/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/221013.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 13, 2022, Vol. 26, No. 285 Headlines 424 GROUP: Taps Jeannette M. Boudreau as Corporate Counsel AAD CAPITAL: Case Summary & Eight Unsecured Creditors ACCESS METALS: Taps Law Office of Gina R. Klump as Counsel AEARO TECHNOLOGIES: 3M Asks 11th Cir. to Reverse Earplug Injunction AITEON 1 LLC: Files Bare-Bones Chapter 11 Petition ALL FLORIDA SAFETY: Taps Mickler & Mickler as Legal Counsel AMC ENTERTAINMENT: Starts $400M Junk Bonds Sale to Refinance Debt AUDACY INC: Moody's Lowers CFR to Caa2, Outlook Remains Negative BANI ENTERPRISES: Starts Subchapter V Case BED BATH: Moody's Lowers CFR to Ca & Alters Outlook to Stable BRICKCHURCH: Taps Duane Morris as Special Litigation Counsel CALCEUS ACQUISITION: Moody's Ups CFR to 'B3', Outlook Stable CARESTREAM HEALTH: Moody's Assigns 'B3' CFR, Outlook Stable CELSIUS NETWORK: Top 3 Execs. Cashed Out $56M Prior to Bankruptcy CHILLKING CHILLERS: Taps Barron & Newburger as Bankruptcy Counsel CINEWORLD GROUP: Intends to Walk Away From 6 More Theater Leases COMPUTE NORTH: Bitcoin Miner Marathon Has $80-Mil. Exposure CROWN FINANCE: Moody's Assigns B1 Rating to DIP Secured Term Loan CUMBERLAND RJ: Case Summary & Five Unsecured Creditors CYPRESS HILLS: Seeks to Hire Singer & Falk CPA's as Accountant DLVR INC: Taps Kilpatrick Townsend & Stockton as Special Counsel DOWNTOWN JORDAN: Gets OK to Hire Toni Campbell Parker as Counsel DPL INC: Moody's Alters Outlook on Ba1 Unsecured Rating to Negative ECO PRESERVATION: Sewer Operators File for Chapter 11 EXPRESSJET AIRLINES: Gets OK to Hire Epiq as Administrative Advisor EXPRESSJET AIRLINES: Seeks to Hire Eversheds as Special Counsel FAIRFIELD HARBOURSIDE: Condo Timeshare Starts Subchapter V Case FIRSTENERGY CORP: Ratepayers Seek $49 Million Settlement Approval GOAL'S GYM LLC: Seeks to Hire Stokes Law as Bankruptcy Counsel GOOD GUYZ: Secured Creditor Says Plan is Neither Fair Nor Equitable GOTO GROUP: Moody's Lowers CFR & Alters Outlook to Negative GRAUSTARK MEMBERS: Houston Apartment Complexes Hit Chapter 11 HIE HOLDINGS: Seeks to Hire KDL CPAs as Accountant HILCORP ENERGY I: Moody's Alters Outlook on 'Ba2' CFR to Positive HOLLEY INC: Moody's Affirms 'B2' CFR & Alters Outlook to Stable HOME DEALS OF MAINE: Taps Thomas Cox as Special Counsel INDIANA WELLNESS: Taps Thieme Adair & Riley as Accountant INSTASET PLASTICS: Auto Parts Supplier Files Subchapter V Case ISAGENIX INT'L: Moody's Assigns C-PD/LD Prob. of Default Rating J&C MAY PROPERTIES: Case Summary & 20 Largest Unsecured Creditors JET OILFIELD: Case Summary & 20 Largest Unsecured Creditors JUUL LABS INC: Hires Two Restructuring Experts to Board KHAWAJA OF MANASSAS: Taps Newton & Sullivan as Special Counsel LIFESCAN GLOBAL: Moody's Cuts CFR to 'Caa2', Outlook Stable LOTUS SKY: Seeks to Hire Joyce W. Lindauer as Legal Counsel LTL MANAGEMENT: Wins Halt to Mississippi, New Mexico Talc Suits MIDWEST OVERNITE: Files Emergency Bid to Use Cash Collateral MOBILESMITH INC: Case Summary & 20 Largest Unsecured Creditors MURPHY CREEK: Taps Law Office of Bonnie Bell Bond as Counsel NATIONAL ASSISTANCE: Seeks Approval to Hire Senior Housing Services NERAM GROUP: Seeks to Hire Hahn Fife & Co. as Accountant NORTH FORK COMMUNITY: Case Summary & Four Unsecured Creditors NP LEHI: Seeks Approval to Hire Tucker Ellis as Bankruptcy Counsel OAK LAWN, IL: Moody's Lowers Rating on $36.5MM GOULT Debt to Ba2 PAI HOLDCO: S&P Downgrades ICR to 'B-' on Elevated Leverage PALMS MEDICAL: Gets OK to Hire Boyer Terry as Legal Counsel PANOP CAB: Claims Will be Paid From Continued Operations PARETEUM CORP: Gets Court Approval for Bankruptcy Plan PATTERN ENERGY: Moody's Affirms Ba3 CFR & Alters Outlook to Pos. PG&E CORP: Fire Victim Trust Sells 35 Million PG&E Shares PRINCIPLE ENTERPRISES: Taps Compass Advisory as Financial Advisor PRINCIPLE ENTERPRISES: Taps Portage Point as Investment Banker PRINCIPLE ENTERPRISES: Taps Whiteford Taylor & Preston as Counsel RAGING BULL: Case Summary & One Unsecured Creditor REVA HOSPITALITY: Case Dismissed a Week After Filing RHRAMDHAN GROUP: Files for Chapter 11 to Stop Foreclosure RXO INC: S&P Assigns 'BB+' ICR on Spin-Off From XPO Logistics S-TEK 1 LLC: Gets OK to Hire NM Financial as Special Counsel SAS AB: Reaches Chapter 11 Lease Amendments for 36 Aircraft SEAICH CARD & SOUVENIR: Files Subchapter V Case SOUND INPATIENT: Moody's Cuts CFR to Caa2 & 1st Lien Debt to Caa1 STOCKTON GOLF: Voluntary Chapter 11 Case Summary STOWERS TRUCKING: Taps Pierson Legal Services as Bankruptcy Counsel SUMMIT II LLC: Taps Johnson Pope Bokor Ruppel & Burns as Counsel TCH CONSTRUCTION: Commences Subchapter V Case THREE ARROWS CAPITAL: NFT Collection to be Liquidated TRADER INTERACTIVE: Moody's Withdraws 'B3' CFR on Debt Repayment TREETOP DEVELOPMENT: Hadid Offers His Resignation as Manager VERICAST CORP: Moody's Lowers CFR to Caa3 & Alters Outlook to Neg. VERICAST CORP: S&P Lowers ICR to 'CC' on Distressed Exchange VIASAT INC: Business Divestiture No Impact on Moody's 'B2' CFR WASHINGTON PLACE: Reaches Agreements w/ Lender, Ayzertech & Lerner WAYNE CITY: Moody's Hikes Issuer Rating to 'B1', Outlook Stable WC BRAKER: Trustee Taps Hilco Real Estate as Appraiser [*] 29th Distressed Investing Conference on Nov. 28 -- Register Now [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 424 GROUP: Taps Jeannette M. Boudreau as Corporate Counsel ---------------------------------------------------------- 424 Group, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire the Law Offices of Jeannette M. Boudreau as its corporate counsel. 424 Group requires legal assistance in connection with the agreement it reached with Guillermo Andrade to settle its claims relating to, among other things, his employment with the company and 424 Group Wholesale, Inc., and his activities as a co-owner and officer of both companies. The firm will be paid at the rate of $375 per hour. As disclosed in court filings, the Law Offices of Jeannette M. Boudreau is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeannette M. Boudreau, Esq. Law Offices of Jeannette M. Boudreau 999 Fifth Ave #320 San Rafael, CA 94901 Phone: +1 415-331-4841 Email: jeannette@boudlaw.com About 424 Group 424 Group, Inc. is a Los Angeles-based company that owns and operates a clothing store. 424 Group filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-19407) on Dec. 23, 2021, with as much as $10 million in both assets and liabilities. Gregory Kent Jones serves as the Subchapter V trustee. Judge Sandra R. Klein oversees the case. The Debtor tapped Weintraub & Selth, APC as bankruptcy counsel; the Law Offices of Jeannette M. Boudreau as corporate counsel; and Stephen Coats as accountant. Bellizio + Igel, PLLC, Chapman Law Group, A.P.C., and Spheriens Avvocati serve as special counsels. AAD CAPITAL: Case Summary & Eight Unsecured Creditors ----------------------------------------------------- Debtor: AAD Capital Partners LLC DBA Peachtree Battle Business Services 1290 W Spring Street SE Suite 280 Smyrna, GA 30080 Chapter 11 Petition Date: October 12, 2022 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 22-58223 Debtor's Counsel: Ashley Reynolds Ray, Esq. SCROGGINS & WILLIAMSON, P.C. 4401 Northside Parkway Suite 450 Atlanta, GA 30327 Tel: 404-893-3880 Email: centralstation@swlawfirm.com Debtor's Restructuring & General Bankruptcy Counsel: FAEGRE DRINKER BIDDLE & REATH LLP Debtor's Sales Agent and Broker: ROBERTDOUGLAS Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Edward Chen as managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FTE7PMY/AAD_Capital_Partners_LLC__ganbke-22-58223__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Eight Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. HLB Gross Collins Services $104,104 3330 Cumberland Blvd Provided Ste 1000 Atlanta, GA 30339 Nancy Davis O'Gara Tel: 770-433-1711 Email: nogara@grosscollins.com 2. Chase Cardmember Service Business $44,492 PO Box 1423 Credit Card Charlotte, NC 28201-1423 Customer Service: 1-800-346-5538 3. Chase Cardmember Service Business $27,017 PO Box 1423 Credit Card Charlotte, NC 28201-1423 Customer Service: 1-800-346-5538 4. Capital One Business $30,786 PO Box 71083 Credit Card Charlotte, NC 28272-1083 Customer Service: 1-800-867-0904 5. Saint Louis Bank Provided $0 9811 South Forty Drive Corporate St. Louis, MO 63124 Guarantee Shawn Oertwig Tel: 314-851-6283 Email: soertwig@stlouisbank.com 6. Bayhill Capital LLC Provided $0 6339 Saint Stephen Lane Corporate Charlotte, NC 28210 Guarantee Chirag Saraiya Tel: 678-362-9229 Email: chirag.saraiya@trainingthestreet.com 7. Ameris Bank Provided $0 3595 Marietta Highway Corporate Canton, GA 30114 Guarantee A. Christian Wilson Tel: 404-266-2424 ext. 109 Email: cwilson@suwllp.com 8. Travelers Business $0 PO Box 26208 Insurance Richmond, VA 23260 Customer Service: 1-800-252-2268 ACCESS METALS: Taps Law Office of Gina R. Klump as Counsel ---------------------------------------------------------- Access Metals Trading, Inc. received approval from the U.S. Bankruptcy Court for the Northern District of California to employ the Law Office of Gina R. Klump to serve as legal counsel in its Chapter 11 case. The firm will be paid at these rates: Attorney $450 per hour Paralegals $75 per hour The firm received a retainer fee of $10,000 from the Debtor. Gina Klump, Esq., a partner at the Law Office of Gina R. Klump, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Ms. Klump can be reached at: Gina Klump, Esq. Law Office of Gina R. Klump 30 5th Street, Suite 200 Petaluma, CA 94952 Tel: (707) 778-0111 Fax: (707) 778-1086 Email: klumplaw@gmail.com About Access Metals Trading Access Metals Trading, Inc., a company in San Ramon, Calif, filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Calif. Case No. 22-40887) on July 31, 2022, with $1,465,176 in assets and $2,364,759 in liabilities. Scott Ehrlich, president of Access Metals Trading, signed the petition. Judge William J. Lafferty oversees the case. The Law Office of Gina R. Klump serves as the Debtor's legal counsel. AEARO TECHNOLOGIES: 3M Asks 11th Cir. to Reverse Earplug Injunction ------------------------------------------------------------------- Rick Archer of Law360 reports that 3M asks the 11th Circuit to reverse an injunction in the MDL over its faulty earplugs. According to the report, 3M is asking the 11th Circuit to reverse a Florida judge's ruling barring it from using its subsidiary, Aearo Technologies, Chapter 11 filing to relitigate decisions made in multidistrict litigation over its allegedly faulty earplugs, calling the decision unprecedented overreach. The bankruptcy court is perfectly capable of differentiating an improper collateral attack from a valid effort to dispute a claim," it said. 3M acquired Aearo in April of 2008 through a stock purchase for approximately $1.2 billion. 3M has sought to block jury trials in more than 230,000 lawsuits from military veterans who claim hearing loss from the Aearo CAEv2 earplugs sold by 3M. In In re 3M Combat Arms Earplug Products Liability Litigation, a plaintiff asked the U.S. District Court for the Northern District of Florida to enter an injunction preventing 3M from relitigating matters in Bankruptcy Court that this Court has already adjudicated. 3M, according to the plaintiff, is seeking to misappropriate the bankruptcy process in a cynical attempt to give a non-debtor a second bite at issues that have already been litigated and resolved. "For three-and-a-half years, this Court has successfully steered this MDL, through a global pandemic no less, to complete sixteen bellwether trials, prepare over a thousand cases for remand, and transfer tens of thousands of cases to the active docket. Despite this, on July 26, 2022, the Aearo Debtors filed a Chapter 11 bankruptcy case in an attempt to abolish the Court's rulings in this case. 3M ignores the history of this case and portrays this litigation as "the failure of the largest MDL in U.S. history." Ex. A Infor. Br. at 1. A constant refrain from 3M is the "colossal docket" where "standard MDL early vetting tools . . . were curtailed or abandoned," id. at 3, 29-33, and exempted "from basic filing requirements." Id. at 33. 3M also seeks to blame the Plaintiffs' attorneys for an "extensive marketing campaign" to reach the claimants in this MDL. See id. at 25-29," Ashley C. Keller of KELLER POSTMAN LLC, counsel for counsel for Plaintiff Richard Valle, said in court filings. U.S. District Judge M. Casey Rodgers of Pensacola, the Florida federal judge overseeing the multidistrict litigation, on Aug. 16, 2022, entered an order barring 3M from attacking her MDL rulings in bankruptcy court. If 3M, according to the ruling, attempts to relitigate the MDL judge's orders in the bankruptcy case brought by its subsidiary Aearo Technologies LLC -- or even if 3M merely provides Aearo with funding to attack rulings from the MDL -- the company faces the prospect of a contempt hearing before the MDL judge. Judge Rodgers said in her ruling, "For the avoidance of doubt, the scope of today's injunction prevents 3M from "attempting to relitigate the same issues or related issues precluded by the principles of res judicata and collateral estoppel in" bankruptcy court. See New York Life, 142 F.3d at 879. This includes the relitigation of identical issues that the defendants litigated and lost against a particular plaintiff in this Court. See, e.g., Jack Faucett Assocs., Inc. v. AT&T, 744 F.2d 118, 124 (D.C. Cir. 1984) (citing S. Pac. Commc'ns Co. v. AT&T, 740 F.2d 1011, 1014 n.2 (1984)). 3M also is enjoined from supporting, directly or indirectly, financially or otherwise, any collateral attack on this Court's orders by any other parties in any other forum, including Aearo. After nearly three and a half years of litigation, 3M has had a "full and fair opportunity to litigate" a myriad of issues that were "critical and necessary" to the Court's orders and judgments. See Christo v. Padgett, 223 F.3d 1324, 1339 (11th Cir. 2000) (articulating standard for collateral estoppel. Today's injunction enforces the preclusive effect of all of those orders and judgments. If 3M defies this injunction by attempting to relitigate (or supporting relitigation of) these matters in the bankruptcy court, this Court retains jurisdiction to convene contempt proceedings to enforce compliance. See United States v. Coulton, 594 Fed. App'x 563, 565-66 (11th Cir. 2014)." About Aearo Technologies Aearo Technologies -- https://earglobal.com/en -- is a 3M company that designs, manufactures, and sells personal protection equipment. The Company offers prescription and non-prescription safety eye wear, face shields, hard hats, and respirators. Aearo serves customers worldwide. To address claims related to the Combat Arms Earplugs Version 2, Aearo Technologies LLC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case No. 22-02890) on July 26, 2022. In the petition filed by John R. Castellano, as authorized signatory, Aearo Technologies estimated assets and liabilities between $1 billion and $10 billion each. 3M is not a debtor in the Chapter 11 cases. 3M has committed $1 billion to fund a trust allocated for Combat Arms claims. Kirkland & Ellis LLP is serving as legal counsel and AlixPartners LLP is serving as restructuring advisor to Aearo Technologies. Ice Miller LLP is serving as bankruptcy co-counsel to the Debtors. Kroll is the claims agent. PJT Partners is serving as financial advisor and White & Case LLP is serving as legal counsel to 3M. AITEON 1 LLC: Files Bare-Bones Chapter 11 Petition -------------------------------------------------- Aiteon 1 LLC filed for chapter 11 protection in the Central District of California without stating a reason. According to court filings, Aiteon 1 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. 8, 2022, at 9:30 AM at UST-LA2, TELEPHONIC MEETING. CONFERENCE LINE:1-866-816-0394, PARTICIPANT CODE:5282999. About Aiteon 1 LLC Aiteon 1 LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Aiteon 1 LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Caae No. 2:22-bk-15412) on Oct. 4, 2022. In the petition filed by Anne Kihagi, as manager, the Debtor reported assets and liabilities between $1 million and $10 million. The Debtor is represented by Paul Edward Manasian. ALL FLORIDA SAFETY: Taps Mickler & Mickler as Legal Counsel ----------------------------------------------------------- All Florida Safety Institute, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ the Law Offices of Mickler & Mickler, LLP to handle its Chapter 11 case. The firm will be paid at hourly rates ranging from $250 to $350 and will be reimbursed for out-of-pocket expenses incurred. Bryan Mickler, Esq., at the Law Offices Of Mickler & Mickler, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Bryan K. Mickler, Esq. Law Offices Of Mickler & Mickler, LLP 5452 Arlington Expy. Jacksonville, FL 32211 Tel: (904) 725-0822 Email: bkmickler@planlaw.com About All Florida Safety Institute All Florida Safety Institute, LLC -- https://allfloridasafetyinstitute.com/driving -- is an all-inclusive driving school serving Florida. All Florida Safety Institute filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code on Sept. 22, 2022, with $1 million to $10 million in both assets and liabilities. Aaron R. Cohen has been appointed as Subchapter V trustee. The Debtor is represented by Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP. AMC ENTERTAINMENT: Starts $400M Junk Bonds Sale to Refinance Debt ----------------------------------------------------------------- Odeon Finco PLC (the "Issuer"), announced Oct. 12, 2022, that it has commenced an offering of $400.0 million aggregate principal amount of senior secured notes due 2027 (the "Notes") in a private offering, subject to market and other conditions. Odeon Finco is a wholly-owned direct subsidiary of Odeon Cinemas Group Limited ("OCGL" and, together with its subsidiaries, "Odeon") and an indirect subsidiary of AMC Entertainment Holdings, Inc. (NYSE: AMC and APE). The Notes will be guaranteed on a senior secured basis by OCGL and certain subsidiaries of OCGL, and on an unsecured standalone basis by AMC. Odeon intends to use the proceeds from the Offering, together with cash on hand, to fund the repayment in full of OCGL's existing term loan facilities, and to pay related fees, costs, premiums and expenses. According to a regulatory filing, the proceeds from the offering, together with cash on hand, are expected to be used to fund repayment in full of the existing term loan facilities made available to OCGL pursuant to the term loan facility agreement dated Feb. 15, 2021, between, among others, OCGL as borrower, Lucid Agency Services limited as agent and Lucid Trustee Services Limited as security agent, as amended on July 14, 2022, and to pay fees, costs, premiums and expenses in connection with the offering and the repayment. About AMC Entertainment AMC Entertainment Holdings Inc., through its subsidiaries, engages in the theatrical exhibition business. As of December 31, 2015, it owned, operated, or held interests in 387 theatres with a total of 5,426 screens primarily in North America. The company was founded in 1920 and is headquartered in Leawood, Kansas. AMC operates over 900 theatres with 10,000 screens globally, including over 661 theatres with 8,200 screens in the United States and over 244 theatres with approximately 2,200 screens in Europe. The Company's subsidiary also includes Carmike Cinemas, Inc. AMC was forced to shutter its theaters when the Covid-19 pandemic struck in March 2020. It has reopened its theaters but admissions have been lower than pre-pandemic levels. The world's biggest theater chain said in an October 2020 filing that liquidity will be largely depleted by the end of 2020 or early 2021 if attendance doesn't pick up, and it's exploring actions that include asset sales and joint ventures. * * * In February 2022, Moody's Investors Service upgraded AMC Entertainment Holdings, Inc.'s Corporate Family Rating to Caa2 from Caa3; and Probability of Default Rating to Caa2-PD from Caa3-PD. The outlook was revised to positive from negative. The ratings upgrade reflects Moody's expectation for continuing improvement in AMC's operating performance and liquidity amid growing attendance levels at the global box office combined with Moody's expectation for a strong movie slate in 2022. Moody's said AMC's Caa2 CFR is supported by the company's position as the world's largest movie exhibitor and reflects the weak, albeit improving, operating and financial performance, which suffered from pandemic-induced revenue and operating losses in 2020 and 2021, and delayed recovery when economies reopened. AUDACY INC: Moody's Lowers CFR to Caa2, Outlook Remains Negative ---------------------------------------------------------------- Moody's Investors Service downgraded Audacy, Inc.'s (Audacy) Corporate Family Rating to Caa2 from B3. In addition, the 1st lien credit facility and senior secured 2nd lien notes ratings of Audacy Capital Corp. (a subsidiary of Audacy) were downgraded to B2 and Caa3 from B1 and Caa1, respectively. The outlook is negative. The ratings downgrade and negative outlook reflect the increased potential for a distressed exchange, which Moody's would consider as an event of default. The impact of high inflation and interest rates will continue to weigh on Audacy's operating performance and heighten refinancing risks. Audacy's accounts receivable facility, $227 million of the revolving credit facility, and the outstanding term loan all mature in the second half of 2024. Audacy's Speculative Grade Liquidity (SGL) rating remains SGL-4 as a result of the near term maturity of the revolver and accounts receivable facility and the potential for cash burn from operations for the remainder of the year, although liquidity is likely to benefit from asset sale proceeds in the next few quarters. Downgrades: Issuer: Audacy, Inc. Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Issuer: Audacy Capital Corp. Senior Secured 1st Lien Bank Credit Facility, Downgraded to B2 (LGD2) from B1 (LGD2) Senior Secured 2nd Lien Regular Bond/Debenture, Downgraded to Caa3 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: Audacy Capital Corp. Outlook, Remains Negative Issuer: Audacy, Inc. Outlook, Remains Negative RATINGS RATIONALE Audacy's Caa2 CFR reflects the extremely high leverage level (11.3x as of Q2 2022 excluding Moody's standard lease adjustments) and Moody's projection that leverage will remain at elevated levels through 2023, which increases refinancing risk and the potential for a distressed exchange. Moody's believes the approaching debt maturity of a portion of the company's debt structure raises the likelihood that Audacy will have difficulty refinancing or extending the debt maturities of the senior secured credit facility during a weak and uncertain economic environment. In addition, the radio industry continues to be negatively affected by the shift of advertising dollars to digital mobile and social media as well as heightened competition for listeners from a number of digital music providers. Secular pressures and the cyclical nature of radio advertising demand have the potential to exert substantial pressure on EBITDA performance over time. Audacy's prior acquisitions to expand the company's podcasting business and the roll out of the new digital audio platform will help offset a portion of the effect of reduced advertising spend in the radio industry in the near term. Audacy has also taken aggressive cost cutting actions and Moody's expects capex will decline as Audacy's new digital platform is completed. Audacy's leading position in sports programming will likely continue to attract increased advertising revenue from sports betting companies as additional markets legalize gambling. ESG CONSIDERATIONS Audacy's ESG Credit Impact Score is highly-negative (CIS-4) driven by the company's exposure to governance risks (G-4) and social risks (S-4). Audacy has very high leverage levels and approaching debt maturities, but will target lower leverage levels when economic conditions improve. A significant percentage of the company's revenue and profitability are generated from radio broadcasting which faces risk from social and demographical trends as competition for listeners from digital music services has increased and advertising dollars have shifted to digital and social media advertising. While Audacy is a publicly traded company listed on the New York Stock Exchange, Joseph M. Field (Chairman) and David J. Field (President /CEO and son of the Chairman) have a significant minority voting interest in the company. Audacy's SGL-4 rating reflects the maturity of the $75 million Accounts Receivable facility in July 2024 and revolving credit facility ($135 million drawn as of Q2 2022). Approximately $227.3 million of the revolver will mature in August 2024 with the remaining $22.7 million due in November 2022. Audacy has $40 million of cash on the balance sheet as of Q2 2022; however, Moody's expects asset sale proceeds in the near term to help bolster liquidity. Capex will decline to about $75 million in 2022 ($104 million LTM Q2 2022) and will decline further in 2023 as the new digital platform is completed. Free cash flow was negative $74 million for the LTM Q2 2022. Moody's projects FCF will remain negative, but less so due to positive working capital and lower capex going forward. The revolver is subject to a consolidated net first lien leverage ratio of 4x (up to 4.5x one year after permitted acquisitions) compared to a calculated ratio of 3.6x as of Q2 2022. Moody's expects the level of cushion of compliance with the covenant will remain tight. However, add backs to the covenant calculation and potential asset sales proceeds increase the ability to remain in compliance with the covenant going forward. The negative outlook for Audacy reflects the elevated potential for a distressed exchange as a result of a challenging economic environment and approaching debt maturities in 2024. Moody's projects leverage will remain in the 10x range in 2023, but begin to decline in 2024 as radio advertising spending improves. The near term completion of Audacy's digital platform will support lower expenses and capex in the near term and the new service offering will contribute to growth over time when economic conditions improve. High margin political advertising revenue as the mid-term elections approach will also offset a portion of the slowing economic growth in 2022, but negatively impact operating performance in 2023, during a non-election year. Audacy will remain very sensitive to any further declines in radio advertising spending as a result of weak economic conditions which will increase potential volatility in operating performance. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded further if Audacy was likely to default on outstanding debt or enter into a distressed exchange as part of an effort to address near term debt maturities. A further deterioration of operating performance or liquidity, or the inability to obtain an amendment from financial covenants if needed, could also lead to negative ratings pressure. Audacy's outlook could be changed to stable if near term maturities were addressed and Moody's expected leverage levels to decline below 7x. An adequate liquidity position would also be required. An upgrade could occur if Moody's expected leverage to decline below 6.5x with an improving liquidity profile and positive free cash flow. Stable organic revenue growth and EBITDA margins would also be required. Audacy, Inc. (fka Entercom Communications Corp.), headquartered in Philadelphia, PA, is the second largest US radio broadcaster based on revenue. The company was founded in 1968 by Joseph M. Field and is focused on radio broadcasting with radio stations in large and mid-sized markets as well as podcasting, digital initiatives, and live events. In November 2017, the company completed the merger of CBS Radio. Joseph M. Field and David J. Field (President /CEO and son of the founder) have a significant minority voting interest in the company. Reported LTM revenue as of Q2 2022 was approximately $1.3 billion. The principal methodology used in these ratings was Media published in June 2021. BANI ENTERPRISES: Starts Subchapter V Case ------------------------------------------ Bani Enterprises 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. According to court filings, Bani Enterprises 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. 10, 2022, 12:00 PM at Telephonic. Proofs of claim are due by Dec. 13, 2022. About Bani Enterprises LLC Bani Enterprises LLC owns and operates gasoline stations. Bani Enterprises LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 22-17883) on Oct. 4, 2022. In the petition filed by Sukhchain Singh, as managing member, the Debtor reported assets and liabilities between $1 million and $10 million. Douglas S. Stanger has been appointed as Subchapter V trustee. The Debtor is represented by Douglas G. Leney of Archer & Greiner, PC. BED BATH: Moody's Lowers CFR to Ca & Alters Outlook to Stable ------------------------------------------------------------- Moody's Investors Service downgraded Bed Bath & Beyond Inc.'s corporate family rating to Ca from Caa2, its probability of default rating to Ca-PD from Caa2-PD and its senior unsecured notes rating to C from Caa3. The speculative grade liquidity rating was upgraded to SGL-3 from SGL-4. The outlook was changed to stable from negative. "The downgrades reflects governance considerations which include the company's announcement that it may pursue liability transactions [1] which Moody's would likely view as a distressed exchange to address its $284 million of senior unsecured notes due in August 2024 in light of the continuing pressures on Bed Bath's operations and credit metrics" said Christina Boni, Senior Vice President. The upgrade to SGL-3 from SGL-4 reflects actions that has taken to improve its liquidity including increasing its asset based revolving credit facility (unrated) to $1.13 billion from $1 billion, raising a $375 million first in-last-out term loan facility (FILO) and an equity issuance of approximately $30 million. The proceeds from the FILO and equity issuance were used to both reduce borrowings under the ABL as well as to increase cash balances which provides the company with adequate liquidity to meet its expected free cash flow deficits over the next twelve months. Inventory levels, although improving, are still misaligned with sales trends and private label product continues to be cleared and replaced with national brands in the face of weak consumer demand. The ABL expires in August 2026 but its maturity will spring to May 1, 2024 if more than $50 million of the 2024 notes are still outstanding on such date. Downgrades: Issuer: Bed Bath & Beyond Inc. Corporate Family Rating, Downgraded to Ca from Caa2 Probability of Default Rating, Downgraded to Ca-PD from Caa2-PD (LGD5) from Caa3 (LGD5) Upgrades: Issuer: Bed Bath & Beyond Inc. Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Outlook Actions: Issuer: Bed Bath & Beyond Inc. Outlook, Changed to Stable from Negative RATINGS RATIONALE Bed Bath's Ca corporate family rating reflects the very high likelihood of a default over the next twelve months. It also reflects governance considerations including the appointment of interim senior management and hiring consultants to support Bed Bath in its efforts deliver on its operational turnaround, which include inventory, cash management and balance sheet optimization. Despite its scale as the largest dedicated retailer of domestic merchandise and home furnishing with a national footprint, the company faces considerable default risk. Bed Bath faces a $284 million notes maturing in 2024 and has announced its exploring a possible distressed exchange which would be viewed by Moody's as an event of default. Despite the major contraction of its business, the company completed its $1 billion accelerated share repurchase program which included the buyback of $40 million of common stock in the first quarter of fiscal 2022. The company's weak demand trends have continued which has weighed heavily on its profitability. Although Bed Bath has recently taken actions to improve its liquidity, the company still needs to stabilize its operating losses and improve its working capital as it navigates a turnaround in a uncertain consumer environment. Although the company is not currently pursuing a sale, the company's buybuyBABY operations, has sales of approximately $1.4 billion and a could pose a meaningful source of additional liquidity. The stable outlook reflects the company's adequate liquidity which supports their ability to remain current on their obligations and that the current ratings adequately reflect the expected probability of default and recovery on the company's debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded should Bed Bath fail to make its interest or principal payments on time including any contractual grace period or should the company file for bankruptcy. An upgrade would require that the company maintains adequate liquidity including addressing its 2024 debt maturity, makes significant progress in its operational initiatives which results in positive free cash flow and market share stabilization while the probability of an event of default decreases. Headquartered in Union, NJ, Bed Bath & Beyond Inc. is a omni-channel retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond, Harmon, Harmon Face Values or Face Values, buybuyBABY, and Decorist. LTM revenues for the period ending August 27, 2022 were approximately $6.8 billion. The principal methodology used in these ratings was Retail published in November 2021. BRICKCHURCH: Taps Duane Morris as Special Litigation Counsel ------------------------------------------------------------ Brickchurch Enterprises, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Duane Morris, LLP as its special litigation counsel. The Debtor needs the firm's legal assistance in connection with a foreclosure action filed by JGB Partners, LP and three other JGB entities in the Supreme Court of New York, in Suffolk County. The firm will be paid at these rates: Partners $725 to $850 per hour Special Counsel $700 per hour Associates $400 to $690 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. Camisha Simmons, Esq., a partner at Simmons Legal, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Camisha L. Simmons, Esq. Simmons Legal PLLC 1330 Avenue of the Americas, Suite 23A New York, NY 10019 Tel: (212) 653-0667 Fax: (800) 698-9913 Email: camisha@simmonslegal.solutions 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, with $50 million to $100 million in both assets and liabilities. Louise Blouin, Brickchurch director, signed the petition. Judge Alan S. Trust oversees the case. Craig D. Robins, Esq., at the Law Offices of Craig D. Robins and Duane Morris, LLP serve as the Debtor's bankruptcy counsel and special litigation counsel, respectively. CALCEUS ACQUISITION: Moody's Ups CFR to 'B3', Outlook Stable ------------------------------------------------------------ Moody's Investors Service upgraded Calceus Acquisition, Inc.'s (Cole Haan) corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD, and senior secured term loan rating to B3 from Caa1. The outlook remains stable. The upgrade reflects the significant improvement in operating performance and credit metrics in FY 2022. Moody's adjusted debt/EBITDA and EBITA/interest for the LTM period ended Q1'23 is expected to be approximately 5x and 1.1x, respectively. Moody's expects operating performance to continue to improve in FY 2023 leading to further improvement of credit metrics including Moody's adjusted debt/EBITDA below 4.5x and EBITA/interest above 1.5x. While the macroeconomic environment remains challenging, the company should benefit from a higher number of events and workers returning to the office as well as gains made in its casual footwear sales. Upgrades: Issuer: Calceus Acquisition, Inc. Corporate Family Rating, Upgraded to B3 from Caa1 Probability of Default Rating, Upgraded to B3-PD from Caa1-PD Gtd Senior Secured 1st Lien Term Loan, Upgraded to B3 (LGD4) from Caa1 (LGD4) Outlook Actions: Issuer: Calceus Acquisition, Inc. Outlook, Remains Stable RATINGS RATIONALE Cole Haan's B3 CFR is constrained by its relatively small scale and operations concentrated in the highly competitive footwear market. In addition, the rating incorporates governance considerations, specifically financial strategy risk associated with private equity ownership. As a mono-brand premium price point retailer, Cole Haan is also exposed to changes in fashion trends and consumers' brand perception. Continued reinvestment in product design, marketing and infrastructure, as well as social factors including responsible sourcing and robust data protection, are necessary to sustain brand value. The rating is supported by Cole Haan's good liquidity over the next 12 months mainly due to the company's moderate balance sheet cash, expectations for positive free cash flow in FY 2023 and revolver availability. The B3 also reflects that Cole Haan will address in a timely manner the February 1, 2024 expiration of its asset-based revolving credit facility, which is currently undrawn. Moody's believes that Cole Haan's well-recognized dual-gender brand and diverse distribution channels, including a growing and profitable digital business, should support further recovery in earnings and cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be downgraded if the company does not make material progress on extending the February 2024 ABL expiration in a timely manner or if the terms of a future refinancing are not economical. The ratings could also be downgraded if there is a deterioration of operating performance or liquidity including continued negative free cash flow or use of the ABL when its expiriation is less than one year away. Quantitatively, the ratings could be downgraded with Moody's adjusted debt/EBITDA above 6x or EBITA/interest below 1x. The rating could be upgraded if the company continues to improve its performance while maintaining good liquidity including consistently positive free cash flow generation and addressing its debt maturities in a timely manner. Specific metrics include Moody's-adjusted debt/EBITDA sustained below 4.75x and EBITA/interest expense above 1.75x. Headquartered in Greenland, NH, Cole Haan is a designer and retailer of men's and women's footwear, handbags, and accessories. Net revenues for twelve months ended May 28, 2022 were approximately $562 million. Apax Partners and the company's management team acquired the company from NIKE, Inc. in early 2013. The principal methodology used in these ratings was Retail published in November 2021. CARESTREAM HEALTH: Moody's Assigns 'B3' CFR, Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and B3-PD Probability of Default Rating to Carestream Health, Inc. Moody's also assigned a B3 rating to the new $541 million senior secured first lien term loan. The outlook is stable. On September 30, Carestream completed its recapitalization process and emerged from Chapter 11. Through this process, Carestream has reduced its debt by approximately $470 million from pre-bankruptcy levels. The new capital structure includes a $541 million senior secured first lien term loan and $85 million asset-based revolving credit facility that will be subject to borrowing base available amounts. In its ratings assignment, Moody's considered the company's exit credit profile, including adequate liquidity, updated capital structure and operating performance. Social and governance risk considerations are material to the rating action. As a medical device company, Carestream faces social risks associated with responsible production as well as exposure to demographic and societal trends in the medical film and imaging industries. Governance risk considerations include the company's aggressive financial policies under private equity ownership. Most recently, Carestream Health was unable to execute a publicly announced out of court recapitalization transaction, and subsequently filed for chapter 11 bankruptcy protection. The following ratings were assigned: Assignments: Issuer: Carestream Health, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured 1st Lien Term Loan, Assigned B3 (LGD3) Outlook Actions: Issuer: Carestream Health, Inc. Outlook, Assigned Stable RATINGS RATIONALE Carestream's B3 Corporate Family Rating reflects the company's high reliance on its film business, which comprises the majority of earnings. Moody's expects that the medical film business will remain in structural decline for the foreseeable future. The company also has a presence in medical digital products, which Moody's expects to grow at rates that align with the broader market. Carestream's ratings reflect the company's moderate leverage coming out of bankruptcy, which Moody's expects will decline from 3.7x for the twelve months ending June 30, 2022 pro-forma the new capital structure, into the mid-three times range over the next 12 to 18 months. Moody's also expects that the company will continue to generate positive free cash flow in 2023, as non-recurring charges associated with cost saving initiatives and restructuring-related costs are wound down. The company has an adequate liquidity position. Carestream has access to a $85 million asset-based-lending (ABL) revolving credit facility with $47 million of outstanding expected following bankruptcy, in addition to approximately $75 million in cash on the balance sheet. There are no material debt maturities until 2027. The company continues to have a leading presence in medical digital products, which Moody's expects to grow at rates that align with the broader market. That said, Moody's continues to expect that the medical film business, which comprises the majority of earnings, will remain in structural decline for the foreseeable future. The outlook is stable. Moody's expects that Carestream's earnings will stabilize over the next 12-18 months, cashflows will be sufficient to cover fixed costs, and financial leverage will trend lower. The B3 rating assigned to the senior secured first lien term loan reflects its interest in substantially all assets of the borrower and the fact that secured debt is the sole financial debt within the company's capital structure. The new term loan provides covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity up to (A) the greater of $150 million and 75% of consolidated EBITDA plus (B) an additional amount subject to 3.00x Total Net First Lien Leverage (if pari passu secured). No portion of the incremental may be incurred with an earlier maturity than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "blocker" provisions which prohibit the investment of intellectual property that is material to the business of the company or restricted subsidiaries (individually or taken as a whole) in unrestricted subsidiaries and only permit non-exclusive licensing of intellectual property in unrestricted subsidiaries if such licensing does not materially detract from the business or value of relative assets, taken as a whole. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees subject to protective provisions which only permit guarantee releases if the primary purpose of such transaction was not to evade the guarantee requirements and was consummated on an arm's length basis with an unaffiliated third party. The credit agreement provides some limitations on up-tiering transactions, including the requirement that each lender directly and adversely affected must consent to any actions to contractually subordinate (x) liens on all or substantially all of the collateral securing the obligations or (y) the obligations in contractual right of payment to other indebtedness for borrowed money. ESG CONSIDERATIONS Carestream Health's ESG credit impact score is very highly negative (CIS-5). The score reflects very highly negative exposure to governance risks (G-5), driven by the company's aggressive financial policies under private equity ownership. Most recently, Carestream Health was unable to execute a publicly announced out of court recapitalization transaction, and subsequently filed for chapter 11 bankruptcy protection. The score also reflects highly negative exposure to social risks (S-4), primarily due to ongoing substitution risk from medical film into new technologies. Finally, the score reflects neutral to low exposure to environmental risks (E-2). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Carestream is able to grow earnings and improve market share in the digital radiography segment. Ratings could also be upgraded with improved liquidity and sustained positive free cashflow. Quantitatively, ratings could be upgraded if debt/EBITDA is sustained below 3.0 times. Ratings could be downgraded if the company experiences a deterioration in operational performance, which could include accelerating negative trends in sales or earnings. In addition, ratings could be downgraded if liquidity weakens. A downgrade could be warranted if the company was unable to generate enough free cash flow to cover mandatory amortization on a sustained basis, driving a further deterioration in liquidity. Quantitatively, ratings could be downgraded if debt/EBITDA was sustained above 4.0 times. Additionally, the ratings could be downgraded if the covenant EBITDA cushion to the maximum total net first lien debt leverage ratio narrows materially. The principal methodology used in these ratings was Medical Products and Devices published in October 2021. Headquartered in Rochester, NY, Carestream Health, Inc. is a global provider of medical imaging products. The company's film business provides specialized paper to produce images from digital x-rays, printers, non-destructive testing, dental film and contract manufacturing. The company's medical digital business provides digital medical imaging systems. The company's LTM revenues are approximately $1.1 billion. Carestream is owned by a number of private equity firms. CELSIUS NETWORK: Top 3 Execs. Cashed Out $56M Prior to Bankruptcy ----------------------------------------------------------------- Krisztian Sandor and Nikhilesh De of CoinDesk report that crypto lender Celsius' top three executives withdrew $56.12 million in cryptocurrency between May and June 2022, right before the company suspended withdrawals and filed for bankruptcy, new court records show. According to a Statement of Financial Affairs filed late Wednesday, Oct. 5, 2022, former CEO Alex Mashinsky, former CSO Daniel Leon and CTO Nuke Goldstein withdrew the funds largely from custody accounts in the form of bitcoin (BTC), ether (ETH), USDC (USDC) and CEL tokens (CEL). Over a dozen other executives, including the company's Chief Compliance Officer, Oren Blonstein, Chief Risk Officer Rodney Sunada-Wong and new CEO Chris Ferraro did not make any significant withdrawals during that time period, according to the document, one of several filed to the Bankruptcy Court for the Southern District of New York. Mashinsky withdrew about $10 million in cryptocurrency in May 2022. Leon withdrew about $7 million (and an additional $4 million worth of CEL denoted as "collateral") between May 27 and May 31. Goldstein withdrew around $13 million (and an additional $7.8 million worth of CEL also denoted "collateral"). Celsius filed for Chapter 11 bankruptcy protection in July 2022 after it halted all user withdrawals citing "extreme market conditions" a month before. Wednesday's, October 5, 2022, documents are the latest development around the beleaguered crypto lender as its bankruptcy case heats up. An independent examiner, appointed by the U.S. Trustee's office, is currently investigating why Celsius fell apart and how it managed and stored customer deposits. Mashinsky and Leon resigned from the lender within the last two weeks. The Financial Times earlier reported that Mashinsky withdrew $10 million in crypto before Celsius froze withdrawals. Key members of the lender's management talked about fresh restructuring plans that involved turning the firm's debt into tokens and a potential pivot to crypto custody, according to audio recordings leaked to the media. However, the court is moving forward with auctioning off Celsius' assets later this October 2022. The bankruptcy court ordered Celsius to update the Unsecured Creditors Committee (UCC), which represents all customers whom Celsius owes assets, about its financial status and cash management on a regular basis, according to another court document filed Wednesday, October 5, 2022. The lender must disclose its monthly budget and cash balance, spending on wages, taxes among other figures, and various performance metrics about its bitcoin mining business and any proceedings from sales of BTC mined by the firm's mining facilities. The firm also must obtain permission from the UCC for any "critical vendor payment" above $50,000. 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 CHILLKING CHILLERS: Taps Barron & Newburger as Bankruptcy Counsel ----------------------------------------------------------------- Chillking Chillers, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Barron & Newburger, PC as its bankruptcy counsel. The firm's services include: (a) advising the Debtor of its rights, powers and duties; (b) reviewing the nature and validity of claims asserted against the property of the Debtor and advising the Debtor concerning the enforceability of such claims; (c) preparing legal documents and reviewing all financial reports to be filed in the Debtor's Chapter 11 case; (d) preparing responses to motions, complaints and other legal papers that may be filed in the case; (e) advising the Debtor in connection with the formulation, negotiation and promulgation of a plan of reorganization and related documents; (f) working with professionals retained by other parties to obtain approval of a consensual plan of reorganization for the Debtor; and (g) performing all other necessary legal services for the Debtor. Barron & Newburger will be paid at these rates: Stephen Sather $525 per hour Other Attorneys $175 to $475 per hour The firm received a retainer in the amount of $9,000. As disclosed in court filings, Barron & Newburger is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Stephen W. Sather, Esq. Barron & Newburger, P.C. 5555 West Loop S 235 Bellaire, TX 77401-2100 Tel: (512) 649-3243 Email: ssather@bn-lawyers.com About Chillking Chillers Chillking Chillers, Inc. is a manufacturer of water chillers and other related products in Bastrop, Texas. Chillking Chillers sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Texas Case No. 22-10594) on Sept. 11, 2022, with up to $1 million in liabilities. Patrick King, president, signed the petition. Judge H. Christopher Mott oversees the case. Stephen W. Sather, Esq., at Barron & Newburger, P.C. is the Debtor's counsel. CINEWORLD GROUP: Intends to Walk Away From 6 More Theater Leases ---------------------------------------------------------------- Regal Cinemas corporate parent Cineworld Group is asking a court for permission to walk away from more of its theater leases as part of its bankruptcy proceedings in Texas. The Debtors operate 747 movie theater locations with 9,139 screens in 10 countries. The Debtors' U.S. theater portfolio is a significant contributing factor to their current financial challenges. As part of formulating a revised, go-forward business plan, the Debtors continue to be identifying unprofitable theater locations in the United States. The Debtors and proposed real estate advisor A&G Realty Partners, LLC, are engaging in an analysis of the Debtors' entire lease portfolio, and have already commenced active negotiations with certain of the Debtors' U.S. landlords. The Debtors have determined, in their business judgment, that certain unexpired leases for U.S. theater sites are unnecessary and burdensome to the Debtors' estates. In a Sept. 30 second omnibus motion, the Debtors seek to reject 6 leases. In total, rejecting the Leases will save the Debtors' estates approximately $5 million. The leases pertain to these theater locations: * Great Escape Harrisburg Mall Stadium 14 at 3501 Paxton Street, Harrisburg, PA 17111-1469; * Shoppingtown 14 at 3649 Erie Blvd E, Syracuse, NY 13214; * Jackson Cinema 4 at 201 Shopping Dr, Jackson, CA 95642; * Berkshire Mall 102 at 123 Old State Rd, Lanesborough, MA 01237; * Bossier Corners Cinema 9 at 2800 Shed Rd, Bossier City, LA 71111-3351; and * Court Street Stadium 12 & RPX at 106 Court St, Brooklyn, NY 11201 On Sept. 7, 2022, in its first omnibus motion, the Debtors sought Court approval to reject 20 leases. In total, rejecting the leases will save the Debtors' estates approximately $12 million. Readco Stonington II, LLC, the landlord for the Regal Stonington 10, 85 Voluntown Rd., Pawcatuk, CT 06379, which is subject to the first omnibus motion, says it does not object to the rejection of the Stonington lease, but claims that retroactive rejection is not authorized under the Bankruptcy Code and even if it is an available remedy, it should not be afforded to the Debtors in the case of the Stonington Lease. About Cineworld Group PLC London-based Cineworld Group PLC was founded in 1995 and is the world's second-largest cinema chain. Cineworld operates 751 sites with 9,000 screens in 10 countries, including the Cineworld and Picturehouse screens in the UK and Ireland, Yes Planet in Israel, and Regal Cinemas in the US. According to The Guardian, the Griedinger family, including Mooky's brother and deputy chief executive, Israel, have struggled to maintain control of the ailing business but have been forced to reduce their stake from 28% in recent years. Cineworld's top five investors include the Chinese Jangho Group at 13.8%, Polaris Capital Management (7.82%), Aberdeen Standard Investments (4.98%) and Aviva Investors (4.88%). The London-listed Cineworld, which has run up debt of more than $4.8 billion after losses soared during the pandemic, is pinning its hopes on a meatier slate of movies in 2022 to bounce back from a two-year lull. Cineworld Group plc and 104 affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 22-90168) on Sept. 7, 2022, estimating more than $1 billion in assets and debt. PJT Partners LP is providing financial advice, Kirkland & Ellis LLP and Slaughter and May are acting as legal counsel and AlixPartners LLP is serving as restructuring advisor to Cineworld. Jackson Walker LLP is the co-bankruptcy counsel. Kroll is the claims agent. COMPUTE NORTH: Bitcoin Miner Marathon Has $80-Mil. Exposure ----------------------------------------------------------- As widely reported, Bitcoin miner Marathon Digital in its latest monthly report revealed exposure of $81.3 million in the now-bankrupt data center Compute North. The total includes investments comprised of $10 million in convertible preferred stock of Compute North and $21.3 million related to an unsecured senior promissory note with the firm. Marathon added that it had paid $50 million to Compute North as operating deposits for hosting services, primarily at its Wolf Hollow and King Mountain facilities in Texas. Compute North filed for Chapter 11 bankruptcy filing on Sept. 22, citing growing pressure due to the effects of crypto winter and rising energy costs. Andrew Asmakov of Decrypt notes that Marathon's "asset light" approach means that the firm doesn't construct or own mining facilities, relying on third parties like Compute North for its operations. The bulk of Marathon's current operations are hosted by a Compute North / NextEra Joint Venture in McCamey, TX ("King Mountain"). The Company also has operations hosted by Compute North in Granbury, TX ("Wolf Hollow"), and minor operations hosted by Computer North facilities in Nebraska and South Dakota. "Our operations at the King Mountain wind farm, among others, are hosted by Compute North, who recently initiated Chapter 11 bankruptcy proceedings. Compute North has been a supportive partner, and we respect this voluntary step to stabilize their business. Based on the information available today, we do not anticipate these proceedings impacting our current operations or our ability to achieve our primary target of 23 exahashes per second in 2023. We are in active discussions with Compute North’s management and intend to closely monitor the progress of their proceedings. While we expect operations to continue as originally anticipated, our asset light model provides us with the optionality to relocate our miners to other locations, should the need arise. We believe this agility is a particularly valuable strategic advantage we maintain given current market conditions," Marathon said in an Oct. 6 statement. "While we expect operations to continue as originally anticipated, our asset light model provides us with the optionality to relocate our miners to other locations, should the need arise," Marathon added. Compute North, one of the world's largest crypto-mining infrastructure providers with facilities in Texas, Nebraska, and South Dakota, raised $385 million in strategic funding in February this year. The firm's other big-name customers include Compass Mining, Hive Blockchain, and Atlas Mining. Marathon said it is currently in the process of relocating approximately 3,000 of its miners from Compute North's facilities in Nebraska and South Dakota to new sites. But this relocation is unrelated to Compute North's bankruptcy and was previously scheduled to occur upon the October 3, 2022 expiry of the Company's contracts at these facilities. $207 Million in Bitcoin Decrypt notes that Marathon's Oct. 6 monthly report revealed that the firm had total bitcoin holdings of 10,670 BTC with a fair market value of $207.3 million as of Sept. 30, 2022. The firm said it produced 360 BTC in September and 616 BTC during the third quarter of this year. On the year-to-date basis, Marathon reported a 23% increase in its Bitcoin production, with 2,582 BTC mined as of Sept. 30. According to Marathon's CEO Fred Thiel, the firm currently has approximately 57,000 active Bitcoin miners deployed, producing about 5.7 EH/s. "We expect to continue building our hash rate in the fourth quarter as approximately 19,000 additional miners, representing approximately 2.0 exahashes per second, are expected to come online in the next 30 days," said Thiel. More than 68,000 Bitcoin mining machines from Marathon were being installed and hosted by Compute North. About Compute North Holdings Computer North Holdings Inc. -- https://www.computenorth.com/ -- is a crypto mining data center company. Compute North has four facilities in the U.S. -- two in Texas and one in both South Dakota and Nebraska, according to its website. While cryptocurrency prices skyrocketed during the pandemic (with bitcoin surging by 300% in 2020), the Federal Reserve's decision to curb rising inflation by hiking interest rates has since ushered in some of the crypto market's biggest losses in history. After amassing a record value above $3 trillion in November 2021, the cryptocurrency market posted its worst first half ever -- plummeting more than 70% through July. Terra's luna token, a once top cryptocurrency worth more than $40 billion, lost virtually all its value within a week in May after sister token TerraUSD, a stablecoin meant to hold a price of $1, broke its dollar peg as markets collapsed. 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 include crypto lenders Celsius Network, Three Arrows Capital, Voyager Digital, and crypto mining firm Compute North. Compute North Holdings and 18 affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 22-90273) on Sept. 22, 2022. In the petition filed by Harold Coulby, as authorized signatory, the Debtor reported assets and liabilities between $100 million and $500 million. Compute North tapped PAUL HASTINGS LLP as bankruptcy counsel; JEFFERIES LLC as investment banker; and PORTAGE POINT PARTNERS as financial advisor. EPIQ CORPORATE RESTRUCTURING LLC is the claims agent. CROWN FINANCE: Moody's Assigns B1 Rating to DIP Secured Term Loan ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the $1,785 million designated debtor-in-possession (DIP) super-priority senior secured term loan facility provided to Crown Finance US, Inc. (DIP) (Cineworld or the company). The B1 rating on the DIP facility primarily reflects the collateral coverage available to the lenders and the structural features of the DIP facility. On September 8, 2022, The United States Bankruptcy Court for the Southern District of Texas (the Court) approved an aggregate $1,785 million DIP loan facility [1]. The DIP facility will mature on September 7, 2023, with up to three separate one-month extension options in certain circumstances. This DIP loan rating is assigned on a point-in-time basis and will be withdrawn as soon as practicable. Cineworld Group plc and certain of its subsidiaries and affiliates filed for Chapter 11 bankruptcy proceedings on September 7, 2022. Subsidiaries and affiliates outside the US, UK, and Jersey businesses were not included in the filing and are not part of the Chapter 11 processes. Moody's subsequently withdrew all the ratings for Crown UK Holdco Limited and Crown Finance US, Inc. RATINGS RATIONALE The B1 rating assigned to the DIP loan facility is primarily underpinned by collateral coverage, which comprises tangible and intangible assets and subsidiary equity interests. Values for such assets depend on a number of variables that can lead to a broad range of outcomes. The rating also reflects the substantial risks associated with the execution of the reorganization. Such complexities include allocating value among pre-petition debt under multiple facilities, and the meaningful size of the contingent liability resulting from the ongoing lawsuit instigated by Cineplex Inc. in the Canadian Courts in 2020. Although ongoing capital expenditure will be required to meet the movie theatre-going consumer's desire for a state-of-the-art cinema experience, Moody's believe the business could support a reorganization with a substantially lower amount of debt and debt-like obligations, subject to the uncertainties surrounding the structural changes in the cinema industry, exacerbated by the pandemic. The company entered the COVID pandemic carrying a high debt load, following strategic acquisitions and ongoing investment in cinema site improvements. The prolonged closures of movie theatres resulting from the pandemic-related restrictions profoundly impacted the business. With the gradual re-opening of cinema sites the movie slate suffered from the studio's delays in productions and releases, and in some cases, the release of titles directly to streaming services. These factors, along with the uncertainty in relation to the Cineplex litigation, the company's inability to gain covenant relief from its existing lenders, and near-term debt maturities were, in Moody's opinion, the primary causes of bankruptcy. Nevertheless, Moody's acknowledges the successful release of the key blockbusters in the first half of 2022, including Top Gun: Maverick; Doctor Strange and the Multiverse of Madness; Jurassic World Dominion, and The Batman indicating the popularity of these types of releases with the movie-theatre going public. The rating also considers that the $1,785 million DIP facility represents 19% of the pre-petition debt, (where pre-petition debt comprises total reported debt liabilities and lease liabilities as of June 30, 2022, and excludes the contingent liability associated with the Cineplex litigation). Of the total $1,785 million DIP facility, $514 million comprises new monies, with the balance being used to purchase the rest of world debt ($271mm) and proposed to refinance the existing priming loans ($1.0bn). The DIP loan facility is a super-priority senior secured priming multi-draw facility for $1,785 million, of which $785 million became available upon Court approval on September 9, 2022 [2], largely to meet immediate liquidity needs. The remainder of the DIP loan facility is expected to become available upon Court approval on a final basis on October 31, 2022, and will be used to refinance the existing priming loans. The DIP loan facility matures on September 7, 2023 with the option for three one-month extensions, in certain circumstances. The loan facility is secured by the assets of the Cineworld Group and includes equity interests in subsidiaries and benefits from guarantees from all the UK, US, and Jersey subsidiaries that are included in the Chapter 11 cases and substantially all those subsidiaries which fall outside the Chapter 11 cases. Moody's considers valuation estimates including asset liquidation and EBITDA multiples in recognizing the asset-light nature of the business and the liens and guarantees provided as collateral for the DIP loan facility. The B1 rating is based on the assumption that the DIP term loan collateral coverage will fall within a range of 1.25x to 1.5x. Moody's believes there is potential for higher asset valuations in a reorganization, but that the current challenging economic conditions, the company's downward revision of earnings outlook for 2023 and 2024 announced as part of the release of the June 30, 2022 interim financials, the uncertainties relating to the studio production release conventions, and the execution risk to an operational turnaround create uncertainties regarding asset values. Moody's also considers that the valuation for the intangible assets and equity interests providing the bulk of the collateral support is highly sensitive to earnings and multiple estimates that are uncertain in the current economic environment. LIST OF AFFECTED RATINGS Assignments: Issuer: Crown Finance US, Inc. (DIP) Senior Secured Super Priority Term Loan, Assigned B1 Outlook Actions: Issuer: Crown Finance US, Inc. (DIP) Outlook, Assigned No Outlook PRINCIPAL METHODOLOGY The methodologies used in this rating were Business and Consumer Services published in November 2021. CUMBERLAND RJ: Case Summary & Five Unsecured Creditors ------------------------------------------------------ Debtor: Cumberland RJ, Inc. dba Rockin Jump 5835 Read, Rd Suwanee, GA 30024 Business Description: The Debtor owns and operates a trampoline park. Chapter 11 Petition Date: October 12, 2022 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 22-21039 Debtor's Counsel: William Rountree, Esq. ROUNTREE, LEITMAN, KLEIN & GEER, LLC 2987 Clairmont Road Suite 350 Atlanta, GA 30329 Tel: 678-587-8740 Email: wrountree@rlkglaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Asif Amin Ali as president. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SB4TBPA/Cumberland_RJ_Inc_dba_Rockin_Jump__ganbke-22-21039__0001.0.pdf?mcid=tGE4TAMA CYPRESS HILLS: Seeks to Hire Singer & Falk CPA's as Accountant -------------------------------------------------------------- Cypress Hills NYC, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Singer & Falk CPA's as its accountant. The Debtor requires an accountant to: a. gather and verify all pertinent information required to compile and prepare monthly operating reports; b. prepare monthly operating reports; c. prepare any necessary reports pursuant to Rule 2015.3 of the Federal Rules of Bankruptcy Procedure regarding non-debtor businesses; d. prepare budgets and financial disclosures; e. assist the Debtor in administering its Chapter 11 case; and f. render such additional services as the Debtor may require in its bankruptcy case. The firm's hourly rates are as follows: Partner $300 per hour Senior Associate $185 per hour Bookkeeper $90 per hour Jesse Singer, a partner at Singer & Falk, disclosed in a court filing that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jesse Singer Singer & Falk CPA's 48 S Service Rd Suite 404 Melville, NY 11747 Phone: (516) 938-1828 Email: Jesse@singerandfalk.com About Cypress Hills NYC Cypress Hills NYC, LLC filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 22-42218) on Sept. 14, 2022, with up to $1 million in both assets and liabilities. Judge Elizabeth S. Stong oversees the case. Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP and Singer & Falk CPA's serve as the Debtor's legal counsel and accountant, respectively. DLVR INC: Taps Kilpatrick Townsend & Stockton as Special Counsel ---------------------------------------------------------------- DLVR, Inc. received approval from the U.S. Bankruptcy Court for the District of Arizona to employ Kilpatrick Townsend & Stockton, LLP as its special counsel. The firm will provide legal services regarding patent and trademark prosecution. Kilpatrick will be paid at hourly rates ranging from $290 to $615 and will be reimbursed for its out-of-pocket expenses. Richard Christiansen, Esq., a partner at Kilpatrick, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Richard B. Christiansen, Esq. Kilpatrick Townsend & Stockton, LLP 12255 El Camino Real Suite 250 San Diego, CA 92130 Tel: (858) 350-3863 Fax: (858) 408-4302 Email: rchristiansen@kilpatricktownsend.com About DLVR Inc. DLVR, Inc. -- https://www.dlvr.com/ -- is a developer of a cloud infrastructure platform designed to optimize, measure and simplify internet videos. The company is based in Phoenix, Ariz. DLVR filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 22-04935) on July 27, 2022, with $1 million to $10 million in both assets and liabilities. The Debtor has elected to proceed under Subchapter V of Chapter 11. Jennifer A. Giamo has been appointed as Subchapter V trustee. Judge Daniel P. Collins oversees the case. Osborn Maledon, P.A. and Kilpatrick Townsend & Stockton, LLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. DOWNTOWN JORDAN: Gets OK to Hire Toni Campbell Parker as Counsel ---------------------------------------------------------------- Downtown Jordan, LLC received approval from the U.S. Bankruptcy Court for the Western District of Tennessee to employ the Law Offices of Toni Campbell Parker to serve as legal counsel in its Chapter 11 proceedings. The normal hourly rate of Toni Campbell Parker, Esq., is $350. Her firm received a retainer in the amount of $2,500. As disclosed in court filings, the Law Offices of Toni Campbell Parker is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Toni Campbell Parker, Esq. Law Offices of Toni Campbell Parker 5100 Poplar Ave, Ste. 2008 Memphis, TN38137 Tel: (901) 683-0099 Fax: (866) 489-7938 Email: Tparker002@att.net About Downtown Jordan Downtown Jordan, LLC filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tenn. Case No. 22-23468) on Aug. 19, 2022, with up to $1 million in both assets and liabilities. Judge M. Ruthie Hagan oversees the case. The Debtor is represented by the Law Offices of Toni Campbell Parker. DPL INC: Moody's Alters Outlook on Ba1 Unsecured Rating to Negative ------------------------------------------------------------------- Moody's Investors Service changed the outlooks of DPL Inc. (DPL) and Dayton Power & Light Company (DP&L; trade name AES Ohio) to negative from stable and affirmed their ratings, including DPL's Ba1 senior unsecured rating and DP&L's Baa2 Issuer rating. RATINGS RATIONALE "The negative outlooks on Dayton Power & Light Company and parent DPL reflect the organization's persistently weak consolidated financial performance, and heightened uncertainty around the credit supportiveness of the Ohio regulatory environment and the utility's relationship with key stakeholders, including the Ohio commission and its staff" said Nati Martel, Vice President-Senior Analyst. "The regulatory lag resulting from the lengthy and delayed rate case outcome has contributed to a ratio of CFO before changes in W/C to debt of just below 7% for the last twelve month period ended June 2022, reducing the likelihood that the ratio will reach 8%, the level Moody's have indicated will be supportive of its current rating, at year-end 2022" added Martel. The continued delay in the rate case outcome, along with DP&L's early and unexpected filing of a new Energy Security Plan (ESP 4) last month, drive Moody's expectation that the consolidated CFO pre-W/C to debt will remain below 8% beyond 2022, and potentially for at least next 12 to 18 months. According to the terms of the ESP 4, the utility will terminate the collection of a non-bypassable Rate Stabilization Charges (RSC) of around $70-$75 million p.a. The utility requested an expedited ESP 4 proceeding from the Public Utility Commission of Ohio (PUCO) so that it can implement it by July 2023. Revenues associated with new riders included in DP&L's ESP 4 filing are likely to only partially offset the negative impact of the revenues lost following the termination of the non-bypassable charge. In addition, DP&L's long delayed rate case proceeding, originally filed nearly two years ago in November 2020, could result in a rate freeze, particularly considering that rate freezes were recommended by both the consumer advocate and the PUCO Staff earlier this year. Moody's would view any rate freeze implemented for the utility as credit negative, particularly considering the current high inflation and rising interest rate environment. The potential for a rate freeze, along with DP&L's unexpectedly early filing of its ESP 4, has heightened uncertainty around the predictability of the utility's regulatory environment and the constructiveness of the utility's relationship with stakeholders, two key drivers of DPL and DP&L's current ratings. The utility's ESP 4 filing at the end of September 2022 was significantly earlier than the timeline of October 2023 agreed upon by the parties under a 2020 settlement agreement. This regulatory uncertainty comes when DPL continues to maintain and service a substantial amount of holding company debt at around $831 million at the end of June 2022. These debt obligations also pressure the group's credit quality and results in a two notches differential between its rating and the rating of DP&L. The lack of ringfencing provisions makes it likely that any downgrade of the parent would also result in a downgrade of the utility, a key rationale for the negative outlooks on both entities. Liquidity DP&L maintains an adequate liquidity profile. At the end of June 2022, its committed credit facility of $175 million (which can be increased to up to $275 million) remained fully available. This facility is scheduled to expire in June 2024. Borrowings under the facility are not subject to conditionality and it includes a single financial covenant requiring that DP&L's consolidated total debt to consolidated total capitalization not exceed 67% at any time. Moody's anticipate the utility will remain in compliance with this covenant. In contrast, DPL's liquidity is much more constrained as of end of June 2022. DPL had outstanding borrowings of $50 million and only $40 million available under its $90 million secured revolving credit facility at the end of June 2022. The group's weak financial performance has reduced the availability under DPL's credit facility to $90 million at the end of June 2022 from $105 million at the end of September 2021. According to the terms of the credit facility, failure to report a ratio of consolidated debt to EBITDA below 7.0x, reduces DPL's borrowing limit by $5 million every quarter starting in the 4Q2021. Moody's expect additional $5 million quarterly reductions until the facility's scheduled expiration in less than a year in June 2023. In addition, borrowings under the facility remain subject to conditionality, including a material adverse change clause, a credit and liquidity negative. Despite the failure to meet the bank facility's financial performance requirements, Moody's expect that DPL will remain in compliance with its other financial covenants. The facility has required a minimum EBITDA over interest ratio covenant of 1.75x since September 30, 2022, which increases to 2.0x at year-end 2022. It also requires that DPL report a trailing-twelve month consolidated EBITDA of at least $150 million. Moody's estimate that DPL's consolidated EBITDA approximated $160 million and the ratio of EBITDA to interest ratio was 2.3x at the end of June 2022. DPL's credit facility remains secured by DP&L's capital stock with the secured amount subject to a limit of 10% of consolidated assets. According to the terms of the facility, DPL's ability to make dividend distributions to AES Corporation (The) (Baa3 stable) will remain limited until its debt is rated investment grade by at least two rating agencies. Moody's anticipate that DPL will repay the outstanding balance under DPL's facility but that it will not renew it upon its maturity next year. However, the dividend restriction will remain in place because it is included in DPL's articles of incorporation. The terms of DP&L's ESP 4 filing include an unspecified equity infusion from AES. This will follow earlier equity contributions to the utility that aggregated $300 million in 2020 and 2021 and helped to improve the utility's equity ratio to around 52% at the end of June 2022 compared to around 43.5% at year-end 2019. Additional equity contributions by AES will aid the group's liquidity profile, particularly if the utility undertakes the material investment program filed as part of its ESP 4. The group's next debt maturities consist of DPL's 5-year $415 million senior unsecured notes due in July 2025. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade An upgrade of the ratings of DPL and DP&L is unlikely given their negative outlooks. A stabilization of the outlook is possible if Moody's perceive that (i) the outcome of DP&L's pending rate case and ESP 4 proceedings are credit supportive; and (ii) enable a clear path for an improvement in DPL's consolidated by 2024 such that they become adequate for its current Ba1 rating; including a ratio of consolidated CFO pre-W/C to debt of at least 8% on a sustainable basis. Factors that could lead to a downgrade A downgrade of the ratings of DPL and DP&L could occur following (i) adverse outcomes of either the rate case or the ESP 4 proceedings that are not credit supportive or (ii) if regulatory relationship between DP&L and key stakeholders, including the PUCO and its Staff, deteriorates. Failure to provide a clear path for an improvement of the consolidated financial metrics by 2024, including a ratio of CFO pre-W/C to debt that remains below 8%, could also trigger a downgrade. Affirmations: Issuer: Dayton Power & Light Company Issuer Rating, Affirmed Baa2 Senior Secured First Mortgage Bonds, Affirmed A3 Issuer: DPL Inc. Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 Issuer: Ohio Air Quality Development Authority Senior Secured Revenue Bonds, Affirmed A3 Outlook Actions: Issuer: Dayton Power & Light Company Outlook, Changed To Negative From Stable Issuer: DPL Inc. Outlook, Changed To Negative From Stable The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in June 2017. Headquartered in Dayton, Ohio, DPL Inc. (DPL) is the holding parent company of the pure regulated T&D utility, The Dayton Power & Light Company (DP&L), trade name: AES Ohio. The utility also holds a 4.9% equity interest in Ohio Valley Electric Corp (OVEC, Baa3 stable). The group's only unregulated operations consist of the captive insurance company Miami Valley Insurance Company. DPL is a subsidiary of The AES Corporation (AES: Baa3 senior unsecured, stable), a globally diversified power holding company. ECO PRESERVATION: Sewer Operators File for Chapter 11 ----------------------------------------------------- ECO Preservation LLC, doing business as Tannehill Sewer, filed for chapter 11 protection in the Northern District of Alabama. Affiliate SERMA Holdings, LLC, also sought Chapter 11 protection. The manager of the Debtors, John Michael White, Sr., also filed a bankrutpcy petition. According to prior reporting by WBMA, Mr. White and the companies he set up for sewer operations in September 2021 were hit with a $4.7 million judgment in a complaint by homeowners in Tuscaloosa County, Ala., for charging huge sewer bills and cutting off water of residents. The federal jury found Mr. White and his companies had committed civil rights violations, put families under emotional distress, and trespassed on their property cutting their water off. According to court filings, ECO Preservation 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. SERMA Holding owns 45% of ECO while Henry H. Tyler owns 40%, and Curtis White Development, LLC owns 15%. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 8, 2022, at 11:00 AM at Creditor Meeting Room Birmingham. About ECO Preservation LLC ECO Preservation LLC is a provider of water, sewage and other systems. ECO Preservation LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No. 2:22-bk-02429) on Oct. 5, 2022. In the petition filed by J Michael White, as managing member, the Debtor reported assets and liabilities between $1 million and $10 million each. SERMA Holdings, LLC, also sought Chapter 11 protection (Bankr. N.D. Ala. Case No. 22-02430) on Oct. 5, 2022, estimating assets of less than $50,000 and debt of $1 million to $10 million. The manager of the Debtor, John Michael White, Sr., also filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 22-bk-02431) on Oct. 5, 2022. The Debtors are represented by Harry P Long of The Law Offices of Harry P. Long, LLC. EXPRESSJET AIRLINES: Gets OK to Hire Epiq as Administrative Advisor ------------------------------------------------------------------- Expressjet Airlines, LLC received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Corporate Restructuring, LLC as its administrative advisor. The firm's services include: a. assisting with, among other things, solicitation, balloting, and tabulation of votes as well as preparing any appropriate reports in support of confirmation of the Debtors' plan of liquidation or reorganization; b. generating an official ballot certification and testifying, if necessary, in support of the ballot tabulation results; c. responding to requests for documents in connection with the balloting services; d. gathering data for, and assisting in the preparation of, the Debtors' schedules of assets and liabilities and statements of financial affairs; e. assisting the Debtors in reconciling claims; f. providing the Debtors with standard reports (as well as consulting and programming support for reports that the Debtors request), program modifications, database modifications, and other features; g. providing a confidential data room, if requested; h. managing and coordinating any distributions pursuant to a confirmed plan of reorganization, liquidation or otherwise; and i. providing other processing, solicitation, balloting and administrative services. The firm will be paid at these rates: Clerical/Administrative Support $25 - $52 per hour IT / Programming $55 - $72 per hour Project Managers/Consultants/ Directors $75 - $175 per hour Solicitation Consultant $175 Executive Vice President, Solicitation $185 Executives No Charge The retainer is $25,000. Kathryn Mailloux, senior director at Epiq, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Kathryn Mailloux Epiq Corporate Restructuring, LLC 777 Third Avenue, 12th Floor New York, NY 10017 Phone: +1 714 394 6998 Email: kmailloux @epiqglobal.com About Expressjet Airlines ExpressJet Airlines, LLC -- https://expressjet.com -- is a regional U.S. airline headquartered in College Park, Ga. ExpressJet Airlines sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10787) on Aug. 23, 2022, with between $10 million and $50 million in both assets and liabilities. John Greenlee, president of ExpressJet Airlines, signed the petition. Morris, Nichols, Arsht & Tunnell, LLC and Eversheds Sutherland (US), LLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent and administrative advisor. EXPRESSJET AIRLINES: Seeks to Hire Eversheds as Special Counsel --------------------------------------------------------------- Expressjet Airlines, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Eversheds Sutherland (US), LLP as its special counsel. The Debtor requires legal advice on issues that arise in connection with the aviation industry, including, among other areas, corporate governance, corporate finance, employment matters, and agreements related to the sale of aviation assets. The firm will be paid at these rates: Partners $735 to $1,650 per hour Associates and Counsel $445 to $1,195 per hour Paralegals/Legal Support $265 to $465 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. Prior to the petition date, the firm received an advance payment retainer of $200,000. Shawn Rafferty, Esq., a partner at Eversheds, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Shawn Rafferty, Esq. Eversheds Sutherland (US), LLP 999 Peachtree Street NE Atlanta, GA 30309 Email: shawnrafferty@eversheds-sutherland.com About Expressjet Airlines ExpressJet Airlines, LLC -- https://expressjet.com -- is a regional U.S. airline headquartered in College Park, Ga. ExpressJet Airlines sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10787) on Aug. 23, 2022, with between $10 million and $50 million in both assets and liabilities. John Greenlee, president of ExpressJet Airlines, signed the petition. Morris, Nichols, Arsht & Tunnell, LLC and Eversheds Sutherland (US), LLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent and administrative advisor. FAIRFIELD HARBOURSIDE: Condo Timeshare Starts Subchapter V Case --------------------------------------------------------------- Fairfield Harbourside Condominium Association Inc. filed for chapter 11 protection in the Eastern District of North Carolina. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor is a North Carolina non-profit corporation formed in 1979. It owns 233 of 832 total weeks in the Fairfield Harbourside Condominium timeshare regime. The timeshare property is contained within 16 condominium units that are all part of the larger Fairfield Harbourside Condominium in New Bern, Craven County, North Carolina. There are a total of 683 timeshare week unit owners. The Association disclosed total assets of $594,900 in assets against $256,400 in total liabilities as of the bankruptcy filing. According to court filings, Fairfield Harbourside Condominium Association Inc. estimates $100,000 to $500,000 in debt to 200 to 999 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. 3, 2022, at 10:00 AM at Greenville 341 Meeting Room. Proofs of claim are due by Feb. 1, 2023. About Fairfield Harbourside Condominium Association Fairfield Harbourside Condominium Association Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02267) on Oct. 4, 2022. In the petition filed by George Lobman, as president, the Debtor reported assets $500,000 and $1 million and liabilities between $100,000 and $500,000. Rochard P. Cook has been appointed as Subchapter V trustee. The Debtor tapped Jason L. Hendren of Hendren Redwine & Malone, PLLC, as counsel; and Jordan Price Wall Gray Jones & Carlton, PLLC, as special counsel. FIRSTENERGY CORP: Ratepayers Seek $49 Million Settlement Approval ----------------------------------------------------------------- Catherine Marfin of Law360 reports that a group of Ohio ratepayers suing electric utility FirstEnergy Corp. over corruption claims asked a federal judge Monday, October 10, 2022, to grant final approval of a $49 million class settlement. As earlier reported, FirstEnergy and Energy Harbor reached a $49 million class action settlement over the House Bill 6 energy law scandal. While not admitting to any wrongdoing, First Energy has agreed to contribute $37.5 million and Energy Harbor $11.5 million to the settlement. Cleveland.com reports that under the proposed settlement, any customer of FirstEnergy subsidiaries Ohio Edison, the Cleveland Electric Illuminating Company, or Toledo Edison who paid any rates, fees, or other costs related to the HB6 scandal between Jan. 1, 2020 and June 22, 2022 would be eligible to receive a portion of the settlement money. According to Ohio Electricity Litigation, a class action lawsuit styled Smith v. FirstEnergy Corp., et al., Case No. 2:20-cv-3755, is pending in the United States District Court for the Southern District of Ohio, and a similar lawsuit styled Emmons v. FirstEnergy Corp., et al., Case No. CV-20 935557, is pending in the Cuyahoga County Court of Common Pleas. Plaintiffs in the lawsuits claim, among other matters, that Defendants FirstEnergy, FirstEnergy Service, Ohio Edison, Toledo Edison, Cleveland Electric, Charles E. Jones, James F. Pearson, Steven E. Strah, K. Jon Taylor, and Michael J. Dowling, and Energy Harbor engaged in a racketeering scheme in order to influence the passage of HB 6, thus causing some Ohio residents to pay excessive charges for electricity. Plaintiffs allege that Defendants violated the federal Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. Secs. 1961-1968, the Ohio Corrupt Practices Act ("OCPA"), and other common and statutory law. About FirstEnergy Corp. FirstEnergy Corp is an electric utility headquartered in Akron, Ohio. It was established when Ohio Edison acquired Centerior Energy in 1997. Its subsidiaries and affiliates are involved in the distribution, transmission, and generation of electricity, as well as energy management and other energy-related services. Then a subsidiary of FirstEnergy Corp., FirstEnergy Solutions Corp., along with affiliates, on March 31, 2018, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 18-50757). Judge Alan M. Koschik on Oct. 16, 2019 confirmed FirstEnergy's plan that erased $4 billion in debt and that was supported by more than 93 percent of voting creditors. FirstEnergy Solutions exited bankruptcy with a new name, Energy Harbor Corp., and ownership obtained by big bondholders Avenue Capital Group and Nuveen Asset Management LLC. Governor Mike DeWine signed House Bill 6 (HB 6) into law on July 23, 2019, approving bailouts for the Davis-Besse and Perry nuclear plants, which were owned by FirstEnergy Solutions (FES), and were previously scheduled to close in 2020 and 2021, respectively, after FES announced its bankruptcy. In July 2021, FirstEnergy Corp. said it has agreed to pay a $230 million fine for its central role in a bribery scheme -- the goal of which was to get legislation passed that included a $1 billion bailout for the two Ohio power plants. Federal prosecutors charged FirstEnergy with conspiring to commit honest services wire fraud. In a deal with the Justice department, the utility company agreed to pay the multimillion-dollar penalty as part of a deferred prosecution agreement. FirstEnergy no longer owns the Perry and Davis-Besse nuclear plants after FES emerged from bankruptcy in February 2020 as Energy Harbor. GOAL'S GYM LLC: Seeks to Hire Stokes Law as Bankruptcy Counsel -------------------------------------------------------------- Goal's Gym, LLC seeks approval from the U.S. Bankruptcy Court for the District of Utah to employ Stokes Law, PLLC as its legal counsel. The firm's services include: a. advising the Debtor regarding its powers and duties; b. taking all necessary action to protect and preserve the estate of the Debtor; c. assisting in preparing legal papers; d. representing the Debtor in connection with all appearances; e. assisting in presenting the Debtor's proposed plan of reorganization and all related transactions; f. representing the Debtor at court hearings on plan confirmation and all related matters; and g. performing all other necessary legal services for the Debtor. Stokes Law will be paid at these rates: Ted F. Stokes, Esq. $275 per hour Paralegals $75 to $125 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. Stokes Law received a retainer of $13,738 from the Debtor. Ted Stokes, Esq., a partner at Stokes Law, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Ted F. Stokes, Esq. Stokes Law, PLLC 2072 North Main Suite 102 North Logan, UT 84341 Tel: (435) 213-4771 Fax: (888) 443-1529 Email: ted@stokeslawpllc.com About Goal's Gym Goal's Gym, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Utah Case No. 22-23708) on Sept. 22, 2022, with up to $1 million in both assets and liabilities. Judge R. Kimball Mosier oversees the case. The Debtor is represented by Stokes Law, PLLC. GOOD GUYZ: Secured Creditor Says Plan is Neither Fair Nor Equitable ------------------------------------------------------------------- Wilmington Trust, not in its individual capacity, but solely as Trustee of MFRA Trust 2016-1, a Delaware Statutory Trust, its successors and/or assignees ("Secured Creditor") objects to the Proposed Chapter 11 Small Business Plan of Good Guyz Investments, LLC. Secured Creditor holds a secured claim by virtue of that certain promissory Note dated September 10, 2019, which is secured by a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing recorded on September 26, 2019, as Document Number 20190603255 in Book 31623, Page 1256, in the Public Records of Miami Dade County, Florida, encumbering real property located at 1925 NE 208 Ter, Miami, FL 33179 ("Property"). On April 11, 2022, Secured Creditor timely filed its proof of claim as Claim Number 8-1 which reflects a total secured claim in the amount of $865,913.85, and current arrearages due and owing in the amount of $865,913.85. The loan matured on October 1, 2020. Secured Creditor claims that substantially all of the gross income of the Debtor was from the operation of the 1920 property. Hence, the Debtor's primary activity is the business of owning single asset real estate and thus, the Debtor does not qualify as a small business debtor and has erroneously elected to file a Subchapter V case. Secured Creditor points out that the plan is premised upon a valuation of the Property at $561,004.00, which grossly understates the value of the Property. Secured Creditor should be permitted additional time to obtain its own interior inspection and appraisal of the Property. Secured Creditor is certain that the interior appraisal will support its position that its claim is fully secured and hence, the proposed cramdown pursuant to 11 § U.S.C 506 is impermissible and the plan cannot be confirmed. Secured Creditor states that under the Plan, Secured Creditor would receive a total of $561,004.00. Pursuant to the Broker's Price Opinion the value of the property alone is at least $1,220,000.00. Consequently, a Chapter 7 liquidation would result in a payoff of Secured Creditor's full claim in the amount of $865,913.85. Hence, the Plan violates the Bests Interests of Creditors Test and cannot be confirmed pursuant to 11 U.S.C. §1129(a)(7)(A). Secured Creditor asserts that pursuant to 11 U.S.C. § 1129(b)(2), a plan is fair and equitable if the plan provides that each holder of a claim of such class receive on account of such claim deferred cash payments totaling at least the allowed amount of such claim, of a value, as of the effective date of the plan, of at least the value of such holder's interest in the estate's interest in such property. Since there is equity in the property, Secured Creditor's Claim is fully secured. Therefore, the allowed claim is the full amount of the Claim as filed. Thus, in order for the Plan to be fair and equitable pursuant to 11 U.S.C. § 1129(b)(2), the Plan must provide to Secured Creditor deferred cash payments totaling at least $865,913.85 plus interests under 11 U.S.C § 506(b). Secured Creditor further asserts that the Plan is not confirmable under Section 1122 of the Bankruptcy Code because of the clear gerrymandering in Class 2. This classification of the Class 2(a) and Class 2(c) as impaired classes entitled to vote in spite of the Plan proposing to pay each class in full is a textbook example of class gerrymandering to ensure the existence of an impaired accepting class. A full-text copy of Secured Creditor's objection dated October 6, 2022, is available at https://bit.ly/3RURznq from PacerMonitor.com at no charge. Attorneys for Secured Creditor: GHIDOTTI | BERGER, LLP 1031 North Miami Beach Blvd. North Miami Beach, FL 33162 Telephone: 305.501.2808 Facsimile: 954.780.5578 bknotifications@ghidottiberger.com About Good Guyz Investments Good Guyz Investments, LLC, a company in Sunny Isles Beach, Fla., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-10728) on Jan. 30, 2022, listing up to $1 million in assets and up to $10 million in liabilities. Bryan Goldstein, manager, signed the petition. Judge Laurel M. Isicoff oversees the case. The Law Offices of Richard R. Robles, P.A. serves as the Debtor's legal counsel. GOTO GROUP: Moody's Lowers CFR & Alters Outlook to Negative ----------------------------------------------------------- Moody's Investors Service downgraded GoTo Group, Inc.'s Corporate Family Rating and the ratings for its 1st lien credit facilities and senior secured notes to B3, from B2. The ratings outlook is negative. The ratings action reflect Moody's expectations for GoTo Group's weak profitability at least over the next 12 months. Downgrades: Issuer: GoTo Group, Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to B3 (LGD4) from B2 (LGD3) Senior Secured 1st Lien Regular Bond/Debenture , Downgraded to B3 (LGD4) from B2 (LGD3) Outlook Actions: Issuer: GoTo Group, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The downgrade of the CFR to B3 reflects Moody's expectation that GoTo Group's adjusted EBITDA and cash flow from operations over the next 12 months through June 2023 will decline significantly over prior year levels. GoTo Group's adjusted EBITDA (as reported by the company on a continuing operations basis and before including changes in deferred revenues and pro forma cost savings) declined 22% in the second quarter of 2022 over prior year, driven by revenue declines and an increase in operating expenses. The company expects to further increase investments to support its high-growth products that include the LastPass password management and GoTo Connect branded cloud-telephony and meeting solutions. In its base case scenario, Moody's expects GoTo Group's revenues to continue to decline through 2Q '23, as growth in the high-growth products is unlikely to fully offset the revenue declines in its legacy collaboration products and remote solutions product segment. Cash flow from operations over this period will be additionally pressured by the large increase in interest expense and incremental investments on brand positioning. As a result, Moody's expects GoTo Group to generate negative free cash flow at least over the next 12 months and its liquidity to weaken over this period. The negative outlook reflects elevated execution risks in accelerating growth from GoTo Group's fast-growing products in a highly competitive market and amid heightened macroeconomic uncertainties. GoTo Group has replenished its sales capacity after it experienced high salesforce turnover in the second half of 2021 that negatively impacted sales. The company has undertaken leadership changes and it is investing to expand its network of channel partners, which is critical to reach its target small and medium business (SMB) customer segment. However, the effectiveness of these actions will need to be demonstrated in earnings improvement. Moody's also expects that competitive intensity in the Unified Collaboration (UC) and Unified Communications as a Service (UCaaS) software segments will increase as the industry growth has slowed after the surge in demand for UC and UCaaS products that was fueled by the social restrictions during the COVID-19 pandemic in 2020 and 2021. The deteriorating economic conditions in the US and Europe have increased the risks of increases in customer attrition rates and/or slowing IT spending in the SMB segment. If adjusted EBTIDA, as defined in the credit agreement, does not rebound by early 2023, the company could be constrained in fully accessing its $250 million revolving credit facility in 2023. The revolving credit facility was undrawn at 2Q '22. The B3 CFR is supported by GoTo Group's good operating scale and prospective adjusted EBITDA margins, despite the anticipated erosion in profitability. It generates revenues primarily from subscription services. The company's GoTo Connect UCaaS and LastPass offerings have strong growth prospects and address large markets, but they face strong competitors with very good brand recognition, technology resources and distribution capabilities. The rating is primarily constrained by GoTo Group's weak projected financial profile. In its base case scenario, Moody's expects total debt to EBITDA (incorporating Moody's standard analytical adjustments and after expensing capitalized software development costs) could increase by more than a turn over the next 12 months, from about mid 7x at 2Q '22, before EBITDA growth turns positive in the second half of 2023. Moody's expects negative free cash flow over the next 12 months. Assuming adjusted EBTIDA and free cash flow trough by mid-2023, Moody's expects GoTo Group to maintain adequate liquidity over the next 12 months. The company had approximately $233 million of unrestricted cash at 2Q '22, pro forma for the acquisition of Miradore in July 2022. GoTo Group's revolving credit facility matures in September 2025, and term loans and senior secured notes mature in September 2027. Revolver borrowings are subject to a net first lien leverage ratio test if utilization exceeds 35%. On August 25, 2022, the LastPass segment notified its customers of a security breach that affected development environment of LastPass's IT infrastructure. LastPass has confirmed that it found no evidence that cyberattack involved any access to customer data or encrypted password vaults. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given Moody's expectations for GoTo Group's very high leverage and negative free cash flow over the next 12 months, a rating upgrade is not expected over this period. Moody's could upgrade GoTo Group's rating over time if the company improves its liquidity cushion and generates sustained growth in revenues and profitability that support free cash flow of 5% or higher relative to total adjusted debt. Conversely, Moody's could downgrade the ratings if liquidity becomes weak or the anticipated turnaround in adjusted EBITDA by mid-2023 is unlikely. GoTo Group (f/k/a LogMeIn, Inc.) is a provider of unified communications and collaboration, remote access and support, and password management solutions. It was acquired by affiliates of Francisco Partners and Evergreen Coast Capital Corp in August 2020. The principal methodology used in these ratings was Software published in June 2022. GRAUSTARK MEMBERS: Houston Apartment Complexes Hit Chapter 11 ------------------------------------------------------------- Montrose Multifamily Members, LLC, and certain of its affiliates sought Chapter 11 protection. Since approximately 2014, the Debtors have owned and operated 14 multi-family apartment complexes in the Montrose neighborhood of Houston, Texas. The Apartment Complexes range in size from 8 units to 28 units per complex with units totaling 215. The Apartment Complexes are subject to deeds of trust executed for the benefit of its secured lender DLP Capital, their sole secured creditor. About Montrose Multifamily, et al. Montrose Multifamily Members, LLC, and its affiliates own and operate 14 multi-family apartment complexes in the Montrose neighborhood of Houston, Texas. Montrose Multifamily Members filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-90323) on Oct. 4, 2022. Its affiliates Montrose Multifamily Members II, LLC, Colquitt 2008, LP, Graustark Members II, LLC, Kipling Partners, LLC, MT Vernon Members, LLC, Norfolk Partners, LLC, and Westmoreland Partners, LLC, also sought Chapter 11 protection, and the Debtors have sought joint administration of their cases. In the petition filed by Christopher Bran, as Manager for Bran Enterprises, LLC, Managing, Montrose Multifamily Members reported assets and liabilities between $1 million and $10 million. Susan Tran Adams at TRAN SINGH, LLP, is the Debtors' counsel. HIE HOLDINGS: Seeks to Hire KDL CPAs as Accountant -------------------------------------------------- Hie Holdings, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Hawaii to employ KDL CPAs, LLC as its accountant. The Debtor requires an accountant to prepare its 2021 and 2022 federal and state income tax returns and Form 5500. KDL will be paid at these rates: Alan Kobayashi $400 per hour Tucker Watanabe $240 per hour David Kang $185 per hour Debra Mott $180 per hour Jade Asahara $125 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. As disclosed in court filings, KDL CPAs is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Alan Kobayashi, CPA KDL CPAs, LLC 745 Fort Street, Suite 1415 Honolulu, HI 96813 Tel: (808) 784-3757 Fax: (808) 784-3755 Email: alan@kdlcpa.com About Hie Holdings HIE Holdings Inc. is the parent entity of Royal Hawaiian Water Co., Ltd., and Hawaiian Isles Kona Coffee Company, Ltd. HIE Holdings is, in turn, owned by Michael Boulware, Julie Boulware and the Glenn Boulware Trust. Royal Hawaiian, doing business as Hawaiian Isles Water Company, operates a water bottling facility in Halawa, Oahu, while Hawaiian Isles Kona Coffee, doing business as Hawaii Coffee Roasters, roasts, packages and distributes coffee. Royal Hawaiian sought for Chapter 11 bankruptcy protection (Bankr. D. Hawaii Case No. 22-00524) on July 30, 2022; HIE Holdings (Bankr. D. Hawaii Case No. 22-00534) on Aug. 3, 2022; and Hawaiian Isles Kona Coffee (Case No. 22-00546) on Aug. 5, 2022. The cases are jointly administered under Case No. 22-00534. At the time of the filing, each of the Debtors reported assets between $1 million and $10 million and liabilities between $1 million and $10 million. Judge Robert J. Faris oversees the cases. Chuck C. Choi, Esq., at Choi & Ito and KDL CPAs, LLC serve as the Debtors' legal counsel and accountant, respectively. HILCORP ENERGY I: Moody's Alters Outlook on 'Ba2' CFR to Positive ----------------------------------------------------------------- Moody's Investors Service changed Hilcorp Energy I, L.P.'s rating outlook to positive from stable, and affirmed its Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, and Ba3 senior unsecured notes ratings. "The change in outlook to positive reflects Hilcorp's continued execution of its strategy of value creation, reduced debt, and improved metrics after the debt funded acquisition of BP p.l.c's Alaskan assets in June 2020," said Arvinder Saluja, Moody's Vice President. Affirmations: Issuer: Hilcorp Energy I, L.P. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4) Outlook Actions: Issuer: Hilcorp Energy I, L.P. Outlook, Changed To Positive From Stable RATINGS RATIONALE Hilcorp's Ba2 CFR reflects its improving credit metrics, a significant portfolio of mature, long-lived assets, and an operational strategy underpinned by a disciplined approach to ongoing cost reduction. Hilcorp's production scale is about 250 mboe/day with 52% of the production being oil, 39% natural gas, and 9% NGLs. It has a sizeable proved developed reserve base in Alaska and Lower 48 US states, with low exploration needs and production that has lower capital intensity. After having repaid almost $1.5 billion of debt related to its 2020 acquisition of Alaskan assets from BP p.l.c. (BP, A2 stable) and Moody's expectation of continued free cash flow generation, which is likely to be used toward further debt repayment, Hilcorp is expected to achieve and maintain modest debt leverage. Hilcorp is constrained by the high cash call of asset retirement obligations, but not of future development given its focus on mature, legacy fields. Due to the nature of Hilcorp's assets, Hilcorp assesses its ARO obligations on a semi-annual basis and has historically set aside $100 million per year to cover future P&A obligations. Lastly, Mr. Jeffery Hildebrand has singular control over its operations through his ownership of Hilcorp's general partner. The CFR considers Hilcorp's partnership and governance structure, concentrated ownership, commercial relationships with affiliated entities controlled by Mr. Hildebrand, but also recognizes that the company has prospered and grown under his control and leadership. The Ba3 rating on Hilcorp's senior unsecured notes reflects their subordinate position to the company's $1.2 billion secured borrowing base revolving credit's priority claim to the company's assets. The presence of the potential senior secured claims ahead of Hilcorp's outstanding senior unsecured notes results in the notes being rated one notch below the Ba2 CFR. Moody's expects the company's liquidity position to remain very good through 2023. At June 30, 2022, Hilcorp had a cash balance of $51 million and roughly $1.17 billion available under its $1.2 billion of elected commitments under the credit facility, which expires in June 2026. The revolving credit facility has a $3.5 billion borrowing base, indicative of the extent of potential additional liquidity available to the company beyond the $1.2 billion revolver commitment amount. The revolving credit facility has two maintenance covenants: 1) maximum total debt-to-EBITDA and 2) minimum current ratio. The company is expected to remain well in compliance with these covenants through 2023. The positive outlook reflects Moody's expectation that the company will continue to generate free cash flow and reduce debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A rating upgrade could be considered if Hilcorp continues to reduce debt and its future growth strategy does not materially deviate from its historic focus on the acquisition of mature, longer-lived assets whose potential avail themselves to future exploitation upside. Consistent free cash flow generation along with maintenance of debt/average daily production below $18,000 per Boe, RCF/debt above 30%, and conservative financial policies that limit owner distributions even in a high commodity price environment would also be supportive of an upgrade consideration. A downgrade is possible should Hilcorp's debt/average daily production increase above $25,000 per Boe, RCF/debt drop below 20%, or debt levels increase significantly to fund a major acquisition or distributions. Hilcorp Energy I, L.P. is a private limited partnership headquartered in Houston, Texas. The company's primary producing assets are located in Alaska, Texas, Louisiana, Wyoming, and the Utica Shale. The principal methodology used in these ratings was Independent Exploration and Production published in August 2021. HOLLEY INC: Moody's Affirms 'B2' CFR & Alters Outlook to Stable --------------------------------------------------------------- Moody's Investors Service affirmed Holley Inc.'s ratings, including its B2 corporate family rating, B2-PD probability of default rating and B2 senior secured rating. The company's speculative grade liquidity rating was downgraded to SGL-3 from SGL-2. The outlook was revised to stable from positive. The action reflects Moody's expectation that Holley's operating performance will likely remain weaker than expected over the next several quarters due to supply chain constraints related to key components and lower demand for the company's discretionary automotive aftermarket products. However, Moody's believes the company currently has sufficient cushion in key credit metrics to withstand these near-term pressures. Over the next 12-18 months, Moody's expects Holley's EBITA margin to be about 16% and debt/EBITDA near 5x compared to its prior expectations of an EBITA margin above 20% and debt/EBITDA below 4x. Despite earnings pressure, Moody's expects Holley to maintain adequate liquidity supported by modestly positive free cash flow and full availability of its $125 million revolving credit facility. Moody's notes, though, that these expectations remain exposed to significant demand risk related to Holley's products should US consumer spending remain constrained in a prolonged recessionary environment. Affirmations: Issuer: Holley Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured Bank Credit Facility, Affirmed B2 (LGD4) Downgrades: Issuer: Holley Inc. Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Outlook Actions: Issuer: Holley Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE Holley's B2 CFR reflects the company's modest scale, elevated demand risk given the discretionary nature of its products and moderately high financial leverage. The rating is supported by a strong competitive position within the niche market for performance automotive aftermarket products, a historically strong operating margin and adequate liquidity. Several factors have contributed to Holley's weaker performance in 2022, including difficulty in procuring semiconductor chips for key products, inventory destocking initiatives at primary customers, and softening consumer demand. To date, supply chain disruptions have had a greater impact on Holley's operating performance, and while those disruptions should gradually improve through 2023, Moody's believes demand for Holley's products remains a significant risk. Holley experienced substantial organic revenue growth in 2020 and 2021 during the pandemic, but Moody's expects volumes for Holley's higher-priced automotive products to decline as consumer discretionary income weakens. Moody's views governance considerations to have a highly negative impact on the rating given the material concentration of ownership by its former private equity sponsor. Holley became a publicly-traded company in 2021 following the completion of its business combination with Empower, Ltd., a special purpose acquisition company ("SPAC"). Over the past year, Holley's former private equity sponsor has reduced its ownership stake in the company from 57% at the time of the transaction to around 46%. Holley has provided a more transparent financial policy with publicly communicated target leverage ratios, and Moody's will look for Holley to demonstrate a track record of executing on its stated financial policy goals as a public company. The stable outlook reflects Moody's expectation for Holley to maintain debt/EBITDA around 5x and generate positive free cash flow over the next twelve months despite demand pressures. Holley's SGL-3 speculative grade liquidity rating reflects Moody's expectation for adequate liquidity over the next 12-18 months. Moody's expects Holley to maintain a cash balance of at least $20 million over this horizon while generating modestly positive free cash flow in 2022 before improving free cash flow towards 5% of total debt in 2023. The company's liquidity is further supported by its undrawn $125 million revolving credit facility expiring 2026. This facility does contain a maximum net leverage ratio of 5x, which Moody's expects Holley to be in compliance with although cushion will weaken over the coming quarters. There are no near-term maturities in Holley's capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Holley demonstrates a supportive financial policy around acquisitions and/or shareholder returns such that debt/EBITDA is expected to be sustained below 4x. Consistently strong organic revenue growth and maintaining good liquidity with free cash flow to debt sustained above 10% could also support an upgrade. The ratings could be downgraded if Holley's operating results deteriorate, including greater than expected organic revenue declines and material EBITA margin compression. Debt/EBITDA approaching 5.5x either through weaker earnings or more aggressive financial policy actions could also pressure the ratings. Finally, the erosion of liquidity could result in a downgrade. Holley Inc., headquartered in Bowling Green, KY, designs and manufactures performance engine products for the enthusiast focused automotive aftermarket. The company's product offerings include electronic fuel injection and tuner systems, ignition controls, carburetors, superchargers, exhaust systems and other products designed to enhance the performance of the car. Revenue for the twelve months ended June 2022 was $713 million. The principal methodology used in these ratings was Automotive Suppliers published in May 2021. HOME DEALS OF MAINE: Taps Thomas Cox as Special Counsel ------------------------------------------------------- Home Deals of Maine, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maine to employ Thomas A. Cox, Esq., as its special counsel. The Debtor requires legal assistance in matters related to litigation, potential claims or adversary proceedings associated with a 2018 mortgage loan made by Finance of America Commercial, LLC. The mortgage loan is now owned by U.S. Bank National Association in trust capacity. The attorney will be paid at the rate of $400 per hour and will be reimbursed for out-of-pocket expenses incurred. Mr. Cox disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Thomas A. Cox, Esq. P.O. Box 1314 Portland, ME 04104 Tel: (207) 749-6671 About Home Deals of Maine Home Deals of Maine, LLC owns 14 rental properties in Maine, with a total current value of $2.7 million. The company is based in Waterville, Maine. Home Deals of Maine filed a petition for Chapter 11 protection (Bankr. D. Maine Case No. 21-10267) on Oct. 6, 2021, listing $3,147,975 in assets and $1,650,258 in liabilities. Jo A. Roderick, sole member, signed the petition. Judge Peter G. Cary oversees the case. The Debtor tapped James F. Molleur, Esq., at Molleur Law Office as bankruptcy counsel, and Thomas Cox, Esq., a practicing attorney in Portland, Maine, as special counsel. INDIANA WELLNESS: Taps Thieme Adair & Riley as Accountant --------------------------------------------------------- Indiana Wellness, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Indiana to employ Thieme Adair & Riley CPAs as its accountant. The firm's services include: (a) assisting the Debtor in organizing its financial books and records; (b) preparing bi-weekly and monthly operating reports; and (c) preparing projections and formulating a plan of reorganization. The firm will be paid $24,000 for monthly recording of income and payment of bills; $1,600 for year-end income taxes; and $1,200 for year-end and quarterly payroll taxes. John Thieme, a partner at Thieme Adair & Riley CPAs, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: John F. Thieme Thieme Adair & Riley CPAs 323 Columbia St. Suite 300 Lafayette, IN 47901 Email: Tjthieme@lafayettecpas.com About Indiana Wellness Indiana Wellness, LLC is a company in Lafayette, Ind., which is primarily engaged in general out-patient care services. Indiana Wellness filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ind. Case No. 22-40176) on July 11, 2022, with $190,785 in assets and $3,710,496 in liabilities. Douglas R. Adelsperger serves as Subchapter V trustee. Judge Robert E. Grant oversees the case. David R. Krebs, Esq., at Hester Baker Krebs, LLC and Thieme Adair & Riley CPAs serve as the Debtor's legal counsel and accountant, respectively. INSTASET PLASTICS: Auto Parts Supplier Files Subchapter V Case -------------------------------------------------------------- Instaset Plastics 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. IPC operates as a plastic injection molding facility, producing parts incorporated into Class A surfaces for the automotive industry. IPC's facility is located at 10101 Marine City Hwy, Anchorville, Michigan 48023. IPC has leased the Anchorville Property since June 2021. The Anchoryille Property is owned by WGS Properties, LLC, a Michigan limited liability company. The current lease is dated June 1, 2021 and expires on May 31, 2031. In 2015, IPC's annual revenue from sales ranged between $18 million and $2 million. IPC had production contracts with several Tier 1 and Tier 2 suppliers associated with multiple OEM platforms. The Company currently has 50 employees. IPC was formed in November 2015 after WGS Global Services, L.C. ("WGS"), as sole member of Instatset Acquisition Company, LLC ("IAC"), acquired the assets and ongoing operations of Instaset Corporation (k/n/a Old Instaset Corporation) ("1C"). In May of 2021, Christopher Goetz acquired WGS's equity position in IPC, becoming the sole member of IPC. McGustavus Miller, Jr., CRO of the Debtor, explains in court filings that shortly after the acquisition of the 1C assets, IPC began experiencing a loss in sales due to significant volitivity in the automotive industry. In 2018, two significant events had a direct impact on IPC -- the announcement by General Motors of its intent to shut down the Lordstown plant and the explosion at the Meridian Magnesium Products of America Plant (Meridian") -- leading to a significant decline in sales and a resulting reduction in revenue. At that time, internal struggles also led to a reduction in revenue. The preacquisition management team's agenda was not progressive, they did not implement necessary price increases to maintain margins, and were resistant to diversification in the customer base. In early 2020, IPC's operations were stabilizing and revenue was steadying at the $4 million to $6 million range. However, the Government's shutdown in March of 2020 had a devastating impact on the Company's ability to continue recovery. The cumulative effect of labor and supply chain shortages along with increases in raw material costs has burdened IPC with substantial debt and no adequate means to generate revenue sufficient to continue to meet customer requirements. According to court filings, IPC estimates $1 million to $10 million in debt to 100 to 199 creditors as of the bankruptcy filing. The petition states that funds will be available to unsecured creditors. About Instaset Plastics Company Instaset Plastics Company LLC is a plastic fabrication company in Michigan. Instaset Plastics Company filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-47794) on Oct. 4, 2022. In the petition filed by McGustavus Miller, Jr., as chief restructuring officer, the Debtor reported assets and liabilities between $1 million and $10 million. The Debtor is Represented by Lynn M. Brimer of Strobl Sharp PLLC. ISAGENIX INT'L: Moody's Assigns C-PD/LD Prob. of Default Rating --------------------------------------------------------------- Moody's Investors Service appended a limited default "/LD" designation to Isagenix International, LLC's Probability of Default Rating (PDR), changing the PDR to C-PD/LD from C-PD. The/LD designation reflects Moody's view that Isagenix's continued failure beyond the grace period to make its interest and principal payments that were due in September 2022 on its senior secured first lien credit facility is a limited default despite the company having entered into a forbearance agreement. The limited default designation will remain until the company resolves the missed interest and principal payments. Isagenix's Corporate Family Rating remains unchanged at C and the outlook remains negative. LD Appended: Issuer: Isagenix International, LLC Probability of Default Rating, Changed to C-PD /LD (/LD appended) from C-PD RATINGS RATIONALE Isagenix's C Corporate Family Rating reflects the high likelihood of a debt restructuring based on the company operating under a forbearance agreement due to missed interest and principal payments due in September 2022. The company's high leverage, refinancing risk driven by expiration of the revolving credit facility in June 2023, and weak operating performance as earnings continue to decline indicate the current debt structure is untenable. Moody's believes a deterioration in member base and weakening consumer demand is contributing to revenue declines, which combined with inflationary cost pressures is leading to significant EBITDA erosion. Moody's anticipates ongoing headwinds in the company's recruiting efforts to continue. Isagenix's current capital structure is unsustainable, prompting Moody's expectations for a high likelihood of near-term restructuring and that the company will unlikely be able to raise sufficient new funds to refinance the maturing debt at a manageable interest cost. Isagenix's ratings are supported by a broad product suite and variable cost structure given the outsourced manufacturing model, including sales commissions and marketing expenses that fluctuate with sales volumes. Isagenix's other outstanding debt, totaling about $43 million of subordinate Zija notes and subordinate shareholder notes and accrued interest, are not rated. The company has indicated the missed interest and principal payments on the secured credit facility did not constitute an event of default under any of Isagenix's shareholder notes or Zija notes. The company and its lender group are operating pursuant to a forbearance agreement that became effective on September 23, 2022. The forbearance period is in effect until November 15, 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook factors in Moody's expectations that Isagenix will continue to face challenges in stabilizing its member base and improving its operating performance. The outlook also recognizes the high likelihood of a debt restructuring and that recovery prospects could further weaken if operating performance continues to deteriorate. Ratings could be downgraded if estimated recovery values continue to deteriorate beyond the current expectations or if liquidity weakens. Ratings could be upgraded if the company can improve liquidity including addressing maturities at a manageable interest cost or through a restructuring that materially reduces debt. The company would also need to materially improve revenue and earnings growth, demonstrate an ability to stabilize membership and sales representative counts, and if the company's capital structure is sustainable and free cash flow is sufficient to meet debt service. The principal methodology used in this rating was Consumer Packaged Goods published in June 2022. Isagenix International, LLC is headquartered in Gilbert, Arizona, is a direct-seller of weight management products, nutritional supplements, and personal care products intended to support a healthy lifestyle. The company operates through a multi-level marketing system that consists of members largely in the US. Isagenix's management and employees acquired a 30% ownership interest in the company through an ESOP in June 2018. The majority of the company is owned by co-founders Jim and Cathy Coover. The company generated about $510 million of revenue for the last twelve months ending June 30, 2022. J&C MAY PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: J&C May Properties, LLC DBA TD Home Center 314 Sylamore Avenue Mountain Vide, AR 72560 Business Description: J&C May is a dealer of building materials and supplies. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Eastern District of Arkansas Case No.: 22-12804 Judge: Hon. Richard D. Taylor Debtor's Counsel: Kevin P. Keech, Esq. KEECH LAW FIRM, PA 2011 South Broadway Little Rock, AR 72206 Tel: 501 221 3200 Fax: 501 221 3201 Email: kkeech@keechlawfirm.com Total Assets: $3,219,000 Total Liabilities: $5,110,977 The petition was signed by Contessa May as member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IHUI5PA/JC_May_Properties_LLC__arebke-22-12804__0001.0.pdf?mcid=tGE4TAMA JET OILFIELD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Jet Oilfield Services, LLC 16890 N. Pecan Midland, TX 79707 Business Description: The Debtor provides support activities for mining, and oil and gas extraction industry. Chapter 11 Petition Date: October 12, 2022 Court: United States Bankruptcy Court Western District of Texas Case No.: 22-70126 Judge: Hon. Tony M. Davis Debtor's Counsel: Stephen W. Sather, Esq. BARRON & NEWBURGER, P.C. 7320 N. MoPac Expressway 400 Austin, TX 78731 Tel: (512) 649-3243 Email: ssather@bn-lawyers.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Brian T. Owen as manager. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QP4B7HY/JET_OILFIELD_SERVICES_LLC__txwbke-22-70126__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. B&D Flowback Services $357,270 P.O. Box 279 Raceland, LA 70394 2. BMF $2,500,000 1820 Avenue M Suite 125 Brooklyn, NY 11230 3. Cannon Advance $1,500,000 c/o Lifetime Funding 5308 13th Ave. Suite 324 Brooklyn, NY 11219 4. Horizon Wellhead Services $344,808 9919 Steelman St Houston, TX 77017 5. Hytec Equipment Services $363,777 PO Box 3004 Grand Junction, CO 81502 6. IBY Outlet Services $527,055 2465 FM 359 South, Building B Brookshire, TX 77423 7. JMP Petroleum Technologies Services $401,919 8111 FM 1960 Ste 100 Humble, TX 77338 8. KB Wellbore Solutions $2,100,000 3419 Swenson Rd. #200 Pearland, TX 7758 9. Meyer Services $2,637,802 6733 Leopard St Corpus Christi, TX 78409 10. Moab Energy LLC Services $578,294 PO Box 4324 Longview, TX 75606 11. Premier Fund US Merchant $1,500,000 c/o Bridge Funding Cash Advance 450 Lexington Ave. 4th Floor New York, NY 10007 12. Reliance Financial Merchant $2,500,000 200 Central Avenue Cash Advance Farmingdale, NJ 07727 Tel: (845) 285-9446 13. Roughneck Rentals Services $293,515 PO Box 748 Minden, LA 71058-0748 14. Shanghai Lengthon Petro Services $424,200 Equip Co Bldg 3, No 398 Jinbai Rd Jinshan Industrial Zone 15. Spin Capital Merchant $1,500,000 111 Washington Ave. Suite 703 Cash Advance Albany, NY 12210 16. Tech-Seal Int'l, Inc. Services $2,300,000 d/b/a TSI Flow 3131 W. Little York Rd. Houston, TX 77091 17. Thrubore Valves LLC Services $332,799 5550 FM 1488 Magnolia, TX 77354 18. TMS Flow Products Services $607,973 PO Box 1024 Youngsville, LA 70592 19. Trionz Flow Services $291,551 3892 Industrial Circle Bossier City, LA 71111 20. W4 Consulting Services $960,250 P.O. Box 31 Arcadia, LA 71001 JUUL LABS INC: Hires Two Restructuring Experts to Board ------------------------------------------------------- Sarah Williams of New York Business reports that Juul Labs Inc. has appointed two new independent directors with expertise in restructuring as the vaping company searches for a financial rescue and prepares for a possible bankruptcy filing. According to the report, one of the new directors is David Barse, who has helped lead the bankruptcy restructuring of cryptocurrency lending company Celsius Network Ltd. as an independent director. The other is Paul Aronzon, a strategic financial consultant and former co-leader of the global financial restructuring group at Milbank LLP, an international law firm. With their addition, Juul's board now has 10 members. 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. Marlboro cigarette maker Altria Group Inc (MO.N) paid $12.8 billion in 2018 for a 35% stake in Juul. Altria valued that stake at $450 million as of June 30, 2022. Juul had been the market leader in e-cigarettes since 2018, according to Euromonitor International. As of 2020, the company held 54.7% share of the $9.38 billion U.S. e-vapor market. On June 23, 2022, the U.S. Food and Drug Administration ordered Juul to remove its e-cigarettes from the U.S. market effective immediately, saying that Juul had failed to show the sale of its products would be appropriate for public health. The Columbia Circuit Court of Appeals on June 24, 2022, granted Juul's emergency request for a stay, pending its appeal of the decision. The FDA later said it was withholding the ban as it was doing an additional review of the company's marketing application. In July 2022, reports said that Juul was considering its options, including bankruptcy, and reportedly hired Kirkland & Ellis and Alvarez & Marsal, as well as bankers at Centerview Partners. On Sept. 6, 2022, Juul agreed to pay $438.5 million to settle claims by 34 U.S. states and territories over its marketing and sales practices, including that it improperly courted teenage buyers. On Sept. 20, 2022, Juul Labs sued the FDA in a federal court in Washington, D.C., over the agency's refusal to disclose documents supporting its order banning the company from selling e-cigarettes. The case is Juul Labs Inc v Food & Drug Administration, U.S. District Court, District of Columbia, No. 22-02853. KHAWAJA OF MANASSAS: Taps Newton & Sullivan as Special Counsel -------------------------------------------------------------- Khawaja of Manassas, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to employ Newton & Sullivan, PLLC as its special counsel. The Debtor requires a special counsel to assist it in matters related to state court litigation. The firm will be paid at these rates: Partners $275 per hour Associates $225 per hour Paraprofessionals $80 per hour As disclosed in court filings, Newton & Sullivan neither holds nor represents any interest adverse to the Debtor or its estate. The firm can be reached through: Daniel R. Sullivan, Esq. Newton & Sullivan, PLLC 3420 Electric Rd Ste 2C Roanoke, VA 24018 Phone: 540-628-7529 Email: dan@newtonsullivan.com About Khawaja of Manassas Khawaja of Manassas, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 22-70482), with up to $1 million in both assets and liabilities. Saef Khawaja, president, signed the petition. Judge Paul M. Black oversees the case. Andrew S. Goldstein, Esq., at Magee Goldstein Lasky & Sayers, PC and Newton & Sullivan, PLLC serve as the Debtor's bankruptcy counsel and special counsel, respectively. LIFESCAN GLOBAL: Moody's Cuts CFR to 'Caa2', Outlook Stable ----------------------------------------------------------- Moody's Investors Service downgraded LifeScan Global Corporation's ratings, including the Corporate Family Rating to Caa2 from B3 and the Probability of Default Rating to Caa2-PD from B3-PD. Moody's also downgraded the company's first lien term loan rating to Caa1 from B3, and the second lien term loan rating to Caa3 from Caa2, and assigned a B1 rating to the company's super priority revolving credit facility. The outlook is stable. The downgrade reflects the company's ongoing performance headwinds and weak liquidity, including elevated refinancing risks. LifeScan's revenues declined by approximately 9% year-over-year in the first half of 2022 (through June 30, 2022) and Moody's expects revenues will continue to decline in at least the mid-single-digit range over the next 12-18 months. This reflects Moody's expectations that the rapid pace of adoption of Continuous Glucose Monitoring (CGM) sensors in key markets such as the US will continue to negatively affect LifeScan's position in traditional blood glucose monitoring (BGM). In addition, Moody's expects that LifeScan's ASPAC segment will continue to face operating headwinds, with margins that will remain pressured over the next 12-18 months amid pricing pressure and supply chain disruption. In the context of LifeScan's recent underperformance, Moody's now expects that the company will be unable to maintain positive cash flow over the next 12-18 months after mandatory term loan amortization, further pressuring the company's weak liquidity profile. To that end, Moody's believes the company's capital structure may be unsustainable, thus elevating the risk of default. Moody's notes that the recent extension of LifeScan's super-priority revolver to July 2024 did not include a refinancing of its first lien term loan (due October 2024) nor its second lien term loan (due October 2025). The revolver extension follows the company's broader proposed refinancing transaction that launched in October 2021, but was not executed. Governance risk is a factor in this rating action. Moody's believes that the looming refinancing effort will be a challenge given the company's track record in the debt capital markets, particularly in the aftermath of recent operating underperformance. The stable outlook reflects Moody's view that LifeScan possesses sufficient cash and revolver capacity to fund operations over the next 12-18 months, though Moody's considers the overall liquidity profile to be weak. Downgrades: Issuer: LifeScan Global Corporation Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior Secured 1st Lien Term Loan B, Downgraded to Caa1 (LGD3) from B3 (LGD4) Senior Secured 2nd Lien Term Loan, Downgraded to Caa3 (LGD5) from Caa2 (LGD6) Assignments: Issuer: LifeScan Global Corporation Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned B1 (LGD1) Outlook Actions: Issuer: LifeScan Global Corporation Outlook, Remains Stable RATINGS RATIONALE LifeScan's Caa2 Corporate Family Rating is constrained by Moody's expectations that revenues will continue to decline for BGM products as volume and pricing will remain pressured. Moody's expects that CGM products -- a category where LifeScan is currently working with a partner on a possible product, but does not yet generate revenue -- will continue to gain share over time. LifeScan's ratings also reflect the company's weak liquidity, including Moody's expectation that the company will be unable to maintain positive cash flow over the next 12-18 months after mandatory term loan amortization. The company has weak liquidity, with $37 million of cash, and $70 million available in its $125 million revolver, for a total of $107 million as of June 30, 2022 (compared to $201 million of total liquidity at December 31, 2021). While Moody's expects the liquidity burn to moderate in the second half of 2022 on reduced working capital requirements, Moody's expects that the company's liquidity cushion will continue to decline due to mandatory amortization requirements. The company's leverage is high with debt/EBITDA in the mid-5 times range on Moody's adjusted basis. LifeScan benefits from its leading market position in BGM products and its global presence with a majority of revenue generated outside North America. The prevalence of diabetes continues to grow, particularly in emerging markets, which is a partial offset for inroads by CGM products in developed markets. The B1 rating assigned to the super priority revolving credit facility reflects its senior position in the capital structure, such that lenders would be repaid in full before any distributions to the other first lien lenders. The Caa1 rating on the first-lien term loan is one notch higher than the Caa2 CFR. This reflects the facilities' first priority lien on substantially all assets and the loss absorption provided by junior debt. The Caa3 rating on the second-lien term loan is one notch below the CFR. This reflects the effective subordination of the term loan to the senior secured credit facilities. ESG CONSIDERATIONS LifeScan's ESG credit impact score is very highly negative (CIS-5). The score reflects very highly negative exposure to governance risks (G-5), driven by the company's aggressive financial policies under private equity ownership, and a weak track record in the debt capital markets. The score also reflects moderately negative exposure to social risks, primarily due to regulatory oversight of blood glucose products, and neutral to low exposure to environmental risks. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if liquidity improves, including a successful refinancing of the company's full debt capital structure. In addition, an improvement in the company's operating performance, including a stabilization of both revenues and margins, would also support an upgrade. Finally, demonstration of improved business diversification outside of BGM could also support an upgrade. Ratings could be downgraded if liquidity further erodes, operating performance deteriorates or the probability of default, including by way of a transaction that Moody's would deem a distressed exchange, were to rise. The principal methodology used in these ratings was Medical Products and Devices published in October 2021. Headquartered in Malvern, PA, LifeScan Global Corporation is a global manufacturer and distributor of BGM products including meters, testing strips, lancets, point of care testing systems and related monitoring software. Fiscal 2021 revenues were approximately $1.05 billion. LifeScan, previously a division of Johnson & Johnson, was acquired by affiliates of Platinum Equity in October 2018. LOTUS SKY: Seeks to Hire Joyce W. Lindauer as Legal Counsel ----------------------------------------------------------- Lotus Sky, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Joyce W. Lindauer Attorney, PLLC as its legal counsel. The Debtor requires legal assistance to effectuate a reorganization, propose a plan of reorganization, and effectively move forward in its Chapter 11 proceeding. The hourly rates of the firm's counsel and staff are as follows: Joyce W. Lindauer, Esq. $450 Austin Taylor, Associate $275 Sydney Ollar, Associate Attorney $250 Larry Boyd, Law Clerk $195 Dian Gwinnup, Paralegal $195 In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. The firm received a retainer of $16,738, which included the filing fee of $1,738, from Juan Favela, the Debtor's president. Joyce Lindauer, Esq., the owner of the firm, disclosed in a court filing that her firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Joyce W. Lindauer, Esq. Joyce W. Lindauer Attorney, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 Facsimile: (972) 503-4034 Email: joyce@joycelindauer.com About Lotus Sky Lotus Sky, LLC is a company in Amarillo, Texas, which operates in the traveler accommodation industry. Lotus Sky sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 22-31618) on Sept. 2, 2022, with up to $10 million in both assets and liabilities. Kunal Patel, owner, signed the petition. Judge Michelle V. Larson oversees the case. Joyce Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC is the Debtor's counsel. LTL MANAGEMENT: Wins Halt to Mississippi, New Mexico Talc Suits --------------------------------------------------------------- The New Jersey Judge overseeing the bankruptcy of Johnson & Johnson's talc unit LTL Management, LLC, ruled Tuesday, Oct. 4, 2022, that the company's Chapter 11 stay should also pause talc claims brought by state governments against nonbankrupt Johnson & Johnson. In the adversary proceeding LTL Management, LLC, Plaintiff, v. State of New Mexico, ex rel. Hector H. Balderas, Attorney General; and State of Mississippi, ex rel. Jim Hood, Attorney General, Defendants, (Adv. Pro. No. 22-01231), Chief Judge Michael Kaplan issued a memorandum opinion granting a motion by LTL Management for order preliminarily enjoining the prosecution of the New Mexico and Mississippi State actions against Johnson & Johnson for talc-related claims. The Debtor argues that the claims asserted in the State Actions are "inherently intertwined" with the claims being resolved in the bankruptcy proceeding (the "Talc Claims"). Accordingly, the Debtor asserts that continuation of the State Actions will impair its ability to resolve the Talc Claims in the chapter 11 bankruptcy case. The Debtor also contends that continued litigation of the State Actions will jeopardize its ability to successfully reorganize. The States oppose the Motion and assert that they are sovereign entities exercising their police and regulatory powers and, thus, should be permitted to proceed with the State Actions. The State of New Mexico filed its complaint against, among others, J&J and Old JJCI in 2020, alleging that Consumer Protection Defendants defrauded consumers and violated state statutes prohibiting unfair trade practices and false advertising. Mississippi's complaint claims that J&J "failed to inform the Public of the known catastrophic health consequences associated with the use of [their] Talc Products" and "purposely procured and disseminated false, misleading, and deceptive information regarding the safety of the Talc Products to the public." But the Debtors assert that the States' claims are "inextricably intertwined" with the Talc Claims, and continued litigation in the State Actions could potentially have adverse impacts on valuation and negotiation of the Talc Claims in the bankruptcy, as well create the possibility of prejudicial record taint. The Court disagrees with the States' contentions, in arguing against "related to" jurisdiction, that the outcome of the State Actions (against J&J and [Old] JJCI) have no relation to, and thus will have no impact on, the Debtor's estate being administered in bankruptcy. Judge Kaplan ruled, "The allegations in the State Actions concern what the Consumer Protection Defendants knew about asbestos in its talc products, when they knew this information, and what actions they took in the wake of learning this information. Further, the State Actions allege that the talc products definitively contained asbestos and, in fact, caused cancer. Any findings regarding these allegations will certainly impact claims valuation, estimation, and resolution by addressing matters that go to the basis and size of the awards—both compensatory and punitive. Continued prosecution of the State Actions could also conceivably strengthen defenses to insurance coverage for the Talc Claims. Debtor's insurance claims are property of the estate and, if the States are successful in establishing Debtor's knowledge and intent, the insurers' defenses to those insurance coverage claims may well be enhanced. Additionally, continued litigation would certainly impair ongoing mediation efforts and negotiations within this bankruptcy case. Finally, continuation of the State Actions would further drain resources and divert attention away from the bankruptcy. Indeed, Debtor -- as successor to Old JJCI -- maintains a material interest in participating in the State Actions. Likewise, J&J is both a defendant in the State Actions and an obligor under the Funding Agreement that is critical to the bankruptcy case. Thus, continuation of the State Actions would potentially disrupt the flow of funds and resources -- including time and energy -- that could otherwise be devoted to the reorganization effort. See, e.g. In re MCSi, Inc., 371 B.R. 270, 271–72 (S.D. Ohio 2004) (quoting Gray v. Hirsch, 230 B.R. 239, 243 (S.D.N.Y. 1999)). These considerations, taken together, provide an adequate basis for this Court to find that continued prosecution of the State Actions is sufficiently "related to" the underlying bankruptcy to confer subject matter jurisdiction to issue an injunction enjoining the States Actions under Sec.105(a)." The Court acknowledged that "unusual circumstances" exist to warrant Sec. 362(a) protection to nondebtors. "[T]he Court concludes that "unusual circumstances" are present warranting an extension of the automatic stay to the nondebtor Consumer Protection Defendants under Sec. 362(a). To the extent Sec. 362(a) does not serve as an independent basis for extension of the stay to nondebtor parties, the Court determines that a preliminary injunction under Sec. 105(a) extending the stay is appropriate. The Court, thus, grants Debtor's Motion and resolves the instant adversary proceeding in Debtor's favor. However, as with the resolution of the Talc Adversary Proceeding and the Securities Action, the Court concludes that taking measures in smaller steps is prudent. Accordingly, the Court will revisit continuation of the automatic stay during the December 2022 Omnibus Hearing Date, which date has not yet been selected." About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. About Johnson & Johnson Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world's largest and most broadly based healthcare company. Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. The corporation had worldwide sales of $82.6 billion in 2020. MIDWEST OVERNITE: Files Emergency Bid to Use Cash Collateral ------------------------------------------------------------ Midwest Overnite, Inc. asks the U.S. Bankruptcy Court for the District of Nebraska for authority to use cash collateral on an interim basis, pursuant to the budget, with a 15% variance, and provide adequate protection. The Debtor requires the use of cash collateral to maintain and preserve the value of its assets. The Debtor began operations with four trucks and slowly began growing. After several years of operations, life on the road began to take its toll on the rolling fleet. Unfortunately for the Debtor, the COVID-19 pandemic exacerbated these issues. Repairs to commercial sized trucks are expensive to begin with compared to non-commercial trucks. These costs did nothing but increase during the pandemic when labor shortages, supply chain shortage, shipping issues, and government lock downs took hold. The Debtor was faced with the prospect of having to make repairs wherever the breakdowns occurred on a first come/first serve basis. Matters were complicated if insurance claims were at issue as it could take weeks for an adjuster to: (i) determine coverage; and (ii) approve coverage before repairs could even be planned. Every repair would take a truck off the road, which in turn would result in lost revenues, sometimes for months on end. Despite lost revenues, the Debtor's obligation to repay its lenders did not abate. The net result was that the Debtor was: (i) paying lenders for trucks that were not generating revenues; (ii) turning to leased vehicles to maintain a steady flow of income; and (iii) dealing with repairs on the leased trucks as well. In addition, the Debtor has suffered tremendously from the recent, prolonged increase in fuel. Contrary to common belief, revenues per load have been dropping during the pandemic but the Debtor's fuel costs are approaching historic highs at nearly $24,000 per week. The Debtor believes the Small Business Association is the primary lender holding a first position interest in assets that constitute 'cash collateral', subject to the provisions of the Bankruptcy Code, including applicable avoidance actions. The Debtor also believes it is not yet obligated to begin repaying any debts owed to the SBA. Prior to the petition date, the Debtor entered into several loan documents with the SBA including: a. Loan Authorization and Agreement dated November 7, 2021; b. Note dated November 7, 2021; c. Security Agreement dated November 7, 2007; and d. a UCC-1 financing statement with the Nebraska Secretary of State at Filing No. 9721311579-8 filed at 9:07 AM CST on November 22, 2021. The Debtor also acknowledges that all or substantially all of its assets, subject to the provisions of the Bankruptcy Code, including applicable avoidance actions, are subject to the liens and security interests of a number of entities, including: a. Centris Federal Credit Union, who filed a UCC-1 financing statement with the Nebraska Secretary of State at Filing No. 9821311820-3 at 5:38 PM CST on November 22, 2021; and b. Samson MCA, LLC who filed a UCC-1 financing statement with the Nebraska Secretary of State at Filing No. 9722376217-1 on September 28, 2022. In addition, and for purposes of disclosure, First Bank & Trust from South Dakota possesses security interest in certain of the Debtor's assets covered by certificates of title; however, and to the Debtor's knowledge, First Bank and Trust does not possess a perfected lien in the Debtor's assets not covered by certificates of title. As adequate protection, the Debtor proposes to grant SBA continuing, valid, binding, enforceable, non-avoidable, and perfected postpetition security interests in and liens on the Prepetition Collateral. A copy of the motion and the Debtor's budget is available at https://bit.ly/3g02vTQ from PacerMonitor.com. The budget provides for total expenses, on a weekly basis, as follows: $55,306 for the week ending October 1, 2022; $57,406 for the week ending October 8 2022; $78,156 for the week ending October 15 2022; $54,156 for the week ending October 22 2022; $54,156 for the week ending October 29 2022; $55,306 for the week ending November 5, 2022; $78,156 for the week ending November 12, 2022; $54,156 for the week ending November 19, 2022; $54,156 for the week ending November 26, 2022; $54,156 for the week ending December 3, 2022; $55,306 for the week ending December 10, 2022; $54,156 for the week ending December 17, 2022; $78,156 for the week ending December 24, 2022; and $54,156 for the week ending December 31, 2022. About Midwest Overnite, Inc. Midwest Overnite, Inc. operates in the general freight trucking industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Neb. Case No. 22-80737) on October 6, 2022. In the petition signed by Chris Horn, Sr., president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Thomas L. Saladino oversees the case. Patrick R. Turner, Esq., at Turner Legal Group, LLC, is the Debtor's counsel. MOBILESMITH INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: MobileSmith, Inc. 5400 Trinity Road Suite 208 Raleigh, NC 27607 Business Description: MobileSmith is a developer of software applications for the healthcare industry. The Company's software products include a cloud-based collection of applications that run on its architected healthcare technology ecosystem. Chapter 11 Petition Date: October 12, 2022 Court: United States Bankruptcy Court Eastern District of North Carolina Case No.: 22-02319 Judge: Hon. Joseph N. Callaway Debtor's Counsel: JM Cook, Esq. J.M. COOK, P.A. 5886 Faringdon Place Suite 100 Raleigh, NC 27609 Tel: 919-675-2411 Email: j.m.cook@mjcookesq.com Total Assets as of June 30, 2022: $1,109,836 Total Liabilities as of June 30, 2022: $6,063,853 The petition was signed by Gleb Mikhailov as chief financial officer and chief executive officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BIPAKEA/MobileSmith_Inc__ncebke-22-02319__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Pototsky and Associates Services $60,000 16485 Collins Ave #1936 Sunny Isles Beach, FL, 33160 2. Zylun Staffing $44,209 Attn: Managing Agent or officer 210 North 1200 East, Ste 200 Lehi, UT, 84043-2309 3. TriNet HR Coporation (WF) - Social Security $35,688 Deferred SS Tax Owed to Tax (CARES Act) Previous Payroll 1100 San Leandro Blvd Vendor - CARES Act San Leandro, CA, 94577 4. Alidade Palisades I, LLC. $34,057 Attn: Managing Agent or Officer 40900 Woodward Ave Ste 250 Bloomfield, MI, 48304-5119 5. GDS Publishing $33,899 Attn: Managing Agent or Officer 55 Water St, 32nd Fl New York, NY, 10041 6. The FiscalHealth Group, LLC $29,150 Attn: Managing Agent or Officer 331 Lodgewood Ln, Lafayette, CO, 80026 7. TCM Bank NA Credit Card $24,725 (Software Credit Card) VISA Debt PO Box 4512 Carol Stream, IL, 60197-4512 8. Cherry Bekaert, LLP Accountant $21,500 Attn: Managing Agent or Officer Services 3800 Glenwood Ave, Ste 200 Raleigh, NC, 27612 9. Ocozzio Inc. $20,000 Attn: Managing Agent or Officer 1030 Stevens Creek Rd, Augusta, GA, 30907 10. Chetu $19,200 Attn: Managing Agent or Officer 1500 Concord Ter., Ste 100 Fort Lauderdale, FL, 33323 11. McGriff Insurance Services $15,186 Attn: Managing Agent or Officer 3605 Glenwood Ave Raleigh, NC, 27612 12. Lepore Associates, LLC $14,000 Attn: Managing Agent or Officer 2660 Crooked Stick Lane Mount Pleasant, SC, 29466 13. Definitive Healthcare $13,438 Attn: Managing Agent or officer 492 Old Connecticut Path, Ste 401 Framingham, MA, 01701 14. Revered $10,000 Attn: Managing Agent or officer 1053 E Whitaker Mill Rd, Ste 115 Raleigh, NC, 27604 15. Robert Smith $10,000 6242 Stockwell Dr Frisco, TX, 75034 16. Paul Enochs, MD $10,000 132 Bruce Drive Cary, NC, 27511 17. Milan DiGiulio, M.D. $10,000 Performance Orthopaedic Surgery & Sports Medicine 3701 NW Cary Pkwy, Suite 305 Cary, NC, 27513 18. Pendo $7,500 Attn: Managing Agent or Officer 301 Hillsborough St Raleigh, NC, 27603 19. Vidyard $6,930 Attn: Managing Agent or Officer 1 Queen St. N, Unit #301 Kitchener, ON, Canada 20. Rhonda Collins $6,251 169 Silverado Drive Georgetown, TX, 78633 MURPHY CREEK: Taps Law Office of Bonnie Bell Bond as Counsel ------------------------------------------------------------ Murphy Creek Estates, LLC seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ the Law Office of Bonnie Bell Bond, LLC as its legal counsel. The firm's services include: a. providing the Debtor with legal advice with respect to its rights and duties under Chapter 11; b. assisting the Debtor in the development of a plan of reorganization or sale of its property; c. preparing and filing pleadings, reports and actions, which may become necessary; d. representing the Debtor in litigation; and e. performing all other necessary legal services for the Debtor. The hourly rates charged by the firm's attorney and paralegals are as follows: Bonnie Bell Bond, Esq. $350 per hour Paralegals $125 per hour The firm will also seek reimbursement for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $17,000. Bonnie Bell Bond, Esq., a partner at the Law Office of Bonnie Bell Bond, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Bonnie Bell Bond, Esq. Law Office of Bonnie Bell Bond, LLC 8400 E. Prentice Avenue, Suite 1040 Greenwood Village, CO 80111 Tel: (303) 770-0926 Fax: (303) 770-0965 Email: bonnie@bellbondlaw.com About Murphy Creek Estates Murphy Creek Estates, LLC, a company in Greenwood Village, Colo., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 22-13594) on Sept. 19, 2022, with up to $10 million in both assets and liabilities. Judge Kimberley H. Tyson oversees the case. The Debtor is represented by Bonnie Bell Bond, Esq., at the Law Office of Bonnie Bell Bond. NATIONAL ASSISTANCE: Seeks Approval to Hire Senior Housing Services ------------------------------------------------------------------- National Assistance Bureau, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Senior Housing Services, LLC as its financial advisor and real estate broker. The firm will assist in the marketing and sale of the Summers Landing Bayberry facility, an assisted care living facility operated by the Debtor located at 315 Arrowood Blvd., Jonesboro, Ga. An advisory fee will be due at the closing of a transaction and will be computed by multiplying the total purchase price received by the Debtor or any selling interest owners by 7 percent. Dan Owens, a principal at Senior Housing Services, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Dan Owens Senior Housing Services, LLC 338 S. Sharon Amity Road, Suite 199 Charlotte, NC 28211-2806 Tel: (704) 641-1469 Email: dowens@seniorhousingservices.com About National Assistance Bureau National Assistance Bureau, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 15-69786) on Oct. 13, 2015, with up to $10 million in assets and up to $50 million in liabilities. William R. Hill Sr., president of National Assistance Bureau, signed the petition. Judge Ellis Monro oversees the case. Theodore N. Stapleton, P.C. serves as the Debtor's bankruptcy counsel while Lowenstein Sandler, LLP is the special counsel. The Debtor's Chapter 11 plan of liquidation was filed on Dec. 2, 2019, and was confirmed by order of the court entered on April 9, 2020. NERAM GROUP: Seeks to Hire Hahn Fife & Co. as Accountant -------------------------------------------------------- Neram Group, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Hahn Fife & Company, LLP as its accountant. The firm's hourly rates are as follows: Donald T. Fife $440 per hour Staffs $80 to $420 per hour Hahn Fife & Company will also be reimbursed for out-of-pocket expenses incurred. Donald Fife, a partner at Hahn Fife & Company, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Donald T. Fife Hahn Fife & Company, LLP 790 E. Colorado Blvd. 9th Floor Pasadena, CA 91101 Tel: (626) 796-9123 Email: dhahn@hahnfife.com About Neram Group Inc. Neram Group, Inc. is a company based in Orange, Calif. It is the fee simple owner of a 12-unit apartment building located at 1211 N. El Dorado Ave, Ontario, Calif., having a comparable sale value of $2.5 million. Neram Group filed a petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 22-10268) on Feb. 16, 2022, with $2,802,000 in assets and $1,675,000 in liabilities. Humberto Perez Figuerola, chief executive officer, signed the petition. Judge Scott C. Clarkson oversees the case. The Debtor tapped the Law Offices of Robert M. Yaspan as bankruptcy counsel, and Hahn Fife & Company, LLP as accountant. NORTH FORK COMMUNITY: Case Summary & Four Unsecured Creditors ------------------------------------------------------------- Debtor: North Fork Community Power, LLC P.O. Box 30032 Walnut Creek, CA 94598 Business Description: The Debtor is engaged in the business of electric power generation, transmission and distribution. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Northern District of California Case No.: 22-41001 Judge: Hon. Roger L. Efremsky Debtor's Counsel: John H. MacConaghy, Esq. MACCHONAGHY & BARNIER, PLC 645 First St. West, Suite D Sonoma, CA 95476 Tel: 707-935-3205 Fax: 707-935-7051 Email: macclaw@macbarlaw.com Total Assets: $24,338,720 Total Liabilities: $27,823,740 The petition was signed by Gregory J. Stangl as authorized agent. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LELXQXQ/North_Fork_Community_Power_LLC__canbke-22-41001__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Four Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Cal. EDD Unknown PO Box 826846 Sacramento, CA 94246-0001 2. Central Valley NMTC Energy Plant $5,820,000 Sub VII, LLC Under 1401 Fulton St., Ste. 604 Construction Fresno, CA 93721 3. Franchise Tax Board Unknown Special Procedures P.O. Box 2952 Sacramento, CA 95812 4. Internal Revenue Service Unknown Special Procedures (CIO) Philadelphia, PA 19114 NP LEHI: Seeks Approval to Hire Tucker Ellis as Bankruptcy Counsel ------------------------------------------------------------------ NP Lehi, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Tucker Ellis, LLP as its legal counsel. The firm's services include: (a) advising the Debtor on all legal issues as they arise; (b) advising the Debtor on issues related to existing loan obligations; (c) preparing pleadings, reports and other legal papers; (d) representing the Debtor in all proceedings related to its Chapter 11 case; (e) assisting the Debtor in the administration of its estate; and (f) providing other necessary legal services. The firm's hourly rates are as follows: Partners $670 per hour Associates $225 per hour Paraprofessionals $85 - $265 per hour Tucker Ellis will also be reimbursed for out-of-pocket expenses incurred. Thomas Fawkes, Esq., a partner at Tucker Ellis, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Thomas R. Fawkes, Esq. Tucker Ellis LLP 233 S. Wacker Dr. Suite 6950 Chicago, IL 60606 Tel: (312) 256-9425 Fax: (312) 624-6309 Email: thomas.fawkes@tuckerellis.com About NP Lehi NP Lehi, LLC is a single asset real estate (as defined in 11 U.S.C. Sec. 101(51B)). NP Lehi sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11399) on Aug. 19, 2022, with between $10 million and $50 million in assets and between $1 million and $10 million in liabilities. Patrick S. Nelson, manager, signed the petition. Judge Theodor Albert oversees the case. Daniel J. Kelly, Esq., at Tucker Ellis, LLP is the Debtor's counsel. OAK LAWN, IL: Moody's Lowers Rating on $36.5MM GOULT Debt to Ba2 ---------------------------------------------------------------- Moody's Investors Service has downgraded to Ba2 from Ba1 the rating on the Village of Oak Lawn, IL's general obligation unlimited tax (GOULT) debt. The outlook has been revised to stable from negative. The rating action applies to approximately $36.5 million in rated GOULT debt. RATINGS RATIONALE The downgrade to Ba2 reflects credit risk stemming from public safety pension contributions that do not meet state mandated levels which could result in intercept of state shared revenue. Despite an improved financial position, there is currently no long-term plan to address the village's elevated pension burden that is likely to continue to grow. The rating further incorporates the village's fixed costs that are high and yet do not capture the full risk of the growing liability. The village's ratio of unfunded pension liabilities to operating revenue remains one of the highest in Moody's rated portfolio of local government issuers. Although the village retains significant legal flexibility as a home rule municipality, its revenue raising authority is underutilized given growing leverage. Also incorporated is the village's large tax base with economic ties to the City of Chicago (Ba1 stable). RATING OUTLOOK The change of the outlook to stable from negative reflects the recently improved yet still narrow financial position that is, however, expected to remain stable over the next two years. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Budgetary adjustments that enable more adequate funding of pensions and moderate the overall liability FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Further narrowing of fund balance and liquidity -- Diversion of state revenues to pension funds that creates additional operating pressures LEGAL SECURITY The Village's general obligation unlimited tax debt is backed by its full faith and credit pledge and the authority to levy a dedicated property tax unlimited as to rate and amount. PROFILE The Village of Oak Lawn is a home rule community located about 15 miles southwest of downtown Chicago. The village provides comprehensive municipal services including emergency services, public safety and water distribution and sewer services to an estimated population of about 55,500. METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in January 2021. PAI HOLDCO: S&P Downgrades ICR to 'B-' on Elevated Leverage ----------------------------------------------------------- S&P Global Ratings lowered its rating on aftermarket auto parts distributor PAI Holdco Inc. (Parts Authority) to 'B-' from 'B'. At the same time, S&P lowered its issue level rating on the company's senior secured term loan to 'B-' from 'B'; the '3' recovery rating is unchanged. The stable outlook reflects that S&P anticipates Parts Authority will reduce its leverage over the next 12-24 months toward 7x and will generate positive free operating cash flow (FOCF) in 2023. S&P said, "The downgrade reflects Parts Authority's weaker credit metrics than our prior expectation, and our view that deleveraging below 6x is unlikely over the next 12-24 months. Parts Authority has faced inflationary cost pressures, particularly within payroll and fuel costs, which have led to S&P Global Ratings' adjusted EBITDA margin contracting more than 350 basis points (bps) in the second quarter of 2022 compared to the same quarter in the prior year. The margin pressure, coupled with around $300 million of incremental debt including revolver borrowings, led to more than 9x LTM leverage. The higher debt balances relative to a year ago are driven by $200 million of incremental term loan issuances and additional revolver draws to fund its acquisition activities and a dividend to the sponsor in November 2021. "We now expect EBITDA margin of around 8% for the full year, meaningfully below our previous expectation for margins sustained in the 10%-11% range and 100 bps below 2021. We believe the company can improve its margin profile in 2023 as it implements its operational improvement initiatives and cost pressures begin to abate, though we now expect leverage will remain higher than 7x at least over the next two years. "Through the first half of 2022, Parts Authority generated negative FOCF of about $23 million, driven by excess capital investments and inventory purchases related to a new greenfield distribution facility. Through the remainder of 2022, we expect more normal capital investments and modest working capital inflows, while ongoing cost headwinds pressure its cash generation. We forecast modestly negative FOCF of less than $10 million for the full year. Its improving profitability and normalized investing activity should enable consistently positive FOCF beginning in 2023. "Parts Authority's rapid growth strategy is driving leverage higher and constraining profitability. The company recorded more than $130 million of acquisitions in 2021 and over $30 million through the first half of 2022. Acquisitions are core to its growth objectives and we expect they will remain a long-term driver of sales growth but at a somewhat moderated pace. However, we also expect its ongoing growth initiatives to pose a headwind to Parts Authority's earnings as the company incurs acquisition and integration related expenses on a continual basis. We believe its S&P Global Ratings'-adjusted EBITDA margin will remain lower than 10% because of these expenses. Furthermore, the company's acquisition and capital investment activity in the past several quarters have exceeded internal cash generation, resulting in rising debt balances. "We believe Parts Authority will become more scrutinous of acquisition opportunities amid higher interest rates that will raise its borrowing costs. This should lead to a slower pace of growth at least over the next two years and accordingly, we forecast modest deleveraging. Our expectation for improved profitability and slower debt growth leads to projected leverage of 8.6x at the end of 2022 declining to about 7.5x in 2023. "The company has a good track record of integrating acquisitions and improving profitability by leveraging its existing infrastructure and technology to realize synergies. However, its acquisition strategy carries execution risk, particularly if acquired locations do not perform as anticipated while the acquisition-related integration and transaction charges weigh on EBITDA. We forecast Parts Authority will largely fund acquisitions with internally generated cash going forward, though we note that this will reduce the amount available for debt pay down or other uses. "The company operates in a largely nondiscretionary category, and we do not anticipate significant performance challenges tied to a recessionary environment. S&P Global Ratings forecasts a shallow recession in the U.S. in the first half of 2023 with slower consumer spending growth. However, the auto parts industry is insulated from economic cycles that affect consumer spending because mobility tends to remain resilient during a downturn and most of Parts Authority's merchandise offering comprises nondiscretionary, failure-related auto hard parts. Meanwhile, we expect consumers to defer new car purchases, raising the average age of vehicles and leading to greater maintenance needs. We also believe disciplined pricing industry-wide will help protect Parts Authority's profit margin. However, a weaker-than-anticipated macroeconomic environment with sharply higher unemployment that leads to significantly lower rates of mobility could adversely affect the company's performance because maintenance needs are tied to vehicle miles driven. "The stable outlook reflects our view that Parts Authority will continue to integrate acquisitions, expand EBITDA, and reduce leverage from current very high levels. However, we expect leverage will remain above 7x through 2023. We also forecast earnings growth and a somewhat moderated cadence of acquisitions will allow for consistently positive FOCF and reduce its reliance on revolver borrowings. "We could lower our rating on Parts Authority if we believe its capital structure is potentially unsustainable. This could occur if it is unable to reduce leverage and its ability to generate consistently positive FOCF dims, perhaps because of acquisition integration challenges that we expect to persist." S&P could raise its rating on Parts Authority if: -- The company lowers its S&P Global Ratings'-adjusted leverage below 6.5x and S&P does not anticipate future releveraging above this level; and -- It expands its S&P Global Ratings-adjusted EBITDA margin to around 10% or more on a sustained basis. ESG credit indicators: E-2, S-2, G-3 PALMS MEDICAL: Gets OK to Hire Boyer Terry as Legal Counsel ----------------------------------------------------------- Palms Medical Transport, LLC received approval from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Boyer Terry, LLC as its legal counsel. The firm's services include: a. advising the Debtor regarding its powers and obligations in the continued operation of its business and management of its property; b. preparing legal papers; c. continuing existing litigation, if any, to which the Debtor may be a party, and conducting examinations incidental to the administration of its estate; d. taking all necessary actions for the proper preservation and administration of the Debtor's estate; e. assisting the Debtor in the preparation and filing of its statement of financial affairs, schedules and lists; f. taking whatever actions are necessary with reference to the use by the Debtor of its property pledged as collateral, including cash collateral, if any; g. asserting, as directed by the Debtor, all claims it has against others; h. working with the Subchapter V trustee to comply with all provisions of the Bankruptcy Code and proposing a consensual plan of reorganization; and i. performing all other necessary legal services for the Debtor. Boyer Terry will be paid at these rates: Attorneys $300 to $370 per hour Paralegals $100 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. The Debtor paid a pre-bankruptcy advance deposit of $15,000. After deducting fees and expenses, the balance of the retainer of $11,893 will be held in trust by the firm. Wesley Boyer, Esq., a partner at Boyer Terry, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Wesley J. Boyer, Esq. Boyer Terry, LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Tel: (478) 742-6481 Email: Wes@BoyerTerry.com About Palms Medical Transport Palms Medical Transport, LLC, an ambulance service in Byron, Ga., filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 22-51074) on Sept. 15, 2022. Jenny Martin Walker has been appointed as Subchapter V trustee. At the time of the filing, the Debtor reported $1 million to $10 million in both assets and liabilities. Judge James P. Smith oversees the case. The Debtor is represented by Wesley J. Boyer, Esq., at Boyer Terry, LLC. PANOP CAB: Claims Will be Paid From Continued Operations -------------------------------------------------------- Panop Cab, Corp., and its Debtor affiliates filed with the U.S. Bankruptcy Court for the Eastern District of New York an Amended Small Business Disclosure Statement for the Amended Chapter 11 Plan of Reorganization dated October 6, 2022. Panop Cab, MLS Management Corp., Rainee Trans, Corp., and 222 East, Corp., are taxi mini fleet corporations located at 1620 Caton Avenue, Brooklyn, New York 11226. The claims of National Credit Union Administration Board, being the main creditor of the cases, was settled pursuant to terms of the Settlement Agreement and approved by the Court order, entered on March 1, 2022. The Settlement agreement was funded in part from the contribution of personal funds of the Debtors' principal, Michael L. Simon, as well as from funds received from the refinancing of Mr. Simon's property. The payment under the Settlement agreement with National Credit Union Administration Board was made in full on March 2, 2022. All remaining claims, including administrative claims, will be funded from sums accumulated in the Debtors' DIP accounts from the date of the petition and from continuing business operations, continuously from the date of the petition. Priority Unsecured Claim consist of the unsecured priority claim of New York State Department of Taxation & Finance in the total amount of $10,459.69. The claim shall be paid in full in one lump sum payment on the effective date of the Plan. Priority Unsecured Claim consists of the unsecured priority claim of NYS Department of Finance in the amount of $10,713.63. The claim shall be paid in full in one lump sum payment on the effective date of the Plan. Class I shall consist of the secured and unsecured claims of the taxi medallion creditor, National Credit Union Administration Board as Liquidating Agent for LOMTO Federal Credit Union, in the amount of $4,631,268.25. According to the terms of the Settlement Agreement, the Debtors retained the taxi medallions # 6J54; 6J55, 4P21; 4P22, 7Y65, 1K40; 1K41 and effectuated the retention of the loan collateral by paying a lump sum of $3,000,000.00 in full settlement of all loan obligations and any and all personal guarantees. The lump sum payment of $3,000,000.00, will be/was paid to the National Credit Union Administration within 5 business days after the entry of the signed order for the approval of the 9019 Motion, in full settlement of the appurtenant loans and National Credit Union Administration Board released all claims it had against the Debtors and their principal, Michael L. Simon. The payment under the Settlement agreement was made in full on March 2, 2022. Class I is impaired. Michael L. Simon, as a Debtors' principal and the sole shareholder, will continue to be employed by the reorganized debtors. A full-text copy of the Amended Disclosure Statement dated October 6, 2022, is available at https://bit.ly/3g2K1C9 from PacerMonitor.com at no charge. Attorneys for the Debtors: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 3099 Coney Island Avenue Brooklyn, NY 11235 Telephone: (718) 513-3145 About Panop Cab, et al. Panop Cab, Corp., et al., are taxi mini fleet corporations located at 1620 Caton Avenue, Brooklyn, New York 11226. Panop Cab, Corp., based in Brooklyn, NY, and its debtor-affiliates sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case No. 19-47710) on Dec. 26, 2019. In their petitions, the Debtors estimated these assets and liabilities: Total Assets Total Liabilities ------------ ----------------- Panop Cab, Corp. $310,200 $1,135,000 Matreiya Trans Corp. $157,164 $330,000 222 East Corp. $314,700 $1,135,000 Rainee Trans, Corp. $312,752 $1,135,000 MLS Managment Corp $311,692 $1,135,000 The petitions were signed by Michael L. Simon, president. The LAW OFFICES OF ALLA KACHAN, P.C. serves as bankruptcy counsel. PARETEUM CORP: Gets Court Approval for Bankruptcy Plan ------------------------------------------------------ Alex Wolf of Bloomberg News reports thatPareteum Corp., a bankrupt provider of cloud communications services, won court approval to liquidate and pay back creditors, using a trust funded by an asset sale valued at about $60 million. Pareteum will create a $1.25 million liquidating trust to pay a class of unsecured creditors, according to a Chapter 11 plan approved Thursday by Judge Lisa G. Beckerman of the US Bankruptcy Court for the Southern District of New York. The trust will also pursue any potential causes of legal action that could bolster cash recoveries for the creditor group, the plan said. About Pareteum Corporation Pareteum Corporation is a cloud software communications platform company which provides communications platform-as-a-service (CPaaS) solutions offering mobility, messaging, and connectivity and security services and applications. It has operations in North America, Latin America, Europe, Middle East, Africa, and the Asia-Pacific region. Pareteum and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10615) on May 15, 2022. In the petition signed by Laura W. Thomas, interim chief financial officer, Pareteum disclosed $52,043,000 in assets and $10,486,000 in liabilities. Judge Lisa G. Beckerman oversees the cases. The Debtors tapped Togut, Segal & Segal, LLP as bankruptcy counsel; King & Spalding, LLP as special counsel; FTI Capital Advisors, LLC as investment banker; FTI Consulting, Inc. as financial advisor; and Kurtzman Carson Consultants, LLC as claims, noticing and balloting agent. PATTERN ENERGY: Moody's Affirms Ba3 CFR & Alters Outlook to Pos. ---------------------------------------------------------------- Moody's Investors Service changed the outlook of Pattern Energy Operations LP ("Pattern Operations") to positive from stable. Concurrently, Moody's affirmed Pattern Operations' Ba3 corporate family rating, Ba3 senior unsecured rating and Ba3-PD Probability of Default rating. Pattern Operations' speculative grade liquidity rating is unchanged at SGL-2. RATINGS RATIONALE "The change in Pattern Operations' outlook to positive reflects the expected improvement in financial metrics driven by management's recent credit supportive initiatives" said Natividad Martel, Vice President - Senior Analyst. "Specifically, Moody's expect that the ratio of debt to EBITDA will range between 7.0-8.0x at year-end 2022 and continue to improve as the company pursues a prudent and conservatively financed growth strategy" said Natividad Martel, Vice President - Senior Analyst. For example, Pattern Operations' holding company debt did not increase to fund the recent addition of the large 1,050 MW Western Spirit windfarm to the portfolio earlier this year. This asset "drop down" was implemented through an in-kind contribution with the sponsors also making a cash equity contribution of $233 million. In addition, the full repayment of $199 million outstanding under the company's bank credit facility at year-end 2021 further underpins Moody's expectation of an improvement in financial metrics at year-end 2022. These initiatives will help to reverse Pattern Operations' weak financial performance in 2021 which was negatively affected by the February 2021 severe Texas winter storm. The company also deleveraged slower than Moody's had expected last year following credit facility borrowings and project debt incurred at the Spring Valley and Lost Creek projects to fund the repayment of its $260 million 364-day term-loan. Pattern Operations' Ba3 rating factors in the long-term contracts on the vast majority of its assets with hedging arrangements limited to its four wind farms in Texas. The company reports that its assets' remaining average contractual life is approximately 12 years. The rating also considers the portfolio's good credit quality counterparties and operations that are diversified across different regions of both the US and Canada. This geographic diversity helps to mitigate the exposure of its cash flow to volatile wind resources given its portfolio's high concentration in wind energy. Pattern Operations remains exposed to some construction risk through its sister company, Pattern Energy Group Holdings 2 LP (Pattern Development). This arises largely through the intertwined management of the flow of funds between all of the Pattern subsidiaries by the issuer's parent company, Pattern Energy Group LP (PEG LP), with the group's liquidity supported with borrowings under the credit facilities entered by Pattern Operations' finance subsidiaries. Liquidity analysis Pattern Operations' SGL-2 speculative grade liquidity rating reflects the company's good liquidity. In November 2021, Pattern US Finance Company LLC and Pattern Canada Finance Company ULC (co-borrowers and co-guarantors) entered into a new $150 million letter of credit (LC) facility (outstanding LC balances $71 million and $45 million at the end of June 2022 and December 2021). This facility, as well as their $375 million revolving bank credit facility, are scheduled to expire in August 2026. As of the end of June 2022, the availability under the revolving credit facility amounted to $346 million with outstanding LCs aggregating $29 million. As mentioned earlier, no borrowings were outstanding at the end of June and March 2022 compared to the outstanding borrowings of $199 million at year-end 2021. The SGL-2 also anticipates that Pattern US Finance Company LLC and Pattern Canada Finance Company ULC will remain comfortably in compliance with the financial covenants embedded in the credit facility. These covenants require that the subsidiaries maintain a first lien leverage ratio (the ratio of borrower first lien debt to borrower cash flow) that does not exceed 3.50:1.00 and an interest coverage ratio (the ratio of borrower cash flow to borrower interest expense) that is not less than 1.75:1.00. However, in the absence of first lien debt in the issuer's capital structure only the interest coverage ratio covenant applies. The ratio was 5.78x at the end of June 2022. Borrowings under the revolving credit facility are subject to material adverse change representation clauses, a credit and liquidity negative. Borrowings under the facility are also used to support liquidity needs for the projects under development by Pattern Operations' sister company, Pattern Development. For example, last year, Pattern Canada Finance Company ULC issued a Revolving Intercompany Demand promissory note to the sister company that is developing the Lanfine Wind project, the next asset expected to be dropped be down to Pattern Operations upon its completion expected by year-end or early 2023. The SGL-2 reflects Pattern Operations' relatively modest capital requirements and Moody's expectation of a continuation of the company's credit supportive strategy to fund growth, which will largely consist of in-kind contributions as it was the case for Western Spirit earlier this year. Moody's anticipate that new projects will be contributed with their final capital structure already in place that will include a combination of tax equity partnerships and back levered project debt. Currently, Pattern Operations has nine unencumbered assets, however, they have entered into tax equity partnerships on these assets. In most cases, the payments under these tax equity partnerships reduce the amount of cash that is distributable to Pattern Operations except under the Broadview and Grady pay-go tax equity arrangements. Affirmations: Issuer: Pattern Energy Operations LP Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4) Outlook Actions: Issuer: Pattern Energy Operations LP Outlook, Changed To Positive From Stable FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an Upgrade Pattern Operations' ratings could be upgraded if, as Moody's expect, its consolidated ratio of debt to EBITDA remains below 7.5x or the ratio of CFO pre- changes in working capital (CFO pre-W/C) to debt remains above 9%, on a sustainable basis. Both ratios are calculated on a run-rate basis considering the full-year financial performance of any new assets, utilizing proportional consolidation of unconsolidated projects, excluding net payments under the tax equity partnerships, and including any parent debt outstanding at Pattern Energy Group LP. Moody's understand the parent company remains unencumbered. Factors that could lead to a Downgrade A stabilization of the outlook or a downgrade of the CFR is likely if Moody's expect a deterioration in Pattern Operations' financial performance such that its consolidated ratio of debt to EBITDA exceeds 8.5x or CFO pre-W/C to debt falls below 5%, on a sustained basis. Both ratios are calculated on a run-rate basis considering the full-year financial performance of any new assets, utilizing proportional consolidation of unconsolidated projects, excluding net payments under the tax equity partnerships and including any unencumbered parent debt outstanding at Pattern Energy Group LP. Pattern Operations' outlook could also be stabilized and the ratings could be lowered if significant exposure to construction risk materializes at PEG LP and/or at Pattern Operations' sister companies. The Ba3 rating on the senior unsecured notes could be downgraded upon changes in the seniority or composition of the group's capital structure including, for example, if incremental senior secured debt in the form of term loans is issued and adversely affects the recovery prospects of the senior unsecured notes. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in May 2017. Pattern Energy Operations LP ("Pattern Operations") is a growth-oriented renewable energy company that owns and operates a fleet of wind farms and transmission assets. Its portfolio of renewable assets currently consist of 25 assets with an installed capacity that aggregates around 5.3 GW, or nearly 3.4 GW on an ownership-adjusted basis. Pattern Energy Group LP (parent or PEG LP) is the issuer's direct parent company and also owns Pattern Energy Group Holdings 2 LP (Pattern Development) and Green Power Investment Corporation (GIP). Both sister companies have a large pipeline of new renewable projects in North America and Japan. GIP indirectly owns the five Japanese assets previously owned by Pattern US Finance Company. PG&E CORP: Fire Victim Trust Sells 35 Million PG&E Shares --------------------------------------------------------- The PG&E Fire Victim Trust (FVT) announced that on Oct. 5, 2022, it sold 35 million shares of PG&E stock as part of its work to compensate the victims of fires in California from 2015 to 2018. The Trust is unique in its creation as it was funded with both cash and shares of stock when it was formally created in 2020 pursuant to PG&E's Chapter 11 Plan of Reorganization. "While the stock price has always been unpredictable, our work at the Trust has remained the same: to help fire victims recover from the devastation of the fires in California and move on with their lives," said Trustee Cathy Yanni. "Every decision our team makes—including the sale of stock—is driven by this mission. The sale will help us continue resolving claims and getting money to fire victims equitably and efficiently." On July 1, 2020, 476,995,175 shares of common stock were transferred to the Trust followed on August 3, 2020, with an additional 748,415 shares transferred. Any sale, disposition or other transaction involving the Trust's shares follow strict guidelines as outlined in filings with the U.S. Bankruptcy Court and the U.S. Securities and Exchange Commission. As of September 30, the Trust had issued determination notices to 82% of all claimants and paid claimants $5 billion. Less than 1% of all claims have been appealed. When the Trust was created, it was funded half in cash, and half in PG&E stock. "The Trust is a limited fund, meaning it has finite money," said Tim Jorstad, Trust CFO. "We are required to administer claims and pay eligible fire victims each an equal proportion of awards. The sale of stock ensures every victim will receive the same pro rata percentage as everyone else." About The Fire Victim Trust The Fire Victim Trust evaluates, administers, processes and resolves eligible claims arising from the 2015 Butte Fire, 2017 North Bay Fires, and 2018 Camp Fire. Under the direction of the Trustee and Claims Administrator, the Fire Victim Trust provides an efficient and equitable process to review claims and compensate fire victims for both economic and noneconomic damages caused by these fires, including destruction or damage to real estate and personal property, additional living expenses, lost wages, business losses, personal injury or death and related medical expenses, and emotional distress. To date, the Fire Victim Trust has disbursed $5 billion to fire victims. For more information about the Fire Victim Trust, please visit www.firevictimtrust.com. About PG&E Corporation PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company, faced extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 2018. The utility faced an estimated $30 billion in potential liability damages from California's deadliest wildfires of 2017 and 2018. On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary, Pacific Gas and Electric Company, filed voluntary Chapter 11 petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). As of Sept. 30, 2018, the Debtors, on a consolidated basis, had reported $71.4 billion in assets on a book value basis and $51.7 billion in liabilities on a book value basis. Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP served as PG&E's legal counsel, Lazard as its investment banker and AlixPartners, LLP as the restructuring advisor to PG&E. Prime Clerk LLC is the claims and noticing agent. PG&E has appointed James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Morrison & Foerster LLP served as the Debtors' special regulatory counsel. Munger Tolles & Olson LLP also served as special counsel. The Office of the U.S. Trustee appointed an official committee of creditors on Feb. 12, 2019. The Committee retained Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor; Centerview Partners LLC as investment banker; and Epiq Corporate Restructuring, LLC as claims and noticing agent. On Feb. 15, 2019, the U.S. trustee appointed an official committee of tort claimants. The tort claimants' committee is represented by Baker & Hostetler LLP. * * * PG&E Corporation and Pacific Gas and Electric Company announced July 1, 2020, that PG&E has emerged from Chapter 11, successfully completing its restructuring process and implementing PG&E's Plan of Reorganization ("Plan") that was confirmed by the United States Bankruptcy Court on June 20, 2020. For the benefit of fire victims, the Plan provided for a Fire Victim Trust, which was funded with an oft-stated value of $13.5 billion, to be half in cash and half in new company PG&E common stock. The $6.75 billion in cash was paid. With respect to the stock consideration, 478 million shares of PG&E stock were delivered to the Fire Victim Trust in accordance with an agreed-to formula under the Plan. PRINCIPLE ENTERPRISES: Taps Compass Advisory as Financial Advisor ----------------------------------------------------------------- Principle Enterprises, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Compass Advisory Partners, LLC as its financial advisor. The firm's services include: a. performing a limited review of the Debtor's recent financial performance, including a review of the recent financial statements, audit reports, schedules and statement of financial affairs to be filed with the court; b. providing financial advisory services in connection with the potential reorganization and refinance of the Debtor's business on a going-concern basis pursuant to the requirements of the Bankruptcy Code; c. reviewing and evaluating the refinance offers or bids and supplemental documents as submitted to the Debtor or its professionals; d. preparing or reviewing financial reports; e. assisting the Debtor in negotiations with all the parties involved in its Chapter 11 case; f. providing other financial support services to the Debtor and its professionals, as requested. Compass will be paid at these rates: Jack Teitz $375 per hour Nick Arrington $375 per hour Aimee E. Rice $300 per hour Administrative Services $75 per hour The firm will receive a retainer in the amount of $20,000. Nicholas Arrington, managing member of Compass, disclosed in a court filing that his firm is "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Nicholas W. Arrington, Esq. Compass Advisory Partners, LLC 480 One Eleven Place Cookeville, TN 38506 Phone: 931-400-0012 Fax: 931-400-0013 Email: Nick@CompassAdvisoryPartners.com About Principle Enterprises Principle Enterprises, LLC offers support activities for the mining industry. The company is based in Canonsburg, Pa. Principle Enterprises sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21779) on Sept. 9, 2022, with between $10 million and $50 million in both assets and liabilities. Judge Gregory L. Taddonio oversees the case. The Debtor tapped Whiteford, Taylor & Preston, LLP as bankruptcy counsel; Compass Advisory Partners, LLC as financial advisor; and Portage Point Partners, LLC as investment banker. PRINCIPLE ENTERPRISES: Taps Portage Point as Investment Banker -------------------------------------------------------------- Principle Enterprises, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Portage Point Partners, LLC as its investment banker. The firm's services include: a. assisting the Debtor in evaluating any potential financing, contacting potential sources of capital as the Debtor may designate, and in implementing such financing; b. assisting the Debtor in preparing documentation within Portage's area of expertise that is required in connection with any financing; c. attending meetings of the board of directors (or similar governing body) of the Debtor with respect to matters on which Portage has been engaged to advise; and d. providing testimony, as necessary, with respect to matters on which Portage has been engaged to advise in any proceeding in the Debtor's Chapter 11 case. Portage will receive a retainer in the amount of $50,000 to be credited against any financing fee equal to $300,000, and payable upon consummation of the financing. As disclosed in court filings, Portage is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jason A. Cohen Portage Point Partners, LLC 300 North LaSalle, Suite 1420 Chicago, IL 60654 Phone: (917) 686-4013 Email: jcohen@pppllc.com About Principle Enterprises Principle Enterprises, LLC offers support activities for the mining industry. The company is based in Canonsburg, Pa. Principle Enterprises sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21779) on Sept. 9, 2022, with between $10 million and $50 million in both assets and liabilities. Judge Gregory L. Taddonio oversees the case. The Debtor tapped Whiteford, Taylor & Preston, LLP as bankruptcy counsel; Compass Advisory Partners, LLC as financial advisor; and Portage Point Partners, LLC as investment banker. PRINCIPLE ENTERPRISES: Taps Whiteford Taylor & Preston as Counsel ----------------------------------------------------------------- Principle Enterprises, LLC received approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Whiteford Taylor & Preston, LLP as its legal counsel. The firm's services include: (a) advising the Debtor with respect to its powers and duties in the continued management and operation of its business; (b) taking all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on its behalf, defense of any actions commenced against the estate, and negotiations concerning all litigation in which the Debtor may be involved, and any objections to claims filed against the estate; (c) attending meetings and negotiating with representatives of creditors and other parties in interest, and advising and consulting on the conduct of the Debtor's Chapter 11 case, including all of the legal and administrative requirements of operating in Chapter 11; (d) preparing legal papers; (e) appearing before the bankruptcy court, appellate courts, and any other courts; (f) preparing and negotiating a plan of reorganization, disclosure statement and all related documents, and taking any necessary action to obtain confirmation of the plan; and (g) performing all other necessary legal services for the Debtor. The hourly rates charged by the firm's attorneys and paraprofessionals are as follows: Junior Associates $325 per hour Partners $740 per hour Paraprofessionals $310 - $350 per hour Daniel Schimizzi, Esq., a partner at Whiteford Taylor, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Daniel R. Schimizzi, Esq. Michael J. Roeschenthaler, Esq. Whiteford Taylor & Preston, LLP 11 Stanwix Street Suite 1400 Pittsburgh, PA 15222 Tel: (412) 275-2401 Fax: (412) 275-2404 Email: mroeschenthaler@wtplaw.com dschimizzi@wtplaw.com About Principle Enterprises Principle Enterprises, LLC offers support activities for the mining industry. The company is based in Canonsburg, Pa. Principle Enterprises sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21779) on Sept. 9, 2022, with between $10 million and $50 million in both assets and liabilities. Judge Gregory L. Taddonio oversees the case. The Debtor tapped Whiteford, Taylor & Preston, LLP as bankruptcy counsel; Compass Advisory Partners, LLC as financial advisor; and Portage Point Partners, LLC as investment banker. RAGING BULL: Case Summary & One Unsecured Creditor -------------------------------------------------- Debtor: Raging Bull Investments Limited 7706 Santee Terrace Lake Worth, FL 33467 Chapter 11 Petition Date: October 12, 2022 Court: United States Bankruptcy Court Southern District of Florida Case No.: 22-17916 Judge: Hon. Mindy A. Mora Debtor's Counsel: Craig I. Kelley, Esq. KELLEY, FULTON & KAPLAN, P.L. 1665 Palm Beach Lakes Blvd The Forum - Suite 1000 West Palm Beach, FL 33401 Tel: 561-491-1200 Email: craig@kelleylawoffice.com Total Assets: $600,000 Total Liabilities: $45,313,808 The petition was signed by Mark S. Croft, manager/majority member Raging Bull, LLC, general partner. The Debtor listed EOG Resources, Inc. as its only unsecured creditor holding a claim of $300,000 for oil and gas operating expenses. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/Q7O5S3Q/Raging_Bull_Investments_Limited__flsbke-22-17916__0001.0.pdf?mcid=tGE4TAMA REVA HOSPITALITY: Case Dismissed a Week After Filing ---------------------------------------------------- REVA Hospitality Garland LLC filed for chapter 11 protection in the Eastern District of Texas. According to court filings, REVA Hospitality Garland estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. Judge Brenda Rhoades on Oct. 11, 2022, entered an order dismissing the Chapter 11 case with prejudice to the refiling of any petition for a period of 90 days. REVA filed the case in violation of Federal Rule of Bankruptcy Procedure 1007(a)(1) and Local Rule of Bankruptcy Procedure 1007(a)(I)(A), failing to present to the Court the creditor matrix, the required alphabetized creditor list which included the name and last known mailing address for every listed creditor. About REVA Hospitality Garland REVA Hospitality Garland LLC is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B). REVA Hospitality Garland LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-41307) on Oct. 4, 2022. In the petition filed by Mejul Gajera, as manager, the Debtor reported assets and liabilities between $500,000 and $1 million. The Debtor is represented by Joyce W. Lindauer of Joyce Lindauer, Attorney. RHRAMDHAN GROUP: Files for Chapter 11 to Stop Foreclosure --------------------------------------------------------- RJRamdhan Group LLC filed for chapter 11 protection in the Middle District of Florida. RJRamdhan Group is in the business of retreading semi trucks tires. The Debtor operates from, and owns the business premises located at 2060 W 21st Street Jacksonville, FL 32209. The Debtor said it filed for Chapter 11 bankruptcy as it was facing foreclosure on investment property due to the Debtor getting Covid-19 and being admitted to hospital, where he spent 6 months paralyzed from the neck down in ICU. Because of this, the business was put on hold and he could no longer operate, which caused him to fall behind on mortgage payments. The Debtor is better and with the help of his brother, he has resumed operations. According to court filings, RJRamdhan Group LLC estimates $1 million to $10 million in debt to 1 to 49 creditors. The petition states that the funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 9, 2022, at 1:00 PM. U.S. Trustee (Jax) will hold the meeting telephonically. Call in Number: 866-718-3566. Passcode: 2721444#. Proofs of claim are due by Dec. 13, 2022. About RJRamdhan Group RJRamdhan Group LLC is in the business of retreading semi trucks tires, operating from its owned premises located at 2060 W 21st Street Jacksonville, FL 32209. RJRamdhan Group LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01998) on Oct. 4, 2022. In the petition filed by Jonathan Ramdhan, as manager, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. The Debtor is represented by Chad T Van Horn of Van Horn Law Group PA. RXO INC: S&P Assigns 'BB+' ICR on Spin-Off From XPO Logistics ------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issuer credit rating to freight broker RXO Inc. S&P also assigned its 'BB+' issue-level rating and '3' recovery rating (rounded estimate: 60%) to the company's proposed unsecured notes. The positive outlook reflects S&P's expectation that credit metrics should improve in the 12 months following the close of the transaction with funds from operations (FFO) to debt increasing to around 60% in 2024 from around 50% in 2022, despite a weaker macroeconomic environment, as the company continues to increase its market share and benefit from its proprietary technology. S&P said, "We believe RXO benefits from its position as a large freight broker, range of service offerings, and technology investments.As an asset-light logistics provider, RXO does not maintain a fleet of vehicles and instead acts as an intermediary between shippers and carriers. The company ranks among the largest participants in the freight brokerage sector, generating $4.7 billion in total revenue in 2021. Within its core truck brokerage business, the company maintains a large network of approximately 98,000 carriers as of June 30, 2022. We believe this scale allows RXO to meet shippers' demand and provide reliable service even during periods of constrained capacity. Its large scale also provides the company access to a significant amount of data, which it incorporates into its various technology offerings including RXO Connect, a digital brokerage software platform that matches shippers and carriers, allowing customers to post loads and truckers to bid on them. We believe the company's historical investments in technology have allowed it to procure capacity more cost effectively, contributing to higher gross margins compared with those of its peers." Outside of truck brokerage, RXO also offers complementary services including managed transportation and air and ocean forwarding. The company is also the largest U.S. provider of last-mile delivery services for big and bulky items, such as furniture and appliances. These additional services provide some diversification. However, RXO derives a larger portion of its total revenue from truck brokerage compared to some peers and is also more geographically concentrated in the U.S. S&P said, "We also acknowledge the highly fragmented nature of the freight brokerage sector. Even the largest participants in the space hold modest market shares, and though RXO ranks among the largest, it is significantly smaller than its largest competitors including C.H. Robinson Worldwide Inc., reporting about 20% of C.H. Robinson's revenue in 2021. Compared to other logistics subsectors, brokerage contracts tend to be shorter, at around 12 months in length, and barriers to entry tend to be lower due to the more commoditized service offerings and minimal upfront capital expenditures. The increased use of digital platforms has increased these barriers somewhat, but this has also led to new entrants from technology companies, including Uber Technologies Inc. and Amazon.com Inc. Nonetheless, we anticipate RXO will benefit from its early investments in technology, which should support customer and carrier retention. "We forecast revenue will moderate in 2023 amid lower freight demand.S&P Global Ratings expects the U.S. will enter into a recession in early 2023 amid inflationary pressures and rising interest rates. We also expect real consumer spending will slow, and retail restocking activity will slow given high inventory levels. Spot market pricing for full truckload transportation has already declined about 25% in September from the prior year according to DAT Solutions. We believe current pricing reflects more normalized levels compared to the record-high levels observed in recent years. Pricing depends on overall freight demand and the number of carriers that choose to leave the market, but we do not anticipate significant increases during the next few quarters. Pricing for ocean and air transportation has also declined, and we believe demand for the large household items for which RXO arranges delivery has also fallen. RXO, like other brokers, reports transportation costs as revenue, which it then bills to its customers. Therefore, we forecast revenue growth will moderate to the low-single-digit percent area in 2023 from the mid-single-digit percent area in 2022, with market share gains partially offsetting lower transportation pricing. We forecast revenue then increases in the high-single-digit percent area in 2024, as the macroeconomic environment improves." RXO's EBITDA margins should remain mostly stable. Like its peers, RXO generally purchases transportation on the spot market and then, on a portion of loads, bills customers under pre-negotiated rates. This results in lower gross margins during periods of rising prices when the spot market price exceeds contracted rates. Conversely, during periods of declining prices, gross margins increase because the broker is able to purchase capacity below contracted rates. S&P said, "Given the current declining price environment, we would typically assume RXO's margins improve over the next few quarters. However, we expect operating costs will offset these gains, as the company builds out its corporate functions following the spin-off from XPO Logistics Inc. As a result, we forecast EBITDA margins will remain in the low-7% area through 2023 before increasing modestly to the mid-7% area in 2024. Stable margins and revenue growth should result in EBITDA growth on an absolute basis and improve credit metrics. We forecast funds from operations (FFO) to debt will also improve to around 60% by 2024 from around 50% in 2022 and 2023, while debt to EBITDA also improves to around 1.25x from the mid-1x area over the same period. On a cash flow basis, we expect operating cash flow (OCF) will improve during the next 12-24 months, benefitting from the declining price environment. Thus, we forecast OCF to debt will improve to the high-40% area in 2023 and 2024 from around 40% in 2022." S&P said, "We expect RXO's financial policy will support higher ratings. Our ratings and positive outlook on RXO incorporate our view that the company will pursue a relatively conservative financial policy. Credit metrics benefit from its lower debt load compared to other rated logistics companies, and we do not anticipate the company will engage in debt-financed acquisitions over the next 12-24 months. Although we believe RXO may return some excess cash flow to shareholders through dividends or share repurchases, we assume its cash balance remains around $100 million to $150 million through 2024, consistent with levels immediately following the spin-off. We would expect to raise our rating if credit metrics improve in line with our current forecast, and financial policy remains unchanged. "The positive outlook reflects our expectation that RXO's credit metrics will improve following the spin-off of the company from XPO Logistics. Although we expect spot market pricing for trucking will decline over the next 12 months, we believe RXO will benefit from its ability to procure capacity at competitive rates and continue to increase market share within its core brokerage segment. We also believe credit metrics will benefit from the company's financial policy that we expect will support higher ratings. We forecast largely stable credit metrics through 2023, with FFO to debt of around 50% before improving to around 60% thereafter. We also forecast debt to EBITDA will remain in the mid-1x area through 2023, improving to around 1.25x thereafter. "We could revise our outlook to stable over the next 12 months if we no longer believe FFO to debt will improve in line with our current expectations and remains below 60% on a sustained basis." This could occur if: -- Freight transportation demand and/or pricing declines more than S&P currently expects; or -- The company pursues a more aggressive financial policy, such as pursuing debt-funded acquisitions or shareholder rewards. S&P said, "We could raise our ratings on RXO over the next 12 months if FFO to debt increases above 60% and we expect it to stay there on a sustained basis. We would also need to continue to expect the company's financial policy would support these metrics." ESG credit indicators: E-2; S-2; G-2 S&P said, "ESG credit factors have an overall neutral influence on our credit rating analysis of RXO. Like its former parent, XPO, RXO's chairman will also be its largest shareholder. However, we do not expect this will lead to the prioritization of his interests over those of other stakeholders. Additionally, unlike XPO, the company does not operate a fleet of vehicles, as it is an asset-light logistics company that arranges for transportation operated by others." S-TEK 1 LLC: Gets OK to Hire NM Financial as Special Counsel ------------------------------------------------------------ S-Tek 1, LLC received approval from the U.S. Bankruptcy Court for the District of New Mexico to employ NM Financial & Family Law, P.C. as its special counsel. The Debtor requires a special counsel to contest the fees charged by its former bankruptcy counsel, Nephi D. Hardman, Attorney at Law, LLC. NM Financial will be paid at these rates: Don Harris, Esq. $350 per hour Dennis A. Banning, Esq. $300 per hour Kat Fox, Esq. $245 per hour Law Clerks $180 per hour Legal Assistants $100 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. The firm received a retainer of $4,000. Dennis Banning, Esq., a partner at NM Financial, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Dennis A. Banning, Esq. NM Financial & Family Law, P.C. 320 Gold Avenue SW, Suite 1401 Albuquerque, NM 87102 Tel: (505) 503-1637 Email: dfh@nmfinanciallaw.com About S-Tek 1 S-Tek 1 LLC, also known as SurvTek -- https://www.survtek.com –- is a land surveying and consulting firm providing services to both the private and public sectors throughout New Mexico. It is based in Albuquerque, N.M. S-Tek 1 filed a Chapter 11 petition (Bankr. D.N.M. Case No. 20-12241) on Dec. 2, 2020, with $355,177 in assets and $2,251,153 in liabilities. Randy Asselin, managing member, signed the petition. Judge Robert H. Jacobvitz presides over the case. The Debtor tapped Nephi D. Hardman Attorney at Law, LLC as its bankruptcy counsel and FPM & Associates, LLC as its accountant. SAS AB: Reaches Chapter 11 Lease Amendments for 36 Aircraft ----------------------------------------------------------- SAS AB announced Oct. 5, 2022, that it has reached agreements with 10 lessors, representing in aggregate 36 aircraft, to amend the terms of existing aircraft and equipment lease agreements. The agreements constitute an important step in reconfiguring the fleet and achieving the SEK 7.5 billion in annual cost savings under the SAS FORWARD plan. The amended lease agreements are subject to approval by the U.S. Bankruptcy Court for the Southern District of New York, and to the plan of reorganization in the chapter 11 process becoming effective. The amended lease agreements have been entered into with 10 lessors – AerCap Holdings N.V., Aergo Capital Limited, Aircastle Limited, ALAFCO Aviation Lease and Finance Company, Avolon Aerospace Leasing Limited, CDB Aviation, Dubai Aerospace Enterprise (DAE) Ltd., ICBC Aviation Leasing Co., Ltd., ORIX Aviation Systems Limited and SDH Wings International Leasing Limited – representing in aggregate 36 aircraft, including 3 wide bodies and 33 narrow bodies, as well as certain equipment related thereto. Through the amended lease agreements, SAS is well on track in achieving the targeted annual cost savings of at least SEK 850 million to 1.0 billion in reduced aircraft lease and capital costs, which constitutes an important step in achieving the SEK 7.5 billion in annual cost savings by fiscal year 2026 under the SAS FORWARD plan. The Company intends to continue negotiations with certain other of its lessors to achieve further amendments in existing lease agreements. Anko van der Werff, President and Chief Executive Officer of SAS, says, "We continue to make progress in our chapter 11 process. The amended lease agreements allow us to reconfigure our fleet and improve our cost structure, which is a key element of our SAS FORWARD plan. We are grateful to our lessors for working constructively with us, as we continue taking necessary actions to become a more competitive airline and a stronger business partner to them. We are continuing to pursue additional lease amendments so we can achieve our targets." Additional Information About the Chapter 11 Process and Implementation of SAS FORWARD On July 5, 2022, to accelerate the implementation of its comprehensive business transformation plan SAS FORWARD, SAS announced that it had voluntarily filed for chapter 11 in the U.S., a well-established and flexible legal framework for restructuring businesses with operations in multiple jurisdictions. Through this process, SAS aims to reach agreements with key stakeholders, restructure the Company's debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection. The SAS FORWARD plan encompasses raising at least SEK 9.5 billion in new equity capital as well as reducing or converting SEK 20 billion of debt into common equity (of which a majority is on-balance sheet debt), including state hybrid notes, commercial hybrid notes, Swiss bonds, term loans from states, aircraft lease liabilities and maintenance contract obligations and other executory contract obligations. The new equity raise and debt-to-equity conversions contemplated as part of SAS FORWARD will entail very substantial dilution to existing shareholders. SAS targets to complete its court-supervised process in the U.S. within 12 months from the commencement of the chapter 11 process in July 2022. Additional information about the Company's voluntary chapter 11 process is available on the Company's dedicated restructuring website, https://sasgroup.net/transformation. Court filings and other documents related to the chapter 11 process in the U.S. are available on a separate website administered by SAS' claims agent, Kroll Restructuring Administration LLC, at https://cases.ra.kroll.com/SAS. Information is also available by calling (844) 242-7491 (U.S./Canada) or +1 (347) 338-6450 (International), as well as by email at SASInfo@ra.kroll.com. About Scandinavian Airlines (SAS AB) SAS SAB, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and Stockholm, is flying to destinations in Europe, USA and Asia. Spurred by a Scandinavian heritage and sustainable values, SAS aims to be the global leader in sustainable aviation. The airline will reduce total carbon emissions by 25 percent by 2025, by using more sustainable aviation fuel and our modern fleet with fuel-efficient aircraft. In addition to flight operations, SAS offers ground handling services, technical maintenance and air cargo services. SAS is a founder member of the Star Alliance, and together with its partner airlines offers a wide network worldwide. On the Web: https://www.sasgroup.net SAS AB and its affiliates, including Scandinavian Airlines Systems Denmark-Norway-Sweden and Scandinavian Airlines of North America Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10925) on July 5, 2022. In the petition filed by Erno HildÃ©n, as authorized representative, the Debtor SAS AB estimated assets between $10 billion and $50 billion and liabilities between $1 billion and $10 billion. Weil, Gotshal & Manges LLP is serving as global legal counsel and Mannheimer Swartling Advokatbyra AB is serving as Swedish legal counsel to SAS. Seabury Securities LLC and Skandinaviska Enskilda Banken AB are serving as investment bankers, Seabury is also serving as restructuring advisor. FTI Consulting is serving as financial advisor. Kroll Restructuring Advisors is the claims agent. SEAICH CARD & SOUVENIR: Files Subchapter V Case ----------------------------------------------- Seaich Card & Souvenir Corporation filed for chapter 11 protection in the District of Utah 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, Seaich Card & Souvenir estimates $1 million to $10 million in debt to 50 to 99 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. 3, 2022, at 405 South Main. Proofs of claim are due by Dec. 14, 2022. About Seaich Card & Souvenir Corporation Seaich Card & Souvenir Corporation -- https://seaich.com/ -- doing business as Seaich Corporation, is a privately held company in the wholesale trade business. Seaich Card & Souvenir Corporation filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No. 22-23909) on Oct. 4, 2022. In the petition filed by Uriah Kennedy, as president, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. D. Ray Strong has been appointed as Subchapter V trustee. The Debtor tapped Cohne Kinghorn, led by is represented by Matthew M. Boley, as counsel; and Rocky Mountain Advisory, LLC, as financial advisor and accountant. SOUND INPATIENT: Moody's Cuts CFR to Caa2 & 1st Lien Debt to Caa1 ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Sound Inpatient Physicians, Inc. including the Corporate Family Rating to Caa2 from B3, and the Probability of Default Rating to Caa2-PD from B3-PD. Moody's also downgraded the ratings of the company's senior secured first lien revolving credit facility and term loan to Caa1 from B2 and the senior secured second lien term loan to Ca from Caa2. The outlook is stable. The ratings downgrade reflects Moody's view that the company will remain free cash flow negative over the next few quarters. Additionally, the company's $75 million revolving credit facility is current and is scheduled to expire in June 2023. With the company's financial leverage at approximately 14.9 times at the end of June 2022 (on Moody's adjusted basis) and uncertain prospects of profit recovery, the risk of the company pursuing a transaction that Moody's considers to be a distressed exchange (and hence a default under Moody's definition) has increased. Governance risk considerations are material to the rating action. The company's earnings have recently deviated materially from management's forecasts and will follow a different trajectory with the change in business strategy. While the company is dealing with its operational challenges, its liquidity has weakened due to negative free cash flow in recent quarters and the impending expiry of the revolver. Downgrades: Issuer: Sound Inpatient Physicians, Inc. Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior Secured 1st Lien Term Loan, Downgraded to Caa1 (LGD3) from B2 (LGD3) Senior Secured 1st Lien Revolving Credit Facility, Downgraded to Caa1 (LGD3) from B2 (LGD3) Senior Secured 2nd Lien Term Loan, Downgraded to Ca (LGD6) from Caa2 (LGD6) Outlook Actions: Issuer: Sound Inpatient Physicians, Inc. Outlook, Remains Stable RATINGS RATIONALE Sound's Caa2 CFR reflects the company's very high financial leverage and high level of business concentration in hospital medicine. With a significant decline in the last twelve month's EBITDA, Moody's estimates that the company's adjusted financial leverage (Moody's adjusted basis) was approximately 14.9x at the end of June 2022. Moody's expects that the LTM debt/EBITDA will remain very high, above 10 times, in the next 12 months. With scaled-down participation in BPCIA program, Moody's views the company's path to deleveraging below 8.0 times debt/EBITDA is uncertain over the next 12-18 months. The company's ratings benefit from Sound's leading position as a provider of hospitalists (i.e. - physicians who work exclusively in a hospital). It is also supported by Moody's view that Sound's focus on value-based care programs better aligns its incentives with hospitals and payors than many other physician staffing/services companies that are primarily focused on fee-for-service business. The credit profile is further supported by the fact that Sound is partially owned by OptumHealth. Sound's liquidity is weak. The company's had -$77 million in cash and almost full availability under the company's $75 million revolver as of June 30, 2022. However, the revolver is currently scheduled to expire in June 2023 and hence Moody's does not view it as a reliable external source of liquidity. Moody's expects that Sound will generate negative free cash flow of $30-$35 million in 2022 (including the repayment of approximately $34 million in stimulus funds). With this cash burn and mandatory amortization commitment of approximately $8.1 million in the next 12 months, the company has limited resources to deal with any unexpected one-off cash outflow due to reasons including rising interest rates. In its stable outlook, Moody's expects that the company's earnings will gradually improve but that liquidity will remain weak increasing the risk of a default. ESG considerations are material to Sound's credit profile. Social considerations are material, given the substantial implications for public health and safety. As a healthcare service provider, social risks include exposure to labor and wage pressures as the company's business is dependent on the availability of skilled human capital (physicians). The company faces substantial implications of demographic and societal trends as the US population ages and demand for care shifts over time. Given the high exposure to government payors, Sound is exposed to unfavorable changes to payors' reimbursements and regulatory changes. Governance risk considerations include the company's aggressive financial policies demonstrated by high financial leverage and a recent track record of earnings deviating materially from management's forecasts. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if the company's operating performance and/or liquidity deteriorates. Failure to refinance or extend the revolver could also result in a downgrade. Adoption of aggressive financial policies including increased probability of a distressed exchange transaction could also pressure the company's ratings. The ratings could be upgraded if the company improves its earnings and cash flow. Positive free cash flow sustained over several quarters and improving interest coverage ratio would support an upgrade. Additionally, an upgrade could occur if there is debt paydown and if Moody's views Sound's capital structure as being increasingly tenable. Sound Inpatient Physicians, Inc. is a provider of physician services in acute, post-acute, emergency medicine, and intensivist facilities through its wholly-owned subsidiaries and affiliated companies. Sound's principal business is to provide hospitalist services to hospitals and health plans designed to improve the well-being of patients while reducing their associated costs through the management of medical care. Revenues for fiscal 2021 were approximately $1.6 billion. The company is primarily owned by private equity sponsor Summit Partners and OptumHealth. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. STOCKTON GOLF: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Stockton Golf and Country Club, a California Nonprofit Mutual Benefit Corporation 3800 W Country Club Blvd Stockton, CA 95204 Business Description: The Debtor is a golf club in Country Club, California. Chapter 11 Petition Date: October 11, 2022 Court: United States Bankruptcy Court Eastern District of California Case No.: 22-22585 Judge: Hon. Christopher D. Jaime Debtor's Counsel: Thomas A. Willoughby, Esq. FELDERSTEIN FITZGERALD WILLOUGHBY PASCUZZI & RIOS LLP 500 Capitol Mall Suite 2250 Sacramento, CA 95814 Tel: (916) 329-7400 Email: twilloughby@ffwplaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bruce Hotchkiss as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AKTSZEI/Stockton_Golf_and_Country_Club__caebke-22-22585__0001.0.pdf?mcid=tGE4TAMA STOWERS TRUCKING: Taps Pierson Legal Services as Bankruptcy Counsel ------------------------------------------------------------------- Stowers Trucking, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of West Virginia to employ Pierson Legal Services to handle its Chapter 11 case. Pierson will be paid at these rates: Attorneys $400 per hour Legal Assistants $200 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. The retainer is $10,000. James Pierson, Esq., a partner at Pierson Legal Services, disclosed in court filings that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: James M. Pierson, Esq. Pierson Legal Services P.O. Box 2291 Charleston, WV 25328 Tel: (304) 925-2400 Email: jpierson@piersonlegal.com About Stowers Trucking Stowers Trucking LLC filed a Chapter 11 bankruptcy petition (Bankr. S.D. W. Va. Case No. 22-20125) on July 7, 2022, with up to $500,000 in both assets and liabilities. Judge B. Mckay Mignault oversees the case. James M. Pierson, Esq., at Pierson Legal Services is the Debtor's legal counsel. SUMMIT II LLC: Taps Johnson Pope Bokor Ruppel & Burns as Counsel ---------------------------------------------------------------- Summit II, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Johnson Pope Bokor Ruppel & Burns, LLP as its legal counsel. The firm's services include: a. advising the Debtor regarding its duties and obligations; b. taking necessary steps to analyze and pursue any avoidance actions; c. preparing legal papers; d. assisting the Debtor in taking all legally appropriate steps to effectuate compliance with the Bankruptcy Code; and e. performing all other necessary legal services for the Debtor. The hourly rates charged by the firm's attorneys are as follows: Alberto Gomez, Jr. Shareholder $425 per hour Angelina Lim Partner $450 per hour The firm will also seek reimbursement for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $20,000. Alberto Gomez, Jr., Esq., a partner at Johnson Pope Bokor Ruppel & Burns, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Alberto F. Gomez, Jr., Esq. Johnson Pope Bokor Ruppel & Burns, LLP Tampa, FL 33602 Tel: (813) 225-2500 Fax: (813) 223-7118 Email: al@jpfirm.com About Summit II Summit II, LLC, a limited liability company in Palm Harbor, Fla., was established specifically to purchase a 170-acre property in Dade City, Pasco County from Harry and Janet Denlinger. Summit II filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03844) on Sept. 20, 2022, with $1 million to $10 million in both assets and liabilities. Kathleen L. DiSanto has been appointed as Subchapter V trustee. The Debtor is represented by Alberto F Gomez, Jr., at Johnson Pope Bokor Ruppel & Burns, LLP. TCH CONSTRUCTION: Commences Subchapter V Case --------------------------------------------- TCH Construction Group Inc. filed for chapter 11 protection in the Eastern District of North Carolina. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor is a North Carolina corporation with its principal place of business located in Lumberton, North Carolina. The Debtor is in the metal fabrication and welding business. The Debtor has 10 employees, excluding its officers. The Debtor has filed a motion to pay prepetition wages of its employees. According to court filings, TCH Construction estimates $1 million to $10 million in debt to 1 to 49 creditors. 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. 9, 2022, at 10:00 AM at Raleigh 341 Meeting Room. Proofs of claim are due by Feb. 7, 2023. About TCH Construction Group TCH Construction Group Inc. is a construction company in Lumberton, North Carolina. TCH Construction Group Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02268) on Oct. 4, 2022. In the petition filed by Timothy W. Monroe, as vice-president, the Debtor reported assets between $1 million and $10 million and liabilities of between $500,000 and $1 million. John G. Rhyne has been appointed as Subchapter V Trustee. The Debtor is represented by Laurie B. Biggs of Biggs Law Firm PLLC. THREE ARROWS CAPITAL: NFT Collection to be Liquidated ----------------------------------------------------- Ana Paula Pereira of CoinTelegraph reports that as part of 3AC's bankruptcy proceedings, over 300 NFTs from Starry Night Capital were recently moved. Teneo, the liquidation firm in charge of the Three Arrows Capital (3AC) bankruptcy process, confirmed in a statement to Cointelegraph on Oct. 5 that it has custody of the NFTs moved from addresses related to Starry Night Capital, a fund launched by the co-founders of the now-bankrupt hedge fund. According to the firm, the collection move was part of the liquidator's duty of identifying assets and maximizing recoveries on behalf of all creditors. A report from Bloomberg estimated that the Starry Night Capital collection's total value sits at around $35 million. It represents only a tiny fraction of the 3AC's debt of $2.8 billion to its creditors. The firm's statement said: "We would like to make clear that VVD [pseudonymous NFT collector Vincent Van Dough] has cooperated with the JLs [Joint Liquidators] in an effort to protect the value of these assets for the benefit of all relevant stakeholders and has sought to ensure that no Starry Night Portfolio assets would be disposed of improperly, or without sanction of the BVI Court if required." VVD also offered to assist with the eventual sale of 3AC NFTs and will likely oversee the assets' disposal with the firm, Teneo said. In 2021, 3AC co-founders Su Zhu, Kyle Davies, and pseudonymous NFT collector Vincent Van Dough (DVV) formed Stary Night Capital, a nonfungible token-focused fund that, initially, intended to invest exclusively in “the most desired" NFTs. In August 2022, Teneo was selected as the liquidation firm in the 3AC case. The Singapore-based hedge fund went bankrupt following the collapse of the Terra ecosystem earlier this year. The company, which once had over $10 billion in assets under management, eventually filed for a Chapter 15 bankruptcy on July 1 in a New York court. About Three Arrows Capital Three Arrows Capital Ltd. was an investment firm engaged in short-term opportunities trading, and is heavily invested in cryptocurrency, funded through borrowings. As of April 2022, the Debtor was reported to have over $3 billion of assets under its management. Three Arrows Capital Ltd. was incorporated as a business company under the laws of the British Virgin Islands. Its sole shareholder owning all of its "management shares" is Three Arrows Capital Pte. Ltd., which previously operated as a regulated fund manager in Singapore until 2021, when it shifted its domicile to the BVI, as part of a global corporate plan to relocate operations to Dubai. The Debtor borrowed digital and fiat currency from multiple lenders to fund its cryptocurrency investments. After cryptocurrency lost 99% of its value, and then prices of other cryptocurrencies had rapid declines, the Debtor reportedly defaulted on its obligations. On June 24, 2022, one of the Debtor's many creditors -- DRB Panama Inc. -- filed an application to appoint joint provisional liquidators -- and thereafter, full Liquidators -- in the Eastern Caribbean Supreme Court in the High Court of Justice (Commercial Division) located in BVI. The application was assigned claim number VIHCOM2022/0117. Subsequently, on June 27, 2022, the Debtor filed its own application for the appointment of joint liquidators before the BVI Commercial Court. On June 29, 2022, the Honorable Mr. Justice Jack of the BVI Commercial Court appointed Russell Crumpler and Christopher Farmer of Teneo (BVI) Limited as joint liquidators of Three Arrows Capital Ltd. On July 1, 2022, liquidators of Three Arrows Capital filed a Chapter 15 bankruptcy in the U.S. (Bankr. S.D.N.Y. Case No. 22-10920) to seek recognition of the BVI proceedings. Judge Martin Glenn is the case judge. Latham & Watkins, led by Adam J. Goldberg is counsel in the U.S. case. The law firm of Ogier, led by Grant Carroll, is advising the liquidators in the BVI proceedings. TRADER INTERACTIVE: Moody's Withdraws 'B3' CFR on Debt Repayment ---------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings for Trader Interactive, LLC including the B3 corporate family rating and the B3-PD probability of default rating. At the time of withdrawal the outlook was stable. Withdrawals: Issuer: Trader Interactive, LLC Corporate Family Rating, Withdrawn, previously rated B3 Probability of Default Rating, Withdrawn, previously rated B3-PD Senior Secured 1st Lien Revolving Credit Facility, Withdrawn, previously rated B3 (LGD4) Senior Secured 1st Lien Term Loan B, Withdrawn, previously rated B3 (LGD4) Outlook Actions: Issuer: Trader Interactive, LLC Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has withdrawn the ratings because Trader Interactive's debt previously rated by Moody's has been fully repaid. This follows Carsales.com Limited's purchase of the remaining 51% stake in Trader Interactive. Headquartered in Virginia Beach, Virginia, Trader Interactive is a leading provider of branded online marketplaces in the US, providing digital marketing services for the recreational vehicles (RV), power sports, commercial truck and equipment industries. TREETOP DEVELOPMENT: Hadid Offers His Resignation as Manager ------------------------------------------------------------ James Nani of Bloomberg Law reports that celebrity developer Mohamed Hadid has offered his resignation as manager from Treetop Development LLC, a bankrupt developer of an unfinished Los Angeles mega-mansion, to allow an independent manager to take over. The notice filed Tuesday, October 4, 2022, by Treetop comes ahead of a hearing Thursday in a California bankruptcy court to consider a lender's push to have the bankruptcy overseen by a court-appointed Chapter 11 trustee, rather than existing management. Treetop has opposed that request. Treetop proposed that instead, Hadid would resign and J. Michael Issa of B. Riley Advisory Services would take over as manager. About Treetop Development Mohamed Anwar Hadid is a Jordanian-American real estate developer. He is known for building luxury hotels and mansions, mainly in the Bel Air neighbourhood of Los Angeles and the city of Beverly Hills, Calif. Hadid's 901 Strada, LLC, based in Los Angeles, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-23962) on Nov. 27, 2019. Strada was entity formed for the purpose of developing and ultimately selling the real property perched on a hillside, and with views to the ocean, located at 901 Strada Vecchia Road, Bel Air, California. 901 Strada sought bankruptcy after the City of Los Angeles revoked the building permits and a court ordered the partially finished structures to be towrn down. Hadid's Coldwater Development, LLC, and Lydda Lud, LLC, filed for Chapter 11 bankruptcy in January 2021 (Bankr. C.D. Cal. Lead Case No. 21-10335). Coldwater and Lydda Lud owned six highly prized, vacant, residential estate lots, totaling 65.63 acres located in the Santa Monica Mountains above Beverly Hills, California. The debtors said the property was worth $130 million but was embroiled in a dispute with the activist group "Friends of the Hastain Trail", which has pushed for a recreational trail easement through the property. The cases have since been converted to Chapter 7 liquidation and the property sold by the bankruptcy trustee for just $1.7 million in April 2022. Hadid's Treetop Development LLC, owner of a 9650 Cedarbrook Drive in Beverly Hills, California, which is a planned 78,000-square-foot home that's currently on the market for $250 million, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14165) on August 2, 2022. In the petition filed by Mohamed A. Hadid, as manager, the Debtor reported assets between $100 million and $500 million and liabilities between $10 million and $50 million. Lewis R Landau, of LeWis R. Landau Attorney at law, is the Debtor's counsel. VERICAST CORP: Moody's Lowers CFR to Caa3 & Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded Vericast Corp.'s ratings, including corporate family rating to Caa3 from Caa1, and changed the outlook to negative from stable. The downgrades reflect deterioration in Vericast's operating performance and Moody's view that macroeconomic headwinds and the investments needed to transform the business will lead to sustained negative free cash flow, diminished earnings and weak liquidity over the next 12-18 months. A secular decline in the company's checks and print advertising business and rising costs will make it difficult for Vericast to improve cash flow to a level that is supportive of its current capital structure, which Moody's views as untenable. High leverage and negative free cash flow create elevated risk of a balance sheet restructuring including a distressed exchange. Moody's took the following rating actions: Downgrades: Issuer: Vericast Corp. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa3 (LGD3) from Caa1 (LGD3) Senior Secured 1st Lien Notes, Downgraded to Caa3 (LGD3) from Caa1 (LGD3) Senior Secured 2nd Lien Global Notes, Downgraded to Ca (LGD6) from Caa3 (LGD6) Outlook Actions: Issuer: Vericast Corp. Outlook, Changed To Negative From Stable RATINGS RATIONALE Vericast's earnings and cash flows have declined sharply as a result of revenue decline in both DM&T and PP&E segments as well as rising materials and delivery costs, which are expected to remain high in 2023. The company's year-to-date Q2 2022 revenue and EBITDA declined 9% and 23%, respectively, from the same period last year. The company's liquidity has also deteriorated as the earnings decline and rising costs led to negative free cash flow of -$88 million as of LTM Q2 2022. The company's liquidity will continue to be pressured further by increasing cash interest costs from rising interest rates, as 40% of its debt is floating. Vericast's interest coverage measured as (EBITDA – Capex)/Interest Expense was weak at 1.3x as of LTM Q2 2022 (including Moody's adjustments) and will erode further absent significant improvements in EBITDA or capex cuts. Moody's believes the company's print and digital marketing products could experience substantial pullback in the current inflationary environment. Vericast faces a $53.7 million term loan stub maturity ($49.9 million currently outstanding) in November 2023 and ABL revolver expiration in April 2024. Furthermore, the ABL revolver has a springing August 2023 maturity if the term loan stub is outstanding. Therefore, to preserve access to the ABL, Moody's believes that Vericast will likely seek to repay the term loan stub ahead of August 4, 2023 ABL springing maturity. Moody's is concerned that the approaching debt maturities may not afford the company enough time to stabilize earnings and strengthen credit metrics enough to permit a successful refinancing of the debt at commercially available terms. Moody's thus views default risk as growing including the potential for a distressed exchange transaction. The Caa3 corporate family rating reflects Vericast's significant level of business risk due to secular declines in both its check and print based advertisements businesses and a shareholder-friendly financial strategy and governance risks associated with private-equity ownership. The company's high leverage and heavy debt service costs limit financial flexibility to effectively mitigate the structural business risks. Vericast's leverage, with Moody's adjusted Debt/EBITDA at 6.2x at Q2 2022 (up from 5.6x a year ago), is high, particularly considering a business model that faces secular pressures. Moody's projects that the company's leverage will rise to mid-6x by the end of 2022, despite continued restructuring and cost cuts. Vericast has limited product diversity and a concentrated customer base in the Harland Clarke business. The ratings continue to garner support from the company's large scale, strong relationships with its clients and multi-year contracts varying between 2-4 years for most of its clients, and strong market positions in the print advertisement and check printing businesses. Vericast's Caa3 CFR also reflects governance risks, including an aggressive financial strategy, concentrated ownership by MacAndrew & Forbes Holdings, Inc. (MacAndrews) and lack of board diversity and independence. Vericast has a track record of sponsor friendly transactions that have continued even as the company had underperformed expectations. Vericast also has had several related party transactions with its sponsor which have effectively diverted funds from the operating entity to the sponsor, including dividends, meaningful financial advisory fees and termination of a loan to MacAndrews without repayment in the past. Moody's views Vericast liquidity as weak, constrained by Moody's expectation of negative free cash in 2023, near term debt maturities, high debt service costs and a potential springing maturity of the ABL revolver in August 2023. Moody's projects that existing cash ($49 million as of June 30, 2022) and effective availability on the ABL may not be sufficient to fund projected shortfall in free cash flow (around between -$75 to -$100 million in 2023), repay the $53.7 million term loan stub ($49.9 currently outstanding) in November 2023, fund capital expenditures in the $50-$60 million range, pay mandatory debt amortization of around $76 million, working capital, and basic cash needs over the next twelve months. The company's ABL facility, which provides for borrowings of up to $250 million subject to a borrowing base, had $25 million in outstanding borrowings and $146 million available for borrowing as of July 3, 2022. The ABL revolver is subject to a springing fixed charge coverage ratio test of 1.0x that applies if excess availability falls below certain threshold. The threshold is calculated as the greater of (a) $15 million or (b) 10.0% of either the ABL commitment or borrowing base at such time, whichever is less. Moody's projects that Vericast will not be able to meet the covenant requirement should it be tested over the coming year. Therefore, the ABL's effective availability will be further reduced from the borrowing base amount, straining external liquidity access. STRUCTURAL CONSIDERATIONS The first lien senior secured note due 2026 and the first lien secured term loans due November 2023 and June 2026 are rated Caa3 reflecting the company's Caa3-PD probability of default rating, an average expected family recovery rate of 50% at default given the mix of first and second lien secured debt and the particular instruments' ranking in the capital structure. The second lien senior secured notes due 2027 are rated Ca reflecting their junior position in the capital structure. The negative outlook reflects Moody's view that the risk of default could increase further or recovery prospects could deteriorate if the company is unable to demonstrate progress turning around the business and improving free cash flow over the next 12 months. The depressed earnings as a result of weak advertising demand and inflationary pressure coupled with weak liquidity elevate the company's refinancing and default risks. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if earnings or liquidity continue to erode, if there is an increasing likelihood of a preemptive balance sheet restructuring, such as a distressed exchange, or a deterioration in creditors' recovery prospects. The ratings could be upgraded if leverage materially declines and liquidity improves driven by improved operating results or due to a sustained improvement in the capital structure. Headquartered in San Antonio, TX, Vericast Corp. ("Vericast") is a provider of check and check related products, direct marketing services and customized business and home office products. The company's LTM Q2 2022 revenue was $2.4 billion. Vericast is owned by MacAndrews & Forbes Holdings, Inc. ("MacAndrews"), a wholly owned entity controlled by Ronald O. Perelman. The principal methodology used in these ratings was Media published in June 2021. VERICAST CORP: S&P Lowers ICR to 'CC' on Distressed Exchange ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Vericast Corp. to 'CC' from 'CCC+'. At the same time, S&P lowered the issue-level rating on the first-lien term loans to 'CC'. The negative outlook reflects the expectation that S&P will lower its issuer credit rating on Vericast to 'SD' upon the completion of these exchanges because S&P considers them to be distressed. At that time, S&P will also lower its issue-level ratings on the debt being exchanged to 'D'. Vericast, a print-based customer service and solutions company headquartered in Texas, announced its plan to exchange a portion of its first-lien term loan into new second-lien notes. The company also proposed to defer the next four quarters of its mandatory amortization payments on its amended first-lien term loan. Under the proposed exchanges, lenders receive less than originally promised, which S&P views as tantamount to default. Vericast announced that it plans to pursue the following transactions: -- Refinance its existing $1.1 billion first-lien term loan due 2026 by subordinating at least $269 million into new second-lien notes due 2027. The remaining portion will be amended into a new first-lien term loan due 2026. -- Defer the next four quarters of 1.625% quarterly mandatory amortization payments into a single payment due in 2025. -- Exchange the remaining $50 million of the initial first-lien term loan due 2023 into the new first-lien term loan due 2026. S&P said, "These transactions will improve near-term liquidity by reducing Vericast's run-rate annual mandatory debt amortization, deferring a year's worth of amortization payments to 2025, and extending the maturity of the $50 million first-lien term loan due 2023. Nevertheless, we view these transactions as distressed exchanges and tantamount to default because lenders will receive less than the original promise of the securities due to the deferral of payments and subordination, which are not offset by adequate compensation. "Vericast's liquidity will remain thin over the next 12 months without these transactions. We have revised our assessment of Vericast's liquidity to less than adequate from adequate because we estimate that its cash sources to uses ratio will not exceed 1.2x over the next 12 months. Cash sources include $49 million in cash balances and about $146 million in availability under its asset-based lending facility as of June 30, 2022. Estimated cash uses include $75 million in annual debt amortization (not pro forma for the proposed transactions), seasonal working capital swings, and about $55 million in annual capital expenditure. In our view, the company is unlikely to withstand adverse events without refinancing. "We exclude the pro forma impact of the proposed transactions from our liquidity assessment because they are not fully committed and subject to execution risk. We will revisit our liquidity assessment after the proposed transactions close. "The negative outlook reflects the expectation that we will lower our issuer credit rating on Vericast to 'SD' upon the completion of these exchanges because we consider them to be distressed. At that time, we will also lower our issue-level ratings on the debt being exchanged to 'D'." S&P could lower the rating if Vericast executes its announced distressed exchange. Although unlikely, S&P could raise the rating on Vericast if it no longer expect it to complete the distressed debt exchange. ESG credit indicators: E-2, S-2, G-3 VIASAT INC: Business Divestiture No Impact on Moody's 'B2' CFR -------------------------------------------------------------- Moody's Investors Service commented that Viasat, Inc.'s announced divestiture of its Link 16 Tactical Data Links business is credit positive but has no immediate impact on the company's B2 corporate family rating and stable outlook. Viasat, Inc., headquartered in Carlsbad, California, operates a consumer satellite broadband internet business, an in-flight connectivity business, and provides satellite and related communications, networking systems and services to government and commercial customers. Revenue for the last twelve months ended June 30, 2022 was $2.8 billion. WASHINGTON PLACE: Reaches Agreements w/ Lender, Ayzertech & Lerner ------------------------------------------------------------------ Washington Place Indiana LLC, Washington Place Indiana 945 LLC and Washington Place Indiana 1073 LLC (collectively the "Debtors") submitted a Revised Disclosure Statement in connection with the Revised joint Chapter 11 plan of reorganization dated October 6, 2022. The Plan seeks to implement a final discounted payoff negotiated with the mortgage lender, RSS BBCMS2017-CI-IN WPL, LLC (the "Lender") in the total sum of $3,800,000. The discounted pay-off satisfies all claims arising out of the senior mortgage lien encumbering the Debtors' commercial shopping center known as Washington Plaza in Indianapolis, Indiana, (the "Shopping Center"). The Debtor also obtained Bankruptcy Court approval of a final insurance settlement with Nationwide Mutual Insurance Company for payment of $875,000 on account of water damages at the Shopping Center. This settlement, together with a New Value Contribution in the sum of $3,500,000, plus available cash of $380,000 representing a large portion of the Debtors' Lockbox funds, have also been allocated for Plan purposes. The Confirmation Fund shall be used to pay all obligations owed to creditors to enable the Debtors to exit bankruptcy. Over the last several weeks, the Debtors have increased their respective proposals to other creditors and received favorable responses from the Lender and the Class 5 and Class 6 creditors [Ayzertech, Inc. and Lerner Arnold & Winston] all of whom are supporting the Plan. The Debtors have made an increased proposal to the Class 3 creditor (Asphalt Solutions) and hope to gain its consent as well. To give the Plan immediate creditability, Debtors' counsel is holding in escrow an initial deposit of $1.4 million toward the New Value Contribution. In addition to this cash deposit, the Debtors are confident that the balance of the New Value will be available prior to Confirmation. The Debtors have also retained additional cash liquidity from the Lockbox funds of about $100,000 to address the potential claims of NNT Enviro Tech (which is still under review) and pay other operating expenses. The Debtors' pre-petition creditors have asserted various types of claims and purported liens against the Debtors' Shopping Center and Insurance Proceeds. The Plan has been updated to include the recent agreements reached with the Lender, Ayzertech and Lerner Arnold & Winston. The Debtors remain hopeful that the rest of the creditors will consent to their proposed treatments as well, including the increased proposal of $250,000 to Asphalt Solutions (up from approximately $175,000). Class 1 consists of the Allowed Secured Claim of the Lender which filed a proof of claim in the total sum of $5,201,968.86. On the Effective Date, the Class 1 Secured Claim of the Lender shall be paid the total sum of $3,800,000 in cash from the Confirmation Fund based upon an agreed discounted payoff. In consideration for this payment, the Lender shall (i) deliver to the Debtors an assignment or satisfaction of the Lender's secured mortgage(s) encumbering the Shopping Center in recordable form; (ii) withdraw or release all claims filed in bankruptcy; and (iii) discontinue with prejudice the pending foreclosure proceedings commenced by the Lender in the Marion Superior Court, Indianapolis, Indiana, Index No. 49D01-2111-MF-037897 (the "Foreclosure Action"). Class 3 consists of the Allowed Claim of Asphalt Solutions, Inc., based on a mechanic's lien against the Debtors' parking lot. The Debtors shall pay the Class 3 Claimant the total sum of $250,000.00 on the Effective Date from the Confirmation Fund. In consideration therefor, the Class 3 Claimant shall (i) deliver a release and discharge of the Class 3 Claimant's mechanic's lien encumbering the Shopping Center in recordable form; and (ii) withdraw or release of all claims filed in bankruptcy. Class 5 consists of the Allowed Claim of Ayzertech, the insurance adjuster based on a contingency fee against the Insurance Proceeds. The Debtors shall pay the Class 5 Claimant the sum of $73,750.00 on the Effective Date from the Confirmation Fund. In consideration therefor, the Class 5 Claimant shall (i) deliver a release of the Class 5 Claimant's existing and potential lien relating to the Insurance Proceeds in recordable form; and (ii) withdraw or release of all claims filed in bankruptcy. Class 6 consists of the Allowed Claim of Lerner Arnold & Winston (LAW) counsel for the Debtors based upon a contingency fee against the Insurance Proceeds. The Debtors shall pay the Class 6 Claimant the sum of $221,250.00 on the Effective Date from the Confirmation Fund. In consideration therefor, Class 6 Claimant shall (i) deliver a release of the Class 6 Claimant's potential charging lien against the Insurance Proceeds in recordable form; and (ii) withdraw or release of all claims filed in bankruptcy. The major source for Plan funding is the New Value Contribution in the total sum of $3,500,000. Debtors' counsel is already holding the sum of $1.4 million in escrow towards the New Value Contribution. The balance of $2.1 million shall be funded and deposited into the Confirmation Fund prior to the start of the Confirmation Hearing. The balance of the plan funding will come from the Insurance Proceeds, plus use of various funds on deposit in the Debtors' Lockbox account totaling $380,000. Simultaneously with the confirmation process, the Debtors have obtained Bankruptcy Court approval of the $875,000 settlement with Nationwide Mutual Insurance Company. The settlement resolves the action pending in the United States District Court for the Southern District of Indiana (Case No. 20 cv 2222) and augments the Confirmation Fund. A full-text copy of the Revised Disclosure Statement dated October 6, 2022, is available at https://bit.ly/3SNeGSl from PacerMonitor.com at no charge. Debtors' Counsel: Kevin J. Nash, Esq. Goldberg Weprin Finkel Goldstein LLP 1501 Broadway 22nd Floor New York, NY 10036 Tel: (212) 221-6700 Email: knash@gwfglaw.com About Washington Place Indiana Washington Place Indiana, LLC and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Lead Case No. 21-43087) on Dec. 15, 2021. In its petition, Washington Place Indiana listed as much as $10 million in both assets and liabilities. David Goldwasser, restructuring officer, signed the petition. Judge Jil Mazer-Marino oversees the cases. Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein, LLP and David Goldwasser, a partner at FIA Capital Partners, LLC serve as the Debtors' legal counsel and chief restructuring officer, respectively. WAYNE CITY: Moody's Hikes Issuer Rating to 'B1', Outlook Stable --------------------------------------------------------------- Moody's Investors Service has upgraded the City of Wayne, MI's issuer rating to B1 from B2. Moody's have also upgraded the city's general obligation limited tax (GOLT) rating to B2 from B3. The outlook is stable. The issuer rating represents Moody's assessment of hypothetical long-term debt of the city supported by a general obligation unlimited tax (GOULT) pledge. The city does not currently have any outstanding debt supported by a GOULT pledge. The pledge supporting the city's outstanding GOLT debt is subject to applicable constitutional, statutory and charter tax rate limitations. RATINGS RATIONALE The issuer rating was upgraded to B1 because the city's financial position has improved following a judgement levy imposed by a state court to ensure the city made its annual pension contribution in fiscal 2021. Although driven by one-time revenue, the bolstered reserves afford the city more runway to structurally balance operations. The city also benefits from ample additional liquidity in its enterprise funds. The city has taken steps to somewhat reduced its annual fixed costs burden by reamortizing a portion of its pension plan and reforming its other post-employment benefits (OPEB). Still, leverage and fixed costs will remain very high because of the city's substantial unfunded pension liabilities. While operations are likely to remain fairly balanced in fiscal 2022, the fiscal 2023 budget includes a general fund deficit and the city will remain challenged by its limited revenue-raising authority. Additional rating considerations are the city's moderately sized tax base, below-average wealth and income characteristics and the local economy's elevated dependence on automotive manufacturing. The city's B2 GOLT rating is one notch below the issuer rating given the lack of a dedicated bond levy and strict limitations on the city's ability to raise revenue. RATING OUTLOOK The stable outlook reflects the city's improved reserve position, including the robust liquidity in its enterprise funds, which provides it more runway to structurally balance its operations. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Sustained improvement of the city's operating reserves and liquidity - Moderation of total leverage and fixed costs FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Larger than anticipated draws on operating reserves - Materially increased leverage and/or fixed costs - Inability to provide essential municipal services LEGAL SECURITY The city's outstanding GOLT bonds carry its full faith and credit and pledge to levy ad valorem property taxes subject to applicable constitutional, statutory and charter tax rate limitations. PROFILE The City of Wayne encompasses six square miles in Wayne County (A1 stable), roughly 20 miles west of the City of Detroit (Ba2 positive). It operates under a council-manager form of government and provides municipal services to about 17,000 residents. METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in January 2021. WC BRAKER: Trustee Taps Hilco Real Estate as Appraiser ------------------------------------------------------ Dawn Ragan, the Chapter 11 trustee for WC Braker Portfolio, LLC, received approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Hilco Real Estate Appraisal, LLC. Hilco will prepare a commercial appraisal of the Debtor's properties for use by the trustee in analyzing the valuation of the properties and making decisions about the future operation of the Debtor's business. The firm has agreed to conduct an appraisal at a flat fee of $40,000, with a $20,000 retainer. As disclosed in court filings, Hilco is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: John C. Satter, MAI, GAA Hilco Real Estate Appraisal, LLC 5 Revere Drive, Suite 300 Northbrook, IL 60062 Phone: 847-714-1288 Email: jsatter@hilcoglobal.com About WC Braker Portfolio WC Braker Portfolio, LLC is primarily engaged in renting and leasing real estate properties. The Debtor filed Chapter 11 petition (Bankr. W.D. Texas Case No. 22-10293) on May 2, 2022, with $100 million to $500 million in assets and $50 million to $100 million in liabilities. Judge Tony M. Davis oversees the case. Todd Headden, Esq., at Hayward PLLC serves as the Debtor's legal counsel. ATX Braker SR, LLC, as mortgage lender, is represented by Liz Boydston, Esq., and Stephen P. McKitt, Esq., at Polsinelli PC; and Mitchell A. Karlan, Esq., and Keith R. Martorana, Esq., at Gibson, Dunn & Crutcher, LLP. Dawn Ragan, the Chapter 11 trustee appointed in the Debtor's case, is represented by Kelly Hart & Hallman, LLP. [*] 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/ [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Midas Construction LLC Bankr. D.S.C. Case No. 22-02637 Chapter 11 Petition filed September 29, 2022 See https://www.pacermonitor.com/view/JEUEHUA/Midas_Construction_LLC__scbke-22-02637__0001.0.pdf?mcid=tGE4TAMA represented by: Richard A Steadman, Jr., Esq. STEADMAN LAW FIRM, P.A. E-mail: rsteadman@steadmanlawfirm.com In re James Allen Sykes Bankr. N.D. Cal. Case No. 22-30531 Chapter 11 Petition filed October 4, 2022 represented by: Heinz Binder, Esq. BINDER & MALTER, LLP Email: heinz@bindermalter.com In re Wall Ventures, Inc. Bankr. S.D. Ind. Case No. 22-03961 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/DQYYJ5Y/Wall_Ventures_Inc__insbke-22-03961__0001.0.pdf?mcid=tGE4TAMA represented by: KC Cohen, Esq. KC COHEN, LAWYER, PC E-mail: kc@esoft-legal.com In re Sherlock Storage LLC Bankr. D. Mont. Case No. 22-90150 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/WU7LYJA/SHERLOCK_STORAGE_LLC__mtbke-22-90150__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Thomas J. Hugues, Jr. Bankr. D.N.J. Case No. 22-17886 Chapter 11 Petition filed October 4, 2022 represented by: Timothy King, Esq. In re 702 Vermont Inc. Bankr. E.D.N.Y. Case No. 22-42458 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/26VR6TY/702_Vermont_Inc__nyebke-22-42458__0001.0.pdf?mcid=tGE4TAMA represented by: Stacey Simon Reeves, Esq. LAW OFFICE OF STACEY SIMON REEVES E-mail: stacey_simon@msn.com In re Blue Diamond Air Systems, Inc. Bankr. E.D.N.Y. Case No. 22-72698 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/OVQYAEI/Blue_Diamond_Air_Systems_Inc__nyebke-22-72698__0001.0.pdf?mcid=tGE4TAMA represented by: Dawn Kirby, Esq. KIRBY AISNER & CURLEY LLP E-mail: dkirby@kacllp.com In re 4424 North Bailey, LLC Bankr. W.D.N.Y. Case No. 22-10897 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/YXUOFGQ/4424_North_Bailey_LLC__nywbke-22-10897__0001.0.pdf?mcid=tGE4TAMA represented by: James Joyce, Esq. E-mail: jmjoyce@lawyer.com In re 610 Norfolk Inc. Bankr. W.D.N.Y. Case No. 22-10902 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/YEF6UPY/610_Norfolk_Inc__nywbke-22-10902__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Ikan Group Inc. Bankr. W.D.N.Y. Case No. 22-10896 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/4IGLBXQ/Ikan_Group_Inc__nywbke-22-10896__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Insight Capital Realty, Inc. Bankr. W.D.N.Y. Case No. 22-10903 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/UOMRMHY/Insight_Capital_Realty_Inc__nywbke-22-10903__0001.0.pdf?mcid=tGE4TAMA represented by: James Joyce, Esq. E-mail: jmjoyce@lawyer.com In re Fairfield Harbourside Condominium Association, Inc. Bankr. E.D.N.C. Case No. 22-02267 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/QPYNQJY/Fairfield_Harbourside_Condominium__ncebke-22-02267__0001.0.pdf?mcid=tGE4TAMA represented by: Jason L. Hendren, Esq. HENDREN, REDWINE & MALONE, PLLC E-mail: jhendren@hendrenmalone.com In re REVA Hospitality Garland, LLC Bankr. E.D. Tex. Case No. 22-41307 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/ISYCVAY/REVA_Hospitality_Garland_LLC__txebke-22-41307__0001.0.pdf?mcid=tGE4TAMA represented by: Joyce W. Lindauer, Esq. ATTORNEY AT LAW & MEDIATOR E-mail: joyce@joycelindauer.com In re Kipling Partners, LLC Bankr. S.D. Tex. Case No. 22-90327 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/Q4KEHYI/Kipling_Partners_LLC__txsbke-22-90327__0001.0.pdf?mcid=tGE4TAMA represented by: Susan Tran Adams, Esq. TRAN SINGH, LLP E-mail: stran@ts-llp.com In re Sierra Cne Sanders Bankr. S.D. Tex. Case No. 22-32965 Chapter 11 Petition filed October 4, 2022 In re GERBRIS Enterprises, LLC Bankr. W.D. Tex. Case No. 22-51130 Chapter 11 Petition filed October 4, 2022 See https://www.pacermonitor.com/view/6VME7SI/GERBRIS_Enterprises_LLC__txwbke-22-51130__0001.0.pdf?mcid=tGE4TAMA represented by: David T. Cain, Esq. LAW OFFICE OF DAVID T. CAIN E-mail: caindt@swbell.net In re John Michael White, Sr. Bankr. N.D. Ala. Case No. 22-02431 Chapter 11 Petition filed October 5, 2022 represented by: Harry Long, Esq. LAW OFFICES OF HARRY P. LONG, LLC In re Marrero Marcer Law LLP Bankr. S.D. Fla. Case No. 22-17764 Chapter 11 Petition filed October 5, 2022 See https://www.pacermonitor.com/view/DRC47PY/Marrero_Marcer_Law_LLP__flsbke-22-17764__0001.0.pdf?mcid=tGE4TAMA represented by: Richard Siegmeister, Esq. RICHARD SIEGMEISTER, PA E-mail: rspa111@att.net In re Leon and Associates LLC Bankr. D.N.J. Case No. 22-17913 Chapter 11 Petition filed October 5, 2022 See https://www.pacermonitor.com/view/CVQ3HQI/Leon__Associates_LLC__njbke-22-17913__0001.0.pdf?mcid=tGE4TAMA represented by: Steven D. Pertuz, Esq. THE LAW OFFICE OF STEVEN D. PERTUZ, LLC E-mail: pertuzlaw@verizon.net In re Frank J. Dicicco Bankr. E.D.N.Y. Case No. 22-42468 Chapter 11 Petition filed October 5, 2022 represented by: Karamvir Dahiya, Esq. DAHIYA LAW OFFICES, LLC Email: karam@bankruptcypundit.com In re WNY Solutions Group Bankr. W.D.N.Y. Case No. 22-10916 Chapter 11 Petition filed October 5, 2022 See https://www.pacermonitor.com/view/SLRH5TY/WNY_Solutions_Group__nywbke-22-10916__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Integrated Marketing Technology, Inc. Bankr. N.D. Cal. Case No. 22-30537 Chapter 11 Petition filed October 6, 2022 See https://www.pacermonitor.com/view/TOGAEJI/Integrated_Marketing_Technology__canbke-22-30537__0001.0.pdf?mcid=tGE4TAMA represented by: Gina R. Klump, Esq. LAW OFFICE OF GINA R. KLUMP E-mail: klumplaw@gmail.com In re DATG Pizzeria, Inc. Bankr. S.D. Fla. Case No. 22-17790 Chapter 11 Petition filed October 6, 2022 See https://www.pacermonitor.com/view/IM2OYKA/DATG_Pizzeria_Inc__flsbke-22-17790__0001.0.pdf?mcid=tGE4TAMA represented by: Alan R. Crane, Esq. FURRCOHEN P.A. E-mail: acrane@furrcohen.com In re BAV AUTO L.L.C. Bankr. D.N.J. Case No. 22-17933 Chapter 11 Petition filed October 6, 2022 See https://www.pacermonitor.com/view/UU2F6NA/BAV_AUTO_LLC__njbke-22-17933__0001.0.pdf?mcid=tGE4TAMA represented by: Steven D. Pertuz, Esq. THE LAW OFFICE OF STEVEN D. PERTUZ, LLC E-mail: pertuzlaw@verizon.net In re Krystof Zizka Bankr. E.D.N.Y. Case No. 22-72733 Chapter 11 Petition filed October 6, 2022 represented by: Douglas Pick, Esq. In re Ricky Dale Birkhahn and Denise Marie Birkhahn Bankr. W.D. Ark. Case No. 22-71245 Chapter 11 Petition filed October 7, 2022 represented by: Stanley Bond, Esq. In re Holy Ground Tiny Homes, LLC Bankr. D. Colo. Case No. 22-13918 Chapter 11 Petition filed October 7, 2022 See https://www.pacermonitor.com/view/IX2HEJI/Holy_Ground_Tiny_Homes_LLC__cobke-22-13918__0001.0.pdf?mcid=tGE4TAMA represented by: Aaron J. Conrardy, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. E-mail: aconrardy@wgwc-law.com In re Alberto Julian Perez Bankr. S.D. Fla. Case No. 22-17834 Chapter 11 Petition filed October 7, 2022 represented by: Jeffrey Bast, Esq. In re Roger Elmon Rosendahl Bankr. N.D. Iowa Case No. 22-00630 Chapter 11 Petition filed October 7, 2022 represented by: Vincent Ledlow, Esq. In re Jose Rafael Nazario Acosta Bankr. D.P.R. Case No. 22-02943 Chapter 11 Petition filed October 7, 2022 represented by: Jesus Batista Sanchez, Esq. In re Yariza Antonia Yulian Bankr. D.P.R. Case No. 22-02939 Chapter 11 Petition filed October 7, 2022 represented by: Carmen Conde Torres, Esq. C. CONDE & ASSOC. In re Gianpaolo Ciancimino and Danielle Nicole Ciancimino Bankr. S.D. Fla. Case No. 22-17851 Chapter 11 Petition filed October 10, 2022 represented by: Jeffrey Ainsworth, Esq. In re Chaffin Guttering, LLC Bankr. W.D. Ky. Case No. 22-10569 Chapter 11 Petition filed October 10, 2022 See https://www.pacermonitor.com/view/KAQKURA/Chaffin_Guttering_LLC__kywbke-22-10569__0001.0.pdf?mcid=tGE4TAMA represented by: Robert C. Chaudoin, Esq. HARLIN PARKER E-mail: chaudoin@harlinparker.com In re MNC Concrete Work LLC Bankr. D.N.J. Case No. 22-18012 Chapter 11 Petition filed October 10, 2022 See https://www.pacermonitor.com/view/O2WGNPQ/MNC_Concrete_Work_LLC__njbke-22-18012__0001.0.pdf?mcid=tGE4TAMA represented by: Andre L. Kydala, Esq. LAW FIRM OF ANDRE L. KYDALA E-mail: kydalalaw@aim.com In re Earth House Inc. Bankr. D.N.J. Case No. 22-18011 Chapter 11 Petition filed October 10, 2022 See https://www.pacermonitor.com/view/O654YXY/Earth_House_Inc__njbke-22-18011__0001.0.pdf?mcid=tGE4TAMA represented by: Andre L. Kydala, Esq. LAW FIRM OF ANDRE L. KYDALA E-mail: kydalalaw@aim.com In re Raveendranath Vaylay Bankr. M.D. Pa. Case No. 22-01949 Chapter 11 Petition filed October 10, 2022 represented by: Tracy L. Updike, Esq. METTE EVANS AND WOODSIDE E-mail: tlupdike@mette.com In re Carlisle Logistics, LLC Bankr. N.D. Tex. Case No. 22-31885 Chapter 11 Petition filed October 10, 2022 See https://www.pacermonitor.com/view/2N2TLXA/Carlisle_Logistics_LLC__txnbke-22-31885__0001.0.pdf?mcid=tGE4TAMA represented by: Eric A. Liepins, Esq. ERIC A. LIEPINS E-mail: eric@ealpc.com In re Walter Dean Hatter Bankr. N.D. Tex. Case No. 22-42413 Chapter 11 Petition filed October 10, 2022 represented by: Joseph Postnikoff, Esq. In re Cutting Edge RV Services, Inc. Bankr. S.D. Tex. Case No. 22-80182 Chapter 11 Petition filed October 10, 2022 See https://www.pacermonitor.com/view/MKSXIRI/Cutting_Edge_RV_Services_Inc__txsbke-22-80182__0001.0.pdf?mcid=tGE4TAMA represented by: Matthew Hoffman, Esq. HOFFMAN & SAWERIS, P.C. E-mail: matthew@mhsawlaw.com ********* 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 ***