/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/221012.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 12, 2022, Vol. 26, No. 284 Headlines 12TH & K ST. MALL: Judge Denies Bid to Delay Disclosures Hearing ABRAXAS PETROLEUM: Signs Exchange Agreement With Biglari ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access ALL YEAR HOLDINGS: Wins Dismissal of Weiss Lawsuit ALTERA INFRASTRUCTURE: $70 Million DIP Loan Wins Final OK AMERICAN FLAMINGO: Member to Fund Chapter 11 Plan ARCHDIOCESE OF AGANA: Judge Confirms Bankruptcy Exit Plan AXYEHHO CORP: Unsecureds Owed $4K Will be Paid in Full AYTU BIOPHARMA: Stockholders Approve Reverse Common Stock Split BARNES ENTERPRISES: Starts Subchapter V Case BERWICK CLINIC: PCO Reports Declining Patient Care Quality BERWICK HOSPITAL: Starts Subchapter V Case BERWICK HOSPITAL: UST Appoints Deborah Fish as PCO BITNILE HOLDINGS: Holds 9.7% Equity Stake in Connexa Sports BITNILE HOLDINGS: Lowers Stake in SilverSun Technologies to 3.3% BRICKCHURCH ENTERPRISES: Unsecureds Owed $10M Unimpaired in Plan CELSIUS NETWORK: Co-Founder Daniel Leon Resigns CELSIUS NETWORK: Court OKs Appointment of Shoba Pillay as Examiner CELSIUS NETWORK: DOJ Intends to Stop Motion to Reopen Withdrawals CELSIUS NETWORK: Files Document to Remind Borrowers to Repay Loans CELSIUS NETWORK: Founder Withdrew $10M Prior to Chapter 11 Filing CFN ENTERPRISES: Agrees to Terminate $726,700 Notes CHARGING GRIZZLY: Case Summary & One Unsecured Creditor COLLEGE OF SAINT ROSE: Fitch Alters Outlook on 'BB' IDR to Neg. CRYPTO CO: Secures $109K in Funding From 1800 Diagonal CUREPOINT LLC: AMOA Seeks Appointment of Chapter 11 Trustee DESERT INSTITUTE: No Patient Care Concern, PCO Report Says DIOCESE OF ROCKVILLE CENTRE: No Abuse Cases Have Been Settled DITECH FINANCIAL: 3rd Circuit Affirms Dismissal of Rauso Complaint DIXWELL PHARMACY: Commences Subchapter V Case EASTERN POWER: S&P Affirms 'B' ICR, Alters Outlook to Negative ELECTRO RENT: S&P Places 'B-' ICR on CreditWatch Negative EMBARQ CORP: Fitch Cuts LongTerm IDR to 'B-', Outlook Stable FORWARD FOODS: Oct. 25 Public Foreclosure Sale Set FREE SPEECH SYSTEMS: Pitches New Adviser to Lead Bankruptcy Case GENEVER HOLDINGS: Case Summary & 20 Largest Unsecured Creditors GLOBAL CORD: Chapter 15 Case Summary HOLONG CS LLC: Files Subchapter V Case IFRESH INC: Qiang Ou Quits as Director INTELSAT SA: Defeats SES Americom Bankruptcy Claims J.C. PENNEY: Rejection of Klairmont Sublease Afforded Deference JUUL LABS: To Enter Financing Talks for Possible Chapter 11 Filing LHOTSE CIS LLC: Files Subchapter V Case LOADCRAFT INDUSTRIES: Unsecureds Owed $3.7M to Get At Least 10% LV FORTUNE LLC: Fortune Hotel Operator Starts Subchapter V Case MASTEN SPACE: Nov. 8 Plan Confirmation Hearing Set MATLINPATTERSON GLOBAL: Unsecureds Unimpaired in Liquidating Plan MINESEN COMPANY: Army Morale Bid for Chapter 11 Trustee Approved MO-PAT SUNRISE MALL: Files Bare-Bones Chapter 11 Petition MORNINGSTAR SENIOR: Fitch Cuts LongTerm IDR to 'BB', Outlook Stable MORRIS RAILS REAL ESTATE: SARE Files for Chapter 11 Bankruptcy NAT'L ASSOC. OF TELEVISION: Files Chapter 11 Subchapter V Case NORTHWEST SENIOR: No Resident Care Concerns, 3rd PCO Report Says OCEAN POWER: Awarded $529K Surveillance Subcontract for DHS S&T PAYROLL MANAGEMENT: Nov. 30 Hearing on Disclosure Statement PECOS ENTERTAINMENT: SARE Hits Chapter 11 Bankruptcy PENTA STATE: Voluntary Chapter 11 Case Summary PHI GROUP: Amends Stock Transfer Agreement With Tin Thanh Group PUERTO RICO: Taps Willke Farr to Advise on PREPA Debt Talks QUICKER LIQUOR: Unsecureds Get Pro Rata Share of $250K Cash Payment REAGOR-DYKES: FMCC Second Summary Judgment Bid Denied REAMIR 57 CORP: Seeks Jan. 31 Extension of Plan Filing Deadline REDWOOD EMPIRE: Unsecureds to Get $290K Plus Interest in Plan REGIONAL HOUSING: No Decline in Resident Care, 6th PCO Report Says ROCKCLIFF ENERGY II: Fitch Affirms B+ LongTerm IDR, Outlook Stable SAMN LLC: Case Summary & Three Unsecured Creditors SIGYN THERAPEUTICS: Board Appoints Three New Directors STONEBRIDGE VENTURES: Court Okays Appointment of Chapter 11 Trustee SUNSHINE ADULT: Asks for Feb. 16 Extension for Plan Approval SWEET HOME HIGGINS: Chapter 9 Case Summary & 7 Unsecured Creditors T.J. MCDERMOTT: Seeks Cash Collateral Access TAMARACK INVESTMENTS: Case Summary & One Unsecured Creditor TEGRA118 WEALTH: S&P Downgrades ICR to 'B-' on Declining Liquidity TROIKA MEDIA: Receives Default Notice From Blue Torch UNIVERSAL HEALTH: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable VANGUARD WINES: Case Summary & 20 Largest Unsecured Creditors VERTEX ENERGY: Signs Second Amended Loan and Security Agreement VITAL PHARMACEUTICALS: Seeks Approval of $454MM DIP Loan WIRELESS SYSTEMS: Court Overrules Objections to Disclosures WRIGHT EXPERIENCE: Marc Albert Appointed as Subchapter V Trustee XEBEC HOLDING: Chapter 15 Case Summary YIELD10 BIOSCIENCE: Appoints Former Cargill Exec to Board ZAPPELLI BODY SHOP: Unsecureds Owed $600K to Get 5% Under Plan [*] 18 Retailers at Risk of Bankruptcy as Consumers Tighten Budgets [*] 29th Distressed Investing Conference on Nov. 28 -- Register Now [*] Howard Brownstein Recognized as Industry Icon by abfJournal ********* 12TH & K ST. MALL: Judge Denies Bid to Delay Disclosures Hearing ---------------------------------------------------------------- The Bankruptcy Court reviewed and considered the stipulation entered into between debtor 12th & K St. Mall Partners, LLC and secured creditor Directed Capital Resources, LLC. Judge Barry Russell ordered that the Third Stipulation to continue hearing on adequacy of 12th & K St. Mall Partners' Disclosure Statement describing Chapter 11 Plan of Reorganization and related deadlines is denied. Parties shall appear in person on Oct. 25th, 2022 at 10:00 a.m in Courtroom 1668, 255 East Temple Street, Los Angeles, CA 90012. About 12th & K. St. Mall Partners 2th & K St. Mall Partners, LLC is a California limited liability company created on Nov. 12, 2003, as a real estate investment company. It currently owns and operates a mixed-use property located at 1020 12th St. Sacramento, Calif. On July 29, 2019, 2th & K St. Mall Partners transferred 8.1% equity ownership in the property to the Ziegelman Family Trust, which is not a member of the company. 2th & K St. Mall Partners sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-10061) on Jan. 6, 2022, disclosing up to $50 million in assets and up to $50 million in liabilities. Robert W. Clippinger, managing member, signed the petition. Judge Barry Russell oversees the case. Matthew D. Resnik, Esq., at Resnick Hayes Moradi, LLP serves as the Debtor's legal counsel. DMR Consulting Group and Valencia Tax Group are the Debtor's accountants. ABRAXAS PETROLEUM: Signs Exchange Agreement With Biglari -------------------------------------------------------- Abraxas Petroleum Corporation entered into an exchange agreement with Biglari Holdings Inc. Abraxas Petroleum previously disclosed that a private sale of the Company's Series A Preferred Stock, par value $0.01 per share, occurred on Sept. 14, 2022 in which Biglari, an Indiana corporation with shares registered for trading on the New York Stock Exchange, (i) purchased from AG Energy Funding, LLC ("AGEF") the 685,505 shares of Preferred Stock that the Company issued to AGEF pursuant to an exchange agreement between AGEF and the Company dated Jan. 3, 2022, and (ii) assumed all of AGEF's rights, titles, and interests in, and obligations and duties under, the Prior Agreement. Owning the Preferred Shares entitles Biglari to vote approximately 82.5% of the total voting power of the Company's outstanding capital stock. Subsequent to the private sale, Biglari proposed an exchange of the Preferred Shares for the Company's common stock, par value $0.01 per share pursuant to which the Company would issue Biglari 90,631,287 shares of Common Stock in exchange for the Preferred Shares. To issue the Stock Consideration to Biglari as contemplated by the Exchange, an amendment to the Company's Articles of Incorporation, as amended, is needed to increase the number of shares of Common Stock authorized for the Company's issuance from 20,000,000 shares to 150,000,000 shares. The proposed amendment is discussed in greater detail in the preliminary proxy statement on Form PRE 14A that the Company filed on Sept. 26, 2022, in which the Board is soliciting proxies to vote shares of Preferred Stock and Common Stock at a Special Meeting of Stockholders for the purpose of approving and adopting the Amendment. On Sept. 23, 2022, the Company's board of directors approved the Company's entry into the Exchange Agreement with Biglari that defines the terms of the Exchange. Subject to the approval of the Company's stockholders to the Amendment and the acceptance of the Amendment by the Nevada Secretary of State, the Exchange Agreement requires the Company to cause the shares of Stock Consideration to be registered in Biglari's name with the Company's transfer agent in book-entry form, and for Biglari to assign and transfer all of the Preferred Shares to the Company by delivering a Stock Power and Assignment. The closing of the Exchange will occur as soon as reasonably practicable after the conclusion of the Special Meeting or at some other time as the Company and Holdings agree. Upon consummation of the Exchange, the Company will cancel the Preferred Shares and the Preferred Stock Certificate of Designation setting forth the terms of the Series A Preferred Stock so that only Common Stock will remain outstanding. Biglari's ownership of the Stock Consideration will represent the right to vote 90% of the total voting power of the Company's outstanding Common Stock. About Abraxas San Antonio, TX-based Abraxas Petroleum Corporation -- www.abraxaspetroleum.com -- is an independent energy company primarily engaged in the acquisition, exploration, development and production of oil and gas. Abraxas Petroleum reported a net loss of $44.57 million for the year ended Dec. 31, 2021, a net loss of $184.52 million for the year ended Dec. 31, 2020, and a net loss of $65 million for the year ended Dec. 31, 2019. As of March 31, 2022, the Company had $78.13 million in total assets, $17.30 million in total liabilities, and $60.83 million in total stockholders' equity. ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, authorized All Florida Safety Institute, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to continue operating the business and pay salaries. As of the Petition Date, the Debtor was indebted to the U.S. Small Business Administration in the approximate amount of $2,066,071 and Westlake Funding Company, LLC in the approximate amount of $500,000. The Debtor's obligation is evidenced by a Promissory Note, Security Agreement, Financing Statement, and Chattel Mortgage executed on or about May 27, 2020 to USA/SBA and July 21, 2021 to Westlake, pursuant to which the Lender provided funds to Debtor. The Debtor is permitted to pay only expenses necessary for the operation of the business and not any pre-petition expenses, officer salaries, professional fees, or insiders without further order of the Court. As additional adequate protection to each Lender's interest and the estate's interest in cash collateral, the Lender is granted a replacement lien to the same nature, priority, and extent that the Lender may have had immediately prior to the date that the case was commenced nunc pro tunc to the Petition Date. Further, the Lender is granted a replacement lien and security interest on property of the bankruptcy estate to the same extent and priority as that which existed pre-petition on all of the cash accounts, accounts receivable and other assets and property acquired by the Debtor's estate or by the Debtor on or after the Petition. The replacement lien will be deemed effective, valid and perfected as of the Petition Date, without the necessity of filing with any entity of any documents or instruments otherwise required to be filed under applicable non-bankruptcy law. The Debtor is directed to make adequate protection payments: a. $6,164 per month to the SBA commencing November 1, 2022 and on the first of the month thereafter or further Court order; b. $14,934 per month to Westlake commencing November 1, 2022 and on the first of the month thereafter or further Court order; c. All other UCC-1 receivable Lenders including NewCo Capital Group, Samson, Cloudfund/Delta and IOU will receive no adequate protection at this time. The order is without prejudice to a later finding that such Lenders may be secured by receivables, personal property, inventory and/or equipment. d. The Debtor will be allowed total expenses in the amount of $300,000 between October 4 and October 14, 2022 for the ordinary expenses of operation, including payroll, officer salaries, insurance, fuel and secured creditor expenses. As additional adequate protection of the Lender's interest in the cash collateral, the Debtor will (a) maintain all necessary insurance coverage on the Lender's collateral and under no circumstances will the Debtor allow its insurance coverage to lapse, (b) continue to pay such monthly insurance payment in a timely manner, and (c) within two days of the request of the Lender, the Debtor will provide to the Lender's counsel a written statement supported by evidence of Debtor's compliance with the foregoing. The Debtor's authority to use the cash collateral will terminate immediately and upon the earlier of (a) order of the Court; (b) the conversion of the case to a Chapter 7 case or the appointment of a Chapter 11 trustee without the consent of the Lender; (c) the entry of an Order that alters the validity or priority of the replacement liens granted to the Bank; (d) the Debtor ceasing to operate all or substantially all of its business; (e) the entry of an order granting relief from the automatic stay that allows any entity to proceed against any material assets of the Debtor that constitute cash collateral; (f) the entry of an Order authorizing a security interest under section 364(c) or 364(d) of the Bankruptcy Code in the collateral to secure any credit obtained or debt incurred that would be senior to or equal to the replacement lien; or (g) the dismissal of the Chapter 11 case. A continued hearing on the matter is set for October 14 at 10 a.m. A copy of the order is available at https://bit.ly/3CoC81f from PacerMonitor.com. About All Florida Safety Institute, LLC All Florida Safety Institute, LLC offers driving lessons, driver's license testing and traffic school. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01926) on September 22, 2022. In the petition signed by Mark Allen, manager, the Debtor disclosed $2,200,185 in assets and $5,618,570 in liabilities. Judge Jacob A. Brown oversees the case. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP, is the Debtor's counsel. ALL YEAR HOLDINGS: Wins Dismissal of Weiss Lawsuit -------------------------------------------------- Pending before the Court are two motions: (1) the Defendants All Year Holdings Limited, the debtor in the main Chapter 11 case, along with its wholly-owned subsidiary YG WV LLC and Wythe Berry Member LLC have moved to dismiss all claims in the amended complaint filed by the Plaintiff Zelig Weiss; and (2) Zelig Weiss has also moved for partial summary judgment on Claim III of its Complaint in opposition to the Motion to Dismiss. The U.S. Bankruptcy Court for the Southern District of New York grants the Defendants' Motion to Dismiss the Plaintiff's Complaint. Accordingly, the Court denies the Plaintiff's Motion for Partial Summary Judgment on Claim III. This action relates to a dispute between individuals and entities with direct and indirect ownership interests in the William Vale, a luxury hotel property and community space in Brooklyn (the "WV Complex"). The Plaintiff Zelig Weiss originally conceived of and developed the WV Complex. Weiss invited Yoel Goldman (a former principal of the Debtor) to join him in the venture, and the two became co-owners of Wythe Berry LLC ("WB LLC"). WB LLC operated and held title to the WV Complex. Weiss and Goldman each owned 50% of WB LLC. Weiss served as the managing member. According to Weiss, Goldman's only role in WB LLC was to provide and/or arrange for its funding. In approximately September 2016, WB LLC required a refinancing transaction as the WV Complex finished construction, and Goldman proposed raising the funds needed by issuing bonds on the Israeli market—it entailed using and/or creating additional entities to execute the refinancing transaction. Weiss alleges that the Debtor then would cause the proceeds of the bond issuance to be used to pay off/refinance an existing mortgage on the WV Complex and debts of WB LLC. Next, the proposed transaction involved transferring title of the WV Complex to a new entity, Wythe Berry Fee Owner, LLC ("Fee Owner"), with Fee Owner leasing the WV Complex back to WB LLC. Finally, Member LLC was created to become the exclusive owner of Fee Owner, with Weiss and Goldman each owning 50% of Member LLC, either individually or through other entities. Claim I of the Complaint seeks a declaratory judgment that any direct or indirect transfer of all or any part of the Debtor's membership interests in YGWV without Weiss' express consent is prohibited by the Member LLC Agreement and shall be null and void. Weiss argues that the Debtor is bound by the Member LLC Agreement for two reasons: (1) YGWV is the Debtor's alter ego; and (2) the Debtor—through its principal at the time, Goldman—extensively negotiated the Member LLC Agreement as Weiss' true counterparty and, thereby, manifested the Debtor's intent to be bound by the agreement. The Court points out that the Debtor is not a signatory to the Member LLC Agreement. In addition, the Court finds that Weiss failed to state a claim under the alter ego theory and "intent to be bound" by the Agreement theory. As a result, Claim I must be dismissed. For Claim II, Weiss seeks a declaratory judgment that the Defendants are violating the covenant of good faith and fair dealing. This claim for breach is brought against both YGWV directly, as well as the Debtor, under Weiss' theories for alter ego and intent to be bound. However, Weiss fails to state a claim for the breach of implied covenant against both parties. The Court posits that with respect to the Debtor, Weiss cannot assert a claim for a breach of the implied covenant because the Debtor is not a party to the contract. Also, Weiss fails to make out a claim for breach of the implied covenant against YGWV, as the agreement in question already contains explicit (and no implicit) provisions that describe YGWV's obligations with respect to assignments of YGWV's interests, and only speaks to limitations on YGWV's—not its parent organization's—ability to transfer its interest. A change in the ownership interests on YGWV's side of the LLC was clearly foreseen by the parties. Weiss' argument for Claim III proceeds in two steps: first, Weiss argues that when the Debtor filed for bankruptcy, its membership in YGWV was terminated by operation of two independent sections of the New York LLC Law; and second, because the Debtor was the sole Member of YGWV, the termination of the Debtor's membership necessarily also caused the dissolution of YGWV under New York LLC Law. The Court finds Weiss' legal theories regarding the termination of All Year's membership under the first step incorrect, and thus, it fails to state a claim under Claim III. The Court explains that the Debtor's membership was not terminated by New York LLC Law because the obvious purpose of the statue is to provide a procedure to avoid dissolution if termination of a member occurs. The Court further explains that the events in New York LLC Law do not work an automatic termination of a member's interest, but instead, the statute empowers the LLC to define its own dissolution events—which the YGWV LLC Agreement does. In this case, bankruptcy is not a dissolution event in the Agreement. Claims IV and V of the Amended Complaint seek injunctive relief but are predicated on the same bases as Claims I through III for declaratory relief. Specifically, Claim IV seeks to enjoin Defendants from transferring All Year's interests in YGWV and Claim V seeks to enjoin All Year and YGWV from acting as managers of Member LLC. Because Weiss' other claims that support the basis for injunctive relief fail, the Court must dismiss the claims for permanent injunctions since it cannot stand. A full-text copy of the Memorandum Opinion and Order dated Oct. 4, 2022, is available at https://tinyurl.com/mva55fhh from Leagle.com. About All Year Holdings Limited All Year Holdings Limited is a real estate development company founded by American real estate developer Yoel Goldman. It operates as a holding company, which, through its direct and indirect subsidiaries, focuses on the development, construction, acquisition, leasing and management of residential and commercial income producing properties in Brooklyn, N.Y. The company's portfolio includes 1,648 residential units and 69 commercial units in Bushwick, Williamsburg, and Bedford-Stuyvesant. All Year Holdings sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 21-12051) on Dec. 14, 2021. At the time of the filing, the Debtor listed $1 billion to $10 billion in assets and liabilities. Judge Martin Glenn oversees the case. Weil, Gotshal & Manges LLP, led by Matthew Paul Goren, Esq., is the Debtor's bankruptcy counsel while Koffsky Schwalb, LLC and Bartov & Co. serve as special counsels. Donlin Recano & Company, Inc. Is the Debtor's administrative agent. On Dec. 16, 2021, the Debtor filed an application under the laws of the British Virgin Islands with the Eastern Caribbean Supreme Court in the High Court of Justice, Commercial Division Virgin Islands (the "BVI Court") seeking the appointment of Paul Pretlove and Charlotte Caulfield of Kalo (BVI) Limited as joint provisional liquidators under the applicable provisions of the BVI Insolvency Act 2003 (the "BVI Proceeding"). The BVI Court entered an order appointing the JPLs on December 20, 2021 (the "JPL Order"). In addition, on April 14, 2022, with the consent of the JPLs and the approval of the BVI Court, the Debtor commenced a proceeding in the District Court of Tel Aviv Yafo for recognition of the Chapter 11 Case as a foreign main proceeding under the applicable provisions of Chapter I, Part C of the Insolvency and Rehabilitation Law 5778-2018. The Israeli Court entered an order recognizing the Chapter 11 Case on May 4, 2022. ALTERA INFRASTRUCTURE: $70 Million DIP Loan Wins Final 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 a final 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, half of which was made available upon entry of the Interim Order; plus * a roll-up and conversion into DIP Loans of $20 million of the outstanding principal balance under a Prepetition IntermediateCo Credit Agreement, upon the entry of the Interim Order and as ratified by the Final Order. Approximately $32 million is outstanding under an IntermediateCo Credit Agreement as of the Petition Date. The Debtors may borrow the remaining $25 million of DIP Loans, which Final Draw will be, subject to the terms and conditions of the DIP Credit Agreement and the Final Order, available and funded to an Escrow Account within five Business Days following the entry of the Final Order. The Debtors are authorized and empowered on a final basis to incur and to perform the DIP Obligations in accordance with, and subject to, the terms of the Interim Order, the Final Order, and the DIP Documents, and to deliver all instruments, certificates, agreements, and documents that may be required or necessary for the performance by the Debtors under the DIP Facility and the creation and perfection of the DIP Lien. 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/3fXvCHk from PacerMonitor.com. The budget provides for total cash flow, on a weekly basis, as follows: $0.2 million for the week ending September 18, 2022; $6.7 million for the week ending September 25, 2022; $5.8 million for the week ending September 30, 2022; $2.0 million for the week ending October 9, 2022; $6.4 million for the week ending October 16, 2022; $2.6 million for the week ending October 23, 2022; $1.1 million for the week ending October 30, 2022; $3.2 million for the week ending November 6, 2022; $0.6 million for the week ending November 13, 2022; $5.4 million for the week ending November 20, 2022; $0.8 million for the week ending November 27, 2022; $9.1 million for the week ending December 4, 2022; and $27.6 million for the week ending December 11, 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. Covington & Burling LLP serves as counsel to each of the Prepetition IntermediateCo Agents. Clifford Chance LLP serves as counsel to the Prepetition Gina Krog Lenders. Bae, Kim, & Lee LLC and Yulchon, LLC, serve as counsel to Export-Import Bank of Korea and Korea Trade Insurance Corporation. AMERICAN FLAMINGO: Member to Fund Chapter 11 Plan ------------------------------------------------- American Flamingo, L.L.C, submitted a Plan and a Disclosure Statement on Sept. 30, 2022. While operating as a Debtor in possession under Chapter 11 Case, Debtor's member, Ebury RE, LLC has begun to foreclose and/or sell real estate properties in the mainland and is generating income, part of it is to be used for additional capitalization of the Debtor so that fund be available to fund the Chapter 11 Plan. The Class 1 secured claims filed by Luis A. Gutierrez Negrón & Carmen M. Bermudez Rivera in the amount of $638,596 will be paid in full with 5% interest in 5 years. Class 2 Priority Unsecured Claims total $14,075. Claims filed by PR Treasury Department. The creditor will receive monthly payment of $268.85 beginning on Dec. 2022 and ending on Nov. 2027. Class 2 is unimpaired. There are no general unsecured creditors in this case. Total monthly payments proposed under the Plan amount to $4,268 beginning in December 2022. The sources of funds for payments are rent income and debtor's member, Ebury RE, LLC. Objections to the Disclosure Statement or to the confirmation of the Plan must be filed with the Court by Oct. 30, 2022, unless the period to object is extended by the Court. Attorney for the Debtor: Hector Eduardo Pedrosa-Luna, Esq. P.O. Box 9023963 San Juan, PR 00902-3963 Tel: (787) 756-7880 Tel: (787) 920-7983 Fax: (787) 754-1109 E-mail: hectorpedrosa@gmail.com A copy of the Disclosure Statement dated September 30, 2022, is available at https://bit.ly/3T61PdV from PacerMonitor.com. About American Flamingo American Flamingo LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B). It is engaged in the business of leasing office spaces in San Juan, Puerto Rico. At the present time, American Flamingo owns an office located at 644 Fernandez Juncos Avenue, Suite 203, San Juan, PR 00907. American Flamingo sought Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 22-01290) on May 5, 2022. In the petition filed by John Hanratty, as member, American Flamingo estimated assets between $500,000 and $1 million and liabilities between $500,000 and $1 million. Hector Eduardo Pedrosa Luna, of The Law Offices of Hector Eduardo Pedrosa Luna, is the Debtor's counsel. ARCHDIOCESE OF AGANA: Judge Confirms Bankruptcy Exit Plan --------------------------------------------------------- Haidee Eugenio Gilbert of Pacific Daily News reports that U.S. Bankruptcy Judge Frances Tydingco-Gatewood confirmed the Archdiocese of Agana's bankruptcy reorganization plan that includes a $34 million to $101 million settlement with more than 270 survivors of clergy sexual assaults dating as far back as the 1950s. "Today's a day of mixed feelings, a day of reckoning," clergy abuse survivor Leo Tudela, 79, told the court, moments after the judge announced her decision on the second day of what was originally planned to be a five-day hearing. Archdiocese attorney Ford Elsaesser later told Pacific Daily News that when all money and assets are transferred to the survivors' trust, which could be in the next 45 to 60 days, the effective date of the plan takes effect. The archdiocese will no longer be in bankruptcy, and an initial round of payments to survivors would follow in two to four months. Of the up to $101 million in settlement listed in the plan, less than $50 million of that is so far guaranteed, mostly from insurance companies, cash contributions from the archdiocese and real estate properties that will be sold. The judge's confirmation of the plan brings to a close a nearly four-year bankruptcy that was filed in January 2019, triggered by allegations of sexual abuses by priests and others associated with the Catholic Church. About Agana Archdiocese The Roman Catholic Archdiocese of Agana is an ecclesiastical territory or diocese of the Catholic Church in the United States that comprises the United States dependency of Guam. The Roman Catholic Archdiocese of Agana sought Chapter 11 protection (Bankr. D. Guam Case No. 19-00001) on Jan. 9, 2019. In the petition signed by Most Rev. Michael Jude Byrnes, Coadjutor Archbishop of Agana, it listed $22.96 million in assets, with $45.66 million in liabilities. The case is handled by Honorable Judge Frances M Tydingco-Gatewood. Edwin H. Caldie, of Stinson Leonard Street LLP, is the Debtor's counsel. AXYEHHO CORP: Unsecureds Owed $4K Will be Paid in Full ------------------------------------------------------ AXYEHHO Corporation filed a Plan of Liquidation and a corresponding Disclosure Statement. AXYEHHO is an entity that holds title to a single parcel of residential real property located at 2026 NE 32nd Avenue, Fort Lauderdale, FL 33305. The Debtor will sell, transfer and otherwise convey all of its property, both real and personal, including all tangible and intangible interest. The extent of these interests is its real Property. Under the Plan, Class 2 General Unsecured Claims are impaired. General unsecured creditors, whose claims are not related to the Real Property, will be paid in full upon the Effective Date of the Plan. General Unsecured Creditors whose claims are not related to the Real Property total $4,462, and will be paid without interest. Class 3: Claims of Real Property Related Unsecured Creditors. Daniil Ageev and Roman Moor are the only Real Property related unsecured creditors. Each of these individuals lent the DIP funds to purchase the Real Property, but neither perfected any security interest in the Real Property. These claimants shall have claims in their allowed amounts, but shall receive no distribution in this case. In the event either of these creditors, or any other party in interest with knowledge of these proceedings and/or the criminal proceeding who wishes to assert a claim to any balance of the Real Property sale proceeds, must do so in connection with Case No. 1:21CR76-JJM-LDA, in the United States District Court, District of Rhode Island, or any related more specific forfeiture proceeding. This Class is impaired. Either (i) each unsecured creditor in a non-accepting impaired class receives or retains under the Plan property having a present value equal to the amount of its allowed claim or (ii) the holders of claims and interests that are junior to the claims of the dissenting class will not receive or retain any property under the Plan. As there are minimal funds for distribution to the general unsecured creditors, the holders of all senior, non-Real Property related unsecured claims and interests will receive full payment. No junior claims will receive or retain any property under the Plan, but will retain their rights to assert a claim in the criminal/forfeiture proceeding. The Debtor projects that the liquidation of its assets pursuant to the Plan will generate sufficient cash flow to fund the Plan of Liquidation. A copy of the Disclosure Statement dated Sept. 30, 2022, is available at https://bit.ly/3UWDZme from PacerMonitor.com. About AXYEHHO Corporation AXYEHHO Corporation is engaged in activities related to real estate. AXYEHHO Corporation filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14717) on June 17, 2022. The petition was signed by Ekaterina Pushkarshkaya as president. At the time of filing, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Judge Scott M. Grossman presides over the case. Stephen Breuer, Esq., at Breuer Law, PLLC, is the Debtor's counsel. AYTU BIOPHARMA: Stockholders Approve Reverse Common Stock Split --------------------------------------------------------------- A special meeting of stockholders for Aytu BioPharma, Inc. was held on Oct. 5, 2022, at which the stockholders: 1. approved an amendment to the Company's Amended and Restated Certificate of Incorporation, as amended, authorizing a reverse stock split of the issued and outstanding shares of the Company's common stock, at a ratio of any whole number up to 1-for-20, such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of the Company's Board of Directors any time before Oct. 4, 2023; 2. approved a proposal to adjourn the Special Meeting, if necessary, to solicit more votes in favor of the reverse stock split proposal. The timing of any reverse stock split that the Board of Directors may approve is uncertain and depends on a number of factors including the future price of the Company's common stock and whether the Company obtains additional time from the Nasdaq Stock Market, LLC to regain compliance with the minimum bid price requirement. About Aytu BioPharma Englewood, Colorado-based Aytu BioPharma, Inc., formerly known as Aytu BioScience, Inc. -- http://www.aytubio.com-- is a specialty pharmaceutical company with a growing commercial portfolio of prescription therapeutics and consumer health products. The company's primary prescription products treat attention deficit hyperactivity disorder (ADHD) and other common pediatric conditions. Aytu markets ADHD products Adzenys XR-ODT (amphetamine) extended-release orally disintegrating tablets, Cotempla XR-ODT (methylphenidate) extended-release orally disintegrating tablets, and Adzenys-ER (amphetamine) extended-release oral suspension. Aytu Biopharma reported a net loss of $110.17 million for the year ended June 30, 2022, compared to a net loss of $58.29 million for the year ended June 30, 2021. As of June 30, 2022, the Company had $137.62 million in total assets, $91.53 million in total liabilities, and $46.09 million in total stockholders' equity. Denver, Colorado-based Plante & Moran, PLLC, the Company's auditor since 2015, issued a "going concern" qualification in its report dated Sept. 27, 2022, citing that the Company's operations have historically consumed cash and are expected to continue to consume cash, which raises substantial doubt about the Company's ability to continue as a going concern. BARNES ENTERPRISES: Starts Subchapter V Case -------------------------------------------- Barnes Enterprises LLP filed for chapter 11 protection in the Middle District of Georgia without stating a reason. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, Barnes Enterprises estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors William S. Barnes, M.D., owns 92.8% of the business while Dr. Mikell C. Peed owns the remaining 7.2%. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 14, 2022, at 10:30 AM at U.S. Trustee Teleconference. Proofs of claim are due by Dec. 12, 2022. About Barnes Enterprises Barnes Enterprises LLP is a financial services company. Barnes Enterprises LLP filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 22-bk-51155) on Oct. 3, 2022. In the petition filed by William S. Barnes, M.D., as managing partner, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. Jenny Martin Walker has been appointed as Subchapter V trustee. The Debtor is represented by Matthew S. Cathey of Stone & Baxter LLP. BERWICK CLINIC: PCO Reports Declining Patient Care Quality ---------------------------------------------------------- Deborah Fish, the patient care ombudsman appointed in Berwick Clinic Company, LLC's Chapter 11 case, filed with the U.S. Bankruptcy Court for the Eastern District of Michigan a third report regarding the quality of patient care provided at the company's vascular clinic. The vascular clinic, Berwick's remaining clinic, continues to deliver the same quality of care as it did prior to the company's Chapter 11 filing without any interruption in care or of service, according to the ombudsman report, which covers the period from Sept. 14 to 26. The clinic is staffed by Dr. John Guerriero D.O. and his team who continue to provide services to the former Berwick patients by contacting patients with pending lab results to provide the results and order follow up diagnostics, if necessary; and by filling all non-controlled substance medications for the clinic patients, 18 and older. Dr. Guerriero and the clinic staff provide services at 1918 W. Front St. Berwick, Pa. Meanwhile, the ombudsman reported that the quality of care provided to patients of the closed Berwick clinics declined significantly or was otherwise materially compromised since the company's Chapter 11 filing. A copy of the ombudsman report is available for free at https://bit.ly/3M9ku60 from PacerMonitor.com. The ombudsman may be reached at: Deborah L. Fish, Esq. Allard & Fish, P.C. 1001 Woodward Avenue, Suite 850 Detroit, MI 48226 Telephone: 313-309-3171 Email: dfish@allardfishpc.com About Berwick Clinic Company Berwick Clinic Company, LLC operates a health care business. The company is based in Bloomfield Hills, Mich. Berwick Clinic filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 22 45589) on July 18, 2022, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Judge Lisa S. Gretchko oversees the case. The Debtor is represented by Robert Bassel, Esq., a practicing attorney in Clinton, Mich. Deborah Fish, Esq., at Allard & Fish, P.C., is the patient care ombudsman appointed in the Debtor's Chapter 11 case. BERWICK HOSPITAL: Starts Subchapter V Case ------------------------------------------ Berwick Hospital Company LLC filed for chapter 11 protection in the Eastern District of Michigan. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, Berwick Hospital Company LLC estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 7, 2022, at 2:00 PM By Telephone. Proofs of claim are due by Feb. 6, 2023. About Berwick Hospital Company LLC Berwick Hospital Company LLC is a community-based medical center serving the health care needs of the people of the North Central Pennsylvania. Berwick Hospital Company LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code on Sept. 30, 2022. In the petition filed by Priyam Sharma, as principal, the Debtor reported assets and liabilities between $1 million and $10 million each. Richardo I. Kilpatrick has been appointed as Subchapter V trustee. Deborah L. Fish has been named as patient care ombudsman. The Debtor is represented by Robert N. Bassel. BERWICK HOSPITAL: UST Appoints Deborah Fish as PCO -------------------------------------------------- Andrew Vara, the U.S. Trustee for Regions 3 and 9, appointed Deborah Fish, Esq., as patient care ombudsman for Berwick Hospital Company, LLC. Section 333(b) of the Bankruptcy Code provides that the patient care ombudsman shall: * monitor the quality of patient care provided to patients of a debtor, to the extent necessary under the circumstances, including interviewing patients and physicians; * not later than 60 days after Oct. 3, and not less frequently than at 60-day intervals thereafter, report to the court after notice to the parties in interest, at a hearing or in writing, regarding the quality of patient care provided to patients of the debtor; and * if such ombudsman determines that the quality of patient care provided is declining significantly or is otherwise being materially compromised, file with the court a motion or a written report, with notice to the parties in interest immediately upon making such determination. Ms. Fish, an attorney at Allard & Fish, P.C., disclosed in a court filing that she is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. A copy of the appointment notice is available for free at https://bit.ly/3V7S9Bd from PacerMonitor.com. The ombudsman may be reached at: Deborah L. Fish, Esq. Allard & Fish, P.C. 1001 Woodward Avenue, Suite 850 Detroit, MI 48226 Telephone: 313-309-3171 Email: dfish@allardfishpc.com About Berwick Hospital Berwick Hospital Company, LLC is a Bloomfield Hills, Mich.-based company, which operates in the health care industry. Berwick filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-47699) on Sept. 30, 2022, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Richardo I. Kilpatrick has been appointed as Subchapter V trustee. Robert Bassel, Esq., serves as the Debtor's legal counsel. Deborah Fish, Esq., at Allard & Fish, P.C., is the patient care ombudsman appointed in the Debtor's Chapter 11 case. BITNILE HOLDINGS: Holds 9.7% Equity Stake in Connexa Sports ----------------------------------------------------------- In an amended Schedule 13D filed with the Securities and Exchange Commission, BitNile Holdings, Inc., Ault Lending, LLC, and Milton C. Ault, III disclosed that as of Sept. 29, 2022, they beneficially own 1,229,000 shares of common stock of Connexa Sports Technologies Inc., representing 9.7 percent of the shares outstanding. The percentage of Shares reported owned by Reporting Persons is based upon 12,663,213 Shares outstanding, which is the total number of Shares outstanding as of June 15, 2022, upon the closing of the underwritten public offering, as reported in the Issuer's prospectus on Form 424(b)(4) filed with the Securities and Exchange Commission on June 16, 2022. The Shares purchased by Ault Lending, LLC (formerly, Digital Power Lending, LLC) were purchased with working capital in open market purchases. The Shares transacted by Ault Lending, LLC as reported on this Amendment No. 2 decreased Ault Lending, LLC's aggregate expenditures by $104,114.59. Consequently, as of Sept. 30, 2022 (the date of this Amendment No. 2), Ault Lending, LLC has expended an aggregate of $3,957,086.08 for the purchase of the Shares. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/896493/000121465922011770/b930220sc13da2.htm About BitNile Holdings BitNile Holdings, Inc. (formerly known as Ault Global Holdings, Inc.) -- www.BitNile.com -- is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which it mines Bitcoin and provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, automotive, telecommunications, medical/biopharma, and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. BitNile's headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV. BitNile reported a net loss of $23.97 million for the year ended Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec. 31, 2020, a net loss of $32.94 million for the year ended Dec. 31, 2019, and a net loss of $32.98 million for the year ended Dec. 31, 2018. As of June 30, 2022, the Company had $596.27 million in total assets, $133.98 million in total liabilities, $116.89 million in redeemable noncontrolling interests in equity of subsidiaries, and $345.40 million in total stockholders' equity. BITNILE HOLDINGS: Lowers Stake in SilverSun Technologies to 3.3% ---------------------------------------------------------------- BitNile Holdings, Inc., Ault Lending, LLC, and Milton C. Ault, III disclosed in a Schedule 13D/A filed with the Securities and Exchange Commission that as of Sept. 29, 2022, they beneficially own 170,000 shares of common stock of SilverSun Technologies, Inc., representing 3.31% of the shares outstanding. The aggregate percentage of Shares reported owned by the Reporting Persons is based upon 5,136,177 Shares outstanding, which is the total number of Shares outstanding as of Aug. 11, 2022, as reported in the Issuer's Quarterly Report on Form 10-Q filed with the SEC on Aug. 12, 2022. The Shares purchased by Ault Lending were purchased with working capital in open market purchases. The Shares transacted by Ault Lending, LLC as reported on this Amendment No. 3 decreased Ault Lending, LLC's aggregate expenditures by $488,238.45. Consequently, as of Sept. 30, 2022 (the date of this Amendment No. 3), Ault Lending, LLC has expended an aggregate of $915,666.38 for the purchase of the Shares. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/896493/000121465922011771/g930220sc13da3.htm About BitNile Holdings BitNile Holdings, Inc. (formerly known as Ault Global Holdings, Inc.) -- www.BitNile.com -- is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which it mines Bitcoin and provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, automotive, telecommunications, medical/biopharma, and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. BitNile's headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV. BitNile reported a net loss of $23.97 million for the year ended Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec. 31, 2020, a net loss of $32.94 million for the year ended Dec. 31, 2019, and a net loss of $32.98 million for the year ended Dec. 31, 2018. As of June 30, 2022, the Company had $596.27 million in total assets, $133.98 million in total liabilities, $116.89 million in redeemable noncontrolling interests in equity of subsidiaries, and $345.40 million in total stockholders' equity. BRICKCHURCH ENTERPRISES: Unsecureds Owed $10M Unimpaired in Plan ---------------------------------------------------------------- Brickchurch Enterprises, Inc., submitted a Plan and a Disclosure Statement. The Plan provides for exit financing ("Exit Financing") in the amount of $52 million and the potential orderly liquidation of the real property of the Debtor through at a private sale, which shall be subject to higher and better offers, following a marketed sale process for the Debtor's real property and improvements located at 366 Gin Lane, Southampton, New York (Block 01.00; Lot 017.014) (the "366 Gin"). Proceeds generated from the Exit Financing, will be utilized to fund distributions under the Plan to Creditors of the Debtor's estate holding Allowed Claims. Any Successful Purchaser, or its nominee, shall take title to the Property, free and clear of all liens, except that the Successful Purchaser may elect to take title subject to the existing Mortgage, provided the Successful Purchaser and the existing mortgagee agree to same. Under the Plan, Class 5 General Unsecured Claims are estimated to total $10,725,000 (final amount to TBD and is dependent on waiver of Louise Blouin's over $10 million unsecured claim). Each holder of an Allowed Class 5 General Unsecured Claim shall receive from the Disbursing Agent, unless otherwise agreed in writing between the Disbursing Agent and the holder of such Claim, payment in full of its Allowed Claim. Class 5 is unimpaired. Counsel for Brickchurch Enterprises, Inc: Camisha L. Simmons, Esq. SIMMONS LEGAL PLLC 1330 Avenue of the Americas, Suite 23A New York, NY 10019 Tel: (212) 653.0667 (New York) Tel: (214) 643.6192 (Dallas) E-mail: camisha@simmonslegal.solutions A copy of the Disclosure Statement dated September 30, 2022, is available at https://bit.ly/3y3LI8v from PacerMonitor.com. About Brickchurch Enterprises Brickchurch Enterprises Inc. is the fee simple owner of a residential single-family guest house which is part of a four-acre residential ocean-front estate property compound. The property, which is located at 366 Gin Lane Southampton, N.Y., has an appraised value of $63 million. Brickchurch sought Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 22-70914) on May 1, 2022, listing $50 million to $100 million in both assets and liabilities. Louise Blouin, Brickchurch director, signed the petition. The case is assigned to Judge Alan S. Trust. Craig D. Robins, Esq., at the Law Offices of Craig D. Robins, is the Debtor's counsel. CELSIUS NETWORK: Co-Founder Daniel Leon Resigns ----------------------------------------------- Olga Kharif of Bloomberg News reports that Celsius Network Ltd., the crypto lender that filed for bankruptcy, said that co-founder Daniel Leon resigned this first week of October 2022. "We confirm that Daniel Leon resigned from his position at Celsius and is no longer part of the organization," the company said in a statement Tuesday to Bloomberg News. Fellow co-founder and Celsius chief executive officer, Alex Mashinsky earlier stepped down in September. The once high-lying crypto lender is going through bankruptcy after having left thousands of investors in a lurch after making risky bets before the collapse of cryptocurrency prices. 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. 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: Court OKs Appointment of Shoba Pillay as Examiner ------------------------------------------------------------------ Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York approved the appointment by William Harrington, the U.S. Trustee for Region 2, of Shoba Pillay, Esq., to serve as examiner in the Chapter 11 cases of Celsius Network LLC and its affiliates. Ms. Pillay is a partner at Jenner & Block, LLP, a law firm in Chicago. Prior to joining the firm in 2021, Ms. Pillay was an assistant U.S. attorney for the Department of Justice for more than 11 years. In court papers, Ms. Pillay disclosed that she is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The examiner can be reached at: Shoba Pillay, Esq. Jenner & Block, LLP 353 N. Clark Street Chicago, IL 60654-3456 Phone: 312 222-9350/312 923-2605 Fax: 312 527-0484 Email: CelsiusExaminer@jenner.com 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. 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: DOJ Intends to Stop Motion to Reopen Withdrawals ----------------------------------------------------------------- Anthonia Isichei of CryptoPotato reports that a United States Trustee for the DOJ, William Harrington, on Friday (September 30, 2022), filed an objection, asking the bankruptcy court to deny Celsius' motions to reopen withdrawals for certain creditors and sell its stablecoin holdings. As previously reported by CryptoPotato, the firm filed for the resumption of withdrawals for customers whose assets are held in its Custody Program and Withhold Account. The US trustee described Celsius' motions as "premature," stating that the company is looking to "impulsively distribute funds" without a comprehensive knowledge of its crypto holding, the relationship between the company's balance sheet, and crypto deposited by various creditors. Furthermore, the filing argued that the lender is seeking to liquidate its stablecoin holdings without providing robust information concerning "ownership, segregation, or the impact of such sale on later distributions to creditors who may have stablecoins on deposit with the Debtors." An excerpt from the filing said: "Any distribution or sale at this juncture could inadvertently impact or limit distributions to other creditors in this case. The interested parties, the United States Trustee, and the Court require additional information to assess what impact such a distribution or sale would have." The US trustee also said that a detailed examiner's report should be submitted before any distribution or sale occurs. On September 29, 2022 Shelby Pillay was appointed an examiner. Two days before, Alex Mashinsky resigned as Celsius CEO. 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. 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 On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. On July 29, 2022, the committee voted to retain White & Case as its counsel. The committee tapped Elementus as blockchain forensics advisor, M3 as its financial advisor, and Perella Weinberg Partners LP as its investment banker. CELSIUS NETWORK: Files Document to Remind Borrowers to Repay Loans ------------------------------------------------------------------ JD Alois of Crowdfund Insider reports that Celsius Network, a crypto yield and lending platform that is going through bankruptcy proceedings, has filed a document with the Bankruptcy Court reminding borrowers they should repay outstanding loans but these outstanding debts and repayments are not currently being enforced. Celsius tweeted that the filed document is to answer questions for account holders with outstanding loans. The document states: "As a general matter, an individual borrower's (individually, a "Borrower" and collectively, "Borrowers") obligation to repay maturing loans on the Debtors' platform remains in force during these chapter 11 cases. During the course of these chapter 11 cases, however, the Debtors are not seeking to enforce payment obligations on account of outstanding loans, borrowers do not need to repay such loans during these chapter 11 cases, and no interest or penalties will be assessed post-maturity." Celsius noted that no interest nor penalties are being assessed post loan maturity. Some followers questioned how the collateral for loans will be impacted. Celsius is scheduled to have several court hearings later this month as the Chapter 11 proceedings move forward. 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. 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 On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. On July 29, 2022, the committee voted to retain White & Case as its counsel. The committee tapped Elementus as blockchain forensics advisor, M3 as its financial advisor, and Perella Weinberg Partners LP as its investment banker. CELSIUS NETWORK: Founder Withdrew $10M Prior to Chapter 11 Filing ----------------------------------------------------------------- Jesse Coghlan of Cointelegraph reports that Celsius Network founder and former CEO Alex Mashinsky allegedly withdrew $10 million from the crypto lending platform just weeks before the company froze customer funds and declared bankruptcy. The withdrawal was cited by sources from the Financial Times who said Mashinsky withdrew the funds in "mid to late May" prior to the June 12 pause on all withdraws. Celsius was a popular crypto-lending platform with 1.7 million customers and $25 billion in assets under management but the prevailing poor crypto market conditions eventually led the company to a $2.85 billion gap in its balance sheet. This led Celsius to pause customer withdraws in June before filing for Chapter 11 bankruptcy in July, with Mashinksy attempting to restructure and revive the company to be based around crypto custody services. The withdrawal raises questions about whether Mashinsky knew ahead of time that the company would be freezing customer funds and withdrawals. However, a spokesperson for Celsius told FT that the founder withdrew cryptocurrency at the time to pay state and federal taxes. "In the nine months leading up to that withdrawal, he consistently deposited cryptocurrency in amounts that totaled what he withdrew in May," the spokesperson said, adding Mashinsky and his family still had $44 million worth of crypto frozen on the platform. Meanwhile, sources told the FT the withdrawal was pre-planned in line with Mashinsky's estate planning. Roughly $8 million worth of assets withdrawn were used to pay income taxes arising from the yield the assets produced, and the remaining $2 million was made up of the platform’s native token Celsius (CEL). The questions will likely be answered when the transactions in question will be presented by Celsius in court in the next few days as part of disclosures by the crypto-lender regarding its finances. There’s also a possibility Mashinsky could be forced to return the $10 million as in the 90 days leading up to a bankruptcy filing, payments by a company can be reversed to benefit creditors under United States laws. Mashinsky resigned as CEO of Celsius on Sept. 27 saying his role "has become an increasing distraction" but said he would continue to focus on helping find a plan to return funds to creditors. 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. 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 On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. On July 29, 2022, the committee voted to retain White & Case as its counsel. The committee tapped Elementus as blockchain forensics advisor, M3 as its financial advisor, and Perella Weinberg Partners LP as its investment banker. CFN ENTERPRISES: Agrees to Terminate $726,700 Notes --------------------------------------------------- CFN Enterprises Inc. agreed with Ezra Chehebar and the Isaac Shehebar 2008 AIJJ Grantor Retained Annuity Trust, the holders of the Company's 18% promissory notes issued on April 8, 2022 representing an aggregate principal balance plus accrued interest of $726,700, to terminate the Notes and in consideration of the termination to issue to the holders an aggregate of 2,906,800 restricted shares of common stock of the Company. The shares were issued under the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as not involving a public offering. About CFN CFN Enterprises Inc. owns and operates CNP Operating, a cannabidiol, or CBD, manufacturer vertically integrated with a 360 degree approach to the processing of high quality CBD products designed for growers, pharmaceutical, wellness providers, and retailers' needs, and a cannabis industry focused sponsored content and marketing business. The Company's ongoing operations currently consist primarily of CNP Operating and the CFN Business and it will continue to pursue strategic transactions and opportunities. The Company is currently in the process of launching an e-commerce network focused on the sale of general wellness CBD products. CFN Enterprises reported a net loss of $12.20 million for the year ended Dec. 31, 2021, compared to a net loss of $1.42 million for the year ended Dec. 31, 2020. As of June 30, 2022, the Company had $6.47 million in total assets, $9.06 million in total liabilities, and a total stockholders' deficit of $2.59 million. New York, NY-based RBSM LLP, the Company's auditor since 2012, issued a "going concern" qualification in its report dated May 13, 2022, citing that the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. This raises substantial doubt about the Company's ability to continue as a going concern. CHARGING GRIZZLY: Case Summary & One Unsecured Creditor ------------------------------------------------------- Debtor: Charging Grizzly, LLC 13821 Technology Drive, Suite A Oklahoma City, OK 73134 Business Description: Charging Grizzly owns a 9.0% interest in Red Hawk SWD 1-17 Well located in the SE4/SW/4 of Section 17, Township 19N, Range 7 WIM, Kingfisher County, Oklahoma. The Debtor also has 9.0% interest in Red Hawk SWD 2-17 a/k/a 2-17H Well located in the SE4/SW/4 of Section 17, Township 19N, Range 7 WIM, Kingfisher County, Oklahoma. The current value of the Debtor's interest is $841,812. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Western District of Oklahoma Case No.: 22-12334 Debtor's Counsel: Stephen J. Moriarty, Esq. FELLERS, SNIDER ET AL 100 N. Broadway, Ste 1700 Oklahoma City, OK 73102-8820 Tel: 405-232-0621 Fax: 405-232-9659 Email: smoriarty@fellerssnider.com Total Assets: $1,433,124 Total Liabilities: $2,705,629 The petition was signed by Charles V. Long, Jr. as managing member/owner. The Debtor listed First National Bank & Trust, located at 130 E, MacArthur Shawnee, OK 74804, as its only unsecured creditor holding a claim of $1.86 million. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/TPUZGXQ/Charging_Grizzly_LLC__okwbke-22-12334__0001.0.pdf?mcid=tGE4TAMA COLLEGE OF SAINT ROSE: Fitch Alters Outlook on 'BB' IDR to Neg. --------------------------------------------------------------- Fitch Ratings has affirmed the 'BB' Issuer Default Rating (IDR) and the 'BB' bond rating on the City of Albany Capital Resource Corporation bonds issued on behalf of the College of Saint Rose (the College, or CSR): - $48,150,000 revenue refunding bonds, series 2021. The Rating Outlook has been revised to Negative. SECURITY The series 2021 bonds are secured by a gross revenue pledge, a mortgage on selected campus facilities appraised at $78 million in September 2021, and a bond-funded debt service reserve. ANALYTICAL CONCLUSION The affirmation of CSR's 'BB' IDR and bond ratings and Outlook revision to Negative reflect sizeable, multi-year declines in the College's already limited student enrollment base, which Fitch expects will persist into fall 2022. The anticipated contraction in enrollment will result in further near-term operating challenges, and is notable, as it follows a comprehensive programmatic and enrollment management overhaul starting in the summer of 2020 that was intended to stabilize, if not grow, enrollment by fall 2022. The Negative Outlook also reflects the College's fiscal 2023 budgeted deficit of $14.5 million, even after incorporating $4.6 million in expected property sales during the fiscal year. Further, this initial budget incorporates a higher enrollment than Fitch expects to materialize in fall 2022. While the College has a demonstrated history of cutting expenses in response to revenue pressure, Fitch believes the fiscal 2023 deficit may remain sizable, which in turn could reduce balance sheet resources and leverage ratios going forward. The 'BB' IDR and bond ratings are supported by a Fitch estimate of $33 million in Available Funds as of fiscal year end 2022 (unaudited), and a 29-member board that is leading the College's comprehensive fundraising campaign's last phase with a goal of raising at least $24 million by 2025. KEY RATING DRIVERS Revenue Defensibility: 'bb' Pressured Enrollment and Limited Demand Characteristics The 'bb' revenue defensibility assessment reflects CSR's pressured enrollment trends, combined with historical selectivity near 80%, thin matriculation around 10%, and a concentrated regional draw in New York State, within the demographically unfavorable Northeast region. These demand characteristics present meaningful constraints on pricing power and net tuition revenue growth prospects. Following a few years of modest but successive enrollment declines, CSR's enrollment was hit especially hard during the pandemic, with enrollment dropping 15% in fall 2020 and another 18% in fall 2021. In fall 2021, first-year freshmen enrollees plummeted to about 315 from a historical 10-year enrollment pattern of around 500. Following a significant academic restructuring starting in the summer of 2020, and an overhaul of the undergraduate admissions department and strategies, CSR expected freshman enrollment to rebound to historical levels in fall 2022. While some parts of CSR's new enrollment strategy of targeting a smaller number of regional, rather than national, applicants may lead to improved selectivity and matriculation rates in fall 2022, preliminary data indicates a further drop in incoming freshmen from the already depressed fall 2021 level. CSR will face revenue headwinds even with rebounds in freshmen matriculants in the coming years, as the smaller incoming cohorts will replace larger graduating cohorts. The College is highly dependent on student-driven (tuition and auxiliary) revenue, historically about 80% of total adjusted operating revenue, with grant funding and endowment distributions comprising the bulk of remaining revenues. In fiscal 2021, the addition of both $2 million in extraordinary endowment support, $1 million in institutional federal stimulus funds, and the budgeted property sales in CSR's fiscal 2023 operating budget indicate an unsustainable reliance on one-time measures to fund ongoing spending needs. Operating Risk: 'bbb' Weakening Operating Performance, Elevated Capital Needs Supported by Capital Fundraising The 'bbb' operating risk assessment reflects Fitch's expectation that CSR will continue to make significant operating changes in fiscal 2023 and beyond to maintain cash flow margins consistently between 5%-10%. The cash flow margin in fiscal 2021 was solid at 13%, but was an outlier from other periods and was buoyed by non-recurring revenue items. Excluding those items, operating cash flow margins would have been closer to 10%. Fitch-calculated preliminary fiscal 2022 estimates indicate a cash flow margin of around 5%, and absent significant recurring adjustments in fiscal 2023, will decline to levels inconsistent with a Fitch 'bbb' operating risk assessment. However, Fitch believes that CSR maintains flexibility to further reduce its expense base on a recurring basis, and management has shown a willingness and ability to make necessary adjustments as needed. With an average age of plant of over 18 years, and a trend of capital spending well below that of annual depreciation expense, Fitch characterizes the College's capital requirements as elevated, but also notes that CSR's spending plans are modest. CSR's current fundraising campaign includes a capital component that will support the College's capital needs. The College has a track record of successful fundraising, raising $23 million in its First 100 Years campaign (2014-2020), and $8.1 million in fiscal 2021 during CSR's 100th Year campaign. A third phase of this campaign called Second Century is underway, and targeted to raise at least $24 million through 2025. Financial Profile: 'bb' Moderate Leverage, with Capacity for Improvement The 'bb' financial profile assessment reflects CSR's limited Available Funds levels against expense and debt obligations. CSR has recently reduced total adjusted leverage by exiting an operating lease for excess student housing, and is on a funding glide path to reduce its unfunded defined benefit pension liability. However, as market performance and unbalanced operations result in deteriorating endowment balances, Fitch expects AF at FYE 2022 to equate to roughly $33 million, below the FYE 2021 level of approximately $38 million. Nevertheless, expected FYE 2022 leverage ratios show only modest year-over-year weakening. CSR had 67% AF/debt and 56% AF/expenses at FYE 2021, and Fitch estimates these ratios will amount to 65% and 50%, respectively, at FYE 2022, both levels consistent with the 'bb' financial profile assessment. Future ratios will be highly dependent on CSRs ability to right-size operations in accordance with revenues and increase balance sheet resources through fundraising. The College has no additional debt plans. Financial covenants of the series 2021 bonds include 1x annual debt service coverage ratio (for which 51% of par amount of bondholders can call an event of default for noncompliance starting at FYE 2022), and a liquidity ratio (20% liquid assets to debt, tested semi-annually). The College reports to be in full compliance of both covenants for fiscal 2022. Given CSR's revenue and expense pressures and the publicly-disclosed budget for fiscal 2023, Fitch estimates debt service coverage in fiscal 2022 will be near, but above, CSR's 1.0x covenant, and fiscal 2023 performance will depend on successful execution of CSR's sizable asset monetization plan along with significant expense and revenue adjustments. Asymmetric Additional Risk Considerations There were no asymmetric additional risk considerations reflected in the rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - Enrollment volatility that contributes to further decline in net student revenues; - Consistently weak cash flow performance of below 5%, or at levels that do not support Fitch-calculated debt-service coverage; - Unsustainable draws on the endowment in fiscal 2023 and beyond, resulting in deterioration of Available Funds to debt levels. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Successful ramp up of planned academic programs including new nursing programs, translating into favorable enrollment growth and net tuition per FTE, sustained for a period of several years; - Successful restructuring of expense base resulting in recurring and steady cash flow margins of 10% or greater; - Meaningful growth in endowment and available funds relative to debt, coupled with sustainable endowment support. CREDIT PROFILE The College of Saint Rose is a private, co-educational institution with approximately 3,800 headcount (3,042 FTE) students as of fall 2021. Approximately 70% of students are undergraduates, and about 80% of headcount enrollment is at the College's main campus in Albany, NY. The remaining 20% of CSR's headcount is enrolled in primarily part-time, professional development and certification programs for teachers through partnerships with organizations in metro New York other New York locations. The College considers teacher education and forensic science among their hallmark programs, has launched new nursing programs consistent with their service mission, and also maintains academic programs in arts and humanities, business, and math and science. Founded by the Sisters of St. Joseph of Carondelet (Sisters of St. Joseph) in 1920, CSR has been led by an independent board since 1970. Currently, the Board has 28 voting members, of whom at least 25% must be Sisters of St. Joseph. Fitch notes that The College of Saint Rose board of trustees includes George R. Hearst III, who is also a current Board Member of the Hearst Corporation, which is the sole owner of Fitch Group and Fitch Ratings. CSR's Board appointed Marcia White as President from July 2020 through June 2023. President White previously led the Saratoga Performing Arts Center during which time the institution turned from deficit to surplus operations, and completed successful fundraising. The College of Saint Rose is accredited by the Middle States Commission on Higher Education (MSCHE), which affirmed CSR's accreditation in 2014 for 10 years. The next scheduled MSCHE review is a self-study visit in 2022-23. Since 2020, MSCHE has required that CSR include evidence of improved financial viability and sustainability in their annual institutional updates. 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. Debt Rating Prior ---- ------ ----- The College of Saint Rose (NY) LT IDR BB Affirmed BB The College of Saint Rose(NY) /General Revenues/1 LT LT BB Affirmed BB CRYPTO CO: Secures $109K in Funding From 1800 Diagonal ------------------------------------------------------ Effective Sept. 30, 2022, The Crypto Company borrowed funds pursuant to a Securities Purchase Agreement entered into with 1800 Diagonal Lending, LLC, and Diagonal purchased a convertible promissory note from the Company in the aggregate principal amount of $108,936 (giving effect to an original issue discount). The SPA contains customary representations and warranties by the Company and Diagonal typically contained in such documents. A portion of the proceeds from the sale of the Note were used by the parties to satisfy all remaining amounts due under a convertible promissory note dated Jan. 11, 2022, issued by the Company to Sixth Street Lending, LLC. After payment of fees, and after satisfaction of the Jan. 11, 2022 convertible promissory note in favor of Sixth Street Lending, the net proceeds to the Company were $80,000, which will be used for working capital and other general corporate purposes. The Note has a maturity date of Sept. 26, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the Note at the rate of 12.0% per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. Payments are due monthly, beginning on Nov. 15, 2022. The Company has the right to prepay the Note in accordance with the terms set forth in the Note. Following an event of default, and subject to certain limitations, the outstanding amount of the Note may be converted into shares of Company common stock. Amounts due under the Note would be converted into shares of the Company's common stock at a conversion price equal to 75% of the lowest trading price with a 10-day lookback immediately preceding the date of conversion. In no event may the lender effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the lender and its affiliates would exceed 4.99% of the outstanding shares of Company common stock. In addition, upon the occurrence and during the continuation of an event of default the Note will become immediately due and payable and the Company shall pay to the lender, in full satisfaction of its obligations thereunder, additional amounts as set forth in the Note. About Crypto Company Malibu, CA-based The Crypto Company -- www.thecryptocompany.com -- is in engaged in the business of providing consulting services and education for distributed ledger technologies, for the building of technological infrastructure, and enterprise blockchain technology solutions. Crypto Company reported a net loss of $785,630 for the 12 months ended Dec. 31, 2021, compared to a net loss of $2.82 million for the 12 months ended Dec. 31, 2020. As of June 30, 2022, the Company had $2.36 million in total assets, $4.48 million in total liabilities, and a total stockholders' deficit of $2.11 million. CUREPOINT LLC: AMOA Seeks Appointment of Chapter 11 Trustee ----------------------------------------------------------- AMOA Finance, LLC asked the U.S. Bankruptcy Court for the Northern District of Georgia to appoint a Chapter 11 trustee to replace Phillip Miles, manager of CurePoint, LLC, and take over the company's bankruptcy case. Michael Holbein, Esq., AMOA Finance's attorney, said the existence of pre-bankruptcy fraudulent transfers warrants the appointment of a trustee in CurePoint's Chapter 11 case. Prior to its bankruptcy filing, Curepoint allegedly made approximately $4 million in transfers to entities affiliated with its manager but unrelated to the company. Except for one, none of those entities provided any goods or services to the company. "The inside transfers are alone reason enough for the appointment of a trustee," Mr. Holbein said in his motion filed in court. Aside from the fraudulent transfers, the attorney also cited the transactions entered into by Curepoint and Mr. Miles' other unrelated companies, which create an "irreconcilable conflict" for Mr. Miles in his role as a manager. The motion is on the court's calendar for Oct. 12. AMOA Finance can be reached at: Michael F. Holbein, Esq. Smith, Gambrell & Russell, LLP 1105 W. Peachtree St., N.E., Suite 1000 Atlanta, GA 30309 Phone: (404) 815-3607 Email: mholbein@sgrlaw.com About Curepoint LLC Curepoint, LLC -- https://www.curepointcancer.com/ -- provides radiation treatment for cancer patients at its facility in Dublin, Ga. Curepoint filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-56501) on Aug. 19, 2022, with between $1 million and $10 million in both assets and liabilities. Todd E. Hennings has been appointed as Subchapter V trustee. Judge Jeffery W. Cavender oversees the case. Will B. Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC is the Debtor's counsel. DESERT INSTITUTE: No Patient Care Concern, PCO Report Says ---------------------------------------------------------- Susan Goodman, the patient care ombudsman, filed with the U.S. Bankruptcy Court for the District of Arizona her first interim report regarding the quality of patient care provided at the health care facility operated by Desert Institute for Spine Disorders, P.C. In her report dated Oct. 3, the ombudsman noted that she did not observe any patient care delivery concerns as contemplated under Section 333(b) of the Bankruptcy Code during her visit to the physician office in Fountain Hills, Ariz. Moreover, the ombudsman has not received any questions or concerns from patients. So long as the ombudsman is not contacted by patients in the interim reporting period, she is comfortable maintaining the maximum, 60-day interval between written report submissions, according to the report. A copy of the ombudsman's first interim report is available for free at https://bit.ly/3V6aEpJ from PacerMonitor.com. The ombudsman may be reached at: Susan N. Goodman, RN, JD Pivot Health Law, LLC P.O. Box 69734 Oro Valley, AZ 85737 Telephone: 520-744-7061 Email: sgoodman@pivothealthaz.com About Desert Institute for Spine Disorders Desert Institute for Spine Disorders, PC is a privately owned and operated medical group practice, specializing in spine disorders and neck and lower back pain located in Fountain Hills, Ariz. Duane D.H. Pitt is the sole shareholder director and sole physician at DISD. DISD filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code on (Bankr. D. Ariz. Case No. 22-05043) on Aug. 1, 2022, with up to $50,000 in assets and up to $10 million in liabilities. The case is jointly administered with the Chapter 11 case (Bankr. D. Ariz. Case No. 22-05046) filed by Duane D.H. Pitt, president of DISD, on Aug. 1, 2022. James E. Cross has been appointed as Subchapter V trustee for DISD. Judge Madeleine C. Wanslee oversees the cases. Randy Nussbaum, Esq., at Sacks Tierney P.A., is the Debtors' legal counsel. Susan Goodman, Esq., at Pivot Health Law, LLC is the patient care ombudsman appointed in the Debtors' cases. DIOCESE OF ROCKVILLE CENTRE: No Abuse Cases Have Been Settled ------------------------------------------------------------- Bart Jones of NewsDay reports that two years after the Roman Catholic Church on Long Island became the largest diocese in the nation to declare bankruptcy, none of the hundreds of clergy sex abuse cases filed against the church has been settled. That has some survivors and their attorneys saying it is adding to the pain and injury the victims suffered as children years or even decades ago. "They declared bankruptcy and said they wanted to see the victims adequately compensated," said Paul Mones, an attorney who is representing some of the survivors. "People who suffered continue to suffer through these legal machinations that they are forced to go through." The Diocese of Rockville Centre has hired a major international law firm, Jones Day, to defend itself in the complex proceedings, which sometimes involve nearly 100 attorneys meeting at the same time. The diocese declined to comment on the proceedings, other than pointing to court documents indicating it recently offered an unspecified "counter-offer" in the mediation, and that more sessions were scheduled for the following weeks. The diocese declared bankruptcy on Oct. 1, 2020, saying the potential cost of payouts stemming from cases filed under the state Child Victims Act left it facing financial ruin. The CVA allowed people to file lawsuits against the church, schools and other institutions regardless of how long ago the alleged abuse took place. Some of the diocesan cases go as far back as 1957, the year the diocese was founded, according to court papers. When the diocese declared bankruptcy, the cases stopped being heard in New York State Supreme Court. Instead, they are now in U.S. Bankruptcy Court. Bishop John Barres said at the time that bankruptcy “offers the only way to ensure a fair and equitable outcome for everyone involved, including abuse survivors whose compensation settlements will be resolved by the courts." Some 200 lawsuits had been filed against the diocese by then, Barres said. Attorneys say there are now 636. The deadline for the CVA one-year “look back” window was extended from August 2020 to August 2021 because of the COVID-19 pandemic. The CVA cases are in addition to about 350 that were settled under a separate diocesan program that began in 2017 and had cost the diocese $62 million in compensation to victims, church officials said. The payout from the CVA legal cases could be far higher, some attorneys said. Mones handled a case in 2007 involving a youth minister who sexually abused two minors at St. Raphael's parish in East Meadow. That case alone ended with an $11.45 million jury award to the victims. Jeff Anderson, a Minnesota-based attorney who is also representing some of the survivors, said the diocese's attorneys are taking a "scorched earth" approach to the negotiations. Still, he added, "I think there is opportunity and I do see progress and I am hopeful. I know that a partial resolution is possible." Jones Day did not respond to a request for comment. Court documents indicate the diocese is spending substantial sums for legal representation. One filing lists a payment to Jones Day of $4,055,063.41 for February through May 2022. One lead attorney was paid at a rate of nearly $1,600 an hour, though the firm wrote that it deducted a 10% discount. A total of 23 Jones Day lawyers were paid, along with 11 law clerks, seven paralegals and other staff. The diocese declined to comment on how much Jones Day or other law firms it has hired were being paid. Church officials have said they were taking cost-cutting measures to deal with the sex abuse cases. In October 2019 the diocese started implementing moves that reduced expenses by $3.5 million a year. In August 2020, it cut staff at its headquarters by 10%, saving $5 million a year. At the same time, the COVID-19 pandemic hit the diocese hard: annual revenue had dropped by 40%, church officials said in October 2020, due to decreased offertory collections at Sunday Masses, which had been suspended in-person. In March 2021, the diocese sold its headquarters in Rockville Centre for $5.2 million in a move approved by the bankruptcy court. Despite the financial problems, diocesan officials say church functions such as Masses, religious education classes and social ministry programs have continued. The diocese is the eighth largest in the United States and home to 1.4 million Catholics. As the bankruptcy settlement process plays out, attorneys say it is unwieldy. At the in-person hearings in Manhattan before Martin Glen, chief judge of the U.S. Bankruptcy Court for the Southern District of New York, 100 representatives — most of them attorneys — gather, though some are on zoom. They represent the survivors, the diocese, the Catholic parishes on Long Island, the insurance companies and other entities. "There's a lot of pieces moving at the same time, some in the same direction, others in opposite directions," Anderson said. Getting them all on the same page isn’t easy, he said, but Judge Glen is pushing them. Jordan Merson, a Manhattan-based attorney representing some of the survivors, said, "It's moving very slowly, and the shame of it is a lot of survivors that have claims in the Diocese of Rockville Centre bankruptcy are watching across New York State as other cases are moving along much faster than this." He added, "But we're hopeful … that the diocese and the parishes will work toward a final solution so that the survivors can get justice as they deserve." Merson is representing Richard Tollner, a clergy sex abuse survivor who heads a committee of eight victims who serve as the voice of all survivors in the diocese during the proceedings. "They are the lay people who have the most powerful voice in the room," Anderson said. About The Roman Catholic Diocese of Rockville Centre, New York The Roman Catholic Diocese of Rockville Centre, New York, is the seat of the Roman Catholic Church on Long Island. The Diocese has been under the leadership of Bishop John O. Barres since February 2017. The State of New York established the Diocese as a religious corporation in 1958. The Diocese is one of eight Catholic dioceses in New York, including the Archdiocese of New York. The Diocese's total Catholic population is approximately 1.4 million, roughly half of Long Island's total population of 3.0 million. The Diocese is the eighth largest diocese in the United States when measured by the number of baptized Catholics. The Roman Catholic Diocese of Rockville Centre, New York, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept. 30, 2020, listing as much as $500 million in both assets and liabilities. The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Sitrick and Company, Inc., as communications consultant. Epiq Corporate Restructuring, LLC is the claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Diocese's Chapter 11 case. The committee tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin Moscou Faltischek, PC as its bankruptcy counsel and special real estate counsel, respectively Robert E. Gerber, the legal representative for future claimants of the Diocese, is represented by the law firm of Joseph Hage Aaronson, LLC. Michael A. Hogan, a retired judge, serves as the Diocese's financial advisor. New Case Judge According to a notice, the Debtor's case has been reassigned from Judge Shelley C. Chapman to Judge Martin Glenn effective June 28, 2022. DITECH FINANCIAL: 3rd Circuit Affirms Dismissal of Rauso Complaint ------------------------------------------------------------------ In the appealed case styled as GENNARO RAUSO, Appellant, v. ANGELA MARTINEZ; MARY McFALL HOPPER; FEDERAL NATIONAL MORTGAGE ASSOCIATION; SUNTRUST MORTGAGE, INC.; DITECH FINANCIAL LLC; GREENTREE CONSUMER DISCOUNT COMPANY; GREENTREE MORTGAGE SERVICING COMPANY; PHELAN HALLINAN DIAMOND & JONES LLP; MARK FINLEY; JOSEPH F. FINLEY; JOHN DOE AND JANE DOE OCCUPANT(S); ALLISON WELLS; JOSEPH E. DEBARBERIE; GREENTREE SERVICING LLC; DORIAN MOLINO; CORE ABSTRACT; LTS ACQUISITION COMPANY, LLC; ADAM H. DAVIS, ESQ.; LAUREN R. TABAS, ESQ., Case Nos. 20-2927, 21-1503 (Consolidated), (3rd Cir.), the U.S. Court of Appeals for the Third Circuit affirmed the judgment of the district court dismissing Gennaro Rauso's complaint. The case started in 2017, when Rauso filed a pro se complaint against financial entities, a law firm, the Delaware County, Pennsylvania Sheriff, and other individuals. The lawsuit arose from a state court foreclosure action and sheriff's sale of property. Rauso alleged that the mortgagor transferred his rights and interests to him. Rauso claimed, among other things, a deprivation of the right to possession and use of the property that was foreclosed. Rauso appealed the district court's April 7, 2020 and Jan. 22, 2021, orders and several related orders, asking the Third Circuit to (1) vacate the April 7 order dismissing his complaint for failure to prosecute and (2) remand the matter in order to give him an opportunity to be heard. The Third Circuit held that Rauso has not shown under the circumstances here that the district court abused its discretion. To the extent Rauso asserts a violation of his right to due process, he has not shown a constitutional violation. In fact, Rauso was given several extensions of time to respond to the motions to dismiss and he has not advanced any reason why he could not comply with the district court's last extension. Regarding the Jan. 22, 2021 order, Rauso argued that the district court erred in dismissing his case for lack of service. He contends that he did not receive notice before the dismissal as required by the rule. He said that he was entitled to rely on the U.S. Marshals Service to serve his complaint because he was proceeding in forma pauperis. Although the U.S. Marshals Service effectuates service for in forma pauperis litigants, Rauso has not shown that he fulfilled his obligations. The Court pointed out that the docket reflects that summonses were issued and forwarded to the U.S. Marshals Service for two of these defendants in December 2019 (Dorian Molino and Core Abstract) and for the third in February 2020 (LTS Acquisition Company, LLC). Then Rauso moved for an extension of time for service, alleging that the U.S. Marshals Service had not served these defendants -- which the district court denied, noting that the summonses had been executed. Rauso also challenges the district court's Jan. 22, 2021, dismissal of three defendants based on a Bankruptcy Court injunction. In May 2019, DiTech Financial LLC (f/k/a Greentree Servicing LLC f/k/a Greentree Consumer Discount Company) notified the district court that it had filed a Chapter 11 bankruptcy petition. DiTech stated that Rauso's action was subject to the automatic stay. DiTech later notified the Court that the bankruptcy court had confirmed the Chapter 11 plan and had enjoined certain pending actions, including Rauso's action. Rauso argues that the district court's dismissal of these defendants violated the automatic stay. However, as Rauso recognizes in his brief, that the automatic stay ends when a discharge is granted. The confirmation of a Chapter 11 plan generally discharges the debtor from debts arising before the date of confirmation. Here, the order confirming the plan and the injunction were issued before the Jan. 22, 2021, dismissal order. Hence, Rauso has not shown a violation of the automatic stay. A full-text copy of the Opinion dated Oct. 4, 2022, is available at https://tinyurl.com/mutz9an5 from Leagle.com. About Ditech Holding Corporation Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Based in Fort Washington, Pennsylvania, the Debtors have approximately 3,300 employees and service a diverse loan portfolio. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. DIXWELL PHARMACY: Commences Subchapter V Case --------------------------------------------- Dixwell Pharmacy LLC filed for chapter 11 protection in the District of New Jersey. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The owners of the Dixwell, Lakshman R Paidi and Sirisha Mallidi, also sought Chapter 11 bankruptcy. The individual debtors Lakshman R. Paidi and Sirisha Mallidi are married to each other; they are residents of New Jersey and own their residence at 160 Midwood Road, Paramus, NJ. Mr. Paidi holds 100% of the membership interests in Dixwell Pharmacy, LLC. Dixwell is a Limited Liability Company organized under the law of Connecticut. It owns a pharmacy and retail store located at 2380 Dixwell Avenue, Hamden, CT, and operates under the name Apex Pharmacy and Homecare Center. The great majority of the claims asserted against Dixwell are substantially identical to those asserted against Mr. Paidi. These include the claim of Live Oak Banking Company, which asserts that Mr. Paidi guaranteed its 2014 loan to Dixwell of more than $2.4 Million, and the claim asserted by Apex Pharmacy & Home Care Center LLC and Annex Home Care & Nutritional Center, which allege that Mr. Paidi guaranteed Dixwell's promissory note in 2014. About Dixwell Pharmacy LLC Dixwell Pharmacy LLC -- https://apexpharm.com -- owns the Apex Pharmacy and Homecare Center in Hamden, Connecticut. Dixwell Pharmacy LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 22-bk-17834) on Oct. 3, 2022. In the petition filed by Lakshman R. Paidi, as managing member, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. Lakshman R Paidi and Sirisha Mallidi also sought Chapter 11 protection (Bankr. D.N.J. Case No. 22-bk-17832) on Oct. 3, 2022. The Debtors' cases are jointly administered under Case No. 22-17832. The Debtors are represented by Brian Gregory Hannon of Law Office of Norgaard O'Boyle. EASTERN POWER: S&P Affirms 'B' ICR, Alters Outlook to Negative -------------------------------------------------------------- S&P Global Ratings affirmed its 'B' rating on U.S. power project Eastern Power LLC's senior secured term loan facilities and revolving credit facility. The recovery rating remains '3', indicating its expectations for meaningful recovery (50%-70%; rounded estimate: 50%). S&P said, "We also revised the outlook to negative from stable to reflect our view of heightened refinance risk with the revolving credit facility maturing in less than a year. The negative outlook also reflects a loss of cash flow diversity with just a single asset remaining to service debt by 2025 and our expectations for a minimum debt service coverage ratio (DSCR) of 0.97x during our assumed refinancing period." Eastern Power LLC sold its PJM assets Rolling Hills, Lincoln, and Crete. The project repaid $493 million on its term loan B following the sale. Eastern Power is a project-financed portfolio of three merchant assets totaling 1.95 gigawatts (GW). These plants service New York Independent System Operator (NYISO, Zone J). The plants are: -- Eastern's $50 million revolving credit facility is current and matures in October 2023. A successful extension of the facility is critical to maintaining the rating. While S&P expects the project could reduce the total amount following the PJM asset sale, we note that approximately $10 million-is required to post ongoing letters of credit to various counterparties. Interest rate exposure is unhedged beyond 2023. Eastern has 100% of its interest rate exposure hedged through December 2022, declining to 0% hedged by December 2023. S&P said, "We view this interest rate exposure as a material risk to the project in the current rising rate environment. We assume the Secured Overnight Financing Rate (SOFR) continues to increase during our forecast period and note that higher than expected increases would impair Eastern's credit metrics." The sale of the PJM assets reduces the cash flow diversity for Eastern Power. Eastern Power finalized the sale of its PJM assets in third-quarter 2022, which represented 50% of its portfolio. This sale eliminates exposure to PJM, and thereby lowers Eastern's cash flow diversity. S&P said, "We expect Eastern to retire Gowanus barges 1 and 4 in November 2022 and model a capacity decrease from 541 MW to 364 MW. We expect full deactivation and retirement of both Gowanus and Narrows in 2025 and a net residual value of about $200 million from the sale of the corresponding land to repay debt. Beyond 2025, Astoria Generating will be the only remaining plant in this portfolio and we expect about $283 million of debt to remain outstanding at this time and an asset life through 2037. We have revised our assessment of Eastern's business risk downward to reflect increased market risk and exposure to a single asset beyond 2025. The overall operations phase stand-alone credit profile (SACP) of 'b' remains unchanged." S&P expects Eastern Power to maintain stable DSCRs despite the loss of portfolio diversity. S&P said, "From present through 2025 we expect solid DSCRs averaging approximately 2x. Following the asset sale and repayment of $493 million, outstanding term loan B debt is about $680 million from $1.173 billion. We expect a cash flow sweep of about $40 million in fourth-quarter 2022, for a year-end debt balance of approximately $640 million. The lower debt balance results in reduced debt service cost compared to our previous forecast, although this is partially offset by rising interest costs. We now project debt outstanding at maturity in 2025 of about $283 million. As a result, we expect a higher minimum DSCR of 0.97x from 0.75x in previous forecast. The minimum expected DSCR of 0.97x is during the refinancing period with only cash flow from Astoria from 2025." S&P forecasts sufficient covenant headroom in all periods. Eastern is subject to a minimum 1.1x DSCR covenant. In calculating cash flows for this covenant, Eastern's credit agreement allows it to include proceeds from asset sales and ignores major maintenance expenses that are paid from a pre-funded major maintenance reserve account, among other items, supporting credit. S&P said, "We do not include nonoperating items, such as asset sale proceeds, in our measure of cash flow available for debt service (CFADS). Therefore, Eastern's covenant DSCRs tend to be higher than our DSCR measures. When considering DSCRs as measured by Eastern's credit agreement, we forecast the project will have sufficient headroom to its 1.1x covenant level through the maturity of the term loan." Although NYISO capacity prices are volatile, S&P expects a material improvement in 2023. Capacity prices are the main driver of profitability for this portfolio with approximately 80%-90% of gross margin coming from capacity payments. S&P said, "We recently revised S&P Global Ratings' capacity price assumptions for NYISO, and we expect summer 2023 prices to rebound to about $11/kilowatt (KW)-month. Zone J prices have been characterized by volatility, and we expect they will remain susceptible to fluctuations based on changes to the peak load forecast and locational capacity requirement. These movements have an outsize impact on Eastern's profitability relative to its peer group and could influence the rating in either direction." S&P said, "In the near term the negative outlook reflects our view of heightened refinancing risk as the revolving credit facility is current. During the medium term, the outlook reflects increased risk of a single asset portfolio from 2025. We expect that DSCRs will average about 1.5x over the next year, and we expect materially higher capacity prices in 2023 to lead to improved cash flow for the portfolio. We also expect the project to continue to repay debt via the cash flow sweep or voluntary prepayments such that the outstanding balance on the term loan is below $600 million by the end of 2023. We forecast a minimum DSCR of 0.97x post maturity from 2025-2037. "We would consider lower ratings if the project fails to renew or extend the revolving credit facility or we forecast debt outstanding at maturity greater than $300 million. We could also lower the rating if we expect minimum DSCRs to be significantly lower during our assumed refinancing period. The most likely catalyst for this would be if NYISO capacity prices do not rebound as expected in summer 2023 or the portfolio fails to use excess cash to deleverage prior to maturity. "We would revise the outlook to stable if the project extends the revolving credit facility and our view of the project's refinance risk improves based solely on Astoria's expected cash flow. This would likely stem from higher Zone J capacity prices than anticipated." ELECTRO RENT: S&P Places 'B-' ICR on CreditWatch Negative --------------------------------------------------------- S&P Global Ratings placed all its ratings, including its 'B-' issuer credit rating on testing and measurement (T&M) equipment rental provider Electro Rent Corp., on CreditWatch with negative implications. The CreditWatch listing signals the potential for at least a one notch downgrade if it does not believe Electro Rent can successfully refinance its upcoming maturities, in a manner it would not view as tantamount to a default, within the next few months. Despite S&P's expectation for continued modest EBITDA growth over the next few quarters, the current state of high-yield credit markets and the potential for a weaker macroeconomic environment in 2023 increases ERC's execution risk for refinancing. ERC's credit metrics continue to improve, driven by organic growth in the company's technology products segment and pricing initiatives. S&P said, "We forecast S&P Global Ratings-adjusted debt leverage near 4x in 2022 and in the 3.5x-4x range in 2023. Notwithstanding current unfavorable capital market conditions, we believe ERC's performance should support its refinancing efforts. Nevertheless, if capital market weakness persists--potentially because of macro-economic or geopolitical factors, or if the company's operating performance begins to soften--we believe ERC may have difficulty addressing its loan maturities according to original promise." While S&P expects end markets to remain mixed in 2022, it forecasts volume growth in some categories and price growth across most categories to support modest EBITDA growth. The telecommunications market continues to be negatively affected by a slower-than-expected expansion of 5G installation, testing, and servicing. This, combined with the maturation of the 4G market, has resulted in less demand for T&M equipment in the telecom sector. However, this weakness has been offset by the company's Technology Products segment, which has been the largest growth driver recently, benefiting from work-from-home, distance learning, and contract staffing trends. S&P said, "We forecast organic revenue growth in the low-single-digit percentage area in 2022, increasing modestly to the mid-single-digits in 2023 as more 5G projects increase demand for telecom T&M equipment. EBITDA margins have benefited from both pricing initiatives and mix shift in 2022, and we forecast further, more modest, margin expansion in 2023 driven by some volume growth. We anticipate slightly positive free operating cash flow (FOCF) of about $5 million-$10 million in 2022, increasing to between $10 million and $15 million in 2023 as cash flow from operations growth outpaces its net capital expenditure (capex)." S&P said, "In the event of macroeconomic weakness, we would expect a contraction in revenue as decreasing industrial activity reduces the demand for T&M equipment and a reduction in contracted employees lowers the rental need for ERC's technology products. "However, we would expect these declines to be partially offset by relatively stable defense end-market demand. Further, in this scenario, we believe declines in rental revenue would be somewhat cushioned as some companies shift to renting, in lieu of buying, to preserve their capital. ERC also can increase its cash generation by slowing fleet growth-related capex investment or by increasing the amount of used equipment sales, but the used equipment market typically weakens during periods of economic distress. Nevertheless, in a scenario in which revenue contracts, ERC would likely draw on its cash balances and/or revolving credit facility as a liquidity source to fund fleet capex. While we note that ERC has not drawn on its revolver since March 2020, an inability to extend the revolver maturity could lead to liquidity pressure in a scenario of weakening demand and heighten the execution risk surrounding ERC's ability to refinance its term loan at its January 2024 maturity. "The CreditWatch listing signals the potential for an at least one notch downgrade if we do not believe Electro Rent can successfully refinance its upcoming maturities, in a manner we would not view as tantamount to a default, within the next few months. Specifically, we may lower our ratings on Electro Rent by one notch or more if we believe the company cannot successfully address the January 2024 maturity of its first-lien term loan before it becomes current. We may also lower the rating if we envision a liquidity shortfall, particularly if the company is unable to extend the maturity of its revolving credit facility. "In resolving the CreditWatch listing, we will monitor Electro Rent's progress toward refinancing its capital structure, and we will aim to resolve the CreditWatch listing within the next few months." ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance is a moderately negative consideration, as is the case for most rated entities owned by private-equity sponsors. We believe ERC's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding period and a focus on maximizing shareholder returns." EMBARQ CORP: Fitch Cuts LongTerm IDR to 'B-', Outlook Stable ------------------------------------------------------------ Fitch Ratings has downgraded Embarq Corporation's Long-Term Issuer Default Rating (IDR) to 'B-' from 'BB' following the completion of the acquisition by Connect Holding LLC, and its subsidiary, Connect Holdings II LLC (d/b/a Brightspeed) of certain assets from Lumen Technologies, including Embarq. The IDR was removed from Negative Watch and assigned a Stable Rating Outlook. In addition, Embarq's senior unsecured debt has been downgraded to 'CCC'/'RR6' from 'BB'/'RR4'. Connect Holding LLC's and Connect Holding II LLC's Long-Term IDR is 'B-'. The Rating Outlook is Stable. As outlined in Fitch's Sept. 19, 2022 Rating Action Commentary, Fitch rated the senior secured term loans, notes and revolver of Connect Holding II 'B+'/'RR2'. Due to market conditions, Connect Holding II has not issued the senior secured notes but will draw on a senior secured bridge loan, with senior secured notes to be issued as market conditions permit. Fitch does not expect to rate the bridge loan. Connect Holding LLC is the parent of Connect Holding II LLC and guarantees the latter's debt. Embarq's senior unsecured notes are structurally subordinated to Connect Holding II's senior secured term loans, notes and revolver. KEY RATING DRIVERS First-Time Rating: The ratings incorporate Brightspeed's initial high leverage as well as the execution risk associated with its fiber build plan and transitioning to its own operating systems following the carve-out from Lumen. The ratings benefit from the strengthening competitive position as the company plans to invest aggressively in a fiber broadband network, which is expected to be funded at the close of the transaction, mitigating the near-term impact of the pressure on cash flows from the high levels of investment. Capital Allocation, Fiber Investment: Brightspeed and its sponsor, Apollo managed funds, are committed to a fiber build plan that is expected to pass up to three million homes and businesses over the next five years, at a cost of more than $2 billion. The company's network currently passes more than six million homes and businesses in 20 states in the Midwest and Southeastern U.S., as well as parts of Pennsylvania and New Jersey. The top eight states account for approximately 85% of the locations passed. The assets to be acquired by Brightspeed will consist of Lumen's residential, small business, wholesale and enterprise businesses in those states; Lumen's national enterprise customers will not be included. The network in the footprint includes approximately 75,000 route miles of fiber, with fiber passing just over 250,000 homes and small businesses. Current broadband penetration is relatively low at less than 20%. Fitch believes successful execution of its fiber deployment plan could lead to improved penetration rates, based on trends demonstrated by other providers transitioning to fiber from legacy copper networks. Leverage Metrics: Fitch expects Brightspeed's initial gross leverage (total debt/operating EBITDA) to be high at approximately 6.6x at YE 2022, but then increase to approximately 8x in 2023. In connection with Brightspeed's capex program, Apollo managed funds will provide an equity commitment letter (ECL) to the Holdco, and Apollo will pay the principal and interest of the Holdco Loan as contemplated by the ECL. Fitch's rating case assumptions reflect the repayment of the Holdco Loan (which is above the restricted group) under the ECL. Notwithstanding this mechanism, Fitch has included the Holdco Loan (approximately $1.9 billion) as debt of the rated entity following an assessment of the loan against Fitch's criteria. Gross leverage excluding the Holdco Loan is projected to be 5.1x at the end of 2022, increasing to approximately 6.3x in 2023. Net leverage metrics are considerably lower at the outset, given starting cash of approximately $1.5 billion. The transaction financing includes the full funding of the fiber build-out plan, as contemplated, until the company generates positive FCF. Fitch believes there is execution risk regarding the company's funding plan, as higher than expected capex per passing and/or success-based capex could lead to some funding requirements earlier than anticipated, as could slower than anticipated penetration gains. As it progresses along its build plan, the company has flexibility to preserve cash by slowing capacity expansion and driving take-up rates in markets already passed. FCF Deficits: As the company's capex accelerates following the close of the transaction, FCF deficits will ramp up. Capex associated with the fiber build out has two major components: capex associated with the expansion of the network to pass homes and small and medium businesses, and the cost to connect those customer locations to the fiber network. The latter capex is success-based and will vary depending on the rate of penetration. Given the upfront costs to pass customers, the deficits are higher in the early years of the plan. Challenging Operating Environment: The rating incorporates a challenging operating environment for wireline operators. Regulatory changes also play a role, as the negative revenue trend in 2022 was significantly affected by the expiration of $279 million of annual Connect America Fund II (CAF II) funding at the end of 2021. Competition from cable operators in the high-speed broadband market remains intense, but the company's fiber build out is expected to materially improve the company's competitive position over time. Ongoing Relationship with Lumen: Initially, Lumen will support Brightspeed under transition services agreements intended to ensure there are no disruptions to customers as it sets up its own operations. Fitch believes execution risk is high with regard to the company setting up its own operations, and successful execution will lead to EBITDA improvements as these costs go away. Brightspeed will continue to provide certain services to Lumen under a 10-year network services agreement (NSA), which incorporates minimum revenue commitments. Services will be provided to Lumen on a wholesale basis for customers that Lumen needs to reach in Brightspeed's territory under national contracts. Similarly, Brightspeed will pay Lumen under master services agreements (MSA) to reach customers in Lumen's territory. Brightspeed is a net beneficiary under these arrangements. Parent-Subsidiary Relationship: Fitch equalized Connect Holding II LLC's and Embarq Corp.'s IDRs , using a stronger subsidiary/weaker parent approach, based on open legal ring-fencing and open access and control. The IDRs of Connect Holding LLC and Connect Holding II LLC are the same, as the parent's stand-alone credit profile starts with the consolidated group profile, including its subsidiary. DERIVATION SUMMARY Brightspeed's exposure to the consumer market is more similar to that of Frontier Communications Parent Inc. (BB-/Stable) than other peers, including its former parent company Lumen (BB/Stable) and Windstream Services, LLC (B/Stable). The latter two have a greater proportion of revenues coming from enterprise lines of business. The consumer market continues to face secular challenges, primarily with respect to legacy voice and broadband services. Competition with cable operators for high-speed broadband services has been intense, given the cable platform's advantage over copper-based networks. Fitch views Brightspeed's aggressive investments in fiber positively, with the potential to improve its competitive position significantly over the first two years, and more over time. Successful execution on these plans will be critical to support the long-term competitive profile. Brightspeed also needs to improve its position in the enterprise and wholesale markets, although the company's enterprise business does have some differences versus the larger wireline operators that have much larger, national enterprise accounts while Brightspeed's enterprise customers are mainly state and local governments, and the education market. In the enterprise market, Brightspeed is smaller than AT&T Inc. (BBB+/Stable), Verizon Communications Inc. (A-/Stable) and Lumen. Brightspeed's wholesale business is larger than its enterprise business, and both wireline and wireless operators are major customers. Compared with Brightspeed, AT&T and Verizon have wireless offerings that provide more service diversification. Fitch expects Brightspeed's fiber build plans to cause its gross leverage to be higher over time than other high-yield peers Lumen and Frontier. KEY ASSUMPTIONS - Fitch expects revenues of just over $2.2 billion in 2023, Brightspeed's first full year of operation. Revenues in 2023 are not directly comparable to 2021 and 2022 given the expiration of CAF II revenues industrywide in 2022, and the changes brought about by the increase in revenues post-close from the Network Service Agreement and the cessation of affiliate revenues recorded pre-close. In 2024 and 2025, Brightspeed could approach mid-single digit growth as the company adds mass market fiber broadband customers. - EBITDA margins are expected to be in the mid-40% range in 2023, and gradually increase toward the upper 40% range as the company's expenses under the transition services agreement TSA wind down. - Fitch expects capex to be in the range of $3.0 billion to $3.2 billion over 2023-2025 as the company passes three million or more homes with a combination of aerial and buried fiber. - Fitch assumes the company does not pay a dividend in the 2022- 2025 rating horizon. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Brightspeed would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. The revolving facility is assumed to be fully drawn. Brightspeed's going concern EBITDA is based on forecast 2023 EBITDA, excluding estimated TSA costs, which assumes Brightspeed has set up its own systems. The GC EBITDA is assumed roughly 20% lower than the PF EBITDA in a bankruptcy scenario due to a slower than anticipated take up of its fiber services, while having incurred significant capex, as well as from competitive pressures on legacy services. These factors pressure EBITDA. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level, upon which Fitch bases the enterprise valuation. An EV multiple of 5.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: The historical bankruptcy case study exit multiples for most telecom companies ranged from 3x-7x, with a median of 5.4x. Fitch estimates Brightspeed's sale transaction multiple was in the high 6x range using estimated 2023 EBITDA, which takes into account the known loss of CAF II revenue in 2022, continued secular declines and the effects of post-transaction agreements with Lumen. This is higher than the 5.5x multiple disclosed when the transaction was announced, which was based on estimated 2020 EBITDA without considering these factors. Moreover, at the close of the transaction, Brightspeed will have very little fiber to the home. Fitch believes the 5.5x multiple will remain appropriate given the long-term benefits of the technology. A significant portion of the fiber build will likely have been completed before the company approaches stress, given the approximately $1.5 billion in prefunding. Frontier Communications emerged in early 2021 with a 5.5x multiple, per Fitch's "Telecom, Media and Technology Bankruptcy Enterprise Values and Creditor Recoveries: 2022 Fitch Case Studies". The recovery analysis produces Recovery Ratings of 'RR2' for the all secured debt, reflecting 81% recovery, and for Embarq, a Recovery Rating of 'RR6', reflecting no recovery. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Gross leverage (including Holdco debt), defined as total debt with equity credit/operating EBITDA, expected to be sustained at or below 5.5x; - Consistent gains in revenues from anticipated investments in fiber and broadband product areas; - Demonstrated stable EBITDA and FCF growth. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A weakening of operating results, including deteriorating margins and an inability to stabilize revenue erosion in key product areas or offset EBITDA pressure through cost reductions; - Weakening of the company's financial flexibility by distributions to the Holdco while the company is in the fiber expansion phase; - Operating EBITDA/interest paid sustained below 1.5x. LIQUIDITY AND DEBT STRUCTURE Strong Initial Liquidity: At the close of the transaction, Brightspeed is anticipated to have approximately $1.5 billion in cash as a result of the transaction funding, and a $600 million senior secured, undrawn revolver maturing in 2027. In addition to the revolver, new senior secured debt of approximately $4.865 billion is expected, with initial indications this debt will be composed of a $1 billion 6.5-year senior secured term loan A, a $2 billion seven-year senior secured term loan B and a $1.865 billion senior secured bridge loan, with senior secured notes expected to be issued as markets permit. Debt also includes $1.437 billion of Embarq senior unsecured notes due 2037 that will be rolled into the company. A new sponsor equity contribution of just over $3 billion is expected. The equity includes the net proceeds of borrowings under a Holdco Loan of approximately $1.9 billion. Fitch has treated the Holdco Loan as debt of the rated entity. ISSUER PROFILE Connect Holdings is the fifth largest wireline provider in the U.S., and provides service primarily to consumers and small and mid-sized businesses. The company also has a presence in the enterprise and wholesale markets. The company operates in 20 states, primarily in the Midwest and Southeastern U.S. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has included the Holdco Loan (approximately $1.9 billion) as debt of the rated entity following an assessment of the loan against Fitch's criteria. 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. Debt Rating Recovery Prior ---- ------ -------- ----- Embarq Corporation LT IDR B- Downgrade BB senior unsecured LT CCC Downgrade RR6 BB FORWARD FOODS: Oct. 25 Public Foreclosure Sale Set -------------------------------------------------- Heritage Global Partners will hold a public foreclosure sale on Oct. 25, 2022, at 10:00 a.m. PDT of the assets owned by Forward Foods LLC by order of the secured party pursuant to Section 9-609 and 9-610 of the Delaware Commercial Code. Assets for sale are: a) trademarks & associated recipes; b) various agreements including warehouse, sublicense and distribution agreements; c) account receivables (About $775,000 as of Sept. 20, 2022); d) raw material & finished good inventory; and e) domain names and social media accounts. If you would like to participate, please email Nick Dove to learn how to become a qualified bidder and eligible to participate in the telephonic auction. Mr. Dove can be reached at: Nick Dove Heritage Global Partners 12625 High Bluff Dr #305 San Diego, CA 92130 Tel: 858-847-0659 Email: ndove@hginc.com Forward Foods LLC filed a Chapter 11 petition Feb. 17, 20009 (Bankr. Case No. 09-10545) after recalling 75% of its products for using peanuts from Peanut Corp. of America. PCA had earlier filed for Chapter 7 liquidation, after closing its plants due to salmonella poisoning on its products. Forward Foods' case was terminated on Aug. 20, 2010. FREE SPEECH SYSTEMS: Pitches New Adviser to Lead Bankruptcy Case ---------------------------------------------------------------- James Nani of Bloomberg Law reports that Infowars' parent company has proposed a new chief restructuring officer to lead its bankruptcy, seeking to overcome a setback incurred by a judge's rejection of its prior pick for the role. Free Speech Systems LLC, controlled by far right-wing conspiracist Alex Jones, on Monday, Oct. 3, 2022, asked a Texas bankruptcy court for approval to hire CPA J. Patrick Magill and his firm, Magill PC, as its new CRO at a cost of $50,000 a month, according to a court filing. The request comes after Judge Christopher M. Lopez last month rejected a motion by Free Speech to employ the previously named CRO because of failures to disclose prior connections to other entities founded by Jones. Magill's responsibilities would include controlling Free Speech’s daily operations, and control of interactions with creditors, Jones, vendors, and Free Speech’s purported secured lender, PQPR Holdings Limited LLC, according to the emergency application. Jones will continue to produce his Infowars show and market products on it, the company said. "This Court's approval of the retention of the CRO and Firm by the Debtor is critical and indispensable to assuring that the chapter 11 process begins smoothly, and, that the Debtor has the optimal managers to help formulate a sound business and reorganization plan quickly," Free Speech said. "Without the CRO and Firm, the Debtor cannot survive in chapter 11." Free Speech Systems in July 2022 filed for protection under the small business bankruptcy statute of Chapter 11 after Sandy Hook Elementary School shooting victim families won judgments against Jones and his website for falsely claiming the massacre was a hoax. Since the bankruptcy filing, Sandy Hook victim families have won nearly $50 million in damages from Jones and Free Speech in a Texas court trial. A second damages trial involving Sandy Hook victim families is ongoing in Connecticut. In September 2022, the bankruptcy suffered a major setback after Lopez sided with the Justice Department's bankruptcy watchdog and rejected Free Speech’s request to employ W. Marc Schwartz as its chief restructuring officer. The judge also rejected a motion to hire attorney Kyung Lee or his firm, Shannon & Lee LLP, as the company's bankruptcy co-counsel. Lee and Schwartz had been working for the debtor for months. Lopez found they failed to disclose to the court that their work overlapped with other three Jones-affiliated companies during a different bankruptcy. Lopez has directed the case's bankruptcy trustee to examine Free Speech's financial affairs, operations and insider relationships. The examination comes following creditors' complaints that the company is using intricate corporate structures to hide assets that could be used to pay claims. About Free Speech Systems Free Speech Systems LLC is a broadcast media production and distribution company that provides broadcasting aural programs by radio to the public. Free Speech Systems is a family-run business founded by Alex Jones. FSS is presently engaged in the business of producing and syndicating Jones' radio and video talk shows and selling products targeted to Jones' loyal fan base via the Internet. Today, FSS produces Alex Jones' syndicated news/talk show (The Alex Jones Show) from Austin, Texas, which airs via the Genesis Communications Network on over 100 radio stations across the United States and via the internet through websites including Infowars.com. Due to the content of Alex Jones' shows, Jones and FSS have faced an all-out ban of Infowars from mainstream online spaces. Shunning from financial institutions and banning Jones and FSS from major tech companies began in 2018. Conspiracy theorist Alex Jones has been sued by victims' family members over Jones' lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet TV, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April 18, 2022. The Debtors agreed to the dismissal of the Chapter 11 cases in June 2022 after the Sandy Hook victim families dismissed the three bankrupt companies from their lawsuits. Free Speech Systems filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on July 29, 2022. In the petition filed by W. Marc Schwartz, as chief restructuring officer, the Debtor reported assets and liabilities between $50 million and $100 million. Melissa A Haselden has been appointed as Subchapter V trustee. Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC, is the Debtor's counsel. GENEVER HOLDINGS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Genever Holdings Corporation P.O. Box 3170 Road Town, Tortola Business Description: Genever Holdings is engaged in activities related to real estate. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court District of Connecticut Case No.: 22-50542 Debtor's Counsel: Douglas S. Skalka, Esq. NEUBERT, PEPE & MONTEITH, P.C. 195 Church Street, 13th Floor New Haven, CT 10166 Tel: 203-821-2000 Email: dskakla@npmlaw.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $100 million to $500 million The petition was signed by Claire Abrehart as director. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6Z2QBBY/Genever_Holdings_Corporation__ctbke-22-50542__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Pacific Alliance Asia Litigation $254,000,000 Opportunity Stuart Sarnoff, Esq. c/o O'Melveney & Myers, LLP 7 Times Square New York, NY 10065 Tel: (212) 326-2293 Email: ssarnoff@omm.com 2. Rui Ma Willful $20,000,000 c/o Carollynn HG Callari, Esq. Personal Callari Partners LLC Injury 100 Somerset Corp Blvd., Suite 206 Bridgewater, NJ 08807 Tel: 908.240.3964 Email: ccallari@callaripartners.com 3. Cheng Jian Wu Jian She Litigation $14,898,483 c/o Law Office of Ning Ye, Esq. 135-11 8th Ave. #1A Flushing, NY 11354 Ning Ye, Esq. Tel: (718) 308-6626 Email: yeningusa@gmail.com 4. Gaosheng Guo Litigation $12,000,000 c/o Law Office of Ning Ye, Esq. 135-11 8th Ave. #1A Flushing, NY 11354 Ning Ye, Esq. Tel: (718) 308-6626 Email: yeningusa@gmail.com 5. Ning Ye Litigation $12,000,000 Law Office of Ning Ye, Esq. 135-11 8th Ave. #1A Flushing, NY 11354 Tel: (718) 308-6626 Email: yeningusa@gmail.com 6. Yan Zhao Litigation $12,000,000 c/o Law Office of Ning Ye, Esq. 135-11 8th Ave. #1A Flushing, NY 11354 Ning Ye, Esq. Tel: (718) 308-6626 Email: yeningusa@gmail.com 7. Xiqiu "Bob" Fu Litigation $10,000,000 c/o Irve J. Goldman Pullman & Compley, LLC 850 Main St. P O Box 7006 Bridgeport, CT 06601 Irve J. Goldman Pullman & Compley, LLC 850 Main St. P O Box 7006 Bridgeport, CT 06601 Tel: (203) 330-2213 Email: igoldman@pullcom.com 8. Zheng ("Bruno") Wu and Willful $10,000,000 Yang Lan Injury c/o Carollynn HG Callari, Esq. Callari Partners LLC 100 Somerset Corp Blvd., Suite 206 Bridgewater, NJ 08807 Tel: 908.240.3964 Email: ccallari@callaripartners.com 9. Hong Qi Qu Litigation $9,809,422 c/o Kevin Tung, Esq. Kevin Kerveng Tung P.C. Queens Crossing Business Center 136-20 38th Avenue, Suite 3D Flushing, NY 11354 Tel: (718) 939-4633 Email: ktung@kktlawfirm.com 10. Nan Tong Si Jian Litigation $5,568,522 c/o Kevin Tung, Esq. Kevin Kerveng Tung P.C. Queens Crossing Business Center 136-20 38th Avenue, Suite 3D Flushing, NY 11354 Kevin Tung, Esq. Kevin Kerveng Tung P.C. Tel: (718) 939-4633 Email: ktung@kktlawfirm.com 11. Jian Gong Litigation $5,380,262 c/o Kevin Tung, Esq. Kevin Kerveng Tung P.C. Queens Crossing Business Center 136-20 38th Avenue, Suite 3D Flushing, NY 11354 Kevin Tung, Esq. Kevin Kerveng Tung P.C. Tel: (718) 939-4633 Email: ktung@kktlawfirm.com 12. Logan Cheng Willful $5,000,000 c/o Jay M. Wolman Injury Randazza Legal Group, PLLC 100 Pearl Street, 14th Floor Hartford, CT 06103 Tel: (702) 420-2001 x18 Email: jmw@randazza.com 13. Yan Zhao Litigation $3,000,000 c/o Law Office of Ning Ye, Esq. 135-11 8th Ave. #1A Flushing, NY 11354 Ning Ye, Esq. Law Office of Ning Ye, Esq. 135-11 8th Ave. #1A Flushing, NY 11354 Tel: (718) 308-6626 Email: yeningusa@gmail.com 14. Yua Hua Zhuang Shi Litigation $1,571,530 c/o Kevin Tung, Esq. Kevin Kerveng Tung P.C. Queens Crossing Business Center 136-20 38th Avenue, Suite 3D Flushing, NY 11354 Kevin Tung, Esq. Tel: (718) 939-4633 Email: ktung@kktlawfirm.com 15. Liehong Zhuang/Xiao Litigation $1,005,000 Yan Zhu c/o Trexler & Zhang, LLP 224 West 35th Street, 11th Floor New York, NY 10001 onathan T. Trexler, Esq. Tel: (718) 888-7894 Email: info@trexlerzhang.com 16. Jun Chen aka Jonathan Ho Litigation $1,000,000 c/o Wayne Wei Zhu, Esq. 41-25 Kissena Blvd, Suite 112 Flushing, NY 11355 Wayne Wei Zhu, Esq. 41-25 Kissena Blvd, Suite 112 Flushing, NY 11355 Tel: (718) 353-8380 17. Samuel Dan Nunberg Litigation $1,000,000 600 S. Dixie Hwy, Suite 455 West Palm Beach, FL 33401 Samuel Dan Nunberg 600 S. Dixie Hwy, Suite 455 West Palm Beach, FL 33401 Tel: (646) 318-0115 Email: snunberg@winstonashe.co 18. Weican "Watson" Meng Wilfull $1,000,000 and Boxun Inc. Injury c/o Carollynn HG Callari, Esq. Callari Partners LLC 100 Somerset Corp Blvd., Suite 206 Bridgewater, NJ 08807 Tel: 908.240.3964 Email: ccallari@callaripartners.com 19. Yua Hua Zhu Shi Litigation $981,501 c/o Kevin Tung, Esq. Kevin Kerveng Tung P.C. Queens Crossing Business Center 136-20 38th Avenue, Suite 3D Flushing, NY 11354 Tel: (718) 939-4633 Email: ktung@kktlawfirm.com 20. Baker & Hostetler LLP Professional $560,368 Attn: Andrew Layden Services 200 S. Orange Avenue Suite 2300 Orlando, FL 32801 Tel: (407) 649-4070 Email: alayden@bakerlaw.com GLOBAL CORD: Chapter 15 Case Summary ------------------------------------ Chapter 15 Debtor: Global Cord Blood Corporation 94 Solaris Avenue PO Box 1348 Grand Cayman KY1-1108 Cayman Islands Business Description: Global Cord Blood Corporation is a life sciences enterprise dedicated to the storage of umbilical cord blood stem cells. Leveraging the rapid developments in life sciences research and the increasing popularity and continuous new developments of clinical applications using stem cells, the Company endeavors to provide umbilical cord blood storage services for parents to save cord blood stem cells on behalf of their children, in China and the Asia Pacific regions, to safeguard the lives and health of their newborns. Foreign Proceeding: In the Matter of Global Cord Blood Corp., FSD2022-0108 (Cayman Islands) Chapter 15 Petition Date: October 7, 2022 Court: United States Bankruptcy Court Southern District of New York Case No.: 22-11347 Foreign Representatives: Margot MacInnis, John Royle, and Chow Tsz Nga Georgia 2nd Floor, Century Yard, Cricket Square PO Box 1044 Grand Cayman KY1-1102 Cayman Islands Foreign Representatives' Counsel: Joshua Dorchak, Esq. MORGAN, LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178 Tel: (212) 309-6700 Email: joshua.dorchak@morganlewis.com Estimated Assets: Unknown Estimated Liabilities: Unknown A full-text copy of the Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/P3W57BA/Global_Cord_Blood_Corporation__nysbke-22-11347__0001.0.pdf?mcid=tGE4TAMA HOLONG CS LLC: Files Subchapter V Case -------------------------------------- Holong CS LLC filed for chapter 11 protection in the Southern District of Texas without stating a reason. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, Holong CS LLC estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 4, 2022, at 2:00 PM at US Trustee Houston Teleconference. Proofs of claim are due by Dec. 12, 2022. About Holong CS LLC Holong CS LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-32935) on Oct. 3, 2022. In the petition filed by Jack Kaphle, as manager, the Debtor reported assets and liabilities between $1 million and $10 million. Jarrod B Martin has been appointed as Subchapter V trustee. The Debtor is represented by Joyce Williams Lindauer of Joyce W. Lindauer Attorney, PLLC. IFRESH INC: Qiang Ou Quits as Director -------------------------------------- Mr. Qiang Ou resigned as a director of iFresh, Inc. on Oct. 5, 2022. Mr. Ou's decision did not result from any disagreement with the Company relating to its operations, policies or practice, according to a Form 8-K filed with the Securities and Exchange Commission. About iFresh Inc. Headquartered in Long Island City, New York, iFresh Inc. -- http://www.ifreshmarket.com-- is an Asian American grocery supermarket chain and online grocer on the east coast of U.S. With eight retail supermarkets along the US eastern seaboard (with additional stores in Connecticut opening soon), and one in-house wholesale business strategically located in cities with a highly concentrated Asian population, iFresh aims to satisfy the increasing demands of Asian Americans (whose purchasing power has been growing rapidly) for fresh and culturally unique produce, seafood and other groceries that are not found in mainstream supermarkets. With an in-house proprietary delivery network, online sales channel and strong relations with farms that produce Chinese specialty vegetables and fruits, iFresh is able to offer fresh, high-quality specialty produce at competitive prices to a growing base of customers. iFresh Inc. reported a net loss of $8.29 million for the year ended March 31, 2020, compared to a net loss of $12 million for the year ended March 31, 2019. As of Dec. 31, 2020, the Company had $131.62 million in total assets, $110.33 million in total liabilities, and $21.29 million in total shareholders' equity. Friedman LLP, in New York, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Aug. 13, 2020, citing that the Company has incurred significant operating losses, has negative working capital of $28.6 million and is not in compliance with its credit agreement. These conditions raise substantial doubt about the Company's ability to continue as a going concern. INTELSAT SA: Defeats SES Americom Bankruptcy Claims --------------------------------------------------- James Nani of Bloomberg Law reports that SES Americom Inc. lost its bid to recover $421 million from competitor Intelsat SA in a fight over billions of dollars in federal payments for surrendering access to certain spectrum so mobile carriers can use it for 5G technology. SES failed to show that Intelsat, which emerged from bankruptcy in February, is liable to SES under under an agreement the two satellite giants struck in 2018, Judge Keith Phillips of the US Bankruptcy Court for the Eastern District of Virginia ruled on Friday. On July 14, 2020, SES Americom, Inc., filed proofs of claim against each of the Debtors, alleging that each Debtor had repudiated its obligations under a consortium agreement, including the obligation to split evenly any proceeds received by Intelsat and SES under that agreement. SES sought "at least $1.8 billion" against each Debtor, claiming it was entitled to "approximately $450 million" in compensatory damages, plus punitive damages. The Debtors objected to SES's proofs of claim. "The Court finds that under the plain language of the Consortium agreement and the evidence in the record, SES has failed to carry its burden of establishing by a preponderance of the evidence that Intelsat is liable to SES under any theory of recovery set forth by SES. Accordingly, Intelsat's objection to SES proofs of claim nos. 84, 85, and 103 will be sustained, and the claims will be disallowed," according to the ruling. About Intelsat S.A. Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held operator of satellite services businesses, which provides a diverse array of communications services to a wide variety of clients, including media companies, telecommunication operators, internet service providers, and data networking service providers. The Company is also a provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The Company's administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat S.A. and its debtor-affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The petitions were signed by David Tolley, executive vice president, chief financial officer, and co-chief restructuring officer. At the time of the filing, the Debtors disclosed total assets of $11,651,558,000 and total liabilities of $16,805,844,000 as of April 1, 2020. Judge Keith L. Phillips oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; PJT Partners LP as financial advisor & investment banker; Deloitte LLP as tax advisor; and Deloitte Financial Advisory Services LLP as fresh start accounting services provider. Stretto is the claims and noticing agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 27, 2020. The committee tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel; FTI Consulting, Inc., as financial advisor; Moelis & Company LLC as investment banker; Bonn Steichen & Partners as special counsel; and Prime Clerk LLC as information agent. J.C. PENNEY: Rejection of Klairmont Sublease Afforded Deference --------------------------------------------------------------- The U.S. Court of Appeals for the Fifth Circuit affirmed the district court's judgment in the appealed case entitled IN THE MATTER OF J.C. PENNEY DIRECT MARKETING SERVICES, L.L.C., Debtor, KLAIRMONT KORNERS, L.L.C., Appellant, Case No. 22-40371, (5th Cir.). Klairmont obtained a sublease from J.C. Penney Properties, Inc. ("JCP") for commercial real estate, where JCP acted as a pass-through entity between Klairmont and the landowner. In 2020, JCP filed for relief under Chapter 11 of the Bankruptcy Code, allowing it to assume or reject ongoing commercial leases. Given that the lease and sublease locked in below-market rates, Klairmont stood to gain from assumption, while the landowner would benefit from rejection. Following negotiations, and at the direction of the company purchasing its assets, JCP chose to reject its sublease to Klairmont—a decision generally afforded deference under the business judgment rule. In its ruling, the bankruptcy court emphasized that the decision to reject the lease rested on JCP's own business judgment regarding the financial benefits of each option -- this was affirmed by the district court. Hence, the appeal. In its appeal, Klairmont argued that a debtor's decision to reject a commercial lease should not receive deference under the business judgment rule because of "bad faith, whim, or caprice" inherent in a third party's negotiations with Klairmont. The Fifth Circuit held that Klairmont's position is untenable, pointing out that Klairmont misapprehends the lens through which courts view the business judgment rule. The correct inquiry under the business judgment standard is whether the debtor's decision regarding executory contracts benefits the debtor, not whether the decision harms third parties. The Court opined that while it is true that bad faith dealing prejudiced Klairmont in its negotiations with JCP for assumption of its sublease. However, Klairmont does not contend that JCP's decision to reject the lease failed to enhance its estate. Neither does Klairmont assert that JCP's action on behalf of its estate was clearly erroneous, too speculative, or contrary to the Bankruptcy Code. Thus, Klairmont will not find relief in asserting that JCP's decision deserves no deference under the business judgment rule. A full-text copy of the Decision dated Oct. 6, 2022 is available at https://tinyurl.com/yc2ybyyh from Leagle.com. About J.C. Penney Co. Inc. J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversaw the cases. The Debtors tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney The committee of unsecured creditors retained Cole Schotz, P.C., and Cooley, LLP. * * * J.C. Penney in November 2020 won approval to sell substantially all of its retail and operating assets ("OpCo") to a group formed by landlords Brookfield Asset Management, Inc. and Simon Property Group and senior lenders through a combination of cash and new term loan debt. Paul, Weiss, Rifkind, Wharton & Garrison LLP was the legal counsel, and BRG Capital Advisors, LLC, served as financial adviser to Simon and Brookfield. JUUL LABS: To Enter Financing Talks for Possible Chapter 11 Filing ------------------------------------------------------------------ Eliza Ronalds-Hannon and Gillian Tan of Bloomberg News report that Juul Labs Inc. is beginning talks regarding funding for a potential Chapter 11 bankruptcy, according to people with knowledge of the preparations. The e-cigarette manufacturer has engaged in informal talks regarding so-called debtor-in-possession financing, said the people, asking not to be named discussing private information. Formal discussions with potential lenders are expected to progress in the coming days, one of them said. "We will continue the preparation process for both a restructuring and other strategic options as we determine what path is best for our company," the company spokesman told Bloomberg when asked, adding that the preparations aren’t final, and plans could still change. Deep Dive recounts that Juul Labs, which Altria (NYSE: MO) owns a 35% stake in, encountered a kerfuffle with the US Food and Drug Administration after the latter ordered it to remove its e-cigarettes from the US market back in June 2022. The agency cited lack of evidence demonstrating their overall safety. Since then, the company has been considering bankruptcy, retaining bankruptcy counsel Kirkland & Ellis and Alvarez & Marsal, as well as exploring various financing options. About Juul Labs Inc. JUUL Labs, Inc., formerly known as Pax Labs, Inc., is an American electronic cigarette company, with its principal place of business in San Francisco, California. LHOTSE CIS LLC: Files Subchapter V Case --------------------------------------- Lhotse CIS LLC filed for chapter 11 protection in the Southern District of Texas without stating a reason. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, Lhotse CIS LLC estimates $1 million to $10 million in debt to 1 to 49 creditors. The Debtor says Guaranty Bank & Trust, N.A., is owed $3.5 million, $1.865 million of which is unsecured. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 4, 2022, at 3:00 PM at US Trustee Houston Teleconference. Proofs of claim are due by Dec. 12, 2022. About Lhotse CIS LLC Lhotse CIS LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-bk-32937) on Oct. 3, 2022. In the petition filed by Jack Kaphle, as manager, the Debtor reported assets and liabilities between $1 million and $10 million. Chris Quinn has been appointed as Subchapter V trustee. The Debtor is represented by Joyce Williams Lindauer of Joyce W. Lindauer Attorney, PLLC. LOADCRAFT INDUSTRIES: Unsecureds Owed $3.7M to Get At Least 10% --------------------------------------------------------------- Loadcraft Industries, Ltd., submitted an Amended Disclosure Statement. This Plan contemplates a reorganization of the Debtor's business as an engineering and sales firm focusing on oilfield parts, sales, Category IV rig inspections, rig rebuilds and specialized oilfield equipment, as the Debtor has sold most of its manufacturing equipment and operations during the course of this Bankruptcy case. Creditors will receive periodic payments. Under the Plan, Class IV General Unsecured Creditors total $3.7 million. Holders of Allowed General Unsecured Claims will receive pro-rata distributions representing 10% of their allowed claims, paid in equal quarterly installments over a 48-month period beginning March 3, 2023. The Reorganized Debtor shall have the right to prosecute, compromise, sell or abandon the "reserved claims" in the exercise of its business judgment. In addition, holders of allowed general unsecured claims shall receive 10% of the proceeds obtained by the Reorganized Debtor from the "reserved claims", net of attorneys' fees and costs incurred by the Reorganized Debtor in prosecution of such claims. Class IV is impaired. With respect to Class V Convenience Claim, holders of claims at or under $500.00 will receive 100% of their Aalowed claim, without interest, in two equal monthly payments on April 1, 2023 and May 1, 2023. The Debtor estimates that Allowed Class V Claims will total approximately $26,000. Class V is impaired. All cash necessary for the Reorganized Debtor to make payments pursuant to the Plan shall be obtained from operations of the Debtor and, potentially, a sale of the Brownwood Facility. The Reorganized Debtor may issue additional equity and/or limited partnership interests as deemed reasonable and necessary in the exercise of its business judgment. The Bankruptcy Court has entered an order fixing Nov. 7 2022, at 2:45 p.m. (Prevailing Central Time), Bankruptcy Courtroom for the Hon. Tony M. Davis 903 San Jacinto, Austin, Texas as the date, time and place for the initial commencement of a hearing on confirmation of the Plan, and fixing Oct. 24, 2022 at 5:00 p.m., (Prevailing Central Time), as the time by which all objections to confirmation of the Plan, which must be accompanied by a memorandum of authorities, must be filed with the Bankruptcy Court and served on counsel for the Debtor. Attorneys for Loadcraft Industries, Ltd: Eric J. Taube, Esq. Mark C. Taylor, Esq. WALLER, LANSDEN DORTCH & DAVIS, LLP 100 Congress Avenue, 18th Floor Austin, TX 78701 Tel: (512) 472-5997 Fax: (512) 472-5248 A copy of the Amended Disclosure Statement dated September 30, 2022, is available at https://bit.ly/3LWIhGl from PacerMonitor.com. About Loadcraft Industries Based in Brady, Texas, Loadcraft Industries specializes in the manufacturing of mobile drilling rig and custom oilfield equipment. Loadcraft Industries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 21-11018) on Dec. 30, 2021, listing as much as $10 million in assets and liabilities. Judge Tony M. Davis oversees the case. The Debtor tapped Waller Lansden Dortch & Davis, LLP and HMP Advisory Holdings, LLC as legal counsel and restructuring advisor, respectively. Gregory Milligan, executive vice president of HMP, serves as the Debtor's chief restructuring officer. LV FORTUNE LLC: Fortune Hotel Operator Starts Subchapter V Case --------------------------------------------------------------- LV Fortune LLC, operator of the Fortune Hotel & Suites in Las Vegas, Nevada, filed for chapter 11 protection to keep its option of buying the hotel property from its new landlords. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. LV Fortune is an Oregon LLC organized on Nov. 16, 2022, to serve as a tenant under a lease agreement with option to buy the Fortune Hotel & Suites. The hotel is a 150-room hotel located at 325 E. Flamingo Road, Las Vegas, Nevada 89169. The hotel includes a pool, fitness room, and business center, as well as 5,000 square feet of flexible meeting, conference, and special event space. The hotel is adjacent to the Tuscany Hotel & Casino on Flamingo. On Dec. 31, 2020, Las Vegas Lucky Investment LLC, as landlord and LV Fortune, as tenant, entered into the Fortune Hotel Lease. The lease started Jan. 1, 2021, with an initial term period of three years, subject to two one-year extension options. Montly rent during the initial three-year term was $30,000 per month. The Lease provides the tenant with the option to purchase the Property from the landlord for a set purchase price of $20.9 million for the initial term, and then in the third or fourth year of the term, the purchase price increases to $22 million. From day one after securing the lease, LV Fortune invited almost half a million dollars to clean up and repair items throughout the hotel. After operating the hotel for about 10 months, in November 2021, LV Fortune entered into a Corporate Group Rooms Agreement with Liberty Wellness Ooutpatient Counselling UU, LLC, thereby providing Liberty with the exclusive right to use all rooms in the Hotel through August 20223. Liberty provides emergency shelter/temporary housing to assist individuals facing homelessness due to the Covid pandemic. Since entering into the lease and continuing through August 2022, thus for 20 months, LV Fortune has done its best to keep its lease obligations current. But on Sept. 1, 2022, the original landlord sold the premises for $20 million to Cathedral GD, LLC, and Cathedral JD, LLC. The new landlords are controlled by 3D Investments LLC and developer Joseph Daneshgar based in Beverly Hills, California. Only a week after acquiring the Property from the original Landlord, the new landlords served a five-day notice to pay rent or surrender premises to LV FOrtune, which asserted that the total amount of $347,429 was due under the lease. Given the new landlord's tactics, and given the tremendous appreciation in the Las Vegas commercial property market since the lease was executed in the middle of the Covid-19 pandemic in 2020, as well as the significant development at or around the property and its excellent location, the Debtor's option to purchase the property as provided in the Lease is extremely valuable, and it believes that the Property is now worth many millions of dollars in excess of the Option's purchase price. Although LV Fortune remains open to all potential possibilities, it believes that the highest and best use fo the Property would be to wait out the expiration of the Group Rooms Agreement with Liberty in August 2023, and then demise the Hotel to allow for a future sale or partnering on a new development fo the Property. Accordingly, in order to avoid the potential loss of the very valuable option, and to provide a full and fair opportunity to provide a prompt cure of any alleged defaults under the lease, and avoid a summary forfeiture of the OPtion, LV Fortune believed that it had no other choice but to seek relief from the Bankruptcy Court to allow it to continue its business, restructure its financial affairs, and to preserve its valuable rights for the benefit of all creditors and parties-in-interest. According to court filings, LV Fortune LLC estimates $10 million to $50 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. About LV Fortune LLC LV Fortune LLC operates the Fortune Hotel & Suites in Las Vegas, Nevada. LV Fortune LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code on October 3, 2022. In the petition filed by Jeffrey Fleming, as manager, the Debtor reported assets and liabilities between $10 million and $50 million each. The case is overseen by Honorable Bankruptcy Judge Mike K Nakagawa. The Debtor is represented by Matthew C. Zirzow of LARSON & ZIRZOW, LLC The Subchapter V trustee can be reached at: Edward Burr 10191 E. Shangri La Road Scottsdale, AZ 85260 Phone: (602) 418-2906 Email: Ted@macrestructuring.com MASTEN SPACE: Nov. 8 Plan Confirmation Hearing Set -------------------------------------------------- Judge Brendan L. Shannon has approved, on an interim basis, the Disclosures in the Plan of Masten Space Systems, Inc., as containing adequate information under 11 U.S.C. Section 1125 for solicitation purposes. The Bankruptcy Court will conduct a confirmation hearing for final approval of the Plan and confirmation of the Plan on Nov. 8, 2022, at 10:00 a.m. No later than Oct. 3, 2022, the Debtor will commence service of the following documents upon the Voting Classes: a. the Plan and all other exhibits annexed thereto; b. the Disclosures Approval Order, including a Ballot to accept or reject the Plan along with a return envelope, and those other documents approved by the Court hereto as set forth herein; and c. such other materials as the Court may direct or approve, including any supplemental solicitation materials the Debtor may file with the Court. (collectively, the "Solicitation Materials"). The Debtor may file a supplement to the Plan no later than October 21, 2022. In order to be counted as votes to accept or reject the Plan, Ballots must be properly executed, completed and delivered to the Voting Agent so that the Ballots are actually received no later than Oct. 28, 2022 at 4:00 p.m. (prevailing Eastern time), unless extended by the Debtor in writing, after consultation with the Committee. Objections to final approval and confirmation of the Plan on any ground, including adequacy of the Disclosures therein, if any, must be filed and served no later than Nov. 1, 2022, at 4:00 p.m. No later than Nov. 3, 2022, at noon, any party in interest may file a brief in support and submit any evidence in support of confirmation of the Plan, as well as respond to any objections or responses filed in opposition to the Plan. Ballots need not be provided to Holders of Unclassified Claims, or to Holders of Priority Non-Tax Claims, Secured Claims, Section 510(b) Claims, or Equity Interests in Classes 1, 2, 5 and 6, respectively, as such Non-Voting Classes are either Unimpaired or are conclusively presumed to have accepted or rejected the Plan in accordance with Sections 1126(f) and (g) of the Bankruptcy Code. About Masten Space Systems Masten Space Systems, Inc. -- https://www.masten.aero -- is a space infrastructure company in Mojave, Calif. Masten Space Systems filed for Chapter 11 protection (Bankr. D. Del. Case No. 22-10657) on July 29, 2022, with between $10 million and $50 million in both assets and liabilities. David Masten, president and chief technology officer of Masten Space Systems, signed the petition. The Debtor tapped Morris James, LLP as bankruptcy counsel; Alston & Bird, LLP as special counsel; Gavin/Solmonese, LLC as financial advisor and restructuring advisor; and Stretto, Inc. as balloting agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Debtor's Chapter 11 case on Aug. 16, 2022. The committee is represented by Kilpatrick Townsend & Stockton, LLP and Cozen O'Connor. MATLINPATTERSON GLOBAL: Unsecureds Unimpaired in Liquidating Plan ----------------------------------------------------------------- MatlinPatterson Global Opportunities Partners II L.P., et al. submitted a First Amended Joint Chapter 11 Plan of Liquidation and a First Amended Disclosure Statement. The Debtors commenced Chapter 11 cases in connection with the winding down of their operations and investments. The purpose of the Plan is to provide for the orderly distribution of the Debtors' Assets to the Holders of Allowed Administrative Claims, Other Priority Claims, Promissory Note Claims, General Unsecured Claims, VRG Claims, HJDK Claims and Partnership Interests. The administration and execution of the Plan will be managed and overseen by the Plan Administrator. The Plan Administrator will be responsible for taking the necessary and appropriate actions to administer the remaining Assets of the Debtors and the Wind Down Estates, and to proceed with an orderly, expeditious, and efficient wind-down and distribution of the remaining Assets of the Debtors and the Wind Down Estates in accordance with the terms of the Plan. The Debtors believe that the distributions under the Plan will provide all Holders of Allowed Claims against and Interests in the Debtors at least the same recovery on account of Allowed Claims and Interests as would a liquidation of the Debtors' assets conducted under chapter 7 of the Bankruptcy Code. Distributions under the Plan to Holders of Allowed Claims and Interests would be made more quickly than in chapter 7, where the continuance of certain non-bankruptcy litigations would substantially delay any such distributions. Furthermore, a chapter 7 trustee would charge a substantial fee, reducing the amount available for distribution on account of Allowed Claims and Interests. Thus, the Debtors believe that Confirmation and Consummation of the Plan is in the best interests of all Holders of Allowed Claims and Interests. Under the Plan, holders of Class 2 General Unsecured Claims will receive, at the applicable Debtor's or the Plan Administrator's option:(i) if such Allowed General Unsecured Claim is due and payable on or before the Effective Date, payment in full in Cash of the unpaid portion of its Allowed General Unsecured Claim on the later of (x) the Effective Date (or as soon as reasonably practicable thereafter) or (y) the date on which such General Unsecured Claim becomes Allowed (or as soon as reasonably practicable thereafter); (ii) if such Allowed General Unsecured Claim is not due and payable on or before the Effective Date, payment in full in Cash in the ordinary course of business consistent with past practices; or (iii) other treatment, as may be determined by the applicable Debtor or the Plan Administrator, as applicable, such that such Allowed General Unsecured Claim shall be rendered Unimpaired. The Debtors have objected to the VarigLog Claims. Accordingly, the Debtors expect that such Claims either (i) will not be Allowed as of the Effective Date or thereafter and will not receive distributions on the Effective Date or thereafter, or (ii) will be estimated by the Bankruptcy Court and Allowed in an amount such that the Allowed VarigLog Claims (if any) will be paid in full pursuant to the terms hereof. The purpose of the Wind Down Estates is to monetize and distribute the Debtors' Assets with no objective to continue or engage in the conduct of a trade or business. The Plan Administrator shall be vested with all powers and authority set forth in the Plan, shall be deemed to have been appointed as the Debtors' Estates' representative pursuant to section 1123(b)(3)(B) of the Bankruptcy Code, and shall have the duties of a trustee set forth in sections 704(a)(1), 704(a)(2) and 704(a)(5) of the Bankruptcy Code. All actions taken by the Plan Administrator in its capacity as such under the Plan shall be deemed to have been taken on behalf of the Wind Down Estates. Counsel to the Debtors: Elisha D. Graff, Esq. Kathrine A. McLendon, Esq. Jamie J. Fell, Esq. Dov Gottlieb, Esq. SIMPSON THACHER & BARTLETT LLP 425 Lexington Avenue New York, NY 10017 Tel: (212) 455-2000 Telephone Fax: (212) 455-2502 Facsimile - and - Tyler B. Robinson, Esq. Lauren W. Brazier, Esq. SIMPSON THACHER & BARTLETT LLP CityPoint, One Ropemaker Street London EC2Y 9HU, England Tel: +44-(0)20-7275-6500 Fax: +44-(0)20-7275-6592 A copy of the First Amended Disclosure Statement dated September 30, 2022, is available at https://bit.ly/3LWMvOi from kccllc.net, the claims agent. About MatlinPatterson Global MatlinPatterson Global Opportunities Partners II L.P. is a private investment fund structured as limited partnership entity organized in the State of Delaware. MatlinPatterson and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No 21-11255) on July 6, 2021, disclosing total assets of $100 million to $500 million and total liabilities of $10 million to $50 million. The cases are handled by Judge David S. Jones. The Debtors tapped Simpson Thacher & Bartlett, LLP as bankruptcy counsel; Schulte Roth & Zabel, LLP as conflicts counsel; FTS US Inc. as tax consultant; Ernst & Young, LLP as tax services provider; and North Country Capital LLC as restructuring advisor. Matthew Doheny of North Country Capital serves as the Debtors' chief restructuring officer. Kurtzman Carson Consultants, LLC is the claims, noticing and administrative agent. MINESEN COMPANY: Army Morale Bid for Chapter 11 Trustee Approved ---------------------------------------------------------------- The U.S. Bankruptcy Judge Robert J. Faris granted a motion for the appointment of a chapter 11 trustee for the estate of The Minesen Company that was filed by The Army Morale, Welfare, and Recreation Fund's ("MWR"). Minesen is a party to four contracts with MWR and the Army, pursuant to which Minesen operates a hotel on the Schofield Barracks military installation. Without these contracts, Minesen has no business at all. Previously, Judge Faris entered a Memorandum of Decision allowing Minesen to assume the contracts if it cured certain identified defaults. After eleven months of further litigation, MWR still contends that Minesen has not cured all of the defaults identified in the Memorandum Decision, but instead Minesen has committed additional defaults. Judge Faris finds that both parties are to blame for the current situation. Minesen has effected cures only begrudgingly and at the eleventh hour and has taken actions that seem calculated to provoke MWR's unhappiness. While some of the delay has been caused by MWR's own inflexibility, Minesen bears the burden of curing its defaults. MWR has made clear that it will never be satisfied with Minesen's performance. Accordingly, Judge Faris concludes that an independent trustee must be appointed to safeguard the interests of the estate and its stakeholders after considering the pattern of intransigent conduct of both Minesen and MWR. A full-text copy of the Order dated Oct. 3, 2022, is available at https://tinyurl.com/bdec6f9s from Leagle.com. About The Minesen Company The Minesen Company -- http://www.innatschofield.com/-- owns a transient military lodging facility at Schofield Barracks in central Oahu known as the Inn at Schofield Barracks. Amenities include queen-sized beds, coffee maker, refrigerator, microwave, television, Internet, air conditioning, laundry, and 24-hour convenience store. The Minesen Company filed a petition for Chapter 11 protection (Bankr. D. Hawaii Case No. 19-00849) on July 4, 2019, listing up to $50 million in assets and up to $10 million in liabilities. Max Jensen, president of The Minesen Company, signed the petition. Judge Robert J. Faris oversees the case. The Debtor tapped Goodsill Anderson Quiin & Stifel as bankruptcy counsel; Snell & Wilmer, LLP, Keith M. Kiuchi, A Law Corporation and Crowell & Moring, LLP as special counsels; Joseph M. Salvator CPA, PC as accountant; and Schlissel & Associates, LLC as tax advisor. MO-PAT SUNRISE MALL: Files Bare-Bones Chapter 11 Petition --------------------------------------------------------- MO-PAT Sunrise Mall LLC filed for chapter 11 protection in the Southern District of Texas without stating a reason. According to court filings, MO-PAT Sunrise Mall LLC, a Single Asset Real Estate, estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 2, 2022, at 10:00 AM at US Trustee Corpus Christi Teleconference. Proofs of claim are due by Jan. 31, 2023. About MO-PAT Sunrise Mall On Oct. 3, 2022, MO-PAT Sunrise Mall LLC filed for chapter 11 protection (Bankr. S.D. Tex. Case No. 22-20244). The Debtor reported assets of $1 million to $10 million and liabilities of $1 million to $10 million. The petition states that funds will be available to unsecured creditors. MO-PAT Sunrise Mall filed a petition for relief under Chapter 11 of the Bankruptcy Code on Oct. 3, 2022. In the petition filed by Thomas E. Morris, as managing member, the Debtor reported assets and liabilities between $1 million and $10 million. The Debtor is represented by Joyce Williams Lindauer of Joyce W. Lindauer Attorney, PLLC. MORNINGSTAR SENIOR: Fitch Cuts LongTerm IDR to 'BB', Outlook Stable ------------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating of Morningstar Senior Living (MSL) and the series 2012 and 2019 bonds issued by the Northampton County Industrial Development Authority on behalf of MSL to 'BB' from 'BB+'. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of the obligated group's (OG) gross revenues, a first mortgage lien, and a debt service reserve fund for the series 2012 and 2019 bonds. ANALYTICAL CONCLUSION The downgrade to 'BB' is based on the increase in long-term permanent debt that MSL will be incurring to fund the completion of Phase 4 and the construction of Phase 5 and 6 of the Heritage Village expansion project. Despite the risks involved with the low level of presales for Phase 6 (one of 17 Phase 6 units has been reserved with a deposit), Fitch notes that the construction and fill of MSL's Heritage Village has been very successful to date. Phases 1-3 (67 units) are fully sold and occupied and Phase 4 (19 units) is expected to be fully occupied by February 2023. The 'BB' rating also reflects MSL's steady demand and weaker profitability in fiscal 2022 along with the expectation of the maintenance of a thin financial profile that is consistent with a below-investment grade life plan community rating through Fitch's forward-looking scenario analysis, within the context of MSL's midrange revenue defensibility and weak operating risk assessments. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Improving Census at Original Campus; Successful Fill of Expansion MSL continues to progress forward on its Heritage Village expansion project, which has brought online 67 units in Phases 1-3 and 10 units in Phase 4 as of Aug. 11, 2022. Management expects eight additional Phase 4 move-ins to occur before the end of November 2022 and the final move-in to occur on February 2023. While independent living unit (ILU) occupancy at MSL's Moravian Hall Square was weak at only 85.4% in fiscal 2022, occupancy has trended positively through fiscal 2022 as 1Q22 averaged 79.9% and 4Q22 averaged a much improved 88.2%. Revenue generation is supported by entrance fee and monthly service fee increases that occur regularly. Management implemented higher than usual increases in 2023, especially on units with higher demand, to help offset inflation pressures. MSL is located in a stable service area with population growth above state and national averages. Demand is also sustained by a healthy real estate market, with median home values that have seen over 10% growth over the past year. Entrance fees on ILUs under a fee-for-service (FFS) traditional declining plan at Moravian Hall Square range from approximately $114,000 to $480,000 and $297,000 to $432,000 for Phase 1-4 units at Heritage Village. Fitch believes these ranges are comparable to home values based on a review of public data that shows average home values around $375,000 in Nazareth, PA. Average entrance fees on the Phase 5 and 6 ILUs are higher than those for existing units, ranging from about $406,000 to $556,000. Pre-sale levels on the Phase 5 units and historical success selling Phases 1-4 indicate market acceptance of a higher price point for the new units. MSL has numerous competitors, but is capable of competing with its preferable location, amenities, and incentives. Despite competition, demand for ILUs in the primary market area (PMA) is favorable as a recent market analysis noted that occupancy at entrance fee retirement communities in and near the PMA are all at 90% or above. Operating Risk: 'bb' Weak Profitability, Robust Capital Spending Morningstar's contract mix historically consisted of predominately lifecare (type-A) contracts. The most recent data provided by management indicates that FFS contracts now outnumber lifecare contracts (57% FFS vs 43% life care). The vast majority of Phase 5 and 6 residents are expected to select FFS contracts, which will continue to shift the contract mix away from lifecare contracts. MSL's operating ratio and net operating margin (NOM) of 99.9% and 6.9% in fiscal 2021, respectively, materially benefitted from the recognition of a $2.5 million Paycheck Protection Program (PPP) loan as revenue. Fiscal 2022 results were affected by the absence of the non-recurring PPP loan funds and increased labor, food and supply costs that offset above budget resident revenue generation -- these challenges produced a very weak operating ratio and NOM of 112.7% and -3.3%, respectively. Fitch expects additional revenues from Phase 4 ILUs, improved census across service lines and MSL's efforts to contain costs and manage labor challenges to produce an improved, but still weak operating ratio and NOM over the outlook period. MSL was able to generate a good NOM-adjusted (NOMA) of 16.7% through high net entrance fee generation from turnover units of $5.6 million that was well above the $3.2 million average from fiscal 2018 to fiscal 2021. Management actively invests in maintaining its existing facilities and expanding the Heritage Village campus. Capex has averaged nearly 400% of depreciation expense over the past few years resulting in a good average age of plant of 10.2 years as of June 30, 2022. Recent improvements to the Moravian Hall Square campus include nursing home and common space renovations, upgrades to personal care areas and roof replacements. A remodel of Bethany House personal care at Moravian Hall Square, which will add private showers and expanded closet space to each resident room, is expected to begin in the second half of fiscal 2023. MSL continues to explore the potential of adding ILUs to the Moravian Hall Square campus (which would require a change to the local ordinance) and additional ILUs on owned property contiguous to the Moravian Hall Square campus. Fitch has incorporated into its analysis capital spending for routine needs, the completion of Phase 4 and the construction of Phases 5 and 6, but additional debt or spending on potential projects for the Moravian Hall Square campus have not been incorporated into the current rating. Proceeds from privately placed bank debt that is expected to be incurred will be used to pay for project costs ($37.2 million), fund 24 months of capitalized interest ($1.2 million), and refund the outstanding series 2012 bonds ($21.3 million). Approximately $16.6 million of the newly issued debt will be short-term entrance fee bonds that are expected to be repaid by approximately $19.5 million in initial entrance fees. Construction on Phase 5 is expected to be completed in June 2024 and construction on Phase 6 is expected to be completed by April 2025. Management is forecasting a 15-month fill up period for Phase 5 and a seven-month fill up period for Phase 6, resulting in fiscal 2027 being the first full year of project stabilization. Following the series 2022 transaction, MSL's pro forma maximum annual debt service (MADS) on permanent debt will increase to about $5.1 million from about $4 million. The additional debt results in weak pro forma capital-related metrics. Pro forma MADS equates to a high 17.3% of fiscal 2022 revenues, pro forma permanent debt to net available is weak at 14.1x, and pro forma revenue-only MADS coverage is very limited at 0.1x in fiscal 2022. Financial Profile: 'bb' Weaker Financial Profile Given MSL's midrange revenue defensibility assessment, weak operating risk assessment and Fitch's forward-looking scenario analysis, Fitch expects key leverage metrics to remain consistent with a 'bb' financial profile throughout the current economic and business cycle. Following the 2022 private debt issuance, the series 2019 bonds, the new series 2022A long-term fixed rate debt ($44.3 million), 2022B ($16.6 million) short-term temporary debt and a $1 million working capital loan will be MSL's debt outstanding. As of June 30, 2022, MSL had approximately $14.6 million of unrestricted cash and investments and $5.9 million in Heritage Village escrow deposits as of June 30 ,2022 that management expects will be released to the organization by the Pennsylvania Insurance Department by the end of 2022. Including the escrow deposits, MSL had approximately $20.5 million of unrestricted cash and investments, which translates into pro forma cash-to-adjusted debt of 28.1%, including the series 2022 permanent debt, and pro forma cash-to-adjusted debt of 23.6%, including the series 2022 temporary and permanent debt. Fitch includes MSL's $4.4 million debt service reserve fund in its calculation of cash-to-adjusted debt. MSL's unrestricted cash and investments (excluding the escrow deposits) represented 202 days cash on hand (DCOH), which is neutral to the assessment of MSL's financial profile. Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years given current economic expectations, shows MSL incrementally improving operating profitability through expense management and revenue growth from census improvement and new Heritage Village ILUs coming online. The stress scenario incorporates both an investment portfolio and cash flow stress that are in line with current economic conditions and expectations. Under these assumptions, MSL's key leverage metrics and coverage levels remain consistent with its 'bb' financial profile assessment, with cash-to-adjusted debt that remains at or below 30% and pro forma MADS coverage that averages 1.4x. Asymmetric Additional Risk Considerations No asymmetric risk considerations were relevant to the rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - Inability to improve operating metrics, particularly if NOM and NOMA are sustained below 0% and 15%, respectively; - Deterioration of unrestricted cash and investments such that DCOH is expected to be sustained below 200 days; - Though not expected, softening ILU occupancy to be consistently below 86%. Factors that could, individually or collectively, lead to positive rating action/upgrade: - An increase in unrestricted liquidity resulting in cash-to- adjusted debt consistently at or above 50%; - Coverage of pro forma MADS is expected to be consistently above 2x; - Improved profitability metrics with operating ratio consistently below 100% or NOM and NOMA consistently above 3% and 15%, respectively. CREDIT PROFILE MSL's Moravian Hall Square campus is located in Nazareth, PA, within the Lehigh Valley area, approximately 70 miles north of Philadelphia. The Moravian Hall Square campus has a health and wellness center that maintains a five-star overall rating from the Centers For Medicare & Medicaid Services. Moravian Hall Square sits on approximately 16 acres. MSL's Heritage Village campus is located one mile away in Upper Nazareth Township. Phase 1 (19 cottages) was completed in 2018, Phase 2 (27 cottages and townhomes) was completed in 2019, and Phase 3 (21 cottages) was completed in 2022. Phases 4 (19 cottages) is expected to be completed in early 2023. The total Heritage Village campus when fully built out will include up to 126 ILUs as currently designed. The actual zoning for the Heritage Village campus would allow for up to 167 units. The Moravian Hall Square campus currently includes 130 ILUs, 61 personal care units, 25 dementia care beds (licensed as personal care) and 61 licensed skilled nursing facility beds. There is some additional ILU capacity on the Moravian Hall Square as contiguous homes surrounding the campus have been purchased to allow for expansion. MSL provides full life care (Type A) and FFS (Type C) contract options. In fiscal 2022 (unaudited), MSL reported total revenues of approximately $28 million. Fitch uses consolidated financial statements in its analysis, but the 2022 figures cited above are for the OG. The OG includes MSL and Morningstar Senior Living Foundation, which represented substantially all assets and revenues of the consolidated entity in fiscal 2021. Not included in the OG is Morningstar Senior Solutions, which is a non-medical home care and care management business serving Lehigh Valley and a wholly-owned subsidiary of MSL that generated $1.8 million in revenue in fiscal 2021. 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. Entity/Debt Rating Prior ----------- ------ ----- Morningstar Senior Living (PA) LT IDR BB Downgrade BB+ Morningstar Senior Living (PA) /General Revenues/1 LT LT BB Downgrade BB+ MORRIS RAILS REAL ESTATE: SARE Files for Chapter 11 Bankruptcy -------------------------------------------------------------- Morris Rails Real Estate LLC filed for chapter 11 protection in the Northern District of Texas. The Debtor disclosed $1.2 million in total assets against $950,000 in liabilities. Its sole asset is the property at 5142 Vanderbilt, in Dallas, Texas. The $950,000 debt is owed to secured creditor Toorak Capital Partners, LLC. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 9, 2022, at 10:00 AM by TELEPHONE. Proofs of claim are due by Feb. 7, 2023. About Morris Rails Real Estate LLC Morris Rails Real Estate LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Morris Rails Real Estate LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code on Oct. 3, 2022. In the petition filed by Sameer Mohan, as managing member, the Debtor reported assets between %1 million and $10 million and liabilities between $500,000 million and $1 million. The Debtor is represented by Eric A. Liepins of Eric A. Liepins, P.C. NAT'L ASSOC. OF TELEVISION: Files Chapter 11 Subchapter V Case -------------------------------------------------------------- The National Association of Television Program Executives (NATPE), which has convened annual gatherings of producers, syndicators, station owners and other TV stakeholders for decades, has filed for Chapter 11 bankruptcy. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. Dade Hayes, writing for the Deadline, reports that NATPE cited the impact of Covid and said it planned to continue holding events, including its annual January 2023 conference, which is shifting to the Bahamas from its longtime Miami base. The pandemic "prevented NATPE from holding events, which typically generate significant revenue," a press release said. "These cancellations forced NATPE to operate on its financial reserves, which now require it to reorganize the NATPE business structure." In June, NATPE held its first in-person marketplace in two years at the Intercontinental Hotel in Budapest, Hungary. Due to the Omicron wave last winter, the group had to cancel its 2022 conference in Miami at the 11th hour, following the more predictable decision to go dark in 2021 at a time when most large-scale events (though, notably, not in the state of Florida) were still in limbo. Earlier this year, NATPE announced that its main event for Stateside attendees would be moving to the Baha Mar Resort in Nassau, Bahamas, in January 2023, and a return to Budapest is slated for June 2023. Both events next year are due to remain on the books during the bankruptcy process. As to the nature of restructuring, NATPE said it is "looking at all possible options." Possibilities could include raising funds through strategic alliances as well as continuing to operate NATPE as a more streamlined and reorganized operation. While no executives were quoted in the press release, it said NATPE was "optimistic" about its prospects of emerging from bankruptcy in a more fortified position in the industry. NATPE traces its roots almost to the advent of the medium. In the three-network era, the group gained prominence by creating common ground for various constituents to conduct business and exhibit their wares. In the 1980s and '90s, as the syndication business reached its peak, NATPE came to symbolize the excesses of the era, as suddenly ascendant producers like King World found a setting where they could spend some of their windfalls. The company, which syndicated ratings powerhouses like The Oprah Winfrey Show and Wheel of Fortune before an eventual sale to CBS, rented out the Louisiana Superdome one year when NATPE was taking place in New Orleans, hosting a party for thousands. In more recent years, NATPE became a more scaled-down and diversified affair, but its main U.S. event in Miami defied expectations that it might follow the downward trajectory of the syndication and local TV sectors toward obsolescence. The streaming boom instead offered a new piece of entertainment real estate to explore, and a satellite event focused on streaming that launched in LA several years ago has expanded the footprint. By putting down roots in Miami more than a decade ago, NATPE settled into a more coherent pattern and used that location to expand the role of international buyers and sellers, especially Latin American companies. While the go-go days of NATPE's past have stayed in the past, the event found a degree of stability until the Covid curtain fell in early 2020. About NATPE The National Association of Television Program Executives (NATPE) is a professional association of television and emerging media executives established in 1963. NATPE filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-bk-11181) on Oct. 11, 2022. The Debtor estimated assets of less than $50,000 and debt of less than $1 million. The Debtor's counsel: Leslie A Cohen Leslie Cohen Law PC 310-394-5900 leslie@lesliecohenlaw.com NORTHWEST SENIOR: No Resident Care Concerns, 3rd PCO Report Says ---------------------------------------------------------------- Susan Goodman, the patient care ombudsman, filed with the U.S. Bankruptcy Court for the Northern District of Texas a third interim report regarding the quality of patient care provided at The Plaza Locations at Edgemere, a health care facility operated by Northwest Senior Housing Corp. The ombudsman's continued, regular engagement with site leadership and third site visit did not reveal any care quality concerns, according to the report, which covers the period from Aug. 3 to Oct. 3. The site visit was in advance of the latest round of hearings. At the time of the visit, the ombudsman would summarize the mood of the staff and residents as having rebounded from much of the negative press and uncertainty that was reported in her first report. Skilled unit census at report filing was 54 as compared to 38 on the ombudsman's first site visit. Assisted living occupancy was 40, up slightly from 37-seven on the first site visit while memory assisted living occupancy was down slightly at 22. While Northwest continued ongoing recruitment efforts for various facility roles, turnover was attributed to normal business operations and national healthcare dynamics rather than to Northwest's continued bankruptcy process, accoridng to the report. A copy of the third interim ombudsman report is available for free at https://bit.ly/3ynuCme from Kurtzman Carson Consultants, LLC, claims agent. The Ombudsman may be reached at: Susan N. Goodman, Esq. Pivot Health Law, LLC PO Box 69734 Oro Valley, AZ 85737 Tel: (520) 744-7061 Email: sgoodman@pivothealthaz.com About Northwest Senior Housing Corp. Northwest Senior Housing Corporation, doing business as Edgemere, is a Texas non-profit corporation and is exempt from federal income taxation as a charitable organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. Northwest Senior Housing Corporation was formed for the purpose of developing, owning and operating a senior living community now known as Edgemere. Northwest Senior Housing Corporation and its affiliates sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No. 22-30659) on April 14, 2022. The petitions were signed by Nick Harshfield, treasurer. At the time of the filing, Northwest Senior Housing listed $100 million to $500 million in both assets and liabilities. Judge Michelle V. Larson oversees the cases. Polsinelli, PC and FTI Consulting Inc. serve as the Debtors' legal counsel and business advisor, respectively. Kurtzman Carson Consultants, LLC, is the Debtors' notice, claims and balloting agent and administrative advisor. The official committee of unsecured creditors tapped Foley & Lardner, LLP as legal counsel, and Ankura Consulting Group, LLC as financial advisor. Susan Goodman, Esq., at Pivot Health Law, LLC is the patient care ombudsman appointed in the Debtor's case. OCEAN POWER: Awarded $529K Surveillance Subcontract for DHS S&T --------------------------------------------------------------- Ocean Power Technologies, Inc. has been selected for a $529,025 procurement by Amentum Services. OPT was awarded the procurement to assist Amentum in providing the Department of Defense (DoD) Information Analysis Center (IAC) with land, air, space, and port and coastal surveillance services in support of the U.S. Department of Homeland Security (DHS) Science & Technology Directorate (S&T). OPT's efforts under the Subcontract will include providing scientific hardware delivery, training, and integration services for DHS S&T Port and Coastal Surveillance (P&CS) projects. The P&CS project seeks to identify and integrate sensors and systems and share data suitable for the full spectrum of maritime operations. OPT will provide the required hardware, hardware deployment support, software, software deployment support, integration services, surveillance and telemetry data, and associated training in support of a PB3 PowerBuoy equipped with OPT's proprietary Maritime Domain Awareness solution. The Maritime Domain Awareness Solution is deployed in support of security efforts to detect illegal, unreported, and unregulated (IUU) fishing, dark vessels, and human/drug trafficking in operation 24/7/365. "We at OPT are proud to support DHS's mission to help secure the nation's coastlines," said Philipp Stratmann, president and chief executive officer of OPT. "Ocean security is national security. We believe OPT's systems are well suited for long term maritime domain awareness deployments and have little to no adverse impact on the environment. DHS has thousands of miles of coastline to protect, and needs to develop detailed, sustainable information sources to execute on its mission to protect our country. Along with our partner, Amentum, we look forward to delivering new technology to DHS to help it achieve these goals." About Ocean Power Technologies Headquartered in Monroe Township, New Jersey, Ocean Power Technologies, Inc. -- http://www.oceanpowertechnologies.com-- provides intelligent maritime solutions and services that enable safer, cleaner, and more productive ocean operations for the defense and security, oil and gas, science and research, and offshore wind markets. Its PowerBuoy platforms provide clean and reliable electric power and real-time data communications for remote maritime and subsea applications. The Company also provides WAM-V autonomous surface vessels (ASV) and marine robotics services through our wholly owned subsidiary Marine Advanced Robotics and strategic consulting services including simulation engineering, software engineering, concept design and motion analysis through our wholly owned subsidiary 3Dent. Ocean Power reported a net loss of $18.87 million for the 12 months ended April 30, 2022, a net loss of $14.76 million for the 12 months ended April 30, 2021, a net loss of $10.35 million for the 12 months ended April 30, 2020, and a net loss of $12.25 million for the 12 months ended April 30, 2019. As of July 31, 2022, the Company had $68 million in total assets, $4.68 million in total liabilities, and $63.31 million in total stockholders' equity. PAYROLL MANAGEMENT: Nov. 30 Hearing on Disclosure Statement ----------------------------------------------------------- Judge Karen K. Specie will convene a hearing to consider the approval of the Disclosure Statement of Payroll Management, Inc., on Nov. 30, 2022, at 10:00 AM, Central Time, via ZOOM. Nov. 23, 2022, is fixed as the last day for filing and serving written objections to the Disclosure Statement. Chapter 11 Plan Payroll Management, Inc., filed with the U.S. bankruptcy Court for the Northern District of Florida a Disclosure Statement in support of Chapter 11 Plan dated September 19, 2022. PMI operated as a PEO (Professional Employer Organization) to employ individuals who worked for various companies, leasing the employees to the companies. DC Mickle-Bee, purchased the company, as a stock purchase, in 2010. The Debtor entered into negotiations with Sunz Insurance to take over its workers compensation insurance responsibilities, but a dispute arose between the parties regarding the extent and implementation of coverage resulting in a delay in resolving the workers compensation issues, which caused yet further cash flow losses to PMI ultimately creating a financial crisis that came to a head in 2017. In October 2017, the majority of the assets of the Debtor were sold to Vensure Employer Services, Inc. in an asset purchase agreement, the substantial compensation for which was the agreement by Vensure to pay several million dollars to the IRS toward payment of PMI's tax liabilities. Following the asset sale to Vensure, PMI filed the instant bankruptcy case with the goal of liquidating its remaining assets in an orderly manner for the benefit of its creditors, which assets included the BP Claim, the Debtor's remaining real estate, the potential recovery of insurance deposits, and other assets in an orderly manner for the benefit of its creditors. Following the filing of the Petition, the Debtor sold its real property located at 49 Laurie Drive, Fort Walton Beach, Florida (the "Real Property Sale"), for a purchase price of $128,000.00, which sale was approved by the Court on June 27, 2018, free and clear of all liens, with liens to attach to proceeds. The Debtor and the IRS (the primary lien holder as to the proceeds) agreed as to the use of certain cash collateral proceeds of the Real Property Sale. The Debtor's Plan is a liquidating Plan. The term of the Plan shall be 5 years or whenever the Debtor's liquidated assets are fully distributed, whichever occurs sooner. Pursuant to the plan, there are 6 classes of secured creditors, two of which were paid pursuant to Court Order entered during the administration of the case, and 1 class of general unsecured creditors. Class 7 consists of Claims of General Unsecured Creditors. The General Unsecured Creditors Class shall receive payments as set forth in Article IV.B of the Plan with funding provided as described in Article VII of the Plan. Class 7 is impaired. Payments to creditors shall be made from cash on hand and from liquidation of the Debtor's remaining assets. Funds paid into the Creditors Fund by the Debtor, shall be used to pay the following claims in the priority indicated: * Claims entitled to priority under Bankruptcy Code s 507 shall be paid in accordance with Bankruptcy Code s 1129(a)(9), as set forth in Article II of the Plan. * Claims entitled to priority under Bankruptcy Code ss 507(a)(2) and (a)(3) shall be paid under the Plan as set forth in Article II of the Plan. * After payment of the foregoing claims, sums paid into the Creditors Fund by the Debtor, shall be paid, on a pro-rata basis, to allowed general unsecured claims. The Debtor shall fund the Creditors Fund from cash on hand that is not subject to creditor liens, from recovery of assets (less expenses of recovery) that are not subject to creditors liens, and from funds carved out by agreement with secured creditors. The Debtor shall have the discretion to make such payments into the Creditors Fund on intervals as determined by the Debtor so long as the total amount of all nonliened funds and assets of the Debtor are fully paid into the Creditors Fund by the conclusion of the five year term of the Plan. The Debtor may choose to pay all of its non-liened funds and assets into the Creditors Fund by a date earlier than the expiration of the five year term of the Plan, and thereby complete its treatment of the unsecured class at an earlier date. The Plan provides for the liquidation of the Debtor's assets and distribution to Administrative Expense, Secured, Priority, and General Unsecured Creditors as set forth in the Plan. In the view of the Plan Proponent, such distributions would exceed what would be expected in the event of a Chapter 7 liquidation. A full-text copy of the Disclosure Statement dated September 19, 2022, is available at https://bit.ly/3C58OxT from PacerMonitor.com at no charge. Counsel for the Debtor: Natasha Z. Revell, Esq. ZALKIN REVELL, PLLC 2078 US Highway 98W, Suite 105A, #110 Santa Rosa Beach, FL 32459 Tel: (850) 267-2111 E-mail: nrevell@zalkinrevell.com About Payroll Management Payroll Management, Inc., provides human resource solutions to businesses that choose to outsource those functions. It offers human resource support, payroll, administration, workers' compensation, recruiting and training, safety training, and miscellaneous services. Payroll Management was founded in 1986 and is based in Fort Walton Beach, Fla. Payroll Management filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 18-30298) on March 27, 2018, listing up to $500,000 in assets and up to $50 million in liabilities. D.C. Mickle-Bee, chief executive officer, signed the petition. Judge Jerry C. Oldshue Jr. presides over the case. Natasha Revell, Esq., at Zalkin Revell, PLLC, serves as the Debtor's bankruptcy counsel. PECOS ENTERTAINMENT: SARE Hits Chapter 11 Bankruptcy ---------------------------------------------------- Pecos Entertainment LLC filed for chapter 11 protection in the Western District of Texas. The Debtor disclosed assets of $500,300 against total liabilities of $2.875 million in its schedules. The Debtor, a Single Asset Real Estate, owns the property at 421 S. Oak Street, Pecos, Texas 79772, valued at $500,000. The petition states that funds will not be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 3, 2022, at 10:00 AM at Via Phone: (866)711-2282; Code: 3544189#. Proofs of claim are due Feb. 1, 2023. About Pecos Entertainment Pecos Entertainment LLC is a Single Asset Real Estate (as defined in 11 U.S.C. § 101(51B)). Pecos Entertainment LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code on Oct. 3, 2022. In the petition filed by Ram Kumwar, as managing member, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. The Debtor is represented by Eric A Liepins of Eric A. Liepins, P.C. PENTA STATE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Five affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Penta State LLC (Lead Case) 22-90331 1101 Alma St, Ste 108 Tomball, TX 77375-4559 Nationwide Laboratory Partners LLC 22-90334 Elite Medical Laboratory Solutions LLC 22-90333 Graham Tomball LLC 22-90332 Zayd Assets LLC 22-90335 Business Description: Debtors Nationwide Laboratory Partners LLC, Elite Medical Laboratory Solutions LLC, and Graham Tomball LLC each d/b/a DIAX Labs operates two independent laboratories based near Houston, Texas. DIAX Labs offers a suite of services, principally including (a) toxicology, (b) molecular diagnostics, (c) genetics, and (d) blood and wellness testing for patients with commercial insurance and Medicare beneficiaries. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Southern District of Texas Judge: Hon. David R. Jones Debtors' Counsel: Thomas D. Berghman, Esq. MUNSCH HARDT KOPF & HARR, P.C. 500 N. Akard Street, Suite 3800 Dallas, TX 75201-6659 Tel: 214-855-7500 Fax: 214-855-7584 Email: tberghman@munsch.com - and - John D. Cornwell, Esq. Thanhan Nguyen, Esq. MUNSCH HARDT KOPF & HARR, P.C. 700 Milam St, Ste 800 Houston, TX 77002 Tel: (713) 222-1470 Fax: (713) 222-1475 Email: jcornwell@munsch.com anguyen@munsch.com Penta State's Estimated Assets: $10 million to $50 million Penta State's Estimated Liabilities: $10 million to $50 million The petitions were signed by Amit Gupta as president. The Debtors failed to include in the petitions lists of their 20 largest unsecured creditors. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CWTINSY/Penta_State_LLC__txsbke-22-90331__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/G3GDEIQ/Graham_Tomball_LLC__txsbke-22-90332__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/GQ7PF7A/Elite_Medical_Laboratory_Solutions__txsbke-22-90333__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/SQGDVJY/Nationwide_Laboratory_Partners__txsbke-22-90334__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/S3YR4PA/Zayd_Assets_LLC__txsbke-22-90335__0001.0.pdf?mcid=tGE4TAMA PHI GROUP: Amends Stock Transfer Agreement With Tin Thanh Group --------------------------------------------------------------- PHI Group, Inc. (n/k/a as Philux Global Group Inc.) entered into an amendment to the Stock Transfer Agreement that was signed on Aug. 13, 2022, by and among the company, Tin Thanh Group Joint Stock Company and Mr. Tran Dinh Quyen, the holder of at least 51.00% of equity ownership in TTG. Effective Oct. 3, 2022, Philux Global, Tin Thanh Group Joint Stock Company and Mr. Tran Dinh Quyen signed an amendment to amend and restate Article 7.1 of the afore-mentioned Stock Transfer Agreement as follows: 7. CLOSING 7.1 Closing Date. The Closing Date shall be within ninety (90) days following the signing of the Stock Transfer Agreement, unless amended otherwise in writing by TTG, the Majority Shareholder and PGG. About PHI Group Headquartered in Irvine, California, PHI Group, Inc. (www.phiglobal.com) primarily focuses on advancing PHILUX Global Funds, a group of Luxembourg bank funds organized as "Reserved Alternative Investment Fund", and building the Asia Diamond Exchange in Vietnam. The Company also engages in mergers and acquisitions and invests in select industries and special situations that may substantially enhance shareholder value. PHI Group reported a net loss of $6.55 million for the year ended June 30, 2021, a net loss of $1.32 million for the year ended June 30, 2020, and a net loss of $2.93 million for the year ended June 30, 2019. As of March 31, 2022, the Company had $5.29 million in total assets, $6.24 million in total liabilities, and a total stockholders' deficit of $946,420. Bangalore, India-based M.S. Madhava Rao, the Company's auditor, issued a "going concern" qualification in its report dated Nov. 7, 2021, citing that the Company has an accumulated deficit of $50,563,530 and had a negative cash flow from operations amounting to $79,446 for the year ended June 30, 2021. These factors raise substantial doubt about the Company's ability to continue as a going concern. PUERTO RICO: Taps Willke Farr to Advise on PREPA Debt Talks ----------------------------------------------------------- Michelle Kaske of Bloomberg News reports that Puerto Rico's financial oversight board is seeking Willkie Farr & Gallagher LLP to serve as special adviser to a mediation team that's steering negotiations between the island's bankrupt power utility and its creditors. The federally-appointed oversight board is also asking the court to allow former US Bankruptcy Judge for the Southern District of New York Shelley C. Chapman to continue in her role as lead mediator in the debt talks, according to court filings. Judge Chapman, who oversaw the Lehman Brothers Holdings bankruptcy, retired this year and rejoined Willkie as senior counsel. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. * * * The two Title III plans of adjustment have been confirmed to date, for the Commonwealth and COFINA debtors. QUICKER LIQUOR: Unsecureds Get Pro Rata Share of $250K Cash Payment ------------------------------------------------------------------- Debtors, Quicker Liquor LLC ("QL") and Nevada Wine Cellars, Inc. ("NWC") submitted a Third Amended Disclosure Statement. The Plan generally calls for the payment of the Debtors' major creditor, Earnest W. Moody Trust ("Moody Trust"), either via payoff or via the sale of NWC to Moody Trust (or its assignee), with the purchaser to pay secured claims as they become due, and contribute $250,000 for payment of administrative, priority, and unsecured claims. NWC owns the real property consisting of the parcel commonly known as 3810 Winery Road, Pahrump, NV 89048, upon which the Winery and related facilities are located; as well as the real property commonly known as 3940 E. Winery Road, Pahrump, NV 89048, which is usable as a parking lot and potentially for future development. NWC had cash on hand of approximately $154,000 as of June 30, 2022, as well as inventory, furnishing, fixtures and equipment. Moody has undertaken appraisals of the real property and other assets, including the business operations of NWC, and determined the total value of NWC to be $6,091,000. QL's assets consist of its equity ownership of NWC. Under the Plan, Class 7 NWC Allowed General Unsecured Claims will be paid their pro rata share of the Cash Payment following payment of administrative and priority claims. Class 7 is impaired. The $250,000 cash payment is to be made by Purchaser to NWC in the event of a Moody Purchase. The Debtor may raise funds to obtain the Moody Payoff through any means, including sale of assets, financing, or investor funds. In the event of a Moody Payoff, payment to other creditors shall be made from funds obtained in operations. Otherwise, the plan shall be effectuated through the Moody Purchase. The Moody Purchase shall include sale of all assets of NWC free and clear of all liens, claims and interests as provided by 11 U.S.C. Section 363(f). The transfers effectuated through the Moody Purchase shall, pursuant to 11 U.S.C. Section 1146(a), be free and clear of all transfer taxes, stamp taxes, or similar taxes. The hearing at which the Court will determine whether to confirm the Plan will take place commencing on Dec. 5, 2022 at 9:30 a.m., in the United States Bankruptcy Court, District of Nevada, located at 300 Las Vegas Blvd. S., Las Vegas, NV 89101. Ballots must be completed using Official Bankruptcy Form 25B and must be transmitted so as to be received by Debtor's counsel on or before 5:00 p.m., PST, on Nov. 21, 2022. Any objection to the Plan, and any declarations in support of or in opposition to the Plan, must be filed with the Court no later than Nov. 21, 2022. Counsel for Quicker Liquor: A.J. Kung, Esq. Brandy L. Brown, Esq. KUNG & BROWN 1020 Garces Avenue Las Vegas, NV 89101 Telephone: (702) 382-0883 Facsimile: (702) 382-2720 E-Mail: ajkung@ajkunglaw.com bbrown@ajkunglaw.com Counsel for Nevada Wine Cellars Inc. Candace C. Carlyon, Esq. Tracy M. O'steen, Esq. CARLYON CICA CHTD. 265 E. Warm Springs Road, Suite 107 Las Vegas, NV 89119 Telephone: (702) 685-4444 Facsimile: (725) 220-4360 E-mail: ccarlyon@carlyoncica.com tosteen@carlyoncica.com A copy of the Third Amended Disclosure Statement Disclosure Statement dated September 30, 2022, is available at https://bit.ly/3CpwywH from PacerMonitor.com. About Quicker Liquor Quicker Liquor, LLC, and its affiliate, Nevada Wine Cellars, Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Lead Case No. 22-10331) on Jan. 31, 2022. In their petitions, the Debtors listed as much as $10 million in both assets and liabilities. Kathy Trout, managing member, signed the petitions. Judge Mike K. Nakagawa oversees the cases. Quicker Liquor and Nevada Wine Cellars are represented by Kung & Brown and Carlyon Cica Chtd., respectively. The Law Offices of Timothy Elson serves as the Debtors' special counsel. The Debtors filed a joint Chapter 11 plan of reorganization on May 31, 2022. REAGOR-DYKES: FMCC Second Summary Judgment Bid Denied ----------------------------------------------------- In the Chapter 11 cases of Reagor-Dykes Motors, LP, et al., Bankruptcy Judge Robert L. Jones has denied Ford Motor Credit Company, LLC's second summary judgment motion. In March 2022, FMCC filed a motion for summary judgment to dismiss the preferential and fraudulent transfer claims brought by the plaintiff, Dennis Faulkner, as Trustee of the Reagor-Dykes Auto Group Creditors Liquidating Trust. On June 3, 2022, the U.S. Bankruptcy Court for the Northern District of Texas issued an opinion and order granting in part and denying in part FMCC's summary judgment motion. The Court held that the Trustee was foreclosed from asserting the Ponzi-scheme presumption of fraudulent intent. The Court did not, however, dismiss the fraudulent transfer claim, finding that the Trustee pleaded and presented some evidence of fraudulent intent under a "badges of fraud" theory and with direct evidence. Because the Trustee pleaded the "badges of fraud"/direct-evidence theory for the first time in his response to FMCC's summary judgment motion, the Court granted FMCC's request to file a second motion for summary judgment to address that issue more comprehensively. The badges of fraud are bridges that connect "questionable acts commonly associated with fraud to findings of actual fraudulent intent." On June 29, 2022, FMCC filed its second motion for summary judgment on this "new" theory, asserting that the Trustee's fraudulent transfer claim should be dismissed in its entirety. FMCC argued that it was prejudiced because the Trustee raised a new legal theory at summary judgment under his already-pleaded fraudulent transfer claim. The Court denied FMCC's second summary judgment motion. The Court explained that the Trustee is not seeking to assert a new claim but is merely asserting alternate legal theories to the Ponzi-scheme presumption. As explained in the First Summary Judgment Opinion, the Trustee submitted evidence in response to summary judgment and pleaded numerous facts in the complaint which, if true, constitute circumstantial evidence of fraudulent intent through the badges of fraud and direct evidence of fraudulent intent. The Court further explained that the Trustee is not exclusively bound to the Ponzi-scheme presumption. The Court held that to whatever extent FMCC suffered any prejudice on account of the Trustee presenting alternative legal theories, that prejudice has been cured because FMCC has been given an opportunity to respond to them via summary judgment, and it has been given months to prepare to address those theories at trial. As direct evidence of Reagor-Dykes' intent in making transfers to FMCC, the Trustee cited factual resumes, Shane Smith's trial testimony, Shane Smith's affidavit, Lindsay Williams's deposition testimony, and Reagor-Dykes employees' emails. The Court considered the evidence, particularly Shane Smith's affidavit and Lindsay Williams's testimony and discovered that Reagor-Dykes' fraud began at the latest in 2016. The bulk of Shane Smith's affidavit concerns the fraud committed but not specifically Reagor-Dykes' intent on the transfers — which refers to spreading payments and kiting checks as the means to cover-up Reagor-Dykes' fraud. Strictly construed under the statute, such evidence is better characterized as circumstantial evidence of Reagor-Dykes' intent in making payments to FMCC. Lindsay Williams' deposition testimony stated that large payments were made to FMCC in anticipation of an audit and to conceal Reagor-Dykes' fraud. Williams also testified that when Reagor-Dykes failed to make payments to FMCC, FMCC "secured their inventory and secured their collateral and stopped floor plan advances." Speaking to the timing of Reagor-Dykes' fraudulent conduct, Williams stated the double flooring occurred in 2016, 2017, and 2018 and was a mechanism used to generate funds to pay FMCC. Reagor-Dykes was kiting funds at the same time. Considering these statements, they show that some transfers between 2016 and 2018 were made to FMCC for the purpose of hiding Reagor-Dykes' fraud. The Court held that the Trustee provided sufficient evidence of a "general chronology of events" of Reagor-Dykes' transactions and conduct after incurring debt that includes acts of fraud. The Court noted that, in the general chronology of events, Smith's affidavit stated Reagor-Dykes faced the "issue of insufficient cash to fund normal operations at RDAG" and Williams' testimony supported the proposition that Reagor-Dykes did not have the available funds to pay-off the vehicles sold. Williams' deposition testimony potentially links the fraudulent acts to Reagor-Dykes' payments to FMCC for the purpose of concealing the fraud. Under the chronology-of-events badge, this evidence demonstrates an issue of material fact on Reagor-Dykes' intent in making certain payments to FMCC. A full-text copy of the Memorandum Opinion dated Oct. 4, 2022, is available at https://tinyurl.com/2ew9y2kj from Leagle.com. About Reagor-Dykes Motors Dykes Auto Group -- https://www.reagordykesautogroup.com/ -- is a dealer of automobiles headquartered in Lubbock, Texas. The Company offers new and used vehicles, automobile parts, and other related accessories, as well as car financing, leasing, repair, and maintenance services. Some of its new vehicles include brands like Ford, Toyota, GMC, Cadillac, Chevrolet and Buick. Reagor-Dykes Motors, LP, and its debtor-affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 18-50214) on Aug. 1, 2018. In its petition, the Debtors estimated $10 million to $50 million in both assets and liabilities. The petition was signed by Bart Reagor, managing member of Reagor Auto Mall I, LLC, general manager and Rick Dykes, managing member of Reagor Auto Mall I, LLC, general partner. The Hon. Robert L. Jones presided over the case. David R. Langston, Esq., at Mullin Hoard & Brown, L.L.P., served as bankruptcy counsel. BlackBriar Advisors LLC served as CRO for the Debtor. A Chapter 11 plan was confirmed in the case on July 10, 2020. REAMIR 57 CORP: Seeks Jan. 31 Extension of Plan Filing Deadline --------------------------------------------------------------- Reamir 57 Corp. filed a second motion seeking an additional extension of the time period to file a Plan of Reorganization through and including January 31, 2022, pursuant to section 1121(e) of the Bankruptcy Code, without prejudice to the Debtor's right to seek extensions of such Periods. This second extension is not made for the purpose of delay. The second requested extension of the time period to file a plan is necessary due to the fact, that the time to file a plan is set to expire on November 2, 2022, and the Debtor needs an additional time to complete the negotiations with landlords. The Debtor is willing to surrender two leased premises know as 508-516 Columbus Avenue, New York, New York 10023 (the "508 Columbus") and 290 Columbus Avenue, in the building known as 100 West 74" Street, Store- Ground Floor and Basement, New York, New York 10023 (the "290 Columbus") and currently is negotiating the terms of Stipulation of settlement with the Landlords regarding the surrender of the said premises and rent arrears. Furthermore, the Debtor is negotiating the term of the cure agreement with 57 Associates, LLC, the Landlord for the property known as 251 East 57 Street, New York, NY. Consequently, the Debtor needs an additional time to complete the negotiations with Landlords, to obtain Court approval and thereafter to file a plan of reorganization and disclosure statement, offering treatment to the Creditors of the estate. The extension of the Time period to file a plan will enable the Debtor to harmonize the diverse and competing interests that exist and seek to resolve any conflicts in a reasoned and balanced manner for the benefit of all parties in interest. Furthermore, the second extension of the time period to file a plan will allow the Debtor to file a Chapter 11 plan without violating the Bankruptcy Code and to provide a treatment to its Creditors. Counsel for the Debtors: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel.: (718) 513-3145 About Reamir 57 Corp. Reamir 57 Corp. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 21-42294) on Sept. 8, 2021, disclosing as much as $1 million in both assets and liabilities. Judge Nancy Hershey Lord oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as its legal counsel and Wisdom Professional Services, Inc. as its accountant. REDWOOD EMPIRE: Unsecureds to Get $290K Plus Interest in Plan ------------------------------------------------------------- Redwood Empire Lodging, LP, submitted a Third Amended Plan of Reorganization. Under the Plan, holders of Class 10 Allowed General Unsecured Claims will receive the total amount of $290,165, plus interest accruing at 1.5% per annum, in 10 equal annual installments beginning 1 year after the Effective Date and continuing on the same date of each year thereafter. Notwithstanding that PPB has waived distributions on account of its deficiency Claim, PPB's deficiency Claim will be included in Class 10 for voting purposes only. Class 10 impaired. All payments under the Plan that are due on the Effective Date will be funded from the cash held by the Reorganized Debtor as of the Effective Date. The funds necessary to ensure continuing performance under the Plan after the Effective Date will be derived from any and all remaining cash retained by the Reorganized Debtor after the Effective Date, cash generated by the Reorganized Debtor from its business operations after the Effective Date, and any other contributions or financing that the Reorganized Debtor may obtain on or after the Effective Date. Attorneys for the Debtor: Isaac M. Gabriel, Esq. Michael Galen, Esq. DORSEY & WHITNEY LLP 2398 E. Camelback Road, Suite 760 Phoenix, AZ 85016 Tel: (602) 735-2700 E-mail: gabriel.isaac@dorsey.com galen.michael@dorsey.com A copy of the Third Amended Plan of Reorganization dated September 30, 2022, is available at https://bit.ly/3UVTquX from PacerMonitor.com. About Redwood Empire Lodging Redwood Empire Lodging, LP, owns and operates two hotels: the Best Western Plus located at 208 N Lake Powell Boulevard, Page, Arizona 86040, and the Best Western Sonoma Winegrower's Inn, located at 6500 Redwood Drive, Rohnert Park, California 94928. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 21-04678) on June 16, 2021. In the petition signed by Debra Heckert, member, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Eddward P. Ballinger Jr. is assigned to the case. Isaac M. Gabriel, Esq., at Quarles & Brady LLP is the Debtor's counsel. REGIONAL HOUSING: No Decline in Resident Care, 6th PCO Report Says ------------------------------------------------------------------ Melanie McNeil, Esq., the patient care ombudsman, filed with the U.S. Bankruptcy Court for the Northern District of Georgia her sixth report regarding the quality of patient care provided at The Gardens of Savannah, which is operated by RHCSC Savannah AL Holdings LLC, an affiliate of Regional Housing & Community Services Corp. Regional Housing & Community Services is the governing body for six personal care homes, including The Gardens of Savannah, in Georgia. In her sixth ombudsman report, Ms. McNeil said she is not aware of any significant change in facility conditions or decline in resident care at The Gardens of Savannah since the last visit. On Sept. 20, an ombudsman representative for the Office of the State Long-Term Care Ombudsman visited The Gardens of Savannah facility. During the visit, the ombudsman representative did not receive any complaints. Instead, the ombudsman representative received positive feedback from the residents who were able to communicate. No decline in resident care was reported since the last visit, according to the report. A copy of the sixth ombudsman report is available for free at https://bit.ly/3Me604V from PacerMonitor.com. The ombudsman may be reached at: Melanie S. McNeil, Esq. 2 Peachtree Street NW, 33rd Floor Atlanta, GA 30303 Telephone: 404-657-5327(O) 404-416-0211 (Cell) Facsimile: 404-463-8384 Email: Melanie.McNeil@osltco.ga.gov About Regional Housing & Community Services Regional Housing & Community Services Corp. and its affiliates filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 21-41034) on Aug. 26, 2021. At the time of the filing, Regional Housing & Community Services listed as much as $100,000 in both assets and liabilities. Judge Paul W. Bonapfel oversees the cases. The Debtors tapped Scroggins & Williamson, P.C. as legal counsel; GGG Partners, LLC as interim management services provider; and SLIB II, Inc., doing business as Senior Living Investment Brokerage, as investment banker. Kurtzman Carson Consultants, LLC is the claims, noticing and balloting agent. Greenberg Traurig, LLP serves as counsel for indenture trustee, UMB Bank, N.A. Melanie S. McNeil, Esq., at Melanie S. McNeil is the patient care ombudsman appointed in the Debtors' cases. ROCKCLIFF ENERGY II: Fitch Affirms B+ LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the 'B+' Long-Term Issuer Default Ratings (IDR) of Rockcliff Energy II LLC. The Rating Outlook is Stable. Fitch has also affirmed the senior secured reserve-based lending (RBL) credit facility at 'BB+'/'RR1' and the 2029 senior unsecured notes at 'BB-'/'RR3'. Rockcliff's ratings reflect the company's sizeable production of approximately 1.0 BCF/d and 5.1 TCFe of proved reserves in the East Texas portion of the Haynesville basin. The ratings also reflect the company's peer-leading Fitch calculated netback of $6.07 per mcfe, $250 million-$600 million of mid-cycle forecasted positive pre-dividend free cash flow, over 15 years of drilling inventory at Fitch's mid-cycle price, and projected sub-1.0x debt/EBITDA profile. Offsetting factors include its size and scale, its continued need to further de-risk its East Texas acreage and uncertainty surrounding the longer-term capital allocation strategy. KEY RATING DRIVERS Low Cost Haynesville Operator: Rockcliff's core acreage in the East Texas portion of the Haynesville basin totals 275,000 net acres, which equates to approximately 15 years of economic inventory life at Fitch's midcycle Henry Hub price of $2.75/mcf. The company's competitive total cash cost profile ($0.81/mcfe as of 2Q22) is largely a result of the shallower, lower decline nature of the assets and proximity to Henry Hub/Gulf Coast demand centers. While the East Texas portion of the basin has less operating history, reservoir characteristics lead to lower development costs and decline rates. Offset operator Comstock Resources Inc.'s (B+/Stable) production results at wells in East Texas are generally consistent with the average IP of its recent Louisiana wells, somewhat mitigating geological and volumetric risk in the region. Positive FCF and Improved Liquidity: Fitch believes Rockcliff can generate pre-dividend positive FCF throughout the base case given its low operating cost structure. Fitch forecast assumes the continuation of a dividend program through the base case. Rockcliff has approximately $209 million outstanding on it $900 million revolver, and Fitch expects the balance will be repaid by the end of 2022. The bond maturity is not until 2029, providing the company with extensive runway. Given Fitch expects Rockcliff to generate material positive FCF over the forecast period, this should further bolster liquidity. Longer-Term Capital Allocation Uncertainty: Management has indicated that its short-term capital allocation plan is to use FCF to repay the revolver borrowings in 2022 following the drawdown of $300 million on March 28, 2022 to fund a dividend payment. Given the current four rig program and expected capex in the $600 million-$675 million range per year, production growth is expected to decline to the mid-low single digits throughout the forecast. Capex guidance increased in 2023 given the inflationary pressures for labor, drilling materials and equipment. Fitch believes that management's intent to maintain limited production growth may lead to continued free cash flow-linked equity distributions. Sub-1.0x Leverage: Rockcliff has a relatively low leverage profile compared to Fitch-rated 'B' category peers in the Haynesville basin, resulting in favorable asset coverage and metrics. At 2Q22, total debt/1P reserves were 1.1x on a barrel of oil equivalent basis while debt/flowing barrel was $5,374. Fitch-calculated total debt/EBITDA is forecast to be approximately 0.5x in 2022 and is expected to remain between 0.5x-0.8x through the rating horizon. Hedging Strategy Reduces Price Risk: Rockcliff has implemented a multiyear hedging strategy to limit downside commodity price risk. As of 2Q22, the company has hedged approximately 65% of its forecast 2H22 production at an average price of $2.53/mcf and 55% of its forecast 2023 production at an average price of $2.52/mcf. Hedge coverage declines thereafter to approximately 25% of 2024 production. Fitch expects that the company to reduce its hedging program given the company's low leverage but to maintain sufficient hedging to de-risk cash flows and reduce pricing volatility. DERIVATION SUMMARY At 2Q 2022, Rockcliff's average daily production of 1,015 mmcfe/d was below Comstock Resources (B+/Stable; 1,364 mmcfe/d), Chesapeake (BB/Positive; 4,126 mmcfe/d) and CNX Resources (BB+/Stable, 1,581 mmcfe/d). The company has proved reserves of 5.1 TCFE which is lower than Comstock (6.1 TCFE at YE 21) and CNX (9.6 TCFE at YE 21). The company achieves favorable netbacks due to its low operating cost profile, proximity to Henry Hub and Gulf Coast demand centers, and materially low interest expense. Rockcliff's 2Q2022 Fitch calculated netback of $6.07 is one of the highest of its peers including Comstock ($5.85), Chesapeake ($6.06), CNX ($5.97) and Southwestern Energy ($5.52). Additionally, Fitch expects the company's debt/EBITDA to be approximately 0.5x at YE 2022 which is in line with Chesapeake but notably lower than aforementioned peers that have expected leverage in the 1.2x-1.5x range. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - WTI oil price of $95/bbl in 2022, $81/bbl in 2023, $62/bbl in 2024 and $50/bbl thereafter; - Henry Hub natural gas price of $7/mcf in 2022, $5/mcf in 2023, $4/mcf in 2024 and $3/mcf in 2025; - Production growth of approximately 17% in 2022 followed by mid- to-low single digit growth in the outer years of the forecast; - Capex of $600 million in 2022 and increasing to approximately $675 million in 2023 before decreasing in the outer years of the forecast; - Assumed $300 million dividend payment from 2023 onwards; - No material M&A activity. Fitch's Key Assumptions Within Our Stress Case for the Issuer - WTI oil price of $67/bbl in 2022, $42/bbl in 2023, $32/bbl in 2024 and $42/bbl in 2025; - Henry Hub natural gas price of $6.25/mcf in 2022, $2.5/mcf in 2023, $2.0/mcf in 2024 and $2.25/mcf thereafter; - Production growth in 2022 unchanged with lower production for the remainder of the forecast; - Assumed dividends are stopped during 2023. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Rockcliff II Energy LLC would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern Approach Fitch assumed a GC EBITDA of $440 million. This value assumes a prolonged downturn in the pricing environment considerably decreasing revenue, limiting capital reinvestment and stagnating production growth. Rockcliff's GC EBITDA reflects Fitch's projections under a stressed case price deck, which assumes Henry Hub natural gas prices of $6.25/mcf in 2022, $2.5/mcf in 2023, $2.0/mcf in 2024 and $2.25/mcf thereafter. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. This value is reflective of an environment in which there is a decline from current prices to stressed levels and then a partial recovery coming out of a troughed pricing environment. An EV/EBITDA multiple of 3.5x was applied to the GC EBITDA to calculate a post-reorganization enterprise value. The historical case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x. The multiple considers 2021 transaction in the Haynesville such as Southwestern Energy's acquisition of Indigo Natural resources at an approximated 3.85x forward multiple, Southwestern's acquisition of GEP Haynesville at a 2.9x forward multiple as well as Chesapeake's acquisition of Vine Energy at an approximate 4x multiple. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch considers valuations such as SEC PV-10 and M&A transactions for each basin including multiples for production per flowing barrel, proved reserves valuation, value per acre and value per drilling location. Fitch has assumed the $900 million RBL facility would be full drawn in a bankruptcy scenario. The RBL facility is senior to the senior unsecured notes in the waterfall. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' recover for the senior secured RBL facility, and a recovery corresponding to 'RR3' for the senior unsecured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Further increase in size and scale with production sustained above 1.3 BCFe/d; - Consistently positive free cash flow generation; - Mid-cycle Total Debt/EBITDA consistently below 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Consistently negative free cash flow or reduction in the RBL borrowing base that impairs the liquidity profile; - Loss of operational momentum resulting in production consistently below 1.0 BCFe/d; - Change in financial policy that results materially weaker credit metrics; - Mid-cycle Total Debt/EBITDA consistently at or above 2.5x. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity Profile: At Q2 2022, Rockcliff had $21.4 million of cash on hand and approximately $691 million of availability under the $1.0 billion RBL credit facility (current elected amount $900 million). Fitch anticipates that Rockcliff will maintain adequate liquidity throughout the rating case. Simple Debt Structure and long-dated maturities: Rockcliff's debt consists of a $1 billion senior secured RBL facility and a $700 million 5.5% unsecured note which matures in December 2024 and October 2029 respectively. The unsecured note has a bullet repayment at maturity. The floating rate RBL facility has a borrowing base that is subject to semi-annual redeterminations. At the most recent redetermination in June 2022, the company elected to keep the facility at $900 million. At June 30, 2022, $209 million currently outstanding under the RBL facility. ISSUER PROFILE Rockcliff Energy II LLC is an independent exploration and production company focused primarily on the development of natural gas properties in the East Texas portion of the Haynesville shale formation. Rockcliff is one of the largest operators in the basin. 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. Debt Rating Recovery Prior ---- ------ -------- ----- Rockcliff Energy II LLC LT IDR B+ Affirmed B+ senior unsecured LT BB- Affirmed RR3 BB- senior secured LT BB+ Affirmed RR1 BB+ SAMN LLC: Case Summary & Three Unsecured Creditors -------------------------------------------------- Debtor: Samn, LLC 8115 N Highway-146 Bayton, TX 77523 Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Southern District of Texas Case No.: 22-33023 Judge: Hon. Eduardo V. Rodriguez Debtor's Counsel: Susan Tran Adams, Esq. TRAN SINGH, LLP 2502 La Branch St. Houston, TX 77004 Email: stran@ts-llp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Amrut Bhakta as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ELVEEEA/Samn_LLC__txsbke-22-33023__0001.0.pdf?mcid=tGE4TAMA SIGYN THERAPEUTICS: Board Appoints Three New Directors ------------------------------------------------------ The Board of Directors of Sigyn Therapeutics, Inc. appointed Jim Dorst, Richa Nand, and Christopher Wetzel to the Company's Board of Directors effective as of Oct. 10, 2022. Jim Dorst has more than 30 years of senior management experience in finance, operations, planning and business transactions at both private and public companies. He was most recently Director of Corporate Development at SYNNEX/Concentrix, where he was primarily responsible for mergers and acquisitions. Mr. Dorst was previously chief operating officer and chief financial officer at SpectraScience, Inc.; CFO of Aethlon Medical, Inc. and vice president of Finance and Operations for Verdisoft Corporation. In addition, he previously served as senior vice president of Finance and Administration at SeeCommerce; CFO and COO of Omnis Technology Corp; and CFO and senior vice president oflnformation Technology at Savoir Technology Group, Inc. Mr. Dorst practiced as a Certified Public Accountant with Coopers & Lybrand (now PricewaterhouseCoopers LLP); and holds a Master of Science degree in Accounting and a Bachelor of Science degree in Finance from the University of Oregon. Since October of 2017, Jim Dorst served as Director of Corporate Development at SYNNEX/Concentrix, until his retirement in July of 2020. The Board has determined he is qualified to serve as he is a financial expert with extensive CFO experience, including a publicly traded extracorporeal blood purification technology company. Richa Nand is a senior legal executive with more than 20 years of experience as an intellectual property attorney and strategic business advisor for biotechnology and medical device companies. She is the founder of Insight Patents, a legal and consulting firm providing IP and transactional corporate services for the life sciences industry. Ms. Nand previously served as vice president of Corporate Development and Legal at Bird Rock Bio - a Johnson & Johnson-backed biopharmaceutical company in San Diego - and Vice President of Intellectual Property and Licensing; Director of Business Development; and In-House Patent Counsel at Cytori Therapeutics. Prior to law school, she was a biomedical researcher at Cedars Sinai Medical Center in Beverly Hills, California. Ms. Nand received a Bachelor of Science degree in Microbiology and Molecular Genetics from the University of California, Los Angeles, and a Juris Doctor degree from Boston University School of Law. Since October of 2017, Richa Nand has operated Insight Patents, an intellectual property (IP) advisory firm providing patent support services to the medical technology and life science industry. The Board has determined she is qualified to serve as she has extensive extracorporeal blood purification technology experience. Christopher Wetzel has more than 25 years of leadership experience in various aspects of the healthcare delivery system and since 2004, has served as chief executive officer for the Surgery Center at Hamilton in New Jersey. His career has focused on building organizations, increasing operational efficiency, increasing profitability, maximizing revenue and managing change in the complex and high-growth healthcare environment. Mr. Wetzel applied his broad background in strategy, finance, and operations to guide various entities starting new ventures, entering new markets and reengineering business processes. He is a long-term investor in the extracorporeal therapy space. Mr. Wetzel received a Master of Business Administration degree in Healthcare Management and a Bachelor of Science degree in Nursing from Thomas Jefferson University (formerly Philadelphia University). Since October of 2017, Chris Wetzel has served as CEO of the Surgery Center at Hamilton, a post he has held since 2004. The Board has determined he is qualified to serve as beyond having extensive medical industry experience, he is a long-term investor in publicly traded extracorporeal blood purification technology organizations. 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. STONEBRIDGE VENTURES: Court Okays Appointment of Chapter 11 Trustee ------------------------------------------------------------------- Judge Theodor Albert of the U.S. Bankruptcy Court for the Central District of California approved the appointment of Arturo Cisneros as Chapter 11 trustee for Stonebridge Ventures, LLC. The appointment comes upon the application filed by Peter Anderson, the U.S. Trustee for Region 16, to appoint a bankruptcy trustee in Stonebridge's Chapter 11 case. Mr. Cisneros disclosed in a court filing that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. A copy of the appointment order is available for free at https://bit.ly/3CxD0SA from PacerMonitor.com. About Stonebridge Ventures Stonebridge Ventures, LLC, a company in Newport Beach, Calif., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11556) on Sept. 10, 2022, with up to $10 million in both assets and liabilities. Joshua R. Pukini, director and chief financial officer, signed the petition. Judge Theodor Albert oversees the case. The Debtor is represented by Summer M. Shaw, Esq., at Shaw & Hanover, PC. SUNSHINE ADULT: Asks for Feb. 16 Extension for Plan Approval ------------------------------------------------------------ Sunshine Adult Social Center, Corp. filed a motion to extend the time to confirm a Chapter 11 Small Business Plan of Reorganization and Disclosure Statement. The Debtors request an extension of the time by which a Plan should be confirmed for an additional 90 days, through and including Feb. 16, 2023. This fourth request is not made for the purposes of delay. The fourth requested extension of the time period for confirmation, is necessary due to the fact, that the time to confirm a plan is set to expire on Nov. 18, 2022, and the Debtor needs additional time to finalize terms of cure agreements with Ellen Rose Associates with respect to pre-petition and post-petition rent arrears, to file the said agreements for Court approval and thereafter to amend a plan of reorganization and disclosure statement. Counsel 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 About Sunshine Adult Social Center Sunshine Adult Social Center sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-44231) on Dec. 9, 2020, disclosing $50,001 to $100,000 in assets and $100,001 to $500,000 in liabilities. Judge Jil Mazer-Marino oversees the case. The Debtor tapped the Law Offices of Alla Kachan as its legal counsel and Wisdom Professional Services Inc. as its accountant. SWEET HOME HIGGINS: Chapter 9 Case Summary & 7 Unsecured Creditors ------------------------------------------------------------------ Debtor: Sweet Home Higgins Red Oak Sewer Facilities Board P.O. Box 281 Sweet Home, AR 72164 Type of Debtor: Sewer Facilities Board Chapter 9 Petition Date: September 9, 2022 Court: United States Bankruptcy Court Eastern District of Arkansas Case No.: 22-12463 Judge: Hon. Bianca M. Rucker Debtor's Counsel: Sheila F. Campbell, Esq. SHEILA F. CAMPBELL P.A. 2510 Percy Machin Drive North Little Rock, AR 72114 Tel: 501-374-0700 Email: campbl@sbcglobal.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Carol Parker as Board Chair. A full-text copy of the petition, along with a list of seven unsecured creditors, is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/H5X7HYQ/Sweet_Home_Higgins_Red_Oak_Sewer__arebke-22-12463__0001.0.pdf?mcid=tGE4TAMA T.J. MCDERMOTT: Seeks Cash Collateral Access -------------------------------------------- T.J. McDermott Transportation Co. asks the U.S. Bankruptcy Court for the District of New Jersey for authority to use cash collateral in accordance with the budget, with a 20% variance through December 15, 2022. The Debtor requires immediate authority to use cash collateral in order to continue its business operations without interruption and to facilitate formulating an effective plan of reorganization. Berkshire Bank has, as of the Petition Date, a valid, perfected and secured lien and security interest in the Debtor's assets securing the Debtor's indebtedness in the approximate amount of $1,637,038 as of the Petition Date, as well as accrued interest, fees and costs, which indebtedness is not subject to defense, offset or counterclaim of any kind or nature and that said debt is an allowed, fully secured claim in an amount to be subsequently determined by Order of the Court under Sections 506(a) and 502 of the Bankruptcy Code. As adequate protection, the Debtor proposes to grant Berkshire Bank a replacement perfected security interest under 11 U.S.C. section 361(2) to the extent that Berkshire Bank's cash collateral lien is validated pursuant to further proceedings and is used by the Debtor, to the extent and with the same priority in all of the Debtor's post-petition collateral, and proceeds thereof, that Berkshire Bank held in the Debtor's pre-petition property, subject to payments due under 28 U.S.C. section 1930(a)(6). To the extent the adequate protection provided proves insufficient to protect Berkshire Bank's interest in and to the cash collateral, Berkshire Bank will have a super-priority administrative expense claim, pursuant to 11 U.S.C. section 507(b), senior to any and all claims against Debtor under 11 U.S.C. section 507(a), whether in this proceeding or in any superseding proceeding, subject to payments due under 28 U.S.C. section 1930(a)(6). A copy of the motion is available at https://bit.ly/3CiIxuS from PacerMonitor.com. About T.J. McDermott Transportation Co., Inc. T.J. McDermott Transportation Co., Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 22-17912) on October 5, 2022. In the petition signed by Leeanna Roman Lozada, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. E. Richard Dressel, Esq., at Lex Nova Law, LLC, is the Debtor's counsel. TAMARACK INVESTMENTS: Case Summary & One Unsecured Creditor ----------------------------------------------------------- Debtor: Tamarack Investments, LLC 13821 Technology Drive, Suite A Oklahoma City, OK 73134 Business Description: Tamarack owns a 32.3% interest in the Red Hawk SWD 1-17 Well located in the SE/4 SW/4 of Section 17, Township 19N, Range 7 WIM, Kingfisher County, Oklahoma. The Debtor also owns a 38.3% interest in the Red Hawk SWD 2-17 a/k/a 2-17H Well located in the SE/4 SW/4 of Section 17, Township 19N, Range 7 WIM, Kingfisher County, Oklahoma. The current value of the Debtor's interests is $3.3 million. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Western District of Oklahoma Case No.: 22-12333 Debtor's Counsel: Stephen J. Moriarty, Esq. FELLERS, SNIDER ET AL 100 N. Broadway, Ste 1700 Oklahoma City, OK 73102-8820 Tel: 405-232-0621 Fax: 405-232-9659 Email: smoriarty@fellerssnider.com Total Assets: $5,621,080 Total Liabilities: $2,820,172 The petition was signed by Charles V. Long, Jr. as managing member. The Debtor listed Redhawk Disposal, LLC as its only unsecured creditor holding a claim of $114,543. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/TFZGPLY/Tamarack_Investments_LLC__okwbke-22-12333__0001.0.pdf?mcid=tGE4TAMA TEGRA118 WEALTH: S&P Downgrades ICR to 'B-' on Declining Liquidity ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating and first-lien credit facility rating on N.J.-based digital wealth and investment management software provider Tegra118 Wealth Solutions Inc. to 'B-' from 'B'. S&P said, "The negative outlook reflects the likelihood of a downgrade should affiliate cash needs exceed S&P's expectations rendering the company dependent on favorable business and financial conditions. "The downgrade reflects our view that cash flow deficits at the company's affiliates will pressure Tegra118's liquidity position. We forecast Tegra118's total liquidity position will decline in 2022 and 2023. As of June 30, 2022, it had $40 million in available liquidity across its cash and unused revolving credit facility, from $52 million as of year-end 2021. We expect the company's liquidity will further deteriorate and will trough at about $20 million over the next 12 months." Integration and growth-related expenses at recently merged affiliates Finantix, InvestCloud, and Advicent have exceeded both our initial expectations and the internally generated free operating cash flow (FOCF) of Tegra118 Wealth Solutions Inc. in the first half of 2022. As a result, Tegra118 has drawn on its revolving credit facility to fund these shortfalls causing its liquidity position to contract. The negative outlook reflects the likelihood of a downgrade should affiliate cash needs exceed our expectations rendering the company dependent on favorable business and financial conditions. S&P could lower its rating on the company if it expects affiliate distributions will persistently exceed Tegra118's FOCF such that its total liquidity sources deteriorate or if it comes to view the company's capital structure as unsustainable. This could occur if: -- Affiliate integration costs remain higher than expectations; -- Profitability deteriorates due to material customer losses, high labor costs, pricing erosion, or an inability to achieve cost savings; or -- The company is unable to raise additional capital to fund near-term cash flow deficits. S&P could consider revising its outlook to stable if organic revenue growth significantly exceeds its forecast and the company substantially increases its profitability while affiliate deficits moderate such that Tegra118 sustains FOCF in excess of intercompany distributions driving improvement in its total liquidity sources. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of the company, as is the case for most rated entities owned by private-equity sponsors. We believe Tegra118 Wealth Solutions Inc.'s highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." TROIKA MEDIA: Receives Default Notice From Blue Torch ----------------------------------------------------- Blue Torch Finance, LLC notified Troika Media Group, Inc. that certain events of default have occurred and are continuing under the Financing Agreement dated as of March 21, 2022, by and among the Company, the lenders, and Blue Torch as collateral agent and administrative agent for the lenders, and that its limited waiver of such events of default had expired. Blue Torch has asserted that the events of default relate to the Company's failure to satisfy certain financial and nonfinancial covenants under the Financing Agreement. In its notice to the Company, Blue Torch has confirmed that the agents and the lenders have not waived the specified events of default, and that the agents and the lenders reserve all of their rights and remedies under the Financing Agreement, the Loan Documents, and any applicable law with respect to the specified events of default, including, without limitation: (i) the right to accelerate the Obligations and to demand immediate full payment of all amounts due under the Financing Agreement and the Loan Documents from the Borrower and other Loan Parties (as defined in the Financing Agreement); (ii) the right to require the obligors to cash collateralize any Obligations that are contingent or not yet due and payable; (iii) the right to repossess and take other actions with respect to any or all collateral; and (iv) the right to take all actions and exercise all remedies available to the agents and/or the lenders under the Loan Documents and applicable law. The Company said it is currently in good faith negotiations with Blue Torch, as agent for the lenders, to amend the Financing Agreement and cure the events of default, although the Company cannot assure that it will be successful in doing so. About Troika Troika Media Group, Inc. (fka M2 nGage Group, Inc.) -- www.thetmgrp.com -- is a consumer engagement and customer acquisition consulting and solutions group based in New York and Los Angeles. Troika's expertise is in Consumer Products and Services, Entertainment and Media, Sports and Sports Betting, Financial and Professional, Education and eSports and Gaming sectors. Its clients include Apple, Hulu, Riot Games, Belvedere Vodka, Unilever, UFC, Leaf Home, AT&T, Andersen Windows, Peloton, CNN, HBO, ESPN, Wynn Resorts and Casinos, IMAX, Netflix, Sony, Yahoo, and Coca-Cola. Troika Media reported a net loss of $38.69 million for the year ended June 30, 2022, a net loss of $16 million for the year ended June 30, 2021, and a net loss of $14.45 million for the year ended June 30, 2020. UNIVERSAL HEALTH: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB+' Long-Term Issuer Default Rating (IDR) on Universal Health Services, Inc. (UHS) and the 'BBB-' instrument rating on its senior secured debt, including its revolver, term loans and bonds. Fitch has also revised the senior secured Recovery Rating to 'RR2' from 'RR1' due to a revised assumption that a priority-recovery accounts receivable securitization facility is likely to remain in place. The Rating Outlook remains Stable despite recent declines in EBITDA due to the pandemic elevating healthcare labor demand and pressuring supply. Fitch expects UHS to manage its balance sheet and contain labor costs sufficiently to limit leverage to 3.0x through 2025, consistent with the 'BB+' IDR. KEY RATING DRIVERS Manageable Margin Pressure: Fitch believes that UHS benefits from financial flexibility consistent with a 'BB+' IDR, despite the pandemic pressuring healthcare labor costs and volumes and likely depressing margins at least through 2023. Although its exposure to service-oriented economies in Nevada and southern California adds risk from cyclicality, Fitch expects operating margins to recover in 2023-2024, with volumes and commercial reimbursement likely benefiting from the company's strong market positions in higher-growth urban areas and from favorable payor mix and service mix. Diversification and Stability: Fitch attributes UHS's historical mid-single-digit revenue growth and stable margins to its dual focus on general acute care and behavioral health, providing diversification that is likely to contain adverse revenue and margin volatility over the ratings horizon. Fitch further believes that COVID-era social change is accelerating the de-stigmatization of behavioral healthcare, which is likely a positive for demand and pricing amid constraints in the supply of and access to care, with access improving as insurance coverage for behavioral health evolves toward parity with general acute care. Sustained Low Leverage, Positive FCF: Fitch expects healthcare labor market pressures to increase gross leverage to Fitch's 3.0x negative rating sensitivity for UHS by the end of 2022. However, Fitch expects UHS to manage its balance sheet and contain labor costs to maintain gross leverage below 3.0x in 2023-2025, consistent with its 'BB+' IDR. Fitch thus expects UHS to continue operating with the least leverage of its for-profit health system peers, with FCF approaching $250 million in 2022, doubling to about $500 million in 2023 and increasing further thereafter, despite high capex levels supporting de novo projects. Conservative Financial Policy: Fitch views UHS's conservative balance sheet management and capital allocation, and its emphasis on de novo growth over M&A, as credit positives. The latter is evident in its opening several behavioral health hospitals in 1H22, a new $300 million acute care hospital in Reno, NV in April (addresses capacity constraints in an adjacent market), and a new $100 million patient tower in August that doubles the size of its acute care hospital in Edinburg, TX. UHS halted stock buybacks and dividends as COVID hit and, after resuming both in 2021, since limited the former amid industry stress. DERIVATION SUMMARY The 'BB+' IDR for UHS reflects its strong financial profile, with leverage in the 2.5x-3.0x range. This compares with leverage at its strongest peers, HCA Healthcare, Inc. (BB+/Stable) and Tenet Healthcare Corp. (B+/Stable), trending within the ranges of 3.0x-3.5x and 5.0x-5.5x, respectively. Leverage at Prime Healthcare Services, Inc. (B/Negative) and Community Health Systems, Inc. (B-/Negative) is trending upward within the ranges of 5.0x-7.5x (rent-adjusted) and 7.5-10.0x, respectively, albeit with credible potential to progress toward targets below 5.0x (rent-adjusted) and 6.0x, respectively through 2024. UHS also benefits from favorable diversification, margins and FCF (despite high growth capex levels). KEY ASSUMPTIONS - Revenue growth of 4%-5% from 2022-2025, driven by annual volume growth averaging 3%. - EBITDA margins rebounding from an assumed trough of 12.5% in 2022 to 14%-15% after 2022-2023, driven by more favorable labor expense trends, facilitated in part by a recovery in volume growth. - Capex of $1.0 billion in 2022, reflecting several large development projects, declining only slightly to $0.9-$1.0 billion thereafter (about 6.5% of revenue), incorporating significant development spending. - FCF nearing $250 million in 2022 and doubling to nearly $0.5 billion in 2023, then recovering to $0.6-$0.8 billion in 2024- 2025(averaging $0.5 billion or 4.0% of revenue for the 2022-2025 period). - Fitch assumes this FCF funds an estimated $0.6 billion in annual share buybacks over the forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch's expectation that UHS will sustain gross debt / operating EBITDA-NCI distributions below 2.0x; - Fitch's expectation that UHS will sustain CFO-Capex / gross debt above 12.0%; - Favorable financial policy communicated in explicit terms. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch's expectation that UHS will sustain gross debt / operating EBITDA-NCI distributions above 3.0x; - Fitch's expectation that UHS will sustain CFO-Capex / gross debt below 8.0%; - Regulatory or litigation developments reducing the diversification value of its behavioral health unit. LIQUIDITY AND DEBT STRUCTURE Favorable Financial Flexibility: Liquidity is solid within the 'BB+' IDR category at $1.19 billion, comprised of $133 million of unrestricted cash on hand and the balance from available capacity under its $1.20 billion revolver due 2026 ($140 million drawn as of June 30, 2022). Refinanced Debt Capital Structure: UHS refinanced most its debt presciently in 2H 2021, strengthening its balance sheet at low rates and eliminating all debt due before 2026. This entailed an amendment to its credit agreement to establish a new $1.20 billion Revolver due 2026 (increasing its capacity by $0.20 billion) and a new $1.70 billion Term Loan A due August 2026 (refinancing its $1.85 billion of Term Loan A), and its repayment in full of its Term Loan B. Rounding out the refinancing, UHS issued $0.7 billion of 1.650% senior notes due 2026 and $0.5 billion of 2.650% senior notes due 2032, and redeemed all $0.4 billion of its 5.000% senior notes due 2026. UHS since entered into an incremental $700 million Term Loan A in June 2022, with proceeds used to repay revolver debt and for general corporate purposes. Debt Issue Notching: Fitch does not employ a waterfall recovery analysis for issuers rated 'BB+'. The further up the speculative-grade continuum a rating moves, the more compressed notching between the specific classes of debt becomes. As such, Fitch rates the senior secured credit facility and senior secured notes 'BBB-'/'RR2', one notch above the 'BB+' IDR. The first-lien senior secured debt recovery rating is constrained at 'RR2' as it retains a priority-recovery accounts receivable securitization facility. ISSUER PROFILE UHS is one of the largest publicly traded, for-profit health systems focused on urban and suburban markets in the U.S. and UK. It delivers care at both inpatient and outpatient settings. ESG CONSIDERATIONS UHS has an ESG Relevance Score of '4' for Exposure to Social Impacts, reflecting pressure to contain healthcare spending growth, a highly-sensitive political environment and social pressure to contain costs or restrict pricing. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. UHS also has an ESG Relevance Score of '4' for Governance Structure, due to the Miller family's significant control of the company via its equity ownership and the relative voting rights of multiple share classes of UHS stock. 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. Debt Rating Recovery Prior ---- ------ -------- ----- Universal Health Services, Inc. LT IDR BB+ Affirmed BB+ senior secured LT BBB- Affirmed RR2 BBB- VANGUARD WINES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Vanguard Wines, LLC 1020 W. 5th Avenue Columbus, OH 43212 Chapter 11 Petition Date: October 10, 2022 Court: United States Bankruptcy Court Northern District of Ohio Case No.: 22-51200 Debtor's Counsel: Richard K. Stoval, Esq. ALLEN STOVALL NEUMAN & ASHTON LLP 10 W. Broad St., Ste. 2400 Columbus, OH 43215 Tel: (614) 221-8500 Fax: (614) 221-5988 Email: stovall@asnalaw.com Total Assets as of September 30, 2022: $1,408,580 Total Liabilities as of September 30, 2022: $5,063,797 The petition was signed by Eric Stewart as president. 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/NOO3SII/Vanguard_Wines_LLC__ohnbke-22-51200__0001.0.pdf?mcid=tGE4TAMA VERTEX ENERGY: Signs Second Amended Loan and Security Agreement --------------------------------------------------------------- As previously disclosed in that certain Current Report on Form 8-K filed by Vertex Energy, Inc. with the Securities and Exchange Commission on Sept. 12, 2022, the Company on that date issued a press release announcing the extension of the anticipated timeline to complete the renewable diesel conversion project at the Company's Mobile, Alabama refinery. The Company also previously filed a Current Report on Form 8-K with the SEC on April 7, 2022 disclosing that on April 1, 2022, Vertex Refining Alabama LLC, a Delaware limited liability company, which is indirectly wholly-owned by the Company; the Company, as a guarantor; substantially all of the Company's direct and indirect subsidiaries, as guarantors; the lenders party thereto as lenders; and Cantor Fitzgerald Securities, in its capacity as administrative agent and collateral agent for the lenders, entered into a Loan and Security Agreement. The Company subsequently filed a Current Report on Form 8-K with the SEC on May 27, 2022 disclosing that an amendment to the Loan and Security Agreement was entered into on May 26, 2022. In connection with the Timeline Extension, on Sept. 30, 2022, Vertex Refining; the Company, as a guarantor; substantially all of the Company's direct and indirect subsidiaries, as guarantors; Vertex Marine Fuel Services LLC and Vertex Refining Texas LLC, which are indirectly wholly-owned by the Company; the lenders thereto; and the Agent, entered into a second amendment to the Loan and Security Agreement. Amendment No. Two (a) extends the date that the Company is required to begin initial commercial production of renewable diesel at the Mobile Refinery, from Feb. 28, 2023 to April 28, 2023, and provides other corresponding extensions of the milestones required to complete the Company's capital project designed to modify the Mobile Refinery's existing hydrocracking unit to produce renewable diesel fuel on a standalone basis, which as previously described, is currently anticipated for mechanical completion during the first quarter of 2023; and (b) waives and extends certain deadlines and time periods for the Company to take other actions in connection with the Loan and Security Agreement. In addition, each of the New Subsidiary Guarantors also entered into a Guarantor Joinder, agreeing to be bound by the terms of the Loan and Security Agreement, and to guaranty the amounts owed thereunder. About Vertex Energy Houston-based Vertex Energy, Inc. is an energy transition company focused on the production and distribution of conventional and alternative fuels. Vertex owns a refinery in Mobile (AL) with an operable refining capacity of 75,000 barrels per day and more than 3.2 million barrels of product storage, positioning it as a leading supplier of fuels in the region. Vertex is also a processor of used motor oil, with operations located in Houston and Port Arthur (TX), Marrero (LA), and Columbus (OH). Vertex also owns a facility, Myrtle Grove, located on a 41-acre industrial complex along the Gulf Coast in Belle Chasse, LA, with existing hydroprocessing and plant infrastructure assets, that include nine million gallons of storage. Vertex Energy reported a net loss of $7.66 million for the year ended Dec. 31, 2021, a net loss of $11.40 million for the year ended Dec. 31, 2020, and a net loss of $5.49 million for the year ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had $266.06 million in total assets, $192.55 million in total liabilities, $43.45 million in total temporary equity, and $30.07 million in total equity. VITAL PHARMACEUTICALS: Seeks Approval of $454MM DIP Loan -------------------------------------------------------- Vital Pharmaceuticals, Inc. and affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, for authority to use cash collateral and obtain postpetition financing. The Debtors seek to obtain senior secured postpetition financing on a super-priority basis pursuant to the terms and conditions of the Superpriority Secured Debtor-in-Possession Credit Agreement by and among the Borrowers, the Guarantors, Truist Bank, as administrative agent for and on behalf of the lenders party thereto, and the DIP Lenders. The DIP Lenders have agreed to extend: * during the interim period pending the entry of the Final Order, up to $34,000,000 in accordance with the DIP Credit Agreement and the Interim Order; and * upon entry of the Final Order, total advances in an amount not to exceed a maximum outstanding principal amount of $454,770,202. The Debtors require immediate access to postpetition financing to continue operating their business for the benefit of all stakeholders, while simultaneously preventing direct, immediate, and substantial harm to the Debtors' estates. The DIP Loans would be repaid in full, and the DIP Loan Commitment would terminate on, the earliest to occur of the following: a. Unless the Final Order will have been entered, the date that is 30 calendar days after the date of entry of the Interim Order, provided, that, this date may be extended with the consent of the Administrative Agent and the Required Lenders to a date that is no later than 60 calendar days after entry of the Interim Order; b. The date upon which any plan of reorganization or Sale Transaction becomes effective; c. The date that is the seven-month anniversary of the Petition Date; and d. Acceleration by the DIP Agent following an Event of Default. It will be a Termination Event if the Debtors fail to adhere to any of the following milestones with respect to the refinance of the DIP Obligations and Prepetition Obligations and/or the sale of all or substantially all of their assets: a. Within 105 days of the Petition Date, (x) deliver to the DIP Agent and Prepetition Agent fully executed and bona fide commitment papers, from a third party investor with the financial wherewithal to consummate the transaction, in respect of a credit facility, equity investment, or other investment or financing that would, upon closing, provide for the payment in full in cash of the DIP Obligations and Prepetition Obligations; or (y) have filed a bid procedures motion in form and content reasonably acceptable to the DIP Agent and the Prepetition Agent seeking authority to (A) designate a "stalking horse" reasonably acceptable to the DIP Agent and the Prepetition Agent, (B) establish bidding procedures and (C) set a date for an auction within 75 days thereafter; provided that if the Debtors have obtained fully-executed commitment papers for Acceptable Financing and after the Transaction Milestone such commitment is terminated or rescinded, then the Debtors would promptly, and in any event within 14 days thereafter, file the Bid Procedures Motion; b. Within 30 days after filing the Bid Procedures Motion, have obtained an order in form and content reasonably acceptable to the DIP Agent and the Prepetition Agent approving the Bid Procedures Motion; and c. In the event that a Bid Procedures Motion has been filed, have consummated a Sale Transaction consistent with the Bid Procedures Motion no later than 14 days prior to the outside date set forth in clause (d) of the definition of "DIP Facility Maturity Date" in the DIP Credit Agreement. Debtor Vital Pharmaceuticals as borrower, certain of its subsidiaries and affiliates as guarantors, the lenders from time-to-time party thereto, and Truist Bank as administrative agent and issuing bank, are parties to an Amended and Restated Revolving Credit and Term Loan Agreement, dated as of August 14, 2020. The Credit Agreement provides two separate credit facilities, each maturing on August 14, 2025: (a) a revolving credit facility and (b) a term loan. As of the Petition Date, the Prepetition Lenders are owed on account of the Prepetition Loans: * $240,000,000 in revolving loan principal obligations, * $104,190,218 in term loan principal obligations, * $6,349,912 in respect of unpaid interest accrued through October 9, 2022, * $4,188,188 in respect of unpaid forbearance fees accrued through October 9, 2022, and * $41,883 in respect of unpaid commitment fees accrued through October 9, 2022. As adequate protection of: (a) the interests of the Prepetition Secured Parties in the Prepetition Collateral against any Diminution in Value of the interests in the Prepetition Collateral, the Debtors grant to the Prepetition Agent, for the benefit of itself and the other Prepetition Secured Parties, continuing valid, binding, enforceable and perfected postpetition security interests in and liens on all of the Debtors' assets; and (b) the interests of the holders of mechanics' liens and/or materialmen's liens arising under applicable Arizona law against any Diminution in Value of the Arizona Mechanics' Lienholders' interest, if any, in the real property of Debtor JHO Real Estate Investment, LLC located at 1635 S. 43rd Avenue, Phoenix, AZ 85009, the Debtors grant to the Arizona Mechanics' Lienholders continuing valid, binding, enforceable and perfected postpetition security interests in and liens on the DIP Collateral. The Adequate Protection Liens will be senior to all other security interests in, liens on, or claims against any of the Debtors' assets. As between the Prepetition Secured Parties Adequate Protection Liens and the Arizona Mechanic's Lienholders Adequate Protection Liens, the Prepetition Secured Parties Adequate Protection Liens will be senior. As further adequate protection of the interests of: (a) the Prepetition Secured Parties in the Prepetition Collateral against any Diminution in Value of such interests in the Prepetition Collateral, the Prepetition Agent, on behalf of itself and the other Prepetition Secured Parties, is to be granted, as and to the extent provided by section 507(b) of the Bankruptcy Code, an allowed superpriority administrative expense claim in each of the Cases and any Successor Cases; and (b) the Arizona Mechanics' Lienholders against any decrease in the value of the Arizona Mechanics' Lienholders' interest, if any, in the Arizona Real Property, the Arizona Mechanics' Lienholders is to be granted, as and to the extent provided by section 507(b) of the Bankruptcy Code, an allowed super-priority administrative expense claim in each of the Cases and any Successor Cases. A copy of the motion is available at https://bit.ly/3RRDnM0 from PacerMonitor.com. About Vital Pharmaceuticals Since 1993, Florida-based Vital Pharmaceuticals, Inc., d/b/a Bang Energy and as VPX Sports, has developed performance beverages, supplements, and workout products to fuel high-energy lifestyles. VPX Sports is the maker of Bang energy drinks, among other consumer products. Vital Pharmaceuticals, Inc., along with certain of its domestic subsidiaries and affiliates, filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 22-17842) on Oct. 10, 2022. VPX estimated $500 million to $1 billion in assets and liabilities as of the bankruptcy filing. The Hon. Scott M. Grossman is the case judge. The Debtors tapped LATHAM & WATKINS LLP as general bankruptcy counsel; BERGER SINGERMAN LLP as co-bankruptcy counsel; HURON CONSULTING GROUP INC., as financial advisor; and ROTHSCHILD & CO US INC. as investment banker. STRETTO is the claims agent. WIRELESS SYSTEMS: Court Overrules Objections to Disclosures ----------------------------------------------------------- Wireless Systems Solutions LLC is slated to seek confirmation of its Plan on Oct. 12, 2022, after the Court rejected objections to the Disclosure Statement explaining the terms of the Plan. The matters before the court are the pending objections filed by creditors SmartSky Networks, LLC ("SmartSky"), First Citizens Bank and Trust Co., and the Bankruptcy Administrator (collectively, the "Objections") to the Disclosure Statement filed by the Debtor. SmartSky, as the primary objecting party along with the other objecting parties, seeks rejection of the Disclosure Statement based on the Debtor's alleged failure to reveal and provide sufficient information regarding: (i) its specific customers and sales contracts, (ii) background and support for projections of future income, and (iii) general financial information such as capital contributions and lease waivers. Rather than being true disclosure statement adequacy issues, these objections actually concern plan confirmation issues raisable under 11 U.S.C. section 1129, such as liquidation value of the Debtor's assets (or going concern value); validity of financial projections; plan feasibility; and fair and equitable cram down standards. The Objections actually pertain to and constitute a proposed plan of reorganization dispute, not a clash concerning the truthfulness and adequacy of information contained in the Disclosure Statement. The Disclosure Statement and filed monthly reports present, for all creditors to see, the Debtor's struggles to obtain definitive contracts generating cash flow to support future, post-confirmation business operations. Due to the lack of sales and cash flow, and inability to obtain any meaningful income to date, SmartSky, First Citizens and one other unsecured creditor voted unanimously against the proposed Plan. Only the first lien secured claimant. The United States Small Business Administration, has voted for the Plan, setting up a "cramdown battle" under Section 1129(b) for the rejecting creditors at the October 12, 2022 confirmation hearing. Based on the record before the court, including the Report of Ballots filed September 28, 2022, it appears Debtor has provided adequate information from which creditors can make an informed judgment about the proposed Plan, albeit the current ballot result is the opposite of the one the Debtor seeks. Accordingly, Judge Joseph N. Callaway entered an order overruling the objections. The Disclosure Statement remains conditionally approved for purposes of the confirmation hearing scheduled for October 12, 2022, under the court's order of August 8, 2022. This is not a final order as nothing herein serves as issue preclusion concerning any matters raised at this hearing or addressed in documents as objections to the Plan for the October 12 confirmation hearing. All of those issues will be heard anew on that date, although testimony rendered at the instant hearing can be considered as part of the record for confirmation purposes then. About Wireless Systems Solutions Wireless Systems Solutions LLC is a North Carolina Limited Liability Company formed in 2015 with a principal offices and assets in Cary, North Carolina, and Morrisville, North Carolina. WSS is a designer and developer of multi-standard, frequency band agnostic, cellular network solutions that leverage its expertise in cellular and wireless communications technology at large. WSS is able to offer a portfolio of products and platforms suitable for multiple markets including defense, first-responders, utilities, telcos, and general network infrastructure solutions. WSS sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-00513) on March 9, 2022. In the petition signed by Susan Gross, vice president, the Debtor disclosed up to $10 million in assets and up to $10 billion in liabilities. Judge Joseph N. Callaway oversees the case. William P. Janvier, Esq., at Stevens Martin Vaughn & Tadych, PLLC is the Debtor's counsel. WRIGHT EXPERIENCE: Marc Albert Appointed as Subchapter V Trustee ---------------------------------------------------------------- John P. Fitzgerald, III, Acting U.S. Trustee for Region 4, appointed Marc Albert, Esq., at Stinson, LLP, as the Subchapter V trustee for Wright Experience, Inc. Mr. Albert disclosed in a court filing that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Marc E. Albert, Esq. Stinson, LLP 1775 Pennsylvania Avenue, NW, Suite 800 Washington, DC 20006 Tel: (202) 728-3020 Email: marc.albert@stinson.com About The Wright Experience The Wright Experience, Inc., a company in Warrenton, Va., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Va. Case No. 22-11257) on Sept. 21, 2022, with as much as $1 million to $10 million in both assets and liabilities. Marc E. Albert serves as Subchapter V trustee. Judge Klinette H. Kindred oversees the case. The Law Office of Henry McLaughlin, P.C. is the Debtor's legal counsel. XEBEC HOLDING: Chapter 15 Case Summary -------------------------------------- Lead Debtor: Xebec Holding USA Inc. 532 Patterson Avenue, Suite 180 Mooresville, NC 28115 United States Business Description: The Debtors and certain non-U.S. based subsidiaries and affiliates of the Debtors primarily supply a wide range of renewable and low-emission gas products and services globally through several channels, including direct sales, channel partners, project developers, and e- commerce. Foreign Proceeding: Superior Court of Quebec, District of Montreal, File No. 500-11-061483-224 Chapter 15 Petition Date: September 30, 2022 Court: United States Bankruptcy Court District of Delaware Thirteen affiliates that concurrently filed voluntary for relief under Chapter 15 of the Bankruptcy Code: Debtor Case No. ------ -------- Xebec Holding USA Inc. (Lead Case) 22-10934 Enerphase Industrial Solutions, Inc. 22-10939 CDA Systems, LLC 22-10940 Xebec Adsorption USA Inc. 22-10941 The Titus Company 22-10942 Nortekbelair Corporation 22-10943 XBC Flow Services - Wisconsin Inc. 22-10944 California Compression, LLC 22-10945 Xebec Systems USA, LLC 22-10946 Xebec Adsorption Inc. 22-10935 Xebec RNG Holdings Inc. 22-10936 Applied Compression Systems Ltd. 22-10937 Compressed Air International Inc. 22-10938 Judge: Hon. Karen B. Owens Foreign Representative: Xebec Adsorption Inc. 700-1130 Sherbrooke Street West Montreal, Quebec H3A 2MB Canada Foreign Representative's Counsel: David M. Klauder, Esq. BIELLI & KLAUDER, LLC 1204 North King Street Wilmington, DE 19801 Tel: (302) 803-4600 Email: dklauder@bk-legal.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of the Lead Debtor's Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BZA2RAY/Xebec_Adsorption_Inc_and_Xebec__debke-22-10934__0001.0.pdf?mcid=tGE4TAMA YIELD10 BIOSCIENCE: Appoints Former Cargill Exec to Board --------------------------------------------------------- Willie Loh, Ph.D. was named to Yield10 Bioscience, Inc.'s Board of Directors effective Oct. 4, 2022. Dr. Loh previously served as a Special Commercial and Technical Advisor to the Company. Dr . Loh was formerly vice president, Market Development of Cargill Inc.'s Global Edible Oils Solutions group in North America. Cargill is a global food and agriculture company. "We are delighted that Willie is expanding his role with Yield10 by serving on our Board of Directors," said Oliver Peoples, Ph.D., chief executive officer of Yield10 Bioscience. "His extensive knowledge of the commercial landscape for commodity and specialty oils including leading the development of omega-3 canola oil as well as his global business and operational management experience in grain seed, grain and oil sales will provide our team with important insights as we continue to advance our commercial plans for Camelina and shape the future of Yield10. Willie brings critical value chain experience at a time when Yield10 is transitioning to a commercial operation to supply Camelina grain to the seed processing and biofuel sectors." "Despite recent supply chain challenges, there remains an unprecedented global demand for vegetable oil production across biofuels, human nutrition and animal feed markets," said Dr. Loh. "Yield10's leadership in the development of Camelina as a new commercial crop has the potential to address the growing gap between vegetable oil supply and demand. Based on the positive attributes of the crop, I believe Camelina represents a viable solution for long-term production, benefitting growers, energy users and consumers alike. I look forward to continuing to work with the Yield10 team and contributing to the Company's commercial success." Dr. Loh retired in 2020 as vice president of Cargill's Global Edible Oil Solutions group in North America, where he was responsible for the market development of novel oil products and led its Project Management Office. Prior to this assignment, Dr. Loh led marketing professionals at Cargill responsible for strategic planning, new business development, product management and innovation in food ingredient oils, foodservice oils and planting seed. Dr. Loh joined Cargill in 1995 and led the specialty oils sales team for 10 years. Dr. Loh earned a Ph.D. in Microbiology from the Ohio State University. He earned an M.S. in Botany from Rutgers University and a B.S. in Biology from Columbia University. Dr. Loh also worked as a Post-Doctoral Research Fellow in Cell and Molecular Biology at the University of Virginia. He has published original research articles in Oil Chemistry, Oilseed Biochemistry, Microbial Physiology and Plant Molecular Genetics and has been granted more than a dozen patents in these areas. Dr. Loh will be entitled to compensation for his service as a member of the Board pursuant to the Company's policy for compensation of non-employee directors. In connection with his appointment to the Board, the Company granted Dr. Loh a stock option to purchase 10,000 shares of the Company's common stock. The stock option will have an exercise price per share of $3.00, the closing price of the Company's common stock on The Nasdaq Capital Market on the date of grant. The stock option will vest in equal quarterly installments over four years, subject to Dr. Loh's continued service as a director. About Yield10 Yield10 Bioscience, Inc. -- http://www.yield10bio.com-- is an agricultural bioscience company that uses its "Trait Factory" and the Camelina oilseed "Fast Field Testing" system to develop high value seed traits for the agriculture and food industries. Yield10 is headquartered in Woburn, MA and has an Oilseeds Center of Excellence in Saskatoon, Canada. Yield10 Bioscience reported a net loss of $11.03 million for the year ended Dec. 31, 2021, compared to a net loss of $10.21 million for the year ended Dec. 31, 2020. As of June 30, 2022, the Company had $14.27 million in total assets, $4 million in total liabilities, and $10.27 million in total stockholders' equity. Boston, Massachusetts-based RSM US LLP, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 25, 2022, citing that the Company has suffered recurring losses from operations. This raises substantial doubt about the Company's ability to continue as a going concern. ZAPPELLI BODY SHOP: Unsecureds Owed $600K to Get 5% Under Plan -------------------------------------------------------------- Zappelli Body Shop, Inc., submitted a Plan of Reorganization. This Plan of Reorganization under Chapter 11 of the Bankruptcy Code proposes to pay creditors of Zappelli Body Shop from revenues received from autobody repair and painting services rendered to customers. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 5 cents on the dollar. The final Plan payment is expected to be paid within 60 months from the effective date of the Plan thus the final payment is expected to be on or before November 21, 2027. The Debtor's level of business has steadily increased since COVID restrictions have lessened and more people are back on the road commuting to and from work resulting in more accidents. The level of business is back to pre-pandemic levels. The company year to date (January through August) averaged $114,805.90 in Revenue. Monthly Expenses can be brought to $104,475.69. In order to accomplish this, the company may be reducing the amount of rent it pays for the commercial space to its owner Samantha Zappelli and may be reducing salaries of owner-employees in order to find the plan. Also, the company may need to reduce its workforce. Under the Plan, Class 3 Non-priority Unsecured Creditors totaling $612,019. Payments totaling $516.00 will be made monthly and distributed on a pro-rata basis. The payments will total a 5% distribution to claim holders. Payments shall begin 30 days after the effective date of the plan and will be monthly for 60 months [five years] paid by the 20th of every month. Class 3 is impaired. The Debtor will continue to operate. Samantha Zappelli will remain the CEO in charge of the business operations and Quinn Zappelli will remain an officer in charge of the service operations. Brooke Zappelli will remain a director of the debtor. The revenues of the business are strong and have returned to pre-pandemic levels. In order to implement and fund the plan the rent for the commercial building which is leased from Samantha Zappelli will be reduced. In addition, salaries of certain employee owners may be cut as well. By reducing the rent and salaries the debtor will create the necessary discretionary income to fund the plan. A copy of the Plan of Reorganization dated September 30, 2022, is available at https://bit.ly/3yaHXy9 from PacerMonitor.com. About Zappelli Body Shop Zappelli Body Shop, Inc., a company based in Santa Rosa, Calif., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-10510) on Dec. 16, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Samantha Zappelli, chief executive officer, signed the petition. Judge Charles Novack oversees the case. Brian A. Barboza, Esq., at the Law Offices of Brian A. Barboza, serves as the Debtor's legal counsel. [*] 18 Retailers at Risk of Bankruptcy as Consumers Tighten Budgets ------------------------------------------------------------------- Ben Unglesbee of Retail Dive reports that 18 retailers are at risk of bankruptcy as consumers tighten their wallets in 2022. Last 2021 was a great one for many if not most in and connected to the retail industry, except for its restructuring experts. (But don't worry about them -- the bankruptcy lawyers and consultants had a sensational 2020.) Revlon and Olympia Sports aside, bankruptcies remain slow after years of "apocalypse" and the surge in the pandemic's first year. The travails of 2020 pulled forward many bankruptcies that might have happened this year or next. Those reorganized were (theoretically) left with cleaner balance sheets, trimmed store footprints and stronger financial positions. Yet retail is a big industry with many players, not all of them on solid footing. Consumers are still capricious. The digital transformation is ongoing and expensive to adapt to. Supply chains are complicated and difficult to master, or even fully understand. COVID-19 is still with us. Demand is as difficult to predict today as it ever was. With stimulus payments gone, consumers under pressure from inflation, capital markets tighter and business inputs still expensive, the financially or operationally weaker players who rode a wave of high demand and a quiet promotional environment are at risk once again. In a summer report on vulnerable retailers, Creditntell cited high inflation, falling demand and "bloated" inventory levels as pressures on margins and profits. "Potentially the biggest stumbling block will be the consumer," Albert Furst, chief operating officer of Creditntell, said in an interview. One proprietary measure of bankruptcy risk in the market comes from CreditRiskMonitor's FRISK scores, which specifically measure the probability of a company filing for bankruptcy within 12 months. The scores factor in various data, including trading volatility, financial metrics and analytics from the firm's own platform that is often used by company credit managers. This time last 2021 the retail companies that carried the very lowest FRISK scores, indicating the highest risk of bankruptcy, numbered just three. As of Sept. 30 this year, the number had surged to 18, a cohort size much more in line with pre-pandemic risk levels. Of that, nine retailers had a FRISK score of 1, indicating a 9.99% to 50% chance of filing for bankruptcy within the next 12 months. Retailers with a 9.99% to 50% chance of bankruptcy Name Sector ---- ------ Bed Bath & Beyond home Digital Brands Group apparel Express apparel iMedia brands television retail Kirkland’s home Party City specialty The RealReal apparel Rite Aid drugstores Tuesday Morning off-price Wayfair home Source: CreditRiskMonitor's FRISK scores as of Sept. 30 Another nine had a FRISK score of 2, representing a 4% to 9.99% chance of bankruptcy by CreditRiskMonitor’s calculations. Retailers with a 4% to 9.99% chance of bankruptcy Name Sector ---- ------ Abercrombie & Fitch apparel Big Lots home Farfetch apparel Land's End apparel Steinhoff (Mattress Firm) home Stitch Fix apparel ThredUp apparel Torrid apparel Source: CreditRiskMonitor’s FRISK scores as of Sept. 30 Among those companies with the lowest scores are digitally savvy operators that held initial public offerings in recent years, including The RealReal, Stitch Fix, ThredUp and Digital Brands Group. That perhaps should not come as a surprise, given the slump in apparel amid inflation on food and gas as well as the high expenses of e-commerce and the losses many digital darlings racked up before (and after) going public. FRISK scores only cover those companies with publicly traded stocks or bonds. Credit ratings and other measures of default risk turn up other names as well. Those with the lowest ratings from Creditntell include, as of July, Tuesday Morning, Party City, GameStop, Rite Aid, Bed Bath & Beyond, Casper and Joann. Creditntell's top retailers at risk Name Sector ---- ------ Tuesday Morning home Party City Specialty GameStop electronics Rite Aid drugstores Bed Bath & Beyond home goods Casper home Joann craft/specialty Source: Creditntell Meanwhile, Fitch Ratings' most recent lists of loans of concern include a handful of retailers, including Belk, Men’s Wearhouse, Boardriders and Premier Brands Group (a reorganized incarnation of the old Nine West Holdings). [*] 29th Distressed Investing Conference on Nov. 28 -- Register Now ------------------------------------------------------------------- Beard Group has announced the agenda for this year's Annual Distressed Investing Conference. Top industry experts will discuss the latest topics and trends in the distressed investing industry, namely: * The Economy and Current and Future Cases * Trends in Healthcare * From Liability Management to Lender-on-Lender Violence * Out of Court and Other Alternatives to Bankruptcy * Mass Tort Restructurings and Settlements * Crypto: How 2022 Will Affect The Future Of The Digital Currency Industry This value packed event features special presentations from keynote speakers, live panel discussions with industry experts and networking with other insolvency professionals. See complete 2022 Conference Agenda at https://bit.ly/3CI7GAE This year's speakers include: * Saul Burian, Managing Director HOULIHAN LOKEY * Rebecca DeMarb, Senior Managing Director DEVELOPMENT SPECIALISTS, INC. * Patrick D. Daugherty, Partner FOLEY & LARDNER LLP * Daniel M. Eggermann, Partner KRAMER LEVIN NAFTALIS & FRANKEL LLP * Steven L. Gidumal, President and Managing Partner VIRTUS CAPITAL, LP * Dan Gropper, Managing Partner CARRONADE CAPITAL MANAGEMENT, LP * FOLEY & LARDNER LLP, Partner Mark F. Hebbeln * Harold L. Kaplan, Partner FOLEY & LARDNER LLP * Michael Lipsky, Portfolio Manager MARINER INVESTMENT GROUP, LLC * Samuel R. Maizel, Partner DENTONS * Douglas Mannal, Partner DECHERT LLP * Patrick J. Nash Jr., Partner KIRKLAND & ELLIS LLP * Gregory Pesce, Partner WHITE & CASE LLP * Rachael Ringer, Partner KRAMER LEVIN NAFTALIS & FRANKEL * Damian S. Schaible, Partner, Restructuring New York, DAVIS POLK * Jennifer Selendy, Founding Partner SELENDY GAY ELSBERG PLLC * Joshua A. Sussberg, Partner, Restructuring KIRKLAND & ELLIS LLP * Steven L. Victor, Senior Managing Director DEVELOPMENT SPECIALISTS, INC. * Stephanie Wickouski, Partner LOCKE LORD LLP William (Bill) Brandt, Jr., Founder & Executive Chairman of Development Specialists, Inc., will also receive the Harvey R. Miller Outstanding Achievement Award for Service to the Restructuring Industry. This year's conference sponsors are: * Premier Sponsors: Foley & Lardner Kirkland & Ellis * Major Sponsors: Development Specialists, Inc Dentons Berkeley Research Group Riveron Locke Lord Kramer Levin Naftalis & Frankel * Patron Sponsors Troutman Pepper * Advocate Sponsors SSG Capital Advisors AAA Lenders * Knowledge Partners PacerMonitor * Media Sponsors BankruptcyData Now on its 29th year, the Annual Distressed Investing Conference will be held November 28, 2022, in-person at the Harmonie Club, New York City. Register at https://bit.ly/3CoGpBM For sponsorships and further information about the Distressed Investing Conference, contact: Bernard Toliver, CMP (240) 629-3300 ext. 149 E-mail: bernard@beardgroup.com Or visit https://www.distressedinvestingconference.com/ [*] Howard Brownstein Recognized as Industry Icon by abfJournal --------------------------------------------------------------- The Brownstein Corporation on Oct. 10 disclosed that its President, Howard Brod Brownstein, has been recognized as an "Industry Icon" by abfJournal, a leading publication serving the secured finance industry. In its 3rd Quarter 2022 issue, abfJournal featured "Industry Icons", and included "Present at the Inception: Brownstein Leads the Evolution of the Turnaround Industry" about Mr. Brownstein's contributions to the turnaround profession and the related secured finance industry. The article describes Mr. Brownstein's 30+ years in the turnaround profession, dating from its early days when it emerged from public accounting, and as one of the earliest to receive the "Certified Turnaround Professional" designation, now recognized as a leading credential in the profession. He has been involved in high-profile cases such as overseeing the liquidation of Montgomery Ward, the largest retail liquidation in history, and serving as chief restructuring officer in U.S. Mortgage, involving a $138 million mortgage fraud against Fannie Mae and others. The article recounts that Mr. Brownstein served on the boards of directors of the Turnaround Management Association, from which he received its "Outstanding Individual Contribution" award, as well as the American Bankruptcy Institute and the Secured Finance Network (formerly the Commercial Finance Association), and that he also regularly serves as an independent corporate board member for publicly-held and privately-owned companies, as well as large nonprofits. Mr. Brownstein continues as President of The Brownstein Corporation, and looks forward to continuing to write and speak at industry events regularly. He also continues to serve on multiple boards, as well as extensively writing and speaking on topics related to turnaround management and finance. "I'd like to be remembered as someone who reached across lines of potential disagreement to help find compromises and areas of common interest," Mr. Brownstein said. About Howard Brod Brownstein In addition to serving as CEO of The Brownstein Corporation, a leading turnaround management and restructuring firm, Mr. Brownstein has served as an independent corporate board director for over 40 years. He currently serves as a director of P&F Industries (NasdaqGM: PFIN) and chairs its Strategic Planning & Risk Assessment and Nominating & Governance Committees, and serves on the Board of Merakey, a nonprofit with over 10,000 employees and operations in several states. Mr. Brownstein has previously served on several publicly-held and privately-owned boards, including PICO Holdings (Nasdaq: PICO), A.M. Castle (OTMKTS: CASL), Special Metals Corp. and Magnatrax Corp. He has chaired audit committees and is a Qualified Financial Expert for Sarbanes-Oxley purposes. He also served as Chair of JEVS Human Services (a United Way agency), and as Chair of the National Philanthropic Trust, then the largest independent provider of donor-advised funds. He has been designated by the National Association of Corporate Directors (NACD) as Directorship Certified and as a Board Leadership Fellow, serves on its national faculty for educational programs, and served as President and Chair of the NACD Philadelphia Chapter. About The Brownstein Corporation The Brownstein Corporation -- http://www.brownsteincorp.com/-- provides turnaround management and advisory services to companies and their stakeholders, as well as investment banking services, fiduciary services, and litigation consulting, investigations and valuation services. The company is headquartered in Conshohocken, PA and is active nationally and internationally. Its professionals have served as Financial Advisor to Debtors and to lenders and Creditor Committees in bankruptcy proceedings, as a litigation expert in several cases including the landmark Merry-Go-Round bankruptcy, as Chief Restructuring Officer in U.S. Mortgage which involved a $138 million mortgage fraud, and as Plan Administrator in Montgomery Ward LLC, the largest retail liquidation in history. ********* 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***