/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/221221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 21, 2022, Vol. 26, No. 354 Headlines 21ST CENTURY VALET: Files Subchapter V Case 25 PRAIRE LANE: Voluntary Chapter 11 Case Summary 305 PETROLEUM: Asset Sale Proceeds to Fund Plan AFTERSHOCK COMICS: Case Summary & 20 Largest Unsecured Creditors ALFRED MILLER: Committee Gets Interim OK to Hire Bankruptcy Counsel ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access ANDOVER SENIOR CARE: Amends HUD Secured Claims Pay Details ANDRADE GUTIERREZ: Chapter 15 Case Summary ANGI GROUP: Moody's Cuts CFR & Senior Unsecured Notes to B2 ARCTIC GLACIER: S&P Places 'CCC+' ICR on CreditWatch Negative BARTECH GROUP: Wins Cash Collateral Access Thru Jan 2023 BEN'S GARDEN: Court OKs Deal on Cash Collateral Access BERWICK CLINIC: Unsecureds Will Get 10% of Claims in Plan CENTURI GROUP: S&P Alters Outlook to Developing, Affirms 'B+' ICR CITY BREWING: Moody's Lowers CFR to Caa2, Outlook Negative CLAIRMONT PLACE: Wins Cash Collateral Access on Final Basis CLUB 77 BAR: Unsecureds to Get $80 per Month for 60 Months COLORADO MUSHROOM: Case Summary & 20 Largest Unsecured Creditors CONSOLIDATED ELEVATOR: Taps Fisher Phillips as Special Counsel CRAWL SPACE: Case Summary & Six Unsecured Creditors DCL HOLDINGS: Case Summary & 30 Largest Unsecured Creditors DOTDASH MEREDITH: Moody's Lowers CFR & Senior Secured Loans to B2 E-BOX LLC: Gets OK to Hire Bob Mims, Tracy Cooper as Accountants EASTGATE WHITEHOUSE: Seeks to Tap Krell & Associates as Accountant EMPIRE COUNTERTOPS: Court OKs Interim Cash Collateral Access ENDOCEUTICS INC: Chapter 15 Case Summary ENERGY DRILLING: Seeks to Hire Jeffrey Chimovitz as Counsel ERIN INDUSTRIES: Unsecured Creditors to Split $309K over 4 Years FEDNAT HOLDING CO: Ends in Ch.11 Filing Due to Severe Florida Storm G-III APPAREL: Moody's Cuts Sr. Secured Rating to B1, Outlook Neg. GANESH AA: Seeks to Tap Bishop Realtor Group as Real Estate Broker GOPHER RESOURCE: S&P Downgrades ICR to 'CCC+', Outlook Negative HEARTBRAND HOLDINGS: Taps ADKF to Provide Tax, Accounting Services HISTORIC & TROPHY: Chapter 15 Case Summary IHEARTMEDIA INC: S&P Alters Outlook to Negative, Affirms 'B+' ICR JRMC HOLBROOK: Seeks to Tap Prince Lobel Tye as Special Counsel MASONITE INT'L: Moody's Cuts Rating on Unsec. Notes to Ba2 NANTASKET MANAGEMENT: In Chapter 11 to Stop Foreclosures NANTASKET MANAGEMENT: Seeks to Tap John F. Sommerstein as Counsel NGV GLOBAL: Court OKs Cash Collateral Access Thru Jan 13 NILEX USA: Chapter 15 Case Summary NORTH AMERICAN ACCEPTANCE: Gets Interim OK to Hire Legal Counsel NUVO TOWER: Amends Bayport Secured Claim Pay Details PARTY CITY: Moody's Lowers CFR to Caa3, Outlook Still Negative PLANTRONICS INC: Moody's Withdraws Ba3 CFR on HP Inc. Transaction PREMIER DENTAL: S&P Alters Outlook to Negative, Affirms 'B-' ICR PRO MACH GROUP: S&P Rates New 100MM First-Lien Term Loan 'B-' R & E PETROLEUM: Taps Sternberg Naccari & White as Special Counsel RITE AID: Moody's Assigns 'B3-PD/LD' PDR on Cash Tender Offer RIVE GAUCHE: Case Summary & 17 Unsecured Creditors ROBERTSHAW US: Moody's Cuts CFR to Caa3 & Alters Outlook to Neg. ROJO'S FAMOUS: Gets OK to Hire Gravis Law as Bankruptcy Counsel SEARS HOMETOWN: In Chapter 11 Amid Dispute With Lampert Co. SENSITIVE HOME: Amends Plan to Include Employee Wage Claims Details SM WELLNESS: Moody's Lowers CFR to Caa2 & Alters Outlook to Stable STARFISH POOL: Future Income to Fund Plan Payments SUNLIGHT RIVER: Seeks to Tap MAC Restructuring as Financial Advisor SURGEPOWER MATERIALS: Involuntary Chapter 11 Case Summary TGPC PROPERTIES: Case Summary & One Unsecured Creditor TK CLEANING: Case Summary & 14 Unsecured Creditors TRAYLOR CHATEAU: Files for Chapter 11, Seeks to Sell Property TSS ACQUISITION: Case Summary & 20 Largest Unsecured Creditors UNDER ARMOUR: Moody's Affirms 'Ba2' CFR & Alters Outlook to Stable VALVOLINE INC: S&P Affirms 'BB' ICR, Off CreditWatch Negative VERITAS NL: Moody's Affirms 'B3' CFR & Alters Outlook to Negative WEBSTER UNIVERSITY: Moody's Cuts Issuer & Rev. Bond Ratings to Ba1 XTRA INCORPORATED: Case Summary & Four Unsecured Creditors ********* 21ST CENTURY VALET: Files Subchapter V Case ------------------------------------------- 21st Century Valet Parking LLC filed for chapter 11 protection in the District of Central California. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, 21st Century Valet Parking LLC estimates between $100,000 and $500,000 in debt owed 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 Jan. 10, 2023, at 10:00 AM at UST-SVND2, TELEPHONIC MEETING. CONFERENCE LINE:1-866-820-9498, PARTICIPANT CODE:6468388. Proofs of claim are due by Feb. 14, 2023. John-Patrick McGinnis Fritz has been appointed as Subchapter V trustee. About 21st Century Valet Parking LLC 21st Century Valet Parking LLC is a valet service provider in Los Angeles, California. 21st Century Valet Parking LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11415) on December 6, 2022. In the petition filed by Mark Allen, as manager, the Debtor reported assets up to $50,000 and liabilities between $100,000 and $500,000 million. The Debtor is represented by: Vahe Khojayan YK Law, LLP 6630 Lankershim Blvd North Hollywood, CA 91606 25 PRAIRE LANE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 25 Praire Lane, Inc. 25 Prairie Lane Chicago, IL 60638 Business Description: The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 20, 2022 Court: United States Bankruptcy Court Northern District of Illinois Case No.: 22-14675 Judge: Hon. Carol A. Doyle Debtor's Counsel: Gregory K. Stern, Esq. GREGORY K. STERN, P.C. 53 West Jackson Boulevard Suite 1442 Chicago, IL 60604 Tel: (312) 427-1558 Fax: (312) 427-1289 Email: greg@gregstern.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jamal R. Jaber as president. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/3HVAPMA/25_Praire_Lane_Inc__ilnbke-22-14675__0001.0.pdf?mcid=tGE4TAMA 305 PETROLEUM: Asset Sale Proceeds to Fund Plan ----------------------------------------------- 305 Petroleum, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Mississippi a Subchapter V Plan of Liquidation dated December 13, 2022. The Debtor owns a convenience store, gasoline facility and a wine and liquor store located at 5028 Highway 305 in Olive Branch, Mississippi 38654. The current equity security holder of the Debtor is Nrupesh Patel. Subsequently, an entity entitled Nandika Petroleum, LLC was formed and it operated the gasoline station and the inside functions of the Debtor's property. Nandika's membership interests are, at least on paper, owned 50% by Mr. Patek and 50% by Vikram Patel ("Vikram"). Vikram supposedly made a capital contribution/stock purchase of $50,000 in exchange for the 50% interest he received in Nandika. The Debtor's principal elected some time ago to dismiss Premier Petroleum Investment, Case No. 20-11596-JDW, from Chapter 11, and part of the proceeds received from the Premier Petroleum asset sale were utilized to fund the Vikram settlement. The Debtor sold and conveyed its tangible assets to a third party, and those assets, and part of its cash, were used to pay, in part, the Vikram compromised and settled debt amount. The Debtor owns cash in its bank account as its only tangible asset. Class 2 consists of Priority Claims. Priority claims, if any, will be paid within 60 months from the date of the filing of the Petition together with statutory interest. Class 3 consists of the Secured Claims of First Security Bank. The claims of the Bank have been paid in full as a result of the sale of the tangible assets of the Debtor with respect to the Bank's debt that was secured by the Debtor's tangible assets. Class 4 consists of the Inventory Claims of Nandika and Nabhij. Shortly prior to the filing of this case, the Debtor informally merged with Nandika and Nabhij so that the Debtor acquired the inventory of Nandika and Nabhij in exchange for assumption of all debts of Nandika and Nabhij as well as assumption of payroll, insurance agreements and related obligations. The sale of assets of the Debtor, as well as the sale of assets of Nandika and Nabhij, allowed the Debtor to pay, in full, any claims of Nandika and Nabhij. Class 5 consists of General Unsecured Creditors. The Debtor will pay to the general, unsecured creditors its net remaining cash after payment of claims in Class 1 and 2. The Debtor's equity security interests will be cancelled. The Debtor's means of execution of the Plan will be provided from cash. A full-text copy of the Liquidating Plan dated December 13, 2022, is available at https://bit.ly/3v31Ll5 from PacerMonitor.com at no charge. Counsel for the Debtor: Craig M. Geno LAW OFFICES OF CRAIG M. GENO, PLLC 587 Highland Colony Parkway Ridgeland, MS 39157 Tel: 601-427-0048 Fax: 601-427-0050 E-mail: cmgeno@cmgenolaw.com About 305 Petroleum 305 Petroleum, Inc., owns a convenience store, gasoline facility and a wine and liquor store located at 5028 Highway 305 in Olive Branch, Mississippi. 305 Petroleum filed a Chapter 11 petition (Bankr. N.D. Miss. Case No. 20-11593) on April 20, 2020. In the petition signed by Nrupesh Patel, president, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Debtor hired the LAW OFFICES OF CRAIG M. GENO, PLLC, as bankruptcy counsel. AFTERSHOCK COMICS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: AfterShock Comics, LLC 15030 Ventura Blvd. #587 Sherman Oaks, CA 91403 Business Description: AfterShock is a comic book publisher. Chapter 11 Petition Date: December 19, 2022 Court: United States Bankruptcy Court Central District of California Case No.: 22-11456 Judge: Hon. Martin R. Barash Debtor's Counsel: David L. Neale, Esq. LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 Email: dln@lnbyg.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Jonathan Kramer as chief executive officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KJCIIDI/AfterShock_Comics_LLC__cacbke-22-11456__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. AS Comics LTD Distribution $514,326 23 High St Agreement Pewsey Wiltshire, England SN9 5AF 2. Imprimerie L'Empreinte Printing $398,887 4177 Boulevard Industriel Services Laval, QC, Canada H7L0G7 3. Tri Vision Int'l Inc. Professional $118,399 3807 Wilshire Blvd., Services Suite 1109 Los Angeles, CA 90010 4. David Sigurani-Sigu Contractor $78,000 Sauce Inc Services 3226 Manitou Ave Los Angeles, CA 90031 5. Transcontinental Professional $60,975 Bolte Postale 11276 Services Succ. Centre-ville Montreal, QC, Canada H3C 5G9 6. Sacker Entertainment Law PC Legal Services $34,500 12100 Wilshire Blvd Suite 1540 Los Angeles, CA 90025 7. Ziffren Brittenham, LLP Legal Services $31,250 1801 W. Century Park Los Angeles, CA 90067 8. Imprimerie Solisco Inc. Printing $29,263 120, 10e Rue Services Scott, QC, Canada, GOS3GO 9. PublicHaus Communications LLC Professional $25,000 8306 Wilshire Blvd #4002 Services Los Angeles, CA 90211 10. Fidelitas Professional $21,025 Development Services 2869 Historic Decatur Rd San Diego, CA 92016 11. Mattia Monaco Professional $18,000 Vicende Street 12 Services San Massimo (CB), Italy 86027-0000 12. Rose Snyder & Professional $17,435 Jacobs LLP Services 15821 Ventura Blvd., Suite 490 Encino, CA 91436 13. San Diego Comic Professional $17,000 Convention Services San Diego Comic Convention P.O. Box 128458 San Diego, CA 92112 14. Emilio Pilliu -- Arancia Professional $15,500 piazza San Carlo, Services 206 -10121 Torino Italy, P. IVA: 10550250012 15. Alberto Locatelli - Professional $15,000 Arancia Studio Services piazza San Carlo, 206 -10121 Torino Italy, P. IVA: 10550250012 16. Manatt, Phelps & Legal Services $13,476 Phillips, LLP 2049 Century Park East, Suite 1700 Los Angeles, CA 90067 17. Inaki Miranda Professional $10,010 Paniagua Services Calle San Ildefonso 10 -bajo dcha Madrid, Spain 28012-0000 18. American Express Credit Card $9,963 P.O. Box 360001 Debt Ft. Lauderdale, FL 33336-0001 19. Damian Couceiro Professional $8,800 Tucuman 3764 Services Rosario, Santa Fe, Argentina 02000-0000 20. Mark Englert Professional $8,600 37541 Starcrest St. Services Palmdale, CA 93550 ALFRED MILLER: Committee Gets Interim OK to Hire Bankruptcy Counsel ------------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 case of Alfred Miller Contracting Company received interim approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Fishman Haygood, LLP as its counsel. Fishman Haygood will render these legal services: (a) advise the committee in connection with its powers and duties under the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Local Rules; (b) assist and advise the committee in its consultation with the Debtor relative to the administration of the case; (c) attend meetings and negotiate with representatives of the Debtor and other parties-in-interest; (d) assist and advise the committee in its examination and analysis of the conduct of the Debtor's affairs; (e) assist and advise the committee in connection with any sale of the Debtor's assets pursuant to Section 363 of the Bankruptcy Code; (f) assist the committee in the review, analysis, and negotiation of any Chapter 11 plan of reorganization or liquidation; (g) assist the committee in analyzing the claims asserted against and interests asserted in the Debtor; (h) assist with the committee's review of the Debtor's schedules of assets and liabilities, statement of financial affairs, and other financing reports; (i) assist the committee in its analysis of, and negotiations with, the Debtor or any third party related to, among other things, cash collateral issues, financings, compromises of controversies, assumption, or rejection of executory contracts and unexpired leases, and matters affecting the automatic stay; (j) take all necessary action to protect and preserve the interests of the committee; (k) prepare legal papers; (l) appear, as appropriate, and protect the interests of the committee before the bankruptcy court, the appellate courts, and the U.S. Trustee; and (m) perform all other necessary legal services in this case. The hourly rates of the firm's counsel and staff are as follows: Members $600 - $445 Associates $445 - $225 Paralegals $200 Fishman Haygood will also seek reimbursement for expenses incurred. Tristan Manthey, Esq., a member of Fishman Haygood, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tristan Manthey, Esq. Fishman Haygood, LLP 201 St. Charles Avenue, Suite 4600 New Orleans, LA 70170-4600 Telephone: (504) 586-5561 Facsimile: (504) 310-0253 Email: tmanthey.fishmanhaygood.com About Alfred Miller Contracting Alfred Miller Contracting Company offers general contracting, fireproofing, specialty precast manufacturing, and field services. It is based in Lake Charles, La. Alfred Miller sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 22-20400) on Nov. 14, 2022, with between $10 million and $50 million in both assets and liabilities. Judge John W. Kolwe oversees the case. Brooke W. Altazan, Esq., at Stewart Robbins Brown & Altazan, LLC is the Debtor's legal counsel. The Office of the U.S. Trustee for Region 5 appointed an official committee of unsecured creditors. The committee tapped Fishman Haygood, LLP as its counsel. ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, authorized All Florida Safety Institute, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to continue operating the business and pay salaries. As of the Petition Date, the Debtor was indebted to the U.S. Small Business Administration in the approximate amount of $2,066,071 and Westlake Funding Company, LLC in the approximate amount of $500,000. The Debtor's obligation is evidenced by a Promissory Note, Security Agreement, Financing Statement, and Chattel Mortgage executed on or about May 27, 2020 to USA/SBA and July 21, 2021 to Westlake. The Debtor is permitted to pay only expenses necessary for the operation of the business and not any pre-petition expenses, officer salaries, professional fees, or insiders without further court order. As additional adequate protection to each Lender's interest and the estate's interest in cash collateral, the Lender is granted a replacement lien to the same nature, priority, and extent that the Lender may have had immediately prior to the date that the case was commenced nunc pro tunc to the Petition Date. Further, the Lender is granted a replacement lien and security interest on property of the bankruptcy estate to the same extent and priority as that which existed pre-petition on all of the cash accounts, accounts receivable and other assets and property acquired by the Debtor's estate or by the Debtor on or after the Petition. The replacement lien will be deemed effective, valid and perfected as of the Petition Date, without the necessity of filing with any entity of any documents or instruments otherwise required to be filed under applicable non-bankruptcy law. The Debtor is directed to make adequate protection payments: a. $3,000.00 to Aaron R. Cohen, Subchapter V Trustee, P.O. Box 4208, Jacksonville, FL 32201 by December 31, 2022 and prior to any salary and/or cash collateral payments being made by the Debtor; b. $6,164.40 per month to the U.S. Small Business Administration commencing November 1, 2022 and on the 1st of the month thereafter or further Court Order; c. $0.00 per month to Westlake Funding Company, LLC. Stay to be lifted upon filing of Consent Motion for Relief by the Creditor and further Order of the Court; d. All other UCC-1 receivable Lenders including NewCo Capital Group, Samson, Cloudfund/Delta and IOU shall receive no adequate protection at this time. This order is without prejudice to a later finding that such Lenders may be secured by receivables, personal property, inventory and/or equipment. As additional adequate protection of the Lender's interest in the cash collateral, the Debtor will (a) maintain all necessary insurance coverage on the Lender's collateral and under no circumstances will the Debtor allow its insurance coverage to lapse, (b) continue to pay such monthly insurance payment in a timely manner, and (c) within two days of the request of the Lender, the Debtor will provide to the Lender's counsel a written statement supported by evidence of Debtor's compliance with the foregoing. The Debtor's authority to use the cash collateral will terminate immediately and upon the earlier of (a) order of the Court; (b) the conversion of the case to a Chapter 7 case or the appointment of a Chapter 11 trustee without the consent of the Lender; (c) the entry of an Order that alters the validity or priority of the replacement liens granted to the Bank; (d) the Debtor ceasing to operate all or substantially all of its business; (e) the entry of an order granting relief from the automatic stay that allows any entity to proceed against any material assets of the Debtor that constitute cash collateral; (f) the entry of an Order authorizing a security interest under section 364(c) or 364(d) of the Bankruptcy Code in the collateral to secure any credit obtained or debt incurred that would be senior to or equal to the replacement lien; or (g) the dismissal of the Chapter 11 case. A continued hearing on the matter is set for January 18, 2023 at 2:30 p.m. A copy of the order is available at https://bit.ly/3HObymG from PacerMonitor.com. About All Florida Safety Institute, LLC All Florida Safety Institute, LLC offers driving lessons, driver's license testing and traffic school. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01926) on September 22, 2022. In the petition signed by Mark Allen, manager, the Debtor disclosed $2,200,185 in assets and $5,618,570 in liabilities. Judge Jacob A. Brown oversees the case. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP, is the Debtor's counsel. ANDOVER SENIOR CARE: Amends HUD Secured Claims Pay Details ---------------------------------------------------------- Andover Senior Care, LLC, submitted a Second Amended Chapter 11 Disclosure Statement in connection with its First Amended Chapter 11 Plan dated December 13, 2022. The Plan provides for full payment of all allowed administrative claims, all allowed priority claims, and full payment of the allowed secured claims of the Department of Housing & Urban Development (hereinafter "HUD"), Commerce Bank (hereinafter "Commerce") and Huntington National Bank (hereinafter ("HNB"). The Plan provides for no payment to claims of general unsecured creditors. Class 1 consists of the Secured Claim of HUD by assignment from Dwight Capital, LLC. After the Filing Date, Dwight assigned its claims herein to HUD. HUD's claim against Debtor is secured by a first mortgage lien in Tracts 1 and 2 and a perfected security interest in all of Debtor's personal property, except that personal property which is the Collateral for the Class 2 claim of Commerce or Collateral for the Class 3 claim of HNB. As of the Filing Date, Dwight held in escrow $1,253,483 of Debtor's funds ("Debtor's Escrow Funds"). After the Filing Date, Debtor's Escrow Funds were increased by $79,282 through post filing payments made by Debtor to Dwight. From Debtor's Escrow Funds, Dwight made post-filing disbursements to the Butler County Treasurer of $69,345 in payment of the remaining 2021 real estate taxes due on Tracts 1 and 2, reducing Debtor's Escrow Funds to $1,263,420. The $1,263,420 in Debtor's Escrow Funds shall be retained by HUD and credited against the HUD Claim. Per an Order entered herein on October 12, 2022, Debtor shall sell Tract 1 and personal property not being retained at auction. It is anticipated the net sale proceeds from the sale of Tract 1 and personal property will be no less than $3,000,000 (the "Auction Proceeds"). The Auction Proceeds shall be paid over to HUD and credited against the HUD Claim. Watercrest Communities, LLC, owned by Dennis and Debie Bush, has served, and will continue to serve, as the manager of the ALF. Watercrest shall be entitled to post-petition monthly management fees of 5% of the gross revenues of the ALF. In addition to Debtor, the Bushes own other assisted living facilities which are managed by Watercrest. Watercrest contracts for insurance coverage, data processing services and accounting services for all the assisted living facilities as a group in order to obtain price discounts. Watercrest then bills each assisted living facility its share of these expenses. Class 4 consists of the Unsecured Priority Claim of Kansas Department for Aging and Disability Services for Quality Care Assessment Fees. Per its Proof of Claims 9 and 11, the Kansas Department of Aging and Disability Service ("KDADS") asserted priority claims in the aggregate amount of $22,110 for quality care assessment fees assessed per KSA §75-7435 and civil penalties assessed per KSA §39-965. On October 28, 2022, Debtor filed an Objection to the claims. An Order was entered on November 29, 2022 disallowing the claims. Class 6 consists of Interest Owners in Debtor. Dennis and Debie Bush are the sole shareholders of the Debtor. Mr. and Mrs. Bush shall retain their stock in the Debtor. They will continue to serve as managing members of the Debtor. And they will receive no compensation from Debtor. The Bushes do own Watercrest, which will be paid management fees by Debtor as set forth in its cash flow projections attached to its Plan. Like in the prior iteration of the Plan, the Debtor shall make no payment on allowed unsecured claims. Claims under the Plan will be paid from income generated by the Debtor from ongoing operations. A full-text copy of the Second Amended Disclosure Statement dated December 13, 2022, is available at https://bit.ly/3Wrgba4 from PacerMonitor.com at no charge. Attorneys for the Debtor Andover Senior Care, LLC: Mark J. Lazzo, Esq. Justin T. Balbierz, Esq. MARK J. LAZZO, P.A. Bldg. 300, Ste. B Wichita, KS 67226 Tel: (316) 263-6895 Fax: (316) 264-4704 E-mail: mark@lazzolaw.com justin@lazzolaw.com About Andover Senior Care Andover Senior Care, LLC, owns and operates an assisted living facility in Andover, Kansas. Andover Senior Care filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 22-10139) on March 11, 2022, listing $5,351,220 in assets and $16,334,476 in liabilities. Dennis L. Bush, managing member, signed the petition. Judge Mitchell L. Herren oversees the case. Mark Lazzo, Esq., at Mark J. Lazzo, P.A. and Colangelo & Taber, P.A., serve as the Debtor's legal counsel and accountant, respectively. ANDRADE GUTIERREZ: Chapter 15 Case Summary ------------------------------------------ Five affiliates that concurrently filed voluntary petitions seeking relief under Chapter 15 of the Bankruptcy Code: Debtor Case No. ------ -------- Andrade Gutierrez Engenharia S.A. (Lead Case) 22-11425 Av. do Contorno, n 8.123, Cidade Jardim Belo Horizonte Minas Gerais Brazil AG Construcoes e Servicos S.A. 22-11428 Andrade Gutierrez Investimentos em Engenharia S.A. 22-11435 Andrade Gutierrez International S.A. 22-11438 Zagope Sgps, S.A. 22-11440 Business Description: The Debtors, along with other related entities and affiliates (the "AG Group"), are part of a larger Brazilian corporate group. The AG Group is one of the largest engineering and heavy construction companies in Brazil and Latin America. Chapter 15 Petition Date: October 31, 2022 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. Martin Glenn Foreign Representative: Gustavo Braga Mercher Coutinho Avenida do Contorno, n 8.123, 3 floor Cidade Jardim Belo Horizonte Minas Gerais Brazil Foreign Representative's Counsel: Timothy Graulich, Esq. DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, NY 10017 Tel: (212) 450-4639 Email: timothy.graulich@davispolk.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of Andrade Gutierrez Engenharia S.A.'s Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/A6C66EA/Andrade_Gutierrez_Engenharia_SA__nysbke-22-11425__0001.0.pdf?mcid=tGE4TAMA ANGI GROUP: Moody's Cuts CFR & Senior Unsecured Notes to B2 ----------------------------------------------------------- Moody's Investors Service downgraded ANGI Group, LLC's ("ANGI Group") Corporate Family Rating to B2 from B1, Probability of Default Rating to B1-PD from Ba3-PD and senior unsecured notes rating to B2 from B1 due to the impact of slowing economic growth on advertising demand, which will lead to a period of sustained elevated leverage and prolonged profitability weakness. The Speculative Grade Liquidity rating is unchanged at SGL-2. The outlook remains negative. ANGI Group is a wholly-owned subsidiary of Angi Inc. ("Angi" or the "company"), which is 84.3%-owned by its parent, IAC Inc. ("IAC"), a leading media and internet company. Following is a summary of the rating actions: Downgrades: Issuer: ANGI Group, LLC Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD4) from B1 (LGD4) Outlook Actions: Issuer: ANGI Group, LLC Outlook, Remains Negative RATINGS RATIONALE The ratings downgrade reflects Moody's expectation that Angi will experience delayed deleveraging, a protracted period of weak earnings and continued negative free cash flow (FCF) over the next 12-18 months driven chiefly by Moody's current expectation that the US economy will likely contract in a couple of quarters of 2023. The recessionary pressures combined with rising interest rates and high inflation will likely lead to reduced consumer spending on discretionary home services as well as a meaningful slowdown in advertising revenue growth. Following: (i) significant investments in Angi Services; and (ii) the rebranding to Angi, which resulted in higher-than-expected customer acquisition costs (CAC) through greater paid search, the company has experienced substantial gross margin compression and operating losses in the past six consecutive quarters. In Q3 2022, however, there was sequential improvement in gross margin and a narrowing operating loss compared to Q2 2022 as Angi managed to reduce CAC in a slowing revenue growth environment. At September 30, 2022, financial leverage, as measured by debt to LTM EBITDA, on a gross and net debt basis was 43.5x and 20.9x, respectively (as calculated and adjusted by Moody's, including Moody's standard operating lease adjustment; however no adjustment is made for stock-based compensation expenses) and FCF to debt on a gross and net basis was -19% and -40%, respectively (Moody's adjusted). Though Moody's continues to expect operating losses to narrow and EBITDA to expand from its nadir over the coming quarters, Moody's project continuing cash burn resulting in cash balances approaching close to $300 million (i.e., 60% of outstanding debt) by year end 2022. Moody's expects one-time investments that increased selling and marketing spend (as a percentage of revenue), associated with Angi's website update and brand consolidation initiatives, paid search strategy and outlays for new product launches will gradually moderate and lead to profitability at Angi Services in 2023. While Moody's expects EBITDA will sequentially improve over the next 18-24 months, it will be lower than pre-pandemic levels and remain pressured for a longer period than anticipated due to slower-than-expected revenue growth amid a lethargic economy. Moody's expects leverage to decrease to the 3.5x-4x range on a net basis and 5.5x-6.5x on a gross basis by 2024 (all metrics are Moody's adjusted). The negative outlook reflects Moody's expectation that the combined impact from macroeconomic headwinds, slowing ad spend growth, higher service request costs and rising interest rates coupled with growing encroachment from smaller home services players will limit the benefits from Angi's rebranding investments. This, in turn, will moderate revenue and EBITDA growth and delay deleveraging. While Angi's Service Professionals will increase online Ads and Leads marketing spend to stimulate consumer demand in a weak economy, Moody's expects that higher borrowing and inflationary costs will prompt consumers to decrease spend on discretionary home services projects. Angi Ads and Leads represent roughly 68% of LTM total revenue, while Angi Services and the European operations account for 27% and 5%, respectively. Though Angi is the online category leader, the home services market remains highly fragmented with increasing competition from Yelp, Frontdoor, Thumbtack, TaskRabbit and Amazon's Selling Services. Yelp has continued to experience share gains and strong double-digit growth in its Home Services business, despite the slowing economy. Though Angi has no exposure to Russia or Ukraine, Moody's continues to expect some macroeconomic spillover from the military conflict in that region. The magnitude of the effects will depend on the length and severity of the crisis. Moody's currently projects US GDP growth will decelerate to 1.8% in 2022 (3.0% in Euro area) and 0.4% in 2023 (-0.6% in Euro area), while US inflation is forecast to remain high near 7% yoy by December 2022, declining to around 3% yoy by year end 2023. Angi's revenue is dependent upon clients' advertising and marketing service spending, which is highly correlated with economic and business cycle conditions and can be cyclical. Moody's anticipates slowing US advertising spend next year in the 4%-6% range, consistent with Moody's expectation for decelerating economic growth, rising interest rates, high inflation and increasing risk of a weak domestic economy. Moody's expects traditional linear TV ad spend to decline in the range of -4% to -6% next year. Following estimated digital ad spend growth of 9% in 2022, Moody's projects digital to increase around 8% in 2023, driven by search advertising in the 10%-12% range offset by continued slowdown in social media advertising. Social ads will likely experience 1%-3% growth in 2022 and remain under pressure next year, growing 4%-6%, due to a combination of structural headwinds. ANGI Group's B2 CFR also reflects Angi's position as the leading online player in the high growth on-demand home remodeling, repair and maintenance space, an estimated $600+ billion market in the US. Additional support is provided by: (i) the potential for long-term growth given that the marketplace is relatively underpenetrated; (ii) Angi's B2C online content delivery expertise reinforced by an effective technology platform that combines lead generation, advertising and end-to-end fulfillment to satisfy consumer demand across three Service Professional experiences; (iii) good customer loyalty with improving take rates (i.e., revenue per transacting Service Professional); (iv) good liquidity via sizable cash balances; and (v) implicit financial support from its parent, IAC, which has approximately $1.16 billion of cash and marketable securities (excluding cash at Angi and Dotdash Meredith, Inc.) at September 30, 2022. Over the next 12-18 months, Moody's expects Angi will maintain good liquidity (SGL-2 Speculative Grade Liquidity) supported mainly by cash balances of at least $250 - $300 million offset by negative FCF. Unrestricted cash-on-hand totaled approximately $329 million at September 30, 2022. Angi does not have a revolving credit facility (RCF) given that the former $250 million RCF was retired in August 2021. The company is not subject to quarterly financial maintenance covenants because the $213 million outstanding term loan was fully repaid in May 2021. The only debt currently in the capital structure consists of $500 million 3.875% senior unsecured notes due August 2028. ESG CONSIDERATIONS Angi's ESG Credit Impact Score is highly negative (CIS-4), reflecting the company's neutral-to-low exposure to environmental risks (E-2), moderately negative social exposures (S-3) to potential breaches of customers' personal data and human capital considerations, and highly-negative governance profile (G-4). Environmental risks are neutral-to-low (across all categories. The nature of Angi's media activities, with limited exposure to physical climate risk and very low emissions of pollutants and carbon, results in low environmental risk. Credit exposure to social risks is moderately-negative related to potential cyberattacks and breaches of customers' personal data resulting in safety and security concerns that could damage the company's reputation and prompt users to avoid using its online home services platform. It also reflects moderately negative responsible production attributed to litigation against the company alleging deceptive business practices. Exposure to human capital is also moderately negative associated with Angi's reliance on attracting, developing and retaining a highly skilled technology workforce. The company benefits from its low risk profile to demographic and societal trends, evidenced by continuing migration of consumers to the fast-growing online home services market. Governance risk is highly negative due to the shift in strategy and increased risk appetite, which has produced elevated financial leverage and negative FCF. Angi is a controlled company with significant majority ownership and voting rights held by its parent, IAC. Most of the company's board members are not independent (as defined by Moody's), a further governance weakness. Somewhat offsetting this is the parent's significant liquidity and track record of achieving business objectives and managing operating risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely over the near-term given the expectation for continued weak debt protection measures for the rating category. Over time, an upgrade could occur if Angi exhibits revenue growth that is in line or ahead of market growth, expanding EBITDA and improved business and geographic diversification. An upgrade would also be considered if financial leverage as measured by net debt to EBITDA is sustained near 4x (as calculated and adjusted by Moody's) and free cash flow as a percentage of net debt is sustained at or above 6.5% (Moody's adjusted). Angi would also need to adhere to conservative financial policies. Ratings could be downgraded if Angi's competitive position were to weaken as evidenced by organic revenue growth in the low to mid-single digit percentage range (or lower), EBITDA margins sustained below 5% (Moody's adjusted), rising customer acquisition costs and/or increasing Service Professional churn beyond the rating horizon (year end 2024). Ratings could experience downward pressure if net debt to EBITDA is sustained above 5.75x (as calculated and adjusted by Moody's) and free cash flow to net debt does not revert to positive territory and/or remains below 3% (Moody's adjusted) by year end 2024. A downgrade could also arise if Moody's expects that cash levels will weaken due to higher-than-expected cash burn rates, sizable share purchases or meaningful M&A activity without a proportionate increase in EBITDA. ANGI Group, LLC is a wholly-owned subsidiary of Denver, CO-based Angi Inc., a leading online marketplace for home remodeling, repair and maintenance that connects quality Service Professionals with consumers. Major brands include HomeAdvisor (Angi Leads), Angi (Angi Ads), and Handy and Angi Roofing (Angi Services). The company is 84.3%-owned by IAC Inc., a leading consumer media and internet company that is home to dozens of popular online brands and services used by millions of consumers each day. Angi's revenue totaled approximately $1.87 billion for the twelve months ended on September 30, 2022. The principal methodology used in these ratings was Media published in June 2021. ARCTIC GLACIER: S&P Places 'CCC+' ICR on CreditWatch Negative ------------------------------------------------------------- S&P Global Ratings placing all of its ratings on Arctic Glacier Group Holdings Inc., including the 'CCC+' issuer credit rating, on CreditWatch with negative implications. The CreditWatch placement reflects the possibility of a lower rating if the company is unable to refinance its term loan and revolver on satisfactory terms within the next few months. The CreditWatch placement reflects the heightened risk that Arctic might be unable to refinance its capital structure because of its currently high leverage, weak cash flow generation, and weak market conditions. Arctic Glacier will need to extend the maturities of its capital structure over the next few months. The company's $40 million revolving credit facility (currently undrawn) is now current and will mature in December 2023. Additionally, its $440 million and $40 million senior secured first-lien term loan mature in March 2024, becoming current in about three months. S&P forecasts leverage of 8x, only slightly positive free operating cash flow in 2022, high interest rates and volatile market conditions could make it challenging for the company to extend its maturities on terms satisfactory to the company. Although liquidity sources should be able to cover uses over the next 12 months, S&P views liquidity as less than adequate given its upcoming maturities. S&P said, "Given company's revolver is now current, we no longer consider it as a liquidity source in our analysis. The company currently has a cash balance of approximately $34 million as of Sept. 30, 2022, which we expect will be sufficient to cover the company's peak working capital use of $25 million over the next couple quarters, without additional need to draw on the revolver. The seasonality of Arctic's business results in more working capital build in the first half of the year, with cash build skewed toward the second half of the year following summer sales and collection of receivables. If cash flow generation within the next two quarters is weaker than expected due to our economists forecast for a recession in 2023, we expect Arctic would potentially have to draw deeper into its revolver prior to its term loan becoming current. This could pose additional risk to refinancing its term loan and revolver. "Notwithstanding the approaching maturities, we expect recent operating performance will support a steady improvement in credit measures." Despite the slight improvement in credit metrics throughout the year, the company's S&P Global Ratings-adjusted leverage remains high at about 8.1x for the 12 months ended Sept. 30, 2022, from more than 9x at the end of 2021. This de-leveraging is primarily due to improved sales from returned demand in the retail, grocery, supercenter, and food service sectors throughout the year, along with new account wins, and pricing. S&P said, "Furthermore, the company's successful execution of its centralized routing and bag size standardization initiatives during the year have improved its cost base, allowing for improved S&P Global Ratings-adjusted EBITDA margin in line with our expectations of about 21% for the 12 months ended Sept. 30, 2022. Though higher fuel and labor costs will continue to be headwinds for the remainder of 2022 and into 2023, we expect the company to continue executing further on its identified procurement and accounts receivable/payable centralization selling, general, and administrative projects during 2023, which will allow the company to maintain and manage profitability in the current inflationary environment." S&P said, "The CreditWatch listing indicates that we could affirm or lower our ratings. We expect to resolve the CreditWatch placement within the next 90 days, prior to the term loan becoming current. We could lower the ratings if the company is unable to refinance its term loan and revolver ahead of the term loan becoming current. We could affirm our ratings if it successfully completes a refinancing, continues to perform in line with our expectations, and there are no significant adverse developments." ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of Arctic Glacier. We believe the company's highly leveraged financial risk profile reflects corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." BARTECH GROUP: Wins Cash Collateral Access Thru Jan 2023 -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized the BarTech Group of Illinois, Inc. to use cash collateral on an interim basis in accordance with the budget. Specifically, the Debtor is authorized to use its cash on hand, funds in its deposit accounts, revenue from the business, and any further proceeds of its assets, including inventory and accounts receivable, which may constitute "cash collateral" of certain lienholders to and including January 13, 2023 substantially in accordance with the budget; provided, however, that if BarTech fails to pay Fifth Third Bank the aggregate sum of $60,000 by 3 p.m. (Chicago, Illinois time) on December 31, 2022, then BarTech's authorization to use cash collateral will automatically expire as of the Payment Deadline. BarTech is authorized to use cash collateral to pay all expenses incurred by BarTech in the operation of their ongoing business post-petition (or if incurred pre-petition, those expenditures authorized by a specific Order of the Court) pending the final hearing on the Motion. The final hearing on the matter is set for January 11 at 10 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/3VazUd9 from PacerMonitor.com. The budget provides for total cash out, on a weekly basis, as follows: $174,947 for the week ending December 11, 2022; $821,765 for the week ending December 18, 2022; $387,404 for the week ending December 25, 2022; $243,068 for the week ending January 1, 2023; $217,715 for the week ending January 8, 2023; and $278,595 for the week ending January 13, 2023. About The BarTech Group of Illinois Inc. The BarTech Group of Illinois Inc. -- https://www.bartechgroup.biz -- is an MBE and DBE certified electrical construction contractor. The BarTech Group of Illinois Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-10945) on Sept. 23, 2022. In the petition filed by Dwayne Barlow, as president, the Debtor reported assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. William B Avellone has been appointed as Subchapter V trustee. Alan L Braunstein of Riemer Braunstein LLP is the Debtor's counsel. Ringold Financial Management Services, Inc., is the financial advisor. BEN'S GARDEN: Court OKs Deal on Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York authorized Ben’s Garden Inc. to use cash collateral on an interim basis in accordance with its agreement with JPMorgan Chase, N.A. The Debtor requires the use of cash collateral to pay costs and expenses necessary to operate its business and preserve and maintain its business. Prior to the commencement of the Proceedings, the Debtor incurred obligations to Chase under a business line of credit which was outstanding as of the Petition Date, with an account number ending in 5001, with a current approximate open principal amount of $99,000. The Line of Credit is secured by a first priority lien on all assets of the Debtor. Chase consents to the use of cash collateral by the Debtor (i) in the ordinary course of business for payment of expenses incurred, or to be incurred in the operation of its business, (ii) for payment of any filing fees or United States Trustee fees in connection with the Proceedings, if any, and (iii) for payment of any professional fees and expenses, to the extent allowed in the Proceedings, provided however, that Chase specifically reserves and does not waive the right to object to the allowance of any such professional fees and expenses. As adequate protection, Chase is granted a continuing post-petition security interest in all of the assets of the Debtor and all substitutions therefore. The Adequate Protection Lien will be subject only to the Chase Lien and to any other valid pre-petition security interest or lien to the extent existing and perfected as of the commencement of the Proceedings. The Adequate Protection Lien will be deemed a valid, enforceable and perfected lien to secure the Post-Petition Loss; and such lien will remain valid and perfected in the event of dismissal or conversion of the Proceedings. As additional adequate protection for any Post-Petition Loss, the Debtor will make a payment of $1,629 per month to Chase for the earlier of the effective date of a Chapter 11 Plan confirmed by the Court, or the case is closed. Future payments will be made by the Debtor on or before the 15th of each month to Chase, with the first payment being due on December 15, 2022. These events constitute an "Event of Default:" a. If the Debtor fails to make any Adequate Protection Payments when due, and such nonpayment has not been cured within three business days after notice from Chase. b. The Court removes the Debtor from possession, converts the case to one under Chapter 7 of the Bankruptcy Code, or dismisses the case, without the consent of Chase. c. Any person or entity is granted relief from the automatic stay with respect to any portion of the Collateral. d. An order of the Bankruptcy Court in this Chapter 11 case is entered or modified in a manner materially adverse to Chase; a motion, pleading or proceeding is filed by the Debtor that could reasonably be expected to result in a material impairment of the rights, remedies or interests of Chase; or there is a determination by the Bankruptcy Court with respect to any motion, pleading or proceeding brought by another party which results in any material impairment of the rights, remedies or interests of the Chase. A copy of the order is available at https://bit.ly/3WbKstT from PacerMonitor.com. About Ben's Garden Ben's Garden Inc. in Stony Brook, NY, filed its voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 22-72391) on September 12, 2022, listing $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Benjamin Busko as president, signed the petition. Judge Louis A. Scarcella oversees the case. CERTILMAN BALIN ADLER & HYMAN, LLP serve as the Debtor's legal counsel. BERWICK CLINIC: Unsecureds Will Get 10% of Claims in Plan --------------------------------------------------------- Berwick Clinic Company, LLC, submitted a Fourth Amended Small Business Plan of Reorganization under Subchapter V dated December 13, 2022. Debtor is a Delaware limited liability company. The sole officer and sole manager is Priyam Sharma. Debtor is owned by Fayette Holdings, Inc., and Priyam Sharma is the sole owner of Fayette Holdings, Inc. Priyam Sharma is also the CEO of the Debtor. Debtor is reorganizing in the sense of preserving its ability to operate in the future, though it no longer provides medical services other than handling former patient requests for medical records, referrals, and lab results. As of January 1, 2023, it will only handle requests from former patients for medical records. Debtor filed this chapter 11 plan as a plan of reorganization as opposed to a plan of liquidation for several reasons, including the following: to preserve the ability to operate in the future, likely in conjunction with Berwick Hospital, so that a psychiatrist may be hired as an employee of Debtor as opposed to an independent contractor of Berwick Hospital to save on costs; and to preserve insurance company payor contracts so that if Debtor does resume operations, it will not need to reinvent the wheel and negotiate new provider contracts which may take between 1 to 2 years. These insurance company payor contracts are proposed to be assumed pursuant to this Plan, and Debtor does not believe that there are any cure costs that would need to be promptly paid upon assumption. Under nonbankruptcy law, Berwick Hospital which is a for profit hospital cannot directly employ a psychiatrist. As a result of negotiations with the Subchapter V Trustee, the Debtor and its principal, Priyam Sharma, Ms. Sharma has agreed to provide the Exit Financing necessary to make the required plan payments in order for the Debtor to be able to reorganize and not liquidate. Debtor believes that the amount of the exit financing necessary to make plan payments will be $126,000 which will be paid by Priyam Sharma in cash on the Effective Date. Debtor anticipates that the allowed amount of priority unsecured claims will be approximately $61,000. This is an unimpaired class and will be paid in full on the Effective Date. The funds to pay these claims shall come from Debtor's funds which will be supplemented with the Exit Financing being provided by Priyam Sharma. General unsecured Claims are not secured by property of the estate and are not entitled to priority under § 507(a) of the Code. The Class GUC shall be paid pursuant to the Plan in full satisfaction of their claims. The funds to pay these claims shall come from Debtor's funds which will be supplemented with the Exit Financing being provided by Priyam Sharma, and the collection of receivables by the Debtor. Because it is unclear as to the base amount of claims, it cannot be determined what percentage unsecured creditors will receive. Debtor believes, however, that the percentage to be distributed to general unsecured creditors other than the PPP loans and the insider claims will be approximately 10% In any event, general unsecured creditors will receive a greater distribution than they would in a chapter 7 liquidation. Plan payments will be made by the Debtor directly, as opposed to having the Subchapter V trustee make the payments. Debtor anticipates that the allowed amount of general nonpriority unsecured claims will be approximately $529,157.33 after the PPP loans are forgiven and the insider claims are subordinated for purposes of payment and voting. Upon the Effective Date, $25,000.00 shall be distributed directly by the Debtor for payment of the general unsecured creditor class, to be distributed pro rata [other than the PPP loans which are in the process of being forgiven or have been forgiven, and the insider claims, none of which will be paid]. Debtor shall also pay all net receivable proceeds to the general unsecured class [other than the PPP loans which are in the process of being forgiven or have been forgiven, and the insider claims, none of which will be paid], in an additional amount of $28,000, on a quarterly basis while it continues to collect receivables. Debtor's billing and collection practices are in accordance with State and Federal laws and in accordance with the provider agreements with Medicare, Medicaid and the private insurers with which Debtor has insurance arrangements. Post-confirmation, Infrahealth will collect receivables on behalf of the Debtor for $1,500 per month which is contemplated to continue for 6 months. For transition purposes, it is contemplated that Athena will be paid $2,000 per month for the first 2 post confirmation months. This is less expensive than the amounts charged otherwise for collections. The alternative to having Infrahealth collect receivables is to continue to have Athena continue with collections. The cost for Athena to continue collections would be approximately $10,000 to $11,000 per month, which is made up of $4,000 per month on average for collections by Athena (which is 7.5% of collections), along with retaining specific employees for billing and collections at a further cost of approximately $6,000 to 7,000 per month. Fayette Holdings, Inc., which is owned solely by Priyam Sharma, is the sole equity holder of the Debtor. Fayette Holdings shall retain its equity interest in the Debtor in the same manner, nature, and extent as prior to the Petition Date. Upon the completion of the Plan Payments, Fayette Holdings shall own the Debtor free and clear of all liens, claims and encumbrances as the Plan Payments shall be in full satisfaction of all claims and administrative expenses. A full-text copy of the Fourth Amended Plan dated December 13, 2022, is available at https://bit.ly/3hMY2Vw from PacerMonitor.com at no charge. Attorneys for the Debtor: Robert Bassel, Esq. P.O. Box T Clinton, MI 49236 Phone: (248) 835-7683 Email: bbassel@gmail.com About Berwick Clinic Company Berwick Clinic Company, LLC, operates a health-care business in Bloomfield Hills, Mich. Berwick Clinic filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 22 45589) on July 18, 2022, disclosing $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Priyam Sharma, a principal at Berwick Clinic, signed the petition. Judge Lisa S. Gretchko oversees the case. Berwick Clinic tapped Robert Bassel, Esq., a practicing attorney in Clinton, Mich., to handle its Chapter 11 case. CENTURI GROUP: S&P Alters Outlook to Developing, Affirms 'B+' ICR ----------------------------------------------------------------- S&P Global Ratings removed all of its ratings on Southwest Gas Holdings Inc. (SWX) and its utility subsidiary Southwest Gas Corp. (SWG) from CreditWatch, where it placed them with developing implications on March 2, 2022. SWX announced that it has reached an agreement to sell its equity interest in MountainWest Pipeline LLC to higher-rated The Williams Cos. Inc. for $1.5 billion, including assumed debt of about $450 million. Pending approvals, S&P expects the transaction will close in 2023. The company also announced its plans to spin off Centuri Group Inc. into a stand-alone, fully independent public company pending approval by the Arizona Corporation Commission. S&P expects the spin-off of this higher-risk business will improve its consolidated business risk. S&P believes Centuri's 2022 financial performance will likely be weaker than it previously expected because of inflationary cost pressures and its elevated debt leverage. S&P said, "At the same time, we placed all of our ratings on MountainWest, including our 'BBB-' issuer credit rating and senior unsecured issue-level rating, on CreditWatch with positive implications. "In addition, we revised our outlook on Centuri to developing from stable and affirmed our 'B+' issuer credit rating. We also affirmed our 'B+' issue-level rating on the company's first-lien term loan. Our '3' recovery rating on the term loan remains unchanged, indicating our expectation for meaningful recovery in the event of a payment default." The developing outlook on Centuri reflects the uncertainty surrounding its spin-off and post-separation capital structure. The positive CreditWatch on MountainWest reflects that S&P expects to raise its ratings due to the likelihood it will be acquired by a higher-rated entity and the potential benefits it will receive as part of a higher-rated group. The positive outlook on SWX and its subsidiary SWG reflects the potential that S&P will raise its rating by one or more notches over the next 12 months due to our expectation for an improvement in the group's business risk following its sale of MountainWest and spin-off of Centuri. SWX's disposal of its higher-risk, nonutility construction operations under Centuri would reduce its consolidated business risk. S&P said, "Upon the completion of its sale of MountainWest and its spin-off of Centuri, we expect to update our base-case forecast to reflect that the company derives 100% of its EBITDA from its lower-risk utility operations under SWG, which is up from roughly 50%-55% currently. Therefore, we anticipate this will lead to an improvement in its consolidated business risk. "We expect SWX will fully repay the $1.6 billion bridge facility it used to finance its acquisition of MountainWest. "In September of this year, the company announced it extended the maturity of its bridge facility to Dec. 30, 2023. We expect SWX will use the proceeds from its sale of MountainWest to fully repay the $1.6 billion bridge facility, which we believe will improve its liquidity position over the next 12 months." Although the post-separation capital structures of SWX and Centuri remain uncertain, SWX's consolidated financial measures will likely not materially weaken because of the significant approximately $2.7 billion reduction in its consolidated leverage. This reflects the repayment of the roughly $1.1 billion outstanding on SWX's bridge facility, MountainWest's $450 million of long-term debt, and Centuri's $1.145 billion first-lien term loan. S&P could raise its ratings on MountainWest if it assesses its group status under its new parent as core. This reflects the potential S&P will view the company as integral to the new group's identity and future strategy and believe it would likely receive support from the group under any foreseeable circumstances. S&P expects to make this determination upon the completion of the acquisition. Outlook -- Southwest Gas Holdings Inc. S&P said, "The positive outlook on SWX reflects the potential that we will raise our rating by one or more notches over the next 12 months due to our expectation for an improvement in its business risk following its sale of MountainWest and spin-off of Centuri. "We could revise our outlook to stable and affirm the ratings if SWX decides not to sell MountainWest and spin off Centuri and maintains funds from operations (FFO) to debt of consistently below 15%. "We could upgrade SWX by one notch if it sells MountainWest and spins off Centuri while maintaining consolidated FFO to debt of consistently above 10%. We could raise our ratings on the company by more than one notch if, following the sale of MountainWest and the spin-off of Centuri, it improves its consolidated FFO to debt above 13%." Outlook -- Southwest Gas Corp. S&P said, "The positive outlook on SWG reflects that we could potentially raise our ratings by one or more notches over the next 12 months. Under our base-case forecast, we assume the company's stand-alone FFO to debt will be in the 16%-18% range through 2024. "We could revise our outlook on SWG to stable and affirm our ratings if we don't upgrade its parent SWX. "We could raise our ratings on SWG if we upgrade its parent SWX, SWG's business risk does not increase, and the company maintains stand-alone financial measures in line with our base-case assumptions." CreditWatch -- MountainWest Pipeline LLC The positive CreditWatch reflects that S&P expects to raise its ratings on MountainWest due to the likelihood it will be acquired by a higher-rated entity and the potential benefits it will receive from being part of a higher-rated group. Outlook -- Centuri Group Inc. The developing outlook on Centuri reflects the uncertainty surrounding its spin-off and post-separation capital structure. S&P could revise its outlook on Centuri to stable and affirm the ratings if its business risk does not increase and its financial measures improve, reflecting debt to EBITDA of consistently below 5x over the next 12 months. S&P could lower its ratings in the next 12 months if: -- Centuri maintains leverage above 5x or its free operating cash flow (FOCF) to debt remains below 5%. S&P could raise its ratings if: -- Centuri's business risk does not increase; and -- Its debt to EBITDA significantly improves to below 4x and its FOCF to debt increases to consistently above 10%. ESG credit indicators: E-2, S-2, G-2 CITY BREWING: Moody's Lowers CFR to Caa2, Outlook Negative ---------------------------------------------------------- Moody's Investors Service downgraded City Brewing Company, LLC's corporate family rating to Caa2 from B3, Probability of Default Rating to Caa2-PD from B3-PD, and the rating on the company's senior secured bank credit facilities to Caa2 from B3. The rating outlook remains negative. The downgrade to Caa2 was prompted by a weaker than expected third quarter ended September 2022 which failed to show anticipated recovery sequentially or year over year over an already weak 2nd half of 2021. Operating results had already deviated materially from original growth and cash flow expectations in 2021 as expansion in the hard seltzer market slowed, leaving excess inventory in trade channels for City's largest customers. Key customers pulled back on orders until the inventory overhang could be cleared, which in turn made City less efficient because it did not downscale its cost structure immediately due to concerns about worker shortages. City Brewing also expected the pull back to be temporary. Although the company said that the inventory overhang was cleared by mid 2022, persistent supply chain and labor availability challenges have slashed efficiency and made it difficult for the company to meet demand. Furthermore, the hard seltzer market has continued to see lower demand than anticipated this year and the category will experience a seasonal low over the next quarter or so which will make Q4 challenging. Exacerbating these issues, equipment delivery delays for new lines at the Irwindale brewery meant that the company missed the ability to fulfill orders for the key summer selling season and may not regain some of those customers until the new calendar year when contracts reset. The company has been challenged with labor issues including a one-week strike at its Latrobe facility, higher labor costs, and a high turnover rate and difficulty recruiting at its Memphis facility, normally one of its most productive. Because certain of its inflationary fee increases are only reset once a year in January, the company's ability to pass on costs will be more limited for the remainder of 2022. All of these issues have combined to reduce revenue, significantly squeeze margins, kept free cash flow negative and led to additional debt. To bolster liquidity, the company entered into $21 million in equipment leases at Irwindale and a sale leaseback for its La Crosse, Wisconsin brewery, which raised $58.7 million in gross proceeds. Then in October, the company entered into another equipment lease for assets in its Memphis facility which provided another $75 million of gross proceeds. The company used the proceeds to fully repay the revolver, which had $36 million outstanding at the end of September, and to fund other expenses including capital spending. The downgrades also reflect the company's high projected leverage and weak liquidity that increases the risk of a distressed exchange or other default if City Brewing is unable to execute an operational turnaround. Moody's now expects pro-forma debt to EBITDA leverage (including Moody's adjustments) to end full year 2022 in the mid teens, compared with around just over 10x expected at the time of the last downgrade. While Moody's expects EBITDA to begin to improve in 2023, the company will be more weakly positioned to start the year and timing of recovery remains uncertain. Moody's expects that leverage will remain high, at well over 8x, and free cash flow to remain weak. With lower growth expectations, the company is also moderating the timing of growth capital spending to better align with demand, which will help to preserve cash. Nevertheless, Moody's expects free cash flow to be negative in 2022, partly due to growth investments, and modestly negative in 2023 as cash flows begin to recover but capital expenditures remain high. City Brewing had a minimal $7 million cash balance as of September and Moody's believes access to the revolver will likely be limited to 30% of the $122 million commitment. Borrowing exceeding this level triggers the revolver's springing 7.15x maximum net debt-to-EBITDA leverage covenant that Moody's projects the company would not meet in the fourth quarter. Moody's anticipates that growth will be bolstered in 2023 as Irwindale comes more fully online, with both slim can and variety pack equipment lines that had experienced delays now delivered and fully operational at that brewery. The company began to transition the Pabst Blue Ribbon business onto its platform in Q3 of 2022 but more meaningful volumes will move over in 2023 and 2024. The following ratings/assessments are affected by the action: Ratings Downgraded: Issuer: City Brewing Company, LLC Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa2 (LGD3) from B3 (LGD3) Outlook Actions: Issuer: City Brewing Company, LLC Outlook, Remains Negative RATINGS RATIONALE City Brewing's Caa2 CFR reflects its high leverage and weak profit margins following its 2021 refinancing exacerbated by a slowdown in its key markets and operational challenges due to labor, input and supply chain issues. The company's credit profile also reflects its smaller scale than most rated beverage companies, operational risks associated with capacity expansion and the build out of the Irwindale Brewery, lost business due to equipment delays and reduced but still high capital spending. Moody's expects free cash flow to be negative in 2022 and improved, but still negative in 2023. This is despite anticipated sales and profit growth next year, as still substantial growth capex and rising interest rates together with stubbornly high labor and input costs will continue to absorb cash. The high leverage and weak liquidity elevate the risk of a distressed exchange or other default if City Brewing is unable to execute an operational turnaround. City Brewing continues to face operational challenges related to supply chain issues and labor availability, risks around its expansion plans and the risk of potential loss of business should categories currently in favor begin to decline, or if customers move production in house or to other co-packers. Although declining, the company still has significant customer concentration with its top two customers accounting for close to 50% of sales. At the same time, City Brewing benefits from its position as the largest non-brand owning alcoholic beverage co-packer in the US, with a longstanding customer base, moderate commodity price exposure, and an asset base that is more geographically diverse with the 2021 addition of the Irwindale brewery in California. Its business is skewed toward producing beverages in premium categories, typically leading to healthy margins. City Brewing also offers customers solutions to manage the increasing product and packaging complexity in the industry that has significant barriers to entry. City Brewing's liquidity is considered weak as it is constrained by a modest $7 million cash balance as of September 2022 and uncertainty regarding the company's ability to generate meaningful positive free cash flow over the next year. The company's $122 million revolving credit facility expires in 2026 and provides good liquidity support but the company is reliant on the facility to fund growth investments over the next year. As of the end of September the revolver had $36 million drawn. The revolving credit facility is subject to a springing Net Debt / EBITDA leverage covenant of 7.15x, which is only tested if borrowings exceed 30% at the end of a quarter. While the borrowings were very close to the level that would trigger covenant testing at the end of the quarter, the facility was paid down in full in October following the execution of the sale leaseback. Still, the bank leverage test was very close to the covenant limit at the end of the September quarter, and further use of the revolver in the future could be constrained. Given lower than originally planned EBITDA, and uncertainty around the timing of anticipated return to growth, it is Moody's expectation that City will likely need to draw under the revolver in the coming months to fund growth capital spending. Furthermore, after the lease transactions, Moody's does not believe that the company would pass the covenant test under the facility if it were triggered, which limits availability to just over $36 million. Moody's does not believe that the growth capital spending is entirely discretionary or deferrable due to commitments to provide capacity to customers. The term loan contains no financial maintenance covenants. Moody's expects that the company will begin to see top line momentum restored in 2023 as key customers resume orders following the hard seltzer inventory reset and the delayed equipment that is now up and running at Irwindale becomes productive, but growth will occur later and be slower than previously expected. City will also benefit from the gradual transition of Blue Ribbon (Pabst) Brewing production from Molson Coors to City Brewing before the end of 2024. ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS City Brewing's ESG Credit Impact Score is highly negative (CIS-4) driven by its G-4 governance score owing to its aggressive financial policy and private ownership. Moderately negative environmental risks exist in relation to water management, natural capital and waste and pollution although its clients assume much of the supply chain risk. Social risk is also moderately negative due to customer relations risk related to its production of alcoholic beverages as well as premium low and no-alcohol products. City Brewing is also exposed to social and demographic trends, which can change consumption patterns and thus demand for products that the company co-packs. As a private company with high leverage and concentrated control, governance risk is highly negative. Environmental risks are moderately negative (E-3) for City Brewing in line with other beverage producers. This mainly reflects the industry's exposure to water management, waste and pollution and reliance on natural capital. While the co-packer's customers largely assume supply and sourcing risks, beverage producers rely on availability of water and specific agricultural ingredients some of which are difficult to obtain or to substitute, without which they cannot produce the end products. City Brewing's physical climate and carbon transition risks are neutral to low. City Brewing's social Issuer Profile Score is moderately negative (S-3), reflecting risks associated with its co-manufacturing of both alcoholic as well as premium non- alcoholic beverages, and its exposure to shifting demographic trends that can cause sudden shifts in the needs of its customer base. The company monitors its social risks closely, including product quality and safety and transparent labeling. Social risks also include exposures to potential changes in demographics and societal trends, which could lead to volume pressure, mitigated by ongoing premiumization and product innovation. These risks are partially balanced by neutral to low risks for health and safety, human capital and responsible production. City Brewing's highly negative (G-4) governance score is influenced by its private ownership. The company is minority owned by private equity firms Charlesbank Capital Partners, and Oaktree Capital Management LLC, with the majority held by Blue Ribbon Partners, which is led by American beverage entrepreneur Eugene Kashper. Moody's believes City Brewing's financial policies are aggressive. This is evidenced by the company making larger than normal distributions to its owners in 2020 and further shareholder distributions were funded with additional debt through the 2021 refinancing. These distributions are aggressive at a time when the company was also investing heavily to expand capacity and ramp up new volume in newer beverage categories. Still, the company's stated plans to lower debt-to-EBITDA leverage over time to under 4x (based on the company's calculation) provides an indication of a current focus on leverage reduction. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects the lack of visibility around an operational recovery given that many of the inefficiencies the company is experiencing are related to supply chain challenges that are not entirely within its control. The negative outlook also reflects the need for substantial capital spending to meet customer commitments, which is leading to negative free cash flow and higher leverage. Negative free cash flow will persist when capital spending subsides if operating cash flow does not improve. A weakened liquidity position given significantly lower than expected sales and negative free cash flows is also contributing to the negative outlook because it is increasing funding needs and debt. A rating upgrade could be considered if the company completes expansion initiatives, restores operating efficiencies and growth, further diversifies its customer base to reduce customer concentration, restores healthy margins, reduces leverages, and generates free cash flow. A downgrade could be warranted in the case of further operational difficulties, including any material delays in getting new capacity on-line to successfully ramp up production, failure to regain customers and fulfill their orders, failure to improve margins, sustained loss of significant customer business that would leave capacity underutilized, large debt financed shareholder returns or acquisitions or if debt to EBITDA leverage remains elevated. A deterioration in liquidity could also lead to a downgrade. The principal methodology used in these ratings was Alcoholic Beverages published in December 2021. Headquartered in La Crosse, WI, City Brewing Company, LLC is engaged primarily in the contract production and packaging of beverages including beer and malt based alcoholic beverages, teas, energy drinks and soft drinks. Customers include large branded, independent beverage makers and marketers, including companies engaged in both the alcoholic and non-alcoholic beverage segments. The company operates breweries in La Crosse, WI, Latrobe, PA and Memphis, TN. The purchase in 2021 of the Irwindale, CA equipment and leasehold added a fourth brewery on the west coast. The company is minority owned by private equity firms Charlesbank Capital Partners, and Oaktree Capital Management LLC, with the majority held by Blue Ribbon Partners, which is owned and led by American beverage entrepreneur Eugene Kashper. City's net sales for the LTM ended September 30, 2022 were over $400 million. However, these revenues are predominately fees and thus may not be comparable with revenues generated by other contract manufacturers. CLAIRMONT PLACE: Wins Cash Collateral Access on Final Basis ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, authorized Clairmont Place Condominium Association, Inc. to use cash collateral on a final basis, in accordance with the budget. Paul M. McGough asserts an assignment of rents as collateral security with respect to amounts collected from residents of the Montclair, a personal care home currently managed by the Debtor. The Debtor requires the use of the Montclair Collections, that may be the cash collateral of McGough, to continue operating its business. McGough asserts that his interest in the Montclair Collections automatically attaches to Montclair Collections arising subsequent to the Petition Date pursuant to 11 U.S.C. section 552(b)(2) such that a replacement lien in the Montclair Collections is not required. The Debtor disputes this contention. As adequate protection for any decrease in value of any interest held by McGough in the cash collateral, McGough is granted a replacement lien pursuant to sections 361, 362 and 363 of the Bankruptcy Code in post-petition Montclair revenue. This lien will be valid, binding, enforceable and automatically perfected and continuing, to the extent that McGough has a valid, properly perfected and enforceable interest prepetition in and to the Montclair Collections. The Debtor may use cash collateral for its ongoing operations as set forth in its Chapter 11 plan. The Debtor will begin making payments to McGough as set forth in the Chapter 11 Plan on January 28, 2023. A copy of the order is available at https://bit.ly/3hAO8Gv from PacerMonitor.com. About Clairmont Place Condominium Association Clairmont Place Condominium Association, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-58123) on Oct. 29, 2021, with up to $1 million in assets and up to $10 million in liabilities. Judge Lisa Ritchey Craig oversees the case. Shayna Steinfeld, Esq., at Steinfeld & Steinfeld, PC is the Debtor's legal counsel. Melanie S. McNeil, Esq., from the Office of the State Long-Term Care Ombudsman, has been appointed as patient care ombudsman. CLUB 77 BAR: Unsecureds to Get $80 per Month for 60 Months ---------------------------------------------------------- Club 77 Bar & Grill, Inc., submitted a Second Amended Disclosure Statement and Plan of Reorganization dated Dec. 13, 2022. The Plan will enable the Debtor to continue operating as a corporation, operating the bar at 1614 Broadway, Buffalo, NY, while satisfying the claims of its creditors over a 5-year period. The Debtor plans to pay all secured and priority claims 100% and allowed non priority and unsecured claims at a rate of 5% over the life of the Plan. Since the Petition Date, the Debtor has concentrated its efforts into operating and managing the bar profitably to generate sufficient income to fund the Plan of Reorganization. The Debtor believes the business will have annual revenues of $115,000 to $130,000 with overhead and yearly overhead and taxes of about $80,000 to $90,000. Additional revenue to fund the Plan will also be available from Mr. Hargrove directly. The Chapter 13 case has been withdrawn, as in September 2022 Mr. Hargrove was awarded a "NYS Homes and Community Renewal East Buffalo Homeowner Assistance Fund Grant" totaling $11,395 which paid in full the real property taxes, water and sewer balances against the bar. The building is owned personally and those taxes were the reason for the personal Chapter 13 filing. Those personal funds of Mr. Hargrove, previously earmarked to satisfy the Ch 13 debts, can now be applied to the Plan payments herein. (In his Ch.13 budget, Mr. Hargrove listed $500 in monthly rent payments from Club 77 as well as almost $450 in Ch. 13 Plan payments. This $950 is now available to supplement the Club 77 monthly Plan payments.) Additionally, his monthly retirement and Social security benefits have increased by about $300 in the last three years. Therefore Club 77 Bar & Grill need only contribute about $2,400 a month for the Plan to succeed. The Debtor's three most recent Monthly Operating Reports (September, October, November,) filed with the Court show an aggregate positive cash flow of $7802 from revenues of $25222 and expenses of $17,420. Class 1 consists of Priority Claims. The Debtor is current with its quarterly US Trustee Fees. A NYS Tax administrative claim of 1,647.66 and any outstanding US Trustee Fees, if any, shall be paid on the Effective date of the Plan, 20 days from confirmation. This class is unimpaired. Class 2 consists of Secured Claims - Taxes. This class is impaired. Under Section 507 of the U.S. Bankruptcy Code, Debtor owes an aggregate amount of $8500 in secured tax debt to the Internal Revenue Service. This debt will be paid over 60 months at 6% annual interest but should be satisfied well before the maximum time proposed. ($164 monthly). Class 3 consists of Priority Tax Claims. This Class is impaired. NY sales Tax and interest ($151775). Internal Revenue Service ($2099). This debt will be paid over 60 months at 6% annual interest but should be satisfied well before the maximum time proposed. ($3142 monthly). Class 4 consists of Unsecured Tax Claims. NY Corporate Tax ($8000), NY Sales tax penalties ($20380), NY State Labor Department ($2545), Internal Revenue Service ($42000). Blustein (23,000) This debt ($95,925 total) will be paid over 60 months at a rate of .05 cents on the dollar but should be satisfied well before the maximum time proposed. Total Plan payments $4,796 ($80 monthly). The Plan contemplates that the debtor shall make Plan payments out of the profitable operation of Debtor's business. The total monthly payment shall be $3,386 ($40,632), annually until completion. Debtor estimated earlier that it shall have revenues of about $115,000 on an overhead of $80,000 annually. Together with Debtor's personal budget surplus of over $1000 available, the Plan is adequately supported by debtor's current revenues. A full-text copy of the Second Amended Disclosure Statement dated December 13, 2022, is available at https://bit.ly/3PJynde from PacerMonitor.com at no charge. Attorney for the Debtor: James M. Joyce, Esq. 3330 Grand Ridge Drive NE Grand Rapids, MI 49525 Tel: (616) 447-1887 Email: JmJoyce@lawyer.com About Club 77 Bar & Grill Club 77 Bar & Grill, Inc., filed a petition for Chapter 11 protection (Bankr. W.D.N.Y. Case No. 21-11067) on Oct. 21, 2021, disclosing under $1 million in both assets and liabilities. Judge Carl L. Bucki oversees the case. The Debtor tapped James Joyce, Esq., an attorney practicing in Grand Rapids, Mich., to handle its Chapter 11 case. COLORADO MUSHROOM: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Colorado Mushroom Farm, LLC 10719 County Road 5 S Alamosa, CO 81101 Business Description: The Debtor is primarily engaged in the production of mushrooms. Chapter 11 Petition Date: December 20, 2022 Court: United States Bankruptcy Court District of Colorado Case No.: 22-14958 Judge: Hon. Michael E. Romero Debtor's Counsel: Robert J. Shilliday III, Esq. SHILLIDAY LAW, P.C. 730 17th Street, Suite 340 Denver, CO 80202 Tel: 720-439-2500 Email: rjs@shillidaylaw.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Baljit Nanda as manager. 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/B5YYAHA/Colorado_Mushroom_Farm_LLC__cobke-22-14958__0001.0.pdf?mcid=tGE4TAMA CONSOLIDATED ELEVATOR: Taps Fisher Phillips as Special Counsel -------------------------------------------------------------- Consolidated Elevator Company, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Fisher Phillips, LLP as its special counsel. Fisher Phillips will assist the Debtor and its bankruptcy counsel in negotiating a collective bargaining agreement with the International Union of Elevator Constructors, and in any disputes regarding the contribution benefits arising out of the CBA with the trustees of the National Elevator Industry Pension Fund, National Elevator Industry Health Benefit Plan and other concerned parties. The firm received a retainer fee of $10,000 from the Debtor. The hourly rates of the firm's counsel and staff are as follows: Robert C. Christenson, Partner $790 Todd Lyon, Partner $625 Seth Kaufman, Partner $650 Eleanor Miller, Associate $445 Henry Thomson-Smith, Associate $445 Mr. Christenson disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert C. Christenson, Esq. Fisher Phillips, LLP 1075 Peachtree Street, NE, Suite 3500 Atlanta, GA 30309 Telephone: (404) 231-1400 Facsimile: (404) 240-4249 Email: rchristenson@fisherphillips.com About Consolidated Elevator Co. Consolidated Elevator Company, Inc. is a company in Covina, Calif., which provides elevator repairs services. Its employees consist of mechanics, salespeople and support staff. Consolidated Elevator Company sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-15611) on Oct. 14, 2022. In the petition signed by its chief financial officer, David J. Sandoval, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Sandra R. Klein oversees the case. The Debtor tapped RHM Law, LLP as bankruptcy counsel and Fisher Phillips, LLP as special counsel. CRAWL SPACE: Case Summary & Six Unsecured Creditors --------------------------------------------------- Debtor: Crawl Space Door System, Inc. 3669 Seagull Bluff Drive Virginia Beach, VA 23455 Business Description: The Debtor Supplies homeowners, pest control companies, contractors, and builders with crawlspace air vents, flood vents, vent covers, and exhaust fans. Chapter 11 Petition Date: December 20, 2022 Court: United States Bankruptcy Court Eastern District of Virginia Case No.: 22-72118 Debtor's Counsel: Paul Driscoll, Esq. ZEMANIAN LAW GROUP 223 East City Hall Ave. Norfolk, VA 23510 Tel: (757) 622-0090 Email: paul@zemanianlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by William G. Syke as president. A full-text copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/P26NSVA/Crawl_Space_Door_System_Inc__vaebke-22-72118__0001.0.pdf?mcid=tGE4TAMA DCL HOLDINGS: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: DCL Holdings (USA), Inc. 11 Concorde Gate, Suite #608 Toronto, Ontario, M3C 3N6 Business Description: DCL is a global supplier of color pigments and dispersions for the coatings, plastics and ink industries. DCL manufactures in six factories globally and supplies its customers through local warehousing. Chapter 11 Petition Date: December 20, 2022 Court: United States Bankruptcy Court District of Delaware Six affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- DCL Holdings (USA), Inc. (Lead Debtor) 22-11319 DCL Corporation (BP), LLC 22-11320 H.I.G. Colors Holdings, Inc. 22-11321 H.I.G. Colors, Inc. 22-11322 DCL Corporation (USA) LLC 22-11323 Dominion Colour Corporation (USA) 22-11324 Judge: Hon. J. Kate Stickles Debtors' Counsel: Jeffrey R. Dutson, Esq. Brooke L. Bean, Esq. KING & SPALDING LLP 1180 Peachtree Street, NE, Suite 1600 Atlanta, Georgia 30309-3521 Tel: (404) 572 4600 Fax: (404) 572-5100 Email: jdutson@kslaw.com bbean@kslaw.com - and - Michael R. Handler, Esq. Miguel Cadavid, Esq. KING & SPALDING LLP 1185 Avenue of the Americas New York, NY 10036 Tel: (212) 556-2100 Email: mhandler@kslaw.com mcadavid@kslaw.com Debtors' Delaware Counsel: Mark D. Collins, Esq. Amanda R. Steele, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 Email: collins@rlf.com steele@rlf.com Debtors' Interim CFO, CRO & Restructuring Personnel Provider: ANKURA CONSULTING GROUP, L.L.C. 485 Lexington Avenue, 10th Floor New York, NY 10017 Debtors' Claims & Noticing Agent: KROLL RESTRUCTURING ADMINISTRATION LLC 55 East 52nd Street, 17th Floor New York New York 10055 Debtors' Lead Investment Bank: TM CAPITAL CORP. Promenade, 1230 Peachtree Street NE Suite 550 Atlanta, GA 30309 Estimated Assets: $100 million to $500 million Estimated Liabilities: $100 million to $500 million The petitions were signed by Scott Davido as chief restructuring officer. A full-text copy of the Lead Debtor's petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GJY2LKQ/DCL_Holdings_USA_Inc__debke-22-11319__0001.0.pdf?mcid=tGE4TAMA List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Internal Revenue Service Due to Government $11,214,333 Centralized Insolvency Operation P.O. Box 7346 Philadelphia, PA 19101 Tel: +1 (800) 973-0424 (Direct); +1 (844) 250-2035 (Fax) 2. The Shepherd Color Company Trade Vendor $2,631,035 4539 Dues Drive P.O. Box 465627 Cincinnati, OH 45246 Contact: Jenna Letts Tel: +1 (513) 874-0714 x3300 (Office); +1 (724) 255-2199 (Mobile) Email: jletts@shepherdcolor.com 3. Oriental Color Corp., Ltd. Trade Vendor $2,257,299 1801, 24th Building Shui Xin Ge, Hangzhou, 310004, China Contact: He Li Email: heli@ocolor.com 4. Innophos Inc. Trade Vendor $1,011,888 P.O. Box 60590 Charlotte, NC 28260 Contact: Maryann Toth Tel: +1 (609) 366-1258 Email: Maryann.Toth@Innophos.com 5. Carlfors Bruk AB Trade Vendor $897,339 Box 44 SE-561 38 Huskvarna, Sweden Contact: Hannah Hultenius Phone: +46 (0)36 389515 Email: hannah.hultenius@carlfors.se 6. Pidilite Industries Ltd. Trade Vendor $674,500 Regent Chambers, 7th Floor, Jamnalal Bajaj Marg, 208, Nariman Point Mumbai 400021, India Contact: Prashant Shridharani Email: pgs@alphachem.com 7. Occidental Chemical Trade Vendor $660,411 Corporation P.O. Box 840642 Dallas, TX, 75284 Contact: Chris Diaz Email: Chris_Diaz@oxy.com 8. Penglai Xin Guang Trade Vendor $622,455 Pigment Chemical Co., Ltd. Eastern Suburbs Penglai City, Shandong Prov., 265600, China Contact: Wang Dan Phone: n/a Email: danwangsh2017@126.com 9. AksharChem (India) Ltd. Trade Vendor $599,699 166/169, Village Indrad, Kadi Kalol Road, Mehsana Dist. Gujarat 382715, India Contact: Hitarth Vaidya Email: hitarth@aksharchemindia.com 10. Toda United Industrial Trade Vendor $594,425 Floor 11, Zinglong Mansion No. 269 Wuyuan Street Wukang Town, Deqing County, Zhejiang, 313200, China Contact: Rose Zhou Phone: +86 572 8425299 Email: zhy@zjunited.com 11. Biddle Sawyer Corporation Trade Vendor $570,322 P.O. Box 36033 Newark, NJ 07188 Contact: Courtney Weiss Phone: +1 (212) 736-1580 x245 Email: weiss@BiddleSawyer.com 12. Vertellus Specialties Trade Vendor $562,744 Austria GmbH St. Peter StraBe 25 4020, Linz, Austria Contact: Bettina Mitterberger Phone: +43 732 662200 2472 Email: BMitterberger@Vertellus.com 13. Berkeley County Treasurer Due to Government $562,169 1003 N. Hwy 52 Moncks Corner, SC 29461 Contact: Carolyn Umphlett Phone: +1 (843) 567-3136 x4728 Email: carolyn.umphlett@berkeleycountysc.gov 14. Aceto US LLC Trade Vendor $553,869 4 Tri Harbor Court Port Washington, NY 11050 Contact: Angela Montoya Email: amontoya@aceto.com 15. Unique Chemical Limited Trade Vendor $546,076 19F Shangmao Century Plaza No. 49 Zhongshan South Road Nanjing, 210005, China Contact: Judy Ding Phone: +86 25 86887400 Email: dingding@uniquechemical-nj.com 16. Brilliant Group Trade Vendor $528,709 Logistics Corporation 159 N. Central Avenue Valley Stream, NY 11580 Contact: Shanshan Yi Phone: +1 (516) 599-2406 x135 Email: ssyi.ny@brilliantgroupusa.com 17. U.S. Customs & Due to Government $474,532 Border Protection P.O. Box 70946 Charlotte, NC 28272 Phone: +1 (317) 298-1200 18. Liaoning Honggang Trade Vendor $472,320 Chemicals Co., Ltd. No. 6, Wanhe 2 Road, Aromatics Base Liaoyang City, Liaoning Prov., China Contact: Jerry Zhang Phone: +86 419 7675988 Email: lyns3322@163.com 19. Meghmani LLP Trade Vendor $469,883 Plot No: Z-34, Dahej, Tal. Vagra, Dist. Bharuch Gujarat 392130, India Contact: Sanjay Nayak Phone: +1 (704) 425-6226 Email: sanjay.nayak@meghmani.com 20. Mazda Colours Ltd. Trade Vendor $459,218 N.K.M. International House, 178, Backbay Reclamation, Babubhai Chinai Marg Mumbai 400020, India Contact: Rehan Ansari Phone: +91 22 61457000 Email: export@mazdacolours.com 21. Ultramarine & Pigments Ltd. Trade Vendor $389,325 556, Vanagaram Road Ambattur, Chennai 600053, India Contact: Naresh Pillai Phone: +91 44 - 2613 6700 - 04 x524 Email: naresh@ultramarinepigments.net 22. CINIC Chemicals Co., Ltd. Trade Vendor $376,176 1730 Huilian Road Qingpu Industrial Park, Shanghai, 201707, China Contact: Zhu Zheng Phone: +86 21 5240 0178 Email: zhuzheng@cinic.com 23. Zeya Chemicals Co., Ltd. Trade Vendor $370,894 A518, Foreign Business Bldg. B Haimen, Jiangsu, 226100, China Contact: Echo Mei Phone: +86 513 82112119 Email: echo@zeyachem.com 24. P&NM Co., Limited Trade Vendor $344,774 Unit 1015, 10/F Block A, New Mandarin Plaza No 14 Science Museum Road Tsim Sha Tsui East, Kowloon, Hong Kong Contact: George Qiao Phone: +86 412 838 6888 Email: George.qiao@hifichem.com 25. U.S. Water Services Corporation Trade Vendor $300,500 4939 Cross Bayou Blvd. New Port Richey, FL 34652 Contact: Zachary Edward Cain Phone: +1 (828) 989-9387 Email: zcain@uswatercorp.net 26. Violet Pigment & Trade Vendor $266,160 Chemical Industry Plot No. 2521, G.I.D.C. Estate Ankleshwar 393002, India Contact: Dilip Gohel Phone: n/a Email: ronakcorporation@hotmail.co 27. Vijay Chemical Industries Trade Vendor $257,264 R-422, MIDC, Thane-Belapur Road, Rabale, Navi Mumbai 400701, India Contact: Chinmay Jangam Phone: +91 96 19144598 (Mobile); +91 22 49769879 (Office) Email: chinmay@vijaychemical.com 28. Brenntag Mid-South Trade Vendor $234,344 4200 Azalea Dr. Charleston, SC 29405 Contact: Matt Moxley Phone: +1 (843) 860-0838 (Mobile); +1 (843) 744-7421 (Office) Email: mmoxley@brenntag.com 29. Lona Industries Limited Trade Vendor $211,956 Gharkul, 82, Dr. M. B. Raut Road, Shivaji Park, Dadar West Mumbai 400028, India Contact: Prakash Patil Phone: Office: +91 22 24442791/2445 1007; Fax: +91 22 2444 2795 Email: export@lona.com; patil@lona.com 30. Ashu Organics (India) Pvt. Ltd. Trade Vendor $209,407 Shop 1 Gurukrupa Society Thane 400602, India Contact: Ashutosh Dewal Email: ashutosh.dewal@ashuorganics.com DOTDASH MEREDITH: Moody's Lowers CFR & Senior Secured Loans to B2 ----------------------------------------------------------------- Moody's Investors Service downgraded Dotdash Meredith Inc.'s Corporate Family Rating to B2 from B1, Probability of Default Rating to B2-PD from B1-PD and senior secured credit facilities ratings to B2 from B1. The downgrade reflects the impact of slowing economic growth on advertising demand, which will weigh on Dotdash Meredith's operating performance and stall deleveraging. The outlook remains stable. Dotdash Meredith is an indirect wholly-owned subsidiary of IAC Inc. ("IAC"), a leading media and internet company. Following is a summary of the rating actions: Downgrades: Issuer: Dotdash Meredith Inc. Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD $150 Million Senior Secured Revolving Credit Facility due 2026, Downgraded to B2 (LGD3) from B1 (LGD3) $350 Million ($336.9 Million Outstanding) Senior Secured Term Loan A due 2026, Downgraded to B2 (LGD3) from B1 (LGD3) $1,250 Million ($1,240.6 Million Outstanding) Senior Secured Term Loan B due 2028, Downgraded to B2 (LGD3) from B1 (LGD3) Outlook Actions: Issuer: Dotdash Meredith Inc. Outlook, Remains Stable RATINGS RATIONALE The ratings downgrade reflects Moody's expectation that Dotdash Meredith will experience delayed deleveraging and weaker-than-expected earnings over the next 12-18 months, chiefly due to Moody's current expectation that the US economy will likely contract in a couple of quarters of 2023. The recessionary pressures combined with rising interest rates and high inflation will likely lead to reduced consumer spending on discretionary products and services as well as a meaningful slowdown in advertising revenue growth. The company has experienced operating losses in the past four consecutive quarters due to the following: (i) larger-than-expected declines in print segment revenue (driven chiefly by deterioration in advertising and subscription revenue, collectively accounting for about 65% of print revenue); (ii) delayed migration and integration of Meredith Holdings Corporation's ("MHC") digital ad platform due to technology delays (human capital considerations); (iii) challenging Q3 macroeconomic conditions, which led to sharp double-digit contractions in online advertising revenue across several consumer discretionary verticals, which Moody's estimates accounts for around 65% of Dotdash Meredith's revenue (e.g., Beauty/Style, Retail, Tech/Telco, Media & Entertainment and Home/CPG); and (iv) higher-than-expected one-time integration and restructuring cash costs, which more than offset better-than-expected realized print expense savings. Previously, Moody's anticipated that 2022 would be a transition year with negative organic revenue growth due to the rationalization of underperforming magazine titles, secular decline in print revenue, investments in MHC's digital content to improve user engagement and one-time costs associated with the merger. However, given that Dotdash Meredith experienced unforeseen integration challenges, faster-than-expected advertising and subscription revenue declines in print, combined with sizable pullbacks in digital ad revenue and Moody's expectation for a weak domestic economy and sluggish ad spending growth, Moody's now expect negative organic revenue growth to continue in 2023, which will lead to a prolonged period of elevated leverage. Moody's currently projects year end 2022 leverage, as measured by total debt to EBITDA, will peak at roughly 7.4x (as calculated and adjusted by Moody's, including Moody's standard operating lease adjustment; however no adjustment is made for stock-based compensation expenses) and free cash flow (FCF) to total debt will be in the range of -6% (Moody's adjusted). Moody's expects operating losses to turn profitable and EBITDA to expand from its nadir over the coming quarters as one-time cash costs subside, MHC's digital migration issues are fully resolved and print revenue and EBITDA contract to smaller proportions with less impact on revenue and EBITDA growth. While EBITDA should sequentially improve over the next 18-24 months, it will be lower than pre-pandemic levels (on a pro forma combined basis) and remain pressured for a longer period than anticipated due to slower-than-expected revenue growth amid a lethargic economy. Moody's now expects leverage to decrease to the 6.5x area at the end of 2023 and retreat further to around 5.5x by year end 2024 (all metrics are Moody's adjusted). The stable outlook considers Moody's expectation that the combined impact from macroeconomic headwinds, slowing ad spend growth, lower ad rates, inflationary pressures and rising borrowing costs will moderate revenue and EBITDA growth and delay deleveraging. Although Dotdash Meredith's larger proportion of online ad revenue associated with brand-driven high intent customer leads and contractual premium digital advertising will likely support growth, Moody's expects that performance marketing revenue will remain pressured due to a combination of cyclical and structural issues, while print revenue will continue to endure secular contraction. Dotdash Meredith has no exposure to Russia or Ukraine, however Moody's continues to expect some macroeconomic spillover from the military conflict in that region. The magnitude of the effects will depend on the length and severity of the crisis. Moody's currently projects US GDP growth will decelerate to 1.8% in 2022 (3.0% in Euro area) and 0.4% in 2023 (-0.6% in Euro area), while US inflation is forecast to remain high near 7% yoy by December 2022, declining to around 3% yoy by year end 2023. Dotdash Meredith's revenue is dependent upon clients' advertising and marketing service spending, which is highly correlated with economic and business cycle conditions and can be cyclical. Moody's anticipates slowing US advertising spend next year in the 4%-6% range, consistent with Moody's expectation for decelerating economic growth, rising interest rates, high inflation and increasing risk of a weak domestic economy. Moody's expects traditional linear TV ad spend to decline in the range of -4% to -6% next year. Following estimated digital ad spend growth of 9% in 2022, Moody's projects digital to increase around 8% in 2023, driven by search advertising in the 10%-12% range offset by continued slowdown in social media advertising. Social ads will likely experience 1%-3% growth in 2022 and remain under pressure next year, growing 4%-6%, due to a combination of structural headwinds. Dotdash Meredith's B2 CFR also reflects the company's: (i) scale and position as a top ten Internet publisher that owns a broad portfolio of leading well-known consumer lifestyle media brands and digital media assets; (ii) high intent online customer traffic that relies on first-party data and is expected to produce greater sales conversions and meaningful ROI for advertising clients than traditional marketing channels; and (iii) leading B2C digital editorial content that facilitates a robust platform for consumer-related advertising spend. The rating also considers Moody's expectation that Dotdash Meredith will benefit from the secular shift of media spend and consumer purchase activity from traditional channels to online platforms. Dotdash Meredith benefits from good liquidity via sufficient cash balances and implicit financial support from its parent, IAC, which has approximately $1.16 billion of cash and marketable securities (excluding cash at Dotdash Meredith and Angi Inc.) at September 30, 2022. Over the next 12-18 months, Moody's expects Dotdash Meredith will maintain good liquidity supported by FCF turning positive in the range of $75-$100 million (compared to -$108 million year-to-date through September 30, 2022), sufficient cash levels (cash-on-hand totaled approximately $139 million at September 30, 2022) and access to the undrawn $150 million revolving credit facility (RCF) to fund internal cash needs and small M&A. Moody's FCF projection assumes no dividends will be paid to IAC. While the term loan B lacks covenants, the RCF and term loan A are subject to a 5.5x Consolidated Net Leverage maintenance covenant (as defined in the credit agreement) that is operative if either the RCF is drawn or the term loan A is outstanding. Moody's expects Dotdash Meredith will maintain sufficient covenant headroom over the next twelve months. ESG CONSIDERATIONS Dotdash Meredith's ESG Credit Impact Score is highly negative (CIS-4), reflecting the company's neutral-to-low exposure to environmental risks (E-2), moderately negative social exposures (S-3) to potential breaches of customers' personal data and human capital considerations, and highly negative governance profile (G-4). Environmental risks are neutral-to-low across all categories. The nature of Dotdash Meredith's media activities, with limited exposure to physical climate risk and very low emissions of pollutants and carbon, results in low environmental risk. Credit exposure to social risks is moderately-negative related to potential cyberattacks and breaches of customers' personal data resulting in safety and security concerns that could damage the company's reputation and prompt users to avoid using its owned and operated digital publications and e-commerce sites. Exposure to human capital is also moderately negative associated with Dotdash Meredith's reliance on attracting, developing and retaining a highly skilled technology workforce. The company benefits from favorable exposure to demographic and societal trends, evidenced by continuing migration of consumers to its fast-growing online editorial content and advertisers shifting spend from traditional channels to digital platforms; however, this is muted by the secular decline in its larger print magazine business as well as the unit's ongoing restructuring to exit certain titles and transition others to digital formats. Governance risk is highly negative due to Dotdash Meredith's moderately high financial leverage and negligible free cash flow generation, offset by good liquidity. This risk also reflects that Dotdash Meredith is a wholly-owned subsidiary of its parent, IAC Inc. and, consequently, does not have an independent board of directors, a governance weakness. The company has a limited track record given its recent formation and newly assigned rating. Somewhat offsetting this is the parent's significant liquidity and track record of achieving business objectives and managing operating risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely over the near-term given the expectation for continued weak debt protection measures for the rating category. Over time, an upgrade could occur if Dotdash Meredith exhibits revenue growth in line or ahead of market growth, expanding EBITDA margins and improved geographic diversity through increased scale (via growth in digital assets) and profitability. An upgrade would also be considered if financial leverage, as measured by total debt to EBITDA, approaches 4.5x (as calculated and adjusted by Moody's) and free cash flow as a percentage of total debt is at least 5% (Moody's adjusted). Dotdash Meredith would also need to adhere to conservative financial policies with respect to potential dividends paid to the parent and maintain at least good liquidity. Ratings could be downgraded if Dotdash Meredith's competitive position were to weaken as evidenced by revenue declines of 7% or more, EBITDA margins fall below 10% (as calculated and adjusted by Moody's) for an extended period, rising traffic acquisition costs and/or faster-than-expected decline in print advertising or subscription revenue. Ratings could experience downward pressure if total debt to EBITDA is sustained above 6.5x (as calculated and adjusted by Moody's) due to EBITDA shortfalls or leveraging transactions. A downgrade could also arise if liquidity remains pressured because free cash flow to total debt does not revert to positive territory and/or remains below 2% (Moody's adjusted) or due to weakened cash levels arising from higher-than-expected cash burn or acquisition spend without a proportionate increase in EBITDA. With headquarters in New York, NY, Dotdash Meredith, Inc. was formed in 2021 via the combination of IAC Inc.'s digital publishing business, Dotdash Media Inc., and Meredith Corp.'s print magazine, digital publishing and brand licensing assets in a transaction valued at approximately $2.7 billion. The merger created a leading internet property and consumer media publisher with over 40 key brands reaching more than 163 million unduplicated online consumers each month. Dotdash Meredith is a 100% owned subsidiary of IAC. Pro forma combined revenue for the twelve months ended September 30, 2022 was approximately $2.1 billion. The principal methodology used in these ratings was Media published in June 2021. E-BOX LLC: Gets OK to Hire Bob Mims, Tracy Cooper as Accountants ---------------------------------------------------------------- E-Box, LLC received approval from the U.S. Bankruptcy Court for the Western District of Tennessee to employ Bob Mims, CPA and Tracy Cooper, CPA as its accountants. The accountants will render these services: (a) assist the Debtor in determining from manual file records, examination of QuickBooks accounts, and other records the master debt; (b) discover debt amounts and character; (c) establish a new QuickBooks account and prepare a post-petition general ledger, chart of accounts and other reporting; (d) examine detailed activity in the bank statements that will be used to correct errors and omissions in the current existing books for the Debtor for the pre-bankruptcy period during 2022, and for the year 2021; (e) payroll adjustments will be made for manual payments and allowances offered to employees that should be inside the context of the payroll system; (f) prepare a pro forma estimate of the income and expenses for 2023 and update as new information is discovered as part of the record keeping project; (g) prepare a listing of assets and receivables on a monthly basis; (h) draft monthly operating reports for the bankruptcy records on a monthly basis; and (i) provide other services as needed. The accountants will be billed at an hourly rate of $150, plus reimbursement for expenses incurred. As disclosed in court filings, Bob Mims, CPA and Tracy Cooper, CPA are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. The accountants can be reached at: Bob Mims, CPA Memphis, TN - and - Tracy Cooper, CPA 307 U.S. Highway 50 W. Tipton, MO 65081 Telephone: (660) 433-5370 About E-Box LLC E-Box, LLC, an electronic manufacturing company in Collierville, Tenn., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-23526) on Aug. 23, 2022, with up to $50 million in assets and up to $10 million in liabilities. Byron Brown, member of E-Box, signed the petition. Judge M. Ruthie Hagan oversees the case. The Law Offices of Craig M. Geno, PLLC and Payne Law Firm serve as the Debtor's legal counsels. Bob Mims, CPA and Tracy Cooper, CPA are the Debtor's accountants. EASTGATE WHITEHOUSE: Seeks to Tap Krell & Associates as Accountant ------------------------------------------------------------------ Eastgate Whitehouse, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Krell & Associates, CPA, PC as accountant. Krell & Associates will render these services: (a) prepare budgets, reports and accounts; (b) assist the Debtor, creditors or its attorneys as may deem necessary in the Debtor's Chapter 11 proceeding; (c) attend conferences with the Debtor, its creditors, and its attorneys, as required; and (d) prepare federal and state income tax returns and assist the Debtor in the contemplated sale of its business. Krell & Associates will be billed as follows: Brian Krell, CPA $525 per hour Other Services $300 per hour In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. Brian Krell, CPA, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian Krell, CPA Krell & Associates, CPA, PC 255 Merrick Road Rockville Centre, NY 11570 Telephone: (516) 394-5188 Facsimile: (516) 394-5189 Email: contactus@krellcpa.com About Eastgate Whitehouse Eastgate Whitehouse, LLC, a company in Rye, N.Y., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22635) on Aug. 19, 2022. In the petition filed by its managing member, William W. Koeppel, the Debtor reported between $10 million and $50 million in both assets and liabilities. Judge Sean H. Lane oversees the case. The Debtor tapped Joel Shafferman, Esq., at Shafferman & Feldman, LLP as bankruptcy counsel; the Law Office of Christopher J. Alvarado, P.C. as special counsel; and Krell & Associates, CPA, PC as accountant. EMPIRE COUNTERTOPS: Court OKs Interim Cash Collateral Access ------------------------------------------------------------ The U.S. Bankruptcy Code for the Eastern District of Texas, Sherman Division, authorized Empire Countertops, LLC to use cash collateral on an interim basis in accordance with the budget. As of the Petition Date, Origin Bank asserts that the Debtor was indebted to Origin under a prepetition credit facility. The Debtor's obligations under the Prepetition Facility are evidenced by these loan documents: 1. The Assignment of Life Insurance Policy as Collateral executed by the Debtor in favor of Origin, dated July 19, 2022; 2. The Business Loan Agreement executed by the Debtor and Origin, dated July 19, 2022; 3. The Note executed by the Debtor in favor of Origin, dated July 19, 2022, in the original principal amount of $3.6 million; 4. The Notice of Final Agreement executed by the Debtor and Origin, dated July 19, 2022; 5. The Commercial Security Agreement executed by the Debtor in favor of Origin, dated July 19, 2022; 6. The Note executed by the Debtor in favor of Origin, dated December 18, 2018, in the original principal amount of $5 million; 7. The Note executed by the Debtor in favor of Origin, dated December 18, 2019, in the original principal amount of $5 million; 8. The Change in Terms Agreement executed by the Debtor and Origin, dated December 18, 2020; 9. The Change in Terms Agreement executed by the Debtor and Origin, dated March 30, 2022; 10. The Change in Terms Agreement executed by the Debtor and Origin, dated May 31, 2022; 11. The Commercial Security Agreement executed by the Debtor in favor of Origin, dated December 18, 2018; 12. The Commercial Security Agreement executed by the Debtor in favor of Origin, dated December 18, 2019; 13. The Commercial Security Agreement executed by the Debtor in favor of Origin, dated December 18, 2020; 14. The Commercial Security Agreement executed by the Debtor in favor of Origin, dated March 30, 2022; 15. The Commercial Security Agreement executed by the Debtor in favor of Origin, dated May 31, 2022; 16. The UCC Financing Statement, Filing Number 18-0044474375, filed by Origin against the Debtor; and 17. The UCC Financing Statement, Filing Number 19-0001128042, filed by Origin against the Debtor. As of the Petition Date, Eagle Eye asserts the Debtor was indebted to it under a prepetition agreement. The Debtor's obligations under the Eagle Eye Prepetition Agreement are evidenced by a Standard Merchant Cash Advance Agreement dated March 24, 2022 and all riders executed in connection therewith. As of the Petition Date, LCF asserts that the Debtor was indebted to LCF under a prepetition agreement. The Debtor's obligations under the LCF Prepetition Agreement are evidenced by the Merchant Agreement dated April 8, 2022 and all riders executed in connection therewith. As of the Petition Date, the Prepetition Obligations are legal, valid, binding, fully perfected, and non-avoidable obligations in the estimated aggregate liquidated amount of not less than (i) $3.649 million with respect to Origin, (ii) no less than $540,479 as of May 6, 2022 with respect to Eagle Eye; and (iii) $179,420 with respect to LCF, (b) the Prepetition Obligations and the Prepetition Liens constitute legal, valid, binding, fully perfected, and non-avoidable obligations of the Debtor. As partial adequate protection and in the same priority and to the same extent and validity as existed prepetition, the Secured Parties are granted: (a) automatic perfected replacement liens on all property now owned or hereafter acquired by the Debtor; and (b) superpriority administrative claims pursuant to sections 361(2), 363(c)(2), 503(b)(1), 507(a)(2), and 507(b) of the Bankruptcy Code. The Replacement Liens granted will not attach to any Chapter 5 causes of action under the Bankruptcy Code. The Replacement Liens and the Superpriority Claims are granted solely to the extent that the Debtor's use of cash collateral results in a diminution in value of the Prepetition Collateral securing the Prepetition Obligations and shall constitute legal, valid, binding, fully perfected, and non-avoidable obligations of the Debtor. The Debtor's right to use cash collateral will expire, l upon the occurrence of a Termination Event that is not otherwise waived in writing by the Secured Parties. The Debtor will immediately cease using cash collateral after the Cure Period upon the occurrence of any of these events: a. the Debtor violates any term of the Interim Order; b. the Debtor fails to obtain final approval of the use of cash collateral on or before January 13, 2023; or c. the entry of an order: i) converting the Debtor's Bankruptcy Case to a case under chapter 7 of the Bankruptcy Code; ii) dismissing the Debtor's Bankruptcy Case; iii) reversing, vacating, or otherwise amending, supplementing, or modifying the Interim Order; or iv) terminating or modifying the automatic stay for any creditor other than the Secured Parties asserting a lien in the Collateral. As additional partial adequate protection for the use of the cash collateral, the Debtor will make monthly payments to Origin of $35,000. The first half of the first Origin Payment will be due and payable on or before December 27, 2022 in the amount of $17,500 and the second half of the first Origin Payment will be due on January 12, 2023 and each subsequent Origin Payment of $35,000 will be due and payable on the 20th day of every month thereafter. In addition, the Debtor will make a one-time payment of $2,500 each to both LCF and Eagle Eye on or before December 23, 2022 and will make two weekly payments of $500 each, one to LCF and one to Eagle Eye, which payments will be due and payable starting on December 30, 2022 and continuing every seven days thereafter. A final hearing on the matter is set for December 28, 2022 at 10 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/3BLL9C8 from PacerMonitor.com. The Debtor projects $260,000 in revenue and $178,307 in expenses for December 2022. About Empire Countertops, LLC Empire Countertops, LLC fabricates and installs countertops from many materials; such as granite, quartz, solid surface, onyx, marble, and quartzite. Its fabrication facility is located in Pilot Point Texas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-41686) on December 5, 2022. In the petition signed by Curtis M. Mahoney, member/manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Brenda T. Rhoades oversees the case. Clayton L. Everett, Esq., at Norred Law, PLLC, is the Debtor's counsel. ENDOCEUTICS INC: Chapter 15 Case Summary ---------------------------------------- Lead Chapter 15 Debtor: Endoceutics Inc. 100-1195, rue Louis-Adolphe-Robitaille Quebec, Quebec G1S 0B8 Canada Type of Business: The Endo Group develops and manufactures specialty pharmaceutical products in the field of women's health. Foreign Proceeding: Proceeding under the Companies' Creditors Arrangement Act, pending before the Supreme Court, Commercial Chamber, in and for the Judicial District of Quebec, Canada (Court File No. 200-11-028152-224) Chapter 15 Petition Date: November 11, 2022 Court: United States Bankruptcy Court District of Massachusetts Five affiliates that concurrently filed voluntary petitions for relief under Chapter 15 of the Bankruptcy Code: Chapter 15 Debtor Case No. ----------------- -------- Endoceutics Inc. (Lead Debtor) 22-11641 Endoceutics Pharma (USA) Inc. 22-11642 Endoceutics Pharma (MSH) Inc. 22-11643 Endoceutics Pharma (Quebec) Inc. 22-11644 Endoceutics SA 22-11645 Judge: Hon. Christopher J. Panos Foreign Representative: Dennis Turpin, President and CEO of Endoceutics, Inc. 100-1195, rue Louis-Adolphe-Robitaille Quebec, Quebec G1S 0B8 Canada Foreign Representative's Counsel: John J. Monaghan, Esq. Lynne B. Xerras, Esq. Kathleen St. John, Esq. HOLLAND & KNIGHT LLP 10 St. James Avenue Boston, MA 02116 Tel: (617) 573-5834 (617) 523-2700 Fax: (617) 523-6850 Email: bos-bankruptcy@hklaw.com - and - Phillip W. Nelson, Esq. 150 N. Riverside Plaza, Suite 2700 Chicago, Illinois 60606 Tel: 312.263.3600 Fax: 312.578.6666 Email: phillip.nelson@hklaw.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of Endoceutics Inc.'s Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FZOGI7Q/Endoceutics_Inc__mabke-22-11641__0001.0.pdf?mcid=tGE4TAMA ENERGY DRILLING: Seeks to Hire Jeffrey Chimovitz as Counsel ----------------------------------------------------------- Energy Drilling Services, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Jeffrey Chimovitz, Esq., an attorney practicing in Burton, Mich., to handle its Chapter 11 case. Mr. Chimovitz will render these services: (a) advise the Debtor of its rights, powers, and duties; (b) perform all legal services for and on behalf of the Debtor that may be necessary or appropriate in the administration of this bankruptcy case and its business; (c) advise the Debtor concerning, and assist in, the negotiation and documentation of financing agreements and debt restructurings; (d) assist in the formulation, negotiation and consummation of a possible sale of the Debtor or its assets; (e) review the nature and validity of agreements relating to the Debtor's interests in real and personal property and advise of its corresponding rights and obligations; (f) advise the Debtor concerning preference, avoidance, recovery or other actions that it may take to collect and to recover property for the benefit of the estate and its creditors; (g) prepare legal documents; (h) advise the Debtor concerning, and prepare responses to, legal papers served in this bankruptcy case; (i) counsel the Debtor in connection with the formulation, negotiation, and promulgation of a plan of reorganization and related documents or other liquidation of the estate; (j) work with and coordinate efforts among other professionals to attempt to preclude any duplication of effort; and (k) work with professionals retained by other parties-in-interest in this bankruptcy case. Mr. Chimovitz will be billed at his hourly rate of $225, plus reimbursement for expenses incurred. The attorney disclosed in a court filing that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Jeffrey A. Chimovitz, Esq. 4500 E. Court Street P.O. Box 90379 Burton, MI 48509 Telephone: (810) 771-7161 Email: Jeffchimovitz@gmail.com About Energy Drilling Services Energy Drilling Services LLC, a drilling contractor in Fenton, Mich., filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-31772) on Nov. 29, 2022. In the petition signed by its managing member, Kaitlyn Adler, the Debtor disclosed up to $10 million in both assets and liabilities. Jeffrey A. Chimovitz, Esq., serves as the Debtor's counsel. ERIN INDUSTRIES: Unsecured Creditors to Split $309K over 4 Years ---------------------------------------------------------------- Erin Industries, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Michigan a Subchapter V Plan of Reorganization dated Dec. 13, 2022. The Debtor is a family-owned business engaged in the prototyping, production and assembly of tube bending, bracket fabrication and tube assemblies. The Debtor is a family-owned business founded in 1975 by T. Earl Atwell. The Debtor is currently 100% owned by T. Earl Atwell's son, Steve Atwell, its CEO. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $1,029,100 for payments to creditors under the Plan plus a capital reserve of $388,599.20. The reserve is necessary to permit the Debtor to invest in capital equipment, ramp-up labor and other items needed to fulfill new business likely to come in during the course of the Plan. The reserve is also necessary to provide the Debtor a margin of error to ensure that Plan payments are made. The Plan provides for payments for 4 years. In the 5th year, the projections currently show that the Debtor may not generate any disposable income to make payments. Accordingly, the Plan does not provide for any payments during that year. The final Plan payment is expected to be paid on January 15, 2026. Class VI consists of the Allowed Claims of all Unsecured Creditors. This Class shall receive monthly payment of $6,860 per month from the Refinance Date to the Date 4 years after the Effective Date. Total payments towards the Allowed Claims of this Class shall be $308,700. The Subchapter V shall have all rights to enforce any default under the Debtor's payment obligations to this Class. The Subchapter V Trustee shall distribute all payments Pro-Rata to the holders of Allowed Unsecured Claims. The Subchapter V Trustee may employ Professionals to make such payments, and shall be entitled to collect its fees and expenses from the amounts paid towards this Class. This Class is Impaired and is entitled to vote on the Plan. Class VII consists of all Allowed Interests. All Interests in the Reorganized Debtor are distributed to existing equity holders on the Effective Date provided, however, that the equity ownerships are subordinate to the obligations of the Debtor under the Plan. All tax attributes of the equity ownership had as of the Petition Date are retained. The Post-Confirmation Debtor will be entitled to operate the Debtor's business after the Effective Date. A full-text copy of the Subchapter V Plan dated December 13, 2022, is available at https://bit.ly/3YDGKL7 from PacerMonitor.com at no charge. Attorneys for Debtor: BUTZEL LONG, P.C. Max J. Newman, Esq. 201 W. Big Beaver Rd., Ste. 1200 Troy, MI 48084 (248) 258-2907 newman@butzel.com About Erin Industries, Inc. Erin Industries, Inc., is a family-owned business engaged in the prototyping, production and assembly of tube bending, bracket fabrication and tube assemblies. Erin serves customers in the automotive industry, aerospace, defense, amusement industry and building trades. In the automotive industry, while Erin Industries has, at times, supplied directly to original equipment manufacturers, it has more commonly acted as a Tier 2 supplier. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-47354) on Sept. 20, 2022. In the petition signed by Steven Atwell, president, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Thomas J. Tucker oversees the case. Max J. Newman, Esq., at Butzel Long, a professional corporation, is the Debtor's counsel. FEDNAT HOLDING CO: Ends in Ch.11 Filing Due to Severe Florida Storm ------------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that FedNat Holding Co., a Florida-based homeowners insurance company, filed for bankruptcy after an increase in severe weather events in the state weighed on its balance sheet. FedNat listed $33.8 million of assets and $171 million of debts in its bankruptcy petition. FedNat has racked up losses in recent years in part because more big storms hit coastal areas of the southeastern US, where the company operates. It has also suffered from the deluge of claims litigation dogging other small Florida insurers. The bankruptcy underscores Florida’s deepening home insurance crisis, where average premiums are nearly triple the national average. Ron DeSantis — the Republican governor expected to make a presidential run — is attempting to reform the system, and the state’s senate has a special session to address the crisis starting Monday. "As an industry, the Florida property insurance industry lost over $1.6 billion in 2020 and over $1.5 billion in 2021," thanks to losses from catastrophes, higher reinsurance costs and litigation abuse, Chief Restructuring Officer Katie S. Goodman said in a sworn bankruptcy court statement. Catastrophe losses cost FedNat $800 million on a gross basis last year, though reinsurance and other recoveries reduced that loss to $86 million, according to court papers. In September, a Florida court ordered a FedNat subsidiary to liquidate after state's insurance regulator deemed it insolvent. At least five other Florida insurers have been put into receivership by state’s regulator this year, Goodman said. FedNat has about $6.5 million of cash on hand, enough to keep operating the business during bankruptcy, the company said in a statement. FedNat will consider reorganizing the business or selling its assets during the Chapter 11 process, according to the statement. FedNat generated a net loss of about $103 million in 2021, following a loss of nearly $80 million in 2020, company filings show. Its stock recently changed hands for one cent. About FedNat Holding Co. FedNat Holding Co. -- https://www.fednat.com -- is an insurance Company provides insurance that’s more than a policy. FedNat Holding Co. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Fla. Case No. 22-19451) on Dec. 11, 2022. In the petition filed by Mark Allen, as manager, the Debtor reported assets between $10 million and $50 million and liabilities between $100 million and $500 million. The Debtor is represented by: Shane G Ramsey, Esq. Nelson Mullins Riley & Scarborough LLP 14050 NW 14th Street Suite 180 Sunrise, FL 33323 G-III APPAREL: Moody's Cuts Sr. Secured Rating to B1, Outlook Neg. ------------------------------------------------------------------ Moody's Investors Service changed G-III Apparel Group, Ltd.'s outlook to negative from positive, downgraded the senior secured rating to B1 from Ba3 and downgraded the speculative grade liquidity rating (SGL) to SGL-2 from SGL-1. At the same time, Moody's affirmed G-III's Ba3 corporate family rating and Ba3-PD Probability of Default rating. The outlook change to negative reflects the risks associated with the announced loss of the Calvin Klein and Tommy Hilfiger licenses between December 2025-2027[1]. These licenses comprise approximately 50% of G-III's revenue and 57% of LTM October 31, 2022 operating income. In order to replace this significant level of lost business, G-III will need to successfully execute on some combination of a buildout of existing owned brands and licenses, winning new licenses or purchasing new brands. The pressure to replace the earnings associated with the lost licenses is compounded by the fact that G-III will also have to address its $650 million asset based revolving credit facility ("ABL") and $400m secured notes which mature in August 2025, shortly ahead of the commencement of the license roll-offs. The downgrade to SGL-2 (good) from SGL-1 (very good) reflects projected negative free cash flow in the first half of the fiscal year ending Jan 2024 which will result in a full year free cash flow deficit when considering G-III's $125 million debt maturity in fiscal 2024, $75 million of which is due in June 2023. The SGL downgrade also reflects G-III's increased reliance on its $650 million ABL. However, G-III still has good liquidity supported by $150 million of cash and $290 million of availability under its ABL at October 31, 2022. The downgrade of the senior secured notes rating to B1 from Ba3 reflects the sustained higher level of borrowings under the ABL than previously anticipated over the next 12 months to manage operational needs and the LVMH note maturities which places more debt ahead of the secured notes in the capital structure. Downgrades: Issuer: G-III Apparel Group, Ltd. Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Senior Secured Regular Bond/Debenture, Downgraded to B1 (LGD4) from Ba3 (LGD4) Affirmations: Issuer: G-III Apparel Group, Ltd. Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Outlook Actions: Issuer: G-III Apparel Group, Ltd. Outlook, Changed To Negative From Positive RATINGS RATIONALE G-III 's Ba3 CFR reflects its solid market position, well known brands, broad product offering and track record of growth, both organically and through new licenses and acquisitions. The rating also considers governance considerations, specifically a conservative leverage policy that targets debt reduction and maintaining moderate leverage. For the LTM period ending October 31, 2022, G-III's debt/EBITDA was 3.3x and EBITA to interest was 3.8x. G-III's credit profile is constrained by the company's ongoing reliance on licensed brands for nearly two-thirds of its sales the large majority of which relates to the contracts that govern the Calvin Klein and Tommy Hilfiger licenses which will not be renewed. As an apparel wholesaler/retailer, G-III has exposure to fashion risk and changes in consumer spending. G-III also has significant wholesale customer concentration, with Macy's, TJX Companies and Ross Stores comprising around 24%, 15% and 13% of fiscal 2022 sales, respectively. The negative outlook reflects the likelihood that G-III's credit metrics will erode as the Calvin Klein and Tommy Hilfiger licenses roll-off barring the company successfully executing on a strategy to replace the lost EBITDA associated with these licenses over the next twelve months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, an upgrade is unlikely at the present time. However, the ratings could be upgraded if the company sustainably captures additional revenue and EBITDA to replace the Calvin Klein and Tommy Hilfiger losses while maintaining conservative financial policies, good liquidity and refinancing its existing debt at manageable rates. Quantitatively, an upgrade would require Moody's-Adjusted debt/EBITDA sustained below 3.5 times and EBITA/interest expense above 3.5 times. The ratings could be downgraded if revenue or earnings deteriorated, or if liquidity materially weakened or financial policies turned more aggressive, such as through shareholder returns or debt-financed acquisitions, that led to materially higher leverage. Failure to sustainably replace lost license income, reduce leverage or to refinance maturing debt in a timely fashion ahead of license expirations could also lead to a downgrade. Specific metrics include Moody's-Adjusted debt/EBITDA sustained above 4.5 times or Moody's-Adjusted EBITA/interest expense below 2.5 times. G-III Apparel Group, Ltd. designs, sources and markets apparel and accessories under owned, licensed and private label brands. G-III's owned brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc and Marc New York. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi's and Dockers brands, as well as major professional and collegiate sports leagues. The company also operates retail stores under the DKNY, Karl Lagerfeld Paris and Vilebrequin stores and its digital channels for the DKNY, Donna Karan, Vilebrequin, Karl Lagerfeld Paris, Andrew Marc, Wilsons Leather and G.H. Bass brands. Revenue for the twelve-month period ended October 2022 was approximately $3.12 billion. The principal methodology used in these ratings was Apparel published in June 2021. GANESH AA: Seeks to Tap Bishop Realtor Group as Real Estate Broker ------------------------------------------------------------------ Ganesh AA Corp seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Bishop Realtor Group to assist in the sale of its real property. Bishop Realtor Group will receive a commission of 6 percent of the gross sales price of any consummated sale. Ashton Gustafson, a real estate agent at Bishop Realtor Group, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ashton Gustafson Bishop Realtor Group 1916 N. Elmwood Ave. Wichita Falls, TX 76308 Telephone: (940) 691-7355 Facsimile: (940) 691-7363 Email: info@bishoprealtors.com About Ganesh AA Corp Ganesh AA Corp filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 22-70211) on Dec. 5, 2022, with as much as $1 million in both assets and liabilities. Eric A. Liepins, PC serves as the Debtor's counsel. GOPHER RESOURCE: S&P Downgrades ICR to 'CCC+', Outlook Negative --------------------------------------------------------------- S&P Global Ratings lowered its ratings on Gopher Resource LLC and on Gopher's senior secured term loan to 'CCC+' from 'B-'; the '3' recovery rating on the term loan is unchanged. The negative outlook indicates that S&P could lower the ratings if the company's credit metrics and liquidity don't improve, and if it sees the risk of a debt restructuring. Leverage to remain above 10x over the next several quarters as the company deals with production and operational challenges. A sharp drop-off in earnings and cash flow could squeeze liquidity further until profits turn around. If Gopher is unable to stabilize production and profitability to get leverage down over the next 12 months, S&P believes there is potential liquidity and refinance risk as its February 2025 term loan maturity approaches. S&P forecasts EBITDA generation this year to be about $45 million, compared to $67 million in 2021. Planned and unplanned outages and labor staffing challenges continue to impact production and result in weak operational performance. Gopher's high fixed costs mean it's highly sensitive to volume changes, causing modest production disruptions to materially affect earnings. Liquidity is tightening. As of Sept. 30, 2022, Gopher had roughly $20 million of liquidity, made up of $15 million of cash on hand and $4 million of availability under its ABL, that the company can draw on before its debt-to-EBITDA springing covenant is tested. As of Sept. 30, 2022, the ratio under the credit agreement was above the 7.6x threshold. If Gopher were to draw more than 35% of the total ABL facility it would no longer be in compliance with this covenant. S&P anticipates debt to EBITDA to further weaken over the next several quarters before an assumed recovery in operational performance begins to build momentum towards the second half 2023. The company has liquidity levers to pull to preserve cash, such as lowering its capital expenditure (capex) spending to address only essential maintenance, and undertaking equipment financing through a sale-leaseback transaction, allowed under the ABL credit agreement. With supportive end-market demand, leverage improvement will depend on the company's ability to resolve the operational issues and consistently improve its run-rate production. Sustaining annual production of more than 300,000 refined tons of lead will be a key driver to improving profitability and free cash flow generation, and thus leverage. Gopher should continue to see strong demand, full order books, and price increases due to the lack of battery recycling capacity in North America. As a low-cost lead battery recycler in North America with a 15% market share, Gopher is well-positioned to benefit from the tight, refined lead market. S&P said, "The negative outlook indicates that we could lower the ratings if the company's credit metrics and liquidity position further deteriorates. We could also lower the rating if we see increased risk of a debt restructuring, such as a below-par exchange offer or similar restructuring on its term loan that we would classify as distressed." S&P could lower the rating over the next 12 months if it believes that: -- Liquidity will deteriorate such that Gopher is in breach of its covenants. -- The company or private equity sponsor are undertaking a debt restructuring or debt repurchases significantly under par, which S&P would see as distressed transaction events. -- Leverage would remain above 8x as the company's term loan maturity approaches. S&P could revises the outlook to stable over the next 12 months if it believes that: -- Operations and production can stabilize, leading to improved profitability and a meaningful recovery in EBITDA. -- Leverage is trending towards 6x, to place the company in a more favorable position to access capital markets and refinance its 2025 maturity. ESG credit indicators: E-4, S-3, G-3 S&P said, "Environmental factors are a negative consideration in our credit rating analysis of Gopher. Gopher participates in the lead-acid battery recycling industry, which is heavily regulated due to its effects on the environment. A key constraining factor in our current rating is potential disruption in operational and financial performance due to the stringent environmental regulation and the concentration in Gopher's operating footprint. We also note these risks are a characteristic of the industry and other operators have had facilities shuttered due to environmental considerations in the past." Social factors are a moderately negative consideration as employees are potentially exposed to hazardous materials. The concentration in Gopher's footprint and the risk that environmental and safety factors could influence Gopher's earnings and creditworthiness is highlighted by the recent investigations due to reports alleging inadequate safety measures at one of its sites earlier this year. Governance factors are a moderately negative consideration. S&P's assessment of Gopher's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with its view of most rated entities owned by private-equity sponsors. HEARTBRAND HOLDINGS: Taps ADKF to Provide Tax, Accounting Services ------------------------------------------------------------------ HeartBrand Holdings, Inc. and American Akaushi Association, Inc. seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ ADKF, PC as tax and accounting services provider. ADKF will render these services: a. Tax Services (i) prepare federal and state income tax returns; and (ii) advise regarding tax positions taken in preparation of tax returns. b. Accounting Services (i) prepare financial statements in accordance with U.S. generally accepted accounting principles; and (ii) obtain limited assurance as a basis for reporting whether ADKF is aware of any material modifications that should be made to financial statements in order for the statements to be in accordance with U.S. generally accepted accounting principles. ADKF will be paid on a fixed fee basis. The firm estimates its fees for the tax services and financial review services will not exceed $30,000 and $25,000, respectively. Tyson Gaenzel, a partner at ADKF, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Tyson Gaenzel ADKF, PC 9601 McAllister Fwy., Suite 800 San Antonio, TX 78216 Telephone: (210) 829-1300 About HeartBrand Holdings HeartBrand Holdings Inc. -- https://www.heartbrandbeef.com -- is a beef company in Texas. It is a leading producer of Akaushi beef, a type of red Wagyu Japanese cattle known for its high-quality meat. HeartBrand Holdings and American Akaushi Association, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case Nos. 22-90127 and 22-90128) on Aug. 2, 2022. In the petition filed by Ronald Beeman as chairman of the Board of Directors, HeartBrand reported assets between $50 million and $100 million and liabilities between $10 million and $50 million. Judge David R. Jones oversees the cases. The Debtors tapped Vinson & Elkins as counsel and ADKF, PC as tax and accounting services provider. Omni Agent Solutions is the claims agent. HISTORIC & TROPHY: Chapter 15 Case Summary ------------------------------------------ Chapter 15 Debtor: Historic & Trophy Buildings Fund FCP-SIF, in judicial liquidation 8, rue Sainte-Zithe L-2763 Luxembourg Grand Duchy of Luxembourg Foreign Proceeding: Liquidation pursuant to Luxembourg law (SIF Law, Art. 45(3)(k), 46) Chapter 15 Petition Date: November 2, 2022 Court: United States Bankruptcy Court Southern District of New York Case No.: 22-11461 Judge: Hon. David S. Jones Foreign Representative: Philippe Thiebaud 8, rue Sainte-Zithe L-2763 Luxembourg Grand Duchy of Luxembourg Foreign Representative's Counsel: Kenneth Aulet, Esq. David J. Molton, Esq. BROWN RUDNICK LLP 7 Times Square New York, NY 10036 Tel: (212) 209-4950 Tel: (212) 209-4800 Fax: (212) 209-4801 Email: kaulet@brownrudnick.com dmolton@brownrudnick.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of the Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/75LJ22Q/Historic__Trophy_Buildings_Fund__nysbke-22-11461__0001.0.pdf?mcid=tGE4TAMA IHEARTMEDIA INC: S&P Alters Outlook to Negative, Affirms 'B+' ICR ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' issuer credit rating on iHeartMedia Inc. and revised the outlook to negative from stable. The negative outlook reflects S&P's expectation that leverage will remain elevated above its 5.5x downgrade threshold through 2023 due to a recession in the first half. It also reflects the risk that a more severe than anticipated recession could keep leverage above 5.5x in 2024 and beyond. Leverage will remain elevated through 2023 before declining below 5.5x in 2024. S&P said, "iHeartMedia underperformed our expectations for revenue growth and profitability over the first three quarters of 2022. The revenue recovery from the COVID-19 pandemic stalled and expenses increased in an inflationary environment. We now expect revenue will increase 9.6% for the year, down from our earlier estimates of almost 15%, and leverage will be roughly 6x, up from about 5x. We expect leverage will increase further to about 7x in 2023 as the company cannot fully offset revenue declines with cost-cutting measures and adjusted EBITDA margin contracts by about 200 basis points. However, we still expect the company to generate free operating cash flow (FOCF) to debt of about 4.7% in 2023, expanding to 7.8% in 2024. We expect iHeartMedia will use cash flow to bolster liquidity or continue repaying debt, such that net leverage will decline to about 5.3x by the end of 2024 when EBITDA growth resumes. Its strong liquidity position, scale, and advantage in digital revenues relative to peers will support the rating through the downturn and mitigate leverage exceeding our 5.5x downside target until economic growth resumes. If the recession is more severe or prolonged than we expect, or broadcast radio advertising declines more than expected, we could reassess this view." S&P said, "We expect a shallow recession in the first half of 2023, leading to a 15% decline in broadcast industry revenue. Broadcast radio advertising revenue (roughly 50% of iHeartMedia's revenue) is highly correlated to GDP growth because expectations for consumer spending drive advertising budgets. Radio advertising also has very short lead times and is one of the first advertising media to decline when the economy slows. Multiple radio broadcasters have publicly indicated that national advertising is slowing much faster than local advertising. Larger advertisers are likely concerned about the economic outlook, which could be the beginning of a broader pullback in radio advertising. In previous downturns--such as those in 2008 and 2020--national advertising was the first category to decline. That precipitated larger pullbacks in local advertising. In addition, the radio industry has lost significant portions of its advertising base in previous downturns, having failed to recover significant portions of revenue lost. For example, we believe the broadcast radio industry lost roughly 20% of total revenue in 2020. In a recession, the industry more likely would face additional losses relative to pre-pandemic levels. "The company's large cash balance and positive free cash flow will likely limit downside risk. We expect iHeartMedia to end 2022 with about $520 million cash on the balance sheet. Despite our expectations for a challenging operating environment in 2023, we still expect the company to generate about $183 million of reported FOCF next year. In the last recession, iHeartMedia cut costs when faced with declining revenues to preserve cash flow. The company will have more than sufficient liquidity to support its operations and meet its fixed-charge obligations over the next 12 months. We expect iHeartMedia to meet or exceed 2022 free cash flow in 2024 as economic growth resumes." iHeartMedia's scale provides a competitive advantage over other radio companies. Its size significantly surpasses that of its peers, making its platform more attractive to national advertisers looking for reach. Its size also provides customer diversity, with no single advertiser contributing more than 2% of revenue and no single advertising category contributing more than 5%. National advertising contributes about 40% of iHeartMedia's broadcast radio advertising revenue compared to about 20% for Audacy Inc. (the second-largest radio broadcaster). Multiple radio broadcasters have publicly indicated that national advertising is slowing much faster than local advertising. iHeartMedia has a scaled digital business. S&P said, "Digital revenue has more than doubled since 2019, and we expect it will be an increasing share of iHeartMedia's total revenue (currently 25% of our 2022 estimate) over the next several years. While podcasting had led the category's growth, the company's other digital products--such as its digital sites and the iHeartRadio app--have also had healthy growth. iHeartMedia is the No. 1 commercial podcasting company (generating more than $250 million in 2021), which we expect will accelerate digital revenue growth given podcasting's increasing popularity. We estimate the cost per thousand listeners for podcasting is more than 3x that for broadcast radio. Given the scale of iHeartMedia's digital audio business, its digital audio segment has healthy EBITDA margins in the low-30% area. Given the scale of iHeartRadio, iHeartMedia can aggregate and analyze user data to provide targeted advertising and measurement analytics. The company also owns technology that allows advertisers to view and buy inventory more easily. For example, the company's SmartAudio product creates digital-like broadcast inventory around user cohorts, which could expand access to digital advertising dollars. Other radio companies have not had the resources to develop these capabilities, which in our view gives iHeartMedia a competitive advantage and an opportunity to gain market share." S&P said, "The negative outlook reflects our expectation that leverage will remain elevated above our 5.5x downgrade threshold through 2023 due to a recession in the first half. It also reflects the risk that a more severe than anticipated recession could keep leverage above 5.5x in 2024 and beyond." S&P could lower the rating on iHeartMedia if leverage remains above 5.5x on a sustained basis. This could occur if: -- The economy enters a severe or prolonged recession; -- Digital revenue growth slows or becomes negative due to increased competition; -- Increased digital investments deteriorate EBITDA margins; or -- The company uses cash for sizable acquisitions that are not immediately accretive or distributes it to shareholders rather than paying down debt. S&P could revise the outlook to stable if: -- S&P expects leverage to decline below 5.5x over the next 12 months; and -- S&P believes the risk of recession has declined significantly, or the recession has passed and the economy is in recovery. ESG credit indicators: E-2, S-2, G-2 JRMC HOLBROOK: Seeks to Tap Prince Lobel Tye as Special Counsel --------------------------------------------------------------- JRMC Holbrook, LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Prince Lobel Tye, LLP as special counsel. The Debtor needs a special counsel in connection with the lawsuit styled James and Jenney Liebelt, derivatively on behalf of Harvey Wharf Condominium Trust v. Rosemary Blasi, et al., Case No. 2082-CV-00300. Prior to the petition date, the firm received $5,000 from Renee and James McGuinness, the Debtor's owner and manager, respectively, and will receive additional $15,000 from them. The hourly rates of the firm's counsel and staff are as follows: Partners $450 - $775 Of Counsel $400 - $635 Associates $295 - $510 Law Clerk/Paralegal $135 - $295 In addition, the firm will seek reimbursement for expenses incurred. Julie Pruitt Barry, Esq., a partner at Prince Lobel Tye, disclosed in a court filing that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Julie Pruitt Barry, Esq. Prince Lobel Tye LLP One International Place, Suite 3700 Boston, MA 02110 Telephone: (617) 456-8090 Facsimile: (617) 456-8100 Email: jbarry@princelobel.com About JRMC Holbrook JRMC Holbrook, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Mass. Case No. 22-11173) on Aug. 16, 2022, with as much as $1 million in both assets and liabilities. Judge Janet E. Bostwick oversees the case. The Debtor tapped Nina M. Parker, Esq., at Madoff & Khoury, LLP as bankruptcy counsel and Prince Lobel Tye, LLP as special counsel. MASONITE INT'L: Moody's Cuts Rating on Unsec. Notes to Ba2 ---------------------------------------------------------- Moody's Investors Service downgraded the ratings of Masonite International Corporation's senior unsecured notes to Ba2 from Ba1. In the same rating action, Moody's affirmed Masonite's Ba1 Corporate Family Rating and Ba1-PD Probability of Default Rating. The outlook is stable. The SGL-1 Speculative Grade Liquidity Rating is maintained. The downgrade of Masonite's senior unsecured note ratings by one notch reflects the changes in the company's capital structure in anticipation of its acquisition of Endura Products, a manufacturer of high-performance door system components. Masonite is planning to fund the $375 million acquisition with a new $250 million delayed draw first lien term loan facility due 2027 (unrated), borrowings under its $350 million ABL revolving credit facility, which was recently upsized from $250 million, and cash on hand. The introduction of new senior secured debt to the capital structure as well as the increased capacity of the ABL facility results in a higher loss absorption by the unsecured debt, and therefore is reflected in a lower rating. The pending Endura acquisition results in a modest leverage increase for Masonite, with pro forma debt to EBITDA rising to 2.8x from 2.3x at October 2, 2022, while EBITA to interest coverage declines to about 6.0x from 7.5x. This acquisition is expected to complement Masonite's "Doors That Do More" operating strategy across its existing and new markets. The following rating actions were taken: Affirmations: Issuer: Masonite International Corporation Corporate Family Rating, Affirmed Ba1 Probability of Default Rating, Affirmed Ba1-PD Downgrades: Issuer: Masonite International Corporation Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD5) from Ba1 (LGD4) Outlook Actions: Issuer: Masonite International Corporation Outlook, Remains Stable RATINGS RATIONALE Masonite's Ba1 Corporate Family Rating is supported by its: 1) strong market position as one of only two vertically integrated interior molded door manufacturers in North America and geographically diversified sales; 2) strong competitive position that benefits from technology innovation and trendsetting products; 3) conservative financial policy, a strong balance sheet, and Moody's expectation of deleveraging; 4) exposure to the repair and remodeling end market for about 54% of total revenue, which is less volatile than new construction; and 5) solid operating margins, and a track record of margin improvement and positive free cash flow supported by productivity initiatives such as automation, facility redesigns, and economies of scale. At the same time, the company's credit profile is constrained by: 1) the cyclicality of residential and commercial end markets and current weakening in residential construction and repair and remodeling activity due to affordability constraints and inflation; 2) the company's shareholder friendly activities, including share repurchases; 3) its acquisition growth strategy, which requires good execution to realize expected synergies, presents integration challenges and results in leverage increases; and 4) exposure to volatility in raw material input costs including steel, wood and chemicals and current inflationary pressures faced by the sector. The stable outlook reflects Moody's expectations that over the next 12 to 18 months Masonite will maintain its conservative financial policies, integrate the acquired business, de-lever modestly, and generate positive free cash flow. Masonite's SGL-1 Speculative Grade Liquidity Rating reflects Moody's expectation that the company will maintain very good liquidity over the next 12 to 15 months. Masonite's liquidity is supported by Moody's expectation of solid free cash flow, ample availability under its $350 million ABL revolving credit facility expiring in 2027, and good room under the term loan's leverage covenant and the ABL's springing fixed charge coverage covenant, as well as by the company's $251 million cash balance at October 2, 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company meaningfully expands scale, improves product diversity and customer mix, achieves sustained EBITA margin above 14% and maintains conservative financial policies with respect to leverage, acquisitions and shareholder returns. Debt to EBITDA approaching 2.0x, EBITA to interest coverage above 7.0x and consistently strong free cash flow accompanied by stable end market conditions, and an all unsecured capital structure would be important considerations for an upgrade. The ratings could be downgraded if Masonite's debt to EBITDA is sustained above 3.0x, EBITA to interest expense falls below 5.0x, EBITA margin declines below 10%, or liquidity deteriorates. Additionally if the company engages in substantial debt funded acquisitions and/or shareholder friendly transactions, financial and operating strategies become more aggressive, liquidity deteriorates, or end markets weaken, the ratings could be downgraded. The principal methodology used in these ratings was Manufacturing published in September 2021. Masonite International Corporation is one of the largest vertically integrated manufacturers of doors in the world, offering interior and exterior doors for both residential and commercial end uses. In the last twelve months ended October 2, 2022, the company generated about $2.9 billion in revenue. NANTASKET MANAGEMENT: In Chapter 11 to Stop Foreclosures -------------------------------------------------------- Nantasket Management LLC filed for chapter 11 protection in the District of Massachusetts. The Debtor is in the business of real estate acquisition, building construction, renting, improvement and sales serving individuals and corporations. Nantasket Management owns real property comprised of six properties in Hull, Massachusetts. The Debtor currently has one unpaid employee -- the Debtor's sole member and manager (Michael Kim). Prior to the Petition Date, the Debtor had acquired 8 former U.S. Coast Guard housing homes in Hull, MA. The Debtor was the winning bidder in a GSA auction for the properties. The Debtor's manager, Mr. Kim, is an engineer who has experience in bidding for and acquiring former U.S. government-owned properties and then selling them for a profit. As of the Chapter 11 filing, the Debtor had six remaining properties located on Nantasket Avenue in Hull, MA. The Debtor had imminent foreclosure pending on all the remaining properties in Hull, MA, and notwithstanding multiple efforts to forestall the foreclosure, the secured lender on the properties, Velocity Commercial Corp, scheduled foreclosures for Dec. 7, 2022. The Debtor was unable to amicably resolve its dispute with its mortgagee and proceed with the Chapter 11 filing in order to invoke protections afforded by the Bankruptcy Code and continue its operations. According to court filings, Nantasket Management estimates between $1 million and $10 million in debt owed to 1 to 49 creditors. The petition states that funds will not be available to unsecured creditors. About Nantasket Management Nantasket Management LLC filed a petition for relief Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 22-11772) on Dec. 6, 2022. In the petition filed by Michael Kim, as managing member, the Debtor reported assets and liabilities between $1 million and $10 million. The Law Offices of John F. Sommerstein is serving as counsel to the Debtor. NANTASKET MANAGEMENT: Seeks to Tap John F. Sommerstein as Counsel ----------------------------------------------------------------- Nantasket Management, LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ the Law Offices of John F. Sommerstein as its bankruptcy counsel. The firm will render these services: (a) advise the Debtor with respect to its power and duties in the continued management and operation of its business and assets; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest and respond to creditor inquiries; (c) advise the Debtor regarding its ability to initiate actions to collect and recover property for the benefit of its estate; (d) advise and assist the Debtor in connection with any potential property disposition; (e) assist the Debtor in reviewing, estimating, and resolving claims asserted against the Debtor's estate; (f) negotiate and prepare a feasible plan of reorganization and all related documents; (g) prepare legal documents; and (h) perform all other bankruptcy-related legal services. Mr. Sommerstein, the firm's owner, will be billed at his hourly rate of $425, plus expenses. The firm received a retainer in the amount of $15,000 from the Debtor. Mr. Sommerstein disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: John F. Sommerstein, Esq. Law Offices of John F. Sommerstein 1091 Washington Street Gloucester, MA 01930 Telephone: (617) 523-7474 Email: jfsommer@aol.com About Nantasket Management Nantasket Management, LLC filed its voluntary petition for Chapter 11 protection (Bankr. D. Mass. Case No. 22-11772) on Dec. 6, 2022. In the petition signed by its manager, Michael Kim, the Debtor listed up to $10 million in both assets and liabilities. Judge Janet E. Bostwick oversees the case. The Law Offices of John F. Sommerstein serves as the Debtor's bankruptcy counsel. NGV GLOBAL: Court OKs Cash Collateral Access Thru Jan 13 -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, authorized NGV Global Group, Inc. and affiliates to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through January 13, 2022. The Debtors require the use of cash collateral to continue the operation of their businesses. As adequate protection to FirstCapital Bank of Texas, N.A. for the Debtors' use of cash collateral, the Lender is granted a replacement lien in the Debtors' assets that serve as collateral under the Lender's applicable loan documents, in the same order of priority that existed as of the Petition Date. As additional partial adequate protection for the Debtors' use of cash collateral, to the extent of any diminution in value and a failure of the other adequate protection provided by the Order, the Lender will have an allowed superpriority administrative expense claim in the cases and any successor case or cases as provided in and to the fullest extent allowed by Sections 503(b) and 507(b) of the Bankruptcy Code. The Replacement Lien and Superpriority Claim are subject and subordinate to a carve-out of funds for all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee pursuant to 28 U.S.C. Section 1930(a) and all fees and expenses of the Debtors' professionals to the extent provided in the Budget and allowed by Order of the Bankruptcy Court. The Replacement Liens are valid, perfected, enforceable and effective as of the Petition Date without the need for any further action by the Debtors or the Lender, or the necessity of execution or filing of any instruments or agreements. The Debtors agree to use their best efforts to seek Court approval to sell, on or before March 31, 2023, approximately 328 120-gallon LNG tanks owned by NGS that serve as collateral for NGS's obligations to Lender, and to pay the net proceeds of such sale (after payment of ad valorem taxes and costs of sale) to the Lender towards satisfaction of such obligations. A copy of the order and the Debtor's budget is available at https://bit.ly/3jha4a4 from PacerMonitor.com. The budget provides for total operating costs, on a weekly basis, as follows: $458,894 for the week ending December 23, 2022; $473,355 for the week ending December 30, 2022; $371,039 for the week ending January 6, 2023; and $485,770 for the week ending January 13, 2023. About NGV Global Group NGV Global Group is a global technology company that designs, manufactures, distributes and supports natural gas operated medium and heavy-duty commercial vehicles sold worldwide. The Company manufactures natural gas engines, fuel storage units and fueling systems for application in its own products and for sale to third party companies interested in the conversion of trucks and buses to operate on natural gas completely (dedicated) or in conjunction (duel-fuel) with diesel fuel. The Company also owns and operates a gas transportation company which is registered with the US Department of Transportation (DOT) allowing the Company to safely transport multiple substances across the U.S. including: CNG, LNG, Hydrogen, Oxygen, Nitrogen and other hazardous materials and gases. NGV Global Group, Inc. and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 22-42780) on November 17, 2022. In the petition signed by Farroukh Zaidi, chief executive officer, the Debtor disclosed up to $50 million in assets and up to $100,000 in liabilities. Judge Edward L. Morris oversees the case. Jeff P. Prostok, Esq., at Forshey Prostok, LLP, is the Debtor's counsel. NILEX USA: Chapter 15 Case Summary ---------------------------------- Chapter 15 Debtor: Nilex USA Inc. 15354 E. Hinsdale Circle Centennial, CO 80112 USA Type of Business: The Debtor operates as a construction company operating in the geosynthetics industry. Foreign Proceeding: Court File No. 24-2878531; Court of King's Bench Alberta; Edmonton, Alberta Chapter 15 Petition Date: December 2, 2022 Court: United States Bankruptcy Court District of Colorado Case No.: 22-14719 Judge: Hon. Kimberley H. Tyson Foreign Representative: Robert Kofman KSV Restructuring Inc., in its capacity as Proposal Trustee 150 King St., Suite 2308 Toronto, Ontario M5H 1JP Canada Foreign Representative's Counsel: Brent R. Cohen, Esq. LEWIS ROCA ROTHGERBER CHRISTIE LLP 1601 19th Street, Suite 1000 Denver, CO 80202 Tel: (303) 628-9521 Email: bcohen@lewisroca.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of the Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UASUSNI/Nilex_USA_Inc__cobke-22-14719__0001.0.pdf?mcid=tGE4TAMA NORTH AMERICAN ACCEPTANCE: Gets Interim OK to Hire Legal Counsel ---------------------------------------------------------------- North American Acceptance Financial, LLC received interim approval from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ The De Leo Law Firm LLC to handle its Chapter 11 case. The hourly rates of the firm's professionals are as follows: Robin De Leo $375 Paralegal $95 The firm has a pre-bankruptcy retainer of $14,031.50 over which it would apply to the court for allowance of post-petition compensation and reimbursement of expenses. Robin De Leo, Esq., an attorney at The De Leo Law Firm, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robin De Leo, Esq. The De Leo Law Firm, LLC 800 Ramon Street Mandeville, LA 70448 Telephone: (985) 727-1664 Email: elaine@northshoreattorney.com About North American Acceptance Financial North American Acceptance Financial, LLC is a subprime indirect automobile finance lender in Metairie, La. It was organized in 2009 to both originate and service auto loans. North American Acceptance Financial sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 22-11537) on Dec. 12, 2022. In the petition signed by its managing member, Larry Verges, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Meredith S. Grabill oversees the case. Robin R. De Leo, Esq., at The De Leo Law Firm, LLC serves as the Debtor's counsel. NUVO TOWER: Amends Bayport Secured Claim Pay Details ---------------------------------------------------- Nuvo Tower, LLC, submitted a First Amended Disclosure Statement in connection with First Amended Plan of Reorganization. On June 22, 2022, the Debtor was forced to file a voluntary petition for relief under Chapter 11 of the Bankruptcy Code to preserve its equity in the Property and give it a reasonable opportunity to refinance the Property, adjudicate the current amount due to Bayport under the Judgment, compel Bayport to accept a satisfaction of the judgment/mortgage, and obtain the needed construction financing to construct the condominium building. On Sept. 20, 2022, the Debtor filed a claim objection, disputing the amount of Bayport's claim. Pursuant to the claim objection, the Debtor believes Bayport's claim as of the Petition Date is $2,250,709, which Bayport disputes. This claim objection is still pending before the Court and has not been adjudicated yet. During the Chapter 11 Case, the Debtor has been seeking out various sources of capital as well as talking to potential brokers and purchasers to either refinance or sell the Property. The Debtor shall market the Property immediately, and the Debtor has agreed to retain a licensed real estate broker, subject to Court approval, to refinance or sell and liquidate the Property for the highest and best price on or before the Sale Closing Date, and if necessary, to conduct an auction sale within 30 days thereafter. Upon closing, the proceeds of refinance or sale shall be distributed to holders of Claims and Interests in the same manner as provided for in the First Amended Plan. Class 1 consists of the Allowed Real Estate Tax Secured Claims The Allowed Class 1 Real Estate Secured Tax Claims in the approximate amount of $40,000, together with any unpaid statutory interest accrued thereon through the Sale Closing, shall be paid in full, in Cash, from the Distribution Fund upon the Sale Closing. Class 1 is unimpaired and deemed to accept the First Amended Plan. Class 2 consists of the Allowed Bayport Secured Claim. The Allowed Bayport Class 2 Secured Claim together with accrued interest on the unpaid principal amount of $1,500,000 at the statutory interest rate of 9% accrued thereon from the Petition Date, shall be paid in full, in Cash, from the Distribution Fund upon the earlier of a post Effective Date refinance of the Property or the Sale Closing. Class 2 is impaired and entitled to vote on the First Amended Plan. The Debtor has previously disputed the amount of Bayport's claim via a claim objection filed on September 20, 2022. Said claim objection is currently pending before the Bankruptcy Court and Bayport disputes the Debtor's amount of $2,250,709. Like in the prior iteration of the Plan, Allowed Class 4 General Unsecured Claims in the approximate amount of $1,618, together with any unpaid statutory interest, costs and reasonable attorneys' fees accrued thereon through the Sale Closing, shall be paid in full, in Cash, from the Distribution Fund upon the earlier of a post-Effective Date refinance or the Sale Closing. The First Amended Plan will be funded with the net proceeds from (a) the sale or refinance of the Property. The sale or refinance of the Property, as applicable, following Confirmation of the First Amended Plan, shall not be subject to any stamp or similar transfer or mortgage recording tax pursuant to section 1146(a) of the Code because they be refinanced or sold under the First Amended Plan and after the Effective Date. A full-text copy of the First Amended Disclosure Statement dated December 13, 2022, is available at https://bit.ly/3WcROxn from PacerMonitor.com at no charge. Attorneys for the Debtor: Jonathan S. Pasternak, Esq. Robert L. Rattet, Esq. Davidoff Hutcher & Citron LLP 605 Third Avenue New York, NY 10158 Tel: 212-557-7200 Fax: 212 286 1884 Email: rlr@dhclegal.com About Nuvo Tower Nuvo Tower LLC is a single asset real estate (as defined in 11 U.S.C. Sec. 101(51B)). It owns four contiguous building lots located at 2954-2958 Brighton 6th St. and 6-7 Brighton Fifth Place in the Brighton Beach section of Brooklyn, which lots are intended for construction of 23-unit condominium complex. Nuvo Tower sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-41444) on June 22, 2022, listing $1 million to $10 million in both assets and liabilities. Haim Pinhas, manager, signed the petition. Judge Nancy Hershey Lord oversees the case. Robert L. Rattet, Esq., at Davidoff Hutcher & Citron, LLP, is the Debtor's counsel. PARTY CITY: Moody's Lowers CFR to Caa3, Outlook Still Negative -------------------------------------------------------------- Moody's Investors Service downgraded Party City Holdings Inc.'s ratings, including its corporate family rating to Caa3 from Caa1, probability of default rating to Caa3-PD from Caa1-PD, senior secured notes ratings to Caa3 from Caa1 and senior unsecured notes ratings to C from Caa3. The speculative grade liquidity rating ("SGL") was also downgraded to SGL-4 from SGL-3. The rating outlook remains negative. The downgrades reflect governance considerations which include Party City's weak liquidity and Moody's view that its capital structure is unsustainable at its current level of earnings which increases the risk of default. The downgrades also reflect the impact of continued weakness in Party City's operating performance and Moody's expectation that cost headwinds will persist longer than previously anticipated. Profitability has been significantly impacted by rising costs in its supply chain, helium shortages and declining demand because of inflationary pressures in the broader macroeconomic environment. Global helium capacity is likely to be slow to recover and freight costs are expected to continue to impact profitability well into 2023. The downgrade of its speculative grade liquidity rating to SGL-4 (weak liquidity) reflects free cash flow deficits of over $350 million for the first three quarters of 2022 which resulted in higher borrowings under its $576.5 million asset-based revolving credit facility ("ABL"). At September 30, 2022, there was $445 million drawn under the ABL leaving $91.7 million available after letters of credit. While free cash flow is expected to improve in 2023, it will likely remain modestly negative after considering the company's $23 million senior notes due August 2023 and Moody's expectation that operating performance will remain constrained by demand volatility and the continued impact of cost headwinds. There will likely be working capital benefits from reduced inventory but this will also reduce the borrowing base availability under its ABL. The company will need to maintain borrowing base availability at a level no less than the greater of: (i) $46 million or (ii) 10% of the total borrowing base. Reducing availability below this level will spring testing of the company's fixed charge covenant ratio which Moody's does not expect the company to meet. Downgrades: Issuer: Party City Holdings Inc. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Senior Unsecured Global Notes, Downgraded to C (LGD6) from Caa3 (LGD6) Senior Secured 1st Lien Notes, Downgraded to Caa3 (LGD4) from Caa1 (LGD4) Outlook Actions: Issuer: Party City Holdings Inc. Outlook, Remains Negative RATINGS RATIONALE Party City's Caa3 CFR reflects its very weak credit metrics which when combined with its weak liquidity results in a high risk of a default over the next 12 months. Supply chain costs, helium shortages and weakening demand has significantly impacted the company's profitability and liquidity in 2022. As a result, debt/EBITDA is unsustainably high at 10.6x and EBIT/interest is low at 0.4x. Global helium shortages will likely continue to be a cost headwind and the company will have to continue to navigate global supply chain issues and the impact of high inflation on demand for the company's products. Party City is also exposed to changing demographic and societal trends, including the shift of consumers to purchasing goods and accessories online. The rating is supported by Party City's strong market presence in both retail and wholesale, geographic diversification, and the historically recurring and stable party goods and accessories segment. The negative outlook reflects the meaningful deterioration in profitability, credit metrics and liquidity. The negative outlook also reflects Moody's view that, absent a material recovery in earnings, its capital structure is unsustainable which increases the risk of default. ESG CONSIDERATIONS Party City's credit impact score has been lowered to CIS-5 from CIS-4 reflecting that the governance IPS has been lowered to G-5 from G-4. The change to G-5 reflects Moody's view that that its capital structure is unsustainable at its current level of earnings. The unsustainable capital structure coupled with weak liquidity increases the risk of default. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require sustained improvement in operating performance and liquidity such that it would allow the company to repay its 2023 debt maturity at par and improve leverage to a more sustainable level. The ratings could be downgraded if the company defaults or if Moody's recovery estimates deteriorate. Party City Holdings Inc. is a designer, manufacturer, distributor and retailer of party goods and related accessories. The company's retail brands principally include Party City and Halloween City. Total revenue is approximately $2.2 billion for the LTM period ending September 30, 2022. The principal methodology used in these ratings was Retail published in November 2021. PLANTRONICS INC: Moody's Withdraws Ba3 CFR on HP Inc. Transaction ----------------------------------------------------------------- Moody's Investors Service has withdrawn Plantronics Inc.'s ratings, including its Corporate Family Rating, Probability of Default Rating, Speculative Grade Liquidity Rating and Senior Unsecured rating, and outlook. RATINGS RATIONALE The vast majority of Plantronics' debt has been repaid following the company's acquisition by HP Inc. Moody's has decided to withdraw the ratings for its own business reasons. Withdrawals: Issuer: Plantronics, Inc. Corporate Family Rating, Withdrawn, previously rated Ba3, On Review For Upgrade Probability of Default Rating, Withdrawn, previously rated Ba3-PD, On Review For Upgrade Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated B2 (LGD5), On Review For Upgrade Outlook Actions: Issuer: Plantronics, Inc. Outlook, Changed To Rating Withdrawn From Rating Under Review Plantronics, Inc. is a provider of audio communications headsets and accessories used by businesses and consumers, voice endpoints (i.e. desktop phones and conference room phones), video endpoints (equipment for video rooms and desktops), and platform solutions for enterprise customers to manage their communications systems. Plantronics acquired Polycom in July 2018; the combined company does business under the Poly logo and generated approximately $1.67 billion of revenue for the LTM period ended July 2, 2022. The company was acquired by HP, Inc. in 2022. PREMIER DENTAL: S&P Alters Outlook to Negative, Affirms 'B-' ICR ---------------------------------------------------------------- S&P Global Ratings revised the rating outlook on Premier Dental Services Inc. to negative from stable and affirmed the 'B-' issuer credit rating. The negative outlook reflects S&P's view that, despite the expected improvement in 2023, there is elevated risk associated with the macroeconomic environment that could dilute the company's efforts at improving EBITDA margin and result in sustained cash outflows over the next 12 months. S&P's 'B-' issuer credit rating reflects its expectation that the company's adjusted EBITDA margin will improve in 2023, leading to leverage 7-8x in 2023, which is consistent with the 'B-' rating. As of the third quarter of 2022, Premier Dental's performance remained pressured by the fallout from the COVID-19 pandemic and the challenging macroeconomic environment, which led to higher staffing, labor, and supplies costs, and patient volumes still below 2019 pre-COVID levels. This has led to 2022 adjusted EBITDA margin as of the third quarter to decline to the low-teens percent range from mid-teens percent for the same period last year. S&P said, "However, we believe some of these higher input costs, especially related to labor costs, could improve in 2023. For instance, the state of California's mandatory sick pay ends in 2022 and, at the same time, the company proactively works on optimizing its labor force. Also, the full-year incorporation of the acquired Mid-Atlantic Dental Partners' (MADP) operating results will also be in effect in 2023. Subsequently, we expect adjusted EBITDA margin to return to about 13%, still below the pre-COVID high-teens rate but improved from the 10%-11% in 2022, and adjusted leverage of below 8x in 2023." However, free operating cash flow will likely remain negative in 2023. S&P said, "Despite the expected operating improvement in 2023, we see some risk to our base case projections associated with the macroeconomic environment that could dilute the company's efforts at improving EBITDA margin. In addition, we project continued elevated working capital uses in 2023 related to the recent MADP acquisition, albeit at a level lower than in 2022. We also expect interest rate increases to somewhat offset the projected EBITDA improvement, limiting the company's free operating cash flow generation. Partially mitigating the interest rate pressure is the interest rate swap that the company has entered to hedge its interest rate risk exposure (75% of the company's debt is hedged). Also, some de novo expenses are discretionary in nature and we believe the company could potentially slow down its de novo growth to preserve liquidity if necessary. "We continue to expect the company will have adequate liquidity in 2023. "We estimate the company's fixed charges to be around $140 million to $150 million, which includes about $65 million to $70 million of interest expense in 2023, $7 million of debt amortization, about $35 million-$40 million of capital expenditure (capex), and about $30 million of working capital usage. Between its reported EBITDA of at least $85 million in 2023, cash balance of $35 million, and revolver availability of $70 million, the company will likely be able to cover its fixed charges for the next 12 months. "Our negative outlook reflects our view that there is elevated risk to our base case projections associated with the macroeconomic environment that could counter the company's efforts at improving EBITDA margin and generating breakeven cash flow in the next 12 months. "We could consider a downgrade if macroeconomic challenges persist and/or the company fails to realize the synergies from the recent acquisition, resulting in sustained free operating cash flow deficit insufficient to cover fixed charges (excluding de novo). "We could return the outlook to stable if we believe the company can generate free operating cash flow (before discretionary de novo spent) sufficient to cover its fixed costs, including annual debt amortization, on a sustained basis. Commensurate with this scenario would be leverage ratio maintained at or below 7x." ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and a focus on maximizing shareholder returns." PRO MACH GROUP: S&P Rates New 100MM First-Lien Term Loan 'B-' ------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level rating and '3' recovery rating to Pro Mach Group Inc.'s (ProMach) proposed $100 million incremental first-lien term loan due 2028. The company plans to use the net proceeds from the term loan to fund acquisitions over the coming year. S&P's 'B-' issue-level rating and '3' recovery rating on ProMach's existing term loan are unchanged. The company has continued to demonstrate favorable operating performance, with a strong booking momentum and a large backlog, despite modest supply chain headwinds in 2022. S&P also views ProMach's business as relatively resilient in the event of a modest macroeconomic recession, given its exposure to the more-stable packaging end markets. While the transaction will modestly increase the company's leverage, its leverage remains within our expectations for the current rating. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's recovery analysis assumes ProMach reorganizes in a default scenario given its relationships with its blue-chip customer base and the high profit margin on the aftermarket services it provides to its installed machine base. -- S&P's analysis is based on emergence EBITDA of about $237 million. It also incorporates our view of ProMach's cyclical end markets and the expected incremental EBITDA from its acquisitions. -- S&P calculates a net emergence enterprise value after priority administrative expenses. After satisfying priority claims and foreign credit facilities lenders' claims, S&P believes the residual value would be sufficient to provide the lenders of its first-lien credit facility with recovery in the lower half of the 50%-70% range. Simulated default assumptions -- Year of default: 2024 -- EBITDA multiple: 5x -- Emergence EBITDA: $237 million -- Jurisdiction: U.S. Simplified waterfall -- Net enterprise value (after 5% administrative expense): $1.128 billion -- Valuation split (obligors/nonobligors): 80%/20% -- Collateral value available to secured creditors: $1.108 billion -- Total secured first-lien debt: $2.094 billion --Recovery expectations: 50%-70% (rounded estimate: 50%) Note: Debt amounts include six months of accrued interest S&P assumes will be owed at default. Collateral value includes asset pledges from obligors (after priority claims) plus equity pledges in nonobligors. S&P generally assume usage of 85% for cash flow revolving facilities at default. R & E PETROLEUM: Taps Sternberg Naccari & White as Special Counsel ------------------------------------------------------------------ R & E Petroleum, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ the law firm of Sternberg, Naccari & White, LLC as special counsel. The Debtor needs a special counsel to continue representation in the actions styled: (i) Dimitri (sic) Johnson v. Khaled Nadim Bou Hamzy, Imad Faiez Hamdan, LKM Convenience LLC, Brother's Foodmart, ABC Insurance Company, R & E Petroleum LLC, Brother's Food Mart, XYZ Insurance Company, Case No. 774-595, 24th Judicial District Court, Jefferson Parish, State of Louisiana; and (ii) R & E Petroleum, LLC, Ragheb Chaar & Elsie Aradi vs. LKM Convenience LLC and Toan Huynh, Case No. 802-522, 24th Judicial District Court, Jefferson Parish, State of Louisiana, Appellate Case No. 2022-CA-376, Fifth Circuit Court of Appeal, State of Louisiana. The hourly rates of the firm's counsel and staff are as follows: Scott L. Sternberg $300 Mervatt F. Eljaouhari $275 Michael S. Finkelstein $260 Graham H. Williams $260 In addition, the firm will seek reimbursement for expenses incurred. Scott Sternberg, Esq., a partner at Sternberg, Naccari & White, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Scott Sternberg, Esq. Sternberg, Naccari & White, LLC 935 Gravier Street, Suite 2020 New Orleans, LA 70112 Telephone: (504) 324-1887 Facsimile: (504) 534-8961 Email: scott@snw.law About R & E Petroleum R & E Petroleum, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 22-11087) on Sept. 20, 2022, with up to $50,000 in assets and up to $1 million in liabilities. Ragheb Chaar, member and manager, signed the petition. Judge Meredith S. Grabill oversees the case. The Debtor tapped Leo D. Congeni, Esq., at Congeni Law Firm, LLC as bankruptcy counsel, and Justin Alsterberg, Esq., at Sternberg, Naccari & White, LLC as special counsel. RITE AID: Moody's Assigns 'B3-PD/LD' PDR on Cash Tender Offer ------------------------------------------------------------- Moody's Investors Service appended a limited default ("LD") designation to Rite Aid Corporation's B3-PD probability of default rating thereby changing it to B3-PD/LD. The LD designation reflects Moody's view that the company's recently completed cash tender offer of its 7.5% secured notes due 2025 is a limited default. Moody's will remove the "/LD" designation from the company's PDR in a few days. Rite Aid's existing ratings, including its B3 corporate family rating, the B1 rating on its senior secured asset backed lending ("ABL") revolving credit facility, the B2 rating on its senior secured term loan, the B3 rating on its senior secured notes, the Caa2 rating on its unsecured notes and its SGL-2 speculative grade liquidity rating remains unchanged. The outlook remains stable. Rite Aid's B3 corporate family rating reflects its high leverage and smaller scale which exposes it to more reimbursement rate pressures as compared to much larger competitors, such as CVS Health (Baa2 stable) and Walgreens Boots Alliance, Inc (Baa2 RUR). The rating also reflects that its operating margins remain weaker than that of its peers. For the first half of 2022, Rite Aid earnings have fallen because of continued store closures, the recent loss of client in the company's pharmacy segment and the significant decline in COVID-19 vaccinations as most of the population has already been vaccinated. This will be only partially offset by an increase in chronic prescriptions and an increase in flu vaccines. As a result, Rite Aid's lease adjusted debt/EBITDA has increased to about 6.4x for the twelve months ended August 27, 2022. However, a more normalized cold and flu season will be a positive for Rite Aid over the next 3-6 months which Moody's expects will improve Rite Aid's lease adjusted debt/EBITDA to roughly 5.5x-6.0x, but EBIT/interest will remain weak at around 0.7x-1.0x for the period. The rating also takes into consideration the litigation risk associated with prescription drug usage especially opioids. Positive ratings consideration is given to Moody's belief that management will continue focus on cost reduction, inventory rationalization, store remodels, growth in the Elixir PBM business, increase the level of script growth through increased traffic and file buys and strategically target participation in limited and preferred networks to boost revenue, earnings and free cash flow. The relative stability and positive longer term trends of the prescription drug industry are other positive rating considerations. Rite Aid's financial strategies have remained balanced with the company using cash received from asset sales to repay debt. Moody's recognizes Rite Aid's long dated debt maturity profile with no debt coming due before 2025 and good availability under the company's $2.8 billion ABL. The stable outlook reflects Moody's expectation that operating performance and credit metrics will modestly improve over the next 12 months. Ratings could be upgraded if the company demonstrates a sustained improvement in operating performance. An upgrade would require continued script volume growth and positive comparable front end sales. Ratings could be upgraded if the company demonstrates that it can maintain debt/EBITDA below 5.0 times and EBIT to interest expense above 1.5 times. In addition, a higher rating would require Rite Aid to continue to maintain a good liquidity profile, including positive free cash flow. Ratings could be downgraded should the likelihood of a default increase for any reason or if Rite Aid experiences a decline in revenues or earnings or increases debt such that debt/EBITDA is likely to remain above 6.5 times and EBIT to interest expense is likely to remain below 1.0 times. Ratings could also be downgraded should liquidity weaken including free cash flow remaining negative or the company does not get any traction on new PBM contracts or if prescription volumes decline. Headquartered in Harrisburg, PA, Rite Aid Corporation operates over 2,500 drugstores in 17 states. It also operates a full-service pharmacy benefit management company (Elixir). Revenue is about $24 billion. RIVE GAUCHE: Case Summary & 17 Unsecured Creditors -------------------------------------------------- Debtor: Rive Gauche Television 15030 Ventura Blvd. #587 Sherman Oaks, CA 91403 Business Description: Founded in 1994, Los Angeles-based Rive Gauche has been engaged in the production, co-production, acquisition and global distribution of television formats and programming. Chapter 11 Petition Date: December 19, 2022 Court: United States Bankruptcy Court Central District of California Case No.: 22-11457 Judge: Hon. Victoria S. Kaufman Debtor's Counsel: David L. Neale, Esq. LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 Email: dln@lnbyg.com Estimated Assets: $50 million to $100 million Estimated Liabilities: $10 million to $50 million The petition was signed by Jonathan Kramer as president. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KUOFWPY/Rive_Gauche_Television__cacbke-22-11457__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 17 Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Jupiter Distribution $1,474,010 Entertainment, Inc. Agreement 8923 Linksvue Dr. Knoxville, TN 37922 2. TBS-CNN Distribution $756,443 CNN Center SE, Agreement 1311 C Atlanta, GA 30303 3. AMC Networks Distribution $375,989 International Agreements Broadcasting 111 Salusbury Rd London, United Kingdom NW6 8RG 4. M2 Pictures Distribution $227,830 c/o Agency for the Agreement Performing Arts 405 S Beverly Dr, 4th Floor Beverly Hills, CA 90212 5. Farpoint Films, Inc. Distribution $121,875 202-1335 Erin St. Agreement Winnipeg Manitoba, Canada R3E 2S7 6. Sauer & Wagner LLP Legal Services $71,255 1801 Century Park East Suite 1150 Los Angeles, CA 90067 7. Discovery Networks Distribution $67,500 Intl LLC Agreement PO Box 734734 Dallas, TX 75373-4734 8. Lower Canada Distribution $60,000 Productions Inc Agreement 1200 Bay St. #400 Toronto Ontario, Canada M5R 2A5 9. Santa Monica Video Post Production $46,642 4100 W. Alameda and Duplication Suite 208 Services Burbank, CA 91505 10. Dinter, Inc. Professional $38,000 5717 SE Miles Grant Rd. Services Stuart, FL 34997 11. Rose Snyder & Accounting and $25,601 Jacobs Tax Services 15821 Ventura Blvd. Suite 490 Encino, CA 91436 12. Tangram Professional $25,442 12 Paulding St. Services Pleasantville, NY 10570 13. Michael V. Bales, Esq Legal Services $24,847 1801 Century Park East Suite 1150 Los Angeles, CA 90067 14. OTTera Inc. Professional $24,006 5152 Sepulveda Blvd Services Sherman Oaks, CA 91403 15. Indigo Films Distribution $23,185 Entertainment Group Agreement 3001 Bridgeway Suite K.#374 Sausalito, CA 94965 16. World Screen Professional $2,500 1123 Broadway Services Suite 1207 New York, NY 10010 17. Creative Differences Producer $441 20 N. Raymond Ave. Royalties Suite 250 Pasadena, CA 91103 ROBERTSHAW US: Moody's Cuts CFR to Caa3 & Alters Outlook to Neg. ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Robertshaw US Holding Corp. (NEW), including the corporate family rating to Caa3 from Caa1, Probability of Default Rating to Caa3-PD from Caa1-PD, and the ratings on the first-lien senior secured term loan to Caa2 from Caa1 and the second-lien senior secured term loan to Ca from Caa3. Moody's also changed the outlook to negative from stable. The downgrades reflect Robertshaw's high refinancing risk within the next 12 months and persistent negative free cash flow that will be exacerbated by a decline in profitability as demand for the company's products has weakened considerably. A higher interest rate burden and investment in working capital will also constrain free cash flow. Robertshaw is facing lower volumes in its appliance end markets (about 65% of revenue) driven by weaker consumer and commercial demand and inventory reductions by its largest customer, amid macro headwinds and supply chain pressures. Moody's expects these demand pressures to persist into calendar 2023. Moody's also expects adjusted debt-to-EBITDA to remain at unsustainable levels (above 10x) for some time with an untenable capital structure. The negative outlook reflects Robertshaw's elevated financial risk given its very high leverage and concerns around improving liquidity in the near term amid weakening demand and continued capital markets volatility that heighten the refinancing risk on the Euro term loan (due December 2023). Sustained deterioration in liquidity would significantly weaken Robertshaw's financial flexibility and challenge its ability to meet debt service obligations. Corporate governance risk was a key factor in Moody's rating action, considering an aggressive financial policy with a tolerance for high leverage and senior management turnover amid the company's underperformance. Downgrades: Issuer: Robertshaw US Holding Corp (NEW) Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Gtd Senior Secured 1st Lien Term Loan, Downgraded to Caa2 (LGD3) from Caa1 (LGD3) Gtd Senior Secured 2nd Lien Term Loan, Downgraded to Ca (LGD5) from Caa3 (LGD5) Outlook Actions: Issuer: Robertshaw US Holding Corp (NEW) Outlook, Changed To Negative From Stable RATINGS RATIONALE The ratings reflect Robertshaw's weak liquidity and very high leverage, as well as its limited scale with a niche focus and exposure to cyclical consumer spending on appliances. The company is also vulnerable to customer price concessions. Despite ongoing cost saving initiatives to improve the fixed-to-variable cost structure, high input and energy costs and operational inefficiencies from supply chain disruptions continue to weigh on margins. Moody's expects the adjusted EBITDA margin to decline to about 10% through fiscal 2023 (ended March), versus a historical level near 14%. Focus on cost reduction efforts, productivity improvements and pricing actions, including price increases and renegotiated pricing with large appliance customers, will temper the margin decline. Robertshaw maintains leading positions in its niche appliance control markets, longstanding relationships with blue chip customers, and serves end markets that have traditionally grown in-line with US GDP. An aging installed base of residential appliances and commercial HVAC systems, contributing to pent up demand, support longer-term growth prospects. However, home renovation spending has moderated amid headwinds from high interest rates and cost inflation for contractor labor and building materials. The company's modest capital spending needs should promote positive and consistent free cash flow generation as business conditions improve. Moody's expects Robertshaw's liquidity to be weak over the 12 months due to negative free cash flow, increased reliance on external financing resources (including the $50 million ABL revolver) and a looming debt maturity. Borrowings on the ABL revolver (expiring in 2027) were $20 million at September 30, 2022, and used largely to offset cash burn tied to working capital investments. The availability under the borrowing base approximated $23 million. The company's new $16 million 6-year loan secured by assets in Mexico will be used to fund working capital and support inventory turns to improve liquidity. Robertshaw's unrestricted cash balance of $24 million and the ABL availability are modest relative to interest expense, working capital volatility and the outstanding Euro term loan (about $35 million) maturing in December 2023. The ABL is subject to a springing covenant - minimum fixed charge coverage ratio of 1.0x - tested only if excess availability is less than 10% of the facility. The first and second lien term loans do not have financial maintenance covenants. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Robertshaw is expected to maintain adequate liquidity, including positive free cash flow and successful refinancing of the 2023 term loan at par. A sustained improvement in margins on the backdrop of improving business conditions and demand would be important considerations for an upgrade, as would a progressive and meaningful decline in leverage. The ratings could be downgraded if Robertshaw is unable to improve liquidity through operating performance and successfully refinance its 2023 debt maturity. The ratings could also be downgraded if there is an increased risk that Robertshaw will enter into a debt restructuring that Moody's would consider a distressed exchange, or if Moody's recovery expectations on the outstanding rated debt decline. Robertshaw US Holding Corp. designs and manufactures electro-mechanical solutions, mechanical combustion systems, and electrical controls primarily for use in residential and commercial appliances, HVAC and transportation applications. Revenue for the twelve months ended September 30, 2022, approximated $562 million. The principal methodology used in these ratings was Manufacturing published in September 2021. ROJO'S FAMOUS: Gets OK to Hire Gravis Law as Bankruptcy Counsel --------------------------------------------------------------- Rojo's Famous, Inc. received approval from the U.S. Bankruptcy Court for the Eastern District of Washington to employ Gravis Law, PLLC as its counsel. Gravis Law will render these services: (a) advise the Debtor regarding its responsibilities and duties; (b) prepare and file schedules; (c) obtain use of cash collateral; (d) prepare and defend other motions; (e) formulate and obtain confirmation of a Chapter 11 Plan of Reorganization; (f) analyze and object to claims; (g) prosecute and defend any adversary proceedings; (h) negotiate with creditors and other parties-in-interest; and (i) perform all other matters requiring legal advice and representation. The firm received a retainer of $26,738 from the Debtor. John O'Leary, Esq., an attorney at Gravis Law, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: John W. O'Leary, Esq. Gravis Law, PLLC 601 W. Kennewick Avenue Kennewick, WA 99336 Telephone: (509) 588-0431 Facsimile: (866) 419-9269 Email: JOLeary@gravislaw.com About Rojo's Famous Rojo's Famous, Inc., a manufacturer of pancake sandwiches in Normandy Park, Wash., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-11534) on Sept. 23, 2022. In the petition signed by its chief financial officer, Al Davison, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Christopher M. Alston oversees the case. John W. O'Leary, Esq., at Gravis Law, PLLC, is the Debtor's counsel. SEARS HOMETOWN: In Chapter 11 Amid Dispute With Lampert Co. ----------------------------------------------------------- Sears Authorized Hometown Stores, LLC, and Sears Hometown Stores, Inc., have sought bankruptcy protection, planning to liquidate the inventory at the dealer-owned stores that sell its home goods after a dispute with its owner Eddie Lampert's TransformCo, which it relied on for inventory and financing. SHS and SAHS distribute products through 121 "Sears Hometown Stores," which are locally owned and operated businesses that offer the largest selection of the trusted names in home appliances, lawn and garden equipment, and tools. Debtor SAHS is a Delaware entity that is owned 100% by Debtor SHS. Debtor SHS is a Delaware corporation that is in turn owned by the following non-debtors in the following percentages: (1) ESL Partners, L.P. (9%), (ii) Edward S. Lampert, (37.75%), (iii) Hometown Midco LLC (45.23%), and (iv) Thomas J. Tisch and certain of his affiliates (8.03%). As of the Petition Date, all Sears Hometown Stores are operated by independent dealers pursuant to the terms of a Store Agreement. Under the dealer model, the Debtors provide inventory (on a consignment basis), branding and marketing to the stores and the dealers are responsible for start-up costs, lease payments and other store operating costs, including payroll. The Debtors pay commissions to dealers that are based on the net sales of merchandise and extended-service plans. Commission costs were $39.1 million, $49.4 million, and $68.3 million in fiscal years 2021, 2020, and 2019, respectively. Prior to the Petition Date, Dealers earned a 9.25% commission on the sale of inventory and a 9.25% of the sale of extended-service plan. The Debtors' prepetition capital structure primarily consists of (i) secured loans from PNC Bank, National Association; (ii) secured loans from Transform SR Acceptance LLC; and (iii) unsecured obligations. The Debtors estimate their unsecured trade debt, as of the Petition Date, to be $2,250,000, which amount excludes obligations to TransformCo. Dispute With Transform The Debtors have a long history with several "Transform" entities. SHS (f/k/a Sears Hometown and Outlet Stores, Inc.) separated from Sears Holdings Corporation ("Sears Holdings") in October 2012. Sears Holdings thereafter eventually became Transform Holdco LLC ("Transform") when, on February 11, 2019, Transform, which is an affiliate of ESL Investments, Inc. (together with its affiliates, including Edward S. Lampert, "ESL"), acquired substantially all of the assets and assumed the related operative agreements and obligations of Sears Holdings during the course of its bankruptcy proceeding. On Oct. 23, 2019, SHS completed the sale of its Sears Outlet and Buddy's Home Furnishing Stores businesses. Immediately following the consummation of the Outlet Sale, pursuant to the terms of an agreement and plan of merger dated as of June 1, 2019 between SHS, Transform and Transform Merger Corporation ("Merger Sub"), Merger Sub merged with and into SHS, with SHS as the surviving corporation (the "Merger"). At the completion of the Merger, ESL effectively owned approximately 95% of SHS and a majority of Transform. In addition, effective upon completion of the Merger, the certificate of incorporation of Sears Hometown and Outlet Stores, Inc., as in effect immediately prior to the Merger, was amended and restated to, among other things, change the name of Sears Hometown and Outlet Stores, Inc. to SHS (i.e. Sears Hometown Stores, Inc. The Debtors rely substantially on TransformCo to provide key products and services. This heavy reliance makes it such that, in the circumstance that TransformCo is unwilling, unable or otherwise fails to provide these key products and services, the Debtors’ businesses will be materially and adversely affected. The Debtors' chapter 11 filing was precipitated, in part, by this very circumstance. With TransformCo unable and unwilling to provide further services and/or inventory without assurances of payment for such services and inventory, and with PNC unwilling to lend further funds to buy new product given the Debtors' financial challenges, Transform declined to provide further inventory to the Debtors. This lack of inventory has caused a rapid downward spiral that contributed to the filing of these Chapter 11 case. Chapter 11 Filing The Debtors' financial performance has suffered over the last few years from a number of factors, including declining sales, rising costs and the "hangover" from the COVID-19 pandemic. For the year ended Jan. 29, 2022, SHS incurred recurring operating and net losses from continuing operations of $16.2 million and $18.3 million, respectively. The Debtors undertook several steps since that time to try to improve performance including, (i) the closure of unprofitable stores, (ii) the optimization of resources, including a reduction in corporate and field expenses such as IT infrastructure costs and travel expenses, and (iii) the implementation of strategies to increase sales, including "Easy Order," a direct-ship sales arrangement with vendors. The Debtors also reached out to several potential strategic buyers in January 2022 to assess interest in the company. Notwithstanding these efforts, the Debtors' financial difficulties continued. The PNC Credit Agreement includes an affirmative covenant that requires the Debtors to maintain certain "excess availability," as defined in the agreement. The Debtors found themselves in breach of this covenant in mid-October 2022 and thereafter were placed in cash dominion and began discussions with PNC and Transform regarding restructuring alternatives. At the same time, with obligations mounting, Transform requested assurances of payment before providing new inventory. In the absence of additional funding from PNC to purchase new inventory from TransformCo, and with TransformCo unwilling to provide inventory and services without assurances of payment, the Debtors found themselves in an untenable position, particularly given the heavy reliance of independent dealers on the sale of inventory received from TransformCo. At the same time, a dispute arose between the Debtors and Transform over the amount of the Debtors' inventory that remain in Transform's control. Attempts to resolve these disputes pre-bankruptcy were not successful. Given these disputes, and without the ability to access new inventory, the Debtors found themselves in a difficult position and ultimately determined that a chapter 11 proceeding would be the best mechanism through which the Debtors could (i) stem losses; (ii) orderly liquidate their inventory at the stores through inventory liquidation sales; (iii) provide some order and control over the sale process and their Dealer network; (iv) provide a forum for resolving their disputes with Transform; and (v) provide a forum for resolving any disputes or issues with their Dealers. In furtherance of these objectives, the Debtors have filed a motion for approval of a Consulting Agreement dated as of December 8, 2022, by and between the Debtors and a joint venture comprised of Tiger Capital Group, LLC, B. Riley Retail Solutions, LLC and SB360 Capital Partners, LLC under which the Debtors would promptly begin inventory sales at their locations in a manner that the Debtors believe will best serve the interests of their dealers, creditors and other parties in interest. About Sears Hometown Stores Sears Authorized Hometown Stores, LLC distributes products through approximately 121 "Sears Hometown Stores," which are locally owned and operated businesses that offer a selection of the trusted names in home appliances, lawn and garden equipment, and tools. Sears Authorized Hometown Stores, LLC and Sears Hometown Stores, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11303) on December 12, 2022. In the petition signed by Elissa Robertson, CEO, Sears Authorized Hometown disclosed up to $50 million in assets and up to $100 million in liabilities. Judge Laurie Selber Silverstein oversees the cases. Saul Ewing LLP is the Debtors' legal counsel, and Gray & Company, LLC, is the Debtors' financial advisor. Stretto is the claims and noticing agent. SENSITIVE HOME: Amends Plan to Include Employee Wage Claims Details ------------------------------------------------------------------- Sensitive Home Inc. submitted a First Amended Plan of Reorganization dated Dec. 12, 2022. The Debtor has secured financing as a debtor-in-possession, and has continued to operate its business. Class 2 consists of the Subordinated Secured Notes. The Debtor will pay the noteholders subject to the Subordinated Secured Note directly their respective portion of the Allowed Secured Amount at the rate of 4%, together comprising the Total Claim. The payments will be made quarterly after the Claims in class 4 are satisfied, with the Claims in this class being paid pro rata, pari passu with the Claims in class 5. Class 3 consists of Priority Unsecured Claims. Any allowed priority claim of Suzanne Sengelmann, Roberta Greenspan or Michele Hall will be paid in full on the Effective Date of the Plan. Absent further Court order, holders of Claims that fail to file and serve a proof of Claim on or before the relevant bar date will not be treated as a creditor for purposes of voting and distribution. The amount of claim in this Class total $35,000.00. Class 4 consists of General Employee Wage Claims. Any allowed general unsecured claim of Suzanne Sengelmann, Roberta Greenspan or Michele Hall will be paid pro rata in quarterly installments, after payment in full of the administrative claims and any claims in classes 1 through 3 to be paid thorough the plan. The amount of claim in this Class total $150,000.00. Class 5 consists of General Unsecured Claims. Allowed General Unsecured Claims will be paid the face value of their allowed claims within five years of the Effective Date. The claimants will be paid quarterly, after the claims in class 4 are satisfied, with the claims in this class being paid pro rata, pari passu with the payments made on the Subordinated Secured Notes. The amount of claim in this Class total $250,000.00. The Plan will be funded from the Debtor's cash flows stemming from the Debtor's future business operations. The Bankruptcy Court has scheduled a January 18, 2023 hearing to consider confirmation of the Plan. A full-text copy of the First Amended Plan dated Dec. 12, 2022, is available at https://bit.ly/3PCHP1I from PacerMonitor.com at no charge. The Debtor's Counsel: Mark M. Billion, Esq. 1073 s. Governors Ave. Dover, DE 19904 Tel: 302-428-9400 Email: markbillion@billionlaw.com About Sensitive Home Sensitive Home offers home cleaning products especially for those with skin, respiratory, and chemical sensitivities. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-11063) on Nov. 10, 2022. In the petition signed by Stuart Dawson Chrisp, director, the Debtor disclosed $317,207 in assets and $1,333,593 in liabilities. The Hon. John T. Dorsey oversees the case. Mark M. Billion, Esq. is the Debtor's Counsel. SM WELLNESS: Moody's Lowers CFR to Caa2 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service downgraded SM Wellness Holdings, Inc.'s (Solis) corporate family rating to Caa2 from B3, the probability of default rating to Caa2-PD from B3-PD, the senior secured rating on its first lien senior secured facilities to Caa1 from B2 and the senior secured rating on its second lien senior secured facilities to Caa3 from Caa2. The outlook was changed to stable from negative. The downgrade reflects Moody's view that Solis' capital structure is unsustainable given the companies operating performance, which has been below Moody's prior expectations, as reflected in sustained negative free cash flow as well as high financial leverage. These challenges suggest an increase in the risk that Solis will pursue a capital restructuring transaction that results in a loss to its lenders. Downgrades: Issuer: SM Wellness Holdings, Inc. Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa1 (LGD3) from B2 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: SM Wellness Holdings, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Solis's Caa2 corporate family rating is constrained by: (1) an untenable capital structure, evident by very high leverage of around 9x and weak interest coverage of about 1x; (2) small scale and geographic concentration in Texas (about 60% of revenue); (3) a narrow business focus on mammography, with around half of revenues linked to voluntary screenings; and (4) ongoing execution risk due to an active debt-funded growth strategy involving acquisitions, joint ventures and standalone facilities. The company benefits from: (1) a tailored service offering focused on breast cancer screening and associated recurring revenue streams, differentiating its business model from multimodal diagnostic providers; (2) low reimbursement risk and a solid payor profile, with limited exposure to government plans; and (3) partnerships with strong healthcare networks providing supportive platforms for expansion. Solis has weak liquidity. Sources total close to $32 million as of Q3-22, consisting of cash on hand of about $7 million (excluding cash held at JVs) and full availability under a $25 million committed undrawn revolving credit facility expiring in 2026. Moody's estimates uses of cash through Q4-23 total close to $18 million, consisting of negative free cash flow of about $15 million and $3 million in mandatory term loan amortizations. Moody's notes the company has flexibility around the pace and spend of discretionary capex, and expects the company to reduce capex to ensure it has liquidity. The secured revolver is subject to a springing first lien leverage covenant of 8x when more than 40% drawn, with which Moody's expects the company to remain comfortably in compliance. Solis has limited capacity to sell assets to raise cash. The company has $23 million in seller notes with a JV partner due in February 2023, with the option of forfeiting repayment and unwinding its JV share in the absence of liquidity to repay the note. In the absence of an additional capital injection, Moody's would expect the company to forfeit the note. Governance considerations include risks associated with private equity ownership and aggressive financial policies that favor shareholders. This is characterized by very high financial leverage, the servicing of which reduces deleveraging in a rising interest rate environment. Governance risks also include the possibility that the company's financial strategy might involve distressed exchanges and/or debt restructuring. As a result, Moody's changed Solis' governance Issuer Profile Score to G-5 from G-4. The Credit Impact Score was also changed to CIS-5 from CIS-4 because of the change in the governance score. Solis's first lien facilities, consisting of a $300 million first lien term loan, $25 million delayed draw term loan (both due 2028) and $25 million revolving credit facility expiring 2026, are rated Caa1, one notch above the Caa2 CFR, reflecting higher recovery in the capital structure. The $100 million second lien and $25 million delayed draw term loans due 2029 are rated one notch below the CFR, at Caa3, reflecting their junior position behind the first lien debt. The debt is guaranteed by the holding company SM Intermediate, Inc. and wholly-owned subsidiaries. The stable outlook reflects Moody's view that the leverage will remain high and liquidity will remain weak in the current environment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Solis materially improves its operating performance such that operating cash flow is consistently positive, financial leverage improves and Moody's views the company's capital structure as sustainable. The ratings could be downgraded if Solis' liquidity deteriorates, or if Moody's believes the probability of default has increased. Headquartered in Addison, Texas, Solis is a provider of mammography services, operating over 100 centers across eleven states dedicated to annual screenings, diagnostic mammograms, breast ultrasounds, biopsies and bone density screenings. Solis is majority owned by private equity sponsor Madison Dearborn Partners. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. STARFISH POOL: Future Income to Fund Plan Payments -------------------------------------------------- Starfish Pool Service LLC filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Small Business Plan of Reorganization under Subchapter V dated December 13, 2022. The Debtor is a Texas limited liability company, with its primary place of operations based in Plano, Texas. Since 2008, the Debtor has been in the business of swimming pool cleaning and pool supplies. Prior to filing this case, the Debtor typically had annual revenues between $1,700,000 and $2,200,000. In the year prior to the Debtor's bankruptcy filing, its revenues average approximately $100,000.00 per month. The Debtor's revenue has decreased substantially recently due to COVID and general market conditions. The Debtor's financial projections show that the Debtor will have projected monthly disposable income of $1,950.44. The Debtor proposes to pay its creditors and claims over a period of 36 months, with the first payment due on the effective date. The Debtor anticipates that this Plan will be confirmed by the Bankruptcy Court by January 31, 2023. This Plan of Reorganization proposes to pay creditors of the Debtor from cash flow from operations and future income. The Plan provides for 3 classes of secured claims. The Debtor does not believe that there are any non-priority unsecured creditors. No priority claimant has filed a proof of claim as of the date of the filing of this Plan, no such unsecured creditor has filed a proof of claim in this case. This Plan also provides for the payment of post-petition administrative claims. Class 1 consists of the secured claim of Plano Independent School District. The Debtor shall pay to the Plano Independent School District its claim in full ($230.76), plus the statutory interest of 12% as a one-time payment on the date of confirmation. Class 2 consists of the Secured claim of Collin County Tax Assessor/Collector. The Debtor shall pay to the Collin County Tax Assessor/Collector its claim in full ($119.30), plus the statutory interest of 12% as a one-time payment on the date of confirmation. Class 3 consists of the secured claims of 24 Capital, Cloudfund LLC, Global Funding Experts, Masada Funding, and Union Funding Source. Class 3 shall be treated as a wholly unsecured debt and paid at a rate of 12% of the estimated total amount of $585,091.00. The Debtor shall pay Class 3 Claims a total of $70,231.68 over a period of 36 months, with monthly payments of $1,950.88, paid to each creditor on a pro-rata basis based on the value of the creditor's individual claims. Aaron Winger shall continue to operate as the responsible individual for the Debtor throughout the implementation of the Plan. The Debtor, through Mr. Winger, shall make the payments due under the terms of this Plan to each creditor and claim holder from the ongoing income that the Debtor derives from its business operations. A full-text copy of the Plan of Reorganization dated December 13, 2022, is available at https://bit.ly/3G9paaV from PacerMonitor.com at no charge. Attorney for Debtor: David S. Henshaw, Esq. Henshaw Law Office 1530 P B Ln PMB H5358 Wichita Falls, TX 76302-2612 Tel: (469) 820-3900 Fax: (855) 650-0757 Email: david@henshawlaw.com About Starfish Pool Service Starfish Pool Service, LLC filed a Chapter 11 bankruptcy petition (Bankr. E.D. Texas Case No. 22-41354) on Oct. 12, 2022, with up to $50,000 in assets and up to $1 million in liabilities. Henshaw Law Office is the Debtor's legal counsel. SUNLIGHT RIVER: Seeks to Tap MAC Restructuring as Financial Advisor ------------------------------------------------------------------- Sunlight River Crossing, LLC seeks approval from the U.S. Bankruptcy Court for the District of Arizona to employ MAC Restructuring Advisors, LLC as financial advisor. MAC will render these services: (a) review and analyze the Debtor's cash liquidity and assist its management in identifying areas of improvement; (b) provide financial advice and assistance to the Debtor in developing a plan of reorganization; (c) attend meetings with the Debtor, its counsel, creditors, parties-in-interest, the U.S. Trustee's Office, and any committees that may be appointed in the case; (d) provide testimony, as necessary, in any proceeding before the Bankruptcy Court with respect to matters for which MAC has been engaged; (e) be available to Debtor's managing member and its bankruptcy counsel; (f) assist the Debtor in connection with financial issues; and (g) drive, coordinate and guide negotiations with lenders, as necessary. Edward Burr, a member of MAC, will be billed at his hourly rate of $395, plus reimbursement for actual out-of-pocket expenses incurred. Harrison Elder, the Debtor's principal, will provide MAC a $5,000 retainer from non-estate funds. Mr. Burr disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Edward W. Burr MAC Restructuring Advisors, LLC 10191 E. Shangri La Rd. Scottsdale, AZ 85260 Telephone: (602) 418-2906 Email: Ted@MacRestructuring.com About Sunlight River Crossing Cornville, Ariz.-based Sunlight River Crossing, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No. 21-04364) on June 4, 2021, with as much as $10 million in both assets and liabilities. Joseph E. Cotterman of Gallagher & Kennedy serves as Subchapter V trustee. Judge Brenda K. Martin presides over the case. Keery McCue PLLC, MAC Restructuring Advisors, LLC, and Jade Accounting Inc. serve as the Debtor's legal counsel, financial advisor, and accountant, respectively. 988, LLC, as lender, is represented by Bryan Wayne Goodman of Goodman & Goodman, PLC. SURGEPOWER MATERIALS: Involuntary Chapter 11 Case Summary --------------------------------------------------------- Alleged Debtor: SurgePower Materials, Inc. 1224 Industrial Dr., Suite C New Braunfels, TX 78130-0000 Business Description: SurgePower is a green technology company that produces high purity graphene. Involuntary Chapter 11 Petition Date: December 20, 2022 Court: United States Bankruptcy Court Western District of Texas Case No.: 22-51436 Petitioners' Counsel: Marc C. Taylor, Esq. WALLER LANSDEN DORTCH & DAVIS LLP 100 Congress Ave., Ste. 1800 Austin, TX 78701-0000 Tel: 512-685-6400 Email: mark.taylor@wallerlaw.com A full-text copy of the Involuntary Petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AYAWM4I/SurgePower_Materials_Inc__txwbke-22-51436__0001.0.pdf?mcid=tGE4TAMA Alleged creditors who signed the petition: Petitioner Nature of Claim Claim Amount 1. Ecliptic Holdings I, LLC $300,000 Attn: Mike Millard Authorized Agent 1209 West 5th St., 3rd Floor Austin, TX 78703-0000 2. Ecliptic Evergreen Innovations Fund I LP $500,000 Attn: Mike Millard Authorized Agent 1209 West 5th St., 3rd Floor Austin, TX 78703-0000 3. Harborock Ltd. $25,000 Attn: Kevin Przybocki, Manager 4302 Aqua Verde Dr. Austin, TX 78746-0000 4. Carbonaceous Green Investments LLC $100,000 Attn: William G. Huff, Manager 3001 Mail Route Rd. Fischer, TX 78623-0000 5. Gibson, Steven George $20,000 7308 Callbraun Ln. Austin TX 78736-0000 6. Shaffer, Richard Thomas $150,000 22 Sheringham San Antonio TX 78218-0000 TGPC PROPERTIES: Case Summary & One Unsecured Creditor ------------------------------------------------------ Debtor: TGPC Properties, LLC 5536 N. 6th Street Phoenix, AZ 85012 Business Description: TGPC is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: December 19, 2022 Court: United States Bankruptcy Court District of Arizona Case No.: 22-08374 Debtor's Counsel: Lamar Hawkins, Esq. GUIDANT LAW PLC 402 East Southern Ave Tempe, AZ 85282 Email: lamar@guidant.law Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Paul Johnson as manager. The Debtor listed The Gathering Place Church located at 5536 N. 6th St., Phoenix, AZ 85012, as its sole unsecured creditor holding a claim of $1 million. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/S4SIQ4I/TGPC_Properties_LLC__azbke-22-08374__0001.0.pdf?mcid=tGE4TAMA TK CLEANING: Case Summary & 14 Unsecured Creditors -------------------------------------------------- Debtor: TK Cleaning & Lawn Service, LLC 240 Old Rawlinson Road Rock Hill, SC 29732 Business Description: The Debtor offers land clearing, screened topsoil, mulch, snow removal, tree removal, lawn maintenance, hardscaping, storm cleanup, and all manner of landscape services. Chapter 11 Petition Date: December 19, 2022 Court: United States Bankruptcy Court District of South Carolina Case No.: 22-03485 Debtor's Counsel: Jane H. Downey, Esq. MOORE BRADLEY MYERS LAW FIRM, P.A. PO Box 5709 1700 Sunset Boulevard West Columbia, SC 29171 Tel: (803) 454-1983 Fax: (803) 791-8410 Email: jane@mbmlawsc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Troy Kelley as owner. A full-text copy of the petition containing, among other items, a list of the Debtor's 14 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/S7E32UY/TK_Cleaning__Lawn_Service_LLC__scbke-22-03485__0001.0.pdf?mcid=tGE4TAMA TRAYLOR CHATEAU: Files for Chapter 11, Seeks to Sell Property ------------------------------------------------------------- Traylor Chateau LLC filed for chapter 11 protection in the Middle District of Florida. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor is a Missouri limited liability company that owns an apartment building located at 5832-5840 Cabanne Avenue, in Saint Louis City, Missouri. The Property contains approximately 30 apartment units, many of which are currently rented by rent-paying tenants as lessees and some of which are currently vacant. Of the vacants units, some will need major repairs before they become rentable and some will need only painting and minor repairs to become rentable. The Debtor will need to expend monies to make the vancant units rentable in order to begin receiving rental income from those currently vancant units. In September 2017, the Debtor entered into a mortgage loan agreement with Reliance Bank with a maturity date in or about September 2022. After the Mortgage Loan origination date and prior to the maturity date, Simmons Bank acquired Reliance Bank and therefore became holder of the Mortgage Loan note. Simmons Bank extended the maturity date of the Mortgage Loan to December 6, 2022. The Debtor said it is seeking to sell the Property and has engaged in discussions regarding the sale of the Property with a prospective buyer but does not yet have a real estate sales contract with a prospective buyer. According to court filings, Traylor Chateau estimates between $500,000 and to $1 million in debt owed to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. About Traylor Chateau LLC Traylor Chateau LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Traylor Chateau LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 22-43815) on Dec. 8, 2022. In the petition filed by Rena T. Traylor, as member, the Debtor reported assets between $1 million and $10 million and liabilities between $500,000 and $1 million. The Debtor is represented by: Frank R. Ledbetter Ledbetter Law Firm, LLC 7251 Boellner Drive Hazelwood, MO 63042 TSS ACQUISITION: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: TSS Acquisition Company DBA TSS Technologies DBA R&3D Technologies DBA MiQ Partners 8800 Global Way West Chester, OH 45069 Business Description: TSS designs and builds automated manufacturing equipment. Chapter 11 Petition Date: December 19, 2022 Court: United States Bankruptcy Court Southern District of Ohio Case No.: 22-12154 Judge: Hon. Beth A. Buchanan Debtor's Counsel: Patricia J. Friesinger, Esq. COOLIDGE WALL CO., L.P.A. 33 West First Street, Suite 200 Dayton, OH 45402 Tel: 937-223-8177 Fax: 937-223-6705 Email: friesinger@coollaw.com Debtor's Business Advisors: PAREEK GROUP, LLC Total Assets: $9,968,914 Total Liabilities: $18,179,460 The petition was signed by Sumner M. Saeks as chief restructuring officer. 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/MCRCSSY/TSS_Acquisition_Company__ohsbke-22-12154__0001.0.pdf?mcid=tGE4TAMA UNDER ARMOUR: Moody's Affirms 'Ba2' CFR & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service changed Under Armour, Inc.'s outlook to stable from positive. At the same time, Moody's affirmed Under Armour's corporate family rating at Ba2, probability of default rating at Ba2-PD, and senior unsecured notes rating at Ba3. The company's SGL-1 speculative grade liquidity rating is unchanged. The outlook change to stable reflects recent declines in Under Armour's operating performance and credit metrics resulting from the difficult global retail environment. Pressured consumer spending when combined with elevated inventory levels across the industry will likely result in high promotional levels, limiting profit growth over the very near term. As a result, Moody's expects credit metrics will not improve to levels needed to upgrade the company over the next 12 months. The affirmation of Under Armour's Ba2 CFR reflects Moody's expectation that credit metrics will remain solid over the next 12-18 months despite the more challenging operating environment. Under Amrour's SGL-1 speculative grade liquidity rating reflects Moody's expectation for very good liquidity, supported by approximately $854 million of unrestricted cash on the balance sheet as of September 30, 2022, full availability under its unrated $1.1 billion revolver, positive free cash flow and ample covenant headroom. Affirmations: Issuer: Under Armour, Inc. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5) Outlook Actions: Issuer: Under Armour, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE Under Armour's Ba2 corporate family rating reflects governance considerations, including conservative financial strategies with a track record of debt reduction and maintaining moderate financial leverage. The rating also reflects its well-known brand and solid competitive position in branded performance apparel, footwear and accessories in the US and internationally. Also considered are the company's track record of innovation and Moody's positive view of the global sports apparel market, which provides credible longer-term organic growth opportunities, particularly in international markets where the company is significantly underpenetrated. Under Armour is constrained by its reliance on a single brand and limited geographic reach, which exposes the company to economic cyclicality and inherent changes in consumer preferences in a concentrated region, as evidenced by it underperformance in North America prior to the pandemic. Under Armour has taken significant actions over the past several years to improve its operations. While operating margins significantly improved in 2021, they remained weak relative to other similarly rated apparel peers and the improvement was short-lived. Now under pressure due to difficult retail operating conditions, it will take additional time to prove that turnaround efforts will have a sustained positive effect FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require a sustained improvement in operating performance, including continued revenue growth in all markets while maintaining higher margins and very good liquidity. Key metrics include operating margins sustained in the high single digit range or better and debt/EBITDA sustained below 2.0x. Ratings could be downgraded should operating performance trends or liquidity deteriorate, or if financial policies turn aggressive, such as through debt-financed returns to shareholders or acquisitions. Quantitative metrics include operating margins sustained at or below mid-single digits or debt/EBITDA sustained above 3.5x. Headquartered in Baltimore, Maryland, Under Armour, Inc. is a designer, developer, marketer and distributor of footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Revenue for the twelve months ended September 30, 2022 exceeded $5.75 billion. The principal methodology used in these ratings was Apparel published in June 2021. VALVOLINE INC: S&P Affirms 'BB' ICR, Off CreditWatch Negative ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB' issuer credit rating on Valvoline Inc. and removed all ratings from CreditWatch, where they were placed with negative implications on Aug. 2, 2022. S&P said, "We will withdraw our issue-level rating on the company's senior secured bank facility upon transaction close and do not anticipate rating the amended and extended bank facility. "At the same time, we lowered our issue-level ratings on the company's existing senior unsecured notes to 'B+' from 'BB-' and revised the recovery rating to '6' from '5'. The '6' recovery rating indicates our expectation for negligible (0%-10%, rounded estimate: 5%) recovery in the event of a payment default. The stable outlook reflects our view that the stand-alone auto retail services business will be a platform for revenue and EBITDA growth going forward." Management expects the transaction to close within the first quarter of 2023, potentially as early as February, pending regulatory and anticompetitive review in a number of foreign jurisdictions. The company indicated it is on schedule to achieve regulatory clearance, though several foreign jurisdictions have yet to give approval. Barring any complications with the remaining regulators, S&P believes the sale to Aramco will likely close within the first quarter of calendar 2023. Valvoline's sale of its Global Products business creates a new, pure-play auto services retailer with faster growth and higher margins, albeit smaller in scale and less diverse, than the previous consolidated entity. Valvoline's strategy onward includes significant investment into growing its retail store footprint within the U.S. and Canada. This, combined with focus on improving efficiency and increasing average ticket size at its existing store, lays the foundation for a business capable of growing top line and EBITDA in the double-digit percent range annually. Retail Services drove significant EBITDA growth for the consolidated entity from 2018-2021 with a 24% compound annual growth rate (CAGR). Moreover, the Retail Services business is inherently higher margin as a standalone entity, a position that the asset-lite franchise model supports. S&P forecasts S&P Global Ratings-adjusted EBITDA margin of about 30% compared to 21%-23% on average for legacy Valvoline. S&P said, "The company has good market position as a leader in preventative automotive services, particularly in the "do it for me" (DIFM) oil change category. We believe management aims to expand higher-margin non-oil change revenue (NOCR) services and look to adapt to an evolving car parc and drive train environment that increasingly consists of electric vehicles and alternative technology. The Valvoline brand name is strong and recognizable with consumers as the company has built a reputation of trust and high-quality service. We believe that new Valvoline is well-positioned to compete and take market share in the auto services retailer industry. Nevertheless, our ratings incorporate the significant international geographic diversification of its Global Products business that accounted for over 68% of legacy Valvoline's sales. We view new Valvoline's competitive position to be in line with auto service retail peers such as Driven Brands Holdings Inc., Mavis Tire Express Services Corp., and LS Group Opco Acquisition LLC. "The company publicly committed to debt reduction following the sale, and we expect credit metrics consistent with legacy Valvoline. We believe Valvoline is contractually obligated to call its $600 million senior unsecured notes due 2030 due to the sale. However, management may have some flexibility related to timing of this debt repayment. We believe it is possible that the 2030 bonds may be held on balance sheet for as much as a year post-close of the transaction, though it is our expectation that the company will maintain short-term liquid assets to cover this future payment should it be delayed. We continue to assume that the debt will be removed from the capital structure by the first quarter of 2024. Additionally, we expect that the company will pay off its existing securitization facility with cash proceeds from the transaction, as well as execute an amended and extended bank facility (contingent on deal closing) consisting of a new revolving credit facility and term loan A expiring in 2028. "New Valvoline intends to eliminate the dividend and prioritize cash flow towards growth, albeit with an appetite for substantial share repurchases. We expect new Valvoline to generate nearly $300 million in operating cash flow in 2023, potentially growing to more than $400 million by 2025, and we believe it will invest a large portion into new store capital expenditures (capex), acquisitions, and maintenance capex to grow the business. However, management plans to maintain shareholder-friendly financial policies in the form of substantial annual share repurchases, likely more than $300 million annually. We will monitor their frequency and magnitude, especially after the $1.6 billion program is complete, and review its effect on discretionary cash flow. "The stable outlook reflects our expectation that over the next year Valvoline will grow its top line and EBITDA, driven by continued growth in store count and higher average ticket prices system-wide. We also expect that post-transaction close, the company will maintain a similar financial risk profile and credit metrics such that S&P Global Ratings-adjusted leverage remains in the low-to-mid 3x area." S&P could lower the ratings over the next year if operating performance falls short of its expectations, including slower revenue growth and limited margin expansion, leading to weaker profitability and cash flows and resulting in S&P Global Ratings-adjusted leverage sustained above 4x. This could occur if: -- The company slows investment into growing its store count, or efficiency and average ticket size throughout the system declines materially; -- Competition from auto service retailer peers intensifies; or -- The company does not deleverage in-line with our expectations, or challenges in closing the sale of its Global Products business arise. Although unlikely within the next 12 months, S&P could raise the ratings if it had a more favorable view of the business. This could happen if: -- The company expands its geographic footprint in the U.S. and Canada faster than our expectations; and -- The amount of vehicles served and average ticket size system-wide grows at a sizable clip; -- A higher rating would also be predicated on the company deleveraging faster than S&P's expectations, such that leverage is sustained in the under 3x. ESG credit indicators: E-2, S-2, G-2 VERITAS NL: Moody's Affirms 'B3' CFR & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Investors Service affirmed Veritas NL Intermediate Holdings B.V.'s ratings including its B3 Corporate Family Rating and B3-PD Probability of Default Rating and revised its outlook to negative from stable. The negative outlook reflects the challenges and costs the company faces revitalizing its product lineup in addition to the revenue and cash flow headwinds from a transition to a subscription model and rising interest rates. The affirmation of the ratings reflects the still sizeable cash balance ($521 million as of September 30, 2022) and Veritas's entrenched position as a back-up and recovery software provider to complex data center installations across the world. RATINGS RATIONALE Veritas's B3 CFR is driven by the company's high financial leverage, challenges from an evolving enterprise storage software market, and Moody's expectation of declining revenues over the next two years. Leverage as of September 2022 is around 7x. The company is ramping up investment in R&D and sales which will drive a significant decline in EBITDA and cash flow over the next 12-24 months. While the goal of the investment is to modernize the portfolio and improve sales, financial metrics will weaken significantly during the investment period with leverage exceeding 10x and free cash flow trending significantly negative over the next 18-24 months. The deteriorating metrics are offset to some degree by the company's very large cash balance, which should fund most shortfalls through this process. Veritas benefits from its leading market position as a provider of backup and recovery software and entrenched position within enterprise customers' critical IT infrastructure. However, the storage management software market is shifting, and solutions provided by new entrants and new technologies have been eroding Veritas's leading market position. Moody's expects revenues in Veritas's core NetBackup and appliance product lines (around 65% of revenues) to continue facing competitive challenges as workloads shift to the cloud, but still remain relatively stable, with mixed but overall declining revenues in its other product lines. While the current investment program has the potential to stabilize and possibly grow revenues longer term, Moody's expects mid-single digit or higher revenue declines over the next 12-18 months exacerbated by ongoing shift to a subscription model and foreign exchange headwinds. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if performance stabilizes, leverage is on track to be sustained below 6.5x and free cash flow to debt is on track to exceed 5%. The ratings could be downgraded if revenues do not show signs of stabilizing, if leverage is expected to exceed 8x for an extended period or free cash flow is expected to be negative (with some cushion while cash balances remain strong) for an extended period. Excessive negative cash flow could also drive a downgrade particularly without a clear path to returning to positive levels. While the strong cash balances provide some cushion to fund shortfalls temporarily, the balances are not sufficient to solve for excess debt in the capital structure or address the 2025 debt maturities. Liquidity is good based on an estimated $521 million of cash and equivalents as of September 2022 and an undrawn revolver. This liquidity helps to mitigate Moody's expectation of strongly negative free cash flow over the next twelve months. As part of the 2021 refinancing, the company extended maturity on its $183 million revolving credit facilities to March 2025. Veritas's term loan and secured note maturity is in September 2025. Veritas's ESG credit impact score (CIS-4) is highly negative, primarily driven by governance risks. Governance risks arise from operating challenges as well as high leverage levels and associated aggressive financial policies of its private equity owner, The Carlyle Group. Moderately negative social risks stem from potential cybersecurity breaches and access to skilled talent. Affirmations: Issuer: Veritas NL Intermediate Holdings B.V. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured Bank Credit Facility, Affirmed B3 to (LGD4) from (LGD3) Senior Secured Regular Bond/Debenture, Affirmed B3 to (LGD4) from (LGD3) Outlook Actions: Issuer: Veritas NL Intermediate Holdings B.V. Outlook, Changed To Negative From Stable Veritas NL Intermediate Holdings B.V. (previously Veritas Bermuda Ltd.), headquartered in Santa Clara, California is a provider of storage management, and backup and recovery software. Veritas is principally owned by investment funds of the private equity firm, The Carlyle Group. Veritas generated approximately $1.7 billion of revenue for the twelve months ended September 30, 2022. The principal methodology used in these ratings was Software published in June 2022. WEBSTER UNIVERSITY: Moody's Cuts Issuer & Rev. Bond Ratings to Ba1 ------------------------------------------------------------------ Moody's Investors Service has downgraded Webster University's (MO) issuer and revenue bond ratings to Ba1 from Baa2. The outlook remains negative. The revenue bonds have an expected final maturity in 2036. The university had total outstanding debt of $124 million at fiscal end 2022. RATINGS RATIONALE The downgrade of Webster University's issuer rating to Ba1 from Baa2 is driven by the magnitude of its recent financial deterioration that will be difficult to reverse, contributing to a material reduction in future financial flexibility. The fiscal 2022 deficit, along with the board authorized use of up to $25 million of reserves to close the forecasted operating deficit in fiscal 2023 and the university's collateral posting requirements on its fully drawn lines of credit leaves it with diminished unrestricted liquidity. While the university has steadily trimmed costs, an absence of plans to fundamentally adjust its expense structure coupled with continuing student market pressures will challenge its ability to restore budgetary balance in the near-term. Social and governance considerations are key drivers of this rating action, including weak regional demographics and shifting student preferences contributing to enrollment challenges, along with the financial strategy limitations reflected in the heightened budgetary and liquidity challenges. Webster University's Ba1 issuer rating incorporates its still good scale and wealth, with enrollment and programmatic diversity providing some prospects for demand stabilization. The introduction of a number of strategies to improve its market position yielded enrollment gains in fall 2022. The university attributes this enrollment growth to efforts to diversify recruitment to maximize its international presence and multiple domestic locations. However, after extensive and sustained enrollment declines over the last decade, the university's operating revenue remains substantially lower than historical levels and well above expenses. The erosion in pricing flexibility, reflected in steady declines in net tuition per student, further underscore the university's brand and strategic positioning headwinds. A complex debt structure, and more limited means for programmatic and capital investment are additional credit challenges. The university's Ba1 revenue bond rating is based on the issuer rating and the general obligation characteristics of the debt without the benefit of additional collateral. RATING OUTLOOK The negative outlook acknowledges the difficulties of executing the multifaceted strategy intended to strengthen student demand, restore structurally balanced operations, and rebuild liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS Significant and sustained improvement in operating performance driven by a restoration in net tuition revenue growth and the implementation of material expense reductions Marked improvement in wealth and liquidity, providing materially stronger coverage of debt and expenses FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS Inability to make substantial progress towards restoring structurally balanced operations in fiscal 2024 Further erosion to the liquidity position beyond fiscal 2023 from any combination of factors including the use of reserves to cover operating deficits LEGAL SECURITY Rated bonds are unconditional obligations of the university with a secured interest in general revenue. PROFILE Originally founded in 1915, Webster University is a private university with its main residential campus just outside of St. Louis, multiple metropolitan and military base campuses scattered through the United States, as well as international locations across nine countries and three continents (Europe, Asia and Africa). Webster offers a diverse mix of undergraduate, graduate, and certificate programs and has extensive online programming. It enrolled just under 8,000 full-time equivalent students in fall 2022 and generated $125 million in operating revenue in fiscal 2022. METHODOLOGY The principal methodology used in these ratings was Higher Education Methodology published in August 2021. XTRA INCORPORATED: Case Summary & Four Unsecured Creditors ---------------------------------------------------------- Debtor: XTRA Incorporated 700 Glendale Avenue South Charleston, WV 25303 Business Description: The Debtor owns several parcels located in Huntington, WV Charleston, WV 25303. Chapter 11 Petition Date: December 19, 2022 Court: United States Bankruptcy Court Southern District of West Virginia Case No.: 22-20195 Judge: Hon. B. Mckay Mignault Debtor's Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE 3818 MacCorkle Ave. S.E. Suite 101 Post Office Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 Email: jcaldwell@caldwellandriffee.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Nathan Phillips as officer/owner. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SFGSRPY/XTRA_Incorporated__wvsbke-22-20195__0001.0.pdf?mcid=tGE4TAMA ********* 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. 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The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN: 1520-9474. 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