR to B1 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings of KAR Auction Services, Inc., including the corporate family rating to B1 from B2, the probability of default rating to B1-PD from B2-PD, the senior secured rating to Ba1 from Ba3, and the senior unsecured rating to B2 from Caa1. The outlook is stable. The Speculative Grade Liquidity rating is unchanged at SGL-1. This completes the review for upgrade that was initiated on February 28, 2022. The ratings upgrade reflects the very sizeable reduction in debt related to KAR's used vehicle auction business of approximately $1.6 billion in aggregate following the sale of KAR's physical auction business in the US to Carvana. The debt reduction represents a notable shift in KAR's financial policy that moderates the company's corporate governance risks. The upgrade of the senior secured and senior unsecured ratings also considers the material reduction in the amount of KAR's secured obligations relative to unsecured obligations in the company's liability structure. Upgrades: Issuer: KAR Auction Services, Inc Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Senior Secured 1st Lien Revolving Credit Facility, Upgraded to Ba1 (LGD2) from Ba3 (LGD2) Senior Unsecured Regular Bond/Debenture, Upgraded to B2 (LGD4) from Caa1 (LGD5) Outlook Actions: Issuer: KAR Auction Services, Inc Outlook, Changed To Stable From Rating Under Review RATINGS RATIONALE The B1 corporate family rating considers KAR's leading position in the digital marketplace for wholesale auctions of off-lease vehicles. Such vehicles are offered for sale by captive finance subsidiaries of auto manufacturers, financial institutions and fleet management companies that seek liquid and efficient channels that enable swift vehicle dispositions. KAR also intends to grow its presence in the much larger dealer-to-dealer market that still largely uses physical auctions for the sale and purchase of used vehicles. The company entered this segment more recently and has yet to complete the integration of the two digital platforms that it acquired in the last two years. KAR's EBITA margin is attractive. This reflects in part the high margin of KAR's floor plan funding business when measured before interest expense. Moody's expects the EBITA margin to improve to nearly 20% in 2023. Moreover, KAR has only a modest amount of debt related to its vehicle auction business while it maintains a sizeable amount of capital at its floor plan funding business. Moody's estimates the ratio of debt-to-equity at the floor plan funding business to be about 2:1. The Ba1 rating of the $325 million revolving credit facility reflects the priority claim of the facility on substantially all of the company's assets (excluding receivables that serve as collateral for floor plan funding obligations) and the much larger proportion of unsecured liabilities in KAR's liability structure. The unsecured liabilities include the B2 rated senior unsecured notes due 2025 that have a remaining principal amount of $350 million following the early tender results of KAR's cash tender offer for these notes. The stable outlook reflects Moody's expectation that auction volumes and fees will start to recover from the unusual conditions in the market for used vehicles in the last two years that were caused by constrained new vehicle supply. Moody's expects liquidity to remain very good (SGL-1) supported by an expected cash balance of at least $150 million, a $325 million revolving credit facility and free cash flow of about $85 million in 2023 after $44 million of cash dividends on KAR's convertible preferred shares. There are no material debt obligations until June 2025, excluding obligations related to KAR's floor plan funding business. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if KAR successfully executes its digital transformation strategy and sustainably establishes itself as a leader in the digital marketplace for wholesale used vehicles, both in the off-lease segment and the dealer-to-dealer segment. An EBITA margin in excess of 20%, a modest amount of debt related to the vehicle auction business and free cash flow of more than $125 million annually would support an upgrade. Additional considerations include a consistent track record of low charge-offs and ample capital at KAR's floor plan funding business. The ratings could be downgraded if KAR faces heightened competition in the digital marketplace or other challenges in the execution of its digital transformation strategy. EBITA margins that fall below 17.5% would be evidence of such challenges. The ratings could also be downgraded if KAR adopts a more aggressive financial policy by materially increasing the amount of debt related to its auction business, if charge-offs deteriorate or if the amount of capital at KAR's floor plan funding business is maintained below historical levels. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. KAR Auction Services, Inc. is a leading provider of wholesale vehicle auctions and related vehicle remarketing services for the automotive industry. The company serves domestic and international buyers and sellers through digital auction platforms, as well as 14 vehicle logistics center locations in Canada. Revenue, pro forma for the sale of the US physical auction business, was $1.5 billion in 2021. KEYWAY APARTMENT: Court OKs Appointment of Miller as Examiner ------------------------------------------------------------- Judge Michelle M. Harner of the U.S. Bankruptcy Court for the District of Maryland approves the appointment by the United States Trustee for Region Four of Scott W. Miller to serve as Chapter 11 examiner for Keyway Apartment Rentals, LLC. On July 21, 2022, the U.S. Trustee has appointed Scott W. Miller as Examiner in the Keyway Apartment Rentals, LLC case. To the best of the U.S. Trustee's knowledge, the Examiner has no connections with the Debtor, creditors, and other parties in interest, their respective attorneys and accountants, the United States Trustee, and persons employed in the Office of the United States Trustee, as set forth in the Declaration. A copy of the order is available for free at https://bit.ly/3T32WM2 from PacerMonitor.com. About Keyway Apartment Rentals Keyway Apartment Rentals, LLC is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). The Debtor owns apartment buildings valued at $6.5 million. Keyway Apartment Rentals filed a voluntary petition for relief under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Md. Case No. 22-13389) on June 21, 2022. In the petition signed by George Divel, III, managing member, the Debtor disclosed $6,653,350 in total assets and $4,252,151 in total liabilities. Joseph M. Selba, Esq., at Tydings & Rosenberg LLP serves as the Debtor's counsel. KUN PENG: Incurs $690K Net Loss in Third Quarter ------------------------------------------------ Kun Peng International Ltd. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $689,999 on $642,596 of revenue for the three months ended June 30, 2022, compared to a net loss of $1.63 million on $452,027 of revenue for the three months ended June 30, 2021. For the nine months ended June 30, 2022, the Company reported a net loss of $966,818 on $7.33 million of revenue compared to a net loss of $2.27 million on $2.63 million of revenue for the same period in 2021. As of June 30, 2022, the Company had $1.75 million in total assets, $4.62 million in total liabilities, and a total deficit of $2.87 million. As of June 30, 2022 and Sept. 30, 2021, the Company had a cash and cash equivalents balance of $263,740 and $2,059,685, respectively. Kun Peng said, "We require additional cash of approximately $1.1 million within the next twelve months, primarily related to third party vendors payables. In an effort to support and maintain our financial position and operations, the Company focused on increasing its revenue through its online platform and trimming its overhead costs. As aforementioned, since the first quarter of 2022, our average monthly online sales have increased. We continue to exert efforts to increase our sales volume and reduce administrative costs. Simultaneously, our director continues to support our operation financially. We believe that such measures will improve our liquidity in the next twelve months. If we are not able to increase revenue or obtain any financing, we may be unable to continue as a going concern. "The Company continues to monitor its operations to help refine the Company's financial liquidity. The financial liquidity of the Company has declined to very unhealthy level in this quarter due to the decline in the balance of cash and cash equivalent. Options under consideration in the review process include, but not limited to, increase of sales on its online business, reduction of overhead costs, fund advance from the Company's stockholders and directors, or financing through issuance of shares. The Company continues to focus on increasing its revenue through its online platform and slimming its administrative costs. For example, we reduced the compensation and benefits of our executives, decreased office supplies expense and trimmed executive travel expenses. Additionally, our director will provide financing to meet our working capital requirements. "In order to continue as a going concern for the next 12 months, the Company continues to focus on increasing its revenue through the sale of health care products on its online platform, King Eagle Mall, streamlining its overhead costs or obtaining a financing from its stockholders or directors. However, the Company cannot provide any assurance that it will be able to increase revenue, that it will be able to successfully implement its business plan, or that financing that will be available to it on commercially acceptable terms, if at all." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001502557/000149315222023045/form10-q.htm About Kun Peng Kun Peng International Ltd. is engaged in the sale of health care products and services through its online platform. KPIL is a Nevada holding company with operations in the People's Republic of China conducted by various subsidiaries and through contractual agreements with a variable interest entity, King Eagle (Tianjin) Technology Co., Ltd. Kun Peng reported a net loss of $1.77 million for the year ended Sept. 30, 2021, compared to a net loss of $208,771 for the year ended Sept. 30, 2020. Malaysia-based J&S Associate, the Company's auditor since 2021, issued a "going concern" qualification in its report dated Jan. 13, 2022, citing that the Company has suffered recurring losses from operations and has incurred an accumulated deficit of $1,821,105 and a working capital deficit of $2,318,784 as at Sept. 30, 2021. These matters raise substantial doubt about the Company's ability to continue as a going concern. LD HOLDINGS: S&P Lowers ICR to 'B-', Outlook Negative ----------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on LD Holdings Group LLC to 'B-' from 'B'. The outlook is negative. S&P said, "We also lowered the debt rating on LD's senior unsecured notes due 2025 and 2028 by two notches to 'CCC+' from 'B'. We revised our recovery rating to '5'--indicating our expectation of a modest recovery (25%) in a simulated default scenario--from '4'." The one-notch downgrade reflects LD's deteriorating operating performance, as rising interest rates led to plummeting mortgage origination volumes and the company's associated operating cash flow. LD reported a large loss and negative EBITDA in the first half of the year, essentially forcing it to sell or borrow against its MSRs. S&P said, "Those factors led its debt-to-tangible equity ratio to rise well above our previous downside threshold of 1.5x. It also had to obtain a profitability covenant waiver on certain secured facilities to avoid a technical default. As of June 30, 2022, LD's debt to tangible equity increased to about 2.1x from 1.4x the prior quarter, and 1.1x at year-end 2021. The rise in leverage is driven by a sharp increase in total debt as the company drew on its secured MSR facilities and its tangible equity declined. While the increase in debt reflects the company's distress and increased leverage, we also recognize the prudence of its efforts to raise liquidity to navigate the challenges by selling or pledging all its MSRs on balance sheet. As of June 30, 2022, LD's MSR facilities had an outstanding balance of $1.1 billion versus $217.4 million the prior quarter, and $262.3 million at year-end 2021. As a result, the company's cash on balance sheet increased to $954.9 million at the end of the second quarter. "We expect the company to report a net loss for the third quarter, further pressuring this ratio as it erodes total equity. On a rolling 12 months (RTM), LD's adjusted EBITDA declined to $55 million (on $98 billion in originations) versus $883 million for full-year 2021 (on $136 billion in originations), and $1.9 billion as of June 30, 2021 (RTM) (on $140 billion in originations). For full-year 2022, we expect LD's EBITDA to be negative as positive EBITDA from the second half of 2021 rolls off." The decline in earnings is a combination of higher operating expenses, lower origination volume, and declining gain-on-sale margins, which are normalizing from historical highs. As of June 30, 2022, LD's gain on sale margin declined to 1.16% from 1.96% the prior quarter, and 2.28% as of June 2021. From a macroeconomic standpoint, S&P's economists now expect U.S. GDP growth of 1.8% (versus 2.4% in June 2022), assess the risk of recession in the next 12 months as 45% (within a 40%-50% range), and predict risks increasing as it heads into 2023. In addition to macroeconomic uncertainty, the rise in mortgage interest rates will continue to create headwinds for the mortgage industry as origination volume is expected to decline primarily because of refinancing burnout. As of June 30, 2022, LD's origination volume declined to about $15.9 billion from $21.5 billion the prior quarter and $34.5 billion in June 2021. The company's refinancing volume declined to $6.5 billion from $24.1 billion for the same time last year. As of June 30, 2022, LD's MSRs on balance sheet were around $2.2 billion, compared with $2.1 billion the prior quarter. While the servicing portfolio's unpaid principle balance (UPB) increased to $155 billion versus $138.8 billion the same time last year, its MSR retention rate has declined to 58% from 90% of its origination volume as the company continues to monetize MSRs for operational liquidity. The servicing book is about 70%-80% conventional (Fannie Mae and Freddie Mac) and 25%-20% government (Ginnie Mae). Year-to-date as of June 30, 2022, servicing fee revenue increased about 29% year over year to $228.4 million. The company expects third quarter origination volume of $5.5 billion to $10.5 billion with gain on sale margin improving to 1.75% to 2.25% (1.16% as of June 30, 2022). The expected improvement is largely driven by LD's plan to exit the wholesale origination channel and focus on originating loans through higher margin, retail and partnership channel. As of August 2022, as part of its Vision 2025, LD reduced headcount to 7,400 from 11,300 at year-end 2021 and expects to end the third quarter with headcount below its stated year-end goal of 6,500(about 42% headcount reduction versus year-end 2021). The company expects its aggressive approach to rightsizing its cost structure will generate approximately $375 million-$400 million of annualized savings and expects run rate profitability exiting 2022, through headcount reduction, attrition, business process optimization, reduced marketing and third-party spending, and real estate consolidation. As part of its strategy, LD plans to incur a one-time cost of $38 million -$45 million ($13 million in second quarter expenses adjusted for $41 million in goodwill impairment) in the second half of this year, of which, 75% will be recognized in the third quarter. Year to date as of June 30, 2022, LD raised additional liquidity by selling $399 million of MSRs ($86.5 million in second quarter) and intends to continue to sell MSRs at attractive prices. Customers in forbearance declined to about 0.4% ($587.8 million UPB) as of June 30, 2022, from about 0.6% ($1.0 billion UPB) at year-end 2021. While the foreclosure moratorium has expired, we expect LD to maintain adequate liquidity access to meet a potential rise in servicing advance requirements. S&P said, "The negative outlook reflects our expectation that over the next 12 months, the challenging operating environment will continue to pressure LD's performance, likely leading to a loss in the third quarter and an increase in debt to tangible equity to 2.0x-2.75x. In our base case, we expect the company's cost-cutting efforts to help it return to profitability by the fourth quarter such that EBITDA interest coverage reverts towards 1.0x. We also expect the company to maintain enough liquidity to meet all of its needs during that time and to obtain any necessary covenant waivers. "We could lower the ratings over the next 6-12 months if we expect operating losses to continue to rise such that the company's cash burn increases, or it is unable to get covenant waivers on its secured facilities, such that technical default is imminent. We could also lower the ratings if any regulatory finding impedes the firm's operating performance or if the company buybacks debt at distressed levels, which we could view as a de facto restructuring tantamount to default. "We could revise the outlook to stable if the company's EBITDA coverage improves above 1.0x and debt to tangible equity declines towards 1.5x on a sustained basis. An upgrade is unlikely in the next 12 months." LIBRA LLC: Involuntary Chapter 11 Case Summary ---------------------------------------------- Alleged Debtor: LIBRA L.L.C. 3750 S Valley View Las Vegas, NV 89103 Involuntary Chapter 11 Petition Date: August 18, 2022 Court: United States Bankruptcy Court District of Nevada Case No.: 22-12960 Judge: Hon. Natalie M. Cox Petitioners' Counsel: David A. Riggi, Esq. RIGGI LAW FIRM 5550 Painted Mirage Rd #320 Las Vegas, NV 89149 Tel: 702-463-7777 Email: RiggLaw@gmail.com A full-text copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LS5RQRQ/LIBRA_LLC__nvbke-22-12960__0001.0.pdf?mcid=tGE4TAMA Alleged creditors who signed the petition: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Carl Giudici Monies Loaned $1,780,100 850 S. Boulder Hwy #432 Henderson, NV 89015 Airmed Health LLC Monies Loaned $17,797 30 N. Gould St Ste R Sheridan WY 82801 LIVEONE INC: Incurs $1.35 Million Net Income in First Quarter ------------------------------------------------------------- LiveOne, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $1.35 million on $23.22 million of revenue for the three months ended June 30, 2022, compared to a net loss of $8.05 million on $38.77 million of revenue for the three months ended June 30, 2021. As of June 30, 2022, the Company had $72.38 million in total assets, $82.15 million in total liabilities, and a total stockholders' deficit of $9.78 million. LiveOne stated, "The Company's principal sources of liquidity have historically been its debt and equity issuances and its cash and cash equivalents (which cash, cash equivalents and restricted cash amounted to $11.3 million as of June 30, 2022)... The Company has a history of losses, with the exception of net income of $1.3 million during the quarter ended June 30, 2022 and had a working capital deficiency of $25.7 million as of June 30, 2022. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern within one year from the date that these financial statements are filed. "The Company's ability to continue as a going concern is dependent on its ability to execute its growth strategy and on its ability to raise additional funds. The Company filed a new universal shelf Registration Statement on Form S-3 with the SEC, which was declared effective by the SEC on February 17, 2022. Under the New Shelf S-3, the Company has the ability to raise up to $150.0 million in cash from the sale of its equity, debt and/or other financial instruments. The continued spread of COVID-19 and uncertain market conditions may limit the Company's ability to access capital, may reduce demand for its services and may negatively impact its ability to retain key personnel. Management may seek additional funds, primarily through the issuance of equity and/or debt securities for cash to operate the Company's business. No assurance can be given that any future financing will be available or, if available, that it be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain terms that result in undue restrictions on its operations, in the case of debt financing or cause substantial dilution for its stockholders, in case of equity and/or convertible debt financing. If the Company is unable to obtain sufficient financing when needed, the Company may also have to reduce certain overhead costs through the reduction of salaries and other means and settle liabilities through negotiation. There can be no assurance that management's attempts at any or all of these endeavors will be successful." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1491419/000121390022048169/f10q0622_liveoneinc.htm About LiveOne Headquartered in Los Angeles, California, LiveOne, Inc. (NASDAQ: LVO) (formerly known as LiveXLive Media, Inc.) is a creator-first, music, entertainment and technology platform focused on delivering premium experiences and content worldwide through memberships and live and virtual events. LiveOne reported a net loss of $43.91 million for the year ended March 31, 2022, compared to a net loss of $41.82 million for the year ended March 31, 2021. As of March 31, 2022, the Company had $76.82 million in total assets, $87.74 million in total liabilities, and a total stockholders' deficit of $10.92 million. Los Angeles, California-based BDO USA, LLP, the Company's former auditor, issued a "going concern" qualification in its report dated June 29, 2022, citing that the Company has suffered recurring losses from operations, negative cash flows from operating activities and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. LONGVIEW POWER: Moody's Hikes Rating on $40MM Sec. Term Loan to B3 ------------------------------------------------------------------ Moody's Investors Service has upgraded Longview Power, LLC's (Longview or Project) $40 million senior secured term loan (Exit Facility) due July 2025 to B3 from Caa1. Longview's rating outlook is stable. RATINGS RATIONALE The rating action reflects Longview's overall improving credit profile due to improving wholesale power prices in PJM Interconnection, L.L.C. (PJM, Aa2 stable), which has considerably improved Longview's cash flows since the second half of 2021, and reflects Moody's expectation that Longview will likely continue to benefit from higher power prices in 2022 and 2023 based on the current forwards. These favorable market conditions have improved the Project's liquidity and overall financial flexibility which should enable it to repay its existing term loan sooner than previously anticipated. The increase in power prices, along with Longview's ability to lock in substantial proportions of its coal supply under lower fixed price contracts for its 2022 coal supply and partially for its supply in 2023, will lead substantial free cash flow generation, despite decreasing capacity prices based on the PJM Base Residual Auction (BRA) during this time period. For example, Longview's EBITDA has increased to approximately $45 million in FY 2021 from approximately $14 million in FY 2020. The project EBITDA is expected to increase substantially to approximately $173 million in 2022 based on current robust power prices in the PJM RTO. Longview's credit metrics relative to the restructured Exit Facility reflects a DSCR of 3.1x, CFO/Debt of 31%, and a Debt/EBITDA level of 1.3x in 2021, with these metrics expected to improve substantially in 2022. Longview's improving cash flows and credit metrics are also a result of lower priced coal supply contracts secured for 2022 and part of 2023 relative to a rising coal market pricing environment. The Project is fully contracted for its coal requirements in 2022 and partially contracted for its 2023 requirements at coal prices which are substantially below current high market prices. The rating further reflects Longview's sound operating performance, with plant availability steadily increasing since 2018, reaching 97% in 2020 and 91% in 2021. Longview has made substantial progress in recent years after experiencing chronic operational related issues following initial commissioning. The annual capacity factor for Longview has remained above 80% over the three year period ending December 2021, reflecting its operating profile as a steady baseload generating unit with a comparatively lower heat rate of 8,600 btu/kWh, in a market where higher cost and inefficient coal fired generation units are being retired, and the project's efficiency remains competitive with combined cycle gas fired generators on an all-in cost basis. The rating upgrade further acknowledges the steps taken by the current management team to improve operational performance and project liquidity. We recognize the benefits of management's decision to opportunistically reduce and exit prevailing power hedges in 2021 and 2022 to preserve cash collateral which otherwise would have adversely strained Longview's liquidity position. The high cost of unwinding hedges have been offset by cash flows generated from energy sales, benefitting from the increased power prices seen during the latter half of 2021 and year to date though the summer months of 2022. Given improved operating cash flows, Longview's liquidity position has improved substantially with approximately $71 million of cash and cash equivalents on hand at December 2021, and an additional $10 million of restricted cash, with cash balances increasing further in the months since. While the structure of the Longview credit facility does not include a debt service reserve fund or other external sources of liquidity, the Project's substantial cash position relative to its required debt service levels partially offsets this structural weakness. Longview performed its major maintenance outage related to its boilers during the late Spring months in 2022, funding approximately $41 million of major maintenance costs and capital expenditure with cash generated internally. The next major overhaul is expected to be in 2024 that would include plans to replace the high pressure section of the plant turbine as part of its 10-year major overhaul. The Project emerged from bankruptcy in August 2020 with a substantially lower debt quantum of $40 million. Under the terms of the financing, the Project has the right to exercise a payment-in-kind (PIK) interest of 5% annually, which reduces cash debt service to about $2 million a year but increase the final debt repayment obligation to approximately $52 million, reflecting a 30% premium. While the term loan does not mature until 2025, management anticipates repaying nearly 50% of the outstanding amounts of the credit facility during the 3rd quarter of 2022, with the remaining amounts expected to be repaid during the 1st quarter of 2023 from anticipated excess free cash flow. However, this repayment plan remains vulnerable to event risks such as a sudden forced outage requiring the utilization of internally available cash liquidity. Furthermore, while Longview's financial performance is forecasted to be strong through at least the first quarter of 2023, the credit profile also considers the high coal prices expected during the remainder of 2023 when the Project is more exposed to market coal prices, and the expectation of a significant drop in cash flows starting 2024 as energy prices are expected to moderate from current robust levels. Moody's anticipate the longer term run rate of the Project's annual EBITDA to be reflective of the levels achieved in 2021, at approximately $45 million. Longview's ESG Credit Impact Score (CIS) of 5 acknowledges that ESG considerations are key driver to Moody's view of Longview's credit profile and having a very highly negative impact on Longview's rating. As a single asset merchant coal generator, Longview is highly exposed to environmental risks, including exposure to carbon transition risks, and faces highly negative demographic and social trends relating to coal fired power generation. Furthermore, rising investor concern regarding ESG considerations also impact Longview's ability to attract capital going forward. However, Longview is somewhat insulated from near term carbon emission related cost pressure given its location in West Virginia, which is unlikely to pass legislation requiring carbon emission limits in the near future. Furthermore, to the extent that Pennsylvania joins the Regional Greenhouse Gas Initiative (RGGI), Longview will have a cost advantage and will also benefit from RGGI related market energy pricing premiums as regional wholesale market prices should increase if Pennsylvania joins RGGI. RATING OUTLOOK The stable outlook incorporates the view that plant operations will remain steady, and the project will maintain its relative competitive position in the PJM market, producing substantial levels of cash flow in 2022 and in 2023. The stable outlook further incorporates the current robust wholesale power price environment, providing a higher degree of cash flow stability, enabling the project's ability to repay its term debt substantially ahead of its maturity date. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Factors that could lead to an upgrade: Given the recent upgrade, prospect for a further upgrade is limited. Over the longer term, Longview could be upgraded if it is able to manage its carbon transition risk while ensuring strong liquidity and robust financial performance on a sustained basis post 2023. Factors that could lead to downgrade: The rating could be downgraded if anticipated cash flow and liquidity levels weaken from current expectations, which could occur if the plant experiences unforeseen operational problems or if wholesale market economics unexpectantly worsen. A downgrade could also occur if changes to the regulatory environment where Longview operates impact its ability to generate cash flow or limits its ability to repay its debt obligations when due. ISSUER PROFILE Longview Power is a special purpose entity that owns and operates a 700 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh, PA. The Longview Power project is owned by a private equity group that largely represents the private lenders that took ownership of the project following its bankruptcy filing in 2020. The Exit Facility was established as part of Longview's April 2020 emergence from bankruptcy, and related debt restructuring which transferred the project's ownership to the senior secured lenders. The principal methodology used in this rating was Power Generation Projects Methodology published in January 2022. M6 MIDSTREAM: Fitch Assigns 'B+' First Time IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'B+' to M6 ETX Holdings II MidCo LLC (M6 Midstream or M6) and a 'BB+'/'RR1' rating to the company's proposed senior secured term loan issuance. The Rating Outlook is Stable. M6's ratings are based on its strong gathering, processing, treating and transportation footprint in the East Texas Haynesville Shale, which includes a single-basin focus and some segment/asset diversity, and its relatively small size, as measured by annual EBITDA. M6 has a predominantly fixed-fee for service business model with some long-term revenue-assurance contracts and strong credit quality counterparties and low relative leverage. While no explicit rating linkage exists, Fitch views M6's relationship with its main sponsor, EnCap Flatrock, as supportive of its credit quality. Fitch has reviewed preliminary terms for the proposed term loan; the assigned ratings assume no material variations in the final terms. KEY RATING DRIVERS Advantaged Asset Footprint: M6 has the largest natural gas gathering and processing (G&P) system in the East Texas portion of the Haynesville basin, and its gas transmission pipeline system transports gas to the U.S. Gulf Coast. Haynesville is the most active dry gas basin in North America, with double the rigs drilling for natural gas as in the Marcellus, which supports the potential for strong near-term production growth. The East Texas Haynesville has historically experienced more muted production growth than its Louisiana counterpart. M6's transmission assets provide valuable access to large demand centers including the U.S. liquified natural gas (LNG) export hub on the Gulf Coast. The M6 asset portfolio is well-positioned to benefit from low-cost supply growth in the Haynesville, though likely at a slower pace compared to overall Haynesville production growth given its position in East Texas in Fitch's view, as well as steadily increasing demand driven by the second wave of U.S. LNG export capacity additions. Limited Size/Scale: M6's size/scale is limited with EBITDA below $300 million, which Fitch generally considers consistent with a 'B' category IDR. The company only operates in a portion of the Haynesville basin. Lack of operational, geographic and geological diversity would expose M6 to outsized event and capital market access risks should there be a slowdown in or longer-term disruption of Haynesville basin production. M6's limited size/scale is partially offset by its operational focus within an attractive natural gas producing region and close proximity to demand centers on the U.S. Gulf Coast. Fitch expects the Haynesville's production growth to continue in the near to intermediate term given its low-cost production dynamics and sufficient pipeline takeaway capacity. This will ultimately benefit M6. While volumes on the M6 system have been relatively flat over the past few years, near-term production growth is likely based on customer drilling and completion plans. Roughly 30%-40% of M6's EBITDA comes from transmission of natural gas vs. gathering and processing it. While the G&P and transmission assets are complementary, Fitch believes M6 could sell some or all of one of these segments without significantly impairing the remaining assets. Typically, this option is not available to midstream issuers with an annual run-rate EBITDA of less than $300 million. Mostly Fixed Fees, Volume Exposed: Fitch expects M6 to generate 75%-80% of its EBITDA from volume-exposed operations, with the balance coming from ship-or-pay contracts. This exposure comes predominantly from its G&P business, where M6 has very few minimum volume commitments. Instead, the company's customers have dedicated certain acreage to M6 to be gathered, when developed. This makes M6 reliant on its customers to drill and complete wells to drive volumes through its G&P assets and to generate fees for providing those services. The ship-or-pay contracts also offer an increased likelihood of matching G&P volumes, as contracted transmission shippers also have acreage dedications with M6. M6 generates most of its gross margin from fixed-fee-for-service activities. Only 10%-15% of expected gross margin will be from activities where M6 takes direct commodity price exposure. However, this exposure is related to a spread between two commodity prices (natural gas and the related natural gas liquids [NGLs]), vs. a single outright commodity price. The overall exposure can be reduced by opting to not process gas when uneconomic. M6's ability to manage and reduce its direct commodity price exposure is supportive of its credit quality. Ship-or-Pay Contracts Provide Some Stability: Fitch expects M6 to generate 20%-25% of EBITDA from contracts under which it will be paid a fixed fee regardless of whether or not volumes are transported. The weighted average remaining life of these contracts is roughly 7.5 years. M6's ship-or-pay contracted counterparties have strong credit profiles, with ExxonMobil making up roughly 40% of these commitments. The inclusion of long-term contracted gas pipelines in its asset portfolio distinguishes M6 from other single-basin midstream peers focused solely on volume-exposed G&P activities. The ship-or-pay contracts are related to the company's long-distance gas transportation pipelines, the Clarity and DD Transmission systems. These assets are highly utilized, and Fitch expects them to remain at or near capacity over the intermediate term due to strong demand for LNG export in the Gulf Coast (where the Clarity system terminates). Strong Leverage: Fitch expects M6 a strong post-acquisition close leverage position of around 4.5x. Given expectations for solid near-term volume growth, supported by elevated development activity in the Haynesville and increasing demand in the Gulf Coast, leverage is expected to decline towards 3.0x over the forecast period. Management has a stated leverage target of 3.0x-3.5x, and the deleveraging plan is supported a conservative financial policy put in place by M6's sponsors. The company's leverage is strong for the rating category. Solid Sponsor Support: The ratings recognize that M6 benefits from a supportive sponsor in, among others, EnCap Flatrock. Along with a larger relative initial equity investment in M6, allowing for low M6 leverage out of the box, Fitch believes EnCap Flatrock would support future expansion capital, should cash on hand/operating cash flows not be sufficient. Additionally, EnCap Flatrock has shown itself to be a patient investor with less aggressive financial policies for sponsored entities, compared to other private-equity midstream owners, in Fitch's view. DERIVATION SUMMARY Given M6's single basin focus, Kinetik Holdings LP (BB+/Stable) is a peer. When combining the single-basin exposure with annual EBITDA that is below $300 million, Medallion Gathering & Processing, LLC (B+/Stable), is a close peer. DT Midstream, Inc. (DTM; BB+/Stable) features both G&P operations and ownership in long-distance natural gas pipelines, similar to both M6 and Kinetik. M6's credit profile compares favorably to that of Medallion given 20%-25% of M6's EBITDA will come from take-or-pay-type contracts and the diversity afforded by operating a long-distance natural gas pipeline, in addition to G&P assets. However, this is partially offset by M6's 10%-15% of EBITDA coming from commodity price exposed margins, compared to Medallion's fully fixed-fee business model. Another partial offsetting factor is the stronger relative volume growth experienced by Medallion over recent history, driven in large part by Medallion's footprint in the Midland sub-basin (Permian). While Fitch expects M6' leverage to be lower than Medallion's, both companies have strong leverage profiles for the rating category, and so leverage is not a distinguishing factor. M6 features an EBITDA breakdown that is relatively similar to both Kinetik and DTM, as to relative contributions from G&P activities and the long-distance transportation of natural gas. However, with projected EBITDA of less than $200 million over the forecast period, M6 is significantly smaller than both Kinetik and DTM. Small business or market disruptions could have a disproportionately large impact on M6 compared to its larger peers. The smaller size/scale accounts for a large portion of the differences between the ratings of M6 and both Kinetik and DTM. DTM also generates a higher percentage of EBITDA from take-or-pay-type contracts and both Kinetik and DTM have greater diversity within their respective pipeline segments, owning stakes in multiple pipeline assets. Collectively, these factors lead to a three-notch difference between the IDR of M6 and those of Kinetik and DTM. Leverage is forecast to be slightly lower at M6 compared to both Kinetik and DTM, but all three issuers have leverage profiles that are strong for their respective rating categories, and so leverage is not a distinguishing factor. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Natural gas production and commodity prices sales consistent with Fitch's price deck for Henry Hub including $4.00/mcf in 2023, $3.25/mcf in 2024 and $2.75/mcf in 2025; -- G&P volumes increase from current levels due to announced customer drilling budgets; -- Ship-or-pay transmission contracts expiring over the forecast period are extended with current customers or recontracted with new customers at prevailing market rates; -- Elevated G&P capital spending in 2023 and 2024, relative to recent history, to connect new wells on dedicated acreage. A portion of this spending garners incremental fees for M6 such that the company generates a 12.5% rate of return within four years of dollars spent; -- No acquisitions assumed over the forecast period; -- No dividends paid to sponsors over the forecast period. For the Recovery Rating, Fitch's estimates the company's going-concern value to be greater than the liquidation value. The going-concern multiple used was a 6.0x EBITDA multiple, which is in the range of most multiples seen in recent reorganizations in the energy sector. There have been a limited number of bankruptcies within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In its recent Bankruptcy Case Study Report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries", published in September 2021, the median enterprise valuation exit multiple for the 51 energy cases with sufficient data to estimate was 5.3x, with a wide range of multiples observed. The recovery analysis assumes a default driven by an inability to refinance the revolving credit facility when due, due to very depressed commodity prices. Fitch assumed a going-concern EBITDA of approximately $125 million, lower than the current trailing 12-month EBITDA given the assumed post-bankruptcy scenario where contract renewal rate and throughput volumes would be less favorable. Fitch calculated administrative claims to be 10% and fully drew down the revolving credit facility, which are the standard assumptions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A $300 million per annum run-rate EBITDA with leverage, measured as total debt with equity credit/operating EBITDA, expected to be below 5.0x on a sustained basis; -- Should contribution from ship-or-pay and/or minimum volume commitment contracts, as a percentage of total EBITDA, be expected to significantly increase from current levels, Fitch could consider a positive rating action. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Actual or forecast leverage, defined previously, above 6.0x; -- The initiation of a distribution policy that Fitch forecasts will have the effect of meaningfully increasing leverage from current expectations; -- A significant increase in capex, targeted towards higher business risk projects; -- An acquisition or acquisitions that meaningfully raise the business risk of M6. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch expects M6's liquidity to remain adequate. Liquidity, pro forma for transaction close, will consist of full availability under the $75 million super senior secured revolving credit facility, which is effectively senior to its term loan, and roughly $45 million of cash acquired. The credit facility matures in 2027. The term loan requires 1% per annum mandatory amortization and requires the company to maintain a debt service coverage ratio (DSCR), as defined in the agreement, of above 1.1x. The revolving credit facility contains restrictions on leverage and debt service coverage ratios. Fitch expects M6 to remain in compliance with its financial covenants throughout the forecast period. ISSUER PROFILE M6 is a midstream company providing gathering, processing and treating services to natural gas producers in the East Texas portion of the Haynesville basin and long-haul transportation to the U.S. Gulf Coast LNG, industrial, and utility demand markets. ESG CONSIDERATIONS M6 ETX Holdings II MidCo LLC has an ESG Relevance Score of '4' for Group Structure due to due to a somewhat complex group structure. Group structure considerations have an elevated scope for M6 given inter-family/related party transactions with affiliate companies. This 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. Rating Actions M6 ETX Holdings II MidCo LLC LT IDR B+ New Rating senior secured LT BB+ New Rating RR1 MARTINEZ QUALITY: Poyner Spruill Represents NorSouth, 2 Others -------------------------------------------------------------- In the Chapter 11 cases of Martinez Quality Painting & Drywall, Inc., the law firm of Poyner Spruill LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the following entities: * NorSouth Construction Company of Georgia, Inc. – NorSouth has an unliquidated unsecured claim arising from Debtor's pre- petition breach of construction contracts, which were terminated pre-petition. NorSouth intends to exercise rights of recoupment and/or setoff regarding any amounts claimed to be owed to Debtor or any third party under the terminated contracts. * Sherwood Fence, LLC – Sherwood has an unliquidated unsecured claim arising from Debtor's pre-petition breach of construction contract, which was terminated pre-petition. Sherwood intends to exercise rights of recoupment and/or setoff regarding any amounts claimed to be owed to Debtor or any third party under the terminated contract. * Blue Ridge Atlantic Construction, LLC – BRAC is in the process of paying Debtor retainage owed to Debtor on Peachtree Creek project, no other active contracts with Debtor at this time. Poyner Spruill LLP has been engaged for the representation of these parties in the Debtor's bankruptcy case. Disclosure and waivers, as necessary, have been obtained. Poyner Spruill LLP has considered and evaluated all potential conflicts of interest in accordance with the Rules of Professional Conduct. Poyner Spruill LLP has determined that the representations are permissible and has obtained the proper consents and waivers from its clients. Poyner Spruill LLP agrees to supplement this disclosure to the extent required and will seek additional consents if necessary. Poyner Spruill LLP holds no claim against or interest in the Debtor. Counsel for Norsouth Construction Company of Georgia, Inc., Sherwood Fence, LLC, and Blue Ridge Atlantic Construction, LLC can be reached at: POYNER SPRUILL LLP Thomas L. Ogburn III, Esq. 301 South College St., Suite 2900 Charlotte, NC 282052 Telephone: (704) 342-5250 Facsimile: (704) 342-5264 E-mail: togburn@poynerspruill.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3QZueRD About Martinez Quality Painting & Drywall Martinez Quality Painting & Drywall, Inc., is a drywall and painting contractor serving the residential commercial customers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D.N.C. Case No. 22-30357) on Aug. 1, 2022. In the petition signed by Ricardo Martinez, president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Craig J. Whitley oversees the case. John C. Woodman, Esq., at Essex Richards, PA, is the Debtor's counsel. MID SOUTH RECYCLING: Case Summary & Six Unsecured Creditors ----------------------------------------------------------- Debtor: Mid South Recycling Inc. 2989 SR 247 Russellville, AR 72802 Business Description: Mid South Recycling Inc. provides waste treatment and disposal services. The Debtor owns a four-acre property located in Russellville, AR, consisting of mini-storage and warehouse with an appraised value of $700,000. Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Eastern District of Arkansas Case No.: 22-12261 Judge: Hon. Bianca M. Rucker Debtor's Counsel: Vanessa Cash Adams, Esq. AR LAW PARTNERS, PLLC 415 N. McKinley Street Suite 830 Little Rock, AR 72205 Tel: (501) 710-6500 Fax: (501) 710-6336 Email: vanessa@arlawpartners.com Total Assets: $1,080,798 Total Liabilities: $891,276 The petition was signed by Lisa Garretson as officer. A full-text copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ER6UBIA/Mid_South_Recycling_Inc__arebke-22-12261__0001.0.pdf?mcid=tGE4TAMA MONTICELLO HORIZON: Unsecureds Owed $147K Unimpaired Under Plan ---------------------------------------------------------------- Monticello Horizon Legacy LLC submitted a Plan and a Disclosure Statement. The Debtor's goal from the inception of the Chapter 11 case has been to stabilize rents at all of the Properties, and then sell some of the Properties to generate sufficient cash to cure and reinstate the Mortgage, as permitted by 11 U.S.C. Sections 1124(2) and 1123(d). The Debtor has been advised by the Lender that the total cure amount is $923,538.40, subject to certain disputed charges, including default rate interest and legal fees. This goal has now been accomplished, as four of the Properties have been sold during the Chapter 11 case, resulting in payments of net proceeds to the Lender in the total sum of approximately $896,068.57. The Debtor is also entitled to a credit for a reserve account being held by Lender in the amount of approximately $18,063.42, leaving a balance due of approximately $9,406.41 to effectuate the Cure. [$923,538.40 - $896,068.57 - $18,063.42]. In fact, however, the Debtor believes that the Cure asserted by the Lender is overstated, and may be subject to reduction for overstated default interest, late fees and other disputed charges. If the parties cannot resolve the amount of the Cure between themselves, the Debtor intends to file an appropriate challenge to the Cure prior to the hearing on confirmation of the Plan. In any event, the Debtor has sufficient funds on hand to satisfy the Cure even if allowed in full in the amount asserted by the Lender. Under the Plan, holders of Class 2 General Unsecured Claims will receive a payment equal to 100% of the Allowed amount of the Claim upon the Effective Date of the Plan, together with post-petition interest at the federal judgment rate as of the entry of the Confirmation Order. The Debtor has scheduled Class 3 claims in the amount of $147,933.00 and does not current intend to object to any of these claims, although it reserves the right to do so. As of the August 1, 2022, the federal judgment rate was 3.0%. Class 2 is unimpaired. The Plan shall be funded through the credit for payments previously made to the Lender from the sales of Properties, together with a reserve being held by the Lender, as well as the payment of an additional amount estimated to be approximately $9,406 to complete the Cure and reinstate the Mortgage (subject to the Debtor's right to challenge the amount of the Cure as stated by the Lender). The additional funds to complete the Cure, as well as the monies needed to pay Allowed Administrative Expense Claims and Allowed General Unsecured Claims in full shall come from the Debtor-in-Possession account, which had a balance of $293,138.24 as of June 30, 2022. Attorney for the Debtor: J. Ted Donovan, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, NY 10036 A copy of the Disclosure Statement dated August 12, 2022, is available at https://bit.ly/3bTUbmE from PacerMonitor.com. About Monticello Horizon Legacy Monticello Horizon Legacy, LLC, owner of 21 residential properties in Sullivan County, N.Y., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 20-35665) on June 24, 2020, listing as much as $10 million in both assets and liabilities. Esther Loeffler, managing member, signed the petition. Judge Cecelia G. Morris oversees the case. Goldberg Weprin Finkel Goldstein, LLP serves as the Debtor's bankruptcy counsel. MY SIZE: Incurs $1.7 Million Net Loss in Second Quarter ------------------------------------------------------- My Size, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.72 million on $801,000 of revenues for the three months ended June 30, 2022, compared to a net loss of $4.34 million on $30,000 of revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $3.90 million on $1.21 million of revenues compared to a net loss of $5.80 million on $57,000 of revenues for the same period in 2021. As of June 30, 2022, the Company had $10.67 million in total assets, $2.97 million in total liabilities, and $7.70 million in total stockholders' equity. "Revenue and gross profit growth, coupled with narrowing operating and net loss during the second quarter validate our business strategy and underscore MySize's ability to efficiently acquire and integrate accretive omnichannel retail operations. We achieved $1.2 million in revenues during the first six months of the year, and we reiterate revenue guidance of at least $5 million for 2022," stated MySize CEO Ronen Luzon. "We've invested in Orgad's infrastructure and inventory with an aim to increase their SKU capacity and corresponding revenues as we look ahead to the upcoming holiday shopping season in the fourth quarter. As Orgad's business scales, we expect wider margin contributions from this business unit. We are also opportunistically evaluating additional acquisition targets that may make similar contributions to our top and bottom line." "MySizeID sizing app revenues, 100 percent of which flow directly into our gross profits, continue to increase and we expect this trend to continue. During the third quarter, we anticipate the first revenues from our recently launched FirstLook Smart Mirror," Luzon concluded. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001211805/000149315222023031/form10-q.htm About My Size Headquartered in Airport City, Israel, My Size, Inc. -- www.mysizeid.com -- is a creator of mobile device measurement solutions that has developed innovative solutions designed to address shortcomings in multiple verticals, including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries. Utilizing its sophisticated algorithms within its proprietary technology, the Company can calculate and record measurements in a variety of novel ways, and most importantly, increase revenue for businesses across the globe. My Size reported a net loss of $10.52 million for the year ended Dec. 31, 2021, a net loss of $6.16 million for the year ended Dec. 31, 2020, and a net loss of $5.50 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $12.28 million in total assets, $2.98 million in total liabilities, and $9.30 million in total stockholders' equity. Tel Aviv, Israel-based Somekh Chaikin, member firm of KPMG International, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 18, 2022, citing that the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. NP LEHI: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: NP Lehi, LLC 180 Avenida La Pata San Clemente, CA 92673 Business Description: NP Lehi is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Central District of California Case No.: 22-11399 Judge: Hon. Theodor Albert Debtor's Counsel: Daniel J. Kelly, Esq. TUCKER ELLIS LLP 201 Mission Street Suite 2310 San Francisco, CA 94105 Tel: 415-617-2400 Fax: 415-617-2409 Email: daniel.kelly@tuckerellis.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Patrick S. Nelson as manager. 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/GNYGDTA/NP_Lehi_LLC__cacbke-22-11399__0001.0.pdf?mcid=tGE4TAMA ORIGINCLEAR INC: Posts $1.3 Million Net Loss in Second Quarter -------------------------------------------------------------- Originclear, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $1.27 million on $3.17 million of sales for the three months ended June 30, 2022, compared to a net loss of $10.90 million on $931,422 of sales for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $4.84 million on $4.40 million of sales compared to a net loss of $28.76 million on $1.73 million of sales for the same period in 2021. As of June 30, 2022, the Company had $5.01 million in total assets, $17.70 million in total liabilities, $12.18 million in commitments and contingencies, and a total shareholders' deficit of $24.87 million. Originclear said, "The Company has not generated significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, raising additional capital and increasing sales. We obtained funds from investors during the six months ending June 30, 2022. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001419793/000121390022048218/f10q0622_originclearinc.htm About OriginClear Headquartered in Clearwater, Florida, Originclear, Inc. -- www.originclear.tech -- is a water technology company which has developed in-depth capabilities over its 14-year lifespan. Those technology capabilities have now been organized under the umbrella of OriginClear Tech Group. OriginClear reported a net loss of $2.12 million for the year ended Dec. 31, 2021. As of March 31, 2022, the Company had $4.52 million in total assets, $17.93 million in total liabilities, $10.72 million in commitments and contingencies, and a total shareholders' deficit of $24.14 million. Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 6, 2022, citing that the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. P&L DEVELOPMENT: Fitch Lowers IDR to CCC+, Outlook Stable --------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) of P&L Development Holdings, LLC (PLD) and P&L Development, LLC 'to 'CCC+' from 'B-' with Stable Rating Outlooks. Fitch has also downgraded P&L Development, LLC's and PLD Finance Corp.'s secured notes ratings to 'CCC'/'RR5' from 'B'/RR3'. The rating actions reflect the strength and persistence of the operating headwinds the company is facing including inflation, supply-chain disruptions and some coronavirus headwinds and end-demand volatility greater than pre-pandemic. PLD has not generated positive unadjusted cash flow from operations in the past four years and will need to execute on its new businesses and operational improvements to reverse this trend and have a sustainable capital structure. Liquidity could become stressed if the operating environment further deteriorates. KEY RATING DRIVERS Pressure from Supply Chain & Inflation: Fitch's Ratings Case assumes that PLD is able to partially mitigate some of the inflationary pressures that have challenged PLD in recent periods through price increases and hedges on key materials. Margins have been severely pressured in recent periods from increased costs for both in-bound and out-bound freight expenses, driven by higher costs related to ocean-freight containers, a shortage of truck drivers and rising gas prices. Inflationary pressures are also increasing operating costs, particularly with propylene, resin, utility rates and production-related supplies. Nevertheless, if the operating environment further deteriorates, liquidity could be stressed. Pandemic's Multiple Headwinds: The pandemic has caused some challenges and disruptions in PLD's supply inputs, operations and end markets. However, the company has made adjustments and is generally meeting customer demand. While uncertainty remains regarding the trajectory of the pandemic, Fitch believes the worst impact on the company's operations from the virus has past. The company has retained all of its customers and secured additional supply contracts that should support near- and intermediate-term growth. Deleveraging Requires Profitable Growth: Fitch assumes that the company will deleverage and begin generating positive FCF primarily through EBITDA growth. The company will need to execute on its legacy business, as well as successfully build the nicotine replacement therapy (NRT) products business, nutritional gummies and a number of key abbreviated new drug applications (ANDAs). In addition, the company continues to focus on achieving operating efficiencies to improve margins. Growth from New Products: New products will help to support intermediate- and long-term growth. PLD currently has access to 83 ANDA products, 75 of which are active. The company is expanding its offerings with a number of significant customers. Some of the other new products/initiatives that the company is working on include nutritional gummies, mouthwash, a docosanol pump and to potentially operate as a contract manufacturer of Abreva. Dependable Demand: Consumer health care products benefit from relatively reliable demand. Sales tend to be recession-resistant as most people prioritize health care needs. However, the pandemic did cause some disruption of demand in certain product categories. These products can be purchased without a physician's prescription and offer relief for some non-critical medical issues. In addition, private label brands offer less costly alternatives to brand-name products, attracting cost-conscious consumers, while at the same time offering higher margins to retailers. No Third-Party Payers: In contrast to generic prescription drug manufacturers, consumer OTC products makers do not face pricing pressure from large third-party payers. However, they still must contend with customers that are tough negotiators because of their operational scale, such as Walmart, Kroger, Walgreens and CVS. Nevertheless, there is significantly less focus by lawmakers, activists and the public on private-label consumer OTC product pricing. Quality Track Record: Product quality and reliability of supply are also important to PLD's customers. PLD stated that it has never lost a customer or had a major quality issue. The company emphasizes that it focuses on the three most important factors that its customers consider: quality, reliability of supply and providing a backup to the overwhelmingly dominant supplier in the market, Perrigo. Pricing in the segment is important but appears rational, given the scale of the largest player, Perrigo, and the much smaller second-largest player, PLD. Small Scale & Concentrated Customers: PLD is significantly smaller than its largest competitor. Scale is important in terms of cost, distribution capabilities and retail shelf space. Nevertheless, the company appears to have carved out a significant niche in the space. However, targeted acquisitions and collaborations will likely be necessary longer-term to generate profitable growth. PLD also has significant customer revenue concentration, while its product revenue concentration is less concerning. PLD's top-selling SKU represents 5.0% of sales for the quarter ended March 31, 2022 and no other SKU representing more than 3.1% of sales in the same period. The company generates 100% of its revenues in the U.S. DERIVATION SUMMARY PLD's rating (CCC+) reflects its position in a generally durable healthcare segment balanced by its significantly smaller scale, margins and FCF relative to peers. PLD's closest peer is Perrigo Plc (BB+/Stable), whose higher rating reflects its scale, diversification and lower leverage. Fitch also compares PLD to other lowly rated healthcare pharmaceutical manufacturers such as Mallinckrodt, Endo and Bausch Health (B-/Negative) which benefit from similar factors as Perrigo. However, each issuer has a material amount of contingent liabilities in the form of either opioid litigation or price fixing. Parent-Subsidiary Linkage The approach taken is a weak parent (P&L Development Holdings, LLC)/strong subsidiary (P&L Development, LLC). Using Fitch's PSL criteria, the agency concludes there is open ring fencing and access and control. As such, Fitch rates the parent and subsidiary at the consolidated level with no notching between the two. KEY ASSUMPTIONS -- Significant near- to intermediate-term growth from new product launches followed by low- to mid-single-digit organic revenue thereafter during the forecast period; -- Margins stressed in the near term because of pressures from supply-chain disruption, inflation and lingering coronavirus complications, but improving thereafter due to a favorable sales mix shift driven new product launches and cost reduction; -- FCF stressed initially, then turning flat to positive in late 2023 or in 2024. -- Leverage (total debt/EBITDA) stressed in the near term and moderating thereafter throughout the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Continued advancing revenue supported by some core product categories, recently launched products and new product development; -- Improving margins through cost control, higher growth in newer products and pricing leading to sustainably neutral to positive FCF; -- Gross leverage (total debt/EBITDA) to remain durably at or below 7.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Further pressure on the credit profile stemming from operational stress, leading to increasing leverage without the prospect of a timely turnaround; -- Operating stress that leads to stressed liquidity; -- Persistently negative operational trend that would significantly strain FCF, making it difficult to execute on core operating and business development activities. LIQUIDITY AND DEBT STRUCTURE Near-Term FCF Stress: Potentially negative FCF for the next 12-24 months could stress liquidity. However, the company has opportunities to generate significant sales growth and meaningful margin improvement in near- to intermediate term with new products, expanding business with current customers and cost savings. Fitch will monitor for execution and improvement in the company's FCF profile. At March 31, 2022, the company had $13 million in cash and cash equivalents and $80.3 million availability on its ABL revolver. The two major maturities in are the secured notes in 2025 and the ABL revolver in 2024. RECOVERY RATING ANALYSIS AND NOTCHING In accordance with Fitch's Recovery Rating (RR) methodology, issue ratings are derived from the IDR and the relevant RR. Fitch's recovery analysis assumes a going-concern enterprise value for a reorganized firm of approximately $216 million. Fitch has assumed a GC EBITDA of $40 million as compared with $58 million at the time of the last review. The reduction reflects Fitch's view that current EBITDA and FCF levels would eventually necessitate a restructuring or default and that the current margin pressures would likely have persisted and been quasi-permanent in the event of said default/restructuring. The GC EBITDA is higher than current EBITDA levels reflecting Fitch's assumption that the valuation would consider incremental revenues and EBITDA from material new business lines and contracts. An EBITDA multiple of 6.0x is used to calculate the enterprise value. This is in-line than the average corporate multiple of 6x and at the lower end of the 6.0x‒7.0x range for smaller, high-yield pharmaceutical firms. This may be slightly conservative, given the relatively less-scrutinized pricing environment and potentially onerous litigation profile compared to prescription drug manufacturers. However, PLD is significantly smaller in scale than its largest peer, Perrigo. Acquisition multiples in the sector range from mid-single digits to mid-teens, depending on the attractiveness of the asset in terms of the exclusivity, diversity and growth potential of the target's product portfolio. However, PLD acquired the Teva OTC business for roughly 3x EBITDA. This is likely due to Teva viewing this business as non-core and focusing on its other segments. The $465 million of secured notes have below-average recovery prospects in a reorganization scenario, which maps to a 'CCC'/'RR5' rating, one notch below the IDR. The subordinated shareholder notes and preferred equity (PIK) are considered to have no recovery prospects. Equity Credit for Hybrid Securities The preferred shares include a mandatory repurchase rights provision that would require the company to repurchase in the event of a sale/change of control. Fitch therefore assigns 0% equity credit to the preferred shares. ISSUER PROFILE PLD manufactures, packages and sells private-label consumer health products. The portfolio of products includes medicines to treat pain, allergies, digestive disorders, insomnia, cough/cold and motion sickness. The company also makes products used for first aid, electrolyte replacement, diagnostics, nutrient/vitamin gummies, supplements, creams/lotions, smoking cessation and nutritional shakes. Rating Prior ------ ----- P&L Development Holdings, LLC LT IDR CCC+ Downgrade B- PLD Finance Corp. senior secured LT CCC Downgrade RR5 B P&L Development, LLC LT IDR CCC+ Downgrade B- senior secured LT CCC Downgrade RR5 B PACWEST BANCORP: Fitch Lowers Subordinated Debt Rating to BB+ ------------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDR) of PacWest Bancorp (PACW) and its bank subsidiary, Pacific Western Bank, to 'BBB-' from 'BBB', reflecting the company's rapid, growth-driven deterioration in its common equity Tier 1 (CET1) ratio to 8.2% at 2Q22 (10.4% at 2Q21). The Short-Term IDR of 'F3' of PACW and Pacific Western Bank are unchanged. The Rating Outlook is Stable. The assigned Viability Rating (VR) of 'bbb-' is one notch below PACW's implied VR of 'bbb' reflecting a higher influence of Fitch's assessment of Capitalization and Leverage. KEY RATING DRIVERS The company's IDRs, VR and senior debt ratings reflects PACW's record of strong asset quality, low credit losses, consistent financial performance and stable deposit base, balanced by its relatively spread-reliant business model, commercial real estate (CRE) concentration and elevated rate of loan growth, which has contributed to deterioration in its capital position. PACW's asset quality remains a rating strength. As of 1Q22, its ratio of impaired loans to gross loans was 28 bps, compared to a peer median of 52 bps. Similarly, net charge-offs represented 2 bps as a share of average gross loans, relative to a peer median of 13 bps. This performance is partly offset by relatively high CRE concentration (regulatory CRE as a share of risk-based capital was 297% at 1Q22), as well as elevated borrower concentration. Ratings are also supported by PACW's stable base of deposit funding, with a ratio of loans-to-customer deposits of 73.3% at 1Q22, which compared favorably to the median of mid-tier bank peers. PACW's share of noninterest-bearing deposit funding also compared favorably, at 42%, supporting a cost of funds of 27 bps at 1Q22. Reliance on brokered deposits was also manageable at roughly 1% of total deposits as of 1H22. In addition to well managed interest expense, PACW's branch-light business model also contributed to a peer-leading efficiency ratio of 49.3% at 1Q22. Strong expense control and low credit losses have underpinned above-average financial performance, with operating profit representing 2.1% of risk-weighted assets at 1Q22 and a prior five-year average of 2.5%. These rating strengths are balanced by a high rate of loan growth which, in combination with the company's recent acquisitions, has pressured capitalization. During the first half of 2022, the company grew its loan portfolio by 15%, following 20% growth in 2021. Yoy growth has been concentrated in residential mortgage and asset-based commercial loans. Unfunded commitments have also grown rapidly, increasing by $4.0 billion yoy at June 2022, primarily in multifamily construction finance. Growth in turn has driven a more than 200 bps yoy decline in the company's CET1 ratio, which is Fitch's core capitalization metric, to 8.2% at 2Q22, as well as a decreased tangible common equity ratio to 5.2% from 7.8% 2Q21. PACW's recent issuance of $513 million in non-cumulative, perpetual preferred stock has supported a partial recovery in the company's Tier 1 capital ratio to 10.2% at 2Q22 (10.4% at 2Q21). The company is considering capital enhancing strategies, such as a credit risk transfer transaction and managing loan growth with expectations of lower levels of loan growth in the second half of 2022 in order to reverse its CET1 trajectory by year-end. However, Fitch does not anticipate a recovery of CET1 to 1H21 levels over the near term. Ratings are also constrained by Fitch's assessment of PACW's relatively narrow business model, relatively low fee income contribution (8% of revenues as of 1H22) and moderate risk appetite, combining legacy community bank operations with national specialty businesses. In addition to its organic loan growth, PACW has a exhibited a consistent appetite for company and asset acquisitions, with well managed integrations to date. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Given PACW's loan concentrations, ratings could be negatively impacted by a deterioration in asset quality relative to similarly rated mid-tier bank peers. -- Ratings may also be sensitive to acquisition appetite viewed by Fitch as strategically incoherent or additive to the company's risk profile. While not expected, further sustained deterioration in CET1 below 8% could prompt negative rating action. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Ratings could be upgraded should PACW successfully execute a credible and sustained recovery in its CET1 ratio above 10%, in the absence of franchise-impairing strategic actions, significant deterioration in asset quality or an increase in loan concentration. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS PREFERRED SHARES PACW's preferred shares have been downgraded to 'B+' from 'BB-', or four notches below its VR; two notches for loss severity given the securities' deep subordination in the capital structure, and two notches for non-performance given that the securities' coupon is non-cumulative and fully discretionary. SUBORDINATED DEBT PACW's subordinated debt rating has been downgraded to 'BB+' from 'BBB-', or one notch below its VR, reflecting one notch for loss severity. In accordance with Fitch's Bank Rating Criteria, this reflects alternate notching to the base case of two notches due to our view of U.S. regulators' resolution alternatives for an entity like PACW as well as early intervention option available to banking regulators under U.S. law. LONG- AND SHORT-TERM DEPOSIT RATINGS Pacific Western Bank's long-term deposit rating has been downgraded to 'BBB' from 'BBB+', or one notch higher than the bank's Long-Term IDR, as U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. Pacific Western Bank's short-term deposit rating has also been downgraded to 'F3' from 'F2' as it no longer qualifies for uplift according to Fitch's criteria. HOLDING COMPANY PACW's VR is equalized with that of its bank subsidiary Pacific Western Bank, reflecting its role as the bank holding company, which is mandated in the U.S. to act as a source of strength for its bank subsidiary. The VR is also equalized reflecting the very close correlation between holding company and subsidiary failure and default probabilities. GOVERNMENT SUPPORT RATING PACW and Pacific Western Bank have a GSR of 'ns'. In Fitch's view, the probability of support is unlikely. IDRs and VRs do not incorporate any support. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES PREFERRED SHARES PACW's preferred stock rating is sensitive to changes in PACW's VR, or to a reassessment of loss severity under a resolution scenario. SUBORDINATED DEBT Subordinated debt ratings are primarily sensitive to any change in PACW's VR. LONG- AND SHORT-TERM DEPOSIT RATINGS The long- and short-term deposit ratings are sensitive to any changes to PACW's Long- and Short-Term IDRs. HOLDING COMPANY Should PACW begin to exhibit signs of weakness, demonstrate trouble accessing the capital markets, or have inadequate cash flow coverage to meet near-term obligations, Fitch could notch down the holding company IDR and VR from the ratings of the operating company. The holding company IDR and VR could be similarly affected by an inability to gain regulatory approval for the payment of dividends from the bank operating company to the holding company. PACW's and Pacific Western Bank GSRs are rated 'ns' and there is limited likelihood that these ratings will change over the foreseeable future. VR ADJUSTMENTS The Asset Quality score of 'bbb' has been assigned below the 'aa' implied score due to the following adjustment reasons: Concentrations (negative) and Historical and Future Metrics (negative). The Earnings and Profitability score of 'bbb+' has been assigned below the 'a' implied score due to the following adjustment reason: Revenue Diversification (negative). The Capitalization and Leverage score of 'bb+' has been assigned below the 'bbb' implied score due to the following adjustment reason: Risk Profile and Business Model (negative). The Funding and Liquidity score of 'bbb' has been assigned below the 'a' implied score to the following adjustment reason: Deposit Structure (negative) and Liquidity Coverage (negative). 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. RATING ACTIONS ENTITY/DEBT RATING PRIOR ----------- ------ ----- PacWest Bancorp LT IDR BBB- Downgrade BBB ST IDR F3 Affirmed F3 Viability bbb- Downgrade bbb Government Support ns ns Affirmed Subordinated LT BB+ Downgrade BBB- Preferred LT B+ Downgrade BB- Pacific Western LT IDR BBB- Downgrade BBB Bank ST IDR F3 Affirmed F3 Viability bbb- Downgrade bbb Government Support ns ns Affirmed long-term LT BBB Downgrade BBB+ deposits subordinated LT BB+ Downgrade BBB- short-term ST F3 Downgrade F2 PANACEA LIFE: Incurs $2 Million Net Loss in Second Quarter ---------------------------------------------------------- Panacea Life Sciences Holdings, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.96 million on $469,472 of revenue for the three months ended June 30, 2022, compared to net income of $27,214 on $313,496 of revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $4.74 million on $935,946 of revenue compared to net income of $397,864 on $825,634 of revenue for the six months ended June 30, 2021. As of June 30, 2022, the Company had $21.97 million in total assets, $19.71 million in total liabilities, and $2.25 million in total stockholders' equity. Panacea said, "We do not have sufficient cash resources to sustain our operations for the next 12 months, particularly if the large sales agreements and purchase orders we have do not result in the revenue anticipated. We may be dependent on obtaining financing from one or more debt or equity offerings or further loans from Ms. Buttorff assuming she agrees to advance further funds." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1552189/000149315222022560/form10-q.htm About Panacea Panacea Life Sciences Holdings, Inc. formerly known as Exactus Inc. (OTCQB:EXDI) -- http://www.exactusinc.com-- is a Nevada corporation organized under the name Solid Solar Energy, Inc in 2008 and renamed Exactus, Inc. in 2016. The Company has pursued opportunities in Cannabidiol since 2019. During most of 2020 the Company was engaged in marketing of hemp derived products sourced from its leased farming operation. Panacea Life reported a net loss of $4.78 million for the year ended Dec. 31, 2021, compared to a net loss of $5.23 million for the year ended Dec. 31, 2020. As of March 31, 2022, the Company had $22.41 million in total assets, $18.23 million in total liabilities, and $4.18 million in total stockholders' equity. Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 25, 2022, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. PAVERS INC: Wins Cash Collateral Access Thru Jan 2023 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas authorized Pavers, Inc. to use cash collateral on an interim basis in accordance with the budget through January 31, 2023. The Debtor requires the use of cash collateral to pay its ongoing expenses for labor, utilities, maintenance and repairs, professionals, and other ordinary operational costs, together with the costs of preparing its assets for liquidation and related marketing expenses. The Debtor is permitted to use cash collateral generated by the Debtor from sales of real estate and personal property and income facilities rentals and any other business operations, all of which has been pledged to The Plains State Bank, dba Bank IV, a division of The Plains State Bank, among others. PSB has an alleged properly perfected first priority security interest in the Cash Collateral, as well as all other real property, equipment, accounts, inventory and personal property of the Estate. Westfield Insurance Company holds an alleged properly perfected second priority security interest in the Debtor's accounts, receivables, nontitled machinery and equipment, general intangibles, goods, and other forms of personal property. Bobcat of Salina, Inc. may assert a first priority purchase money security interest in certain Bobcat parts, tracks, and rentals, though the Debtor asserts that Bobcat holds no claims. The US Small Business Administration holds an alleged properly perfected third priority security interest in the Debtor's accounts, receivables, non-titled machinery and equipment, general intangibles, goods, and other forms of personal property. The Guarantee Company of North America USA holds an alleged properly perfected fourth priority security interest in the Debtor's accounts, receivables, non-titled machinery and equipment, general intangibles, goods, and other forms of personal property. As of the Petition Date, Westfield, Bobcat, the SBA, and GCNA are collectively known as the "Junior Lienholders." The Debtor will deposit the cash collateral into the Debtor's debtor-in-possession accounts with PSB. To the extent that the cash collateral is generated from the sales of any of PSB's Collateral, as defined below, after the DIP Account balance has reached $50,000, all excess proceeds from such sales may thereafter be applied by PSB to the specific loans secured by the specific Collateral sold. As adequate protection, PSB and the Junior Lienholders are granted a replacement lien and post-petition lien on post-petition assets of the Debtor. PSB will hold a continuing lien on post-petition rents pursuant to 11 U.S.C. section 552(b)(2). The replacement lien and continuing lien will be in proportion to, and to the extent that, the cash collateral is used by the Debtor on a post-petition basis, and in the same order and priority as such liens existed on the Petition Date. These events constitute an "Event of Default:" a. The entry of an order by the Court granting relief from or modifying the automatic stay of Section 362 of the Bankruptcy Code (i) to allow any creditor to execute upon or enforce a lien on or security interest in any of the Collateral; b. Dismissal of the case or conversion of the case to Chapter 7 case; c. The sale after the Petition Date of any portion of any of the Debtor's assets outside the ordinary course of dealing and without approval by the Court under 11 U.S.C. section 363; and d. The failure by the Debtor to perform, after notice from PSB, in any respect, any of the material terms, provisions, conditions, covenants, or obligations under the Order granting the Motion or under the requirements of the underlying loan documents between the Debtor and PSB, to the extent such requirements materially affect the Collateral and are not otherwise inconsistent with the terms of the Order or bankruptcy law. As partial adequate protection, PSB is granted a valid, automatically perfected replacement lien against the assets of the Debtors, for the full amount of the cash collateral which is utilized pursuant to the Order granting the Motion. The replacement liens will have the same validity, avoidability and priority as the security interests and liens existing against the Cash Collateral as of the date of the Order on the Motion. The replacement liens will be declared to be valid and perfected without the need for the execution, recording or filing of any further document or instrument or the taking of any further act otherwise required under nonbankruptcy law. PSB, for its benefit, is granted, (i) an additional and replacement continuing valid, binding, enforceable, non-avoidable, and automatically perfected post-petition security interest in and lien on any and all presently owned and hereafter acquired personal property and all other assets of the Debtors and the estate, together with any proceeds thereof, including, without limitation, as set forth in the loan documents; (ii) to the extent provided by Sections 503(b) and 507(b) of the Bankruptcy Code, an allowed superpriority administrative expense claim in the case and any Successor Case; (iii) payments from the proceeds from the auction or sale of its Collateral at the closing of the sale of any such transaction, with such payments to be made to PSB according to its relative priority in the assets as of the Petition Date; and (iv) any refunds paid or payable to the Debtor, including but not limited refunds of insurance premiums. The Junior Lienholders are granted the same adequate protection set forth but only (i) if PSB will have had its allowed claims therein paid in full, (ii) with the same relative order and priority as existed on the Petition date, and (iii) only to the extent that its equity position in any item of Collateral has been diminished by the Debtor's use of such Collateral. The Post-Petition Replacement Adequate Protection Lien granted to PSB will have the same priority as the priority PSB enjoyed in the Debtor's assets as of the Petition Date, and nothing set forth therein is intended to grant PSB or any other creditor a priming lien on or security interest in the Debtor's assets and property. The Carve-Out means: 1) Fees payable to the Subchapter V trustee, in an amount not to exceed $5,000; 2) The allowed professional fees and disbursements for the Debtor's accountant in the case, in an amount not to exceed $5,000; and 3) The allowed professional fees and disbursements for the Debtor's counsel in the case, in an amount not to exceed $40,000; and 4) Any costs of sale associated with the sale of the Collateral, including broker commissions, marketing fees, property taxes, escrow fees, recording costs, and similar expenses, to the extent authorized by any section 363 order approving of such sales. A copy of the order is available at https://bit.ly/3pnyChF from PacerMonitor.com. About Pavers, Inc. Pavers, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 22-40463) on August 8, 2022. In the petition signed by Jeffrey B. Wilson, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Dale L. Somers oversees the case. David Prelle Eron, Esq., at Prelle Eron and Bailey, PA is the Debtor's counsel. PECO ELECTRIC: Wins Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina, Greenville Division, authorized Peco Electric Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. Kapitus is a secured creditor of the Debtor, based on a Loan Agreement and Security Agreement. Kapitus has a perfected blanket security interest in the Debtor's assets, including but not limited to accounts, accounts receivable, inventory, and equipment by virtue of a filed UCC-1 Financing Statement, filed on November 3, 2021. The Debtor acknowledges and agrees Kapitus has the senior lien on all of its assets to the extent provided in the filed UCC-1 Financing Statement other than titled assets and particular assets for which a different creditor provided purchase money financing. The Debtor acknowledges and agrees that, as of the Petition Date, the Debtor was indebted to Kapitus in the principal amount of $61,162. The Debtor agrees that, at the time of the petition, Kapitus was owed less than the value of the Debtor's accounts receivable and that Kapitus is therefore oversecured. The Debtor further represents Kapitus will be paid in full in the Debtor's Chapter 11 Plan of Reorganization. Kapitus has consented to the Debtor's use of cash collateral upon the agreements, representations, and conditions contained therein. The Debtor says its Chapter 11 Plan proposes payment in full of Kapitus's claim over 36 months, with interest of 6.75% and reasonable attorneys' fees of up to 15% of the principal balance, with estimated payments of $2,173 per month. The Debtor will make monthly adequate protection payments in the amount of $2,173 to Kapitus beginning on August 15, 2022, and due by the 15th day of each consecutive month thereafter until a Plan is confirmed. All payments by the Debtor to Kapitus will be remitted via ACH payment. As adequate protection for any diminution in value of Kapitus's interests in the collateral and post-petition interest, costs and fees, Kapitus is granted valid and perfected replacement security interests in, and liens on the same type of post-petition assets in which Kapitus holds valid and perfected liens prior to the Petition Date and all cash or other proceeds generated post-petition by the Pre-Petition Collateral to the same extent, validity and priority as existed on the Prepetition Collateral. The Adequate Protection Liens will constitute perfected liens on all of the Collateral as to which Kapitus held a valid and perfected lien as of the Petition Date to the same extent, validity and priority as existed on the Prepetition Collateral. To the extent the protection afforded to Kapitus is found to be inadequate, Kapitus will have the right to assert a claim under 11 U.S.C. sections 503(b), 507(a) and 507(b). These events constitute an "Event of Default:" a. The failure by the Debtor to perform, in any material respect, any of the terms, provisions, conditions, covenants, or obligations under the Consent Order or the Existing Agreements; b. The entry of an order by the Court granting the Debtor's landlord or any other party (i.e. not limited to the Parties hereto) relief from or modifying the automatic stay under Bankruptcy Code section 362(a); c. Dismissal of the chapter 11 case or conversion of the chapter 11 case to a chapter 7 case, or appointment of a chapter 11 trustee or examiner, or other responsible person; and/or d. A material default by the Debtor in reporting financial or operational information as and when required under this Consent Order, the Existing Agreements, or the Local Bankruptcy Rules of the Eastern District of North Carolina. A copy of the order and the Debtor's 30-day budget is available at https://bit.ly/3bVlAoB from PacerMonitor.com. The Debtor projects $123,600 in total receipts and $60,705 in total expenses. About Peco Electric Inc. Peco Electric Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01444) on July 1, 2022. In the petition signed by Thomas Ballard, Jr., president, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Joseph N. Callaway oversees the case. Jonathan E. Friesen, Esq., at Gillespie & Murphy PA is the Debtor's counsel. POST OAK TX: Aug. 30 Hearing for Plan Confirmation -------------------------------------------------- Judge Erik P. Kimball has entered an order conditionally approving the Disclosure Statement of Post Oak TX, LLC. The hearing on final approval of the Disclosure Statement and confirmation of the Plan has been set on August 30, 2022, at 9:30 a.m. in United States Bankruptcy Court, Courtroom B, 8th Floor, 1515 North Flagler Drive West Palm Beach, Florida 33401. The last day for filing and serving objections to final approval of the Disclosure Statement is on August 26, 2022. The last day for filing and serving objections to confirmation of the Plan is on August 26, 2022. The last day for filing elections under 11 U.S.C. Sec. 1111(b) is on Aug. 26, 2022. The last day for filing and serving objections to claims is on Aug. 26, 2022. The last day for filing written ballots acceptances or rejections of the Plan is on August 26, 2022. On or before 5:00 p.m. on August 26, 2022, the Plan Proponents must file with the Court the Local Form "Certificate of Proponent of Plan on Acceptance of Plan, Report on Amount to be Deposited, Certificate of Amount Deposited and Payment of Fees," and the Local Form "Confirmation Affidavit." The last day for filing and serving fee applications is on August 26, 2022. About Post Oak TX, LLC Post Oak TX, LLC is part of the traveler accommodation industry. Post Oak TX sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-18563) on August 31, 2021. E. Llywd Ecclestone, Jr., president of Hotel Resort Company, a Florida corporation, as general partner, of Hotel Resort Properties, LLLP, the Debtor's member/manager, signed the petition. The Debtor disclosed between $50 million to $100 million in both assets and liabilities. Judge Erik P. Kimball oversees the case. Andrew Zaron, Esq., at Leon Cosgrove, LLP, is the Debtor's counsel. KapilaMukamal, LLP is the Debtor's financial advisor. POST OAK TX: Unsecureds Unimpaired Under Settlement Plan -------------------------------------------------------- Post Oak TX, LLC, and Rialto submitted a Disclosure Statement in support of its Plan of Reorganization. After a series of judicial settlement conferences facilitated by the Honorable Peter D. Russin, the Debtor, Lender and Debtor Insider Parties entered into the Global Settlement through which the Plan will be funded and which, inter alia, resolves any and all disputes by and among the Settling Parties, the relevant terms of which are as follows: 1. Rialto shall have an Allowed Claim in this case as of the Petition Date in the amount of $99,672,245. 2. Rialto and the Debtor will file the Plan jointly and the Settling Parties shall support and not oppose the Plan. 3. In connection with the Plan, the Plan Proponents will file a Disclosure Statement that, in addition to describing the Plan, will generally describe the following confidential agreement between the Debtor Insider Parties and the Rialto Parties, as follows: During the judicial settlement conferences, the Debtor Insider Parties and Rialto discussed many issues, including the value of the Assets. For purposes of the Bankruptcy Case, the precise value is unimportant given the payment in full of all Allowed Claims or the consent of all non-paid parties to their treatment under the Plan. In connection with possible non-bankruptcy matters, the Debtor Insider Parties and Rialto entered into a confidential agreement stating certain details regarding the value of the Assets and related matters. The existence of the confidential agreement is disclosed herein, but the Debtor Insider Parties and Rialto have agreed to maintain the details of the agreement in confidence, particularly since the agreement has no impact on any parties to this Bankruptcy Case." A condition to the effectiveness of the Global Settlement is the entry into the Confidential Agreement by and between the Debtor Insider Parties and Rialto. 4. Upon the entry of the Final Confirmation Order, the Debtor shall transfer the Assets to NewCo, free and clear of all liens, claims, encumbrances and interests, pursuant to ordinary and customary terms and conditions for a section 363(f) sale of assets. NewCo shall be responsible for the payment of any Liens against the assets it acquires pursuant to the Plan; provided that, NewCo may seek to avoid any such Liens, including on the basis that they are subject to lien stripping under 11 U.S.C. Sec. 506. The assets shall include all cash and accounts, and any executory contracts or unexpired leases that NewCo, in its sole discretion, may seek to have the Debtor assume and assign. 5. Prior to the entry of the Final Confirmation Order, any use of cash by the Debtor shall remain subject to budgets either approved by the Bankruptcy Court, or jointly agreed to by Rialto and the Debtor as has been done throughout the course of the Bankruptcy Case. The foregoing budgets shall continue to include a line item for, and Rialto shall continue to receive, adequate protection payments in the amount of $150,000 per month. Between the date of the entry of a final, non-appealable order approving the Global Settlement and the entry of the Final Confirmation Order, any and all sums in excess of $2,000,000 in the Debtor's operating account at the end of each month, after payment of the amounts set forth in the budget approved for the subject month, shall be transferred to the trust account of counsel for Rialto, Agentis PLLC (the "Rialto Trust Money") on or before the 5th day of the following month. 6. The Debtor shall continue to operate its business in the ordinary course of business between the date of the execution of the Global Settlement Agreement and the Effective Date, pursuant to the budgets either approved by the Bankruptcy Court or jointly agreed to by the Debtor and Rialto. The Debtor shall not encumber any of its assets without the prior written consent of Rialto. 7. On the Effective Date, Rialto shall direct Hilton to pay from the Debtor's operating account (defined as the "Lender Carveout"): (a) all allowed unsecured claims and Administrative Expense Claims2 , excluding the Rialto Claim, the Insider Claims, and the Administrative Claims of the Professionals; (b) U.S. Trustee fees due in the ordinary course; plus, (c) an additional $650,000.00 to Llwyd and Dianna Ecclestone, or to such entity as they may designate (the "$650,000"). In the event there are insufficient funds in the Debtor's operating account to pay the Lender Carveout, Rialto shall direct its counsel to pay any shortfall from the Rialto Trust Money. 8. Estate Professional Fees. All outstanding fees and costs of Estate Professionals shall be payable upon the entry of the Final Confirmation Order from the $650,000, and shall be capped at $150,000, over and above any fees and costs paid through April 25, 2022. 9. Upon the earlier of the Effective Date or satisfaction of Rialto's obligations to the Debtor and Debtor Insider Parties under the Global Settlement and the Plan, the Settling Parties shall be deemed to have released each other from any and all claims arising from the Loan Documents. Under the Plan, Class 3 Allowed General Unsecured Claims, on the Effective Date, the Disbursing Agent shall pay 100% of all Allowed General Unsecured Claims, excluding the unsecured claims of any of the Debtor Insider Parties or any claim by Rialto attributable to the deficiency of its Allowed Claim (which need not and will not be determined). Class 3 is unimpaired. The Plan shall be funded in accordance with the Global Settlement. The hearing to finally approve this Disclosure Statement and confirm the Plan will be held on August 30, 2022 at 9:30 a.m. at the Flagler Waterview Building, 1515 N Flagler Dr. Room 801 Courtroom B, West Palm Beach, Florida 33401. Attorneys for Wilmington Trust, National Association, as Trustee, for the benefit of the registered holders of Wells Fargo Commercial Mortgage Trust 2015-LC20, Commercial Mortgage Pass-Through Certificates, Series 2014-LC20, through its special purpose entity, RSS JPMBB2014- C25 – TX POT, LLC, c/o Rialto Capital Advisors, LLC: Jacqueline Calderin, Esq. AGENTIS PLLC 55 Alhambra Plaza, 8th Floor Coral Gables, FL 33134 Tel: (305) 722-2002 E-mail: jc@agentislaw.com Attorneys for Post Oak TX, LLC: Andrew Zaron, Esq. LEON COSGROVE LLP 255 Alhambra Circle, 8th Floor Coral Gables, FL 33134 Tel: (305) 740-1975 E-mail: azaron@leoncosgrove.com A copy of the Disclosure Statement dated August 10, 2022, is available at https://bit.ly/3JOzJ37 from PacerMonitor.com. About Post Oak TX, LLC Post Oak TX, LLC is part of the traveler accommodation industry. Post Oak TX sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-18563) on Aug. 31, 2021. E. Llywd Ecclestone, Jr., president of Hotel Resort Company, a Florida corporation, as general partner, of Hotel Resort Properties, LLLP, the Debtor's member/manager, signed the petition. The Debtor disclosed between $50 million to $100 million in both assets and liabilities. Judge Erik P. Kimball oversees the case. Andrew Zaron, Esq., at Leon Cosgrove, LLP, is the Debtor's counsel. KapilaMukamal, LLP is the Debtor's financial advisor. PRESS ON HOLDINGS: Files for Chapter 11 to Stop Foreclosure ----------------------------------------------------------- Press on Holdings LLC has sought bankruptcy protection in Colorado. The Debtor owns residential real property at 5 Mockingbird Lane, Englewood, Colorado. The bankruptcy filing was prompted by a pending foreclosure upon the property. The Debtor filed a motion asking the Court to enter an order establishing a bar date for the filing of proofs of claim and/or interest and requests for allowance of administrative expense claims under Sec. 503(b)(9) of the Bankruptcy Code. The Debtor intends to file a Plan of Reorganization. In order to prepare for confirmation of a Plan of Reorganization, the Debtor must know with some certainty the nature and extent of the pre-Petition Date claims and interests which will be asserted against the estate by creditors. According to the petition, Press on Holding estimates between 1 and 49 unsecured creditors. The petition states funds will be available to unsecured creditors. About Press on Holdings Press on Holdings LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Press on Holdings LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Col. Case No. 22-13040) on August 16, 2022. In the petition filed by Preston Parsons, as a managing member, the Debtor reports estimated assets and liabilities between $1 million and $10 million. Aaron A Garber, of Wadsworth Garber Warner Conrardy, P.C., is the Debtor's counsel. PRESSURE BIOSCIENCES: Posts $2.9 Million Net Loss in Second Quarter ------------------------------------------------------------------- Pressure Biosciences, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $2.92 million on $498,137 of total revenue for the three months ended June 30, 2022, compared to a net loss of $4.75 million on $608,927 of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company recorded a net loss of $7.16 million on $978,137 of total revenue compared to a net loss of $11.32 million on $1.17 million of total revenue for the six months ended June 30, 2021. As of June 30, 2022, the Company had $2.89 million in total assets, $30.10 million in total liabilities, and a total stockholders' deficit of $27.21 million. Pressure Biosciences stated, "We have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of June 30, 2022, we did not have adequate working capital resources to satisfy our current liabilities and as a result, we have substantial doubt regarding our ability to continue as a going concern. As described in Notes 5 and 6 of the accompanying consolidated financial statements, we have been successful in raising debt and equity capital. We received $4.0 million in net proceeds from loans in the six months ended June 30, 2022. We have efforts in place to continue to raise cash through debt and equity offerings. "We will need substantial additional capital to fund our operations in future periods. If we are unable to obtain financing on acceptable terms, or at all, we will likely be required to cease our operations, pursue a plan to sell our operating assets, or otherwise modify our business strategy, which could materially harm our future business prospects." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/830656/000149315222023029/form10-q.htm About Pressure Biosciences South Easton, Mass.-based, Pressure Biosciences Inc. -- http://www.pressurebiosciences.com-- develops and sells innovative, broadly enabling, high pressure-based platform technologies and related consumables for the worldwide life sciences, agriculture, food and beverage, and other key industries. Pressure Biosciences reported a net loss of $20.15 million for the year ended Dec. 31, 2021, compared to a net loss of $16.01 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $2.83 million in total assets, $25.04 million in total liabilities, and a total stockholders' deficit of $22.21 million. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 4, 2022, citing that the Company has a working capital deficit, has incurred recurring net losses and negative cash flows from operations. These conditions raise substantial doubt about its ability to continue as a going concern. PRIME SECURITY: Moody's Affirms 'B1' CFR, Outlook Remains Stable ---------------------------------------------------------------- Moody's Investors Service affirmed Prime Security Services Borrower, LLC's (dba ADT) B1 corporate family rating, its B1-PD probability of default rating, and the respective Ba3 and B3 instrument ratings on the residential alarm monitoring company's first- and second-lien debt. However, given the pressures on ADT's liquidity as a result of $700 million of first-lien notes becoming a current obligation on its balance sheet as of June 30th, Moody's has changed ADT's speculative grade liquidity rating to SGL-3, from SGL-2, reflecting an adequate liquidity profile. The outlook remains stable. Because in Moody's view ADT's management has effectively chosen to allow the notes to become a current liability, governance considerations are a driver of this action. Ratings Affirmed: Issuer: Prime Security Services Borrower, LLC Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Secured 1st lien Revolving Credit Facility, Affirmed Ba3 (LGD3) Senior Secured 1st lien Term Loan due 2026, Affirmed Ba3 (LGD3) Senior Secured 1st Lien Regular Bond/Debenture, Affirmed Ba3 (LGD3) Senior Secured 2nd lien Regular Bond/Debenture, Affirmed B3 (LGD6) Issuer: The ADT Security Corporation Senior Secured 1st Lien Regular Bond/Debenture, Affirmed Ba3 (LGD3) Changed: Issuer: Prime Security Services Borrower, LLC Speculative Grade Liquidity Rating, Changed to SGL-3, from SGL-2 Outlook Actions: Issuer: Prime Security Services Borrower, LLC Outlook, Remains Stable RATINGS RATIONALE ADT's B1 CFR reflects its leading position in the US residential alarm-monitoring and home automation services market, and from positive operating trends, including revenue diversification and anticipated acceleration in monitoring revenue through 2022. Moody's expects revenue growth of roughly 15% in 2022, to about $6.2 billion, as a result of higher pricing and customers choosing more interactive services, as well as a push in 2021 to spend heavily on customer acquisitions. A new, fast-growing solar unit will support revenue growth as well, with the segment representing about 15% of total revenue this year, although it will be a drag on earnings initially. Heavy growth spending from 2021 is abating, and Moody's anticipates revenue growth for 2023 to ease to below 10%. ADT has weaker liquidity as a result of the designation of $700 million of first-lien notes as a current liability, a large obligation relative to less than $50 million of June 30th balance sheet cash, just under $500 million availability under the revolving credit facility, and Moody's expectation for roughly $200 million in Moody's-adjusted free cash flow in 2022. Credit market conditions through the summer of 2022 have presented economically unattractive opportunities for refinancing The ADT Security Corporation's $700 million, 4.125% first-lien notes, which mature in June 2023. While Moody's thinks the company could readily refinance them, albeit at a higher coupon, Moody's also believes the company is waiting for a more opportune time to do so. Additionally, while expected cash and revolver availability by the end of 2022 might be just enough to satisfy the maturity of the notes, by mid-April of 2023 an additional, $750 million of 5.25% first-lien notes will become a current obligation as well, which would put a severe strain on liquidity. In the light of the very large resultant current obligation posed by the 4.125% first-lien notes (which represented nearly 7% of ADT's more than $10 billion of total debt as of June 30, 2022), ADT's liquidity is weakened, but this is due to a practical technicality rather than to operational weakness. As such, Moody's has lowered its liquidity assessment by only one notch. Ongoing efforts to delever combined with robust operating growth will help the company sustain debt-to-RMR (recurring monthly revenue) comfortably below 30 times, a strong level for the B1 CFR. However, Moody's views ADT's commitment to maintaining conservative financial policies as an important credit consideration. Private equity sponsor Apollo's large-majority ownership in the company will need to decline meaningfully before Moody's can be comfortable that ADT is likely to put creditors' concerns before those of shareholders. Adequate liquidity, in the forms of positive, GAAP-based free cash flow and the large, $575 million revolving credit facility (which Moody's expects to be minimally drawn by year-end) that is supplemented by a receivables-securitization facility, also support ADT's ratings. Furthermore, as with alarm monitoring companies in general, Moody's assumes that ADT can both curtail its active subscriber acquisition program and turn to the alarm monitoring industry's robust market for trading alarm monitoring contacts, in order to generate additional liquidity. The stable outlook assumes the successful, timely refinancing of the 4.125% first-lien notes, plus sponsor Apollo's continued elevated ownership interest in the company and the governance risks that ownership stake implies. Moody's expects ADT's primary operating metrics -- revenue, attrition, creation multiples, steady-state-free-cashflow to debt leverage, and debt/RMR leverage – to improve moderately over the next 12 to 18 months. STRUCTURAL CONSIDERATIONS All of ADT's debt is secured on either a first- or second-lien basis. The ratings for the individual debt instruments incorporate ADT's overall probability of default, reflected in the B1-PD, and the Loss Given Default assessments for individual instruments. The Ba3 ratings on ADT's $2.8 billion first-lien term loan, $575 million first-lien revolver, and $5.5 billion of first-lien notes are weakly positioned given the increased preponderance of first-lien debt relative to debt subordinated to it ($1.3 billion of B3-rated second-lien notes) in the company's capital structure. In the past few years ADT has steadily reduced the amount of debt subordinated to first-lien debt, resulting in a large preponderance of debt now being first lien. As there is no longer a sufficient amount of subordinated debt that heretofore had been providing ratings support or "cushion" for the first-lien debt, the first-lien debt's credit riskiness has been aligning more closely with ADT's B1 CFR itself. However, Moody's continues to believe that ADT's ongoing improvements in operating metrics – including one or two that fall within Moody's CFR upgrade triggers – suggest that a Ba3 instrument rating continues to reflect the credit risk inherent in the first-lien debt, as the overall credit profile improves. The respective one-notch-above- and two-notches below-differential for the first- and second-lien debt ratings relative to the CFR reflects the proportion of first-lien debt versus debt subordinated to it in the capital structure. However, Moody's notes that any incremental first-lien debt issuance or similar reduction in subordinated debt will likely cause ADT's first-lien debt stack to be downgraded from Ba3 to B1, in line with the CFR. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if ADT can sustain recent operating momentum and maintain debt-to-RMR leverage below 30 times, and if Moody's anticipates that private-equity ownership in the company will approach 50% or less. The ratings could be downgraded if Moody's has diminished confidence in the company's ability to refinance its upcoming debt maturities; if additional dividend recapitalizations or large debt-funded acquisitions are made; if debt-to-RMR is sustained above 35 times, or if FCF-to-debt falls to the low-single-digit percentages. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Headquartered in Boca Raton, FL, Prime Security Services Borrower, LLC (dba ADT; NYSE: ADT) is a leading provider of security, interactive automation, and monitoring services for approximately 6.7 million residential (primarily) and business customers, and for independent security-alarm dealers on a wholesale basis (excluded from the 6.7 million count). The company is the product of a May 2016, Apollo-backed combination of alarm monitors Protection 1 (P1) and The ADT Security Corporation. Moody's expect the company's 2022 total monitoring, services, and equipment-installation revenue to be at least $6.1 billion, a better than 15% improvement relative to 2021. PROFESSIONAL DIVERSITY: Posts $91K Net Income in Second Quarter --------------------------------------------------------------- Professional Diversity Network, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income attributable to the company of $91,063 on $2.20 million of total revenues for the three months ended June 30, 2022, compared to a net loss attributable to the company of $635,624 on $1.46 million of total revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, Professional Diversity reported a net loss attributable to the company of $612,202 on $4.25 million of total revenues compared to a net loss attributable to the company of $1.41 million on $2.95 million of total revenues for the six months ended June 30, 2021. As of June 30, 2022, the Company had $6.88 million in total assets, $4.34 million in total liabilities, and $2.55 million in total stockholders' equity. On June 30, 2022, cash balances were approximately $2.4 million as compared to $3.4 million on Dec. 31, 2021. Working capital surplus from continuing operations on June 30, 2022, was approximately $0.6 million as compared to $0.4 million on Dec. 31, 2021. "While the challenges in current global economic conditions continue, we believe that there is still opportunity for all of our business lines to grow. We recently hired additional sales and customer service personnel for the PDN network, as well as bringing on Ms. Grace Reyes, former Board member of PDN, to consult with, and strengthen, the NAPW business line dedicated to women. Our RemoteMore business line continues to exceed budgeted revenue expectations," said Adam He, CEO of Professional Diversity Network. "Even through this economic downturn, we still maintain focused on building up core operations, capitalizing on strategic opportunities, and maximizing shareholder value through our share buyback plan." Professional Diversity stated, "We continue to focus on our overall profitability by reducing operating and overhead expenses. We have continued to generate negative cash flows from operations, and we expect to incur net losses for the foreseeable future, especially considering the negative impact COVID-19 has had and may continue on our liquidity and financial position. These conditions raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. The condensed consolidated financial statements do not include any adjustments that might be necessary if we unable to continue as a going concern. "We are closely monitoring operating costs and capital requirements. Our Management continues to contain and reduce costs, including terminating non-performing employees and eliminating certain positions, replacing and negotiating with certain vendors, and implementing technology to reduce manual time spent on routine operations. If we are still not successful in sufficiently reducing our costs, we may then need to dispose of our other assets or discontinue business lines." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001546296/000149315222022755/form10-q.htm About Professional Diversity Headquartered in Chicago, Illinois, Professional Diversity Network, Inc. -- https://www.prodivnet.com -- is a global developer and operator of online and in-person networks that provides access to networking, training, educational and employment opportunities for diverse individuals. Professional Diversity reported a net loss of $2.76 million for the year ended Dec. 31, 2021, a net loss of $4.35 million for the year ended Dec. 31, 2020, compared to a net loss of $3.84 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $8.15 million in total assets, $5.56 million in total liabilities, and $2.59 million in total stockholders' equity. Wilmington, DE-based Ciro E. Adams, CPA, LLC, the Company's auditor since 2018, in its report dated March 31, 2022, citing that the Company has incurred significant losses, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. PWM PROPERTY: Administrative Bar Dates Unworkable, Says UST ----------------------------------------------------------- Andrew R. Vara, United States Trustee for Region 3, filed an objection to PWM Property Management LLC, et al.'s Motion for Entry of an order approving the Amended Disclosure Statement and granting related relief. The Debtors request that the Court enter an order, on shortened notice, establishing Aug. 30, 2022 as the deadline to file administrative expense claims that accrued up to Aug. 30, 2022. In addition, a second bar date is proposed, requiring creditors to file a separate administrative expense claim within 30 days of the Effective Date of the plan for those claims that arose between August 30, 2022 and the Effective Date. Failure to timely file such a claim will result in it being discharged. Notice of the administrative claims bar date would be served "one Business Day after the entry of the Supplemental Disclosure Statement order, or as soon as reasonably practicable thereafter." The U.S. Trustee objects to the proposed administrative bar dates as they are likely unworkable for most claimants, do not provide proper notice, and create unnecessary additional hoops for claimants to jump through to protect their claims. About PWM Property Management PWM Property Management LLC, et al., are primarily engaged in renting and leasing real estate properties. They own two premium office buildings, namely 245 Park Avenue in New York City, a prominent commercial real estate assets in Manhattan's prestigious Park Avenue office corridor, and 181 West Madison Street in Chicago, Illinois. On Oct. 31, 2021, PWM Property Management LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11445). PWM estimated assets and liabilities of $1 billion to $10 billion as of the bankruptcy filing. The cases are pending before the Honorable Judge Mary F. Walrath and are being jointly administered for procedural purposes under Case No. 21-11445. The Debtors tapped White & Case LLP as restructuring counsel; Young Conaway Stargatt & Taylor, LLP as local counsel; and M3 Advisory Partners, LP as restructuring advisor. Omni Agent Solutions is the claims agent. PWM PROPERTY: Unsecureds Owed $4M Unimpaired Under Plan ------------------------------------------------------- Judge Mary F. Walrath has entered an order approving the Amended Disclosure Statement of PWM Property Management LLC, et al. The Bankruptcy Court has scheduled the Plan confirmation hearing to begin on Aug. 30, 2022, at 10:30 a.m. (prevailing Eastern Time). The deadline by which all objections to the Plan must be filed with the Bankruptcy Court and served so as to be actually received by the appropriate notice parties is Aug. 17, 2022, at 4:00 p.m. (prevailing Eastern Time). The voting deadline is Aug. 17, 2022, at 4:00 p.m. (prevailing Eastern Time). Amended Plan PWM Property Management LLC, et al. submitted a Disclosure Statement for the Amended Joint Chapter 11 Plan of Reorganization. On June 9, 2022, the Debtors filed the Joint Chapter 11 Plan of Reorganization of PWM Property Management LLC and Its Debtor Affiliates [Docket No. 672] (the "Initial Plan"). Contemporaneously with the filing of the Initial Plan, the Debtors filed the Bidding Procedures Motion seeking authorization to run an auction process with respect to transaction proposals for 245 Park Avenue and 181 West Madison pursuant to the Bidding Procedures. Following the filing of the Bidding Procedures, the Debtors engaged with all stakeholders with respect to a consensual form of order. As part of those discussions, the Debtors accelerated their negotiations with SLG Member—who, along with its affiliates, holds a preferred equity investment, mezzanine debt, and other claims in these cases—regarding a potential stalking horse bid for 245 Park Avenue. Those productive discussions resulted in a definitive agreement for SLG Member to sponsor a comprehensive plan of reorganization for the Debtors with respect to 245 Park Avenue. On July 8, 2022, the Plan Sponsor Debtors and SLG Member entered into the Park Avenue Plan Sponsor Agreement, whereby SLG Member agreed to serve as the Park Avenue Plan Sponsor in accordance with the Park Avenue Plan Sponsor Agreement, subject to higher and better offers at the Auction (as defined in the Bidding Procedures). On July 19, 2022, the Debtors filed the Plan incorporating the Park Avenue Plan Sponsor Transaction. The Debtors continued the Court-supervised marketing process for 245 Park Avenue and 181 West Madison pursuant to the Bidding Procedures. The Debtors, however, did not receive any Qualified Bids for 245 Park Avenue, other than the Park Avenue Plan Sponsor Transaction, prior to the Bid Deadline of July 21, 2022. Accordingly, the Debtors cancelled the Auction for 245 Park Avenue scheduled for July 26, 2022 and SLG Member was deemed the Successful Bidder. Similarly, in light of the market feedback the Debtors received prior to the Bid Deadline, the Debtors cancelled the Auction for 181 West Madison and seek to confirm the Plan with respect to the West Madison Owner. The Plan contemplates the following stakeholder recoveries: * All Other Priority Claims will be paid in full in Cash; * All Other Secured Claims will be paid in full in Cash, Reinstated, or receive such other treatment that renders such Claims Unimpaired under the Bankruptcy Code; * All Allowed outstanding General Unsecured Claims against the Debtors will be paid in full in Cash, Reinstated, or otherwise Unimpaired by the Plan, provided that, to the extent any portion of any such Claim is Disputed, only the Undisputed portions of such Claim shall be paid on the Effective Date of the Plan, with the remainder subject to the resolution procedures set forth in Article VII of the Plan; * Each Holder of an Allowed Park Avenue Mortgage Loan Claim will receive the treatment set forth in the Park Avenue Mortgage Loan Amendment, plus payment in Cash of the Park Avenue Mortgage Payment; * Each Holder of an Allowed West Madison Mortgage Loan Claim will receive, at the election of the Debtors, either (a) Reinstatement of the principal amount of such Allowed Claim, plus payment in full in Cash of all accrued but unpaid interest at the non-default rate of 3.9% and all reasonable fees and ancillary expenses required to be paid under and in accordance with the West Madison Mortgage Loan Documents and the West Madison Cash Collateral Order, in each case, through the Effective Date; or (b) the treatment set forth in the West Madison Mortgage Loan Agreement (if any); * Each Holder of an Allowed Mezzanine A Loan Claim, Mezzanine B Loan Claim, or Mezzanine C Loan Claim will receive the treatment set forth in the applicable Mezzanine Loan Amendment; * Each Holder of an Allowed Mezzanine A Guarantee Claim, Mezzanine B Guarantee Claim, or Mezzanine C Guarantee Claim will receive the Replacement Guarantee Agreements under clause (ii) of the definition thereof from the Replacement Guarantor with respect to the applicable Park Avenue Mezzanine Loan Guarantee, provided that any Reinstatement of such Holder's Claim shall be against the Replacement Guarantor and, for the avoidance of doubt, (a) shall only apply to Claims arising after the Effective Date, and (b) West Madison Holding will, on the Effective Date, be released and discharged from all its liabilities under the Mezzanine A Guarantee Agreement, the Mezzanine B Guarantee Agreement, and the Mezzanine C Guarantee Agreement, respectively, by that Replacement Guarantee Agreement. For the avoidance of doubt, West Madison Holding shall not be released and discharged from its liabilities under the Park Avenue Mezzanine Indemnities; * Each Holder of an Allowed Park Avenue Mortgage Guarantee Claim will receive the Replacement Guaranty Agreements under clause (i) of the definition thereof from the Replacement Guarantor with respect to the Park Avenue Mortgage Guarantee Agreement and the Park Avenue Mortgage Indemnity, provided that any Reinstatement of such Holder's Allowed Park Avenue Mortgage Guarantee Claim shall be against the Replacement Guarantor and (a) shall only apply to Claims arising after the Effective Date, and (b) West Madison Holding will, on the Effective Date, be released and discharged from all its liabilities under the Park Avenue Mortgage Guarantee Agreement by that Replacement Guarantor Agreement with respect thereto, but, notwithstanding the Replacement Guarantee Agreement with respect to the Park Avenue Mortgage Indemnity, shall not be released and discharged from its liabilities under the Park Avenue Mortgage Indemnity, all as provided in those Replacement Guarantee Agreements and the Park Avenue Mortgage Loan Amendment; * All Intercompany Interests shall be, at the option of the Park Avenue Plan Sponsor: (a) Reinstated; (b) set off, settled, distributed, contributed, cancelled, or released, without any distribution on account of such Intercompany Interests; or (c) otherwise treated as determined by the Park Avenue Plan Sponsor in its sole discretion; * Equity Interests in West Madison Holding and PWM Property Management LLC Common Equity Interests will be Reinstated; * The Park Avenue Plan Sponsor or its designee shall receive 100% of the New 245 Park JV LLC Common Equity Interests on account of the Park Avenue Preferred Equity Interests that comprise the Preferred Equity Bid Amount. Park Avenue Preferred Equity Interests that do not comprise the Preferred Equity Bid Amount shall be extinguished as of the Effective Date and deemed discharged, and Holders of such Park Avenue Preferred Equity Interests shall not receive any distribution from the Debtors on account thereof; provided that, as set forth in the Plan, all Claims and Causes of Action (including, for the avoidance of doubt, any judgment or enforcement thereof) arising out of the Park Avenue Preferred Equity Interests against any non-Debtor, including, but not limited to, with respect to the redemption of the Park Avenue Preferred Equity Guarantee, remain outstanding on and after the Effective Date and shall not be satisfied, compromised, settled, released, or discharged in full or in part pursuant to Article III.B of the Plan and all rights of SLG Member with respect thereto are expressly reserved; and * The Holder of such Park Avenue Preferred Equity Interest Guarantee shall receive the same treatment provided with respect to Park Avenue Preferred Equity Interests in 245 Park JV LLC. Counsel to the Debtors: Thomas E Lauria, Esq. Fan B. He, Esq. WHITE & CASE LLP 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131 Telephone: (305) 371-2700 - and - Bojan Guzina, Esq. Jason N. Zakia, Esq. Gregory F. Pesce, Esq. WHITE & CASE LLP 111 South Wacker Drive Chicago, IL 60606 Telephone: (312) 881-5400 - and - Edmon L. Morton, Esq. Kenneth J. Enos, Esq. Allison S. Mielke, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 North King Street, Rodney Square Wilmington, DE 19801 Telephone: (302) 571-6600 A copy of the Order dated August 12, 2022, is available at https://bit.ly/3Ai0NVt from Omniagentsolutions, the claims agent. A copy of the Disclosure Statement dated August 12, 2022, is available at https://bit.ly/3JS6v3o from Omniagentsolutions, the claims agent. About PWM Property Management PWM Property Management LLC, et al., are primarily engaged in renting and leasing real estate properties. They own two premium office buildings, namely 245 Park Avenue in New York City, a prominent commercial real estate assets in Manhattan's prestigious Park Avenue office corridor, and 181 West Madison Street in Chicago, Illinois. On Oct. 31, 2021, PWM Property Management LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11445). PWM estimated assets and liabilities of $1 billion to $10 billion as of the bankruptcy filing. The cases are pending before the Honorable Judge Mary F. Walrath and are being jointly administered for procedural purposes under Case No. 21-11445. The Debtors tapped White & Case LLP as restructuring counsel; Young Conaway Stargatt & Taylor, LLP as local counsel; and M3 Advisory Partners, LP as restructuring advisor. Omni Agent Solutions is the claims agent. PWM PROPERTY: Wells Fargo Says Disclosures Have Same Infirmities ---------------------------------------------------------------- Wells Fargo Bank, National Association, as Trustee, opposes PWM Property Management LLC, et al.'s Motion for entry of an order approving the Amended Disclosure Statement. According to Wells Fargo, the Amended Disclosure Statement and Amended Plan contains the same infirmities as the Original Disclosure Statement and the original Plan of Reorganization to which the Original Disclosure Statement pertained, including that the treatment of the "West Madison Mortgage Loan Claim" is "impaired," not "unimpaired." Accordingly, the West Madison Trustee, as its Opposition to the Motion, hereby incorporates by this reference the Original Objection as if set forth in full herein. A copy of the Original Objection, without attached Exhibits, is attached hereto as Exhibit "A" with the following link: https://bit.ly/3vZ8g9t. As the true treatment of the West Madison Mortgage Loan Claim is "impaired," the proposed Amended Plan, as it relates to the West Madison Owner, cannot be confirmed. Therefore, the Amended Disclosure Statement should not be approved. Attorneys for the Park Avenue Trustee and the West Madison Trustee: William F. Taylor, Jr., Esq. Shannon D. Humiston, Esq. MCCARTER & ENGLISH LLP 405 North King Street, 8th Floor Wilmington, DE 19801 Telephone: (302) 984-6300 E-mail: WTaylor@mccarter.com SHumiston@mccarter.com - and - Robert B. Kaplan, Esq. Nicolas De Lancie, Esq. Thomas M. Geher, Esq. JEFFER MANGELS BUTLER & MITCHELL LLP Two Embarcadero Center, Fifth Floor San Francisco, CA 94111-3813 Telephone: (415) 398-8080 E-mail: rbk@jmbm.com nde@jmbm.com tmg@jmbm.com About PWM Property Management PWM Property Management LLC, et al., are primarily engaged in renting and leasing real estate properties. They own two premium office buildings, namely 245 Park Avenue in New York City, a prominent commercial real estate assets in Manhattan's prestigious Park Avenue office corridor, and 181 West Madison Street in Chicago, Illinois. On Oct. 31, 2021, PWM Property Management LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11445). PWM estimated assets and liabilities of $1 billion to $10 billion as of the bankruptcy filing. The cases are pending before the Honorable Judge Mary F. Walrath and are being jointly administered for procedural purposes under Case No. 21-11445. The Debtors tapped White & Case LLP as restructuring counsel; Young Conaway Stargatt & Taylor, LLP as local counsel; and M3 Advisory Partners, LP as restructuring advisor. Omni Agent Solutions is the claims agent. PWP INVESTMENTS: Wins Cash Collateral Access Thru Nov 30 -------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized PWP Investments, LLC to use cash collateral on an interim basis in accordance with the budget through and including November 30, 2022. The Debtor's request for a one-time authorization to spend an estimated $1,580 to repair damage caused by a water leak is also granted. The Debtor owns rental property located at 1232 South Kenmore Avenue, Los Angeles, CA 90006, which is encumbered by a First Deed of Trust in favor of Lima One Capital, LLC. The loan secured by the DOT matured prior to the Petition Date. According to the Debtor, the principal balance on the Loan is $1,038,596. The Property generates monthly rental income of $7,070. Nothing in the record indicates that the Property is declining in value. Based on the absence of evidence of declining value and the proposed monthly adequate protection payment of $2,000 to the Lender, the Court held that the Lender is adequately protected. In addition, the use of cash collateral to pay insurance, property taxes, utilities, and maintenance on the Property provides further adequate protection to the Lender. A further hearing on the matter is set for November 30 at 10 a.m. A copy of the Memorandum of Decision is available at https://bit.ly/3QOBkse from PacerMonitor.com. About PWP Investments LLC PWP Investments, LLC is in the Real Estate Investment Trusts business. PWP Investments, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13044) on June 1, 2022. In the petition filed by Christopher C. Uyan, as managing member, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The case is assigned to the Honorable Bankruptcy Judge Ernest M. Robles. Thomas B. Ure, Esq., at Ure Law Firm is the Debtor's counsel. QUEST PATENT: Incurs $220K Net Loss in Second Quarter ----------------------------------------------------- Quest Patent Research Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $219,943 on zero revenue for the three months ended June 30, 2022, compared to a net loss of $692,634 on zero revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $382,583 on $122,000 of revenues compared to a net loss of $5.85 million on zero revenue for the six months ended June 30, 2021. As of June 30, 2022, the Company had $1.34 million in total assets, $9.59 million in total liabilities, and a total stockholders' deficit of $8.24 million. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0000824416/000121390022048016/f10q0622_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 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. 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. RENNOVA HEALTH: Posts $504K Net Loss in Second Quarter ------------------------------------------------------ Rennova Health, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $503,786 on $3.61 million of net revenues for the three months ended June 30, 2022, compared to a net income of $9.07 million on $928,849 of net revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $2.77 million on $4.75 million of net revenues compared to a net income of $5.18 million on $278,157 of net revenues for the same period in 2021. As of June 30, 2022, the Company had $19.23 million in total assets, $47.80 million in total liabilities, and a total stockholders' deficit of $28.57 million. At June 30, 2022, the Company had a working capital deficit and a stockholders' deficit of $42.7 million and $28.6 million, respectively. In addition, the Company had a loss from continuing operations before other income (expense) and income taxes of approximately $1.9 million and $7.9 million for the six months ended June 30, 2022 and 2021, respectively, and cash used in operating activities was $1.2 million and $3.7 million for the six months ended June 30, 2022 and 2021, respectively. As of Aug. 15, 2022 (the date of this report), the Company's cash is deficient and payments for its operations in the ordinary course are not being made. The continued losses and other related factors, including past due accounts payable and payroll taxes, as well as payment defaults under the terms of certain outstanding notes payable and debentures, raise substantial doubt about the Company's ability to continue as a going concern for 12 months from the filing date of this report. "There can be no assurance that the Company will be able to achieve its business plan, which is to acquire and operate clusters of rural hospitals and related healthcare service providers, raise any additional capital or secure the additional financing necessary to implement its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to raise adequate capital to fund its operations and repay its outstanding debt and other past due obligations, fully align its operating costs, increase its revenues, and eventually gain profitable operations. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is 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/0000931059/000149315222023021/form10-q.htm About Rennova Health Rennova Health, Inc. -- http://www.rennovahealth.com-- is a provider of health care services to rural communities. The Company owns one operating acute care hospital in Oneida, Tennessee known as Big South Fork Medical Center (classified as a critical access hospital), an acute care hospital and physician's office located in Jamestown, Tennessee that it plans to reopen and operate, and a rural clinic in Kentucky. Net loss available to common stockholders for the year ended Dec. 31, 2021, was $500.87 million while the net loss available to common stockholders for the year ended Dec. 31, 2020, was $281.59 million. As of March 31, 2022, the Company had $19.01 million in total assets, $47.58 million in total liabilities, and a total stockholders' deficit of $28.57 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company has recognized recurring losses and negative cash flows from operations, and currently has minimal revenue producing activities. This raises substantial doubt about the Company's ability to continue as a going concern. S3 SPA: Files Emergency Bid to Use Cash Collateral -------------------------------------------------- S3 SPA, LLC asks the U.S. Bankruptcy Court for the District of Arizona for authority to use cash collateral in accordance with the budget. The Debtor needs to use the revenue generated from operations to maintain its values and relationships with suppliers, and pay its ongoing operational costs which include payroll, to continue day to day operations. In 2020, Kiera Stroup, the Debtor's owner, began to look for a new location for the Debtor as the Debtor had outgrown the current space. Stroup was turning down clients on a daily basis since she only had three treatment rooms. She found the current location and prior to lease negotiations, she met with an architect that also had a construction arm of his business, and would presumably be knowledgeable in the cost of plans as well as construction costs, or so she thought. She described in detail her vision for the buildout and the architect gave a ballpark estimate of $150,000. Based on the estimate and the commitment from the landlord, Phillips Edison, for a Tenant Improvement Analysis of $150,000, she signed a 10 year lease. After paying the architect approximately $15,000 and various fees to the City of Tempe to file the plans, the architect started soliciting bids. The bids came in at approximately $550,000 for the buildout. Stroup pared it down to the "basics" at $450,000, which was still outrageous, but she was already in a lease. She did the best she could, borrowing money to begin construction. Traditional banks will not touch a business like the Debtor and the SBA would not even reply to emails and phone calls. As such, Stroup was forced to find alternative solutions for borrowing money. She took merchant cash advances, which are secured by future receivables. She was able to keep current, although it was an extreme strain on the business through 2021. In January 2022, the bottom dropped out of the business as revenue was down 40% due to the Omicron variant of COVID. Stroup was never able to catch up. Revenues slowly improved in February, March, April and May, but in June, the revenue dropped by $15,000, due to seasonality, and Stroup anticipates the same for July. She simply could not afford the astronomical weekly payments on the merchant cash advance agreements. At that point, she sought the advice of counsel and decided to file bankruptcy. Various lenders may claim the revenue generated by the Debtor is its "cash collateral" as defined in 11 U.S.C. section 363. The Debtor proposes to use income generated by its business in accordance with the Budget with a 20% variance. The Debtor performed a UCC search which is being filed separately. However, the Debtor is unsure which creditor is actually in first position on the Debtor's cash collateral, but anticipates Paypal is in first position on the cash collateral. The Debtor's budget provides that whichever creditor is in first position on the cash collateral will receive an adequate protection payment based upon the actual value of the cash collateral, which provides for a monthly payment of $600 per month. The lenders, if any, will be adequately protected as follows: a. By continuation and preservation of the going value of the business. b. By the equity cushion in the value of the business. c. By the replacement lien in the Debtor's assets. d. Finally, by making adequate protection payments as set forth in the Budget. A copy of the motion and the Debtor's budget is available at https://bit.ly/3AxGlA1 from PacerMonitor.com. The budget provides for total expenses, on a monthly basis, as follows: $64,971 for the month of August 2022; $64,592 for the month of September 2022; $65,342 for the month of October 2022; $66,641 for the month of November 2022; $68,967 for the month of December 2022; and $68,992 for the month of January 2023. About S3 SPA, LLC S3 SPA, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 2:22-bk-05439-PS) on August 17, 2022. In the petition filed by Kiera L. Stroup, owner, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. D. Lamar Hawkins, Esq. at Guidant Law, PLC is the Debtor's counsel. SALEM HARBOR: Unsecured Creditors to Split $175K in Plan -------------------------------------------------------- Salem Harbor Power Development LP, et al., submitted an Amended Joint Chapter 11 Plan. Under the Plan, holders of Class 5 General Unsecured Claims will receive (A) its Pro Rata share of the Cash Pool Distribution Amount (which, for the avoidance of doubt, is $175,000 in Cash) and (B) solely to the extent such holder votes to accept the Plan, the General Unsecured Claims Treatment; provided that to the extent the IEP Judicial Lien is found to be valid and enforceable and is not avoided or invalidated pursuant to or in connection with the IEP Lien Avoidance Action or otherwise, unless the holder(s) of Class 4 IEP Judicial Lien Claim(s) (if applicable) agrees to less favorable treatment, the Cash Pool Distribution Amount (which, for the avoidance of doubt, is $175,000 in Cash) will be distributed to such holder(s) of Class 4 IEP Judicial Lien Claim(s) (if applicable) and no distribution will be made to holders of Allowed General Unsecured Claims pursuant to the Plan. Class 5 is impaired. "IEP Judicial Lien Claim" means the IEP Claim secured by the IEP Judicial Lien (if applicable). For the avoidance of doubt, and notwithstanding anything to the contrary herein: (a) the IEP Judicial Lien Claim shall exist only to the extent that the IEP Judicial Lien is found to be valid and enforceable and is not avoided or invalidated pursuant to or in connection with the IEP Lien Avoidance Action or otherwise; and (b) if the IEP Judicial Lien is avoided pursuant to or in connection with the IEP Lien Avoidance Action or the IEP Judicial Lien is otherwise found to be invalid and/or unenforceable, the IEP Judicial Lien Claim shall be treated as a General Unsecured Claim under the Plan in Class 5. "IEP Lien Avoidance Action" means the adversary proceeding commenced by the Debtors against IEP, captioned as Salem Harbor Power Development LP v. Iberdrola Energy Projects, Inc., A.P. No. 22-50347-MFW (Bankr. D. Del.), through which the Debtors are seeking to avoid the IEP Judicial Lien pursuant to section 547(b) of the Bankruptcy Code. The Reorganized Debtors will fund distributions under the Plan with cash held on the Effective Date by or for the benefit of the Debtors or Reorganized Debtors, including Cash from operations, the New Common Equity, and the Exit Facility Loans. On the Effective Date, the Reorganized Debtors shall enter into the Exit Facility, the terms of which will be set forth in the Exit Facility Documents. To the extent undrawn as of the Effective Date, the Gas Lateral Letter of Credit shall either be renewed in its entirety or replaced with a new letter of credit on substantially similar terms to those existing as of the Petition Date such that the Gas Lateral Letter of Credit shall continue in full force and effect following the Effective Date under the Exit Facility and the Exit Facility Documents. On and after the Effective Date, the Exit Facility Documents shall constitute legal, valid, and binding obligations of the Reorganized Debtors and be enforceable in accordance with their respective terms. The letter of credit issued by MUFG Union Bank, N.A. to secure DevCo's obligations under that certain Contractual Service Agreement, dated as of January 6, 2015, shall be renewed on substantially similar terms to those existing as of the Petition Date and remain outstanding on the Effective Date, and the cash collateral securing such letter of credit will continue to be held as security for the renewed letter of credit. Counsel to the Debtors: Brian S. Hermann, Esq. John T. Weber, Esq. Alice Nofzinger, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019 Telephone: (212) 373-3000 Facsimile: (212) 757-3990 - and - Pauline K. Morgan, Esq. Andrew L. Magaziner, Esq. Katelin A. Morales, Esq. Timothy R. Powell, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square, 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 A copy of the Amended Joint Chapter 11 Plan dated August 12, 2022, is available at https://bit.ly/3w6W4U1 from PacerMonitor.com. About Footprint Power Salem Harbor Salem Harbor Power Development LP, f/k/a Footprint Power Salem Harbor Development LP (DevCo), owns and operates a 674 MW natural gas-fired combined-cycle electric power plant located in Salem, Massachusetts. The Facility, located along Salem Harbor, is a more efficient and environmentally responsible replacement of a previous coal-fired power plant located at the same site. Salem Harbor Power Development LP, f/k/a Footprint Power Salem Harbor Development LP (DevCo), and its debtor-affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10239) on March 23, 2022. In the petition signed by John R. Castellano, chief restructuring officer, Devco disclosed up to $1 billion in both assets and liabilities. DevCo is the only Debtor with business operations. Other than DevCo, each Debtor's assets consist solely of its membership or partnership interests, as applicable, in its subsidiaries. Paul, Weiss, Rifkind, Wharton and Garrison LLP and Young Conaway Stargatt and Taylor, LLP represent the Debtor as counsel, Alixpartners as financial advisor, Prime Clerk LLC as claims, noticing, solicitation and administrative agent, Houlihan Lokey Capital, Inc. as investment banker. MUFG Union Bank, N.A., as agent to the prepetition lenders, retained Mayer Brown LLP, as primary counsel; Potter Anderson & Corroon LLP, as Delaware counsel; Goodwin Procter LLP, as Massachusetts counsel; and PJT Partners LP, as financial advisor. SANDY ROAD FARMS: Court OKs Deal on Cash Collateral Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas approved the agreement between Sandy Road Farms, LLC and Rabo AgriFinance LLC authorizing the Debtor to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through the conclusion of a final hearing on the Cash Collateral Stipulation. The Debtor requires the use of cash collateral to, among other things, permit the orderly continuation and/or liquidation of the operation of its business, maintain business relationships with vendors, suppliers and customers, and make payroll. As partial adequate protection for the Debtor's use of Rabo's cash collateral, and to the extent of any diminution in the amount or value of Rabo's cash collateral after the Petition Date, Rabo will have and continue to hold a valid, automatically perfected post-petition replacement lien against any and all post-petition farm products, cash, accounts receivable, inventory and other like property generated or acquired by the Debtor after the Petition Date, and in any products, proceeds or insurance recoveries or governmental payments related thereto. Rabo's replacement lien will have the same validity, avoidability and priority as Rabo's prepetition security interest and liens as of the Petition Date. Rabo's replacement lien will be deemed valid and perfected without the need for the execution, recording or filing of any further document or instrument or the taking of any further act otherwise required under non-bankruptcy law. As additional adequate protection for the use of Rabo's cash collateral, and to the extent provided by sections 503(b) and 507(b) of the Bankruptcy Code, Rabo is granted an allowed superpriority administrative expense claim in the Case. A final hearing on the matter is scheduled for September 13, 2022 at 2:30 p.m. A copy of the order is available at https://bit.ly/3bZqFMx from PacerMonitor.com. About Sandy Road Farms Sandy Road Farms LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 22-40446) on August 1, 2022. In the petition filed by Glenn Karlberg, as manager and chief restructuring officer, the Debtor reported assets between $1 million and $10 million and liabilities between $50 million and $100 million. Judge Dale L. Somers oversees the case. The law firms McDowell Rice Smith & Buchanan and Cairncross & Hempelmann serve as the Debtor's counsel. SANUWAVE HEALTH: Posts $2.7 Million Net Income in Second Quarter ---------------------------------------------------------------- SANUWAVE Health, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $2.70 million on $3.88 million of total revenue for the three months ended June 30, 2022, compared to a net loss of $8.62 million on $2.91 million of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $1.72 million on $7.08 million of total revenue compared to a net loss of $13.55 million on $5.03 million of total revenue for the same period in 2021. As of June 30, 2022, the Company had $18.62 million in total assets, $52.42 million in total liabilities, and a total stockholders' deficit of $33.8 million. SANUWAVE said, "We expect to devote substantial resources for the commercialization of the dermaPACE System and intend continue to research and develop the next generation of our technology as well as the non-medical uses of the PACE technology, both of which will require additional capital resources. The Company had an accumulated deficit of $183.9 million through December 31, 2021, and has a current year to date net loss of $1.7 million. These factors and the events of default on the notes payable create substantial doubt about the Company's ability to continue as a going concern for a period of at least twelve months from the financial issuance date. Historically, our operations have primarily been funded from the sale of capital stock, notes payable, and convertible debt securities. The continuation of our business is dependent upon raising additional capital to fund operations; we may not be able to do so, and/or the terms of any financings may not be advantageous to us." During the six months ended June 30, 2022, cash used by operating activities totaled approximately $5.4 million, which was driven in part by the net loss for the period along with losses on extinguishment and issuance of debt offset largely by the change in the fair value of the derivative liabilities. Cash provided by investing activities during the first six months of 2022 consisted primarily of the proceeds received in the sale of assets of $948,000. Cash provided by financing activities for the period consisted primarily of $2.9 million received from the NH Note Expansion in February 2022 and proceeds from short-term notes of $545,000 in May from the C6 note refinancing and the short-term loan in June of $1.6 million. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1417663/000114036122029465/brhc10040345_10q.htm About SANUWAVE Health Headquartered in Suwanee, Georgia, SANUWAVE Health, Inc. (OTCQB:SNWV) -- http://www.SANUWAVE.com-- is a shock wave technology company using a patented system of noninvasive, high-energy, acoustic shock waves for regenerative medicine and other applications. The Company's initial focus is regenerative medicine utilizing noninvasive, acoustic shock waves to produce a biological response resulting in the body healing itself through the repair and regeneration of tissue, musculoskeletal, and vascular structures. SANUWAVE reported a net loss of $27.26 million for the year ended Dec. 31, 2021, compared to a net loss of $30.94 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $18.62 million in total assets, $57.58 million in total liabilities, and a total stockholders' deficit of $38.96 million. New York, NY-based Marcum LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated May 13, 2022, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations and the occurrence of the events of default on the Company's debt. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SEAWORLD PARKS: Moody's Ups CFR to B1 & Sr. Unsecured Notes to B3 ----------------------------------------------------------------- Moody's Investors Service upgraded SeaWorld Parks & Entertainment, Inc.'s corporate family rating to B1 from B2, and the senior unsecured notes to B3 from Caa1. The senior secured first lien notes and credit facility (including a revolver and term loan B) were affirmed at Ba3. The outlook is stable. The upgrade of the CFR and stable outlook reflect SeaWorld's very strong recovery from the pandemic as a result of ongoing consumer demand, pricing initiatives, and effective expense management which has led to a reduction in leverage to 3.4x as of Q2 2022. High inflation rates and slower economic growth will weigh on operating performance in the near term, but further improvements in attendance toward pre-pandemic levels is likely to support additional growth in 2023. The senior secured notes and credit facility were affirmed at Ba3, one notch above the CFR, which considers the relatively high percentage of secured debt in the capital structure. Moody's expects SeaWorld will maintain a strong liquidity position as a result of cash on the balance sheet of $161 million, access to an undrawn $390 million revolving credit facility due 2026, and Free Cash Flow (FCF) as a percentage of debt in the mid to high teens over the next year. As a result, SeaWorld's Speculative Grade Liquidity (SGL) rating was upgraded to SGL-1 from SGL-2. A summary of the actions are as follows: Upgrades: Issuer: SeaWorld Parks & Entertainment, Inc. Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Senior Unsecured Regular Bond/Debenture, Upgraded to B3 (LGD5) from Caa1 (LGD5) Affirmations: Issuer: SeaWorld Parks & Entertainment, Inc. Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3) Senior Secured 1st Lien Regular Bond/Debenture, Affirmed Ba3 (LGD3) Outlook Actions: Issuer: SeaWorld Parks & Entertainment, Inc. Outlook, Remains Stable RATINGS RATIONALE The B1 CFR reflects the very strong improvement in operating performance with EBITDA well above pre-pandemic levels, and substantial FCF generation ($370 million LTM Q2 2022). While further improvement will likely be impacted by high inflation rates and slower economic growth in the near term, Moody's expects SeaWorld will benefit from attendance growth toward pre-pandemic levels in 2023 driven by new rides and attractions. Strong expense management and additional pricing strategies will also support performance. SeaWorld has concentrated exposure to five different states in the US, but less restrictive health requirements during the pandemic benefited performance at its parks in Florida (which is its largest market with five parks) and Texas. Parks located in California, Virginia, and Pennsylvania were impacted by more restrictive conditions until June 2021. SeaWorld benefits from its portfolio of parks in key markets including SeaWorld, Busch Gardens, and Sesame Place as well as separately branded parks that generate meaningful annual attendance. Significant expenditures on new rides and attractions prior to the pandemic and additional spending going forward will also support performance through 2023. SeaWorld's parks in Orlando face competition from destination parks, although the company has focused on attracting guests from nearby markets in recent years. Guest traffic from international customers will take longer to recover, but represent a relatively small portion of overall attendance. SeaWorld competes for discretionary consumer spending from an increasingly wide variety of other leisure and entertainment activities as well as cyclical discretionary consumer spending. The parks are highly seasonal and sensitive to weather conditions, terrorism, public health issues as well as other disruptions outside of the company's control. ESG CONSIDERATIONS SeaWorld's ESG Credit Impact Score is highly-negative (CIS-4) driven by the company's governance risk (G-4). While SeaWorld has significantly reduced leverage levels driven by EBITDA growth, the company has also completed significant stock repurchases both prior to and following the pandemic and the company made an unsuccessful attempt to acquire Cedar Fair, L.P. in Q1 2022. There has also been elevated levels of turnover within senior management, including the resignation of SeaWorld's past two CEOs after a brief tenure with the company. The current CEO, who has been with the Company for over 20 years in various roles including the CFO, was appointed as the CEO in 2021 after acting as interim CEO since April 2020. SeaWorld is a publicly traded company listed on the NYSE, but financial sponsor, Hill Path Capital LP, maintains a significant ownership position with the founder of Hill Path serving as Chairman of the Board. The stable outlook reflects Moody's expectations that results will continue to improve going forward driven by attendance growth, effective pricing and cost management which will lead to leverage decreasing to the low 3x range in 2023. High inflation rates and slower economic growth may moderately elevate volatility in operating performance in the near term, but Moody's expects revenue and profitability will improve over time as attendance grows due to good consumer demand for out of home entertainment. SeaWorld will continue to generate strong operating cash flow which will fund high levels of capex spend on new rides and attractions, including the potential development of hotels and additional Sesame Place parks. These investments will help support rising guest attendance levels and an increase in average revenue per guest. SeaWorld's SGL-1 reflects $161 million of cash on the balance sheet as of Q2 2022 and an undrawn $390 million revolver due August 2026. Moody's expects SeaWorld will maintain FCF as a percentage of debt in the mid to high teens in 2023, although a significant portion is likely to be used on additional share repurchases ($455 million YTD Q2 2022). SeaWorld will spend approximately $180 to $200 million in capex in 2022 which is in line with pre-pandemic levels ($195 million of capex in 2019). The expenditures will be used on new technology, infrastructure, rides and attractions. The large number of new rides and attractions from capex prior to the pandemic as well as new attractions going forward will continue to support a recovery in attendance through 2023. The parks are divisible and could be sold individually, but all of the company's assets are pledged to the credit facility and asset sales trigger 100% mandatory repayment if proceeds are not reinvested within 12 months. The term loan is covenant light, but the revolver is subject to a springing maximum net first lien secured leverage covenant ratio of 6.25x when greater than 35% is drawn. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS SeaWorld's ratings could be upgraded if Moody's expected leverage to be sustained in the low 3x range and the company maintained a conservative financial policy consistent with a higher rating level. A strong liquidity position would also be required with FCF as a percentage of debt in the mid to high teens. SeaWorld's ratings could be downgraded if Moody's expected leverage to be sustained above 5x as a result of debt funded acquisitions or equity friendly transactions. A weakened liquidity position could also lead to ratings pressure. SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (SeaWorld), own and operate twelve theme park and water parks located in the US. Properties include SeaWorld and Aquatica (Orlando, San Diego and San Antonio), Busch Gardens (Tampa and Williamsburg), Discovery Cove (Orlando) and Sesame Place (Langhorne, PA and San Diego, CA). The Blackstone Group Inc. (Blackstone) acquired SeaWorld in 2009 in a leverage buyout for $2.4 billion (including fees). SeaWorld completed an initial public offering in 2013 and Blackstone exited its ownership position in 2017. SeaWorld's revenue was approximately $1.7 billion as of LTM Q2 2022. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. SEDAMSVILLE HISTORICAL: Case Summary & Five Unsecured Creditors --------------------------------------------------------------- Debtor: Sedamsville Historical Society Corp 5615 Sidney Rd Cincinnati, OH 45238 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Southern District of Ohio Case No.: 22-11383 Debtor's Counsel: J. Christian A. Dennery, Esq. DENNERY, PLLC 7310 Turfway Rd, Ste 550 Florence, KY 41042 Tel: 859-692-3685 Fax: 859-286-6726 Email: jcdennery@dennerypllc.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by John C. Klosterman as corporate representative. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UJG2BMQ/Sedamsville_Historical_Society__ohsbke-22-11383__0001.0.pdf?mcid=tGE4TAMA SIGYN THERAPEUTICS: Posts $666K Net Loss in Second Quarter ---------------------------------------------------------- Sigyn Therapeutics, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $666,325 on zero revenue for the three months ended June 30, 2022, compared to a net loss of $649,861 on zero revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $1.34 million on zero revenue compared to a net loss of $1.11 million on zero revenue for the same period in 2021. As of June 30, 2022, the Company had $395,908 in total assets, $1.58 million in total liabilities, and a total stockholders' deficit of $1.18 million. The Company had an accumulated deficit of $5,610,130 at June 30, 2022, had a working capital deficit of $1,258,926 and $341,187 at June 30, 2022 and Dec. 31, 2021, respectively, had a net loss of $666,325 and $1,344,371 and $649,861 and $1,111,543 for the three and six months ended June 30, 2022 and 2021, respectively, and net cash used in operating activities of $854,308 and $681,534 for the six months ended June 30, 2022 and 2021, respectively, with no revenue earned since inception, and a lack of operational history. The Company said these matters raise substantial doubt about its ability to continue as a going concern. Sigyn stated, "While the Company is attempting to expand operations and increase revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a private offering or an asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1642159/000149315222022514/form10-q.htm About Sigyn Sigyn Therapeutics, Inc. is a development-stage therapeutic technology company headquartered in San Diego, California USA. Its business focus is the clinical advancement of Sigyn Therapy, a multi-function blood purification technology designed to overcome the limitations of previous drugs and devices to treat life-threatening inflammatory disorders, including sepsis, the leading cause of hospital deaths worldwide. Sigyn reported a net loss of $3 million for the year ended Dec. 31, 2021, compared to a net loss of $1.26 million for the year ended Dec. 31, 2020. New York, New York-based Paris Kreit & Chiu CPA LLP, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 21, 2022, citing that the Company has suffered recurring losses from operations, has a net capital deficiency, and negative cash flows from operating activities, therefore, the Company has stated that substantial doubt exists about its ability to continue as a going concern. SINTX TECHNOLOGIES: Posts $2.5 Million Net Loss in Second Quarter ----------------------------------------------------------------- SINTX Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.51 million on $240,000 of total revenue for the three months ended June 30, 2022, compared to a net loss of $2.20 million on $101,000 of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $5.36 million on $370,000 of total revenue compared to a net loss of $4.83 million on $202,000 of total revenue for the six months ended June 30, 2021. As of June 30, 2022, the Company had $17.49 million in total assets, $5.45 million in total liabilities, and $12.05 million in total stockholders' equity. The Company had an accumulated deficit of $255.8 million and $250.4 million as of June 30, 2022, and Dec. 31, 2021, respectively. To date, the Company's operations have been principally financed from proceeds from the issuance of preferred and common stock and, to a lesser extent, cash generated from product sales. It is anticipated that the Company will continue to generate operating losses and use cash in operating activities. The Company's continuation as a going concern is dependent upon its ability to increase sales, and/or raise additional funds through the capital markets. Whether and when the Company can attain profitability and positive cash flows from operations or obtain additional financing is uncertain. SINTX stated, "The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. We believe the publication of such data would help sales efforts as the Company approaches new prospects. The Company continues to make changes to the sales strategy, including a focus on revenue growth by expanding the use of silicon nitride in other areas outside of spinal fusion applications. The Company has also acquired equipment and certain proprietary know-how for the purpose of developing, manufacturing and commercializing armored plates made from boron carbide and a composite of boron carbide and silicon carbide for military, law enforcement and other civilian uses. We also expect the acquisition of TA&T will further broaden the Company's sources of revenue." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1269026/000149315222022235/form10-q.htm About SINTX Technologies Headquartered in Salt Lake City, Utah, SINTX Technologies, Inc. -- https://ir.sintx.com -- is an OEM ceramics company that develops and commercializes silicon nitride for medical and non-medical applications. The core strength of SINTX Technologies is the manufacturing, research, and development of silicon nitride ceramics for external partners. The Company presently manufactures advanced ceramics powders and components in its FDA registered, ISO 13485:2016 certified, and ASD9100D certified manufacturing facility. SINTX reported a net loss of $8.78 million for the year ended Dec. 31, 2021, a net loss of $7.03 million for the year ended Dec. 31, 2020, and a net loss of $4.79 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $18.88 million in total assets, $4.43 million in total liabilities, and $14.45 million in total stockholders' equity. SOUTHWESTERN ENERGY: Fitch Hikes IDR to 'BB+', Outlook Stable ------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Rating of Southwestern Energy Company (Southwestern) to 'BB+' from 'BB'. Fitch has also upgraded the senior unsecured notes to 'BB+'/'RR4' from 'BB'/'RR4' and affirmed the senior secured revolver and senior secured Term Loan B at 'BBB-'/'RR1'. The Rating Outlook is Positive. Southwestern's ratings are supported by its production scale, expectation of material FCF generation at current Strip prices, current debt reduction efforts, strong exposure to liquified natural gas plants (LNG) through its Haynesville operations, solid hedging program, and ample liquidity. This is partially offset by volatile natural gas prices, increasing differentials in the Appalachian basin, and inflationary pressures on drilling and completion costs. The Positive Outlook reflects Fitch's belief the company will continue to reduce debt until its goal of gross debt of $3.5 billion is met. KEY RATING DRIVERS Expected Material Debt Reduction: Southwestern's gross debt target of $3.5 billion by Q4 2023 should allow the company to maintain debt/EBITDA below 2.0x under Fitch's long-term natural gas price assumption of $2.75, which is consistent with investment grade metrics. Given current commodity price levels, Fitch believes the company should generate sufficient FCF to meet the target level and date. In addition, the company plans to address the Term Loan B debt in 2022, which should materially reduce secured debt and simplify the capital structure. Southwestern also has high coupon notes that are callable in 2023, which should lead to lower weighted interest costs. Growing Haynesville Exposure: Through its two recent acquisitions in the Haynesville, Southwestern is the largest producer in that basin and has strong exposure to the growing LNG market, which is benefiting from higher exports to Europe and Asia. The acquisitions allow for scale in the basin, which should have a positive impact on overall costs, and the basin could be a source of future production growth. The company sends approximately 1.5 billion cubic feet per day (bcf/d) to existing LNG operators. Southwestern's Appalachian acreage continues to deliver favorable operational results, and Fitch believes development spending in the company's liquids-weighted region combined with higher NGL prices should help support netbacks. Widening differentials and takeaway capacity remain long-term concerns for Appalachian operators. Netbacks in Appalachia are typically lower than for operators in the Haynesville. Revised Capital Allocation Plans: Southwestern has reiterated that debt reduction remains its highest priority until it reaches its goal of gross debt of $3.5 billion. The company also announced a $1 billion stock repurchase program, although the pace and timing of that program will likely be determined by FCF generation and the debt reduction efforts. Hedges Program Remains Robust: Despite historically high natural gas prices, the company maintains a strong hedge policy. Southwestern has hedged 85% of projected 2H 22 natural gas production at an average price of $2.84 and Fitch estimates 63% of projected 2023 production at an average price of $2.94. Fitch believes that as the debt reduction efforts continue to progress, the percentage of hedged production is likely to move lower, although this should not have a material impact on Southwestern's credit profile. There is a short delay between the timing of settling hedging contracts with the receipt of revenue from the actual production sold. During periods of high commodity prices, a large working capital use can occur, which would lead to material drawings on the revolver. Although this is a timing issue and has no impact on profitability, the revolver draws could have an impact on the timing of overall debt reduction. Fitch believes liquidity is adequate to meet these swings. DERIVATION SUMMARY Southwestern is one of the largest U.S. natural gas E&P companies at approximately 4.8bcfe/d, as of June 30, 2022, which is larger than Chesapeake Energy Corporation (CHK: BB/Positive) at 3.7 bcfe/d and CNX Resources (CNX; BB+/Stable) at 1.6 bcfe/d, but below EQT Corporation (EQT; BBB-/Stable) at 5.5bcfe/d. Fitch estimates Southwestern's 2022 debt/EBITDA at 1.3x, which is lower than CNX (1.5x) but slightly higher than EQT (1.1x) based on Fitch's current price deck. Fitch calculated unhedged netbacks for Southwestern of $3.41/mcfe, which is at the low end of the range of its peers but not materially lower than EQT ($3.49/mcfe) or CNX ($3.54/mcfe), although Southwestern does not own midstream operations integrated into its upstream business. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the Issuer: -- WTI oil price of $100/bbl in 2022, $81/bbl in 2023, $62/bbl in 2024, and $50/bbl in the long term; -- Henry Hub natural gas price of $6.25/mcf in 2022, $4/mcf in 2023, $3.25/mcf in 2024 and $2.75 in the long term; -- Production of 4.8bcfe/d in 2022 and flat over the long term; -- Liquids mix of 12%-13% over the forecast horizon; -- Annual Capex of approximately $2.0 billion from 2022 to 2023; -- FCF is used to reduce debt until the $3.5 billion gross debt target is reached with the balance of FCF available after reaching the debt target for share repurchases over the forecast horizon. Fitch made no assumptions for dividends, acquisitions, or divestitures. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Further debt reduction at or below the $3.5 billion gross debt target; -- Mid-cycle debt/EBITDA approaching 1.5x on a sustained basis; -- Improvement in netbacks relative to natural gas peers. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Mid-cycle debt/EBITDA above 2.0x on a sustained basis; -- Change in stated financial policy that leads to weaker credit metrics; -- Weakening in differential trends and the unit cost profile. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Southwestern's liquidity consists of $50 million of cash on hand and a $2.0 billion secured credit facility with availability of $1.5 billion after $406 million drawn and $109 million in letters of credit. The borrowing base is $3.5 billion, and elected commitments are $2.0 billion. In August 2022, the company added a temporary increase under the commitments of $500 million to provide additional liquidity ahead of the coming winter to provide further protection against commodity price volatility. The revolver matures in April 2027. The next material bond maturity is in 2025 of approximately $389 million. Fitch anticipates FCF will be used to reduce outstanding revolver borrowings and the term loan in the near term and the 2027 and 2028 notes in 2023. ISSUER PROFILE Southwestern Energy Company is an independent energy company engaged in exploration and development of, principally, natural gas. E&P operations are primarily comprised of Northeast Appalachia in Pennsylvania, Southwest Appalachia in West Virginia, and the Haynesville Basin in Louisiana. RATING ACTIONS ENTITY/DEBT RATING RECOVERY PRIOR ----------- ------ -------- ----- Southwestern LT IDR BB+ Upgrade BB Energy Company senior unsecured LT BB+ Upgrade RR4 BB senior secured LT BBB- Affirmed RR1 BBB- STANFORD CHOPPING: UST Appoints Holder as Subchapter V Trustee -------------------------------------------------------------- Tracy Hope Davis, United States Trustee for Region 17, appointed Lisa Holder as Subchapter V trustee for Stanford Chopping, Inc. The Sub V Trustee's connections with the Debtor, creditors, and any other parties-in-interest are limited to the connections set forth in the Verified Statement of Ms. Holder. The Subchapter V Trustee can be reached at: Lisa Holder 3710 Earnhardt Drive Bakersfield, CA 93306 Telephone: (661) 205-2385 E-mail: Lholder@Lnhpc.com About Stanford Chopping Stanford Chopping, Inc. filed a Chapter 11 petition (Bankr. E.D. Calif. Case No. 22-11080) on June 29, 2022. The Hon. Jennifer E. Niemann oversees the case. David C. Johnston is the Debtor's counsel. In the petition signed by Alex Stanford, secretary, the Debtor disclosed $1 million to $10 million in estimated assets and liabilities. STONE CLINICAL: Unsecureds Owed $7M Paid From Cash Fund ------------------------------------------------------- Judge Meredith S. Grabill will convene a hearing to determine the adequacy of the Amended Disclosure Statement of Stone Clinical Laboratories, LLC, for Tuesday, September 27, 2022, at 9:00 a.m. in-person. Any objections to the Amended Disclosure Statement must be filed and served on interested parties by Tuesday, September 20, 2022. The Debtor must serve the Amended Disclosure Statement on all parties in interest via first-class U.S. Mail no later than Tuesday, August 30, 2022. Committee-Backed Plan Stone Clinical Laboratories, LLC and the Official Committee of Unsecured Creditors has proposed a Plan for the monetization of the Debtor's Assets and claims in an efficient and cost-effective manner. According to the Amended Disclosure Statement, the Debtor and the Committee reached the conclusion during the case that it was in the best interests of the estate to monetize the operating assets of the Debtor in as short a period as possible. To accomplish this goal, the Debtor retained Gordian Seaport to conduct a sales process. Incident to the sales process, the Court approved bidding procedures and an auction of the Debtor's assets was conducted. The reason for the determination is due to the nature of the Debtor's operating assets. The most valuable assets of the Debtor were comprised of "provider agreements." A provider agreement in the Debtor's business is an agreement between a healthcare payor (such as an insurer or network) and a clinical laboratory that authorizes a patient to be reimbursed or the Debtor be paid for services performed at a fixed cost. It has been said that a "provider agreement" is nothing more than a price list for the party providing the service. Most of the Debtor's provider agreements had cancellation provisions that allowed the counterparty to the contract to cancel the contract without cause provided the Debtor is given the requisite notice under the contract. The nature of the cancellation process means that the term of the contract is largely irrelevant since the contract would be cancellable without cause notwithstanding the cancellation is within the term of the contract. Without cause means that the party cancelling the contract does not need to provide any reason or justification for the cancellation. The Debtor was a party to 33 "provider contracts" of which only 4 lacked "without cause" termination provisions. Of the contracts that had termination provisions, 6 have written notices in excess of 120 days and 21 have written termination provisions that require 90 days or less notice. The Debtor and the Committee were fearful the longer the Bankruptcy Case continued, the more likely it was that the Debtor would receive a termination notice. The decision to sell the operating assets proved to be correct with the Court approving a sale of most of the Debtor's assets for $2,550,000.00 to a special purpose entity formed by Stone Clinical Laboratories of FL, LLC. Upon the closing of the sale, the Debtor and the Committee will address claims possessed by the Debtor against entities owned or controlled by Christopher Ridgeway ("Stone Entities"). Based upon an investigation performed by the Debtor and others, the Debtor is aware that in excess of $2,600,000.00 was advanced to Stone Florida by the Debtor. The Debtor and the Committee believe claims against other Stone Entities exist for the usurpation of corporate opportunity and against Ridgeway for mismanagement and breach of fiduciary duty. The Committee has spoken with counsel for the Stone Entities and will attempt to arrive at a settlement figure for the claims that is acceptable to the Debtor and the Committee. If no settlement is reached, the claims possessed by the Debtor will be filed either before or after confirmation of the Plan and become the property of the Liquidation Trust. Any Assets that have not been liquidated by the Effective Date will be transferred to the Liquidating Trust, the Liquidating Trustee will liquidate those Assets in accordance with the terms of the Plan. Similarly, the Liquidating Trustee will be able to pursue certain Causes of Action on behalf of the Debtor if those claims are not settled pursuant to the and confirmation of the Debtor's Plan or by separate order of Court. The Liquidating Trustee will distribute the cash and the proceeds from the sale of the Assets and Causes of Action (net of expenses) to creditors in accordance with the terms of the Plan. The Debtor and the Committee will either include in the Plan or by a separate Bankruptcy Rule 9019 Motion any settlement of any claim possessed by the Debtor if a settlement is reached prior to the confirmation of the Plan. Under the Plan, Class 6 General Unsecured Claims totaling $7,013,125.50. Class 6 consists of all General Unsecured Claims and all Claims arising from the rejection of any executory contract against the Debtor. The Deficiency Claims of the Classes 1, 2, 3, 4 and 9 creditors, shall be paid pro rata with the Class 6 creditors (and potentially the Class 5 and 8 creditors) out of the Cash Fund until such Claims are paid in full. Class 6 is impaired. The Plan proposed herein is a liquidation over time of the assets of the Debtor. The operating assets have been sold pursuant to the sales process that was run by Gordian. The Court approved the bid procedures to be employed by the Debtor and the sale of the Debtor's Operating Assets for $2,550,000.00. The Debtor possesses a claim against the State of Louisiana that has been filed in the 19th Judicial District for the Parish of East Baton Rouge. The claim arises out of a contract between the Debtor and the State of Louisiana with respect to the State's response to the Covid Pandemic. The Debtor has asserted a claim in excess of $30,000,000.00. It is believed the State will litigate this claim and recovery is not anticipated in the immediate future. The Debtor has filed a suit to subordinate the claims of Whale Capital to the claims of the creditors in Class 6 and those who will share in the distributions to the Class 6 creditor. The suit is based upon a) the Operating Agreement between Whale Capital and Christopher Ridgeway; b) a reclassification of the Whale Capital Class 5 claim as either equity or preferred equity; and c) equitable subordination under 11 U.S.C. section 510(c). The outcome of this suit may have a material impact on the recovery by creditors. Attorneys for the Official Committee of Unsecured Creditors: Michael D. Rubenstein, Esq. LISKOW & LEWIS, APLC 1001 Fannin Street, Suite 1800 Houston, TX 77002 Tel: (713) 651-2953 Fax: (713) 651-2908 E-mail: mdrubenstein@liskow.com Attorneys for Stone Clinical Laboratories LLC: Douglas S. Draper, Esq. HELLER, DRAPER & HORN, L.L.C. 650 Poydras Street, Suite 2500 New Orleans, LA 70130 Tel: (504) 299-3300 Fax: (504) 299-3399 E-mail: ddraper@hellerdraper.com A copy of the Order dated August 12, 2022, is available at https://bit.ly/3QnSRHZ from PacerMonitor.com. A copy of the Amended Disclosure Statement dated August 12, 2022, is available at https://bit.ly/3C2pTc3 from PacerMonitor.com. About STONE Clinical Laboratories STONE Clinical Laboratories, LLC is a full-service clinical reference laboratory that specializes in preventative and molecular diagnostics testing. The company is based in New Orleans, La. On July 15, 2021, Whale Capital, L.P., Hologic, Inc. and Woman's Hospital Foundation filed an involuntary Chapter 11 petition against the Debtor. On Jan. 10, 2022, the court entered the order for relief, thereby, commencing the Chapter 11 case (Bankr. E.D. La. Case No. 21-10923). The petitioning creditors are represented by The Derbes Law Firm LLC, Jaffe Raitt Heuer & Weiss P.C., and The McCarthy Law Firm. Judge Meredith S. Grabill presides over the case. Heller, Draper & Horn, LLC and Gordian Seaport Advisors, LLC serve as the Debtor's legal counsel and investment banker, respectively. David Asbach, acting U.S. Trustee for Region 5, appointed an official committee of unsecured creditors on Feb. 3, 2022. The committee is represented by Liskow & Lewis, APLC. STONEMOR INC: Incurs $17.3 Million Net Loss in Second Quarter ------------------------------------------------------------- StoneMor Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $17.26 million on $80.05 million of total revenues for the three months ended June 30, 2022, compared to a net loss of $35.39 million on $82.98 million of total revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $29.50 million on $161.02 million of total revenues compared to a net loss of $40.01 million on $161.29 million of total revenues for the six months ended June 30, 2021. As of June 30, 2022, the Company had $1.80 billion in total assets, $1.97 billion in total liabilities, and a total stockholders' deficit of $174.67 million. Joe Redling, StoneMor's president and chief executive officer said, "During the second quarter of 2022, our teams continued to deliver strong sales production performance, even as we faced tough comparisons after our record performance throughout 2021. Specifically, our cemetery sales production grew 6.5% in the second quarter of 2022, compared with the same quarter of 2021, including 12% growth related to our pre-need sales production. We continue to focus on managing our costs to combat the inflationary pressures from suppliers and managing certain extraordinary costs associated with our various corporate initiatives that have had a negative impact on our performance." As of June 30, 2022, the Company had $83.3 million of cash, including $12.0 million of restricted cash, and $392.6 million of total debt. "Through the second quarter, we remain confident that we will meet or exceed our previously announced 2022 annual guidance targets for organic growth in our trusts of $70 million and unlevered free cash flow of $40 million," said Jeff DiGiovanni, StoneMor's senior vice president and chief financial officer. "For the six months ended June 30, 2022, we generated $36.6 million in organic trust growth, which excluded $10.3 million in trust funds added through our recent acquisitions, as well as $17.6 million in unlevered free 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/1753886/000095017022017101/ston-20220630.htm About StoneMor Inc. StoneMor Inc. (http://www.stonemor.com),headquartered in Bensalem, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 304 cemeteries and 72 funeral homes in 24 states and Puerto Rico. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. StoneMor reported a net loss of $55.28 million for the year ended Dec. 31, 2021, a net loss of $8.36 million for the year ended Dec. 31, 2020, and a net loss of $151.94 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $1.78 billion in total assets, $1.94 billion in total liabilities, and a total stockholders' deficit of $157.48 million. STRATHCONA RESOURCES: Fitch Rates CAD700MM First Lien Loan 'BB+' ---------------------------------------------------------------- Fitch Ratings has affirmed Strathcona Resources Ltd's Long-Term Issuer Default Rating (IDR) at 'B+' and secured revolving credit facility at 'BB+'/'RR1'. In addition, Fitch has assigned a 'BB+'/'RR1' rating to Strathcona's planned CAD700 million first-lien term loan, and has downgraded its senior unsecured notes to 'B'/'RR5' from 'B+'/'RR4'. The Rating Outlook is Stable. The senior unsecured notes have been downgraded due to the amount of higher priority debt Strathcona is adding to its capital structure to fund the acquisition of Serafina Energy Ltd. Strathcona's ratings reflect its low decline asset base, proved reserve size, FCF, and expectations and leverage trending to 1.0x during Fitch's forecast period. The ratings also consider execution risks around the company's M&A growth strategy, exposure to West Texas Intermediate (WTI) and Western Canadian Select (WCS) spreads, and the company's higher operating cost profile. KEY RATING DRIVERS Complimentary Asset Acquisition: The acquisition of Serafina compliments Strathcona's existing Lloydminster production, adding an approximately 40Mboepd of heavy oil assets that are similar steam assisted gravity drainage (SAGD) to Strathcona's existing thermal production, but lower viscosity, which reduces steam injection requirements and benefiting cost structure. Debt Funded M&A: Strathcona plans to fund the CAD1.9 billion due at closing of the CAD2.3 billion purchase price by increasing its first lien revolving credit facility from CAD1.5 billion to CAD2.0 billion and drawing it to CAD1.8 billion, which is an increase of CAD927 from 1Q21. Concurrently, Strathcona is adding a first-lien CAD700 million 18-month term loan that has an excess cash sweep feature. The revolver size and utilization as a funding source is atypical at Strathcona's rating level and introduces liquidity risk to its credit profile until drawings can be reduced. Once this occurs, Fitch could review the rating. FCF Provides Debt Reduction Ability: Proforma the acquisition, Fitch expects positive cash flow through its forecast period. This includes in excess of CAD1 billion generated in 2023 with a full year of production contributions from the Serafina acquisition. This provides a path under Fitch's base case for meaningful revolver balance reductions, although liquidity risk is heightened until this occurs. Since Strathcona does not pay a dividend, Fitch does not expect any capital distributions allowing it to focus FCF to debt. Fitch forecasts a temporary leverage increase towards 2.0x in 2022 due to the mid-year timing of the Serafina acquisition before reducing to approximately 1.0x leverage through the forecast period under its base case, which assumes USD100/bbl WTI in 2022, USD81/bbl in 2023, USD62/bbl in 2024 and USD50/bbl longer-term. Strathcona targets a longer term 1.0x to 1.3x leverage at USD70/bbl and has identified a 2.0x leverage target at USD40 WTI as a threshold for potentially distributing a dividend. M&A Growth: The Serafina acquisition is expected to close on Aug. 29, 2022. This, along with the closing of the Caltex Resources Ltd. and the Tucker thermal asset transactions, and subsequent acquisition of outstanding economic interests in these in March 2022, has grown Strathcona's gross of inter-field transaction production to approximately 150mboepd, which is a meaningful production level for the 'B' rating category. Fitch anticipates Strathcona will continue utilizing M&A as an active element of its strategy, and would look for asset cohesion in any further transactions. Its success to date in finding good value assets stuck in challenging corporate situations may be more difficult to emulate under the current strength of the oil and gas prices. Low Decline, Large Reserve Asset Base: Excluding any impact from the planned Serafina acquisition, the benefits of Strathcona's corporate decline rate of 18%, which positions favorably against typical E&P's, results in lower sustaining capital requirements for Strathcona. This balances a more intensive operating cost structure, reflected in its CAD37.1/boe expenses and Fitch calculated unhedged netback of CAD44.3 in 1Q22. Pro-forma the Serafina acquisition, Strathcona will have approximately 1.3 billion boe of proved reserves, although a large portion of the asset base is lower value proved undeveloped (PUD) reserves associated with oil sands. Strathcona's reserve base size is consistent with the 'BB' rating category. Exposure to Differential Risks: Excluding the 40mboepd Saskatchewan heavy oil production expected from Serafina, Strathcona's operations consist of Cold Lake Thermal in Alberta, condensate-rich Montney and Lloydminster Heavy Oil. These three plays provide good operational diversification for an E&P of Strathcona's size. The overall basin diversification of these plays are tempered, as they are located in Canada's Western Canadian Sedimentary Basin, exposing Strathcona to sometimes volatile WCS-WTI spreads. WCS-WTI spreads have expanded to approximately USD20/bbl, the exposure of which adds a layer of volatility to realized prices given the company's bitumen and heavy oil production represented approximately 2/3rds of the companies proforma production 1Q22 production. The addition of Serafina includes a 50mboepd rail facility, which facilitates shipping crude by rail to the U.S. without the need to blend condensate. Production shipped by rail will help reduce overall exposure to WCS-WTI spreads. Natural and Financial Hedges: Strathcona benefits from its ability to use natural gas and condensate that it produces in its Montney operations to partially cover fuel for steam generation and diluent requirements in its thermal and heavy oil operations. Excluding the impact of Serafina, natural gas production in excess of consumption needs and condensate production in excess of 20% of consumption needs act as these natural hedges. This hedge from its operations reduces exposure to pricing fluctuations in natural gas and condensate that otherwise would need to be sourced externally. Additionally, Strathcona uses differential and price hedges to improve visibility on future cash flows. Prior to the Serafina acquisition these hedges were generally on 25% to 30% of the following 12 to 18 months expected production. At Serafina's close, Strathcona will be required to hedge 50% of its next six months of production and 30% of the six months following that. The six-month 50% of production hedge is a rolling requirement as long as the CAD700 term loan is outstanding. DERIVATION SUMMARY Pro-forma the Serafina transaction Strathcona will produce approximately 150mboepd gross of intercompany uses. This compares against other 'B+' rated Canadian heavy oil producers MEG Energy which produces 101.1mboepd in 1Q22 (in 2Q22 MEG production decreased 67mboepd due to down time at Christina Lake) and Baytex at 83.1mboped. It is above Canadian producer Vermilion's (BB-) 1Q22 86.2mboepd, whose rating benefits from its international diversification and higher price exposure. Strathcona has a notably large reserve base for the 'B+' rating category with proforma Stickney and Serafina at approximately 1.3 billion boe proved reserves. This is in line with MEG at 1.3 billion boe and is materially above Baytex and Vermilion respective proved reserves. At YE 2022, debt/EBITDA is forecast at approximately 1.8x, then trending at or below 1.0x through the remainder of Fitch's forecast, which is comparable within the peer group of MEG, Baytex, Vermilion, which are each forecast at or below 1.0x leverage. In terms of debt/flowing barrel, proforma Serafina at CAD20.8M/bbl Strathcona trails the peer group with the exception of MEG energy at 24.3M/bbl, whose absolute debt level of CAD2.5 billion will now be below Strathcona's CAD3.2 billion. KEY ASSUMPTIONS -- WTI prices of USD100/bbl in 2022, USD81/bbl in 2023, USD62/bbl in 2024 and USD50/bbl thereafter; -- Henry Hub prices of USD6.25/mcf in 2022, USD4/mcf in 2023, USD3.25/mcf in 2023 and USD2.75/mcf thereafter; -- Intercompany eliminations grow in step with bitumen and heavy oil growth; -- Capex between CAD700-CAD800 million in 2023 to 2025; -- Term loan repaid in 2023; -- No distributions or M&A, revolver balance reduction is prioritized; -- G&A scale efficiencies on a per BOE basis. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Improved financial flexibility including materially reduced revolver utilization and allocation of FCF to absolute debt; -- Improving relative cash netback through lower and sustainable operating costs; -- Production sustained above 125mboepd; -- Mid-cycle total debt/operating EBITDA maintained below 2.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Deviation from stated M&A and financial policy, especially in regards to funding of future acquisitions; -- Loss of operational momentum leading to production sustained below 80mboepd; -- Deteriorating liquidity and financial flexibility, including inability to reduce revolver borrowings; -- Mid-cycle total debt/operating EBITDA sustained above 3.0x. TALLGRASS ENERGY: Fitch Affirms BB- LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Tallgrass Energy Partners, LP's (Tallgrass) Long-Term Issuer Default Rating (IDR) at 'BB-'. Fitch has also affirmed the Senior Secured rating at 'BB+'/'RR1' and Senior Unsecured rating at 'BB-'/'RR4'. The Rating Outlook is Stable. The ratings reflect Tallgrass's highly contracted revenue profile underpinned by long-term (approximately a decade) take-or-pay type contracts, its ability to generate stable cash flows, improvement in counterparty credit profile of Tallgrass's largest asset (ROCKIE; Tallgrass owns 75%), and the parent subsidiary relationship between Tallgrass (subsidiary) and Tallgrass Energy, LP (parent with a large term loan referred to as Holdco). Concerns include a contract cliff at ROCKIE in mid-2024 when its most remunerative contract expires along with some other small contracts, which is expected to increase leverage in the years 2024 and 2025. KEY RATING DRIVERS Highly Contracted Revenue Profile: The majority of Tallgrass's revenue is generated under long-term take-or-pay type contracts. It's largest asset, ROCKIE, has a weighted average (by volume) contract life of nearly a decade underpinned by take-or-pay contracts. Liberty Express Pipeline, LLC (LEP), which owns the Tallgrass Pony Express Pipeline (Pony), is the second largest EBITDA contributor to Tallgrass. LEP features minimum volume commitments (MVCs) type of contracts that largely function like take-or-pay contracts, provided volumes delivered in a certain period do not exceed the contractual minimum. Historically, volumes transported on Pony have exceeded the sum of its MVC contract minimums. Pony's success with volumes is partly due to providing volume incentive rates over the minimum volume to MVC customers. In addition, some of Tallgrass' other assets also enjoy nearly a decade long, take-or-pay contracts. Near-Term Cash Flow Stability: Tallgrass's highly contracted revenue profile with long-term contracts helps the company generate stable cash flows. In 2021, Tallgrass overall generated approximately 83% of the EBITDA under long-term take-or-pay type contracts, 13% under area dedicated type contracts, and only roughly 4% came from commodity price exposed business. Most of Tallgrass's assets are regulated by Federal Energy Regulatory Commission (FERC). For LEP (second largest asset), the company is able to update contract rates annually to adjust for inflation based on FERC approved rates. Given the above, Tallgrass has been able to generate positive cashflows even during commodity price downturns. Tallgrass' policy, in the near term, is to use the excess cashflows toward debt reduction to achieve leverage of around 4.0x-4.5x. In Fitch's view, the company will be able to maintain leverage in the target range in the medium term. Customer Counterparty Credit Profile: Tallgrass generates most of its revenues through long-term contracts from creditworthy customers. ROCKIE has had its counterparty credit quality improve considerably this year due to higher commodity prices. Two of ROCKIE's largest customers were upgraded to investment-grade by Fitch. However, majority of its customers continue to be non-investment-grade. Tallgrass' second largest asset (LEP) has most of its nameplate capacity contracted with top five customers. LEP's largest customer (by volume) recently received an upgrade; however, it already had an investment-grade rating before. Furthermore, LEP's second largest customer (by volume) continues to be rated non-investment-grade. Increasing Leverage in 2025: ROCKIE has a contract cliff in mid-2024 when its most remunerative contract, along with some other contracts are expiring. Fitch expects the company will be able to re-contract most of its capacity. ROCKIE has demonstrated its ability to successfully re-contract expiring capacity in the last twelve months. Fitch, in its forecast for ROCKIE in June 2022 annual review, had estimated the re-contracting rates based on recent contract wins by the company, which is considerably lower than the current rates. Therefore, in 2025, Fitch expects ROCKIE's EBITDA to reduce considerably, and as such, distributions made to Tallgrass is also expected to reduce. LEP (Pony), generated a sizable portion of its EBITDA through uncontracted capacity; as such, the pipeline is exposed to volumetric risks that are dependent on the oil production activities in the regions it operates in. In the last twelve months, monthly Pony volumes have consistently been around 85% of its nameplate capacity with a slight positive trend. However, volumes dropped nearly 32% during the recent commodity price downturns in 2020 due to the impact of the coronavirus. Tallgrass's gathering, processing and terminaling (G&P) business generates a vast majority of its revenue through volume and commodity sensitive contracts. Therefore, a considerable amount of the company's business is exposed to oil and gas activity levels. Fitch has made considerations of aforementioned risks in its forecast. Fitch, has and will evaluate, Tallgrass by making a pro forma adjustment with Holdco's debt imputed, and in 2025, expects the leverage to be around 7.2x. Parent Subsidiary Rating Linkage: There is a parent subsidiary relationship between Holdco and Tallgrass. Fitch determines Holdco's standalone credit profile (SCP) to be based on consolidated metrics and considers Tallgrass to have a stronger SCP than Holdco. Legal ring-fencing is considered to be open given that only the revolving credit facility has a limitation on dividends going up. Effective control is evaluated as open given that Holdco owns the general partner and 100% of the limited partner, effectively controlling all major transactions. Funding and cash management policy is evaluated as porous due to Tallgrass's ability to obtain both internal and external funding. Therefore, access and control are deemed to be porous. DERIVATION SUMMARY There exists a parent subsidiary linkage (PSL) between Holdco (parent) and Tallgrass (subsidiary). Based on the PSL evaluation, legal ring-fencing is considered to be open and access and control is deemed to be porous. Given the PSL outcome, The Williams Companies, Inc. (WMB; BBB/Stable) is the top comparable to Tallgrass. Both WMB and Tallgrass have two FERC regulated long distance pipelines at the core of their credit, along with a gathering and processing business. WMB and Tallgrass, both feature highly contracted long-term revenue profile with creditworthy customers. In addition, both have stronger subsidiaries, rated higher than the parent. WMB has much larger relative operating scale, with EBITDA in its most recent fiscal year at approximately $5.4 billion versus Tallgrass' at $773 million. This is somewhat offset by WMB having a much larger gathering and processing business, which is considered riskier than FERC-regulated pipeline business. Fitch forecasts WMB to have a total debt to EBITDA of around 4.8x in FY2022; which is much lower compared to the expectations for Tallgrass (pro forma with Holdco's debt imputed) of approximately 5.4x, increasing roughly to 7.2x over the forecast horizon. Tallgrass's smaller scale and higher leverage is the reason for the difference in IDRs between the two companies. NuStar Energy (NuStar; BB-/Stable), which has FERC-regulated refined products pipeline is another peer comparable to Tallgrass insofar as both have PSLs and FERC regulated pipelines, albeit for NuStar it is minority of its business. NuStar and its subsidiaries have the same IDR due to strong PSL, which is not the case with Tallgrass. Though NuStar's pipeline does not feature long-term take-or-pay type contracts like Tallgrass, the products it transports are essential for daily lives of residents of the United States and hence it has a resilient business helping it generate stable cash flows. Both NuStar and Tallgrass have similar operating scale with EBITDA of around $700 million in most recent fiscal. Fitch forecasts NuStar to have leverage of around 5.4x-5.6x in 2022, which is also similar to Fitch's expectations for Tallgrass of around 5.4x. KEY ASSUMPTIONS -- Fitch's Price Deck; West Texas Intermediate (WTI) oil price assumption of USD100/bbl in 2022, falling to USD50/bbl by 2025; and Henry Hub prices of USD6.25/mcf in 2022, falling to USD2.75/mcf in 2025; -- Oil and Gas production and activity levels in regions where Tallgrass operates consistently with Fitch's base case forecast for Oil and Gas Prices; -- ROCKIE's EBITDA and distributions to Tallgrass consistent with Fitch's expectations for ROCKIE, which among other things reflects the re-contracting risks for 2024 contract cliff; -- Liberty Express Pipeline (Pony Express) transport volumes consistent with the prevailing volumes in recent months; -- Distributions upstream consistent with the amounts required to service the term loan for 2022, which increases over the forecast period; -- Inflationary pressure lead to a slight drop in EBITDA margins in 2022 versus 2021 and compresses further with lower commodity price driven activity levels. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Proportionate consolidated total debt with equity credit (currently there are no hybrids) to operating EBITDA (measured at the Holdco level) that is expected to be below 7.0x for a sustained period; -- A decrease in business risk, such as might occur with ROCKIE and/or Pony contracting a significant part of their capacity in a long-term revenue-assured relationship with an investment grade shipper. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Proportionate consolidated total debt with equity credit (currently there are no hybrids) to operating EBITDA (measured at the Holdco level) that is expected to be above 8.0x for a sustained period; -- A large customer with a long-term take or pay (ROCKIE) contract or MVC (Liberty Express) contract has a financial condition that is consistent with a potential bankruptcy filing, and the current market for Tallgrass's transportation service indicates the potential for a contract rejection. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of March 31, 2022, the company had approximately $1.14 billion of liquidity. Tallgrass had $7 million of cash on the balance sheet, $1.13 billion available on its revolving credit facilities (net of $5.3 million in outstanding letters of credit). Tallgrass has a maximum limit of $1.5 billion on its revolving credit facility maturing on July 19, 2025. As defined in the credit facility, the financial covenants permit a maximum total debt to EBITDA of 5.5x, secured debt to EBITDA of 3.5x, and the interest coverage ratio (defined as consolidated EBITDA to consolidated interest expense) to be over 2.5x. As of March 31, 2022, the company was in compliance of all the financial covenants and had ratios of 4.77x, 0.52x and 3.26x for total debt to EBITDA, senior debt to EBITDA and interest coverage, respectively. Tallgrass's next maturity of a senior unsecured note is on Oct. 1, 2025. At Holdco, as of March 31, 2022, cash was approximately $102 million and borrowings under the term loan was approximately $1.48 billion. Fitch expects distributions from Tallgrass to be supportive of Holdco's ability to maintain a minimum debt service coverage ratio covenant of 1.1x. ISSUER PROFILE Tallgrass owns and operates a variety of midstream assets located in the United States with a concentration in long-distance interstates pipelines SUMMARY OF FINANCIAL ADJUSTMENTS ESG CONSIDERATIONS: Tallgrass Energy Partners, LP has an ESG Relevance Scores of '4' for Group Structure due to the high number of entities in the family. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Rating Actions Rating Prior ------ ----- Tallgrass Energy Partners, LP LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR1 BB+ Tallgrass Energy Finance Corp. senior unsecured LT BB- Affirmed RR4 BB- TBC COMPANIES: Oct. 4 Confirmation of the Plan ---------------------------------------------- Judge Pamela W. McAfee has entered an order conditionally approving the Disclosure Statement of TBC Companies, LLC. The hearing to consider confirmation of the Plan is scheduled on Tuesday, Oct. 4, 2022, at 10:00 AM in Room 208, 300 Fayetteville Street, Raleigh, NC 27601. Sept. 28, 2022, is fixed as the last day for filing and serving written objections to the Disclosure Statement. Sept. 28, 2022, is fixed as the last day for filing written acceptances or rejections of the Plan. Sept. 28, 2022, is fixed as the last day for filing and serving written objections to confirmation of the Plan. The Debtor must prepare and file a summary report on the votes, with a copy of each ballot attached, with the court by 5:00 pm one day prior to the confirmation hearing. About TBC Companies, LLC TBC Companies, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01737-5-PWM) on Aug. 8, 2022. In the petition signed by Joseph Keller, member, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Paul D. Bradford, PLLC is the Debtor's counsel. TOUCHPOINT GROUP: Posts Second Quarter Loss of $1.5 Million ----------------------------------------------------------- Touchpoint Group Holdings, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a loss of $1.49 million on $1,000 of revenue for the three months ended June 30, 2022, compared to a loss of $1.24 million on $34,000 of revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a loss of $2.52 million on $31,000 of revenue compared to a loss of $2.42 million on $66,000 of revenue for the same period in 2021. As of June 30, 2022, the Company had $2.27 million in total assets, $5.17 million in total liabilities, $605,000 in temporary equity, and a total stockholders' deficit of $3.51 million. Touchpoint said, "The Company has incurred net losses and negative cash flows from operations which raise substantial doubt about the Company's ability to continue as a going concern. The Company has principally financed these losses from the sale of equity securities and the issuance of convertible debt instruments. "The Company will be required to raise additional funds through various sources, such as equity and debt financings. While the Company believes it is probable that such financings could be secured, there can be no assurance the Company will be able to secure additional sources of funds to support its operations, or if such funds are available, that such additional financing will be sufficient to meet the Company's needs or on terms acceptable to us." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/225211/000175392622001074/g083131_10q.htm About Touchpoint Group Headquartered in Miami, Florida, Touchpoint Group Holdings Inc. -- http://touchpointgh.com-- is engaged in media and digital technology, primarily in sports entertainment and related technologies that bring fans closer to athletes and celebrities. Touchpoint Group a net loss attributable to common stockholders of $5.19 million for the year ended Dec. 31, 2021, a net loss attributable to common stockholders of $3.54 million for the year ended Dec. 31, 2020, and a net loss of $6.63 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $2.77 million in total assets, $4.71 million in total liabilities, $605,000 in temporary equity, and a total stockholders' deficit of $2.54 million. Tampa, Florida-based Cherry Bakaert LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 15, 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. TPC GROUP: Disclosures Inadequate, Says Creditors Committee ----------------------------------------------------------- The Official Committee of Unsecured Creditors of TPC Group Inc. et al., filed an objection to the Debtors' motion for entry of an order approving Disclosure Statement. The Debtors entered chapter 11 with a restructuring support agreement outlining the terms of a plan of reorganization negotiated by and for the benefit of their equity sponsors and a subset of their creditors without the participation of unsecured creditors, including trade creditors and thousands of tort victims collectively asserting hundreds of millions of dollars of claims related to injuries and property damage caused by the November 27, 2019 explosions at the Debtors' chemical processing plant in Port Neches, Texas (the "Port Neches Explosions"). It is precisely these unsecured creditors -- a majority of whom, unlike the members of the Ad Hoc Noteholder Group, never chose to become creditors of the Debtors and are proposed to receive de minimis or no recoveries subject to providing third party releases-that must be afforded a sufficiently detailed and easily understandable disclosure statement that will enable them to make an informed judgment when voting on the Plan. Unfortunately, notwithstanding the minimum fundamental creditor protections set forth in Bankruptcy Code section 1125, the Debtors filed a 116-page Disclosure Statement that fails to contain the basic information required and, in fact, contains almost none of the most important information unsecured creditors need to evaluate the Plan and their proposed treatment thereunder. For example, the Disclosure Statement is littered with placeholders and numerous incorrect or misleading statements and lacks even the most rudimentary information needed to evaluate the Plan, such as claim amounts, estimated recovery percentages, and the valuation analysis, liquidation analysis and financial projections, the Committee tells the Court. On August 1, the advisors to the Committee sent the advisors to the Debtors a preliminary list, a copy of which is attached hereto as Exhibit A (https://bit.ly/3JMLLKx), requesting the minimum information required to address the Disclosure Statement's deficiencies. Among other things, the Committee requested necessary disclosures concerning: * the impact of the Plan's third party release provisions on creditor claims against non-Debtor third parties, including but not limited to claims asserted against the Supporting Sponsors in the MDL; * the claims asserted against the Supporting Sponsors in the MDL and developments in the MDL since the Petition Date, including the positions the Supporting Sponsors and the Debtors have taken with respect to the application of the automatic stay as to the claims asserted against them in the MDL; * a clear explanation for unsecured creditors of the consequences of voting to accept or reject the Plan and failing to opt out of the proposed releases; * the factual and legal bases for the Plan's third party release and exculpation provisions; * the factual and legal bases for the Plan's Debtor release and exculpation provisions, including the value of the claims being released by the estates; * the purported value that the released parties and exculpated parties, including the Supporting Sponsors, are providing under the Plan; * the value of the claims against the Supporting Sponsors considered by the Special Committee, whether the Special Committee considered the value the Supporting Sponsors are providing to the Debtors' estates in exchange for the proposed releases and the Special Committee's basis for determining that such releases are in the best interests of the Debtors' estates; * why the proposed releases, including releases of the Supporting Sponsors, are a necessary part of the Plan; * whether the Plan contemplates a settlement pursuant to Bankruptcy Rule 9019,3 and, if so, information regarding the claims being settled, who the counterparties are to the settlement, who considered and approved the settlements on behalf of the Debtors' estates and a description of any analysis they did on how the requirements of this rule have been met; * proposed allowed claim amounts (including amounts of accrued and unpaid interest, fees, premiums or other related claims, to the extent applicable); * estimated recovery percentages for each class of claims; * the methodology used to calculate the value of secured creditors' collateral and allowed amounts of claims, including allowed amounts of the 10.5% Notes' secured and deficiency claims; * the Debtors' unencumbered or potentially unencumbered assets; * insurance proceeds related to the Port Neches Explosions, including the potential amount and timing of receipt and the application of such proceeds to creditor recoveries under the Plan; * purported liens on insurance proceeds and whether the Debtors believe such liens have been properly perfected; * the various categories of General Unsecured Claims, including whether unpaid property damage settlement amounts owed under the Voluntary Settlement Program are contemplated to be General Unsecured Claims and whether holders of such claims will be solicited in connection with confirmation; * the general categories and estimated amounts of General Unsecured Claims, including the amount of Allowed 10.5% Notes Deficiency Claims; * the process for determining which trade claims will be Specified Trade Claims; * whether the Plan contemplates that the Debtors will be consolidated for any purpose, including distribution to creditors, or how value is being allocated on debtor-by-debtor basis; * important tax consequences for holders of General Unsecured Claims, including of the consequences of holding a liquidating trust interest and discussion of tax treatment of tort claim payments from the GUC Trust; * the value proposed to be provided to the members of the Ad Hoc Noteholder Group in connection with the Backstop Motion and the Rights Offerings; and * updated information concerning various significant case developments since the Disclosure Statement was filed, including the outcome of the DIP Motion, the filing of the Schedules and Statements, the establishment of the Claims Bar Date and numerous contract assumption motions. To date, the Debtors have not addressed any of the deficiencies raised by the Committee. The Committee respectfully submits that the Disclosure Statement lacks clarity and sufficient disclosures regarding issues of material importance to the Debtors' unsecured creditors-and which is absolutely necessary to make an informed decision on the Plan-and should not be approved unless and until such issues are fully and completely addressed. Moreover, the Debtors' proposed Solicitation Procedures contain inconsistent and one-sided provisions tilted in favor of the Debtors that must be remedied to protect creditors' due process rights. The Solicitation Procedures must be modified as set forth herein. Counsel for the Official Committee of Unsecured Creditors of TPC Group Inc., et al.: Justin R. Alberto, Esq. Patrick J. Reilley, Esq. Andrew J. Moore, Esq. COLE SCHOTZ P.C. 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801 Telephone: (302) 652-3131 Facsimile: (302) 652-3117 E-mail: jalberto@coleschotz.com preilley@coleschotz.com aroth-moore@coleschotz.com - and - Philip C. Dublin, Esq. Naomi Moss, Esq. AKIN GUMP STRAUSS HAUER&FELD LLP One Bryant Park, Bank of America Tower New York, NY 10036-6745 Telephone: (212) 872-1000 Facsimile: (212) 872-1002 E-mail: pdublin@akingump.com nmoss@akingump.com - and - Marty L. Brimmage, Jr., Esq. Lacy M. Lawrence, Esq. 2300 N. Field Street, Suite 1800 Dallas, TX 75201 Telephone: (214) 969-2800 Facsimile: (214) 969-4343 E-mail: mbrimmage@akingump.com llawrence@akingump.com About TPC Group TPC Group, headquartered in Houston, is a 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 more than 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. TPC Group Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group estimated assets and debt of $1 billion to $10 billion to $10 billion. The Hon. Craig T. Goldblatt is the case judge. Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn & Tunnell LLP is the co-counsel; Moelis & Company LLC is the investment banker; and FTI Consulting is the financial advisor. Simpson Thacher & Bartlett LLP is the special finance counsel. Kroll Restructuring Administration is the claims agent. Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd. Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as counsel to the Ad Hoc Noteholder Group that supports the Debtors' restructuring. Evercore Group L.L.C., is the Group's financial advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to the Ad Hoc Noteholder Group. The Supporting Noteholders are funds controlled by FIG LLC and Fortress Capital Finance III(A) LLC, Monarch Alternative Capital LP., PGIM Inc., Redwood Capital Management LLC, and Strategic Value Partners LLC. Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of Non-Consenting Noteholders, led by Bayside Capital, Inc., and Cerberus Capital Management, L.P. Milbank LLP previously served as the group's counsel but was later replaced by Pachulski and SGE. TREES CORP: Incurs $183K Net Loss in Second Quarter --------------------------------------------------- Trees Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $182,948 on $3.24 million of total revenue for the three months ended June 30, 2022, compared to a net loss of $1.38 million on $698,608 of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $1.04 million on $6.81 million of total revenue compared to a net loss of $3.74 million on $1.36 million of total revenue for the same period during the prior year. As of June 30, 2022, the Company had $22.99 million in total assets, $12.58 million in total liabilities, and $10.41 million in total stockholders' equity. Trees said, "We have incurred recurring losses and negative cash flows from operations since inception and have primarily funded our operations with proceeds from the issuance of convertible debt. We expect our operating losses to continue into the foreseeable future as we continue to execute our acquisition and growth strategy. As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2021, has also expressed substantial doubt about our ability to continue as a going concern. Our condensed consolidated 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/1477009/000155837022013503/cann-20220630x10q.htm About Trees Corp Headquartered in Denver, Colorado, Trees Corporation (formerly known as General Cannabis Corp) -- provides services and products to the regulated cannabis industry. The Company is a trusted partner to the cultivation, production and retail sides of the cannabis business. General Cannabis reported a net loss of $8.87 million for the year ended Dec. 31, 2021, compared to a net loss of $7.68 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $22.02 million in total assets, $12.42 million in total liabilities, and $9.61 million in total stockholders' equity. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 25, 2022, citing that the Company has suffered recurring losses from operations and has negative working capital that raise substantial doubt about its ability to continue as a going concern. TRINITI DME: Seeks Cash Collateral Access ----------------------------------------- Triniti DME Solutions, LLC asks the U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, for authority to use cash collateral in accordance with the proposed budget. A search in the Texas Secretary of State shows that allegedly secured positions are held by National Funding, Inc. (filing number 21-0029265411, filing number 22-0013700500, and 22- 0015914266), an unidentified party (filing number 22-0022349529), Cloud Fund (filing number 22- 0029108791), and an additional unidentified party (filing number 22-0031913293). While these UCC filings appear to be secured as blanket liens, the Debtor believes the Merchant Cash Advance lenders are not properly secured in any of the Debtor's property nor accounts. As adequate protection, the Debtor is proposing that, in exchange for the use of cash collateral, these entities be awarded replacement liens to the same extent and priority, if any, that existed as of the date of filing. The Debtor will continue to investigate the true nature of these transactions and work with these entities before a final cash collateral hearing to determine if anything other than replacement liens are necessary. A copy of the motion is available at https://bit.ly/3wb38il from PacerMonitor.com. About Triniti DME Solutions, LLC Triniti DME Solutions, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-40975) on August 2, 2022. In the petition signed by Martin Fuller, owner, the Debtor disclosed $50,000 in assets and up to $500,000 in liabilities. Robert C Lane, Esq., at The Lane Law Firm is the Debtor's counsel. TRINITY HEALTH: S&P Lowers 2017C Revenue Bonds Rating to 'BB+' -------------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'BB+' from 'BBB-' on Ward County, N.D.'s series 2017C fixed-rate revenue bonds, issued for Trinity Health. The outlook is negative. "The downgrade and negative outlook reflect our view of the expected near-term decline of unrestricted reserves due to a strategic equity contribution for Trinity's replacement hospital, leading to very thin days' cash on hand and cash to long-term debt," said S&P Global Ratings credit analyst Wendy Towber. "Management also projects a softening in earnings and operating cash flow concurrent with the facility's launch," Ms. Towber added. The 2017C bonds are secured by gross revenues of the obligated group and a mortgage on certain hospital property. Trinity Health consists of the parent company, Trinity Hospitals, Trinity Kenmare Hospital, Trinity Homes, Trinity Health Foundation, B&B Drug, and Medical Arts Outpatient Services. Trinity Hospitals is licensed for 416 acute-care beds (200 in service) on two campuses in Minot. Trinity Health is the only tertiary health care facility in Minot and in northwestern North Dakota. TWO'S COMPANY: Unsecureds Owed $458K to Get 3 Cents on Dollar ------------------------------------------------------------- Two's Company Restaurant & Lounge, LLC submitted a Second Amended Plan of Reorganization. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $2,531 per month for the first year after confirmation, $2,536 per month in the second year after confirmation, and $3,713.33 per month in the third year after confirmation and thereafter. The Plan will pay priority claims in full within 60 months from the commencement of the case as required by statute. Payments shall continue for a total of 58 Plan payments. Plan payments to the secured creditor continue after the conclusion of the plan. The final Plan payment is expected to be paid 20 years after the date of confirmation. This Plan of Reorganization under chapter 11 of the Bankruptcy Code proposes to pay creditors of the Debtor from cash flow from operations. If the confirmation is consensual, then the Debtor shall make all of the payments. If the confirmation is non-consensual, then for the term of the Plan, the Debtor shall make a lump sum payment to the Subchapter V Trustee, and the Subchapter V Trustee shall make the payments provided below and receive compensation for the services as allowed by 11 U.S.C. section 1194(a)(3), except that in all circumstances the payment shall be made to the single secured creditor directly. Class 3 nonpriority unsecured claims consist of claims that were scheduled as unsecured, claims that were scheduled as secured claims but have had their liens avoided, and the undersecured portion of claims filed as secured. These claims do not include employees of the Debtor that were paid the amounts owing on the date of the filing of the petition in the ordinary course of the payroll. These claims also do not include the unsecured claim of the Debtor's principal, Craig Ziemanski. These claims total $458,047.49. Non-priority unsecured creditors will receive distributions, which the proponent of this Plan has valued at approximately 3.4 cents on the dollar, or an estimated total of $15,597.63. Class 3 is impaired. Upon consensual confirmation, the Debtor shall commence monthly payments directly to the creditors in the amount required for amortization of priority and secured claims. Further, the excess projected disposable income after payment of priority and secured monthly payments shall be paid monthly to administrative expense claims until such time as the administrative expenses are paid in full. Thereafter, the excess projected disposable income after payment of priority and secured monthly payments shall be paid pro rata to Allowed Unsecured Claims on a quarterly basis. Attorney for the Debtor: George B. Goyke, Esq. GOYKE & TILLISCH, LLP 2100 Stewart Avenue, Suite 140 Wausau, WI 54401 Tel: (715) 849-8100 E-mail: goyke@grandlawyers.com A copy of the Second Amended Plan of Reorganization dated August 12, 2022, is available at https://bit.ly/3Anw1L1 from PacerMonitor.com. About Two's Company Restaurant & Lounge Two's Company Restaurant & Lounge, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code(Bankr. W.D. Wisc. Case No. 21-12177) on Oct. 22, 2021, listing up to $500,000 in assets and up to $1 million in liabilities. William E. Wallo serves as Subchapter V trustee. Judge Catherine J. Furay oversees the case. Goyke & Tillisch, LLP serves as the Debtor's legal counsel. Business Consultants and Gassner Company, S.C. are the Debtor's accountants. VANTAGE DRILLING: Posts $48.3 Million Net Income in Second Quarter ------------------------------------------------------------------ Vantage Drilling International filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $48.33 million on $73.24 million of total revenue for the three months ended June 30, 2022, compared to a net loss of $28.98 million on $35.60 million of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported net income of $34.14 million on $131.57 million of total revenue compared to a net loss of $64.98 million on $55.77 million of total revenue for the same period during the prior year. As of June 30, 2022, the Company had $754.30 million in total assets, $96.69 million in total current liabilities, $347.68 million in long-term debt, $9.96 million in other long-term liabilities, and $299.97 million in total equity. As of June 30, 2022, Vantage had approximately $246.3 million in cash, including $18.9 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at Dec. 31, 2021. The Company used $32.0 million in cash from operations during the second quarter of 2022 compared to $25.6 million used during the same period of 2021. Ihab Toma, CEO, commented: "As previously announced, we are very pleased to have closed the sale of EDC to ADES Arabia and to support their operations in Qatar. The sale meaningfully improved the Company's liquidity." Mr. Toma continued: "With regard to the rigs we own and manage, we continue to see a constructive environment as rig activity levels remain strong. Our focus remains on taking advantage of the recovery that is underway to secure higher dayrates and continuing to provide safe, efficient and reliable operations for our clients." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1465872/000095017022016980/ck0001465872-20220630.htm About Vantage Drilling International Vantage Drilling International, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two ultra-deepwater drillships, and five premium jackup drilling rigs. Its primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells globally for major, national and independent oil and gas companies. The Company also markets, operates and provides management services in respect of, drilling units owned by others. Vantage Drilling reported a net loss of $110.25 million for the year ended Dec. 31, 2021, compared to a net loss of $276.76 million for the year ended Dec. 31, 2020. As of March 31, 2022, the Company had $719.91 million in total assets, $104.51 million in total current liabilities, $347.27 million in long-term debt (net of discount and financing costs), $16.50 million in other long-term liabilities, and $251.62 million in total equity. * * * As reported by the TCR on May 9, 2022, S&P Global Ratings affirmed its 'CCC' issuer credit rating on Vantage Drilling International. S&P said the 'CCC' rating reflects the refinancing risk related to the company's $350 million senior secured notes due November 2023. VENUS CONCEPT: Posts $10.5 Million Net Loss in Second Quarter ------------------------------------------------------------- Venus Concept Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $10.51 million on $27.27 million of revenue for the three months ended June 30, 2022, compared to net income of $242,000 on $25.83 million of revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $19.15 million on $53.67 million of revenue compared to a net loss of $9.19 million on $48.43 million of revenue for the same period during the prior year. As of June 30, 2022, the Company had $132.75 million in total assets, $109.36 million in total liabilities, and a total stockholders' equity of $22.84 million. "Second quarter total revenue results were below expectations driven by significant sales force disruption in a key market in the U.S.," said Domenic Serafino, chief executive officer of Venus Concept. "We experienced continued strong demand for Bliss and BlissMAX in our 'Body Franchise' and our ARTAS iX and Neograft in our 'Hair Restoration Franchise', and our sales team in the rest of the U.S. executed our focused sales strategy well, delivering 24% growth in subscription and system sales to U.S. customers in their respective regions in Q2." Mr. Serafino continued: "We have implemented a series of strategic initiatives and expect our focused commercial strategy, including prioritizing cash sales, and streamlined global operations to enhance the cash flow profile of our business and accelerate our path to long term profitability. We are also evaluating non-dilutive financing opportunities to enhance our cash position and balance sheet in the near term." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1409269/000143774922020232/vero20220630_10q.htm About Venus Concept Toronto, Ontario-based Venus Concept Inc. is an innovative global medical technology company that develops, commercializes, and delivers minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related practice enhancement services. The Company's aesthetic systems have been designed on a cost-effective, proprietary and flexible platform that enables the Company to expand beyond the aesthetic industry's traditional markets of dermatology and plastic surgery, and into non-traditional markets, including family and general practitioners and aesthetic medical spas. Venus Concept reported a net loss of $22.14 million for the year ended Dec. 31, 2021, compared to a net loss of $82.82 million for the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $153.87 million in total assets, $112.27 million in total liabilities, and $41.60 million in stockholders' equity. Toronto, Canada-based MNP LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 28, 2022, citing that the Company has reported recurring net losses and negative cash flows from operations, that raises substantial doubt about its ability to continue as a going concern. VERITAS FARMS: Incurs $606K Net Loss in Second Quarter ------------------------------------------------------ Veritas Farms, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $606,167 on $285,552 of revenues for the three months ended June 30, 2022, compared to a net loss of $695,946 on $559,940 of revenues for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss of $1.89 million on $767,638 of revenues compared to a net loss of $1.85 million on $1.45 million of revenues for the same period during the prior year. As of June 30, 2022, the Company had $8.18 million in total assets, $5.35 million in total liabilities, and $2.83 million in total shareholders' equity. Cash decreased to $164,383 at June 30, 2022 from $481,763 at Dec. 31, 2021. The decrease was primarily due to net cash used in operating activities. As of June 30, 2022, total assets were $8,175,150 as compared to $8,597,840 at Dec. 31, 2021. The decrease in assets is primarily due to a decrease in cash and property and equipment, net of accumulated depreciation. Total current liabilities as of June 30, 2022 were $2,623,646, as compared to $2,209,096 at Dec. 31, 2021. The increase was mainly due to increases in dividends payable and deferred revenue. Net cash used in operating activities was $2,268,762 for the six months ended June 30, 2022, as compared to $2,292,280 for the six months ended June 30, 2021. The decrease is largely attributable to the increase in net loss attributable to common shareholders, and by changes in inventories, accounts payable, accounts receivable, deferred revenue and accrued expenses. Net cash provided by investing activities was $23,621 for the six months ended June 30, 2022 as compared to net cash used of $37,158 for the six months ended June 30, 2021, reflecting a decrease in capital expenditures in 2022. Net cash provided by financing activities was $1,927,761 for the six months ended June 30, 2022 as compared to $2,689,810 for the six months ended June 30, 2021. Net cash provided by financing activities for the six months ended June 30, 2022 included net proceeds of $2,000,000 from a convertible note payable received from the Wit Trust. Net cash provided by financing activities for the six months ended June 30, 2021 included net proceeds of $803,994 from a loan received under the U.S. Small Business Administration Paycheck Protection Program as part of the business incentives offered in the Coronavirus Aid, Relief, and Economic Security Act received in February 2021, net proceeds of $86,895 from private offerings of our equity securities and $1,805,440 from initial closings under private placements. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1669400/000121390022047240/f10q0622_veritasfarms.htm About Veritas Fort Lauderdale, Florida-based Veritas Farms, Inc. -- www.TheVeritasFarms.com -- is a vertically-integrated agribusiness focused on growing, producing, marketing, and distributing superior quality, whole plant, full spectrum hemp oils and extracts containing naturally occurring phytocannabinoids. Veritas Farms owns and operates a 140 acre farm in Pueblo, Colorado, capable of producing over 200,000 proprietary full spectrum hemp plants which can potentially yield a minimum annual harvest of 250,000 to 300,000 pounds of outdoor-grown industrial hemp. Veritas Farms reported a net loss of $7.07 million for the year ended Dec. 31, 2021, compared to a net loss of $7.59 million for the year ended Dec. 31, 2020. As of March 31, 2022, the Company had $8.38 million in total assets, $4.91 million in total liabilities, and $3.47 million in total shareholders' equity. Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 12, 2022, citing that the Company has sustained substantial losses from operations since its inception. As of and for the year ended Dec. 31, 2021, the Company had an accumulated deficit of $33,930,714, and a net loss of $7,263,567. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. Continuation as a going concern is dependent on the ability to raise additional capital and financing, though there is no assurance of success. VIRGINIA WILLIAMSBURG: Case Summary & Five Unsecured Creditors -------------------------------------------------------------- Debtor: Virginia Williamsburg LLC 5615 Sidney Rd Cincinnati, OH 45238 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Southern District of Ohio Case No.: 22-11384 Debtor's Counsel: J. Christian A. Dennery, Esq. DENNERY, PLLC 7310 Turfway Rd, Ste 550 Florence, KY 41042 Tel: 859-692-3685 Fax: 859-286-6726 Email: jcdennery@dennerypllc.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by John C. Klosterman as corporate representative. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UXD66QQ/Virginia_Williamsburg_LLC__ohsbke-22-11384__0001.0.pdf?mcid=tGE4TAMA VOYAGER DIGITAL: Has Aug. 29 Auction for Alternative Offers ----------------------------------------------------------- Voyager Digital Holdings, Inc., et al. submitted an Amended Plan and a Disclosure Statement. The Debtors seek to effectuate a comprehensive reorganization through either (a) a restructuring pursuant to the Stand-Alone Plan or (b) a sale of the Company through either (i) an alternative chapter 11 plan of reorganization pursuant to which a controlling stake of the equity in Reorganized Voyager may be distributed to a third party purchaser or (ii) an orderly sale of all or substantially all of the Debtors' assets through an asset sale pursuant to section 363 of the Bankruptcy Code. The Stand-Alone Plan contemplates a comprehensive restructuring of the Debtors business, pursuant to which Holders of Account Holder Claims will receive their pro rata share of the New Common Stock, available Cash, Coins, the Voyager Tokens, and the 3AC Recovery. The Bidding Procedures provide that the Debtors will seek confirmation of a Stand-Alone Plan or Alternative Plan, as applicable, in accordance with the following timeline: * Disclosure statement objection deadline will be on September 9, 2022, at 4:00 p.m. prevailing Eastern Time. * Disclosure statement hearing will be on September 15, 2022, at 11:00 a.m., prevailing Eastern Time, or as soon thereafter as the Debtors may be heard. * Solicitation deadline will be on September 26, 2022, or 10 days after entry of the Order approving the Disclosure Statement. * Plan objection and plan voting deadlines will be on October 24, 2022, at 4:00 p.m., prevailing Eastern Time. * Confirmation hearing will be on November 1, 2022, at [_]:00 [a/p].m. prevailing Eastern Time. As an alternative to the Stand-Alone Plan, the Debtors may effectuate a Third-Party Transaction in the form of either (a) an Alternative Plan or (b) a 363 Sale if the Debtors determine, in their business judgment, that doing so would be more value maximizing for stakeholders. The timeline, pursuant to the Bidding Procedures, by which formal bids (each, a "Bid") to effectuate a Third-Party Transaction, shall be submitted, evaluated, and approved: * Bid deadline will be on August 26, 2022 at 12:00 p.m. prevailing Eastern Time. * Auction will be on August 29, 2022 at 10:00 a.m., prevailing Eastern Time, if needed. * Sale objection deadline will be on September 6, 2022, at 4:00 p.m., prevailing Eastern Time. * Sale hearing will be on September 8, 2022 at 11:00 a.m., prevailing Eastern Time, or as soon thereafter as the Debtors may be heard. A Bid submitted by a third party may take the form of an Alternative Plan. If the Debtors determine that an Alternative Plan represents the most value maximizing path forward for stakeholders, the Debtors will pursue such Alternative Plan. An Alternative Plan may result in a third party obtaining a controlling stake in the equity of Reorganized Voyager. In the event that the Debtors pursue an Alternative Plan, the Debtors will provide all Holders of Claims and Interests with additional information and revised documents, as applicable, and use commercially reasonable best efforts to confirm and effectuate such Alternative Plan in accordance with the timeline set forth in Article III.A. If the Debtors determine that a 363 Sale provides greater value to the Debtors' creditors than the Stand-Alone Plan and/or an Alternative Plan, the Debtors will seek to effectuate such 363 Sale. A 363 Sale may result in a third party obtaining control of all or substantially all of the Debtors' assets. In the event the Debtors consummate a 363 Sale that entails the sale of all or substantially all of the Debtors' assets, the Debtors will seek confirmation of a chapter 11 plan that distributes proceeds of the 363 Sale to customers and other stakeholders. In the event that the Debtors pursue a 363 Sale, the Debtors will provide all Holders of Claims and Interests with additional information and revised documents, as applicable. A copy of the Disclosure Statement dated August 12, 2022, is available at https://bit.ly/3C3Gnkn from PacerMonitor.com. About Voyager Digital Holdings Based in Toronto, Canada, Voyager Digital Holdings Inc. -- https://www.investvoyager.com/ -- runs a cryptocurrency platform. Voyager claims to offer a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. Voyager Digital Holdings Inc. and two affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10943) on July 5, 2022. In the petition filed by Stephen Ehrlich, as chief executive officer, the Debtor estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Consello Group as strategic financial advisor. Stretto, Inc. is the claims agent. WALL007 LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: WALL007, LLC 3926 Vista Woods Drive Carrollton, TX 75007 Chapter 11 Petition Date: August 19, 2022 Court: United States Bankruptcy Court Eastern District of Texas Case No.: 22-41049 Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS 12770 Coit Road Suite 850 Dallas, TX 75251 Tel: 972-991-5591 Fax: 972-991-5788 Email: eric@ealpc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Barton as president and managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VJ4ZNYA/WALL007_LLC__txebke-22-41049__0001.0.pdf?mcid=tGE4TAMA WEIRD VENDING: Wins Cash Collateral Access Thru Sept 1 ------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, authorized Weird Vending, LLC to use cash collateral on an interim basis through September 1, 2022. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court, including payments to the Subchapter V Trustee; (b) the current and necessary expenses set forth in the budget and (c) additional amounts as may be expressly approved in writing by Vend Lease. Secured creditors that assert an interest in the cash collateral will have a perfected post-petition lien against the 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 documents 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 all applicable loan and security documents as well as the Operating Guidelines and Reporting Requirements for Debtors in Possession and Chapter 11 Trustees established by the Office of the United States Trustee. A final hearing on the matter is scheduled for September 1 at 10 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/3PCtcK5 from PacerMonitor.com. The budget provides for total expenses, on a weekly basis, as follows: $15,309 for the week starting August 1, 2022; $49,836 for the week starting August 8, 2022; $75,453 for the week starting August 15, 2022; $28,984 for the week starting August 22, 2022; and $29,954 for the week starting August 29, 2022. About Weird Vending, LLC Weird Vending, LLC is a closely held Florida limited liability company organized on May 29, 2020. It operates a vending machine company that specializes in the placement of vending machines carrying unique, nostalgic, and uncommon products designed to provide entertainment value to patrons of bars, restaurants and other social establishments. Weird Vending has deployed 81 vending machines in four primary locations which include Orlando; Tampa/St. Petersburg/Sarasota; Dallas, Texas; and Denver, Colorado. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 6:22-bk-02772) on August 2, 2022. In the petition signed by Michael Williams, president the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Grace E. Robson oversees the case. Daniel A. Velasquez, Esq., at Latham Luna Eden and Beudine LLP is the Debtor's counsel. WIRECO WORLDGROUP: Moody's Ups CFR & Sr. Secured Term Loan to B1 ---------------------------------------------------------------- Moody's Investors Service upgraded WireCo WorldGroup Inc.'s corporate family rating to B1 from B2 and probability of default rating to B1-PD from B2-PD. Moody's also upgraded the company's senior secured term loan to B1 from B2. The rating outlook is stable. The upgrade reflects WireCo's efforts during the past several years to improve its product mix by exiting from low-margin products, and gradually shift away from volatile energy markets, which have historically squeezed the company's profits during downturns. The upgrade also considers the company's track record in passing through higher input costs led by steel through improved pricing strategy, processes and controls around price negotiations and reflecting surcharge mechanism into contracts, which have also improved its margins in recent quarters. WireCo has also been managing its cost base more effectively, with meaningful cost cuts and targeted investments for strategic initiatives. "We also expect WireCo's tighter control of working capital will help secure positive free cash flow in coming years," said Motoki Yanase, Vice President and Senior Credit Officer at Moody's. "The stable outlook reflects Moody's view that these efforts have improved WireCo's fundamental profitability and cash flow generation, and positioned the company to better withstand the cyclicality in some of its end markets," added Yanase. Upgrades: Issuer: WireCo WorldGroup Inc. LT Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Senior Secured Bank Credit Facility, Upgraded to B1 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: WireCo WorldGroup Inc. Outlook, Remains Stable RATINGS RATIONALE WireCo's B1 corporate family rating reflects the company's strong niche in wire products, including steel ropes, synthetic ropes and plastic molding and sheets in the global markets. The rating further reflects WireCo's diversified end markets to various user industries, its geographic diversification across the United States, Europe, South American, and Asia, and solid demand in its end markets, including from mission critical steel wire roping used on cranes and other industrial applications, and synthetic rope used in fishing, maritime, and offshore oil & gas and renewable energy markets. Moody's also recognizes improvement in WireCo's profitability over the past several years, which was achieved through the demand recovery coupled with the company's efforts to invest in high-margin and exit from low-margin products; transform its pricing strategy, processes, and controls driving above-inflationary price increases; and manage its cost base. These credit strengths are counterbalanced with the cyclicality in some of WireCo's end markets, led by the volatile oil and gas sector, exposure to raw material costs (mainly steel), and competition in the fragmented global steel ropes and wire markets. WireCo has good liquidity that covers its cash outflow for the next 12 months as of March 2022. The company had $28 million of cash on hand at the end of March and $50 million available under its $115 million ABL facility expiring in 2026. Moody's projects about $20 million in free cash flow generation in 2022 and over $30 million in 2023, which will facilitate increased availability on the ABL as outstanding borrowings are repaid. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if the business' operating profile further improves such that it can better cope with inherent end market cyclicality, along with better credit metrics. Specifically, Moody's would upgrade the ratings if debt/EBITDA is below 3.5x, free cash flow/debt is above 10% and EBITA/interest expense is above 3.0x. Moody's could downgrade the ratings if industry conditions turn downward and negatively affect WireCo's profit and cash flow generation. Pressure on the ratings could also result if there is implementation of aggressive financial policy actions including large debt financed acquisitions or shareholder distributions. Specifically, Moody's would downgrade the ratings if debt/EBITDA is above 4.5x, free cash flow/debt is below 5.0%, or EBITA/interest expense is below 2.0x. Headquartered in Prairie Village, Kansas, WireCo WorldGroup Inc., is a global manufacturer and seller of wire ropes, high-tech synthetic ropes, electromechanical cable, and other related products. The company sells into diverse industries including infrastructure, industrial, energy, mining, maritime and fishing. The company generated about $706 million revenue for the twelve months that ended March 31, 2022. WireCo is owned by affiliates of Onex Corporation and Paine Schwartz Partners LLC. The principal methodology used in these ratings was Manufacturing published in September 2021. WP REALTY: Sept. 15 Hearing on Plan & Disclosures ------------------------------------------------- Judge Sean H. Lane has entered an order conditionally approving the Disclosure Statement of WP Realty Acquisition III, LLC. The Combined Hearing to consider approval of the adequacy of the Disclosure Statement and confirmation of the Plan will be held before the Honorable Sean H. Lane, U.S. Bankruptcy Court, One Bowling Green, New York, NY 10004, via Zoom on September 15, 2022 at 10:00 a.m. The objections, if any, to the final approval of the adequacy of the Disclosure Statement and/or confirmation of the Plan final approval of the Disclosure Statement or confirmation of the Plan must be filed and served on or before September 8, 2022. The Debtor's Reply, if any, shall be filed with this Court on the ECF system on or before 12:00 noon on September 13, 2022. The completed ballots must be submitted by email, regular mail or overnight delivery so as to be received no later than September 8, 2022 at 5:00 p.m. prevailing Eastern time. The Debtor shall tabulate the ballots, certify the acceptance and rejection of the Plan, and file a Certification of the Balloting with the Clerk of the Court no later than September 13, 2022. Attorney for the Debtor: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway - 22nd Floor New York, NY 10036 E-mail: kjnash@GWFGLaw.com About WP Realty Acquisition III WP Realty Acquisition III LLC is engaged in activities related to real estate. It owns a property located in New Rochelle, New York having a current value of $4.1 million (estimated without development). WP Realty Acquisition III filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-23038) on Sept. 11, 2020. The Debtor disclosed $4,177,531 in total assets and total liabilities $4,674,589. Judge Sean H. Lane oversees the case. Goldberg Weprin Finkel Goldstein LLP, led by Kevin J. Nash, is the Debtor's legal counsel. [^] BOND PRICING: For the Week from August 15 to 19, 2022 --------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- Accelerate Diagnostics AXDX 2.500 63.500 3/15/2023 Ahern Rentals Inc AHEREN 7.375 76.603 5/15/2023 Ahern Rentals Inc AHEREN 7.375 77.043 5/15/2023 American Campus Communities Operating Partnership LP ACC 2.250 99.938 1/15/2029 American Campus Communities Operating Partnership LP ACC 3.875 102.913 1/30/2031 American Campus Communities Operating Partnership LP ACC 4.125 100.118 07/01/2024 Apollo Commercial Real Estate Finance Inc ARI 4.750 99.950 8/23/2022 Avaya Holdings Corp AVYA 2.250 25.375 6/15/2023 BP Capital Markets America Inc BPLN 3.194 99.891 04/06/2025 BPZ Resources Inc BPZR 6.500 3.017 03/01/2049 Basic Energy Services BASX 10.750 8.000 10/15/2023 Basic Energy Services BASX 10.750 15.000 10/15/2023 Bed Bath & Beyond Inc BBBY 3.749 41.063 08/01/2024 Buckeye Partners LP BPL 6.375 82.463 1/22/2078 Buffalo Thunder Development Authority BUFLO 11.000 56.397 12/09/2022 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 19.946 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 9.059 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 27.000 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 9.615 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 20.450 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 19.363 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 19.997 8/15/2026 Diebold Nixdorf Inc DBD 8.500 62.016 4/15/2024 EnLink Midstream Partners LP ENLK 6.000 76.250 N/A Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 Energy Transfer LP ET 6.250 83.600 N/A Envision Healthcare EVHC 8.750 33.659 10/15/2026 Envision Healthcare EVHC 8.750 33.612 10/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 32.955 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 68.352 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 31.805 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 68.352 7/15/2023 Federal Home Loan Banks FHLB 4.000 99.110 7/25/2024 Federal Home Loan Banks FHLB 4.625 99.309 7/26/2027 Federal Home Loan Banks FHLB 4.000 99.291 7/25/2024 Federal Home Loan Mortgage Corp FHLMC 4.000 99.337 7/22/2024 First Busey Corp BUSE 4.443 99.950 5/25/2027 GNC Holdings Inc GNC 1.500 0.924 8/15/2020 GTT Communications Inc GTTN 7.875 8.250 12/31/2024 GTT Communications Inc GTTN 7.875 7.000 12/31/2024 JPMorgan Chase & Co JPM 4.625 91.857 N/A Lannett Co Inc LCI 7.750 33.738 4/15/2026 Lannett Co Inc LCI 4.500 29.764 10/01/2026 Lannett Co Inc LCI 7.750 31.925 4/15/2026 MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023 MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023 MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023 MBIA Insurance Corp MBI 13.772 11.119 1/15/2033 MBIA Insurance Corp MBI 13.772 11.119 1/15/2033 Macy's Retail Holdings LLC M 6.700 88.090 7/15/2034 Macy's Retail Holdings LLC M 6.700 88.090 7/15/2034 Morgan Stanley MS 1.800 78.646 8/27/2036 OMX Timber Finance Investments II LLC OMX 5.540 0.783 1/29/2020 Party City Holdings PRTY 6.125 71.279 8/15/2023 Party City Holdings PRTY 6.125 71.279 8/15/2023 Patriot National Bancorp Inc PNBK 6.250 72.558 6/30/2028 Patriot National Bancorp Inc PNBK 6.250 72.558 6/30/2028 Plains All American Pipeline LP PAA 6.125 85.750 N/A Renco Metals Inc RENCO 11.500 24.875 07/01/2003 Revlon Consumer Products Corp REV 6.250 10.000 08/01/2024 Rolta LLC RLTAIN 10.750 1.353 5/16/2018 Sears Holdings Corp SHLD 6.625 4.578 10/15/2018 Sears Holdings Corp SHLD 8.000 1.010 12/15/2019 Sears Holdings Corp SHLD 6.625 4.578 10/15/2018 Sears Roebuck Acceptance Corp SHLD 7.000 1.084 06/01/2032 Sears Roebuck Acceptance Corp SHLD 7.500 1.059 10/15/2027 Sears Roebuck Acceptance Corp SHLD 6.750 1.084 1/15/2028 Sears Roebuck Acceptance Corp SHLD 6.500 1.040 12/01/2028 Shift Technologies Inc SFT 4.750 29.750 5/15/2026 TPC Group Inc TPCG 10.500 54.030 08/01/2024 TPC Group Inc TPCG 10.500 53.500 08/01/2024 TerraVia Holdings Inc TVIA 5.000 4.644 10/01/2019 UpHealth Inc UPH 6.250 33.000 6/15/2026 Vroom Inc VRM 0.750 26.000 07/01/2026 Wayfair Inc W 0.375 97.683 09/01/2022 Wesco Aircraft Holdings Inc WAIR 8.500 50.623 11/15/2024 Wesco Aircraft Holdings Inc WAIR 13.125 31.205 11/15/2027 Wesco Aircraft Holdings Inc WAIR 8.500 54.202 11/15/2024 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN: 1520-9474. 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