/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230223.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 23, 2023, Vol. 27, No. 53 Headlines 12TH & K ST: Seeks to Hire StoneHarbor as Loan Broker 4TH AVENUE APARTMENTS: Court OKs Interim Cash Collateral Access 9300 WILSHIRE: Case Summary & Nine Unsecured Creditors ACASTI PHARMA: Incurs $3.9 Million Loss in Third Quarter ADAPTIVE IDENTITY: Case Summary & Six Unsecured Creditors AEQUOR MGT: Seeks to Hire Munsch Hardt Kopf & Harr as Legal Counsel AMERICANAS SA: Taps Citi for Possible Assets Sale AMERICANN INC: Posts $22,745 Net Income in First Quarter AVAYA INC: Expects to Exit Chapter 11 in 60 to 90 Days AVAYA INC: Fitch Lowers LongTerm Issuer Default Rating to 'D' BED BATH: O'Melveny Represents B. Riley as Sole Bookrunner BELTWAY PLAZA: Files Emergency Bid to Use Cash Collateral BETTER NUTRITIONALS: Wins Cash Collateral Access Thru March 31 BLACK DIAMOND: Taps Daly & Black as Special Litigation Counsel BRIGHT MOUNTAIN: Amends Credit Pact to Provide Add'l $1.5M Loan CAPSTONE GREEN: Incurs $5.2 Million Net Loss in Third Quarter CASA CBW: Gets OK to Hire Yusufov Law Firm as Bankruptcy Counsel CEL-SCI CORP: Posts $8 Million Net Loss in First Quarter CELSIUS NETWORK: Selects NovaWulf as Plan Sponsor DIOCESE OF HARRISBURG: Bankruptcy Plan With $18M for Victims Okayed ELITE CHILD: Taps Law Office of Henry McLaughlin as Counsel EMERALD ELECTRICAL: Seeks to Extend Plan Exclusivity Until July 31 EMPLOYEE LOAN: Seeks to Hire Investment Banker, Financial Advisor ERBO PROPERTIES: Seeks Chapter 11 Bankruptcy Protection FPG DS MEZZ: Public Sale of LLC Interests on March 15 FRANKO CATH: SARE Files for Chapter 11 Bankruptcy FREE SPEECH: Jones Delays New Podcast Amid Objections FTX GROUP: Ex-Exec Donella Reaps Millions from His Charity via FTT FTX GROUP: SBF Bail Backed by Scientist, Stanford Dean FTX TRADING: Clients Want Fraud Suits Grouped in Florida Court GEN DIGITAL: Fitch Affirms LongTerm IDR at 'BB+', Outlook Negative GLOBAL AVIATION: Seeks Cash Collateral Access GLOBAL MIXED: Files Emergency Bid to Use Cash Collateral GOODLIFE PHYSICAL: Seeks to Hire Leslie Cohen Law as Counsel GRAND CANYON: Seeks to Hire Carlyon Cica as Bankruptcy Counsel HCA HEALTHCARE: Fitch Affirms & Then Withdraws BB+ LongTerm IDR IBIO INC: Posts $33.6 Million Net Loss in Second Quarter IBIO INC: To Sell Texas Property for $2.1 Million J&B EXPRESS: Seeks to Hire Kerkman & Dunn as Legal Counsel JEFFERSON LA BREA: Wins Cash Collateral Access Thru May 31 KAISER GYPSUM: Bankruptcy Plan Defeats Appeal of Insurer KANE CORPORATION: Owner's Plan Confirmed by Judge LOANDEPOT INC: DBRS Assigns B Long Term Issuer Rating LTL MANAGEMENT: Judge Kaplan to Dismiss Case After 3rd Cir. Mandate LUCIRA HEALTH: Case Summary & 30 Largest Unsecured Creditors MADISON CLINIC: Wins Cash Collateral Access, DIP Loan MEHLING ORTHOPEDICS: Files Emergency Bid to Use Cash Collateral MIAMI JET TOURS: Gets OK to Hire Escarpio & Company as Accountant MIAMI JET TOURS: Gets OK to Hire Leiderman as Legal Counsel MIAMI JET: Gets Approval to Hire Moecker Auctions as Appraiser MILLERS HOME: Taps Law Office of Jan L. Hammerman as Co-Counsel MOBIQUITY TECHNOLOGIES: Closes $3.75 Million Public Offering MULLEN AUTOMOTIVE: Widens Net Loss to $376.9 Million in 1st Quarter NAUTICAL SOLUTIONS: Court Approves Bankruptcy Plan NORMANDIE LOFTS: Seeks to Hire Leslie Cohen Law as Counsel NUZEE INC: Incurs $2.2 Million Net Loss in First Quarter PELLETIER MANAGEMENT: Taps Katheryn Kihle of Bakken as Broker PHOENIX SERVICES: Exclusivity Period Extended to April 25 RAGSTER INVESTMENT: Unsecureds Will Get 10% of Claims in 36 Months RAMARAMA INC: Seeks Cash Collateral Access RED VENTURES: S&P Rates New $850MM Secured Term Loan B 'BB-' REGIONAL HEALTH: Declares Dividend Payable on Feb. 28 RENNASENTIENT INC: Case Summary & Six Unsecured Creditors REVERE POWER: S&P Affirms 'B-' Rating on Senior Secured Debt REVLON INC: Gets Approval to Hire Kroll LLC as Valuation Advisor REVLON INC: Lenders Face Setback in Collateral Stripping Fight RIOME PLUMBING: March 23 Disclosure Statement Hearing Set SAN JORGE CHILDREN'S: Has Deal on Cash Collateral Access SEINEYARD INC: Seeks to Hire Naumann Group as Real Estate Broker SOUTH BAY PROPERTY: Seeks to Hire Leslie Cohen Law as Counsel SPG HOSPICE: Trustee Wins Cash Collateral Access Thru March 31 STANADYNE LLC: Seeks Cash Collateral Access STARRY GROUP: Exit Facility or Asset Sale Proceeds to Fund Plan STEM HOLDINGS: Delays Filing of Quarterly Report TECHNICAL COMMUNICATIONS: All 4 Proposals Passed at Annual Meeting TECHNICAL COMMUNICATIONS: CFO Quits; Interim Replacement Named TOPAZ SOLAR: Fitch Affirms 'BB' Rating on $1.1BB Sr. Secured Notes TOPS HOLDING: Litigation Trustee Taps Omni as Claims Agent TRADER CORP: S&P Upgrades 'B' Long-Term Issuer Credit Rating TSS ACQUISITION: Seeks to Hire Rua M&A as Business Broker TSS ACQUISITION: Taps Thompson Auctioneers to Sell Properties UNCLE DAN'S TIRE: Court OKs Cash Collateral Access Thru June 30 USA ROOFING: Bid to Use Cash Collateral Denied VANTAGE SPECIALTY: S&P Alters Outlook to Pos., Affirms 'B-' ICR VOIP-PAL.COM INC: Incurs $616K Net Loss in First Quarter WHO DAT?: Taps Enlign Business Brokers as Financial Advisor [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 12TH & K ST: Seeks to Hire StoneHarbor as Loan Broker ----------------------------------------------------- 12th & K St. Mall Partners, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ StoneHarbor Capital Corp. as its loan broker. The Debtor requires a broker to obtain financing for its real property located at 1020 12th St., Sacramento, Calif. The new loan is necessary to satisfy debt owed to DCR Mortgage and allow the Debtor to successfully reorganize. Tim Gerlach, principal at StoneHarbor, disclosed in a court filing that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tim Gerlach, CPA StoneHarbor Capital Corp. 31 West 52nd Street, 16th Floor New York, NY Direct: 323-505-9222 Email: tim.gerlach@stoneharborcapital.com About 12th & K. St. Mall Partners 2th & K St. Mall Partners, LLC is a California limited liability company created on Nov. 12, 2003, as a real estate investment company. It currently owns and operates a mixed-use property located at 1020 12th St. Sacramento, Calif. On July 29, 2019, 2th & K St. Mall Partners transferred 8.1% equity ownership in the property to the Ziegelman Family Trust, which is not a member of the company. 2th & K St. Mall Partners sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-10061) on Jan. 6, 2022, with up to $50 million in assets and up to $50 million in liabilities. Robert W. Clippinger, managing member, signed the petition. Judge Barry Russell oversees the case. Matthew D. Resnik, Esq., at Resnick Hayes Moradi, LLP serves as the Debtor's legal counsel. DMR Consulting Group and Valencia Tax Group are the Debtor's accountants. 4TH AVENUE APARTMENTS: Court OKs Interim Cash Collateral Access --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas authorized 4th Avenue Apartments, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. As adequate protection, the Debtor is directed to make monthly interest payments to IRock Loans, LLC as adequate protection, at the contracted rate under the Note, which is 10% of the mortgaged amount, for a monthly payment of $14,168. IRock Loans, LLC reserves its rights to a determination that the post-petition rents are not property of the estate and instead the Lender's property pursuant to an assignment of rents. If the Bankruptcy Court makes this determination in favor of the Lender, then it may fashion an equitable remedy to address the use of post-petition rents. A final hearing on the matter is set for March 29, 2023 at 9 a.m. A copy of the order is available at https://bit.ly/3Zf3XDa from PacerMonitor.com. About 4th Avenue Apartments 4th Avenue Apartments, LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 22-51475) on Dec. 29, 2022, with $1 million to $10 million in both assets and liabilities. Samuels F. Sells, manager, signed the petition. 4th Avenue Apartments, LLC owns a 52-unit garden-style apartment community built between 1950 and 1956 in Phenix City, Ala., part of the Columbus, Georgia Metropolitan Statistical Area, and directly across the Chattahoochee River from Fort Benning. The property comprises 13 buildings totaling 59,200 square feet at an average of 1,138 square feet per unit. 4th Avenue Apartments, LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). It is one of several affiliated companies that purchase, refurbish, operate, and manage residential real estate as attractive investment opportunities. Judge Craig A. Gargotta oversees the case. The Debtor tapped Parkins & Rubio, LLP as legal counsel and RSM US, LLP as accountant. 9300 WILSHIRE: Case Summary & Nine Unsecured Creditors ------------------------------------------------------ Debtor: 9300 Wilshire LLC AKA 9300 Wilshire, LLC 9744 Wilshire Blvd, Ste 203 Beverly Hills, CA 90212 Business Description: The Debtor is engaged in activities related to real estate. Chapter 11 Petition Date: February 21, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-10918 Debtor's Counsel: Victor Sahn, Esq. Steve Burnell, Esq. GREENSPOON MARDER LLP 333 S Grand Ave Suite 3400 Los Angeles, CA 90071 Tel: (213) 626-2311 Fax: (954) 771-9264 Email: victor.sahn@gmlaw.com Estimated Assets: $100 million to $500 million Estimated Liabilities: $50 million to $100 million The petition was signed by Leonid Pustilnikov as manager. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KNT4LTY/9300_Wilshire_LLC__cacbke-23-10918__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Nine Unsecured Creditors: Entity Nature of Claim Claim Amount 1. CBRE Real Estate $70,000 1840 Century Park Commission East, Ste 900 Los Angeles, CA 90067 Neal Golub Tel: 310 550 2667 Email: Neal.Golub@cbre.com 2. Cohen Law Group Legal Services $190,000 Attn: Marc Cohen 547 S. Spring Street, Suite 1208 Los Angeles, CA 90013 Marc Cohen Tel: 213 223 7707 Email: marc@clgapc.com 3. Englander Knabe Public $5,625 Allen & Associates LLC Relations 801 S. Figueroa St, Services Ste 1050 Los Angeles, CA 90017 Erik Rose Tel: 8056240572 Email: eric@ekapr.com 4. KFA Architecture $99,500 3573 Hayden Ave Professional Culver City, CA 90232 Services John Arnold Tel: 3103093918 Email: john@kfalosangeles.cam 5. KPFF Engineering $30,000 700 S Flower St, Ste 2100 Professional Los Angeles, CA 90017 Services Sharad Ganju Tel: 2134180201 Email: Sharad.Ganju@kpff.corn 6. Manela & Company Accounting $18,260 Attn: Limor Amrani Services 6300 Wilshire Blvd. Suite 2030 Los Angeles, CA 90048 Tel: 3237820818 7. Newmeyer Dillion Legal Services $14,680 895 Dove St, 5th FL Newport Beach, CA 92660 Michael Shonafelt Tel: 9492717220 Email: michael.shonafelt@ndlf.com 8. Rutan Tucker Legal Services $25,848 18575 Jamboree Rd, 9th FL Irvine, CA 92612 Doug Dennington Tel: 7146415100 Email: ddennington@rutan.com 9. Sturgis Holdings LLC Ground Rent $312,609 768 Pleasant Valley Rd, Ste 300 Diamond Springs, CA 95619 Terrie Prodhon Tel: 5306221731 Email: terrie.prodhon@prodhon-cpa.com ACASTI PHARMA: Incurs $3.9 Million Loss in Third Quarter -------------------------------------------------------- Acasti Pharma Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a loss and total comprehensive loss of $3.89 million for the three months ended Dec. 31, 2022, compared to a loss and total comprehensive loss of $3.78 million for the three months ended Dec. 31, 2021. For the nine months ended Dec. 31, 2022, the Company reported a loss and total comprehensive loss of $13.34 million compared to a loss and total comprehensive loss of $5.91 million for the nine months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $116.80 million in total assets, $20.08 million in total liabilities, and $96.72 million in total shareholders' equity. Management Discussion Jan D'Alvise, chief executive officer of Acasti, said "Significant progress was made over the past few months on all three of our clinical programs. We ended calendar 2022 in a very strong fashion with the completion of two successful clinical trials, and we announced important pharmacokinetic study results for both GTX-101 and GTX-102 in late December. In both cases, the preliminary topline results met all outcome measures. These positive results allow us to advance both programs to the next stage of clinical development in 2023. We expect 2023 to be very exciting for Acasti with two of our drug candidates ready to enter Phase 3. We look forward to receiving clarifying guidance from the FDA in calendar Q1 2023 on the Phase 3 study design for our lead program, GTX-104, a novel formulation of nimodipine for continuous IV infusion in patients suffering from subarachnoid hemorrhage. We are hopeful that this FDA feedback will confirm our 505(b)(2) regulatory strategy and allow us to finalize the study protocol, paving the way for the initiation of our Phase 3 safety study later this year." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1444192/000095017023002695/acst-20221231.htm About Acasti Pharma Acasti Pharma Inc. -- http://www.acastipharma.com-- is a late-stage specialty pharma company with drug delivery capability and technologies addressing rare and orphan diseases. Acasti's novel drug delivery technologies have the potential to improve the performance of currently marketed drugs by achieving faster onset of action, enhanced efficacy, reduced side effects, and more convenient drug delivery -- all which could help to increase treatment compliance and improve patient outcomes. Acasti Pharma reported a net loss and comprehensive loss of $9.82 million for the year ended March 31, 2022, a net loss and comprehensive loss of $19.68 million for the year ended March 31, 2021, and a net loss and comprehensive loss of $25.51 million for the year ended March 31, 2020. As of Sept. 30, 2022, the Company had $120.91 million in total assets, $20.75 million in total liabilities, and $100.16 million in total shareholders' equity. ADAPTIVE IDENTITY: Case Summary & Six Unsecured Creditors --------------------------------------------------------- Debtor: Adaptive Identity Systems, LLC 46755 Camaron Road Temecula, CA 92590 Business Description: The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Section 101(51B). Chapter 11 Petition Date: February 22, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-10649 Debtor's Counsel: Rose Ann Frazee, Esq. FRAZEE LAW GROUP 5133 Eagle Rock Blvd Los Angeles, CA 90041 Tel: (323) 274-4287 Email: roseann@frazeelawgroup.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Hilario D. Gonzales as managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2GG2Z4A/Adaptive_Identity_Systems_LLC__cacbke-23-10649__0001.0.pdf? mcid=tGE4TAMA List of Debtor's Six Unsecured Creditors: Entity Nature of Claim Claim Amount 1. BBG, Inc Appraissal $2,350 8343 Douglas Services Avenue Suite 700 Dallas, TX 75225 Kacey Spoerl Tel: (214) 269-0537 Email: kspoerl@bbgres.com 2. Bill E. Darnell, P.E. Professional $13,650 Darnell & Associates Services 4411 Mercury Street, Suite 2074 San Diego, CA 92111 Bill E. Darnell Tel: (619) 233-9373 3. David Schneider Professional $38,000 Fong, Hart, Services Schneider, Partners 31742 Coast Highway Laguna Beach, CA 92651 David Schneider Tel: (949) 645-9444 4. ECORP Consulting, Inc. Professional $18,378 215 N. 5th Street Services Redlands, CA 92374 Gloria Cochran Tel: (909) 307-0046 5. George Opeck Professional $54,200 Architect Services 13900 Maeguesas Way #4108 Marina Del Rey, CA 90292 Tel: (310) 874-3420 6. TKE Engineering Professional $103,000 2305 Chicago Avenue Services Riverside, CA 92507 Michael P. Thornton Tel: (760) 955-5000 AEQUOR MGT: Seeks to Hire Munsch Hardt Kopf & Harr as Legal Counsel ------------------------------------------------------------------- Aequor Mgt, LLC and Aequor Holdings, LLC seek approval from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Munsch Hardt Kopf & Harr, P.C. as their legal counsel. The firm's services include: a. providing the Debtors with legal advice and representation throughout their Chapter 11 cases; b. assisting the Debtors in carrying out their duties under the Bankruptcy Code; c. consulting with the U.S. trustee, any statutory committee that may be formed, creditors and other parties in interest concerning administration of the bankruptcy cases; d. assisting in the potential sales of the Debtors' assets; e. assisting in the preparation of legal papers, schedules, statements and reports, and representing the Debtors at court hearings, meetings of creditors and U.S. trustee interviews; f. assisting the Debtors in connection with formulating and confirming a Chapter 11 plan; g. assisting the Debtors in analyzing and appropriately treating the claims of creditors; h. appearing before the bankruptcy court or other courts having jurisdiction over any matter associated with the bankruptcy cases; and i. other necessary legal services. Munsch's hourly rates range from $180 for paralegals with the lowest billing rates to $750 for shareholders with the highest billing rates. The hourly rates for attorneys and paraprofessionals who will most likely be working on the cases are as follows: Davor Rukavina, Shareholder $600 per hour Thomas Berghman, Shareholder $550 per hour An Nguyen, Associate $390 per hour As disclosed in court filings, Munsch is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Davor Rukavina, Esq. Munsch Hardt Kopf & Harr, P.C. 700 Milam Street, Suite 800 Houston, TX 77002-2806. Tel: 713-222-1470 Fax: 713-221-1475 Email: drukavina@munsch.com About Aequor Mgt Aequor Mgt, LLC -- https://BurroSand.com/ -- claims to be the lowest cost producer of 100 Mesh frac sand in the Permian Basin serving oil and gas producers. The company is based in Tyler, Texas. Aequor Mgt and Aequor Holdings, LLC filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Lead Case No. 23-60010) on Jan. 5, 2023. At the time of the filing, Aequor Mgt reported $1 million to $10 million in assets and $50 million to $100 million in liabilities while Aequor Holdings reported $10 million to $50 million in both assets and liabilities. Judge Joshua P. Searcy oversees the cases. The Debtors are represented by Davor Rukavina, Esq., at Munsch Hardt Kopf & Harr, P.C. AMERICANAS SA: Taps Citi for Possible Assets Sale ------------------------------------------------- Taís Fuoco of Bloomberg News reports that Americanas hired Citi to help structure the possibility of monetizing its assets, in addition to supporting the search for other financial solutions to rescue the retailer, Valor said, citing sources who spoke on condition of anonymity. Americanas went in search of a bank that was more distant from the crisis and chose Citi because it is one of the few banks operating in Brazil without exposure to the retailer, according to the report One of the main assets that Americanas has in its portfolio is Natural da Terra, hortifruti that it acquired in 2021 for 2.1b reais. About Americanas SA Americanas was one of the largest diversified retail chains in Brazil, with a wide platform of physical stores, robust e-commerce, fintech, and has just entered into the niche food retail. It is listed on B3, being indirectly controlled by billionaire Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles. The retailer nosedived in January 2023 after becoming mired in an accounting scandal. The firm filed for bankruptcy at a court in Rio de Janeiro on Jan. 19, 2023. Americanas sought protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White & Case LLP, led by John K. Cunningham, is the U.S. counsel. AMERICANN INC: Posts $22,745 Net Income in First Quarter -------------------------------------------------------- Americann, Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net income of $22,745 on $734,766 of rental income for the three months ended Dec. 31, 2022, compared to a net loss of $533,028 on $243,681 of rental income for the three months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $15.20 million in total assets, $9.37 million in total liabilities, and $5.82 million in total stockholders' equity. The Company believes that the COVID-19 pandemic has had certain impacts on its business, but management does not believe there has been a material long-term impact from the effects of the pandemic on the Company's business and operations, results of operations, financial condition, cash flows, liquidity or capital and financial resources. The Company said it has established policies to monitor the pandemic and has taken a number of actions to protect its employees, including restricting travel, encouraging quarantine and isolation when warranted, and directing most of its employees to work from home. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1508348/000143774923003222/acan20221231_10q.htm About AmeriCann Americann, Inc. (OTCQB:ACAN) is a specialized cannabis company that is developing state-of-the-art product manufacturing and greenhouse cultivation facilities. Its business plan is based on the continued growth of the regulated marijuana market in the United States. Americann, Inc. reported a net loss of $173,244 for the year ended Sept. 30, 2022, compared to a net loss of $862,893 for the year ended Sept. 30, 2021. As of Sept. 30, 2022, the Company had $15.44 million in total assets, $9.63 million in total liabilities, and $5.80 million in total stockholders' equity. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Dec. 29, 2022, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. AVAYA INC: Expects to Exit Chapter 11 in 60 to 90 Days ------------------------------------------------------ Avaya Holdings Corp. (NYSE: AVYA), a global leader in solutions to enhance and simplify communications and collaboration, on Feb. 14, 2023, announced that it has entered into a Restructuring Support Agreement with overwhelming support of more than 90% of the Company's secured lenders (the "Investor Group"). Implementing the Financial Restructuring will accelerate Avaya's ongoing business transformation, significantly enhance its ability to invest in its innovative cloud-based communications portfolio and position the Company for long-term success. Completing the Financial Restructuring will reduce the Company's total debt by more than 75%, from approximately $3.4 billion today to approximately $800 million. Additionally, it will substantially increase Avaya's cash and strengthen its liquidity position, resulting in an expected emergence balance sheet with less than 1x net leverage. Due to the overwhelming support of its financial stakeholders, the Company expects to implement the Financial Restructuring on an expedited basis and complete this comprehensive balance sheet de-leveraging within 60 to 90 days. These actions will not impact the Company's customers, channel and strategic partners, suppliers, vendors or employees. Alan Masarek, Avaya's Chief Executive Officer, said, "I joined Avaya to help unlock the power of its iconic brand, global customer footprint, massive partner ecosystem, large-scale communications deployments and outstanding team. Building on this tremendous foundation, we have made significant progress pioneering an ambitious business model transformation, establishing a competitive product strategy for our subscription and cloud-delivered services and implementing operational efficiencies to better serve the Avaya ecosystem. Strengthening Avaya's capital structure is a critical step to fully realize our transformation, and we are excited to move ahead as a well-capitalized company with one of the strongest balance sheets in our industry that includes substantial cash to invest in our own success." With substantially improved financial flexibility, the Company will accelerate its investment in innovative communications products, solutions and services for customers, including the Avaya Experience Platform, its cloud-based Contact Center offering. Mr. Masarek continued, "We appreciate the strong support from our investors, who recognize the incredible value in Avaya's business, brand and opportunities ahead. I also thank our customers and partners for their continued trust, as well as Avaya's team members for their unwavering focus on providing exceptional service and support to those we serve. With this additional financial strength, we will be ideally positioned to accelerate innovation and advance our cutting-edge, long-range product roadmaps for the benefit of our customers." To efficiently implement the Financial Restructuring, Avaya and all of its U.S. subsidiaries today filed voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas. During this process, Avaya will continue serving its customers and partners without interruption and providing them with outstanding communications solutions, service and support as usual. The Company has received commitments for $628 million in debtor-in-possession ("DIP") financing, including a $500 million new-money term loan from the Investor Group led by Apollo Global Management, Inc. and Brigade Capital Management, LP, among others, and a $128 million ABL facility from a bank syndicate led by Citi. Upon Avaya’s emergence from the court-supervised process, the $500 million new-money term loan and $128 million ABL facility will roll into exit facilities. Additionally, as part of the Financial Restructuring, certain members of the Investor Group have committed to provide $150 million of additional new-money financing through a fully backstopped debt rights offering at exit. This new committed financing of approximately $780 million, together with cash on hand and cash generated from ongoing operations, is expected to provide substantial liquidity to support Avaya during the restructuring process and beyond. Avaya has filed a number of customary motions with the court to support its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption. Pursuant to the terms of the Financial Restructuring, all of the Company's vendors and suppliers will be paid in full, regardless of when goods or services were delivered. Vendors and suppliers to Avaya’s non-U.S. subsidiaries will continue to be paid in the ordinary course. Expansion of Global, Strategic Partnership with RingCentral Avaya also announced today that it has extended and expanded its global, strategic partnership with RingCentral, Inc., which was formed in 2019 to introduce and launch Avaya Cloud Office® by RingCentral ("Avaya Cloud Office"). Avaya will continue to act as the exclusive sales agent for direct and partner sales of Avaya Cloud Office, Avaya' exclusive multi-tenanted cloud PBX solution, in the geographies where it is available. The partnership has also expanded to include additional go-to-market constructs that enable Avaya to sell Avaya Cloud Office to its installed base on a direct basis. In addition, Avaya will be compensated in cash as Avaya Cloud Office seats are sold and, in connection with the Financial Restructuring, RingCentral's preferred stock in Avaya will be eliminated. Mr. Masarek added, "We are pleased to extend, expand and enhance our partnership with RingCentral, which provides Avaya an efficient way to deliver a market-leading multi-tenanted cloud PBX offering to our customers as part of our broader suite of communications solutions. We look forward to building on the Avaya Cloud Office footprint and continuing to support the adoption of seamless cloud functionality by our global customers at a pace that meets their business needs." About Avaya Morristown, New Jersey-based Avaya offers digital communications products, solutions and services for businesses of all sizes. Avaya delivers its technology predominantly through software and services, both on-premise and through the cloud in a diverse range of industries, including financial services, manufacturing, retail, transportation, energy, media and communications, healthcare, education, and government. Avaya Inc. and 17 affiliates first sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 17-10089) on Jan. 19, 2017. The 2017 debtors emerged from bankruptcy and their second amended joint Chapter 11 plan of reorganization was declared effective on Dec. 15, 2017. The 2017 Plan provides holders of first-lien debt with 90.5% of stock in the reorganized company and holders of second-lien notes with a pro rata share of 4% of stock and warrants for an additional 5.1% of the shares. Avaya projected to have $2.925 billion of funded debt and a $300 million senior secured asset-based lending facility available following emergence. Avaya, Inc., and 20 affiliated entities, including Avaya Holdings Corp., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 23-90088) on Feb. 14, 2023. The Hon. David R. Jones oversees the cases. The 2023 petitions were signed by Eric Koza as chief restructuring officer. The Debtors estimated $1 billion to $10 billion in both assets and liabilities on a consolidated basis. Avaya Holdings' most recent financial report filed with the Securities and Exchange Commission was for the three-month period end March 31, 2022. In its Form 10-Q report, Holdings disclosed $5.8 billion in total consolidated assets against $5.2 billion in total consolidated liabilities. In the 2023 bankruptcy filing, the Debtors have retained Kirkland & Ellis LLP and Jackson Walker LLP as bankruptcy co-counsel; Evercore Group LLC as investment banker; AlixPartners LLP as restructuring advisor; PricewaterhouseCooopers LLP as auditor; and Kurtzman Carson Consultants LLC as claims and noticing agent. Counsel to Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent under the DIP Term Loan: Mark Somerstein, Esq. Patricia Chen, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 E-mail: mark.somerstein@ropesgray.com patricia.chen@ropesgray.com A group of lenders are represented by Akin Gump Strauss Hauer & Feld LLP, Centerview Partners LP and Alvarez & Marsal North America, LLC. Counsel to the Akin Ad Hoc Group: Ira S. Dizengoff, Esq. Philip C. Dublin, Esq. Naomi Moss, Esq. Akin Gump Strauss Hauer & Feld LLP One Bryant Park Bank of America Tower New York, NY 10036 E-mail: idizengoff@akingump.com pdublin@akingump.com nmoss@akingump.com A group of lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP, Glenn Agre Bergman & Fuentes LLP, and FTI Consulting, Inc. Counsel to the PW Ad Hoc Group: Andrew N. Rosenberg, Esq. Brian S. Hermann Brian Bolin, Esq. Joseph M. Graham, Esq. Xu Pang, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP E-mail: arosenberg@paulweiss.com bhermann@paulweiss.com bbolin@paulweiss.com jgraham@paulweiss.com xpang@paulweiss.com Counsel to Goldman Sachs Bank USA, as administrative agent and collateral agent under the Prepetition Term Loan: Brian M. Resnick, Esq. Michael Pera, Esq. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 E-mail: brian.resnick@davispolk.com michael.pera@davispolk.com AVAYA INC: Fitch Lowers LongTerm Issuer Default Rating to 'D' ------------------------------------------------------------- Fitch Ratings has downgraded Avaya Inc.'s Long-Term Issuer Default Rating (IDR) to 'D' from 'CC' and its senior secured term loans and notes to 'C'/'RR5' from 'CC'/'RR4'. There is no Outlook or Watch given the 'D' rating. Fitch's rating actions follow Avaya Holding Corp.'s, along with certain of its direct and indirect subsidiaries, entering into a restructuring support agreement with the support of more than 90% of its secured lenders. Completion of the financial restructuring will reduce Avaya's total debt to approximately $800 million from approximately $3.4 billion, a reduction of more than 75%. Avaya has also restructured its agreement with RingCentral, Inc., and in connection with the restructuring, RingCentral's preferred stock in Avaya will be eliminated. The company expects to emerge with net leverage of less than 1x. The company expects to implement the restructuring on an expedited basis and emerge within 60 to 90 days. Fitch may withdraw the ratings 30 days after a default. KEY RATING DRIVERS Recovery Rating (RR) Assumptions: The recovery analysis assumes an enterprise value of Avaya similar to the valuation in the restructuring plan, which envisions Avaya as a going-concern. The company is expected to take steps during and following its bankruptcy to strengthen its business, including incremental cost savings, which leads to Fitch's assumption of going-concern EBITDA of $200 million. Fitch assumes Avaya receives a going-concern recovery multiple of 7.0x EBITDA. The 7.0x multiple compares with the 2017 bankruptcy exit multiple for Avaya of 8.1x, and the median multiple of 8.4x for recent transactions for low-to-moderate growth enterprise communications companies in the 8x-9x range, including ShoreTel, West Technology (f/k/a Intrado), Polycom and Alcatel Lucent's enterprise business, among others. Under the company's plan, $56 million of the secured ABL is drawn and a 5% administrative claim is assumed. Fitch-forecasted going-concern EBITDA of $200 million and recovery multiple of 7.0x result in a post-reorganization enterprise value of $1.3 billion after the deduction of expected administrative claims. After the $628 million of DIP financing and the $56 million of secured ABL borrowings, the $3.14 billion of first-lien senior secured recovery is 21%. Per Fitch's instrument mapping, the rating on the first-lien debt is 'C'/'RR5' on the first-lien debt. Delayed Filings: The company has delayed filing its 10-Q for 1Q fiscal 2023, its 10-K for fiscal 2022 and 10-Q for 3Q fiscal 2022 past the prescribed due dates. Material Weaknesses: In August 2022, Avaya disclosed there is substantial doubt about its ability to continue as a going concern and that it is conducting certain internal investigations. On Nov. 30, 2022, the company disclosed via an 8-K that it had determined that control deficiencies under review represent material weaknesses in its internal control over financial reporting (ICFR). The company is fully cooperating with the SEC investigation into the circumstances regarding its 3Q fiscal 2022 financial results. Further, PricewaterhouseCoopers LLP's opinion dated Nov. 22, 2021 in the 2021 Form 10-K, relating to the effectiveness of the company's internal control over financial reporting as of Sept. 30, 2021, should no longer be relied upon for the reasons described in the 8-K filing. The material weaknesses in ICFR did not result in a material misstatement of any of the company's previously issued financial statements. Avaya's management has indicated in its SEC filings that the company is working to remediate the control deficiencies. Earnings and Cash Flows Pressured: Avaya's cash flows have been under pressure as it transitions to a cloud/subscription-based model, with Cleansing Materials filed by management now projecting adjusted EBITDA of $191 million in fiscal 2024 versus $719 million in fiscal 2021. This is materially below Fitch's last projection of $592 million in fiscal 2024. Management projects adjusted EBITDA will grow in fiscal 2024 after bottoming out at $51 million in fiscal 2023, reaching $464 million in fiscal 2027, still well below fiscal 2021 levels. A cost reduction program in fiscal 2023 should partially mitigate the pressure on cash flow from this transition and from recent declines in operating results. To offset the pressure on cash flow, the company has targeted cost reductions reaching a run rate of nearly $525 million by the first quarter of fiscal 2024, and through early January 2023, approximately $373 million of the savings initiatives have been implemented. New CEO: In late July 2022, the company appointed Alan Masarek CEO, previously CEO of Vonage Holdings Corp. from 2014 to 2020. Masarek led Vonage's transition to an enterprise-focused cloud communications services provider from a residential phone provider. The new CEO has initiated a comprehensive review of Avaya's strategic and business operations. Fitch believes that there is material execution risk associated with possible strategic changes and the company's cost reduction plans. The new CEO's prior experience has the potential to mitigate the execution risk as Avaya continues to transition to the cloud/subscription-based model. Market Position Evolving: Avaya's business continues to shift to a recurring revenue and software- based model. However, it has experienced working capital headwinds resulting from this shift in the business model. OneCloud ARR, a key measure of this change, has increased from $35 million at the end of fiscal 2019 to $838 million at the end of 3Q22 (and from $750 million at the end of 2Q22). Similarly, revenue from cloud, alliance partners and subscription has increased from 14% in fiscal 2018 to 53% in 3Q22. The ratings are limited by the competitiveness of the company's markets, particularly for cloud-based solutions. Near-Term Leverage: Fitch has not updated its financial forecast given the accounting uncertainties. For the last publicly reported period, EBITDA leverage at the parent was approximately 5.1x for the LTM ending March 31, 2022. Based on Fitch's estimate of debt on Sept. 30, 2022, and using the company's projected adjusted EBITDA of $288 million for fiscal 2022, leverage was approximately 12x. Long-Term Business Plan: Fitch has not evaluated the company's long-term business plan filed in the December 2022 or February 2023 8-K Cleansing Materials. DERIVATION SUMMARY Avaya faces numerous competitors given its cloud-based, on-premise and hybrid solutions for CC and UC applications. Avaya is a large vendor in the global UC industry but is substantially smaller and less diversified than its primary competitors in the enterprise market: Cisco Systems, Inc. and Microsoft Corporation. Additional competitors in the enterprise market include NEC, Atos Unify, Alcatel-Lucent Enterprise and Huawei. In the mid-market UC industry, competitors include Mitel, NEC, Cisco and Microsoft. KEY ASSUMPTIONS Fitch has not updated its operating assumptions and has only updated its recovery assumptions given Avaya's internal investigations of its financial results for the quarter ended June 30, 2022 and the material weaknesses in the company's internal control over financial reporting. RATING SENSITIVITIES Rating sensitivities do not apply given the financial restructuring plan to be filed under Chapter 11 of the U.S. Bankruptcy Code. LIQUIDITY AND DEBT STRUCTURE Avaya has commitments for $628 million in debtor-in-possession (DIP) financing, including a $500 million new-money term loan from an investor group led by Apollo Global Management, Inc. and Brigade Capital Management, LP, among others, and a $128 million ABL facility from a bank syndicate led by Citi. Upon emergence, the $500 million new-money term loan and $128 million ABL facility will roll into exit facilities. Additionally, as part of its financial restructuring, certain members of the investor group have committed to provide $150 million of additional new-money financing through a fully backstopped debt rights offering at exit. This new committed financing of approximately $780 million, together with cash on hand and cash generated from ongoing operations, is expected to provide substantial liquidity to support Avaya during the restructuring process and thereafter. ISSUER PROFILE Avaya Inc. provides digital communications products, solutions and services, including contact center and unified communications and collaboration products and services. Its primary customers are enterprises and midmarket businesses. Avaya operates in approximately 190 countries and has about 90,000 customers. ESG CONSIDERATIONS Avaya Inc. has an ESG Relevance Score of '4' for Governance Structure due to the sudden departure of the CEO in mid-2022 and uncertainties regarding potential changes in strategy and operations, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Avaya Inc. has an ESG Relevance Score of '4' for Financial Transparency due to preliminary third quarter results for revenue and adjusted EBITDA that were materially lower than prior guidance and the material weakness in its internal controls over financial reporting, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Avaya Inc. LT IDR D Downgrade CC senior secured LT C Downgrade RR5 CC BED BATH: O'Melveny Represents B. Riley as Sole Bookrunner ---------------------------------------------------------- O'Melveny represented B. Riley Securities, Inc., a leading middle market investment bank, as sole bookrunner on an underwritten public offering of Bed Bath & Beyond Inc. (Nasdaq: BBBY) Series A convertible preferred stock and warrants. The transaction was announced on February 7. A wholly owned subsidiary of B. Riley Financial, Inc. (Nasdaq: RILY), B. Riley Securities provides corporate finance, advisory, research, and sales and trading services that include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, corporate restructuring, and recapitalization. Bed Bath & Beyond Inc. is an omnichannel retailer that makes it easy for its customers to feel at home. The company, which operates under the names Bed Bath & Beyond and buybuy BABY, sells a wide assortment of merchandise including bedding, bath, kitchen food prep, home organization, indoor décor, and baby and personal care. The O'Melveny team advising B. Riley Securities was led by partners Jeeho Lee, C. Brophy Christensen, Dave Johnson and Alex Anderson, counsel Tai Vivatvaraphol and Dawn Lim and associates Andi Hasaj and Hayley Wolf. About B. Riley Securities B. Riley Securities (Nasdaq: RILY) -- http://www.brileysecurities.com-- is a leading middle market investment bank that provides corporate finance, advisory, research, and sales and trading services. Investment banking services include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, corporate restructuring, and recapitalization. The firm is nationally recognized and highly ranked for its proprietary small-cap equity research. B. Riley Securities is a wholly owned subsidiary of B. Riley Financial, Inc. About O'Melveny O'Melveny, a global law firm with 18 offices, is home to a talented team of more than 750 lawyers who help its clients grow, protect their assets, and navigate the challenges of complex law and regulation. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operate under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. The Company reported a net loss of $559.62 million for the fiscal year ended Feb. 26, 2022, a net loss of $150.77 million for the year ended Feb. 27, 2021, and a net loss of $613.82 million for the year ended Feb. 29, 2020. As of Nov. 26, 2022, the Company had $4.40 billion in total assets, $5.20 billion in total liabilities, and a total shareholders' deficit of $798.64 million. * * * As reported by the TCR on Jan. 11, 2023, S&P Global Ratings raised its issuer credit rating on Union, N.J.-based specialty home retailer Bed Bath & Beyond Inc. (BBBY) to 'CC' from 'SD' (selective default). S&P said, "The 'CC' rating and negative outlook on BBBY reflects our view that while not actively in default, the company is highly vulnerable and a distressed transaction or broader restructuring is a virtual certainty based on its deteriorating liquidity position, challenging operating conditions, and the looming maturities of its outstanding 2024 notes." As reported by the TCR on Nov. 28, 2022, Moody's Investors Service retained Bed Bath's corporate family rating at Ca and the outlook remains stable. According to Moody's, Bed Bath & Beyond's Ca corporate family rating reflects the very high likelihood of further defaults over the next twelve months. BELTWAY PLAZA: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- Beltway Plaza Investment, LLC asks the U.S. Bankruptcy Court for the District of Maryland, Greenbelt Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to meet its obligations and preserve its business as a going concern. The Debtor is currently indebted to Freedom Bank of Virginia under a $5.705 million commercial term loan. The Lender has asserted that the Debtor owes it $5.855 million as of November 3, 2022, excluding attorneys' fees and expenses and foreclosure costs and expenses. The amount consists of principal of $5.220 million, accrued and unpaid interest of $541,892, late charges of $19,224, forced place insurance expenses of $68,667, and appraisal costs and expenses of $5,320. The Lender further asserts that interest continues to accrue under the Loan after November 3, 2022 at the rate of $1,385 per day. The Loan is evidenced by a Consolidated, Modified and Restated Promissory Note dated February 25, 2016 executed by the Debtor to the order of the Lender in the stated principal amount of $3.250 million, (i) as amended, modified and increased to $3.937 million by a Loan Modification Agreement and Release of Guarantors dated August 23, 2017 executed by and between the Lender, the Debtor and others, (ii) as further amended, modified and increased to $5.145 million by a Second Amendment to Consolidated, Modified and Restated Promissory Note dated February 14, 2020 executed by and between the Lender and the Debtor, and (iii) as further amended, modified and increased to $5.705 million by a Third Amendment to Consolidated, Modified and Restated Promissory Note dated July 31, 2020 executed by and between the Lender and the Debtor. The Note provides, inter alia, the Debtor to make monthly principal and interest payments to Lender in the amount of $32,322. As adequate protection, the Lender will be granted a security interest for the Prepetition Indebtedness of the same priority and to the same extent as that granted by the Security Documents. The security interest will become duly perfected without the necessity for filing or execution of documents which might otherwise be required pursuant to applicable non-bankruptcy law for the creation or perfection of the security interest. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3ILrDti from PacerMonitor.com. The Debtor projects $28,435 in total expenses. About Beltway Plaza Investment, LLC Beltway Plaza Investment, LLC is the owner of an eight story 65,010 sq. ft. commercial office building located at 4710 Auth Place, Suite 140, Suitland, Maryland 20746. The Debtor has approximately 20 commercial tenants and is incorporated in the state of Maryland, but its charter is currently forfeited for failure to file personal property returns. Efforts to reinstate the Debtor's charter are in process. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-11094) on February 20, 2023. In the petition signed by Ho Chong Suh, authorized member, the Debtor disclosed up to $50 million in assets and up to $10 million in liabilities. Craig M. Palik, Esq., at McNamee Hosea, P.A., represents the Debtor as legal counsel. BETTER NUTRITIONALS: Wins Cash Collateral Access Thru March 31 -------------------------------------------------------------- The U.S. Bankruptcy Court for Central District of California, Riverside Division, authorized Better Nutritionals, LLC on an interim basis in accordance with the budget, with a 10% variance, through March 31, 2023. The Debtor needs to continue to use cash collateral to preserve its assets and ongoing business operations. As previously reported by the Troubled Company Reporter, the parties that have or may have security interests in the cash collateral are Aramark Services, Inc., Suitable Staffing Solutions, and insiders Sharon and Odelya Hoffman. Pursuant to a settlement agreement entered into within 90 days before the Petition Date, Aramark has a security interest in substantially all of the Debtor's assets. Pursuant to a judgment lien filed by Suitable Staffing within 90 days before the Petition Date, Suitable Staffing has a security interest in assets described in California Code of Civil Procedure section 697.530 (including accounts receivable and inventory). Finally, shortly before the Petition Date, the Hoffmans loaned the Debtor money needed to commence the case, and as part of the loan transaction received a security interest in substantially all of the Debtor's assets. The aggregate amount owed to the Secured Parties is approximately $4.3 million, which is far less than the value of the assets in which the Secured Parties have interests. As adequate protection, the party claiming an interest in cash collateral is granted a replacement lien on all of the estate's assets, excluding avoiding power claims and recoveries, to the extent that the Debtor's use of each such party's collateral results in a decrease in value of such party's interest, if any, in the estate's assets; provided, however, that such replacement liens will only attach to the extent, validity, and priority of the party's prepetition liens, and will not apply in the event that any such prepetition liens are avoided. The replacement liens are automatically perfected by the entry of the order as of the commencement of the case without further filing or recording in compliance with any state or federal laws; provided, however, that the replacement liens will only have effect to the extent, validity, and priority of the party's prepetition liens, and will have no force or effect in the event that any such prepetition liens are avoided. As additional adequate protection against the diminution in value of each secured party's interest in cash collateral, each party claiming an interest in cash collateral will be entitled to a "super-priority" administrative expense claim. A copy of the order is available at https://bit.ly/3IIkIRz from PacerMonitor.com. About Better Nutritionals, LLC Better Nutritionals, LLC is a contract manufacturer and R&D leader in nutritional supplements. It is an FDA-registered manufacturer, and meets stringent standards to label its products as vegan, Kosher-certified, and free of top-8 allergens and gluten. The Debtor sought protection from Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14723) on December 20, 2022. In the petition signed by Sharon Hoffman, manager, the Debtor disclosed up to $100 million in assets and up to $500 million in liabilities. Judge Mark Houle oversees the case. John N. Tedford, IV, Esq., at Danning Gill Israel & Krasnoff, LLP, is the Debtor's legal counsel. BLACK DIAMOND: Taps Daly & Black as Special Litigation Counsel -------------------------------------------------------------- Black Diamond Developers, LP and CCC Operations, LLC seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Daly & Black, P.C. as special litigation counsel. The firm's services include: (a) analyzing the claims owned by the Debtors; (b) preparing and filing such pleadings as are necessary to pursue the Debtors' claims; (c) conducting examinations of witnesses, claimants and other parties in interest in connection with such litigation; (d) collecting any judgment that may be entered in favor of the Debtors in the claims; (e) handling any appeals that may result from the potential litigation; and (f) other legal services that may be appropriate in connection with the prosecution of the claims. The Debtors have negotiated a contingency fee of 40 percent for work through trial and entry of final judgment if there is no appeal, or 45 percent after final judgment in the event of an appeal. As disclosed in court filings, Daly & Black is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard Daly, Esq. Maria Gerguis, Esq. Daly & Black, P.C. 2211 Norfolk Street, Suite 800 Houston, TX 77098 Tel: (713) 655-1405 Fax: (713) 655-1587 Email: MGerguis@dalyblack.com About Black Diamond Developers Black Diamond Developers, LP owns and operates a golf course and country club called The Cimarron Country Club, in Mission, Texas. Black Diamond and affiliate, CCC Operations, LLC, filed for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-70179) on Nov. 3, 2022. Catherine Stone Curtis has been appointed as Subchapter V trustee. At the time of the filing, Black Diamond reported up to $10 million in assets and up to $500,000 in liabilities while CCC Operations reported up to $50,000 in assets and up to $500,000 in liabilities. Judge Eduardo V. Rodriguez oversees the cases. The Debtors tapped Matthew Brian Probus, Esq., at The Probus Law Firm and Daly & Black, P.C. as bankruptcy counsel and special litigation counsel, respectively. BRIGHT MOUNTAIN: Amends Credit Pact to Provide Add'l $1.5M Loan --------------------------------------------------------------- Bright Mountain Media, Inc. and its subsidiaries CL Media Holdings LLC, Bright Mountain Media, Inc., Bright Mountain LLC, MediaHouse, Inc. entered into the Sixteenth Amendment to Amended and Restated Senior Secured Credit Agreement on Feb. 10, 2023. The Company and its subsidiaries are parties to a credit agreement between itself, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P. as Administrative Agent and Collateral Agent dated June 5, 2020, as amended. The Credit Agreement was amended to provide for an additional term loan amount of $1,500,000. This term loan matures on June 30, 2023. As of Feb. 10, 2023, the accumulated term loan principal is $32,608,194, inclusive of fees and interest paid in kind capitalized. About Bright Mountain Based in Boca Raton, Fla., Bright Mountain Media, Inc. -- www.brightmountainmedia.com -- is engaged in operating a proprietary, end-to-end digital media and advertising services platform designed to connect brand advertisers with demographically-targeted consumers -- both large audiences and more granular segments -- across digital, social and connected television publishing formats. The Company defines "end-to-end" as its process for taking ad buying from beginning to end, delivering a complete functional solution, usually without requiring any involvement from a third party. Bright Mountain reported a net loss of $12 million for the year ended Dec. 31, 2021, a net loss of $72.71 million for the year ended Dec. 31, 2020, a net loss of $4.17 million for the year ended Dec. 31, 2019, and a net loss of $5.22 million for the year ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $30.28 million in total assets, $41.80 million in total liabilities, and a total shareholders' deficit of $11.52 million. East Brunswick, New Jersey-based WithumSmith+Brown, PC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated June 10, 2022, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. CAPSTONE GREEN: Incurs $5.2 Million Net Loss in Third Quarter ------------------------------------------------------------- Capstone Green Energy Corporation has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $5.21 million on $19.61 million of net total revenue for the three months ended Dec. 31, 2022, compared to a net loss of $5.15 million on $20.61 million of net total revenue for the three months ended Dec. 31, 2021. For the nine months ended Dec. 31, 2022, the Company reported a net loss of $12.19 million on $59.03 million of net total revenue compared to a net loss of $13.32 million on $53.88 million of net total revenue for the same period during the prior year. As of Dec. 31, 2022, the Company had $104.86 million in total assets, $103.77 million in total liabilities, and $1.09 million in total stockholders' equity. "While the Company believes internally generated cash will adequately fund operating and investment activities over the next 12 months, there will not be sufficient internally generated cash, nor does the Company expect that it could obtain sufficient financing through underwritten public offerings, at-the-market offerings or other similar methods, to retire the outstanding debt," Capstone said in the SEC filing. The Company has engaged Greenhill & Co., LLC, a global investment banking firm, to assess financing alternatives related to the "Note Payable" as well as to raise incremental capital for general corporate purposes. Greenhill's refinancing efforts are ongoing as of December 31, 2022, accoridng to Capstone. "As there is no guarantee that the Company will successfully complete these financing activities, these conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the date of the financial statements are issued," Capstone further said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1009759/000155837023001197/cgrn-20221231x10q.htm About Capstone Green Headquartered in Van Nuys, California, Capstone Green Energy Corporation -- http://www.capstonegreenenergy.com-- is a provider of customized microgrid solutions, on-site resilient green Energy as a Service (EaaS) solutions, and on-site energy technology systems focused on helping customers around the globe meet their environmental, energy savings, and resiliency goals. Capstone reported a net loss of $20.21 million for the year ended March 31, 2022, a net loss of $18.38 million for the year ended March 31, 2021, a net loss of $21.90 million for the year ended March 31, 2020, and a net loss of $16.66 million for the year ended March 31, 2019. CASA CBW: Gets OK to Hire Yusufov Law Firm as Bankruptcy Counsel ---------------------------------------------------------------- Casa CBW, LLC received approval from the U.S. Bankruptcy Court for the District of Arizona to hire Yusufov Law Firm, PLLC. The Debtor requires legal counsel to: a. prepare and file statements and bankruptcy schedules; b. formulate and prepare a Chapter 11 plan of reorganization and disclosure statement; c. provide the Debtor with legal advice regarding its powers and duties in the continued operation of its affairs; and d. provide other legal services relating to the administration of the estate and the Debtor's efforts to reorganize. The firm received a retainer in the total amount of $17,728. As disclosed in court filings, Yusufov Law is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: German Yusufov, Esq. Yusufov Law Firm PLLC 5151 E. Broadway Blvd, Suite 1600 Tucson, AZ 85711 Phone: (520) 745-4429 Email: info@yusufovlaw.com About Casa CBW Casa CBW, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-00711) on Feb. 6, 2023, with up to $100,000 in assets and up to $1 million in liabilities. Jody Corrales has been appointed as Subchapter V trustee. Judge Scott H. Gan oversees the case. German Yusufov, Esq., at Yusufov Law Firm, PLLC, represents the Debtor as legal counsel. CEL-SCI CORP: Posts $8 Million Net Loss in First Quarter -------------------------------------------------------- CEL-SCI Corporation has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss available to common shareholders of $8.03 million for the three months ended Dec. 31, 2022, compared to a net loss available to common shareholders of $8.78 million for the three months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $44.56 million in total assets, $17.96 million in total liabilities, and $26.59 million in total stockholders' equity. CEL SCI stated, "Since inception, the Company has financed its operations through the issuance of equity securities, convertible notes, loans and certain research grants. The Company will likely continue to generate net operating losses as it continues the development of Multikine and brings other drug candidates into clinical trials. Until such time as the Company becomes profitable, any or all of these financing vehicles or others may be utilized to assist the Company's capital requirements. "Capital raised by the Company has been expended primarily for patent applications, research and development, administrative costs, and the construction and upgrade of the Company's manufacturing and laboratory facilities. The Company does not anticipate realizing significant revenues until entering into licensing arrangements for its technology and know-how or until it receives regulatory approval to sell its products (which could take several years). Thus, the Company has been dependent upon the proceeds from the sale of its securities to meet all of the Company's liquidity and capital requirements and anticipates having to do so in the future. "The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts. The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/725363/000165495423001725/cvm_10q.htm About CEL-SCI CEL-SCI Corporation is a clinical-stage biotechnology company focused on finding the best way to activate the immune system to fight cancer and infectious diseases. Its lead investigational therapy Multikine (Leukocyte Interleukin, Injection) completed a pivotal Phase 3 clinical trial for patients who are newly diagnosed with locally advanced (stage III and IV) primary (not yet treated) squamous cell carcinoma of the head and neck (SCCHN). Multikine has received Orphan Drug Status from the U.S. Food and Drug Administration(FDA) for this indication. Cel-Sci Corporation reported a net loss of $36.70 million for the year ended Sept. 30, 2022, compared to a net loss of $36.36 million for the year ended Sept. 30, 2021. As of Sept. 30, 2022, the Company had $50.52 million in total assets, $18.36 million in total liabilities, and $32.16 million in total stockholders' equity. Potomac, Maryland-based BDO USA, LLP, the Company's auditor since 2005, issued a "going concern" qualification in its report dated Dec. 27, 2022, citing that the Company has suffered recurring losses from operations and has future liquidity needs that raise substantial doubt about its ability to continue as a going concern. CELSIUS NETWORK: Selects NovaWulf as Plan Sponsor ------------------------------------------------- Celsius Network LLC, et al., said in filings that its proposed sale to NovaWulf Digital Management, LP, reflects the highest and best offer that will maximize the value of the Debtors' assets and will save Celsius from heading into liquidation. The Debtor's Chapter 11 Plan, which is based on the deal with NovaWulf, has the support of the unsecured creditors' committee. NovaWulf will make a direct cash contribution of $45 million to 55 million to NewCo, furnish additional consideration to customers transacting on the NewCo platform to offset anticipated gas fees, and assume significant liquidation and winddown costs that would otherwise be incurred by the Debtors in a controlled liquidation of the Debtors' business. NovaWulf has also partnered with Figure Technologies and the Provenance Blockchain to provide licensed trading and loan services, allowing Celsius' Earn creditors the opportunity to gain immediate access to liquidity for their share of the Debtors' illiquid assets, and Celsius' retail loan holders the ability to reinstate their loan on new terms Over the last several months, the Debtors and their advisors, in concert with the official committee of unsecured creditors and their advisors, have worked tirelessly in pursuing a dual-track process marketing of the Debtors' retail platform and mining business while simultaneously developing a standalone reorganization. More specifically, in September 2022, Centerview Partners LLC, the Debtors' investment banker, began a marketing process designed to identify potential bidders for, and maximize the value of, all or substantially all of the Debtors' assets (the "Assets"). The Debtors, in consultation with Centerview, contacted over 130 parties they believed may be interested in a transaction. As part of that process, the Debtors executed over forty confidentially agreements with prospective bidders, and such parties were granted access to a virtual data room populated with diligence materials to facilitate their assessment of the Assets. Parties that expressed interest in the Assets were also given the opportunity to discuss the business and technology with the Debtors' management team. The Debtors' robust marketing process ultimately produced six non‑binding bids for their retail platform (or portions of their assets), three non‑binding bids for their mining business, and certain other bids for individual assets. Importantly, none of the bids for the Debtors' mining business were cash bids above liquidation value -- all were preliminary and non‑binding, contingent on raising financing, structured, and would have significantly diluted creditors' equity stake in the mining business. After thoroughly analyzing each bid, the Debtors’ marketing process has come to a value‑maximizing conclusion—the Debtors, in consultation with the Committee, have reached an agreement in principle with a bidder and plan sponsor: NovaWulf Digital Management, LP. Because most of the other bids the Debtors received contemplated variations of a liquidation plan, the Debtors believe that the agreement with NovaWulf maximizes the value of the Debtors' assets and will ultimately bring these chapter 11 cases to a successful conclusion. The proposed NovaWulf transaction also provides the foundation for a potential settlement with respect to the Debtors' customer loan portfolio. Over the coming days, the Debtors and their advisors will work with the Committee and NovaWulf to finalize a binding agreement, at which point the Debtors will cancel the Auction and designate NovaWulf as the Successful Bidder. The results to date have been achieved in no small part due to the Debtors' extensive engagement with the Committee and other stakeholders. While much work remains to be done, the Debtors are committed, now more than ever, to consummating the deal with NovaWulf as these chapter 11 cases transition to the confirmation process. * * * Rick Archer of Law360 reports that a New York bankruptcy judge Wednesday, February 15, 2023, gave Celsius Network's creditors three weeks to respond to the company's early-morning proposal to hand control of its cryptocurrency platform to an investment firm and ownership of the company to its largest account holders. About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network, LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as legal counsels; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Stretto, the claims agent and administrative advisor, maintains the page https://cases.stretto.com/celsius On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case, LLP, as its bankruptcy counsel; Elementus Inc. as its blockchain forensics advisor; M3 Advisory Partners, LP as its financial advisor; and Perella Weinberg Partners, LP, as its investment banker. Shoba Pillay, Esq., is the examiner appointed in the Debtors' Chapter 11 cases. Jenner & Block, LLP, and Huron Consulting Services, LLC, serve as the examiner's legal counsel and financial advisor, respectively. DIOCESE OF HARRISBURG: Bankruptcy Plan With $18M for Victims Okayed ------------------------------------------------------------------- The Roman Catholic Diocese of Harrisburg (RCDH) announced Feb. 15, 2023, that its Chapter 11 Plan of Reorganization has been approved by the United States Bankruptcy Court for the Middle District of Pennsylvania. With this approval, the RCDH has emerged from bankruptcy, nearly three years from when this process started. With the plan approved, the RCDH and related entities will establish a Survivor Compensation Trust and provide funding to the Trust in an amount equal to $7.5 million. The settling insurers will contribute an additional $10.75 million, bringing the total Trust amount to $18.25 million. This Trust will provide financial restitution for survivors of clergy sexual abuse. According to the plan, the Trust will be established by early March. More details related to the Trust are included in the Plan, which is on file with the Bankruptcy Court and on the Diocesan website. Once established, a Trust administrator, and not the Diocese, will determine compensation amounts and claim eligibility for abuse survivors. The RCDH filed for reorganization under Chapter 11 of the United States Bankruptcy Code in February 2020. More than 60 timely filed proofs of claim from clergy abuse survivors were received during the reorganization process. The move to declare bankruptcy came after years of financial hardship, which was exacerbated by the Grand Jury investigation and subsequent lawsuits, and after every attempt to scale back operations, including reducing overhead, were unsuccessful. The RCDH has a zero-tolerance policy regarding child abuse and has passed every audit related to the United States Conference of Catholic Bishops' Charter for the Protection of Children and Young People since 2002. In 2019, the Diocese's independent Survivor Compensation Program assisted 111 survivors, for a total financial commitment of $12,784,450. Bishop Gainer's Statement The Most Reverend Ronald W. Gainer, Bishop of Harrisburg, offered the following statement on the completion of this process: "Three years ago, I announced that the Roman Catholic Diocese of Harrisburg was filing for Chapter 11 bankruptcy protections. That difficult decision was made as a means of stabilizing the Diocese's financial situation, while at the same time allowing us to make restitution to survivors of clergy sexual abuse and continue our ministries. "This morning, myself and our legal counsel attended a hearing at the United States Bankruptcy Court for the Middle District of Pennsylvania, presided over by the Honorable Henry W. Van Eck. During this hearing, the Joint Plan of Reorganization for the Roman Catholic Diocese of Harrisburg was confirmed. This confirmation brings our reorganization process, which started on February 19, 2020, to a conclusion. "This was a difficult, emotional process for many, most especially the abuse survivors who served on the Tort Claimants Committee and those that aided them in their duties. I particularly wish to express my gratitude and appreciation to these survivors; you represented all survivors who presented a claim during this process and the difficult work you completed was vital in achieving a resolution. While it is my prayer that the Trust established through this process will bring some level of restitution for the abuse each survivor has endured, I acknowledge that no amount of money will ever make reparations for these horrific and sinful acts. "As you will read in the pages of the Plan, the Diocese recognizes and is fully committed to addressing the horrors of clergy abuse. In addition to establishing the Trust, we will continue to offer mental, spiritual and pastoral counseling to survivors, if they so desire. We will work tirelessly so all survivors know that the Church cares for them. Our foremost concern will be their emotional and spiritual welfare and we will continue to offer survivors immediate, loving and compassionate care. Through our new Youth Protection protocols, which enhance our current policies, we will increase our educational efforts on recognizing potential child abuse and coming together, as one Catholic community, to support those that have been harmed by members of the Church. "I will never be able to adequately express my deep sorrow for the pain these survivors have endured. All I can say is how profoundly sorry I am and I pray that our actions will demonstrate our commitment to supporting you in your path to healing. "When this process started, I know that it was very difficult for our clergy and the faithful as well. There was a lot of uncertainty about the future. But our clergy and the faithful responded to the reorganization with grace and an understanding that this path was the only path forward at that time. It’s difficult to put into words how grateful I am to our clergy and staff, and most especially to the Catholic faithful. Each of you supported and assisted our Diocese through this difficult process and played a part in helping us to secure a more stable financial future. "Three years ago, I said our goals were to stabilize our financial situation and provide just and fair compensation to survivors of clergy abuse, while continuing to maintain our charitable, spiritual and educational ministries. Now, as our Diocese enters this new chapter, I believe we have reached these goals. "As we institute the agreements detailed in our Plan in the coming months, know that we will continue to remain vigilant in protecting all children, young people and vulnerable adults in our care. The road ahead may not always be easy, but through our faith in Christ and by working together, I have faith the Roman Catholic Diocese of Harrisburg has a bright future." About Roman Catholic Diocese of Harrisburg The Diocese of Harrisburg is comprised of 89 parishes in 15 counties in Central Pennsylvania. The Harrisburg diocese is one of several Catholic districts that has sought Chapter 11 bankruptcy protection over the past several years to address child abuse lawsuits. The Roman Catholic Diocese of Harrisburg sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 20-00599) on Feb. 19, 2020, listing up to $10 million in assets and up to $100 million in liabilities. Judge Henry W. Van Eck oversees the case. The Debtor tapped Waller Lansden Dortch & Davis, LLP as legal counsel; Kleinbard, LLC as special counsel; Keegan Linscott & Associates, PC as financial advisor; and Epiq Corporate Restructuring, LLC as claims and noticing agent. The Hon. Michael Hogan has been tapped as unknown abuse claims representative. The U.S. Trustee for Regions 3 and 9 appointed a committee to represent tort claimants in the Chapter 11 case of the Roman Catholic Diocese of Harrisburg. The Tort Claimants' Committee is represented by Stinson, LLP. ELITE CHILD: Taps Law Office of Henry McLaughlin as Counsel ----------------------------------------------------------- Elite Child, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire the Law Office of Henry McLaughlin, P.C. to handle its Chapter 11 case. The firm will be paid $500 per hour for its legal services. The fee cap is $4,000. Henry McLaughlin, Esq., a partner at The Law Office of Henry McLaughlin, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Henry W. McLaughlin, Esq. The Law Office of Henry McLaughlin, P.C. 707 E Main St., Ste 1050 Richmond, VA 23219 Tel: (804) 205-9020 Fax: (804) 205-9029 Email: henry@mclaughlinvalaw.com About Elite Child Elite Child, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 23-70150) on Jan. 23, 2023, with as much as $1 million in both assets and liabilities. Henry W. McLaughlin, Esq., at the Law Office of Henry McLaughlin, P.C. represents the Debtor as counsel. EMERALD ELECTRICAL: Seeks to Extend Plan Exclusivity Until July 31 ------------------------------------------------------------------ Emerald Electrical Consultants LLC asked the U.S. Bankruptcy Court for the Northern District of Georgia to extend the periods within which only the company may file a chapter 11 plan and solicit acceptances thereof by approximately 120 days, through and including July 31, 2023 and September 28, 2023, respectively. The court previously extended the plan period and solicitation period through April 1, 2023 and May 31, 2023, respectively. The debtor sought more time to work through various issues after its sales motion was granted. The debtor needs to sell the various vehicles and pieces of equipment, close those sales, pay down the lender's claims, and determine the extent to which these cost-saving measures impact cash flow and reduce the claims of the primary secured lender. Further, the debtor is considering filing suit with respect to various claims related to a particular project that was a key factor prompting the filing of this case. About Emerald Electrical Consultants LLC Emerald Electrical Consultants LLC specializes in substation construction, related technical services, and consulting across the United States, with a focused presence in the southeastern and central regions of the country. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-20913) on September 15, 2022. In the petition signed by Lindy Truitt, president and CEO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge James R. Sacca oversees the case. Benjamin Keck, Esq., at Keck Legal, LLC, is the Debtor's counsel. EMPLOYEE LOAN: Seeks to Hire Investment Banker, Financial Advisor ----------------------------------------------------------------- Employee Loan Solutions, LLC filed an amended application seeking approval from the U.S. Bankruptcy Court for the Southern District of California to (i) employ Hamilton Grant, LLC as its investment banker and Impact Capital Group, Inc. as its financial advisor; and (ii) authorize the investment banker to assist the Debtor with respect to any refinance of the loan with secured creditor Sunrise Banks, N.A. The Debtor initially sought court approval to employ Impact as investment banker. In response to concerns raised by Sunrise Banks, Impact and Hamilton Grant agree that the success fee will be waived in the case in which the bank is the only bidder and, therefore, succeeds with its credit bid. On the other hand, if Sunrise outbids any other offer, then the full success fee would be due Impact and Hamilton Grant. About Employee Loan Solutions Employee Loan Solutions, LLC, a wholly owned subsidiary of Emp Loan Holdings, Inc., markets and services a web-based employee benefit platform called TrueConnect, a trademarked brand since 2016. TrueConnect is an employee financial wellness benefit offered at no cost or financial risk to employers. Employee Loan Solutions sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Calif. Case No. 22-03210) on Dec. 16, 2022. In the petition signed by its chief executive officer, Douglas Farry, the Debtor disclosed $38,144,499 in assets and $7,613,600 in liabilities. Judge Christopher B. Latham oversees the case. The Debtor tapped Caroline R. Djang, Esq., at Buchalter as bankruptcy counsel; Breakwater Law Group, LLP as special corporate counsel; Hamilton Grant, LLC as investment banker; and Impact Capital Group, Inc. as financial advisor. ERBO PROPERTIES: Seeks Chapter 11 Bankruptcy Protection ------------------------------------------------------- ERBO Properties LLC and two affiliates filed for chapter 11 protection in the Southern District of New York. ERBO Properties owns the real property known as and located at 541-545 West 21st Street, New York. ERBO Properties acquired the Property in the early 1980s. The Property was utilized primarily as storage space for many years. As the real estate market changed in the West Chelsea neighborhood of Manhattan and with the development of Hudson Yards, ERBO elected to redevelop the Property into a first class modern office building. Debtor-affiliates Gold Mezz LLC and Kova 521, LLC, own the equity in ERBO. According to court filings, ERBO Properties estimates between $50 million and $100 million in debt owed to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A teleconference meeting of creditors under 11 U.S.C. Section 341(a) is slated for March 15, at 2:30 p.m. at the office of UST. About ERBO Properties ERBO Properties LLC is a Single Asset Real Estate (as defined in 11 U.S.C. SEc. 101(51B)). It is the owner of a property located at 541 West 21st Street, New York, NY 10011, valued at $80 million. ERBO Properties LLC and affiliates Gold Mezz LLC and Kova 521, LLC, sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 23-10210) on Feb. 13, 2023. In the petition filed by Erno Bodek, as manager, ERBO reported assets and liabilities between $50 million and $100 million. The Debtor is represented by: Scott S. Markowitz, Esq. Tarter Krinsky & Drogin LLP 541-545 West 21st Street New York, NY 10011 Tel: (212) 216-8000 Email: smarkowitz@tarterkrinsky.com FPG DS MEZZ: Public Sale of LLC Interests on March 15 ----------------------------------------------------- RREF IV-D Mezz Dock Square LLC, as administrative agent for itself and the co-lenders, and SCP Dock Square Lender LLC ("secured party") will sell all of the limited liability company interests in FPG DS Owner One LLC and FPG DS Owner Two LLC held by FPG DS Mezz One LLC and FPG DS Mezz Two LLC ("pledged entity") to the highest qualified bidder at public sale to take place on March 15, 2023, at 10:00 a.m. Eastern Daylight Time (New York), both in person and remotely from the offices of Paul Hastings LLP, 200 Park Avenue, New York, New York 10166, with access afforded in person and remotely via Zoom or other web-based video conferencing and telephonic conferencing program selected by secured party. Remote log in credentials will be provided to registered bidders. Secured party's understanding is that the principal asset of FPG DS Owner One LLC and FPG DS Owner Two LLC is the parcel of real property commonly known as 20 Clinton Street, Boston, Massachusetts 02109. Interested parties who intended to bid on the collateral must contact: Jessica Merritt Cushman & Wakefield US Inc. Tel: 212-841-7651 Email: jessica.merritt@cushwake.com Attorneys of Secured Party: Paul Hastings LLP Attn: Eric R. Allendorf, Esq. 200 Park Avenue New York, New York 10166 Tel: (212) 318-6383 Fax: (212) 303-7083 Email: ericallendorf@paulhastings.com FRANKO CATH: SARE Files for Chapter 11 Bankruptcy ------------------------------------------------- Franko Cath LLC filed for chapter 11 protection in the Eastern District of New York. The Debtor disclosed $1,541,000 in assets against $876,100 in liabilities in its schedules. The Debtor, a Single Asset Real Estate, says its mixed-use property, with apartments and a store, at 118-09 Liberty Avenue, South Richmond Hill, NY, is valued at $1.5 million. The petition states that funds will be available to unsecured creditors. About Franko Cath LLC Franko Cath LLC owns in fee simple title a mixed-use property (store/apartments) located at 118-09 Liberty Avenue, South Richmond Hill NY valued at $1.50 million. Franko Cath LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-4048) on January 13, 2023. In the petition filed by Franklin Oquendo, as managing member, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. The case is overseen by Honorable Bankruptcy Judge Nancy Hershey Lord. The Debtor is represented by: Richard S Feinsilver, Esq. RICHARD S FEINSILVER, ESQ. 149-36 122nd Street South Ozone Park, NY 1420 FREE SPEECH: Jones Delays New Podcast Amid Objections ----------------------------------------------------- James Nani of Bloomberg Law reports that Alex Jones will refrain from posting more episodes of his new subscription podcast, addressing Sandy Hook victim families' concerns that the right-wing conspiracist could transition to the new show and liquidate his bankrupt business that owes them money. Jones made a "solemn promise" to stop posting on his new Alex Jones Live podcast, Jones' personal bankruptcy attorney, Vickie L. Driver of Crowe & Dunlevy, said at a hearing Tuesday, February 14, 2023,in at the US Bankruptcy Court for the Southern District of Texas. Sandy Hook victim families, which raised their concerns in a filing Monday, February 13, 2023, are owed more than $1.4 billion in damages from Jones and Free Speech Systems LLC, the bankrupt parent company of his Infowars website. Jones also has separately filed for bankruptcy protection. The damages, issued in Texas and Connecticut courts, stem from his lies that the Sandy Hook shooting was a hoax. A Free Speech Systems attorney said during the hearing Tuesday, February 14, 2023, that the business is preparing a bankruptcy plan that proposes to pay off claims over time with a portion of the business’s net income. On the Alex Jones Live show earlier this week, Jones said he planned to devote less time to Infowars and concentrate more on the podcast, the Connecticut families said. That raised concerns over the future of Free Speech Systems and whether it could continue as a business without him. The Connecticut plaintiffs raised their concerns as part of an objection to Free Speech Systems' motion to continue a commercial real property lease for his Austin studios. "Jones says that the purpose of his new venture is to provide a 'bridge' in case the bankruptcy courts 'don't treat us right,'" the Connecticut families said in a filing. The families noted that Jones has also suggested that he has other job offers that could involve him leaving Free Speech Systems and Infowars. Jones intends to continue working at Free Speech Systems and toward a resolution in the bankruptcy, his attorney said Tuesday, February 14, 2023. But his employment is predicated on there being a "good result in this case," she added, noting that Jones has taken a pay cut and has a pending request to the court to increase his salary. "Just because someone is making alternative plans to support their family does not necessarily mean that they're abandoning ship," Driver said. "It's just that I think any prudent person would think about how they would take care of their family or make a living if they weren't going to be able to do so at their current place of work." The case is Free Speech Systems LLC, Bankr. S.D. Tex., No. 22-60043, hearing 2/14/23. About Free Speech Systems Free Speech Systems LLC is a broadcast media production and distribution company that provides broadcasting aural programs by radio to the public.Â Free Speech Systems is a family-run business founded by Alex Jones. FSS is presently engaged in the business of producing and syndicating Jones' radio and video talk shows and selling products targeted to Jones' loyal fan base via the Internet. Today, FSS produces Alex Jones' syndicated news/talk show (The Alex Jones Show) from Austin, Texas, which airs via the Genesis Communications Network on over 100 radio stations across the United States and via the internet through websites including Infowars.com. Due to the content of Alex Jones' shows, Jones and FSS have faced an all-out ban of Infowars from mainstream online spaces. Shunning from financial institutions and banning Jones and FSS from major tech companies began in 2018. Conspiracy theorist Alex Jones was sued by victims' family members over Jones' lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet TV, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April 18, 2022. The Debtors agreed to the dismissal of the Chapter 11 cases in June 2022 after the Sandy Hook victim families dismissed the three bankrupt companies from their lawsuits. Free Speech Systems filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on July 29, 2022.Â In the petition filed by W. Marc Schwartz, as chief restructuring officer, the Debtor reported assets and liabilities between $50 million and $100 million. Melissa A Haselden has been appointed as Subchapter V trustee. Alexander E. Jones filed for personal bankruptcy under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on Dec. 2, 2022, listing $1 million to $10 million in assets against liabilities of $1 billion to $10 billion in liabilities. Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC, is FSS's counsel.Ã‚ Raymond W. Battaglia and Crowe & Dunlevy, P.C., led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan, and Antonio Ortiz are representing Alex Jones. FTX GROUP: Ex-Exec Donella Reaps Millions from His Charity via FTT ------------------------------------------------------------------ Mandy Williams of Crypto Potato reports that Ruairi Donnelly, former chief of staff at bankrupt crypto exchange FTX, used insider trading information of FTX tokens (FTT) to enrich his charitable foundation, Polaris Ventures. A majority of Polaris's wealth came from Donnelly's initial transfer of FTT after he purchased the token before its public listing, the Wall Street Journal (WSJ) reported Tuesday, citing people familiar with the matter. According to WSJ, Donnelly was one of the first employees at trading firm Alameda Research before he became the chief of staff at FTX in 2019. While working for both firms, Donnelly co-founded Polaris, a Swiss-based foundation that promoted research into effective altruism and artificial intelligence. When FTX was launched, the exchange offered Donnelly and other early employees a deal to purchase the FTT tokens for $0.05 each before they became publicly traded for $1. Donnelly accepted the offer and asked FTX to exchange $562,000 of his salary for 11.2 million FTT tokens. At his request, FTX forwarded the tokens as a grant to Polaris. This was confirmed through the foundation’s financial statements. Polaris's Assets Are Stuck on FTX Six months later, after FTT began trading publicly in 2020, the foundation made millions of dollars selling its stash in the open market. Notably, Donnelly was still an employee at FTX. Later that same year, Donnelly resigned from FTX and Alameda to pay more attention to his work at Polaris. Eventually, the foundation began to invest its new capital in artificial intelligence companies, including Anthropic. FTX and its affiliated entities filed for voluntary Chapter 11 bankruptcy in November, and millions of customers' assets are frozen on the platform, including 20% of Polaris's amassed wealth. About $30 million of Polaris's $150 million assets are stuck in FTX, while Donnelly is seeking an exit by selling the rights to the account for cents on the dollar. Donnelly's Lawyer Says Otherwise Meanwhile, Donnelly's lawyer Jason P.W. Halperin said that the initial FTT sent to the foundation didn't belong to FTX, as they were for his client's unpaid wages. He argued that Donnelly intended to donate part of his income to charities when he started working for Alameda in 2017. Halperin further revealed that one of Donnelly's colleagues at FTX and Alameda also donated FTT worth $30,000 to Polaris. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10 showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. FTX GROUP: SBF Bail Backed by Scientist, Stanford Dean ------------------------------------------------------ Ava Benny-Morrison of Bloomberg Law reports that two people who co-signed FTX co-founder Sam Bankman-Fried’s $250 million bail package have been publicly identified as the former dean of Stanford's law school and a senior research scientist at the elite university. A New York federal judge on Wednesday, February 15, 2023, unsealed the names of Larry Kramer, who served as Stanford Law School dean from 2004 to 2012, and computer scientist Andreas Paepcke. Bankman-Fried, who has pleaded not guilty to fraud charges over the collapse of FTX, has deep ties to Stanford. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10 showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. FTX TRADING: Clients Want Fraud Suits Grouped in Florida Court -------------------------------------------------------------- Lauren Berg of Law360 reports that a group of plaintiffs who claim they were defrauded by the now-bankrupt cryptocurrency platform FTX urged the U.S. Judicial Panel on Multidistrict Litigation on Friday, February 10, 2023, to consolidate all similar cases in Florida federal court. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10 showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. GEN DIGITAL: Fitch Affirms LongTerm IDR at 'BB+', Outlook Negative ------------------------------------------------------------------ Fitch Ratings has affirmed Gen Digital Inc.'s (fka NortonLifeLock Inc.; NYSE: GEN) Long-Term Issuer Default Rating (IDR) at 'BB+'. Fitch has also affirmed GEN's senior secured term loans and the secured revolver at 'BBB-'/'RR1' and its senior unsecured notes at 'BB+'/'RR4'. The Rating Outlook remains Negative. The Negative Outlook reflects GEN's elevated leverage following the acquisition of Avast plc (Avast), which was largely funded with debt. GEN is a significant generator of FCF, and Fitch forecasts that the company's leverage (as defined by Fitch) will remain higher than the negative rating sensitivity of 3.5x for the next several quarters. GEN is committed to having long-term net leverage (as defined by the company) of approximately 3.0x, and Fitch believes the company can achieve this by balancing debt reduction with its share repurchase plan. KEY RATING DRIVERS FCF to Lower Debt: Following the acquisition of Avast, GEN has significantly increased its leverage, and Fitch now forecasts leverage (defined as EBITDA Leverage) to be approximately 4.0x at the end of FY24, higher than previously anticipated. With growth in EBITDA, mandatory amortization payments, and expectations for the early repayment of debt, Fitch expects leverage to fall to below 3.5x at the end of FY25. GEN has publicly stated that it has a long-term net leverage target (as defined by GEN) to be approximately 3.0x. Avast Merger Increases Leverage: In September 2022, GEN completed the acquisition of Avast, a company based in Prague. When the merger occurred, the company changed its name from NortonLifeLock Inc. to Gen Digital Inc. Avast was acquired for just over $9 billion including the repayment of $942 million of Avast's debt. Shareholders were paid with cash, which was largely funded with debt, and 94 million shares of GEN's common stock that was valued at $2.1 billion. Capital Allocation Strategy: GEN intends to utilize its FCF for both debt repayment and share repurchases. Fitch believes the company will reduce debt and over the past four fiscal years, it has repaid $2.4 billion of debt while repurchasing $1.9 billion of equity. Before dividends, Fitch estimates that GEN will generate $1 billion or more annually over the forecast horizon. During the first nine months, approximately $904 million was used for share repurchases. In the first month of 4QFY23, GEN voluntarily repaid $250 million of the TL B. Share Repurchase Program: GEN has stated that its long-term target is to reduce its diluted share count to pre-Avast merger levels and for the merger, 94 million shares were issued. During 3QFY23, GEN spent $500 million to repurchase 23 million shares leaving another 71 million shares to bring the count to pre-merger levels. With the stock price just over $21 per share (as of Feb. 15, 2023), that translates into another $1.5 billion of share repurchases. High Interest Expense: With rising interest rates, GEN will have a significant amount of cash directed toward interest expense. Prepayment of debt will reduce the interest expense burden and help the company reach its publicly stated target of having net leverage (as defined by GEN) of approximately 3.0x by the end of FY25. Somewhat Diverse Offerings: For the quarter ending Dec. 30, 2022, GEN had 65% of its revenues from consumer security solutions such as Norton 360 Security, Avast Security offerings, Norton Secure VPN, Avira Security and other consumer security offerings. Almost 35% of revenues were from Identity and information protection includes revenues from Norton 360 with LifeLock offerings, LifeLock and other privacy offerings. The remaining 2% of revenues are derived from legacy revenues. Approximately 66% of revenues were from the Americas, 24% from EMEA and 10% were from APJ for the recent quarter. Avast Acquisition Strategy: Avast's focus was more on cyber privacy, and it did not have a strong presence in North America. Norton has more of a focus on cyber security, and LifeLock has a focus on identity, and both of these offerings are largely in the U.S. and Canada. Over time, GEN plans to focus on its cross-sell/upsell opportunities. Negative Outlook: The Negative Outlook reflects Fitch's concern that leverage may be above the negative rating sensitivity of 3.5x for a sustained period of time. GEN has the ability to generate significant FCF, which may be directed toward share repurchases, acquisitions, debt reduction and dividends. Should the company prioritize debt paydowns over the next several quarters, Fitch would expect leverage to fall below 3.5x and the Outlook could return to Stable. On the other hand, if GEN prioritizes returns to shareholders and debt funded acquisitions, Fitch would expect leverage to remain over 3.5x for an extended amount of time, which could result in a one-notch downgrade to 'BB'. DERIVATION SUMMARY GEN's 'BB+' rating reflects its significant size, strong brand recognition, its operating profile and EBITDA margins in the mid-50's. With a strong focus on the consumer market, the company had actively been looking to grow and expanded its international presence. The Avast acquisition helps GEN achieve these goals. The company's rating is two notches above MeridianLink (MLNK) and Instructure Holdings, Inc. (INST), which are not direct peers, yet all three are public software companies rated in the 'BB' range. MLNK is focused on software systems for financial institutions. INST is focused on learning management systems for educational institutions. The rating for GEN is higher given its size and stronger credit profile. MLNK and INST have EBITDA margins in the low 40's and 30's, respectively, which is much lower than GEN. MLNK and INST are both significantly smaller than GEN, which generates about 10x the EBITDA of the smaller rated software companies. Fitch expects gross leverage for both MLNK and INST to be below 4.0x. GEN is rated below other technology peers including Constellation Software (BBB+/Stable) and Cadence Design Systems (A-/Stable). These are higher rated than GEN since they have stronger credit profiles. However, GEN has consistently had stronger EBITDA and FCF margins, which benefit from its strong consumer market position. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue growth in the double digits in FY24 reflecting the Avast acquisition and strong single digit beyond then, reflecting Fitch's assumptions for the consumer's appetite for cybersecurity software, privacy and identity protection; - Gross margins are in the range of low 80's to nearly 85%; - EBITDA margins of in the mid-50's reflecting increased operating efficiencies longer-term; - FCF is directed toward debt repayment and shareholder returns continue through flat dividends and share repurchases; - Fitch assumes that GEN may be acquisitive once leverage is reduced to its net leverage (as defined by GEN) target of 3.0x. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a Stable Outlook: - Should Fitch anticipate that GEN will reduce leverage (defined by Fitch as EBITDA Leverage) to below 3.5x over the next several quarters, the Outlook could be revised to Stable from Negative. Factors that could, individually or collectively, lead to Positive rating action/upgrade: - Fitch's expectation of leverage below 2.5x on a sustained basis; - Debt/FCF ratio below 5x on a sustained basis. Factors that could, individually or collectively, lead to Negative rating action/downgrade: - Fitch's expectation of leverage above 3.5x on a sustained basis; - Debt/FCF ratio above 7.5x on a sustained basis; - Evidence of negative organic revenue growth and/or erosion of EBITDA and FCF margins; - Significant debt-financed acquisitions or share repurchases that significantly weaken the company's credit profile for a prolonged period of time. LIQUIDITY AND DEBT STRUCTURE Liquidity Expected to Remain Solid: As of Dec. 30, 2022, GEN had total liquidity of $2.3 billion including $812 million of cash on the balance sheet and a fully undrawn secured $1.5 billion revolving credit facility due 2027. GEN has approximately 74% of its debt as floating rate debt and the remaining 26% is fixed rate debt. GEN's Term Loan A2 amortizes at 5% per annum while Term Loan B amortizes at 1% per annum. The nearest debt maturity is in 2025 when $1.1 billion of senior notes become due. With strong FCF, Fitch expects GEN's liquidity to remain robust. ISSUER PROFILE Gen Digital, Inc. (f.k.a. NortonLifeLock, Inc.; NYSE: GEN) is a global provider of consumer cyber safety solutions, with more than 500 million users in over 150 countries. The company offers consumers both premium and "freemium" software. Gen Digital provides solutions for cybersecurity, privacy and identity protection. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Gen Digital Inc. LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ senior secured LT BBB- Affirmed RR1 BBB- GLOBAL AVIATION: Seeks Cash Collateral Access --------------------------------------------- Global Aviation Technologies LLC asks the U.S. Bankruptcy Court for the District of Kansas for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to fund continued operations consistent with the budget. Conway Bank, the U.S. Small Business Administration, Credibly of Arizona LLC, Front Capital, WebBank, ODK Capital, LLC, Payroll Funding Company LLC, Wynwood Capital Group assert an interest in the cash collateral. The Debtor proposes to make monthly payments of $15,500 to Conway. The Debtor also seeks to grant Conway and the SBA replacement liens in the Debtor's post-petition assets, except for any Chapter 5 avoidance actions. Although they may claim an interest in the Debtor's cash collateral, the Debtor does not propose to provide Credibly, Front, WebBank, OnDeck, PFC, and Wynwood with any adequate protection because any interest these lenders might maintain in the Debtor's cash collateral is completely unsecured. As of the Petition Date, Conway is owed approximately $3.196 million by the Debtor, including $2.658 million owed on Loan 2320 that is guaranteed by the SBA. Conway claims a lien in all assets owned by GAT. The SBA has a UCC filed on all assets owned by GAT, as well. Conway's security interest appears to be higher priority than the SBA's security interest, but only because SBA has just guaranteed the debt owed on Loan 2320. As adequate protection for Conway's and the SBA's interest in cash collateral, the Debtor proposes to pay Conway a monthly payment in the amount of $15,500 beginning March 1, 2023 and on the 1st of each week thereafter at Conway's contractual, non-default rate of interest, which is presumed to be 7.75% per annum. Because SBA has just guaranteed the debt GAT owes Conway under Loan 2320, GAT proposes that this payment to Conway will also provide adequate protection for the SBA's interest in cash collateral. In addition, Conway and the SBA will have and would be granted as adequate adequate protection for any post-petition diminution in value of its pre-petition collateral, additional and replacement security interests interests and liens, in the same priority as existed pre-petition, in and upon all of the pre-petition collateral and all of the Debtor's now-owned and after-acquired assets and rights of any kind or nature. A copy of the motion is available at https://bit.ly/3Zc3ZeN from PacerMonitor.com. About Global Aviation Technologies LLC Global Aviation Technologies LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 23-10111) on February 20, 2023. In the petition signed by Candace Cottner, managing member/director of finance, the Debtor disclosed up to $500,000 in assets and up to $50 million in liabilities. Nicholas R. Grillot, Esq., at Hinkle Law Firm LLC, represents the Debtor as legal counsel. GLOBAL MIXED: Files Emergency Bid to Use Cash Collateral -------------------------------------------------------- Global Mixed Martial Arts Academy, LLC asks the U.S. Bankruptcy Court for the Northern District of Florida, Gainesville Division, for authority to use cash collateral necessary to cover its estimated operating costs through March 23, 2023 as shown on the budget. The Debtor anticipates the amount required to pay operating costs for the next thirty days is $15,000. The Debtor requires the use of receivables and inventory to operate its business. In June, 2020, the Debtor obtained an Economic Disaster Loan from the U.S. Small Business Administration in the approximate amount of $145,000. No payments have been made as of this date. The Debtor is uncertain as to whether loan payments are currently due. The Debtor pledged all of its assets to the SBA to secure the loan. The SBA filed a UCC-1 Financing Statement on June 20, 2020. The Debtor also has a contract with Fitness-Sales.Net. LLC which provides to pay to the Debtor 60% of net funds received from membership contracts which are between Fitness-Sales.Net, LLC and members which attend classes provided by the Debtor. The Debtor believes that the value of the receivables is less than the total amount owed to the SBA. The SBA holds a perfected first priority lien on all of the accounts receivable, in whatever form. On May 26, 2022, the Debtor obtained a loan from Expansion Capital Group, LLC in the amount of $38,000. The contract with Expansion Capital purports to be an agreement by which Expansion Capital purchased $50,160 of receivables from the Debtor. The Debtor believes that the money received from Expansion Capital was simply a loan of $38,000. To secure the loan, the Debtor pledged a security interest in its assets to Expansion Capital. Expansion Capital recorded a UCC-1 Financing Statement on August 26, 2022. On January 26, 2022, the Debtor obtained a loan from Celtic Bank in the amount of $23,400. The loan to Celtic Bank is serviced by On Deck. The Debtor executed a loan agreement which pledged to Celtic Bank a security interest in all of the Debtor's assets. Celtic Bank never filed a UCC-1 financing statement. The security interest is unperfected. The SBA is the only creditor that holds a secured lien on cash collateral. Although Expansion Capital recorded a UCC-1, its position is junior to that of the SBA. There is not enough value in the cash collateral to secure any of Expansion Capital's lien. As adequate protection, SBA will receive a first priority postpetition lien on cash collateral to the validity and extent of its prepetition lien. A copy of the motion is available at https://bit.ly/3Y1up28 from PacerMonitor.com. About Global Mixed Martial Arts Academy, LLC Global Mixed Martial Arts Academy, LLC provides training services in specialized areas of martial arts. The primary source of revenue is from memberships fees. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-10029) on February 21, 2023. In the petition signed by Jason R. Dodd, president, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Lisa C. Cohen, Esq., at Ruff & Cohen, P.A., represents the Debtor as legal counsel. GOODLIFE PHYSICAL: Seeks to Hire Leslie Cohen Law as Counsel ------------------------------------------------------------ Goodlife Physical Medicine Corp seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Leslie Cohen Law, PC to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor regarding its rights and responsibilities under the U.S. Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules, and how the application of such provisions relates to the administration of the Debtor's estate; b. assisting the Debtor in the preparation of certain documents to be filed with the bankruptcy court or the Office of the U.S. Trustee; c. representing the Debtor, with respect to bankruptcy issues, in the context of its pending Chapter 11 case and representing the Debtor in contested matters; d. assisting in the negotiation, formulation and confirmation of a plan of reorganization; and e. rendering services for the purpose of pursuing, litigating or settling litigation. The firm's hourly rates are as follows: Leslie Cohen, Esq. $625 per hour J'aime Williams, Esq. $430 per hour Senior Contract Attorneys $350 per hour Paralegals $175 per hour Paraprofessionals $110 per hour Leslie Cohen Law received a pre-bankruptcy retainer of $28,000, which was paid by non-debtor entity David Carry Chiropractic, Inc. Leslie Cohen, Esq., president and sole shareholder of Leslie Cohen Law, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Leslie A. Cohen, Esq. J'aime K. Williams Esq. Leslie Cohen Law, PC 506 Santa Monica Blvd., Suite 200 Santa Monica, CA 90401 Tel.: (310) 394-5900 Fax: (310) 394-9280 Email: leslie@lesliecohenlaw.com jaime@lesliecohenlaw.com About Goodlife Physical Medicine Corp Goodlife Physical Medicine Corp, a company in Redondo Beach, Calif., filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10340) on Jan. 23, 2023. In the petition filed by its owner, David Carry, the Debtor reported up to $50,000 in assets and $1 million to $10 million in liabilities. Judge Sandra R. Klein oversees the case. The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen Law, PC. GRAND CANYON: Seeks to Hire Carlyon Cica as Bankruptcy Counsel -------------------------------------------------------------- Grand Canyon Destinations, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Carlyon Cica, Chtd. to handle its Chapter 11 case. Candace Carlyon, Esq., at Carlyon, will primarily be responsible for the firm's representation of the Debtor and her hourly rate is $750. The firm received a pre-bankruptcy retainer in the amount of $35,000. Ms. Carlyon disclosed in a court filing that her firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Candace C Carlyon, Esq. Carlyon Cica, Chtd. 265 E. Warm Springs Road, Suite 107 Las Vegas, NV 89119 Phone: 702-685-4444 Email: CCarlyon@CarlyonCica.com About Grand Canyon Destinations Grand Canyon Destinations, LLC is a bus and small tour company offering well-planned and affordable day trips, primarily from Las Vegas to the Grand Canyon. Grand Canyon Destinations filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-10399) on Feb. 3, 2023, with $1 million to $10 million in both assets and liabilities. Nathan F. Smith, Esq., has been appointed as Subchapter V trustee. Judge Natalie M. Cox oversees the case. The Debtor is represented by Candace C. Carlyon, Esq., at Carlyon Cica, Chtd. HCA HEALTHCARE: Fitch Affirms & Then Withdraws BB+ LongTerm IDR --------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of HCA Inc. and its parent, HCA Healthcare, Inc. (HCA), at 'BB+' and the instrument ratings of HCA's senior secured ABL at 'BBB-'/'RR1', its senior secured cash flow revolver and senior secured term loans at 'BBB-'/'RR2', and its senior unsecured notes at 'BB+'/'RR4'. The Rating Outlook remains Stable. Fitch has also chosen to withdraw the ratings of HCA Inc. and HCA Healthcare, Inc. for commercial reasons. KEY RATING DRIVERS Leadership Position Stable Amid Industry Headwinds: HCA is the largest for-profit operator of acute care hospitals in the U.S. measured by revenues, with a broad geographic footprint and considerable depth in its local markets. While this favorable operating profile drives HCA's leading profitability among its health system peers, challenging industry conditions in 2022 reduced HCA's Fitch-defined EBITDA margin by nearly 200 bps to 18.6%. This reflects constrained staffing availability (limiting growth in volumes and revenue), intense labor expense pressures (from higher use of, and elevated unit costs for, temporary staffing, and full-time employee compensation increases) and elevated levels of other operating expense (including Medicaid provider taxes, professional fees, utilities and insurance costs). Ample Headroom to Absorb Top Line Pressures: HCA has ample headroom within the 'BB+' IDR to absorb persisting pandemic-driven pressures on operations, which included a spike in COVID-19 admissions in early 2022, staffing constraints and labor cost pressures, all of which have moderated gradually since. HCA still delivered 3% same-facility revenue growth in 2022, driven by mid-single-digit outpatient volume growth (equivalent admissions +3.3%; admissions +0.5%) despite flat revenue per equivalent admission (with COVID admissions both more voluminous and higher in acuity in 2021). For 2023, HCA sees COVID volumes declining to 3%-4% from just over 5% in 2022, with same-facility growth of 2.0-3.0% in equivalent admissions and 2.0% in revenue per equivalent admission. Fitch forecasts revenue up 4% in 2023 to $62.6 billion, with Fitch-defined EBITDA up 2% to $11.4 billion, driven by persisting but moderating operating headwinds. Margins Likely Lower, Leverage Higher. Amid economic uncertainty, inflation and some pressure on government reimbursement (including Medicare 340B payment reductions and a less favorable contribution from Medicaid), HCA's Fitch-defined EBITDA margin is forecasted to decline 50 bps to 18.1% in 2023. This further reflects HCA's improving employee recruitment and retention, lower use and moderating unit costs for temporary staffing, and its recent management of unit cost increases for supplies in the low-single-digit range, offset by high-single-digit other operating expense inflation (including rising ED management and physician outsourcing costs). With dividends and share repurchases exceeding FCF, Fitch-defined debt is forecasted up $2.0 billion in 2023 (after rising by $3.3 billion in 2022), boosting leverage to 3.5x from 3.3x at YE 2022 (and 2.8x at YE 2021), but still within the 3.0x-4.0x range appropriate for the 'BB+' IDR and targeted by HCA. Share Buybacks Driving Up Debt: While HCA continues to invest heavily in capex to upgrade clinical equipment and systems, add capacity in constrained locations and expand select inpatient service lines and outpatient offerings, its industry-leading profitability supports consistently robust FCF, providing considerable flexibility in capital allocation. Fitch forecasts about $3.4 billion of FCF before dividends in 2023, net of $4.3 billion of capex (down slightly from 2022 and in line with HCA guidance), with Fitch-defined CFO-capex totaling 9% of debt, within Fitch's 8%-12% sensitivity range for the 'BB+' IDR. While HCA notably adjusted capital deployment at the onset of the pandemic to preserve liquidity, HCA has since resumed heavy share buybacks, which totaled $7.0 billion in 2022 (after $8.2 billion in 2021). With interest costs up and EBITDA down in 2022, but HCA planning to use a "majority" of $4.6 billion authorized for stock repurchase, Fitch forecasts $4.0 billion of stock repurchases, $0.7 billion of dividends and $0.5 billion of acquisitions in 2023, again boosting debt by $2.0 billion. More M&A Likely. Despite a recent lull in acquisition activity, Fitch sees the pandemic reinforcing the factors driving consolidation within healthcare services. Providers continue to amass scale to protect profitability as health insurers and suppliers consolidate amid secular pressures on Medicare and Medicaid reimbursement that Fitch expects to persist. Fitch sees M&A likely playing an increasing role in HCA's growth strategy, but would not expect M&A alone to drive leverage above its negative rating sensitivity level of 4.0x. HCA has focused historically on executing tuck-in acquisitions in existing markets, but has shown some willingness to explore new geographies and service lines. While HCA also has the financial flexibility to pursue large-scale deals, Fitch expects smaller targets are more likely the focus in advancing its strategy of building leading comprehensive health system networks in markets benefitting from favorable demographic trends. DERIVATION SUMMARY Rating Derivation Versus Peers Peer Comparison HCA is operationally well-positioned relative to publicly-traded health system peers including Tenet Healthcare Corp. (B+/Stable), Community Health Systems (B-/Negative), and Universal Health Services 'BB+/Stable). HCA's hospitals are generally located in higher-growth urban and suburban markets with more favorable demographics and it is better positioned in building a continuum of care delivery assets in its markets. Its financial profile is also amongst the strongest in the peer group due to its moderate financial leverage, industry-leading profitability and its high absolute level of free cash flow generation. In applying Fitch's Parent and Rating Subsidiary Linkage criteria, Fitch considers HCA Inc., the wholly owned subsidiary of HCA Healthcare, Inc., as stronger than the parent entity due to its greater proximity to the operating assets. Legal ring-fencing is considered open due to cross-default provisions on the debt of the two entities, while access and control are viewed as strong due to common management. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue growth in the low- to mid-single digits over the forecast period, including an increase of about 4% in 2023 split fairly evenly between volume growth and mix-adjusted rate increases (the former driven by mid-single-digit increases in outpatient volume). - Fitch-defined EBITDA margin of 18%-19%, rising modestly over the forecast period amid moderating pressure on labor and supplies costs, offset by persisting pressure on other operating expense. - Dividends ranging of $0.7 billion-$0.8 billion annually, increasing gradually over the forecast period. - Share repurchases of $4.0 billion-$5.0 billion annually, increasing gradually over the forecast period. - Tuck-in acquisitions of $0.5 billion annually (and smaller JV investments) over the forecast period. - Capex at 6%-7% of revenue over the forecast period, including $4.3 billion in 2023. - Leverage managed at stable levels of about 3.5x Fitch-defined EBITDA over the forecast period. - CFO-capex / debt of 8%-10% over the forecast period. RATING SENSITIVITIES Prior to Fitch's withdrawal of ratings, the following factors, individually or collectively, could have led to a positive rating action or upgrade: - HCA sustaining Fitch-defined Leverage at or below 3.0x; and - HCA sustaining CFO-capex / debt at or above 12%. Prior to Fitch's withdrawal of ratings, the following factors, individually or collectively, could have led to a negative rating action or downgrade: - HCA sustaining Fitch-defined leverage at or above 4.0x; and - HCA sustaining CFO-capex / debt at or below 8%. LIQUIDITY AND DEBT STRUCTURE Strong Financial Flexibility: Sources of liquidity at YE 2022 total $4.4 billion, including $0.9 billion of cash on hand and $3.5 billion in availability under two committed lines of revolving credit maturing in 2026.The maturities of Fitch-defined debt of $37.4 billion are well-laddered, with about 5% due in 2024, 12% in 2025 and 23% in 2026 and the balance thereafter. HCA also has ample flexibility under financial maintenance covenants in its bank credit agreement, which limit consolidated net leverage to 6.75x and limit debt incurrence to levels consistent with first-lien senior secured net leverage below 3.75x. HCA maintained a comfortable liquidity cushion throughout the pandemic by suspending dividend payments and share repurchases in March 2020 and establishing a $2.0 billion 364-day revolving credit facility, which was terminated in January 2021. With conditions since normalizing, HCA has notably repurchased over $15.0 billion of common stock during the 2021-2022 period, in addition to paying common dividends of $0.6 billion-$0.7 billion annually. For 2023, the Board of Directors approved a new $3.0 billion share repurchase authorization, permitting up to $4.6 billion of share repurchases in 2023 including capacity remaining under its 2022 authorization. HCA received $6.6 billion in CARES Act grants and loans during 2020, but chose to return all CARES Act funds received to the federal government, so there is no effect on the company's reported revenue, EBITDA and cash flow measures from such fiscal support. Debt Issue Notching: The ABL facility has a first-lien interest in substantially all eligible accounts receivable (A/R) of HCA, Inc. and its guarantors, while its other bank debt has a second-lien interest in certain of such A/R. Due to this priority security interest, the ABL is rated 'BBB-'/'RR1' while the senior secured cash flow revolver and senior secured term loans are rated 'BBB-'/'RR2'. The availability on the ABL facility is based on eligible A/R as defined by HCA's credit agreement. Fitch notes that there is a considerable amount of non-guarantor value in the capital structure (operating subsidiaries that are not guarantors of the secured debt comprise about 40% of total assets). Given the 'BB+' IDR on HCA and the permanent release of the subsidiary guarantees and collateral previously securing the legacy senior secured notes upon its attaining investment grade corporate family ratings by Moody's and S&P in 2022, Fitch downgraded HCA's legacy senior secured notes from 'BBB-'/'RR2' to 'BB+'/'RR4' per Fitch's recovery rating criteria for these newly-unsecured bonds. ISSUER PROFILE HCA is the largest for-profit U.S. health system with a comprehensive network of general acute care hospitals and outpatient facilities, which generated $60 billion of revenue in 2022. As of YE 2022, HCA's network spanned 20 states and the United Kingdom, including 182 hospitals with an expansive presence in Florida and Texas and about 2,300 ambulatory sites of care. In 2022, its hospital inpatient operations averaged nearly 42,000 average beds in service and contributed nearly 2.1 million admissions with over 0.5 million inpatient surgeries and nearly 9.0 million ED visits, while its outpatient operations included over 125 freestanding ASCs, over 125 freestanding EDs and over 250 urgent care centers, contributing over 1.5 million equivalent admissions with over 1.0 million outpatient surgeries. Fitch views HCA's outpatient operations as a key complement to its leading capabilities in high-acuity inpatient services, offering valuable diversification and synergies. Fitch further believes HCA's network plays a key role in the ongoing expansion of its leading local market positions and contributes to operating margins exceeding those of its for-profit health system peers. As U.S. healthcare services providers continue to seek operational efficiencies to offset reimbursement pressures, staffing constraints and inflation generally, Fitch expects HCA's scale will continue to differentiate the company's industry-leading financial results. ESG CONSIDERATIONS HCA has an ESG Relevance Score of '4' for Exposure to Social Impacts due to societal and regulatory pressures to contain growth in U.S. healthcare spending, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- HCA Healthcare, Inc. LT IDR BB+ Affirmed BB+ LT IDR WD Withdrawn BB+ HCA Inc. LT IDR BB+ Affirmed BB+ LT IDR WD Withdrawn BB+ senior secured LT WD Withdrawn BBB- senior secured LT BBB- Affirmed RR1 BBB- senior unsecured LT BB+ Affirmed RR4 BB+ senior unsecured LT WD Withdrawn BB+ senior secured LT BBB- Affirmed RR2 BBB- senior secured LT WD Withdrawn BBB- IBIO INC: Posts $33.6 Million Net Loss in Second Quarter -------------------------------------------------------- iBio, Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss available to the Company's stockholders of $33.55 million on $0 of revenues for the three months ended Dec. 31, 2022, compared to a net loss available to the Company's stockholders of $11.94 million on $0 of revenues for the three months ended Dec. 31, 2021. For the six months ended Dec. 31, 2022, the Company reported a net loss available to the Company's stockholders of $51.68 million on $0 of revenues compared to a net loss available to the Company's stockholders of $20.95 million on $84,000 of revenues for the six months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $51.80 million in total assets, $32.98 million in total liabilities, and $18.82 million in ttoal stockholders' equity. iBio stated, "The history of significant losses, the negative cash flow from operations, the limited cash resources on hand and the dependence by the Company on its ability to obtain additional financing to fund its operations after the current cash resources are exhausted raises substantial doubt about the Company's ability to continue as a going concern. Our management concluded that our recurring losses from operations and the fact that we have not generated significant revenue or positive cash flows from operations raise substantial doubt about our ability to continue as a going concern for the next 12 months after issuance of our financial statements. Our auditors also included an explanatory paragraph in its report on our financial statements as of and for the year ended June 30, 2022 with respect to this uncertainty." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1420720/000142072023000009/ibio-20221231x10q.htm About iBio Inc. iBio, Inc. -- http://www.ibioinc.com-- develops next-generation biopharmaceuticals using computational biology and 3D-modeling of subdominant and conformational epitopes, prospectively enabling the discovery of new antibody treatments for hard-to-target cancers and other diseases. iBio reported a net loss attributable to the Company of $50.30 million for the year ended June 30, 2022, a net loss attributable to the Company of $23.21 million for the year ended June 30, 2021, a net loss attributable to the company of $16.44 million for the year ended June 30, 2020, and a net loss attributable to the Company of $17.59 million for the year ended June 30, 2019. As of Sept. 30, 2022, the Company had $84.56 million in total assets, $36.20 million in total liabilities, and $48.37 million in total stockholders' equity. Holmdel, New Jersey-based CohnReznick LLP, the Company's auditor since 2010, issued a "going concern" qualification in its report dated Oct. 11, 2022, citing that the Company has suffered recurring losses from operations and negative cash flows from operating activities for the years ended June 30, 2022 and 2021 and has an accumulated deficit as of June 30, 2022. These matters, among others, raise substantial doubt about its ability to continue as a going concern. IBIO INC: To Sell Texas Property for $2.1 Million ------------------------------------------------- iBio, Inc. said it entered into an Auction Sale Agreement with Holland Industrial Group, together with Federal Equipment Company and Capital Recovery Group LLC for the sale at public auction of equipment and other tangible personal property located at the Company's facility at 8800 Health Science Center Pkwy, Bryan TX 77807. The Auctioneer has guaranteed an amount of gross proceeds from the sale of the Equipment of $2,100,000, which will be paid within five days of the Company providing Auctioneer with evidence reasonably satisfactory to Auctioneer that the Company will deliver free and clear title to the Equipment, including the payment of any personal property taxes, if any. In addition, the Company will receive 80% of any gross proceeds that exceed $2,300,000. About iBio Inc. iBio, Inc. -- http://www.ibioinc.com-- develops next-generation biopharmaceuticals using computational biology and 3D-modeling of subdominant and conformational epitopes, prospectively enabling the discovery of new antibody treatments for hard-to-target cancers and other diseases. iBio reported a net loss attributable to the Company of $50.30 million for the year ended June 30, 2022, a net loss attributable to the Company of $23.21 million for the year ended June 30, 2021, a net loss attributable to the company of $16.44 million for the year ended June 30, 2020, and a net loss attributable to the Company of $17.59 million for the year ended June 30, 2019. As of Sept. 30, 2022, the Company had $84.56 million in total assets, $36.20 million in total liabilities, and $48.37 million in total stockholders' equity. Holmdel, New Jersey-based CohnReznick LLP, the Company's auditor since 2010, issued a "going concern" qualification in its report dated Oct. 11, 2022, citing that the Company has suffered recurring losses from operations and negative cash flows from operating activities for the years ended June 30, 2022 and 2021 and has an accumulated deficit as of June 30, 2022. These matters, among others, raise substantial doubt about its ability to continue as a going concern. J&B EXPRESS: Seeks to Hire Kerkman & Dunn as Legal Counsel ---------------------------------------------------------- J&B Express, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Wisconsin to hire Kerkman & Dunn as its legal counsel. The firm's services include: a. advising the Debtor with respect to its duties and powers under the Bankruptcy Code; b. advising the Debtor on the conduct of its Chapter 11 Subchapter V case, including the legal and administrative requirements of operating in Chapter 11 Subchapter V; c. attending meetings and negotiating with representatives of creditors and other parties in interest; d. prosecuting actions on the behalf of the Debtor, defending actions commenced against the Debtor, and representing the Debtor's interests in negotiations concerning litigation in which it is involved; e. preparing pleadings; f. advising the Debtor in connection with any potential sale of its assets; g. appearing before the court; h. assisting the Debtor in preparing, negotiating and implementing a Chapter 11 plan, and advising the Debtor with respect to any rejection of or reformulation of the plan, if necessary; i. assisting the Debtor in state court actions related to judgments and collection actions initiated by or against the Debtor; and j. other necessary legal services. The firm will be paid at these rates: Jerome R. Kerkman $525 per hour Evan P. Schmit $435 per hour Gregory M. Schrieber $410 per hour Averi N. Niemuth $325 per hour Nicholas W. Kerkman $295 per hour Non-Attorney Paraprofessionals $125 per hour As disclosed in court filings, Kerkman & Dunn is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Nicholas W. Kerkman, Esq. Kerkman & Dunn 839 N. Jefferson St., Suite 400 Milwaukee, WI 53202-3722 Phone: 414.277.8200 Facsimile: 414.277.0100 Email: nkerkman@kerkmandunn.com About J&B Express J&B Express, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Wis. Case No. 23-20494) on Feb. 7, 2023, with up to $10 million in both assets and liabilities. Mark S. Werner, manager, signed the petition. Judge Rachel M. Blise oversees the case. Nicholas W. Kerkman, Esq., at Kerkman and Dunn, is the Debtor's legal counsel. JEFFERSON LA BREA: Wins Cash Collateral Access Thru May 31 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorized Jefferson La Brea D&J Properties LLC to use cash collateral on a final basis through May 31, 2022. The Debtor is permitted to use the cash collateral solely to pay the expenses set forth in the budget or such further budget that may be approved by the secured creditors or the Court. The Debtor will be deemed in compliance with the Budget as long as, for any particular operating month, (1) the aggregate expenditures for all categories set forth in the Budget do not exceed the budgeted aggregate expenses by more than 15%; and (2) the expenditures with respect to any particular category of expense set forth in the Budget does not exceed the amount set forth in the budget for such category by more than 20%. As previously reported by the Troubled Company Reporter, Mega Bank and JBM Family Trust assert an interest in the Debtor's cash collateral. The Court said each secured creditor of record will receive, as adequate protection, a replacement lien on postpetition collateral for any diminution in the secured creditor's collateral as of the Petition Date arising from the Debtor's use of such collateral but only to the same extent, priority, applicability and validity as the prepetition lien held by the secured creditor. A copy of the order is available at https://bit.ly/3ZiitKp from PacerMonitor.com. About Jefferson La Brea D&J Properties LLC Jefferson La Brea D&J Properties LLC leases a commercial property located at 5112-5118 W. Jefferson Blvd., and 3409-3421 S. La Brea Avenue, in Los Angeles. Jefferson La Brea D&J Properties LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14481) on August 17, 2022. The Debtor considers itself a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). In the petition filed by Jason E. Upchurch, as manager, the Debtor estimated assets between $10 million and $50 million and estimated liabilities between $1 million and $10 million. Judge Vincent P. Zurzolo oversees the case. The Debtor is represented by David B. Shemano, Esq., at ShemanoLaw. KAISER GYPSUM: Bankruptcy Plan Defeats Appeal of Insurer -------------------------------------------------------- Evan Ochsner of Bloomberg Law reports that an insurance company potentially on the hook for millions of dollars in asbestos-related injury claims never had the right to challenge Kaiser Gypsum Co. Inc.'s bankruptcy plan because the plan did not change the insurer's rights or responsibilities, an appeals court ruled. Truck Insurance Exchange's rights and obligations were left untouched by Kaiser Gypsum's Chapter 11 plan, meaning it had no standing to oppose the plan in bankruptcy court, the US Court of Appeals for the Fourth Circuit ruled Tuesday, February 13, 2023. The Fourth Circuit's ruling affirmed federal district and bankruptcy courts' prior decisions rejecting Truck' efforts to prevent Kaiser Gypsum's plan. About Kaiser Gypsum Kaiser Gypsum Company, Inc.'s principal business consisted of manufacturing and marketing gypsum plaster, gypsum lath and gypsum wallboard. It has no current business operations other than managing its legacy asbestos-related and environmental liabilities. Kaiser Gypsum has no material tangible assets. Hanson Permanente Cement, Inc.'s primary business was the manufacture and sale of Portland cement products. It is a wholly-owned, indirect subsidiary of non-debtor Lehigh Hanson, Inc. HPCI is the direct parent of Kaiser Gypsum as well as non-debtor Hanson Micronesia Cement, Inc. and non-debtor Hanson Permanente Cement of Guam, Inc., the operating subsidiaries. Non-debtor Permanente Cement Company, which has no assets or operations, is also a wholly-owned subsidiary of HPCI. Kaiser Gypsum and HPCI sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on Sept. 30, 2016. Charles E. McChesney, II, vice president and secretary, signed the petitions. The Debtors tapped Rayburn Cooper & Durham P.A. and Jones Day as their bankruptcy counsel, NERA Economic Consulting as consultant, and PricewaterhouseCoopers LLP as financial advisor. Cook Law Firm P.C., K&L Gates LLP and Miller Nash Graham & Dunn LLP serve as special counsel. At the time of the bankruptcy filing, the Debtors estimated their assets and liabilities at $100 million to $500 million. The U.S. Bankruptcy Administrator for the Western District of North Carolina appointed an official committee of unsecured creditors. The creditors' committee hired Blank Rome LLP and Moon Wright & Houston, PLLC as bankruptcy counsel. The official committee representing asbestos personal injury claimants retained Caplin & Drysdale, Chartered as its legal counsel. Lawrence Fitzpatrick, the future claimants' representative, tapped Young Conaway Stargatt & Taylor, LLP as his bankruptcy counsel, Alexander Ricks PLLC as local counsel, and Ankura Consulting Group, LLC as claims evaluation consultant. KANE CORPORATION: Owner's Plan Confirmed by Judge ------------------------------------------------- Judge Hannah L. Blumenstiel has entered an order confirming the Combined Plan of Reorganization and Disclosure Statement of Peter Kane, a creditor and the sole equity security holder of Debtor Kane Corporation. As proposed by Mr. Kane in Section B(1) of the Confirmation Brief, Part 1(b)(3) and (6) of the Plan are deemed modified to read as follows: * Claim no. 4 filed by Peter Kane in the amount of $3,185,706.34 shall be allowed in full and shall be paid 15.75% of such amount, subject to the following: (a) no payment on account of such claim shall be made by the Debtor until and unless all other payments required of the Debtor (as distinguished from payments required of the Special Representative) under this Plan have been made or have been accounted for with appropriate reserves under the provisions of Part 8(c) of this Plan; and (b) payments will be made on the claim only as future cash flow of the Debtor permits, based on the Debtor's projections of anticipated revenues and expenses. * The scheduled claim of Sunbow Properties, LLC, in the amount of $105,000.00, shall be allowed in full and shall be paid 15.75% of such amount, subject to the following: (a) no payment on account of such claim shall be made by the Debtor until and unless all other payments required of the Debtor (as distinguished from payments required of the Special Representative) under this Plan have been made or have been accounted for with appropriate reserves under the provisions of Part 8(c) of this Plan; and (b) payments will be made on the claim only as future cash flow of the Debtor permits, based on the Debtor's projections of anticipated revenues and expenses. A copy of the Confirmation Order dated February 16, 2023 is available at https://bit.ly/3ILGyUs from PacerMonitor.com at no charge. Attorneys for the Debtor: Merle C. Meyers, Esq. MEYERS LAW GROUP, P.C. 100 Shoreline Highway, Suite B160 Mill Valley, CA 94941 E-mail: mmeyers@meyerslawgroup.com About Kane Corporation Kane Corporation, the Debtor, is a California corporation in the business of real estate consulting and management, and has operated since 1984. Peter Kane is the Company's President, C.E.O. and sole shareholder. Kane Corporation filed a Chapter 7 voluntary petition (Bankr. N.D. Calif. Case No. 21-30819) on Dec. 17, 2021. The case was converted to one under Chapter 11 on Nov. 10, 2022. Judge Hannah L. Blumenstiel oversees the case. Matthew D. Metzger, Esq., at Belvedere Legal, PC serves as the Debtor's legal counsel. LOANDEPOT INC: DBRS Assigns B Long Term Issuer Rating ----------------------------------------------------- DBRS, Inc. assigned a Long-Term Issuer Rating of 'B' to loanDepot, Inc. At the same time, DBRS Morningstar assigned a Long-Term Issuer Rating of 'B' to the Company's operating subsidiary loanDepot.com, LLC. The trend for all the ratings is Stable. The Company's Intrinsic Assessment (IA) is 'B', while its Support Assessment is SA3, resulting in the Company's final rating being equalized with its IA. KEY RATING CONSIDERATIONS The ratings reflect loanDepot's franchise as one of the top nonbank mortgage loan originators and servicers in the U.S., with proper liquidity and acceptable capitalization. The ratings also consider the Company's earnings generation volatility given its concentrated and cyclical business model, as well as a primarily asset-based funding profile, and heightened exposure to operational and market risk. The Stable trend reflects our expectation that the Company will successfully execute on its strategic initiatives, including cost reduction and business restructuring as it copes with the challenging mortgage origination environment while maintaining a sound balance sheet. Nonetheless, a material weakening in the housing market accompanied by a sharp economic downturn constitute key downside risks to our expectations. RATING DRIVERS The ratings would be upgraded if the Company improves and sustains its earnings generation capacity while maintaining a similar risk profile and sound capitalization. Conversely, a prolonged period of weak operating results would result in a ratings downgrade. Additionally, a material reputational damage associated with weak operating risk management practices, regulatory oversight, or litigation would result in a ratings downgrade. RATING RATIONALE loanDepot's franchise is underpinned by its positioning as one of the top retail-focused nonbank mortgage lenders in the highly fragmented U.S. residential mortgage market. The franchise also benefits from a growing set of mortgage lending, servicing, and other complementary products and services, as well as a sophisticated proprietary technology that provides loanDepot with increased efficiency and scale. Historically, loanDepot has focused more on refinance originations (refi). However, as a result of the shifting mortgage market dynamics, loanDepot is transitioning towards less interest rate sensitive purchase mortgage originations. Moreover, the Company has launched new products and services in 2022, including HELOCs and purpose driven lending for the underserved population in the U.S. through new joint ventures. In 2021 spurred by the significant demand for mortgage refinancing, loanDepot originated $137 billion of mortgages equating to 3.4% of the market however, with mortgage rates rising reducing demand for mortgage refinancing, the Company's market share moderated further to approximately 2.6% in 9M22. The Company's earnings power is constrained in today's operating environment since a sizeable portion of revenue is generated from transactional sources such as gain on origination and sale of loans (70% of net revenue in 9M22 and 88% in 2021), exposing earnings to the volatility and cyclicality of the housing market and the overall interest rate environment. As a result of significantly higher interest rates that have dramatically slowed both the refi market and the overall housing market, the Company reported net losses of $452.6 million in 9M22, compared to a net income of $608.4 million in 9M21. This follows record earnings of $2.0 billion in 2020. The Company has experienced significant growth in its servicing portfolio as a result of extensive investment in its in-house servicing capabilities, which resulted in the successful transition to fully in-house servicing in 3Q22. Overall, loanDepot's servicing portfolio totaled $139.7 billion in unpaid principal balance (UPB) in 9M22. Revenues from servicing are recurring in nature and can partially offset the decline from gain on origination and sale of loans leading to a less volatile earnings profile, which would be viewed favorably. We see the change in revenue mix with the increasing share of servicing fee income, which represented 31% of net revenue in 9M22 from the past five-year average of around 9% as evidence of progress in the investment to grow in-house servicing. To address the much more difficult operating environment, the Company has taken steps to reduce costs through business process optimization. Indeed, as part of its Vision 2025 strategy, loanDepot reduced its headcount to approximately 6,100 employees as of September 30, 2022, down 46% from YE21. Furthermore, the Company is on track to reduce non-volume related expenses by $375 million to $400 million by YE22, which should help the Company return to profitability. The Company is primarily subject to market risk and specifically interest rate risk, as it holds a substantial portion of assets at fair value (FV), which are interest rate sensitive. Indeed, at September 30, 2022, approximately 70% of the Company's total assets were marked to fair value. However, loanDepot utilizes derivative instruments to mitigate such risks for the interest rate lock commitments and loans held for sale as well as for its mortgage servicing rights (MSRs). Credit risk is limited due to the Company's originate-to-sale business model, but it is subject to the risk associated with the representations (reps) and warranties. The Company has historically registered low credit losses and non-accrual loans associated to sold loans' reps and warranties. Nonetheless, following a fairly stable level of charge-offs during the past three years, in 9M22, charge-offs totaled $69.5 million, up from $9.3 million in 9M21, while at the same time, the Company built its reserves for loan obligations to $68.9 million from $27.0 million in the same prior year period. We see credit losses as likely to increase should the U.S. economy weaken over the next year. loanDepot's funding profile is limited as the Company primarily sources its funding needs through secured borrowing resulting in a highly encumbered balance sheet. Indeed, secured funding constituted approximately 81.5% of total debt outstanding at 3Q22, though lower compared to a five-year (2017-2021) average of approximately 92%. As of September 30, 2022, the Company had $5.4 billion total debt outstanding comprised of short-term warehouse credit lines (47.1%), securitizations (24.1%), senior unsecured notes (18.5%), and repurchase agreements (10.3%). Funding is largely aligned with its asset base, and is sourced through established relationships with a diverse group of participating financial institutions. Meanwhile, at September 30, 2022, loanDepot's liquidity position was strong with $1.1 billion of cash and equivalents representing nearly 16% of total assets and well exceeding the Company's target cash balance of between 5%-7% of assets. We view this excess liquidity as prudent given the weakening economic outlook that raises the potential for a sharp increase in delinquencies in the Company's servicing portfolio, where it would need fund servicing advances for delinquent customers. loanDepot's capitalization is acceptable with a tangible equity-to-tangible assets of 14.6% at September 30, 2022, providing a sufficient cushion to absorb operating losses while still meeting the pertinent covenant requirements. To preserve capital, the Company suspended quarterly dividend distributions back in March 2022. Notes: All figures are in U.S. Dollars unless otherwise noted. LTL MANAGEMENT: Judge Kaplan to Dismiss Case After 3rd Cir. Mandate ------------------------------------------------------------------- Mike Spector of Reuters reports that a federal judge expresses intent to dismiss Johnson & Johnson (J&J) talc unit, LTL Management, bankruptcy. The bankruptcy case filed by Johnson & Johnson's (JNJ.N) subsidiary shouldering talc-related lawsuits will soon be dismissed unless a U.S appeals court agrees to reconsider its decision to nix the company's attempt to offload the litigation into Chapter 11 proceedings, a federal judge said on Tuesday, February 14, 2023. U.S. Bankruptcy Judge Michael Kaplan said during a hearing in Trenton, New Jersey that he intends to toss the Chapter 11 case once the Philadelphia-based 3rd U.S. Circuit Court of Appeals issues a formal mandate to carry out a January 30, 2023 ruling by a three-judge panel to dismiss the matter. The 3rd Circuit panel ruled that the J&J subsidiary, called LTL Management, had no legitimate claim to Chapter 11 protection because it did not face financial distress. The dismissal is on hold since LTL asked the full 3rd Circuit late on Monday, February 13, 2023, to reconsider the panel's decision. Should the 3rd Circuit deny that request, Kaplan could dismiss the case within days. "It is my intent, when the mandate is issued, to issue an order dismissing the case," Kaplan said during Tuesday's, February 14, 2023, hearing. Should the 3rd Circuit refuse a rehearing, LTL could seek to further delay the bankruptcy's dismissal, including potentially at the U.S. Supreme Court, a lawyer for the J&J subsidiary, Greg Gordon, told the hearing. Absent a reversal, the 3rd Circuit's decision would force J&J back into trial courts to battle nearly 40,000 lawsuits alleging the company's Baby Powder and other cosmetic products containing talc cause cancer. Gordon told the judge that LTL was engaged in a "Herculean effort to get the defense team back in place" to manage cases in trial courts should Kaplan ultimately dismiss the bankruptcy. J&J maintains its talc products are safe. LTL's bankruptcy had put the deluge of talc cases on hold. Kaplan on Tuesday granted a 24-year-old plaintiff's request to allow his case to proceed in California in the wake of the 3rd Circuit's decision. "The pendulum has swung," Kaplan said, ruling that a trial for the terminally ill plaintiff should no longer be indefinitely halted on grounds that it could threaten LTL's bankruptcy reorganization. Kaplan said other cases would remain paused in the short term while LTL's appeals process unfolds. The 3rd Circuit decision more broadly cast a cloud over J&J's use of a maneuver known as the Texas two-step, named for a Texas law the company employed to carve its consumer business into two new subsidiaries. In October 2021, J&J offloaded the tidal wave of talc lawsuits it faced onto one of its newly created units, LTL, which then declared bankruptcy. Reuters last year detailed the secret planning of Texas two-steps by Johnson & Johnson and other major firms in a series of reports exploring corporate attempts to evade lawsuits through bankruptcies. J&J, with a market capitalization of more than $400 billion, has argued that the avalanche of lawsuits posed a serious financial threat. The company's costs of verdicts, settlements and legal fees soared to about $4.5 billion, with no end in sight, according to bankruptcy-court filings. The 3rd Circuit's reasoning underscored what some legal experts call an inherent contradiction: bankruptcies being executed by multinational firms worth billions of dollars that were in little danger of running out of money to pay plaintiff-creditors. LTL declared bankruptcy while J&J avoided seeking Chapter 11 protection, with all its inherent financial and reputational wreckage. J&J said it generously financed LTL to ensure a fair settlement - better, the company and its subsidiary argued, than trial courts where some plaintiffs receive outsized payments while others receive little or nothing. The 3rd Circuit found that J&J's funding of the subsidiary, initially $2 billion and perhaps eventually more, undercut any claim of financial peril necessary to justify LTL's bankruptcy filing. In a petition seeking a rehearing filed Monday, a lawyer for LTL, Neal Katyal, called that reasoning "upside-down." A 2018 Reuters investigation found that J&J knew for decades that asbestos, a known carcinogen, was present in its Baby Powder and other cosmetic talc products. The company said in May 2020 it would stop selling talc-based Baby Powder in the United States and Canada, in part due to what it called "misinformation" and "unfounded allegations" about the product. The company later decided to stop selling talc-based Baby Powder globally starting this 2023. J&J has denied its talc contains asbestos. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. LUCIRA HEALTH: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Lucira Health, Inc. 1315 63rd St. Emeryville, CA 94608 Business Description: Founded in 2013, Lucira is a medical technology company focused on the development and commercialization of transformative and innovative infectious disease test kits. Chapter 11 Petition Date: February 22, 2023 Court: United States Bankruptcy Court District of Delaware Case No.: 23-10242 Debtor's Counsel: Sean M. Beach, Esq. Ashley E. Jacobs, Esq. Joshua B. Brooks, Esq. Timothy R. Powell, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: sbeach@ycst.com ajacobs@ycst.com jbrooks@ycst.com tpowell@ycst.com - and - Robert L. Eisenbach III, Esq. COOLEY LLP 3 Embarcadero Center 20th Floor San Francisco, CA 94111 Tel: (415) 693-2000 Fax: (415) 693-2222 Email: reisenbach@cooley.com - and - Olya Antle, Esq. COOLEY LLP 1299 Pennsylvania Avenue, NW Suite 700 Washington, DC 20004-2400 Tel: (202) 842-7800 Fax: (202) 842-7899 Email: oantle@cooley.com Debtor's Financial Advisor: ARMANINO LLP Debtor's Claims & Notcing Agent and Administrative Advisor: DONLIN, RECANO & COMPANY, INC. Re: Lucira Health, Inc. P.O. Box 199043 Blythebourne Station Brooklyn, NY 11219 Toll Free Tel: 1 (877) 534-8310 Fax: 1 (212) 481-1416 Email: lhinfo@drc.equiniti.com Total Assets as of Dec. 31, 2022: $145,897,301 Total Debts as of Dec. 31, 2022: $84,720,814 The petition was signed by Richard Narido as chief financial officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XDGV3SY/Lucira_Health_Inc__debke-23-10242__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Nypro DR, LLC- Trade $15,972,651 Dominican Republic Branch ITABO Industrial Park, Building 11 Haina San Cristobal 91000 Dominican Republic Karen Allard Tel: 813-340-8539 Email: karen_allard@jabil.com 2. International Point of Trade $2,733,388 Care, Inc. 135 The West Mall, Unit 9 Toronto, ON M9C1C2 Canada Vicki Scomazzon Tel: 416-847-2777 Email: vscomazzon@ipocdx.com 3. Pegatron Corporation Trade $2,624,585 No. 76, Ligong St., Beitou Dist. Taipei, Taiwan 11261 Zoe Wu Tel: +886-2-8143-9001 #36978 Email: zoe_wu@pegatroncorp.com 4. A.M.A Plastics Inc Trade $1,905,330 1100 Citrus Street, Riverside, CA 92507 Stacy Donnelly Tel: (951) 547-5236 Email: ar.riverside@westfall- technik.com 5. New England Biolabs Trade $1,654,414 PO Box 3933 Boston, MA 2241 Tel: (800) 632-5227 Email: accountsreceivable@neb.com 6. Biosearch Trade $1,594,927 Technologies, Inc. 2199 South McDowell Blvd Petaluma, CA 94954 Windarsih Sas Tel: (213) 599-6010 Email: pet.ar@lgcgroup.com 7. Calvary Robotics Trade $1,466,257 855 Publishers Pkwy, New York, NY 14580 Karen Harrison Tel: 585-347-6127 ext. 319 Email: kharrison@calvaryrobotics.com 8. Norwalt Design Trade $1,115,980 961 rt. 10 East Randolph, NJ 07869 Donna Collura Tel: 973-927-3200 x1200 Email: donna@norwalt.com 9. Campbell Wrapper Corp Trade $881,355 1415 Fortune Ave De Pere, WI 54115 Julie Wolfinger Tel: (715) 607-0432 Email: Julie.Wolfinger@CampbellWrapper.com 10. Promega Corporation Trade $865,693 P.O. Box 689768 Chicago, IL 60695-9768 Ellyn Barrett Tel: 608-274-4330 Email: Ellyn.barrett@promega.com 11. Jabil Circuit Trade $741,888 (Shanghai) Co. Ltd. NO 600 Tian Lin Road Shanghai, China Sunny Chen Tel: 86-021-33957712 Email: jingjing_shi@jabil.com 12. Integrated DNA Trade $633,072 Technologies, Inc. 25104 Network Place, Chicago, IL 60673-1251 Amy Haag Tel: 877-569-0132 Email: accountsreceivable@idtdna.com 13. Dignity-GoHealth Professional $613,194 Urgent Care, LLC Services P.O. Box 741051 Los Angeles, CA 90074-1051 A'sha Lenon Email: asha.lenon@gohealthuc.com 14. Plitek, LLC Trade $544,023 69 Rawls Road Des Plaines, IL 60018 Samantha Bucaro Tel: 847.827.6680 ext. 230 Email: samantha.bucaro@plitek.com 15. Actalent, Inc. Professional $504,140 3689 Collection Ctr. Dr. Services Chicago, IL 60693 Jen Douglas Tel: 480-758-3733 Email: jedougla@allegisgroup.com 16. Tecan US, Inc. Trade $460,660 9401 Globre Center Drive Morrisville, NC 27560 Joe Fischer Tel: (919) 572-5405 Email: Joe.fischer@tecan.com 17. MicroGroup, Inc. Trade $451,645 7 Industrial Park Rd Medway, MA 02053 Alonso Castro Tel: (508) 533-4925 ext. 221 18. DWFritz Automation, Inc. Trade $385,435 9600 Boeckman Road Wilsonville, OR 97070 Kelly McCord Tel: (503) 885-1587 Email: KMcCord@dwfritz.com 19. Essex Technology Professional $313,340 Group, Inc. Services P.O. Box 79928 Baltimore, MD 21279-0928 Olga Rusakova Tel: 201-291-5124 Email: orusakova-srvc@essextec.com 20. Bluebird Express, LLC Trade $310,504 145 Hook Creek Blvd., Bldg C2 Valley Stream, NY 11581 James Gillett Tel: 516-255-0800 Email: accounting@bluexps.com 21. Real Staffing Group Professional $310,442 909 Fannin St. Services Houston, TX 77010 Gareth Jonathan Tel: (832) 900-5900 Email: g.jonathan@three.com 22. Edgewater Automation LLC Trade $286,896 481 Renaissance Drive St. Joseph, MI 49085 Paige Vargas Tel: 269-983-1300 Email: accounting.mi@edgewater automation.com 23. Avnet Inc. Trade $242,400 PO Box 100340 Pasadena, CA 91189 Allen Rebellon Tel: (469) 498-6258 Email: allen.rebellon@avnet.com 24. Techflex Packaging LLC Trade $238,883 13771 Gramercy Place Gardena, CA 90249 Carlos Mercado Tel: (310) 493-3629 Email: cmercado@tfpack.com 25. ECENTA America Inc. Trade $222,565 325 North St. Paul Street, #2825 Dallas, TX 75201 Alicia Campos Tel: (425) 241-7440 Email: alicia.campos@ecenta.com 26. Oxford Global Professional $197,953 Resources, LLC Services P.O. Box 3256 Boston, MA 02241-3256 Sandra Jackson Tel: 978-538-1761 Email: epayments@oxfordcorp.com 27. Tata Consultancy Professional $177,192 Services Ltd Services Nirmal Building 9th Floor Nariman Point Mumbai, Maharashtra 400021 India Aswinikumar Varshapally Tel: -9966668239 Email: aswinikumar.v@tcs.com 28. Aeronet Worldwide, Inc. Trade $168,164 42 Corporate Park Irvine, CA 92606 Stephanie G. Ancheta Tel: 949-474-3000 ext 332 Email: sguerrero@aeronet.com 29. The Regents of the Trade $167,076 University of California P.O. Box 748872 Los Angeles, CA 90074-4872 Jennifer Hunter Tel: 415-476-1462 Email: CGACollections@ucsf.ed 30. Definitive Healthcare, LLC Professional $165,000 550 Cochituate road Services Unit 4 Framingham, MA 01701 Sam Cogliandro Tel: 888-307-4107 Email: billing@definitivehc.com MADISON CLINIC: Wins Cash Collateral Access, DIP Loan ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama, Northern Division, authorized the Madison Clinic for Applied Behavior Analysis, LLC, to use cash collateral and obtain postpetition financing, on an interim basis. The obtained a post-petition financing arrangement with Huntsville Rental Property, LLC, who is a pre-petition lender and an insider. The Debtor requires the use of cash collateral and DIP financing to pay normal operating expenses and to purchase inventory and supplies. The Court said the automatic stay is modified to permit (a) the Debtor to implement the terms of the DIP Loan Documents and (b) Debtor to create, and Huntsville Rental Properties to perfect, any and all liens, mortgages and security interests granted to them thereunder. The security interest and lien granted to Huntsville Rental Properties under the Order and will be evidenced by the Order, and except as otherwise provided therein, will be deemed to be first, valid and perfected as against all third parties upon entry of the Order, provided, however, that Huntsville Rental Properties may take such steps as they deem appropriate to comply with such recording statutes and the Debtor will execute and deliver such additional documents and will take any and all additional action to comply with such recording statutes as Huntsville Rental Properties may request. A copy of the order is available at https://bit.ly/3IqhtwU from PacerMonitor.com. About the Madison Clinic for Applied Behavior Analysis, LLC Madison Clinic for Applied Behavior Analysis, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-80259-CRJ11) on February 14, 2023. In the petition signed by Lindsay Chapman, owner, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Stuart M. Maples, Esq., at Maples Law Firm, PC, represents the Debtor as legal counsel. MEHLING ORTHOPEDICS: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------------- Mehling Orthopedics, LLC asks the U.S. Bankruptcy Court for the District of New Jersey for authority to use cash collateral. The Debtor requires the use of cash collateral to continue operating in the ordinary court as a debtor-in-possession to maximize value as a going-concern while it negotiates and proposes and orderly reorganization of its Medical Practice. The creditors that assert an interest in the Debtor's cash collateral are LG Funding LLC, Samson MCA LLC c/o Steven Markowitz, Jr., Velocity Capital Group, and Advantage Platform Services, Inc. d/b/a Advantage Capital Funding. Between June 2022 and August 2022, the Debtor entered into a number of agreements with Secured Creditors and incurred debt totaling approximately $600,000. The Debtor owns substantial accounts payable by insurance companies for work performed in its Medical Practice and other payables due to the Debtor. The Receivables that total approximately $13.865 million as of November 1, 2022, and are broken out as follows: $2.877 million (0-30 Days); $616,750 (31-45 Days); and $9.060 million (Over 90 Days). Further, the majority of Secured Creditors took additional guaranties and other collateral as security in additional to the Receivables based upon the Agreements annexed to the Shapiro Certification. The Secured Creditors are adequately protected by an equity cushion in the Receivables, and as the Secured Creditors have other collateral including guaranties. As adequate protection, the Debtor offers Secured Creditors replacement liens, nunc pro tunc to the Petition Date, a replacement perfected security interest under Section 361(a) of the Bankruptcy Code to the extent that Secured Creditors' cash collateral is used by the Debtor, to the extent and with the same priority in the Debtor's post-petition collateral, and proceeds thereof, that Secured Creditors held in the Debtor's pre-petition collateral. A copy of the Debtor's motion and budget is available at https://bit.ly/3Kq60Qw from PacerMonitor.com. The Debtor projects $217,418 in disposable income and $63,508 in total expenses for one month. About Mehling Orthopedics LLC Mehling Orthopedics LLC is a health care business; it operates an orthopedic trauma practice dedicated to creating individualized treatment plans for traumatic injuries and disabilities including orthopedic trauma and sports-related injuries from 214 Street, Suite 101, Hackensack, NJ 07601. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 23-11121) on February 10, 2023. In the petition signed by Brian Mehling, member, the Debtor disclosed up to $50,000 in both assets and liabilities. Melinda D. Middlebrooks, Esq., at Middlebrooks Shapiro, P.C., represents the Debtor as legal counsel. MIAMI JET TOURS: Gets OK to Hire Escarpio & Company as Accountant ----------------------------------------------------------------- Miami Jet Tours, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Escarpio & Company, LLC as its accountant. Escarpio will assist with the Debtor's projections for its Chapter 11 plan of reorganization; prepare and file any required tax returns; and provide the Debtor with tax advice. As disclosed in court filings, Escarpio is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jose Escarpio Escarpio & Company, LLC 9580 SW 107TH Ave Ste 201 Miami, FL, 33176-2792 Tel: (305) 275-0055 About Miami Jet Tours Miami Jet Tours, Inc. is a Miami transportation company specializing in private transportation for small and large groups, pre and post cruise transfers, corporate and sporting events, concerts, school trips, churches, weddings, and customized transportation needs. Miami Jet Tours sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10569) on Jan. 25, 2023, with up to $1 million in assets and up to $10 million in liabilities. Rafael Mulkay, president of Miami Jet Tours, signed the petition. Judge Robert A. Mark oversees the case. Zach B. Shelomith, Esq., at Leiderman Shelomith Alexander + Somodevilla, PLLC and Escarpio & Company, LLC are the Debtor's legal counsel and accountant, respectively. MIAMI JET TOURS: Gets OK to Hire Leiderman as Legal Counsel ----------------------------------------------------------- Miami Jet Tours, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Leiderman Shelomith + Somodevilla, PLLC. The Debtor requires legal counsel to: a. give advice with respect to the powers and duties of the Debtor under the Bankruptcy Code; b. give advice with respect to the Debtor's responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; c. prepare legal documents; d. protect the interests of the Debtor in all matters pending before the court; e. represent the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan; and f. perform other necessary legal services. The hourly rates charged by the firm's attorneys and legal assistants are as follows: Zach B. Shelomith, Esq. $450 Attorneys $350 to $450 Legal Assistants $195 The Debtor paid the firm an advance fee and cost deposit in the total amount of $26,717. Zach Shelomith, Esq., a member of Leiderman, disclosed in a court filing that his firm does not represent any entity in any matter, which would constitute a conflict of interest or otherwise impair the disinterestedness of the firm. Leiderman can be reached through: Zach B. Shelomith, Esq. Leiderman Shelomith Alexander + Somodevilla, PLLC 2699 Stirling Road, Suite C401 Ft. Lauderdale, FL 33312 Tel: (954) 920-5355 Fax: (954) 920-5371 Email: zbs@lss.law About Miami Jet Tours Miami Jet Tours, Inc. is a Miami transportation company specializing in private transportation for small and large groups, pre and post cruise transfers, corporate and sporting events, concerts, school trips, churches, weddings, and customized transportation needs. Miami Jet Tours sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10569) on Jan. 25, 2023, with up to $1 million in assets and up to $10 million in liabilities. Rafael Mulkay, president of Miami Jet Tours, signed the petition. Judge Robert A. Mark oversees the case. Zach B. Shelomith, Esq., at Leiderman Shelomith Alexander + Somodevilla, PLLC and Escarpio & Company, LLC are the Debtor's legal counsel and accountant, respectively. MIAMI JET: Gets Approval to Hire Moecker Auctions as Appraiser -------------------------------------------------------------- Miami Jet Tours, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Moecker Auctions, Inc. Moecker has agreed to conduct an inspection and appraisal of the Debtor's vehicles for a fee of $1,050. Eric Rubin, the firm's appraiser who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Moecker can be reached through: Eric Rubin Moecker Auctions, Inc. 1883 Marina Mile Blvd., Suite 106 Fort Lauderdale, FL 33315 Phone: 954-252-2887 Fax: 954-252-2791 Email: info@moeckerauctions.com About Miami Jet Tours Miami Jet Tours, Inc. is a Miami transportation company specializing in private transportation for small and large groups, pre and post cruise transfers, corporate and sporting events, concerts, school trips, churches, weddings, and customized transportation needs. Miami Jet Tours sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10569) on Jan. 25, 2023, with up to $1 million in assets and up to $10 million in liabilities. Rafael Mulkay, president of Miami Jet Tours, signed the petition. Judge Robert A. Mark oversees the case. Zach B. Shelomith, Esq., at Leiderman Shelomith Alexander + Somodevilla, PLLC and Escarpio & Company, LLC are the Debtor's legal counsel and accountant, respectively. MILLERS HOME: Taps Law Office of Jan L. Hammerman as Co-Counsel --------------------------------------------------------------- Millers Home Repair Remodeling & Design received approval from the U.S. Bankruptcy Court for the District of Colorado to hire the Law Office of Jan L. Hammerman as co-counsel with Stuart J. Carr, P.C. The firm's services include: a. providing the Debtor with legal advice with respect to its powers and duties; b. assisting the Debtor in the preparation of a plan of reorganization under Chapter 11; c. filing the necessary pleadings, reports and action that may be required in the continued administration of the Debtor's property under Chapter 11; d. taking necessary actions to enjoin and stay until a final decree the continuation of pending proceedings and to enjoin and stay until a final decree the commencement of lien foreclosure proceedings and all matters as may be provided under Section 362; e. performing all other necessary legal services for the Debtor; and f. coordinating the administration of the Debtor's estate with counsel to individual debtor, Walter Kevin Miller, if he elects to file a petition under Title 11. The firm's current rate is $185 per hour with the likelihood that such rate will increase to $200 per hour effective Aug. 1. As disclosed in court filings, Jan L. Hammerman Law Office represents no interest adverse to the estate in the matter upon which it is to be engaged for the Debtor, according to court filings. The firm can be reached through: Jan L. Hammerman, Esq. Law Office of Jan L. Hammerman PO Box 3446 Englewood, CO 80155 Telephone: (720) 261-8013 Email: jlhammerman111@msn.com About Millers Home Repair Remodeling & Design Millers Home Repair Remodeling & Design sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-10347) on Feb. 1, 2023, with $50,000 in assets and $500,001 to $1 million in liabilities. Stuart J. Carr, P.C. and the Law Office of Jan L Hammerman represent the Debtor as counsel. MOBIQUITY TECHNOLOGIES: Closes $3.75 Million Public Offering ------------------------------------------------------------ Mobiquity Technologies, Inc. announced the closing of its underwritten public offering of shares of common stock and pre-funded warrants, accompanied by Series 2023 Warrants, for gross proceeds of approximately $3.75 million, prior to deducting underwriting discounts and commissions and offering expenses payable by the Company and excluding any exercise of the underwriter's over-allotment option to purchase any additional securities. The proceeds from the offering will enable Mobiquity Technologies to expand its product offerings and enhance its Artificial Intelligence (AI) technology. The Company filed a final prospectus relating to the offering with the Securities and Exchange Commission on Feb. 15, 2023, which describes, among other things, the number and terms of the securities sold in the offering. Spartan Capital Securities, LLC acted as sole bookrunner for this offering. Ruskin Moscou Faltischek P.C. represented the Company and Manatt, Phelps & Phillips, LLP represented Spartan Capital Securities, LLC. About Mobiquity Headquartered in Shoreham, NY, Mobiquity Technologies, Inc. is a next-generation marketing and advertising technology and data intelligence company which operates through its proprietary software platforms in the programmatic advertising space. The Company's product solutions are comprised of two proprietary software platforms: its advertising technology operating system (or ATOS) platform; and its data intelligence platform. Mobiquity reported a net comprehensive loss of $34.95 million for the year ended Dec. 31, 2021, a net comprehensive loss of $15.03 million for the year ended Dec. 31, 2020, and a net comprehensive loss of $44.03 million for the year ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $4.02 million in total assets, $1.83 million in total liabilities, and $2.20 million in total stockholders' equity. Lakewood, Co-based BF Borgers CPA PC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 29, 2022, citing that the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. MULLEN AUTOMOTIVE: Widens Net Loss to $376.9 Million in 1st Quarter ------------------------------------------------------------------- Mullen Automotive Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to common shareholders of $376.91 million for the year ended Dec. 31, 2022, compared to a net loss attributable to common shareholders of $156.05 million for the year ended Dec. 31, 2021. The $220.9 million or 142% increase in net loss attributable to common shareholders was primarily due to a $164.0 million increase in non-cash financing expenses and $59.6 million increase in operating losses for ramping-up development efforts and reflecting the addition expenses from the acquisition of Bollinger Motors and the purchase of ELMS assets. As of Dec. 31, 2022, the Company had $440.95 million in total assets, $420.20 million in total liabilities, and $20.75 million in total stockholders' equity. "As of the date of this Quarterly Report, we have yet to generate any revenue from our business operations. To date, we have funded our capital expenditure and working capital requirements through equity and debt capital...Our ability to successfully commence commercial operations and expand our business will depend on many factors, including our working capital needs, the availability of equity or debt financing and, over time, our ability to generate cash flows from operations," Mullen Automotive stated. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1499961/000155837023001277/muln-20221231x10q.htm About Mullen Mullen Automotive Inc. (fka Net Element Inc.) operates a Southern California-based electric vehicle company that operates in various verticals of businesses focused within the automotive industry. During 2021, the Company completed a merger with Net Element, Inc., a Delaware-incorporated company. The Company changed its name from "Net Element, Inc." to "Mullen Automotive Inc." Mullen Automotive reported a net loss of $740.32 million for the year ended Sept. 30, 2022, compared to a net loss of $44.24 million for the year ended Sept. 30, 2021. Fort Lauderdale, Florida-based Daszkal Bolton LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated Jan. 13, 2023, citing that the Company has sustained net losses, has indebtedness in default, and has a deficiency in working capital of approximately $36.0 million at Sept. 30, 2022, which raise substantial doubt about its ability to continue as a going concern. NAUTICAL SOLUTIONS: Court Approves Bankruptcy Plan -------------------------------------------------- Alex Wolf of Bloomberg Law reports that offshore oil drilling services provider Nautical Solutions LLC won court approval to reorganize in bankruptcy under a plan to reduce the company’s $740 million secured debt load. Nautical Solutions' Chapter 11 plan, approved at a hearing Wednesday, February 15, 2023, in the US Bankruptcy Court for the Southern District of Texas, implements a debt reduction deal the company negotiated for more than a year with a group of lenders before filing for bankruptcy last January 2023. As reported in the TCR, the Debtors have reached a Restructuring Support Agreement with 100% of the Debtors' equity holders and holders of approximately 68% of the First Lien Claims (including 100% of the Noteholders). The key terms of the Restructuring Support Agreement, which are reflected in the Plan, include: * treatment for holders of First Lien Claims, who shall receive: (a) the New Senior Secured Notes; (b) any excess Cash distribution owed and payable in accordance with the New Senior Secured Notes Exchange Agreement; and (c) additional Cash in an amount calculated at a rate of 8.50% per annum on $587,500,000 for the period from September 1, 2022 through the Effective Date, in accordance with the New Senior Secured Notes Exchange Agreement; * an Enhanced Collateral Package for the benefit of the New Senior Secured Noteholders, including, among other things, new Master Services Agreements documenting material shared services and other intercompany arrangements between the Debtors and ECO Affiliates, new IP licensing arrangements, and various undertakings and support agreements; * assumption of the Asset Sale Documents; * repayment in full or reinstatement of all unsecured trade claims; and * reinstatement of all equity interests in the Nautical Solutions. About Nautical Solutions Nautical Solutions is a leading provider of marine operational support services and solutions to petroleum exploration, extraction, and production, oilfield service, and offshore construction customers. Nautical Solutions, L.L.C and Nautical Solutions (Texas) LLC each filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90002) on Jan. 9, 2023. In the petition filed by Charles F. Comeaux, as chief financial officer, Nautical Solutions reported assets and liabilities between $500 million and $1 billion. The Hon. Christopher M. Lopez oversees the cases. KIRKLAND & ELLIS LLP and KIRKLAND & ELLIS INTERNATIONAL LLP serve as the Debtors' general bankruptcy counsel. JACKSON WALKER LLP is the local counsel. JEFFERIES LLC is the Debtors' investment banker and ANKURA CONSULTING GROUP is the financial advisor. KURTZMAN CARSON CONSULTANTS LLC is the claims agent. NORMANDIE LOFTS: Seeks to Hire Leslie Cohen Law as Counsel ---------------------------------------------------------- Normandie Lofts KTown, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Leslie Cohen Law, PC to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor regarding its rights and responsibilities under the U.S. Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules, and how the application of such provisions relates to the administration of the Debtor's estate; b. assisting the Debtor in the preparation of certain documents to be filed with the bankruptcy court or the Office of the U.S. Trustee; c. representing the Debtor, with respect to bankruptcy issues, in the context of its pending Chapter 11 case and representing the Debtor in contested matters; d. assisting in the negotiation, formulation and confirmation of a plan of reorganization; and e. rendering services for the purpose of pursuing, litigating or settling litigation. The firm's hourly rates are as follows: Leslie Cohen, Esq. $625 per hour J'aime Williams, Esq. $430 per hour Senior Contract Attorneys $350 per hour Paralegals $175 per hour Paraprofessionals $110 per hour Leslie Cohen Law received a pre-bankruptcy retainer of $45,000, which was paid by non-debtor Strategic Realty Holdings. Leslie Cohen, Esq., president and sole shareholder of Leslie Cohen Law, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Leslie A. Cohen, Esq. J'aime K. Williams Esq. Leslie Cohen Law, PC 506 Santa Monica Blvd., Suite 200 Santa Monica, CA 90401 Tel.: (310) 394-5900 Fax: (310) 394-9280 Email: leslie@lesliecohenlaw.com jaime@lesliecohenlaw.com About Normandie Lofts KTown Normandie Lofts KTown, LLC is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). The company is based in Calabasas Calif. Normandie Lofts KTown filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10125) on Jan. 30, 2023, with $1 million to $10 million in assets and $10 million to $50 million in liabilities. Edward Lorin, manager, signed the petition. Judge Martin R. Barash oversees the case. The Debtor is represented by Leslie A. Cohen, Esq. at Leslie Cohen Law, PC. NUZEE INC: Incurs $2.2 Million Net Loss in First Quarter -------------------------------------------------------- NuZee, Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.18 million on $1.14 million of net revenues for the three months ended Dec. 31, 2022, compared to a net loss of $2.80 million on $1.02 million of net revenues for the three months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $10.05 million in total assets, $2.11 million in total liabilities, and $7.93 million in total stockholders' equity. NuZee stated, "Since our inception in 2011, we have incurred significant losses, and as of December 31, 2022, we had an accumulated deficit of approximately $67 million. We have not yet achieved profitability and anticipate that we will continue to incur significant sales and marketing expenses prior to recording sufficient revenue from our operations to offset these expenses. In the United States, we expect to incur additional losses because of the costs associated with operating as an exchange-listed public company. We are unable to predict the extent of any future losses or when we will become profitable, if at all. "To date, we have funded our operations primarily with proceeds from registered public offerings and private placements of shares of our common stock and other equity securities. Our principal use of cash is to fund our operations, which includes the commercialization of our single serve coffee products, the continuation of efforts to improve our products, administrative support of our operations and other working capital requirements. "As of December 31, 2022, we had a cash balance of $6,491,819. Considering our current cash resources and our current and expected levels of operating expenses, we believe that our cash and cash equivalents will be sufficient to fund our planned operations for at least nine months from February 13, 2023 but expect to need additional capital to fund our planned operations beyond that. This evaluation is based on relevant conditions and events that are currently known or reasonably knowable. A reduction in consumer demand for, or revenues from the sale of, our single serve coffee products could further constrain our cash resources. We have based these estimates on assumptions that may prove to be wrong, and our operating projections, including our projected revenues from sales of our single serve coffee products, may change as a result of many factors currently unknown to us." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1527613/000149315223004495/form10-q.htm About NuZee NuZee, Inc. (d/b/a Coffee Blenders) is a co-packing company for single serve coffee formats that partners with companies to help them develop within the single serve and private label coffee category. Nuzee reported a net loss of $11.80 million for the year ended Sept. 30, 2022, a net loss of $18.55 million for the year ended Sept. 30, 2021, a net loss of $9.52 million for the year ended Sept. 30, 2020, and a net loss of $12.21 million for the year ended Sept. 30, 2019. As of Sept. 30, 2022, the Company had $11.71 million in total assets, $1.97 million in total liabilities, and $9.74 million in total stockholders' equity. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2013, issued a "going concern" qualification in its report dated Dec. 23, 2022, citing that the Company has suffered recurring losses and negative cash flows from operations that raises substantial doubt about its ability to continue as a going concern. PELLETIER MANAGEMENT: Taps Katheryn Kihle of Bakken as Broker ------------------------------------------------------------- Pelletier Management and Consulting, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Katheryn Kihle, a real estate broker at Re/Max Bakken Realty. The Debtor requires a broker to market and sell its properties located at 110 Iowa Ave., and 406 1st St., in Flaxton, N.D. Miss Kihle disclosed in a court filing that RE/MAX Bakken Realty is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Katheryn Kihle RE/MAX Bakken Realty 1135 2nd Avenue West Suite 201 Williston, ND 58801-5918 Tel: (701) 580-8116 About Pelletier Management and Consulting Ohio-based Pelletier Management and Consulting, LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Case No. 22-31296) on Sept. 16, 2022, with between $500,000 and $1 million in assets and between $1 million and $10 million in liabilities. Donald W. Mallory has been appointed as Subchapter V trustee. Judge Beth A. Buchanan oversees the case. The Debtor is represented by Patricia J. Friesinger, Esq., at Coolidge Wall Co., LPA. PHOENIX SERVICES: Exclusivity Period Extended to April 25 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended the time Phoenix Services Topco, LLC and its affiliates can keep exclusive control of their Chapter 11 cases, giving the companies until April 25 to file a bankruptcy plan and until June 26 to solicit votes on that plan. The companies have already begun the process of formulating a bankruptcy plan and expect to file that plan and related documents in the coming weeks. The extension will allow the companies to finalize their plan and also make final modifications to their customer contracts necessary for their long-term viability, according to court filings. About Phoenix Services Topco Phoenix Services Topco, LLC provides services to global steel-producing companies, including the removal, handling, and processing of molten slag at customer sites, and the preparation and transportation of metal scraps, raw materials, and finished products. Phoenix Services Topco and eight affiliates, including Phoenix Services Holdings Corp., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10906) on Sept. 27, 2022. In the petitions signed by its chief financial officer, Robert A. Richard, Phoenix Services Topco disclosed $500 million to $1 billion in both assets and liabilities. Judge Mary J. Walrath oversees the cases. The Debtors tapped Weil, Gotshal, and Manges, LLP and Richards Layton & Finger, P.A. as legal counsels; AlixPartners, LLP as financial advisor; PJT Partners, Inc. as investment banker; and Stretto, Inc. as claims and noticing agent and administrative advisor. Barclays Bank PLC, as DIP and First Lien Group lender, is represented by Gibson, Dunn & Crutcher LLP while Credit Suisse Loan Funding LLC, as DIP lender, is represented by Pachulski Stang Ziehl & Jones, LLP. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Oct. 11, 2022. Squire Patton Boggs (US), LLP, Cole Schotz, P.C. and FTI Consulting, Inc. serve as the committee's lead bankruptcy counsel, Delaware counsel and financial advisor, respectively. RAGSTER INVESTMENT: Unsecureds Will Get 10% of Claims in 36 Months ------------------------------------------------------------------ Ragster Investment Group, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Texas a Plan of Reorganization under Subchapter V dated February 20, 2023. The Debtor owns and operates a trucking business. Debtor's income was reduced as a result of COVID-19 and related increases in expenses. The Debtor was unable to cover all expenses and was facing potential repossessions of vehicles integral to business operations, which led to the filing of this Case. According to the Debtor's Schedules filed in this Case, the Debtor's liabilities (excluding Administrative Expense Claims) totaled $2,503,194.65 as of the Petition Date. Secured Proofs of Claim total $2,032,918. The Debtor scheduled total non-priority Unsecured Claims of $191,744.00. Under the Plan the Debtor will pay 100% of Allowed Secured Claims and 10% of Allowed Unsecured Claims. Class 18 Claims consists of Allowed General Unsecured Claims. Class 18 Claimants shall be paid 10% of their Claims over 36 months from the Effective Date, without interest. These Claims will be paid in equal monthly installments commencing on the first day of the first month following the Effective Date and continuing on the first day of each month thereafter. These Claims are Impaired, and the holders of these Claims are entitled to vote to accept or reject the Plan. Class 19 Equity Interests shall be retained. The Debtor intends to make all payments required under the Plan from available cash and income from the business operations of the Debtor. The Debtor believes that the Plan is feasible because all creditors with Allowed Claims will be paid under fair and equitable terms. On the Confirmation Date of the Plan, all property of the Estate shall vest in the Debtor pursuant to sections 1141(b) and (c) of the Bankruptcy Code, free and clear of all Claims and interests except as otherwise provided in this Plan. This Plan will evidence the release of any and all Liens or encumbrances against all property dealt with by the Plan, unless such Lien or encumbrance is specifically retained in the Plan. A full-text copy of the Plan of Reorganization dated February 20, 2023 is available at https://bit.ly/3IhQGTk from PacerMonitor.com at no charge. Attorneys for Debtor: Joyce W. Lindauer, Esq. Joyce W. Lindauer Attorney, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 Facsimile: (972) 503-4034 Email: joyce@joycelindauer.com About Ragster Investment Group Ragster Investment Group, Inc., owns and operates a trucking business. Ragster Investment Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-42825) on Nov. 22, 2022. In the petition signed by Timothy Ragster, chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Edward L. Morris oversees the case. Joyce Lindauer, Esq., at JOYCE W. LINDAUER ATTORNEY, PLLC, is the Debtor's legal counsel. RAMARAMA INC: Seeks Cash Collateral Access ------------------------------------------ Ramarama, Inc. asks the U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, for authority to use cash collateral. The Debtor requires the use of cash collateral to pay certain necessary operating expenses and avoid irreparable harm to the bankruptcy estate. Prior to the Petition Date, and in connection with a refinance of existing indebtedness associated with the Ellis Road Development, the Debtor obtained: -- a Promissory Note in the aggregate principal amount of $600,000 in favor of, inter alia, a group of individuals, payment of which was secured by a lien and encumbrance on the Ellis Road Development. -- a Promissory Note in the aggregate principal amount of $55,000 in favor of Albert E. Baptist, Jr., repayment of which was secured by a lien and encumbrance on the Ellis Road Development. The single-family residence located on the Ellis Road Development has been, and currently remains, leased on a month-to-month periodic basis by two separate and unrelated individuals, who remit a monthly rental payment to the Debtor in the amount of $700 each, for a total aggregate rental payment received by the Debtor of $1,400 per month. The Debtor proposes that the Cash Collateral Creditors, whose cash collateral is utilized by the Debtor, have a continuing post-petition replacement lien and security interest in all property and categories of property of the same extent, validity, and priority as said creditor held pre-petition. The validity, enforceability, and perfection of the postpetition replacement liens will be immediately deemed perfected, without the need for any further action on the part of creditors. A copy of the motion is available at https://bit.ly/3Ip7qIb from PacerMonitor.com. About Ramarama Inc. Ramarama Inc. acquires, develops, and sells distressed residential and commercial properties. Ramarama Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-00107) on Jan. 13, 2023. In the petition filed by Mark Bullock, as president, the Debtor reported assets and liabilities between $1 million and $10 million. The Debtor is represented by Joseph Zachary Frost, Esq., at Buckmiller, Boyette & Frost, PLLC. RED VENTURES: S&P Rates New $850MM Secured Term Loan B 'BB-' ------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '3' recovery rating to Red Ventures Holdco L.P.'s financing subsidiaries Red Ventures LLC and New Imagitas Inc.'s proposed $850 million senior secured term loan B due 2030. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in the event of a payment default. Red Ventures will use the proceeds alongside expected borrowings on its recently upsized $1.02 billion revolving credit facility ($272 million outstanding) to refinance it $1.22 billion outstanding senior secured term loan due 2024. S&P said, "All our existing ratings on Red Ventures, including our 'BB-' issuer credit rating and stable outlook, are unchanged. The term loan refinancing is leverage neutral. We expect Red Ventures' S&P Global Ratings' adjusted leverage to decline to 2.6x-2.8x by the end 2023 from our expectations of 3.5x-3.7x in 2022, as recent cost reductions will offset revenue softness caused by macroeconomic weakness over the next 12 months. Although we expect leverage below our upgrade threshold of 3x by the end of 2023, we would need to see the company establish a track record and show a commitment to maintaining leverage below 3x to raise our ratings." Key analytical factors -- The company's capital structure comprises a proposed $100 million accounts receivable securitization facility (not rated), $1.02 billion first-lien revolving credit facility due in 2027, and the proposed $850 million first-lien term loan B due in 2030. -- Red Ventures LLC and New Imagitas Inc. are coborrowers of the credit facility. -- The credit facility is secured by a lien on substantially all of the coborrowers' and guarantors' capital stock and tangible and intangible property (subject to 65% of the voting stock of the first-tier foreign subsidiary and other excluded assets). Simulated default assumptions -- S&P's scenario considers a default in 2027 because of a sharp decline in advertising and marketing spending (due to economic weakness) and key client losses or pricing pressure (due to increased competition). -- Other default assumptions include a 60% draw on the accounts receivable securitization facility and an 85% draw on the revolving credit facility. The spread on the revolving credit facility rises to 5% as the company obtains covenant amendments. All debt includes six months of prepetition interest. -- S&P valued Red Ventures on a going-concern basis using a 6.5x multiple of its projected emergence EBITDA, which is in line with what it uses for peers of a similar size and business strength. Simplified waterfall -- EBITDA at emergence: $207 million -- EBITDA multiple: 6.5x -- Gross enterprise value: $1.35 billion -- Net enterprise value (after 5% administrative costs): $1.3 billion -- Estimated priority debt claims: $60 million -- Value available for senior secured debt claims: $1.2 billion -- Estimated senior secured debt claims: $1.8 billion --Recovery expectations: 50%-70% (rounded estimate: 65%) REGIONAL HEALTH: Declares Dividend Payable on Feb. 28 ----------------------------------------------------- Regional Health Properties, Inc. announced that its Board of Directors declared a dividend of one one-thousandth (1/1,000th) of a share of the Company's newly-designated Series E Redeemable Preferred Shares, no par value per share, for each outstanding share of the Company's common stock, payable on Feb. 28, 2023 to shareholders of record as of 5:00 p.m. Eastern Time on Feb. 27, 2023. The outstanding shares of Series E Preferred Stock will vote together with the outstanding shares of Common Stock, as a single class, exclusively with respect to (a) any proposal submitted to holders of Common Stock to amend the Company's Amended and Restated Articles of Incorporation to (i) make certain changes to the terms of the Company's 10.875% Series A Cumulative Redeemable Preferred Shares and (ii) temporarily increase the authorized number of shares of the Company (including the authorized shares of the Company's preferred stock), and (b) any proposal to adjourn any meeting of shareholders called for the purpose of voting on the Charter Amendment Proposal, and will not be entitled to vote on any other matter, except to the extent required under the Georgia Business Corporation Code. Subject to certain limitations, each outstanding share of Series E Preferred Stock will have 1,000,000 votes per share (or 1,000 votes per one one-thousandth of a share of Series E Preferred Stock). All shares of Series E Preferred Stock that are not present in person or by proxy at any meeting of shareholders held to vote on the above-described proposals as of immediately prior to the opening of the polls on the Charter Amendment Proposal at such meeting will automatically be redeemed by the Company. Any outstanding shares of Series E Preferred Stock that have not been so redeemed will be redeemed if such redemption is ordered by the Company's Board of Directors or automatically upon the approval by the Company's shareholders of the Charter Amendment Proposal. The Series E Preferred Stock will be uncertificated, and no shares of Series E Preferred Stock may be transferred by the holder thereof except in connection with a transfer by such holder of any shares of Common Stock held by such holder. In that case, a number of one one-thousandths of a share of Series E Preferred Stock equal to the number of shares of Common Stock to be transferred by such holder will be automatically transferred to the transferee of such shares of Common Stock. About Regional Health Properties Regional Health Properties, Inc. (NYSE American: RHE) (NYSE American: RHEpA) -- http://www.regionalhealthproperties.com-- is a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term healthcare through facility lease and sub-lease transactions. Regional Health a net loss of $1.18 million for the year ended Dec. 31, 2021, and a net loss of $688,000 for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $95.42 million in total assets, $89.52 million in total liabilities, and $5.90 million in total stockholders' equity. Regional Health said it received a notice from NYSE American on Jan. 3, 2023 that the Company is not in compliance with the continued listing standard set forth in Section 704 of the NYSE American Company Guide due to the Company's failure to hold an annual meeting of shareholders for the fiscal year ended Dec. 31, 2021 on or before Dec. 31, 2022. RENNASENTIENT INC: Case Summary & Six Unsecured Creditors --------------------------------------------------------- Debtor: Rennasentient, Inc. DBA AlphaGraphics 301 Ashville Avenue Suite 121 Cary, NC 27518 Chapter 11 Petition Date: February 21, 2023 Court: United States Bankruptcy Court Eastern District of North Carolina Case No.: 23-00485 Debtor's Counsel: Philip M. Sasser, Esq. SASSER LAW FIRM 2000 Regency Parkway Suite 230 Cary, NC 27518 Tel: 919-319-7400 Fax: 919-657-7400 Email: travis@sasserbankruptcy.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Eric Webb 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/TUBH76A/Rennasentient_Inc__ncebke-23-00485__0001.0.pdf?mcid=tGE4TAMA REVERE POWER: S&P Affirms 'B-' Rating on Senior Secured Debt ------------------------------------------------------------ S&P Global Ratings affirmed its 'B-' rating on the senior secured debt of Revere Power LLC and its 'B' rating on the senior secured debt of Kestrel Acquisition LLC. The outlooks are negative for Revere and Kestrel. S&P said, "We completed our review of the aforementioned projects and determined that their credit quality is not affected by the updated criteria. We affirmed our 'B-' rating on Revere's senior secured debt and our 'B' rating on Kestrel's senior secured debt. An affirmation implies that our view of the credit risks of both projects has not changed because of the criteria update. We will continue to monitor developments pertaining to these entities and provide an updated credit opinion, as and when necessary." Outlook (Revere Power LLC) S&P said, "The negative outlook reflects the possibility that we will lower the rating if Revere becomes vulnerable to unfavorable business, financial, and economic conditions in meeting its financial commitments. This could occur if upcoming capacity prices or energy margins do not improve from projected levels, which would lead to lower-than-expected sweeps, and potentially challenge the maturity extension of the revolving credit facility (RCF). If the project was not able to extend the maturity of its RCF due March 2024, this could affect our assessment of Revere's liquidity and lead to further negative rating actions. "We could lower our rating if Revere becomes vulnerable to unfavorable business, financial, and economic conditions, which would limit its ability to meet its financial commitments. This could occur if upcoming capacity price, energy margins, or operational performance negatively affect cash flow generation, which in turn would lead to a higher-than-projected term loan B (TLB) balance at maturity and greater pressure on refinancing. We could also lower the rating if we view the project as having constrained liquidity or if it violates its financial covenants. "Although unlikely in the near term, we could revise the outlook to stable if the minimum debt service coverage ratio (DSCR) rises above 1.1x on a sustained basis and we believe that the project's refinancing prospects have improved. This could occur due to higher-than-expected capacity payments in uncleared periods or materially higher performance in terms of cash flow sweep because of better energy margins." Outlook (Kestrel Acquisition LLC) S&P said, "The negative outlook reflects the possibility that Kestrel could underperform our base-case scenario in the near term by generating weak DSCRs and failing to sweep any cash against its term loan over the next several quarters. We expect about $375 million outstanding on the term loan at maturity in mid-2025, resulting in a 1.11x minimum DSCR over the life of the asset." S&P could lower the rating if its expectation for the project's financial performance over the life of the asset worsened. This would likely result from the project sweeping less cash than we expect against the term loan, such that the balance at maturity exceeded our current expectation of about $375 million. This failure to sweep could stem from lower future PJM capacity auction results compared with our expectation, a deterioration in forecast energy margins if spark spreads do not rebound, or unexpected operational issues that lead to forced outages. S&P said, "We could revise the outlook to stable if Kestrel realized a minimum DSCR above 1.25x over the life of the project. This could stem from a secular improvement in power and capacity prices in PJM or outperformance of the gas-optimization plan. We could raise the rating if the project materially reduced market exposure while maintaining similar DSCRs by signing an offtake contract or entering a hedge that we think materially supports creditworthiness." REVLON INC: Gets Approval to Hire Kroll LLC as Valuation Advisor ---------------------------------------------------------------- Revlon, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Kroll, LLC as valuation advisor. The firm's services include: 1) Goodwill Impairment Testing -- ASC 350. Pursuant to the terms and conditions of the Engagement Letter, Kroll will estimate the fair value of certain reporting units, on a value basis consistent with the carrying amounts of such reporting units determined by the Debtors as of Oct 1, 2022 (the Valuation Date). The services provided by Kroll will be used for financial reporting purposes to assist the Debtors with their goodwill impairment test and the application of the quantitative Step 1 of Accounting Standards Codification Topic 350, Intangibles-Goodwill, and Other, which requires, in part, the determination of the fair value of reporting units. Kroll will estimate the fair value of the following reporting units as of the Valuation Date: -- Fragrances -- Professional Portfolio, -- Elizabeth Arden Skin, -- Elizabeth Arden Fragrances, and -- Revlon The impairment test will also be performed for certain of the Debtors' indefinite-lived assets, which include the following five trade names: -- American Crew, -- Elizabeth Arden Branded Products, -- Cutex, -- Eight Hour Cream, and -- Revlon 2) Recoverability Test for Long-Lived Assets – ASC 360. Kroll will also provide services to assist the Debtors with their impairment testing of certain long-lived assets under Accounting Standards Codification Section 360-10-35, Impairment and disposal of long-lived assets, which requires, in part, first performing a recoverability test for the long-lived asset (or asset group) when certain impairment indicators are present, and then performing a fair value test for those long-lived assets (or asset groups) that failed the recoverability test, by estimating their fair values. Kroll will perform impairment testing for long-lived assets within the following asset groups: -- Fragrances and customer relationships, -- Professional Portfolio and trade names, -- Elizabeth Arden Skin and trade names, -- Elizabeth Arden Fragrances and trade names, and -- Revlon and trade names Kroll will be compensated, subject to court approval, as follows: (a) a fixed fee of $75,000, excluding direct engagement and administrative expenses, (b) 5 percent of Kroll's fees for unallocated expenses; and (c) legal fees relating to Kroll's retention and compensation, including legal fees totaling $23,650, incurred for its services during August, September and October 2022. If the recoverability test under ASC 360 needs to be performed for the asset groups, the incremental fees will be $12,000. Any later consultations with the Debtors' auditor and any third parties will be billed on an hourly basis, subject to further court approval. As disclosed in court filings, Kroll is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: John Walsh Kroll, LLC 55 East 52nd Street 17 Fl New York NY 10055 Phone: +1 212 593 1000 About Revlon Inc. Revlon Inc. manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; antiperspirant deodorants; and other beauty care products. Today, Revlon's diversified portfolio of brands is sold in approximately 150 countries around the world in most retail distribution channels, including prestige, salon, mass, and online. Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high-quality product innovation, performance and sophisticated glamour. In 2016, Revlon acquired the iconic Elizabeth Arden company and its portfolio of brands, including its leading designer, heritage and celebrity fragrances. Revlon is among the leading global beauty companies, with some of the world's most iconic and desired brands and product offerings in color cosmetics, skin care, hair color, hair care and fragrances under brands such as Revlon, Revlon Professional, Elizabeth Arden, Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos, Christina Aguilera and AllSaints. Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay, Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also sought bankruptcy protection on June 15 and June 16, 2022. Revlon disclosed total assets of $2,328,093,000 against total liabilities of $3,689,240,395 as of April 30, 2022. The Hon. David S. Jones is the case judge. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as bankruptcy counsel; Mololamken, LLC as special litigation counsel; PJT Partners, LP as investment banker; KPMG, LLP as tax services provider; and Alvarez & Marsal North America, LLC as restructuring advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal serve as the Debtors' chief restructuring officer and interim chief financial officer, respectively. Meanwhile, Kroll Restructuring Administration, LLC is the Debtors' claims agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province, LLC and Houlihan Lokey Capital, Inc. serve as the committee's legal counsel, financial advisor and investment banker, respectively. On Dec. 23, 2022, the Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement. REVLON INC: Lenders Face Setback in Collateral Stripping Fight -------------------------------------------------------------- In the adversary proceeding, AIMCO CLO 10 LTD, et al., v. REVLON, INC., et al., Adv. Pro. No. 22-01167, In re Chapter 11 REVLON, INC., et al., (Bankr. S.D.N.Y. Case No. 22-10760), lenders to Revlon Inc., lost in their lawsuit over their claims that Revlon's 2020 transaction with Jefferies Finance LLC improperly stripped the 2016 term lenders of the collateral securing their loans. According to Bloomberg, Judge David S. Jones said in a Feb. 14, 2023 decision that a group of creditors, which includes Brigade Capital Management and Antara Capital, cannot force Revlon to unwind the deal through a lawsuit in bankruptcy court. In a hearing Feb. 14, Judge Jones indicated that similar claims against rival Revlon lenders may be moot as well, Bloomberg reported. In September 2016, Revlon acquired the beauty brand Elizabeth Arden for $1.03 billion. To finance the acquisition, Debtor Revlon Consumer Products Corporation ("RCPC") entered into a 2016 "Credit Agreement" which included a secured $1.8 billion term loan facility and provisions for the issuance of supplemental revolver loans to fund RCPC's business operations. Plaintiffs claim to hold interests in more than 50% of the term loans outstanding under the 2016 Credit Agreement. Part of the collateral that secured the term loans was Revlon's intellectual property assets, including its trademarks and other rights associated with many of the best known, most well-established beauty brands in the world. Prior to the onset of the COVID-19 pandemic, Debtors underwent a prolonged period of declining customer demand. This downturn worsened considerably during the COVID-19 pandemic. The Debtors experienced a significant decline in net sales in a majority of their business segments and regions. Beginning in 2019, Debtors explored and implemented a variety of financing and other corporate transactions to address their capital structure. Two of these transactions were the 2019 "Ares Financing" and the 2020 "BrandCo Facilities", both of which are the subject of this lawsuit. In addition, a nearly $1 billion mistaken payment to lenders by Citibank, N.A., the Administrative Agent for the 2016 Term Loans, caused significant uncertainty and complexity for the Debtors' capital structure. Notwithstanding Debtors' efforts to overcome these challenges, significant liquidity and operational issues forced Debtors to commence Chapter 11 cases. On Oct. 31, 2022, the 2016 lenders commenced the adversary proceeding challenging the 2020 BrandCo Transaction. The defendants are numerous debtor and non-debtor entities that Plaintiffs allege orchestrated a scheme "to improperly manipulate Revlon's capital structure and strip hundreds of millions of dollars of collateral that should be available to secure Plaintiffs' claims in these bankruptcy cases." The plaintiffs are Aimco CLO 10 Ltd, Aimco CLO, Series 2017-A, Aimco CLO, Series 2018-B, Aimco CLO, Series 2015-A, Aimco CLO, Series 2018-A, Allstate Insurance Company, Antara Capital Master Fund LP, Halcyon Loan Advisors Funding 2013-1 Ltd, Halcyon Loan Advisors Funding 2013-2 Ltd, Halcyon Loan Advisors Funding 2014-1 Ltd, Halcyon Loan Advisors Funding 2014-2 Ltd, Halcyon Loan Advisors Funding 2014-3 Ltd, Halcyon Loan Advisors Funding 2015-1 Ltd, Halcyon Loan Advisors Funding 2015-2 Ltd, Halcyon Loan Advisors Funding 2015-3 Ltd, Halcyon Loan Advisors Funding 2017-1 Ltd, Halcyon Loan Advisors Funding 2017-2 Ltd, Benefit Street Partners CLO II Ltd, Benefit Street Partners CLO III Ltd, Benefit Street Partners CLO IV Ltd, Benefit Street Partners CLO IX Ltd, Benefit Street Partners CLO V Ltd, Benefit Street Partners CLO VI-B, Ltd, Benefit Street Partners CLO VII Ltd, Benefit Street Partners CLO VIII Ltd, Benefit Street Partners CLO X Ltd, Benefit Street Partners CLO XII Ltd, Acis CLO 2014-5 Ltd, Battalion CLO IX Ltd, Battalion CLO VII Ltd, Battalion CLO VIII Ltd, Battalion CLO X Ltd, Battalion CLO XI Ltd, Battalion CLO XII Ltd, Battalion CLO XIV Ltd, Big River Group Fund Spc LLC, Blue Falcon Limited, Brigade Collective Investment Trust - Brigade Diversified Credit Cit, Brigade Credit Fund II Ltd, Brigade Debt Funding I, Ltd, Brigade Debt Funding II, Ltd., Brigade Distressed Value Master Fund Ltd, Brigade Opportunistic Credit Lbg Fund Ltd, City Of Phoenix Employees Retirement Plan, Delta Master Trust, FCA Canada Inc. Elected Master Trust, FCA UU LLC Master Retirement Trust, FedEx Corporation Employees Pension Trust, Future Directions Credit Opportunities Fund, Illinois State Board of Investment, JPMorgan Chase Retirement Plan Brigade Bank Loan, JPMorgan Chase Retirement Plan Brigade Hy Bond, Los Angeles County Employees Retirement Association, Mediolanum Best Brands Global High Yield, Northrop Grumman Pension Master Trust (Account A - Hy), Panther Bcm, LLC - Class A, SC Credit Opportunities Mandate, LLC, SEI Global Master Fund Plc The Sei High Yield Fixed Income Fund, SEI Institutional Investments Trust - High Yield Bond Fund, SEI Institutional Managed Trust - High Yield Bond Fund, SEI Institutional Managed Trust - Multi-Strategy Alternative Fund, The Coca-Cola Company Master Retirement Trust, U.S. High Yield Bond Fund, Castleknight Master Fund LP, Corre Opportunities Qualified Master Fund LP, Corre Horizon Fund, LP, Corre Horizon II Fund, LP, Ellington CLO II Ltd, Ellington CLO I Ltd, Ellington CLO III Ltd, Greywolf CLO II Ltd, Greywolf CLO IV Ltd (Re-Issue), Greywolf CLO V Ltd, Arch Investment Holdings IV Ltd, Cardinal Fund LP, Gim Credit Master Lux Sarl, HPS Loan Management 10 2016 Ltd, HPS Loan Management 11 2017 Ltd, HPS Loan Management 2013 2 Ltd, HPS Loan Management 3 2014 Ltd, HPS Loan Management 4 2014 Ltd, HPS Loan Management 5 2015 Ltd, HPS Loan Management 6 2015 Ltd, HPS Loan Management 7 2015 Ltd, HPS Loan Management 8 2016 Ltd, HPS Loan Management 9 2016 Ltd, Institutional Credit Fund Subsidiary LP, Liquid Loan Opportunities Master Fund LP, Watford Asset Trust I, Zurich American Life Insurance Company - Zalico VL Series Account - 2, Zurich American Insurance Company, Livello Capital Special Opportunities Master Fund LP, JMP Credit Advisors CLO III R Ltd, JMP Credit Advisors CLO IV Ltd, JMP Credit Advisors CLO V Ltd, Venture 28a CLO Limited, Venture 31 CLO Limited, Venture 32 CLO Limited, Venture 33 CLO Limited, Venture XII CLO Limited, Venture XIII CLO Limited, Venture XIV CLO Limited, Venture XIX CLO Limited, Venture XV CLO Limited, Venture XVI CLO Limited, Venture XVII CLO Limited, Venture XVIII CLO Limited, Venture XX CLO Limited, Venture XXI CLO Limited, Venture XXII CLO Limited, Venture XXIII CLO Limited, Venture XXIX CLO Limited, Venture XXV CLO Limited, Venture XXX CLO Limited, New Generation Loan Fund Limited Partnership, Nuveen Asset Management, LLC, Nuveen Alternative Investment Funds SICAV-SIF - Nuveen US Senior Loan Fund, Nuveen High Yield Income Fund, LP, Nuveen Long-Short Credit Fund, LP, Nuveen Senior Loan Fund, LP, California Street CLO IX Limited Partnership, California Street CLO XII, Ltd., Municipal Employees Annuity and Benefit Fund of Chicago, Nuveen Credit Strategies Income Fund, Nuveen Diversified Dividend and Income Fund, Nuveen Floating Rate Income Opportunity Fund, Nuveen Floating Rate Income Fund, Nuveen Senior Income Fund, Nuveen Short Duration Credit Opportunities Fund, Nuveen Floating Rate Income Fund, Nuveen High Yield Income Fund, Pensiondanmark Pensionsforsikringsaktieselskab - Pensiondanmark Pensionsforsikringsaktieselskab, Principal Diversified Real Asset Cit, Principal Diversified Real Asset Fund, SCOF 2, Ltd, Symphony CLO XIV, Ltd, Symphony CLO XV, Ltd, Symphony CLO XVI, Ltd., Symphony CLO XVII, Ltd, Symphony CLO XVIII, Ltd, Symphony Floating Rate Senior Loan Fund, TCI-Symphony CLO 2016-1, Ltd, TCI-Symphony CLO 2017-1, Ltd, ZAIS CLO 1 Limited, ZAIS CLO 11 Limited, ZAIS CLO 2 Limited, ZAIS CLO 5 Limited, ZAIS CLO 6 Limited, ZAIS CLO 7 Limited, ZAIS CLO 8 Limited, ZAIS CLO 9 Limited, ZAIS CLO 13 Limited, Cedar Funding II CLO Ltd, Cedar Funding IV CLO Ltd, Cedar Funding V CLO Ltd, Cedar Funding VI CLO Ltd, and Cedar Funding VIII CLO Ltd. The defendants are Revlon, Inc., Revlon Consumer Products Co., Beautyge I, Beautyge II, LLC, BrandCo Almay 2020 LLC, BrandCo Charlie 2020 LLC, BrandCo CND 2020 LLC, BrandCo Curve 2020 LLC, BrandCo Elizabeth Arden 2020 LLC, BrandCo Giorgio Beverly Hills 2020 LLC, BrandCo Halston 2020 LLC, Brandco Jean Nate 200 LLC, BrandCo Mitchum 2020 LLC, BrandCo Multicultural Group 2020 LLC, BrandCo PS 2020 LLC, BrandCo White Shoulders 2020 LLC, Jefferies Finance LLC, Jefferies LLC, Ares Corporate Opportunities Fund V LP, ASOF Holdings II LP, ASSF IV AIV B Holdings III LP, Angelo, Gordon & Co LP, Cyrus Capital Partners LP, Deutsche Bank Ag Cayman Islands Branch, Diameter Capital Partners LP, Glendon Capital Management LP, King Street Capital Management, LP, Nut Tree Capital Management LP, Oak Hill Advisors LP, and 140 Summer Partners Master Fund LP, Plaintiffs ask the Bankruptcy Court to unwind the 2020 BrandCo Transaction and restore the 2016 Term Loan Facility agent's first-priority liens on all intellectual property that Revlon used as collateral to facilitate the 2020 BrandCo Transaction. All Defendants have moved to dismiss the Complaint, with three separate motions before the Court (the "Motions"), filed, respectively, on behalf of defendants who are Debtors, the Jefferies Defendants, and the BrandCo Lenders. The Debtors ask the Court to dismiss all claims for equitable relief asserted against the Debtors, including any claims seeking specific performance, injunctive relief, or declaratory relief that specified agreements are "void" or should be "rescinded" (the First through Tenth and Twelfth through Seventeenth Causes of Action, collectively, the "Equitable Relief Claims"), or in the alternative, striking all Equitable Relief Claims pursuant to Fed. R. Civ. P. 12(b)(6) and 12(f) and Fed. R. Bankr. P. 7012. The Jefferies Defendants and the BrandCo Lenders also challenge the availability of equitable relief and argue that the Complaint fails to state claims for relief as against them under applicable state and federal law. Plaintiffs oppose the Motions. The Adversary Proceeding arises against the backdrop of Debtors' effort to obtain prompt confirmation of a plan of reorganization that it hopes will allow it to resume profitable operations, put more sustainable financing in place, and stop incurring the enormous costs associated with remaining in bankruptcy. At argument on Feb. 2, notwithstanding that the non-debtor Defendants' motions did not discuss the standing doctrine that is the basis of this ruling as to Debtor Defendants' Motion, counsel for Debtors contended that a grant of Debtors' Motion based on Debtors' standing-based arguments would logically support dismissal of the Complaint in its entirety (Tr. 119:25–120:2; 120:13–14; 228:23–25), and counsel for Plaintiffs at least appeared to agree (Tr. 233:11–234:2). The Court concludes that Plaintiffs' Equitable Relief Claims against the Debtor Defendants impermissibly "attempt[] to use inventive pleading to sidestep the automatic stay[.]" Sec. Inv. Prot. Corp. v. Bernard L. Madoff Inv. Sec. LLC, 477 B.R. 351, 354 (Bankr. S.D.N.Y. 2012). Plaintiffs' Equitable Relief Claims are derivative of claims that belong exclusively to Debtors' bankruptcy estates. Accordingly, the Debtor Defendants' Motion is GRANTED and Plaintiffs' Complaint as to the Debtor Defendants is dismissed. "Despite their insistence that they seek to remedy an injury that is particularized to them, examination of the Complaint reveals that Plaintiffs are mounting an attack on the key underpinnings of Debtors' current capital structure and possible estate entitlements, an effort that in substance replicates the fraudulent transfer and potential similar estate claims that the UCC and the estate have investigated and provisionally settled, all hinging especially on the 2020 BrandCo Transaction. Plaintiffs' claims for equitable relief thus entirely overlap with claims and proposed forms of relief that either were, or could have been, sought by the UCC or any other authorized estate representative regarding fraudulent transfers, preferences, or other voidable transactions by which the BrandCo Lenders acquired their interests in estate property. Again, every single one of the Complaint’s equitable claims against the Debtor and other Defendants seeks to invalidate, void, set aside, or override aspects of the 2020 BrandCo Transaction, as could indisputably have been done through the UCC's investigation and negotiations if legally and factually supportable. This specifically includes Plaintiffs’ demand for a Court-compelled unwinding of pre-bankruptcy transactions and the reordering, creation, or elimination of security interests tied to those transactions and their collateral—all characteristic estate entitlements to unwind a fraudulent transfer. Further, the BrandCo Lenders' liens securing their loans to Debtors cannot be subordinated or invalidated without fundamentally changing Debtors' rights and obligations under their most important financing arrangements, and, for reasons described above flowing from the automatic stay and its bar on non-bankruptcy-forum pursuit of claims against property of the estate, Debtors and other authorized estate representatives have exclusive authority to seek relief from those arrangements," Judge Jones said in his decision. The decision resolves only the Debtor Defendants' Motion. The BrandCo Lenders' and Jefferies Defendants' Motions will be resolved in a separate decision. The parties were directed to file letters not to exceed three pages on or before Feb. 15, 2023, concerning whether the standing grounds on which this Decision is based apply to the remaining causes of action as against the non-debtor Defendants. About Revlon Inc. Revlon Inc. manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; antiperspirant deodorants; and other beauty care products. Today, Revlon's diversified portfolio of brands is sold in approximately 150 countries around the world in most retail distribution channels, including prestige, salon, mass, and online. Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high-quality product innovation, performance and sophisticated glamour. In 2016, Revlon acquired the iconic Elizabeth Arden company and its portfolio of brands, including its leading designer, heritage and celebrity fragrances. Revlon is among the leading global beauty companies, with some of the world's most iconic and desired brands and product offerings in color cosmetics, skin care, hair color, hair care and fragrances under brands such as Revlon, Revlon Professional, Elizabeth Arden, Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos, Christina Aguilera and AllSaints. Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay, Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also sought bankruptcy protection on June 15 and June 16, 2022. Revlon disclosed total assets of $2,328,093,000 against total liabilities of $3,689,240,395 as of April 30, 2022. The Hon. David S. Jones is the case judge. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as bankruptcy counsel; Mololamken, LLC as special litigation counsel; PJT Partners, LP as investment banker; KPMG, LLP as tax services provider; and Alvarez & Marsal North America, LLC as restructuring advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal serve as the Debtors' chief restructuring officer and interim chief financial officer, respectively. Meanwhile, Kroll Restructuring Administration, LLC is the Debtors' claims agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province, LLC and Houlihan Lokey Capital, Inc., serve as the committee's legal counsel, financial advisor and investment banker, respectively. RIOME PLUMBING: March 23 Disclosure Statement Hearing Set --------------------------------------------------------- Judge Andrew B. Altenburg, Jr., has entered an order within which the hearing on the adequacy of the Disclosure Statement of Riome Plumbing & Mechanical LLC shall be held on March 23, 2023 at 10 a.m. at Courtroom 4B, Mitchell H. Cohen US Courthouse, 400 Cooper Street, 4th Floor, Camden NJ 08101. Judge Altenburg further ordered that written objections to the adequacy of the Disclosure Statement shall be filed and served no later than 14 days prior to the hearing. A copy of the order dated Feb. 16, 2023. is available at https://bit.ly/3lYRPYz from PacerMonitor.com at no charge. Attorneys for the Debtor: David A. Kasen, Esq. KASEN & KASEN, P.C. Society Hill Office Park, Suite #3 1874 E. Marlton Pike Cherry Hill, NJ 08034 Tel: (856) 424-4144 Fax: (856) 424-7565 E-mail: dkasen@kasenlaw.com About Riome Plumbing Riome Plumbing & Mechanical LLC is Categorized under Plumbers and Plumbing Contractors. Riome Plumbing & Mechanical sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 22-14859) on June 14, 2022. In the petition filed by Tyrone Pitts, as managing member, the Debtor reports estimated assets and liabilities between $500,000 and $1 million. David A. Kasen, of Kasen & Kasen PC, is the Debtor's counsel. SAN JORGE CHILDREN'S: Has Deal on Cash Collateral Access -------------------------------------------------------- San Jorge Children's Hospital Inc. and Oriental Bank advised the U.S. Bankruptcy Court for the District of Puerto Rico that they have reached an agreement regarding the Debtor's use of cash collateral and now desire to memorialize the terms of this agreement into an agreed order. The parties agree that the Debtor may continue using cash collateral up to May 31, 2023. All terms, requirements, acknowledgments, assurances, and adequate protection remedies already granted to the secured creditor and approved by the Court regarding its rights and claim will remain unaltered as specifically detailed in the Stipulation for the interim use of cash collateral dated November 1, 2022 and the Cash Collateral Order dated November 11, 2022. A copy of the motion is available at https://bit.ly/3YYUHDh from PacerMonitor.com. About San Jorge Children's Hospital San Jorge Children's Hospital, Inc. operates a hospital specializing in pediatrics in San Juan, P.R. San Jorge Children's Hospital filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-02630) on Sept. 1, 2022, with between $10 million and $50 million in both assets and liabilities. Edward P. Smith, chief operating officer, signed the petition. Judge Maria De Los Angeles Gonzalez presides over the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as bankruptcy counsel and Galindez, LLC as external auditor. Cardona Jimenez Law Offices, P.S.C. represents the official committee of unsecured creditors appointed in the Debtor's case. SEINEYARD INC: Seeks to Hire Naumann Group as Real Estate Broker ---------------------------------------------------------------- Seineyard, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to hire The Naumann Group Real Estate, Inc. to sell its property located at 8056 Woodville Highway, Tallahassee, Fla. The firm will receive a commission equal to 6 percent of the sales price (the fee will be split if any buyer also has an agent or broker). As disclosed in court filings, Naumann does not represent interest adverse to the Debtor's estate in the matter upon which it is to be engaged. The firm can be reached through: Brian Messer The Naumann Group Real Estate, Inc. 2050 Capital Cir NE Tallahassee, FL 32308 Phone: +1 850-325-1681 About Seineyard Inc. Seineyard, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-40028) on Jan. 27, 2023, with $500,001 to $1 million in both assets and liabilities. Bruner Wright, P.A. is the Debtor's bankruptcy counsel. SOUTH BAY PROPERTY: Seeks to Hire Leslie Cohen Law as Counsel ------------------------------------------------------------- South Bay Property Homes, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Leslie Cohen Law, PC to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor regarding its rights and responsibilities under the U.S. Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules, and how the application of such provisions relates to the administration of the Debtor's estate; b. assisting the Debtor in the preparation of documents to be filed with the bankruptcy court or the Office of the U.S. Trustee; c. representing the Debtor, with respect to bankruptcy issues, in the context of its pending Chapter 11 case and representing the Debtor in contested matters; d. assisting in the negotiation, formulation and confirmation of a plan of reorganization; and e. rendering services for the purpose of pursuing, litigating or settling litigation. The firm's hourly rates are as follows: Leslie Cohen, Esq. $575 per hour J'aime Williams, Esq. $430 per hour Senior Contract Attorneys $350 per hour Paralegals $175 per hour Paraprofessionals $110 per hour Leslie Cohen Law received a pre-bankruptcy retainer of $28,000 which was paid by non-debtor National Mortgage Resources, Inc. Leslie Cohen, Esq., president and sole shareholder of the firm, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Leslie A. Cohen, Esq. J'aime K. Williams Esq. Leslie Cohen Law, PC 506 Santa Monica Blvd., Suite 200 Santa Monica, CA 90401 Tel.: (310) 394-5900 Fax: (310) 394-9280 Email: leslie@lesliecohenlaw.com jaime@lesliecohenlaw.com About South Bay Property Homes South Bay Property Homes, LLC is a real estate solutions company in Los Angeles. South Bay Property Homes filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10061) on Jan. 31, 2023, with $1 million to $10 million in both assets and liabilities. Steve Miller, manager, signed the petition. Judge Ronald A. Clifford, III oversees the case. The Debtor is represented by Leslie A. Cohen, Esq., at Leslie Cohen Law, PC. SPG HOSPICE: Trustee Wins Cash Collateral Access Thru March 31 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized James Cross, the duly appointed and acting Chapter 11 Trustee of SPG Hospice, LLC, Scottsdale Physicians Group, PLC, and United Telehealth Corp., to use cash collateral on an interim basis through March 31, 2023, in accordance with the budget and the Debtors' agreement with Arizona Bank & Trust and TOPPS, LLC. As previously reported by the Troubled Company Reporter, the Debtors are in default to Arizona Bank under several loan documents. On March 18, 2020, Arizona Bank made: (1) a multiple advance loan (Loan No. XXXXX6771) in the maximum principal amount of $4,000,000 to the Borrowers for working capital and other general corporate purposes; and (2) a term loan (Loan No. XXXXX6772) in the maximum principal amount of $1,950,000 to refinance certain existing term debt of the Borrowers. The RLC Loan and the Term Loan were evidenced by the "Loan Agreement" executed by the Borrowers and Arizona Bank with an effective date of March 18, 2020. On March 18, 2020, the Borrowers, as makers, executed the "Revolving Promissory Note" in the maximum loan amount of $4,000,000 in favor of Arizona Bank, as payee. The RLC Note had a maturity date of March 18, 2021. On March 18, 2020, the Borrowers, as makers, also executed the "Term Promissory Note" in the principal sum of $1,950,000 in favor of Arizona Bank, as payee. The Term Note had a maturity date of March 18, 2024. TOPPS, LLC contended it made two loans to debtor SPG: * The first, made on June 23, 2021, in the principal amount of $1.5 million, is evidenced by, among other things, a Secured Promissory Note in the principal amount of $1.5 million and a Collateral Security Agreement through which, among other things, SPG granted TOPPS a security interest in the accounts receivable described therein. The security interest was perfected by the filing of a UCC-1 financing statement with the Arizona Secretary of State on July 7, 2021. * The second, made on September 30, 2021, in the principal amount of $750,000, is evidenced by, among other things, a Secured Promissory Note in the principal amount of $750,000 and a Collateral Security Agreement through which, among other things, SPG granted TOPPS a security interest in the accounts receivable described therein. The security interest was perfected by the filing of a UCC-1 financing statement with the Arizona Secretary of State on October 15, 2021. The Court said consistent with the Budget and as a form of adequate protection, the Trustee will pay continue to Arizona Bank the Minimum Adequate Protection Payment on the same terms and timeline as previously required by the Cash Collateral Orders. The Trustee's authority to use cash collateral during the Extension Period is conditioned upon HonorHealth funding a payment to SPG in the amount of $225,000 on or before February 21, 2023. A copy of the Court's order and the Debtors' budgets is available at https://bit.ly/3Z8aC1I from PacerMonitor.com. The Debtor projects total operating expenses, on a weekly basis, as follows: $1,959 for the week ending March 10, 2023; $3,664 for the week ending March 17, 2023; $24,230 for the week ending March 24, 2023; and $69,473 for the week ending March 31, 2023. About SPG Hospice, LLC SPG Hospice, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 22-02385) on April 19, 2022. In the petition signed by Nima Ghadimi, managing member, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Eddward P. Ballinger Jr. oversees the case. Jonathan Philip Ibsen, Esq., at Canterbury Law Group, LLP is the Debtor's counsel. STANADYNE LLC: Seeks Cash Collateral Access ------------------------------------------- Stanadyne LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to use cash collateral and provide adequate protection. The Debtors require the use of cash collateral for working capital and other general purposes in the ordinary course of business. On May 12, 2017, the Debtors entered into a financing agreement, under which Cerberus Business Finance, LLC served as collateral agent and administrative agent for the lenders. The Financing Agreement originally provided for a $15 million revolving credit facility, and a $75 million term loan facility. The Prepetition Credit Facility had a maturity of five years. The Financing Agreement was subsequently amended to increase the Revolving Credit Facility to $25 million and the Term Loan Facility to $255 million. As of the Petition Date, the total amount due under the Financing Agreement was approximately $281 million. As adequate protection, Cerberus, for its own benefit and the benefit of the Prepetition Secured Lenders, will be granted, to the extent of any Diminution in Value postpetition security interests in and liens in all property, assets or interests in property or assets of the Debtors. Cerberus, for its own benefit and the benefit of the Prepetition Secured Lenders, to the extent of any Diminution in Value, will also be granted superpriority administrative expense claims against the Debtors' estates, having priority over any and all other claims against the Debtors. The Debtors will pay to Cerberus the reasonable and documented fees (including reasonable and documented attorneys' fees), and other out-of-pocket expenses incurred by Cerberus from the Petition Date through the Budget Period up to an aggregate amount of $900,000. The Debtors will pay $300,000 to the Prepetition Secured Parties on or about March 6, 2023 as additional adequate protection, which amount will be applied to Prepetition Obligations if it is later established by a final order of the Court or another court of competent jurisdiction that the Prepetition Secured Lenders are undersecured. These events constitute an "Event of Default": i. The Debtors fail to make any payment required under the Interim Order after such payment becomes due under the terms hereof; ii. The Debtors fail to comply in any material respect with any covenant, agreement, or provision of the Interim Order; iii. Any Debtor uses cash collateral to fund any payments in respect of prepetition or postpetition claims other than (i) as permitted under the Interim Order or any other order of the Court consented to by Cerberus; or (ii) as otherwise expressly contemplated by the Approved Budget; iv. The Interim Order ceases, for any reason, to be in full force and effect in any respect, or the Replacement Liens or the Superpriority Claims created by the Interim Order cease in any respect to be enforceable and of the same effect and priority purported to be created thereby; and v. The Court will have entered an order amending, supplementing or otherwise modifying the Interim Order without the consent of Cerberus. A copy of the motion is available at https://bit.ly/3KtQN0D from PacerMonitor.com. About Stanadyne LLC Stanadyne LLC is a global automotive technology offering engine-based fuel and air management systems. Stanadyne is a developer and manufacturer of fuel pumps and fuel injectors for diesel and gasoline engines. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10207) on February 16, 2023. In the petition signed by John Pinson, chief executive officer, the Debtor disclosed up to $500 million in both assets and liabilities. Judge John T. Dorsey oversees the case. The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Hughes Hubbard and Reed LLP as co-general bankruptcy counsel, Kroll, LLC as financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, abd balloting agent and administrative advisor. STARRY GROUP: Exit Facility or Asset Sale Proceeds to Fund Plan --------------------------------------------------------------- Starry Group Holdings, Inc., and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a Disclosure Statement for Joint Chapter 11 Plan of Reorganization dated February 20, 2023. The Company is in the telecommunications industry and invests in the future of fixed wireless technology. The Company designs and builds its own fixed wireless equipment, cloud-based network control plane, and billing and operations support systems to run their network and provide their service. The Debtors are proposing the Plan following extensive arm's length, good-faith discussions with certain of their key stakeholders. These discussions have resulted in significant majorities of the Holders of the Debtors' funded indebtedness agreeing to support the restructuring contemplated by the Plan and vote to accept the Plan pursuant to a Restructuring Support Agreement entered into immediately prior to the commencement of the Chapter 11 Cases by and among the Debtors and certain Holders of Prepetition Term Loan Claims (collectively, the "Consenting Prepetition Lenders"). In connection with negotiating the Restructuring Support Agreement, the Debtors and Holders of the Debtors' funded indebtedness exchanged several proposals and counter-proposals regarding the terms of a comprehensive restructuring, and the parties conferred on numerous occasions in an attempt to achieve consensus with respect to the same. The Plan reflects such a consensus, and the Debtors and the Consenting Prepetition Lenders believe the Plan represents the best available option for all creditors and parties in interest. Having agreed with their key creditor constituencies on the principal terms of the Restructuring, which enjoys broad-based support, as reflected in the Restructuring Support Agreement, the Debtors are also pursuing a competitive sale process for their assets (or reorganized equity) as permitted by the Restructuring Support Agreement. To that end, on February 20, 2023, the Debtors filed a motion with the Bankruptcy Court (the "Bidding Procedures Motion"), seeking authorization to conduct a competitive and robust sale process, which the Debtors believe will ensure that they maximize the value of their assets (or reorganized equity). To be a qualified bid, a third party bid must exceed $170,000,000 (the "Minimum Qualified Bid") and meet the other requirements established in the Bidding Procedures for the submission of qualified bids. In the event that at least one Minimum Qualified Bid is obtained, the Debtors shall conduct an auction to determine the highest or otherwise best bid for the Debtors' assets (or reorganized equity). The Debtors are pursuing on parallel paths both the Restructuring and a Sale Transaction. Any Sale Transaction may be implemented pursuant to the Plan and the Confirmation Order or pursuant to a separate 363 Sale Order. The Debtors may sell all or substantially all of their assets or the Reorganized Starry Holdings Equity in a Sale Transaction under the Plan or a 363 Sale Order, in which case the proceeds thereof shall be distributed in accordance with the applicable provisions of the Plan, the Debtors will be wound down, and the Restructuring will not occur. If the Debtors do not sell all or substantially all of their assets or the Reorganized Starry Holdings Equity under the Plan or a 363 Sale Order, they will consummate the Restructuring. In the event of a Restructuring, the Plan will allow the Debtors to strengthen their balance sheet, and will also ensure that the Debtors continue to operate as a going concern, preserving the jobs of the Debtors' employees. Class 4 consists of General Unsecured Claims. On the Effective Date, except to the extent that a Holder of an Allowed General Unsecured Claim and the Debtor against which such Allowed General Unsecured Claim is asserted agree to less favorable treatment for such Holder, each Holder of an Allowed General Unsecured Claim shall receive, in full and final satisfaction of its Allowed General Unsecured Claim: * In the event of a Restructuring: -- Each Participating GUC Holder shall receive in full and final satisfaction of its General Unsecured Claim, its Pro Rata Share of the greater of (a) $250,000; and (b) the difference between (i) the amount of professional fees of the Debtor Professionals and Committee Professionals set forth in the Initial Budget minus (ii) the actual amount of professional fees and expenses Allowed to such Retained Professionals at any time, subject to a cap of $2,000,000; and -- Each Non-Participating GUC Holder shall receive no consideration on account of its General Unsecured Claims. * In the event of a Sale Transaction: -- Each Participating GUC Holder shall receive in full and final satisfaction of its Allowed General Unsecured Claim, its Pro Rata Share of the greatest of (a) $250,000; (b) the difference between (i) the amount of professional fees of the Debtor Professionals and Committee Professionals set forth in the Initial Budget minus (ii) the actual amount of professional fees and expenses Allowed to such Retained Professionals at any time, subject to a cap of $2,000,000; and (c) except as otherwise provided in and giving effect to any applicable Sale Order, after the Holders of Allowed Prepetition Term Loan Claims and the Holders of Allowed Claims entitled to priority of payment under 11 U.S.C. § 507 have been satisfied in full in Cash, the amount of Cash, if any, to which Allowed General Unsecured Claims are legally entitled under the Bankruptcy Code; and -- Each Non-Participating GUC Holder shall receive, except as otherwise provided in and giving effect to any applicable Sale Order, after the Holders of Allowed Prepetition Term Loan Claims and the Holders of Allowed Claims entitled to priority of payment under 11 U.S.C. § 507 have been satisfied in full in Cash, the amount of Cash, if any, to which Allowed General Unsecured Claims are legally entitled under the Bankruptcy Code. Class 4 is Impaired and Holders of Class 4 General Unsecured Claims are entitled to vote to accept or reject the Plan. Class 8 consists of all Equity Interests. On the Effective Date, except to the extent that a Holder of an Allowed Equity Interest and the Debtor against which such Allowed Equity Interest is asserted agree to less favorable treatment for such Holder, each Holder of an Allowed Equity Interest shall receive, in full and final satisfaction of its Allowed Equity Interest: * In the event of a Restructuring, Equity Interests shall receive no distribution under the Plan, and all Equity Interests shall be released, discharged, and extinguished, as the case may be, and shall be of no further force or effect, and such Holder shall receive no recovery on account of such Allowed Equity Interest; or * In the event of a Sale Transaction, except as otherwise provided in and giving effect to any applicable Sale Order, after the Holders of Allowed Prepetition Term Loan Claims, Holders of Allowed Claims entitled to priority of payment under 11 U.S.C. § 507, and Holders of Allowed Claims in Class 4 and Class 6 have been satisfied in full in Cash, Holders of Allowed Equity Interests shall receive the amount of Cash, if any, to which Equity Interests are legally entitled under the Bankruptcy Code. Class 8 is Impaired and Holders of Class 8 Equity Interests are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, Holders of Class 8 Equity Interests are not entitled to vote to accept or reject the Plan. In consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, Causes of Action and controversies resolved pursuant to the Plan. The entry of the Confirmation Order shall constitute the Bankruptcy Court's approval of the compromise or settlement of all such Claims, Interests, Causes of Action and controversies, as well as a finding by the Bankruptcy Court that such compromise or settlement is in the best interests of the Debtors, their Estates and Holders of Claims and Interests is fair, equitable and is within the range of reasonableness. Distributions made to Holders of Allowed Claims are intended to be indefeasible. In the event of a Restructuring, the Debtors shall fund Cash distributions under the Plan with: (1) Cash on hand, including Cash from operations and the proceeds of the DIP Facility, and (2) the proceeds of the Exit Facility. Cash payments to be made pursuant to the Plan will be made by the Reorganized Debtors or the Distribution Agent in accordance with Article VI. In the event of a Sale Transaction, the Debtors shall fund distributions under the Plan from Cash on hand (if any) and the Sale Transaction Proceeds in accordance with the terms of the Sale Transaction Documents and the Plan. A full-text copy of the Disclosure Statement dated February 20, 2023 is available at https://bit.ly/3KzYrHb from PacerMonitor.com at no charge. Proposed Counsel for Debtors: LATHAM & WATKINS LLP Jeffrey E. Bjork, Esq. Ted A. Dillman, Esq. Jeffrey T. Mispagel, Esq. 355 South Grand Avenue, Suite 100 Los Angeles, California 90071 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 Email: jeff.bjork@lw.com ted.dillman@lw.com jeffrey.mispagel@lw.com - and – Jason B. Gott, Esq. 330 North Wabash Avenue, Suite 2800 Chicago, Illinois 60611 Telephone: (312) 876-7700 Facsimile: (312) 993-9767 Email: jason.gott@lw.com YOUNG CONAWAY STARGATT & TAYLOR, LLP Michael R. Nestor, Esq. Kara Hammond Coyle, Esq. Joseph M. Mulvihill, Esq. Timothy R. Powell, Esq. Rodney Square, 1000 North King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Email: mnestor@ycst.com kcoyle@ycst.com jmulvihill@ycst.com tpowell@ycst.com About Starry Group Boston-based Starry Group Holdings, Inc. (NYSE: STRY) is a licensed fixed wireless technology developer and internet service provider. The Company is an early-stage growth company. Starry Group Holdings, Inc. and 11 affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10219) on February 20, 2023. The Hon. Karen B. Owens oversees the cases. Lawyers at YOUNG CONAWAY STARGATT & TAYLOR, LLP and LATHAM & WATKINS LLP serve as counsel to the Debtors; PJT PARTNERS LP serves as their investment banker; FTI CONSULTING, INC. as their financial advisors; and KURTZMAN CARSON CONSULTANTS LLC as their claims and noticing agent. As of September 30, 2022, Starry Group had $270.6 million in total assets against $309.7 million in total liabilities. The petitions were signed by William J. Lundregan as authorized officer. STEM HOLDINGS: Delays Filing of Quarterly Report ------------------------------------------------ Stem Holdings, Inc. has filed a Form 12b-25 with the Securities and Exchange Commission to notify that it is unable to file its Form 10-Q for the period ended Dec. 31, 2022, within the prescribed time period without unreasonable effort or expense. The Company anticipates that it will file its Form 10-Q within the grace period provided by Exchange Act Rule 12b-25. About Stem Holdings Headquartered in Boca Raton, Florida, Stem Holdings, Inc. -- http://www.stemholdings.com-- is a multi-state, vertically integrated, cannabis company that, through its subsidiaries and its investments, is engaged in the manufacture, possession, use, sale, distribution or branding of cannabis, and holds licenses in the adult use and medical cannabis marketplace in the states of Oregon, Nevada, California, Oklahoma and Massachusetts. Stem Holdings reported a net loss of $17.53 million for the year ended Sept. 30, 2022, a net loss of $64.6 million for the year ended Sept. 30, 2021, and a net loss of $11.5 million for the year ended Sept. 30, 2020. Deer Park, IL-based LJ Soldinger Associates, LLC, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Jan. 13, 2023, citing that the Company had a net loss of approximately $17.5 million, negative working capital of $0.8 million and an accumulated deficit of $133.1 million as of and for the year ended Sept. 30, 2022. In addition, the Company has commenced operations in the production and sale of cannabis and related products, an activity that is illegal under United States Federal law for any purpose, by way of Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970, otherwise known as the Controlled Substances Act of 1970 (the "ACT"). These facts raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. TECHNICAL COMMUNICATIONS: All 4 Proposals Passed at Annual Meeting ------------------------------------------------------------------ Technical Communications Corporation held its 2023 annual meeting of shareholders at its executive offices in Concord, MA, at which the shareholders: (a) voted to elect Francisco F. Blanco as Class II director to serve on the Board of Directors for a term of three years expiring at the 2026 Annual Meeting of Stockholders; (b) approved on an advisory, non-binding basis, the compensation of the Company's named executive officers; (c) chose, on a non-binding, advisory basis, to vote annually on the compensation of the Company's named executive officers; and (d) ratified the appointment of Stowe & Degon, LLC as the Company's independent registered public accounting firm for the fiscal year ending Sept.r 30, 2023. About Technical Communications Concord, Massachusetts-based Technical Communications Corporation -- http://www.tccsecure.com-- specializes in secure communications systems and customized solutions to protect highly sensitive voice, data and video transmitted over a wide range of networks, serving government entities, military agencies, and corporate enterprises. As of Dec. 24, 2022, the Company had $1.91 million in total assets, $4.68 million in total liabilities, and a total stockholders' deficit of $2.77 million. Westborough, Massachusetts-based Stowe & Degon LLC, Technical Communications Corporation's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 22, 2022, citing that the Company has an accumulated deficit, has suffered significant net losses and negative cash flows from operations and has limited working capital that raise substantial doubt about its ability to continue as a going concern. TECHNICAL COMMUNICATIONS: CFO Quits; Interim Replacement Named -------------------------------------------------------------- Michael P. Malone gave notice of his intent to resign as chief financial officer, treasurer and assistant secretary of Technical Communications Corportation, effective on Feb. 13, 2023. Mr. Malone has indicated that his departure from the Company was not the result of any disagreement with management or the Board, but was the result of his intention to retire. On Feb. 13, 2023, Mr. Carl H. Guild, Jr. (age 79) was elected by the Board of Directors as acting chief financial offcer, treasurer and asst. secretary, effective immediately. Mr. Guild has been president and chief executive officer of the Company since 1998 and Chairman of the Board of Directors since 2001. He was also vice-chairman of the Board from 1998 to 2001 and Chairman in 1998, and was an independent consultant to the Company from 1997 to 1998. From 1993 to 1997, he was a senior vice president with Raytheon Engineers and Constructors, Inc., a former unit of Raytheon Company, a defense, homeland security and aerospace technology company. Mr. Guild serves as president and chief executive officer of the Company pursuant to an Employment Agreement (as amended) with the Company. Mr. Guild's base salary for each of fiscal years 2022 and 2021 was $285,000. Mr. Guild did not receive a bonus with respect to the fiscal years ended Sept. 24, 2021 or Sept. 25, 2021. As a result of a company wide furlough between December 2020 and March of 2021 Mr. Guild's salary was reduced by 40% during that period, and his salary was again reduced by 40% in Decmeber 2022 and in January 2023 was reduced futher by 60%. Pursuant to his employment agreement, upon termination of his employment without "cause" by the Company or upon his death or disability, Mr. Guild is entitled to receive severance pay in an amount equal to the greater of six months' base salary at the then-current level or the balance of the term of the agreement, less applicable taxes and other required withholdings and amounts owed to the Company, and including all health and other benefits to which he had been entitled while employed by the Company at the Company's expense for at least six months. If the Company determines not to renew Mr. Guild's employment agreement, he is entitled to an amount equal to six months' base salary at the then-current level, less applicable taxes and other required withholdings and amounts owed to the Company, and the continuation of all health and other benefits to which he had been entitled while employed by the Company at the Company's expense for at least six months. Mr. Guild may terminate his employment agreement upon prior written notice to the Company. Upon his voluntary termination, he is entitled to severance pay - defined as his base salary at the then-current level, less applicable taxes and other required withholdings and amounts owed to the Company - equal to six months if the termination date is on the renewal date of the agreement or the lesser of six months or the balance of the term of the agreement if the termination date is before such renewal date. In the event of a change in control of the Company where Mr. Guild resigns or is terminated without cause by the Company within 24 months after such an event, any unvested options held shall automatically vest and become immediately exercisable. In addition, Mr. Guild would be entitled to receive severance pay in an amount equal to 24 months' base salary at the then-current level, less applicable taxes and other withholdings and amounts due and plus all accrued and unpaid expenses and vacation time. In the event that any payment to be received pursuant to such change in control or the value of any acceleration right in any Company stock options held in connection with the change in control of the Company would be subject to an excise tax pursuant to Section 4999 of the Code, whether in whole or in part as a result of being an "excess parachute payment" within the meaning of such terms in Section 280G(b) of the Code, the amount payable will be increased (grossed up) to cover the excise tax liability due under Section 4999 of the Code, if otherwise permitted under the Code. In fiscal 2022, the Board of Directors awarded Mr. Guild an option to purchase 7,000 shares of Common Stock for his service as a director, as it did for all other directors. These non-qualified options were granted on May 13, 2022 under the 2021 Plan at an exercise price of $1.75 per share with a term of 10 years, and vest over a five year period. Mr. Guild did not receive any stock options in fiscal 2021. Financing Arrangement On Nov. 18, 2021, the Company issued an amended and restated demand promissory note in the principal amount of up to $2,000,000 in favor of Mr. Guild, Jr., who loaned the money to the Company to provide working capital. The $2,000,000 consisted of $1,000,000 previously loaned to the Company at an interest rate of 6% and an additional $1,000,000 at an interest rate of 7.5%. On Aug. 4, 2022, the Company issued an amended and restated demand promissory note in the principal amount of up to $4,000,000 in favor of Mr. Guild, who loaned the additional funds. The $4,000,000 consists of $1,000,000 previously loaned to the Company at an interest rate of 6% and $2,000,000 previously loaned to the Company at an interest rate of 7.5% and an additional $1,000,000 at an interest rate of 7.5%. About Technical Communications Concord, Massachusetts-based Technical Communications Corporation -- http://www.tccsecure.com-- specializes in secure communications systems and customized solutions to protect highly sensitive voice, data and video transmitted over a wide range of networks, serving government entities, military agencies, and corporate enterprises. As of Dec. 24, 2022, the Company had $1.91 million in total assets, $4.68 million in total liabilities, and a total stockholders' deficit of $2.77 million. Westborough, Massachusetts-based Stowe & Degon LLC, Technical Communications Corporation's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 22, 2022, citing that the Company has an accumulated deficit, has suffered significant net losses and negative cash flows from operations and has limited working capital that raise substantial doubt about its ability to continue as a going concern. TOPAZ SOLAR: Fitch Affirms 'BB' Rating on $1.1BB Sr. Secured Notes ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB' rating on Topaz Solar Farms, LLC's (Topaz) $1.100 billion ($735.7 million outstanding) senior secured notes due September 2039. The Rating Outlook is Positive. RATING RATIONALE The rating of Topaz's notes is constrained by the rating of its sole power purchase agreement (PPA) counterparty, Pacific Gas and Electric Company (PG&E, BB/Positive). The project's credit profile is otherwise strong, supported by its fully contracted revenue structure, low operating risk, standard project finance debt structure, and a history of strong financial performance that Fitch expects to continue. Topaz displays a strong operational performance and healthy financial metrics, with modest leverage and strengthening debt service coverage ratios (DSCR). Metrics are consistent with the 'A' category, but the project rating is constrained by the off-taker. The Positive Outlook is driven by the improved credit profile of PG&E Corporation (PCG) and its primary subsidiary, PG&E, the latter being the sole offtaker under the PPA. KEY RATING DRIVERS Operation Risk - Midrange Proven Technology and Experienced Operator Thin-film photovoltaic (PV) technology has a long operating history, which mitigates plant performance risks. The plant operator, NovaSource Power Services (NovaSource), acquired First Solar's North American O&M business in 2021, and has a track record of high plant availability. Long-term operating and maintenance (O&M) agreements support routine and unscheduled maintenance needs. Fitch's financial analysis incorporates operating cost increases to mitigate unforeseen events, including the risk of contractor replacement. Revenue Risk - Volume - Stronger Solid Solar Resource Revenue Risk - Volume has been revised to 'Stronger' from 'Midrange' based on historical performance. Actual generation has outperformed Fitch Base Case for the each of the last seven years with an average annual overperformance of 7%. Fitch has maintained the production haircut at 2% given that this is a single-site project, in line with peer projects. Total generation output in Fitch's rating case is based on a one-year P90 estimate of electric generation to mitigate the potential for lower-than-expected solar resources. The PPA provides reimbursement for curtailment directed by the utility. The project can meet debt obligations under a one-year P99 generation scenario. Revenue Risk - Price - Stronger Stable Contracted Revenues The fixed-price, 25-year PPA with below investment grade PG&E extends one month beyond debt maturity. This structure is consistent with a stronger assessment under Fitch's current criteria. All PG&E's obligations were confirmed under its post-filing plan as the utility emerged from bankruptcy. Debt Structure - Senior - Stronger Conventional Debt Structure The senior-ranking, fully amortizing, fixed-rate debt benefits from a six-month debt service reserve backed by a letter of credit and strong 1.20x forward and backward-looking debt service coverage equity distribution test. Financial Profile Under Fitch's base case DSCRs average 2.21x with a minimum of 1.92x for the period 2023-2039. Fitch's rating case includes stresses that increase O&M expenses and reduce energy output, resulting in an average DSCR of 1.96x with a minimum of 1.70x. In both scenarios, annual DSCRs generally increase over time, reflecting a profile supportive of the rating. PEER GROUP Fitch privately rates several renewable project financings that demonstrate rating case DSCRs consistent with a strong investment grade profile but are constrained to sub-investment grade by the credit quality of PG&E as the sole revenue counterparty. Publicly rated Solar Star Funding, LLC (BBB-/Positive) has an average rating case DSCR of 1.47x and is rated investment grade due to the relative strength of its sole revenue counterparty, Southern California Edison Co. (BBB-/Positive). RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - A decline in the credit quality of PPA off-taker, PG&E; - A Fitch rating case DSCR profile below around 1.15x. Factors that could, individually or collectively, lead to positive rating action/upgrade: An improvement in the credit quality of PPA off-taker, PG&E. CREDIT UPDATE Topaz continues to display a very stable operational profile. In 2022, actual output was 3% above the sponsor's P50 forecast and 6% above Fitch's base case. Plant's effective availability was also strong at 99.3% (compared to Fitch's base case estimate of 97%). The energy lost due to maintenance events did not impact operations significantly. However, the project has been dealing with persistent industry-wide inverter failures. Topaz has been working closely with its suppliers to repair and revamp inverters as they fail in order to minimize disruption. Topaz has also been negotiating a proactive plan with suppliers to swap out modules every three to four years to help prevent inverter failures. Costs associated with these repairs are passed through per the O&M agreement. PG&E requested curtailment totaled approximately 50,300 MWh in 2022 or 4% of generation, up from 27,600 MWh in the previous year. All curtailed generation is paid for by PG&E as per the terms of the PPA. PG&E does not disclose why it is curtailing generation, but it does tend to occur more frequently during shoulder periods when demand is lower. Cash flow available for debt service (CFADS) totaled $197.3 million in 2022, exceeding base case expectations by 18%. Total revenues were $210.7 million, outperforming base case expectations of $187.9 million. Total costs were$13.6 million in 2022, coming in under 2022's base case by nearly 34%. The ultimate DSCR impact was a slight decrease to 2.26x compared to 2.30x in 2021, which exceeds Fitch's prior base case scenario of 1.88x, and rating case scenario of 1.70x, for 2022. FINANCIAL ANALYSIS Fitch's base case utilizes the P50 electric generation estimate, 97% availability, 0.9% annual panel degradation, a 2% energy output reduction, and a 2.0% inflation assumption. Fitch's rating case utilizes the same degradation, output reduction and inflation assumptions but further sensitizes performance using the P90 electric generation estimate and a 10-15% increase in costs. The resulting profile produces improved metrics with average DSCR of 1.96x and a minimum DSCR of 1.70x for the rating case (previously was 1.95x and 1.70x, respectively) and an average DSCR 2.21x with minimum DSCR of 1.92x for the base case (it was 2.19x and 1.88, respectively). These metrics are well above the minimum indicative threshold for investment grade. Annual DSCRs projections grow over time due to the decreasing amortization profile, providing a greater cushion for debt repayment during the latter years. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Topaz's ratings are constrained by PG&E's ratings. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Topaz Solar Farms LLC Topaz Solar Farms LLC/ Debt/1 LT LT BB Affirmed BB TOPS HOLDING: Litigation Trustee Taps Omni as Claims Agent ---------------------------------------------------------- Alan Halperin, as litigation trustee of the Tops Holding Litigation Trust, seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Omni Agent Solutions as claims and noticing agent. The litigation trust was established pursuant to the court-approved Chapter 11 plan of reorganization filed by Tops Holding II Corporation and its subsidiaries. As litigation trustee, Mr. Halperin is tasked to investigate and pursue causes of action and requires a claims and noticing agent to help him discharge his duties, which include the distribution of notices, dissemination of information to the public, and the processing and docketing of proofs of claim. The hourly rates of the firm's professionals are as follows: Analyst $40 - $65 Consultants $70 - $170 Senior Consultants $175 - $220 Solicitation and Securities Services $225 Technology/Programming $85 - $155 Omni has agreed to cap its monthly fees at $1,500 for "maintenance-related" expenses. Paul Deutch, the executive vice president of Omni, disclosed in court filings 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 K. Osborne Omni Agent Solutions 5955 De Soto Avenue, Suite 100 Woodland Hills, CA 91367 Telephone: (818) 906-8300 Email: Bosborne@omniagnt.com About Tops Holding II Corporation Tops Markets, LLC -- http://www.topsmarkets.com/-- is headquartered in Williamsville, NY and operates 169 full-service supermarkets with five additional by franchisees under the Tops Markets banner. It employs over 14,000 associates and is a full-service grocery retailer in Upstate New York, Northern Pennsylvania, and Vermont. Tops Management, led by Frank Curci, its chairman and chief executive officer, acquired Tops Markets in December 2013 through a leveraged buyout from Morgan Stanley's private equity arm. Morgan Stanley bought the company in 2007 from the Dutch retailer now known as Koninklijke Ahold Delhaize NV. In 2010, Tops Markets acquired The Penn Traffic Company, a local chain with 64 stores. In 2012, it purchased 21 Grand Union Family Markets stores. Tops Holding II Corporation and its subsidiaries, including Tops Markets, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-22279) on Feb. 21, 2018, to pursue a financial restructuring that would eliminate a substantial portion of debt from their balance sheet. Tops Holding II listed total assets of $977 million and total liabilities at $1.17 billion as of Dec. 30, 2017. The Debtors hired Weil, Gotshal & Manges LLP as their legal counsel; Hilco Real Estate, LLC as real estate advisor; Evercore Group L.L.C. as investment banker; FTI Consulting, Inc., and Michael Buenzow as chief restructuring officer; and Epiq Bankruptcy Solutions, LLC, as their claims and noticing agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 6, 2018. The committee tapped Morrison & Foerster LLP as its legal counsel, and Zolfo Cooper, LLC, as its financial advisor and bankruptcy consultant. On Nov. 9, 2018, the court confirmed the Debtors' joint Chapter 11 plan of reorganization. A litigation trust was established pursuant to the plan and the litigation trust agreement dated Nov. 19, 2018, by and between the Debtors and Alan D. Halperin, in his capacity as litigation trustee. The litigation trustee is represented by Donna H. Lieberman, Esq., at Halperin Battaglia Benzija, LLP. TRADER CORP: S&P Upgrades 'B' Long-Term Issuer Credit Rating ------------------------------------------------------------ On Feb. 21, 2023, S&P Global Ratings withdrew its ratings on Trader Corp., including its 'B' long-term issuer credit rating, at the issuer's request following the redemption of the company's senior secured first-lien term loan. S&P Global Ratings also withdrew its 'B' issue-level rating on the company's revolving facility. The ratings were on CreditWatch with negative implications at the time of the withdrawal. TSS ACQUISITION: Seeks to Hire Rua M&A as Business Broker --------------------------------------------------------- TSS Acquisition Company seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Rua M&A, LLC to market and potentially sell its operations in Oakland, Calif. Rua M&A served as broker for CKC Engineering, LLC when the latter sold its assets to the Debtor, which assets became the Debtor's Oakland operations for automation work. The terms of the contract between Rua M&A and the Debtor provide for the payment of a $10,000 retainer that will be applied against the success fee, if a closing occurs, and provide for success fees at a minimum of $75,000 and at a reducing percentage as follows: Transaction Value Success Fee ----------------- ----------- On the first $1,000,000 5% On $1,000,001 - $2,000,000 4% On $2,000,001 - $3,000,000 3% On $3,000,001 - $4,000,000 2% On the balance over $4,000,000 1% As disclosed in court filings, Rua M&A is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Randy Rua Rua M&A, LLC dba NuVescor Group, Rua Associates 333 Bridge Street NWSuite 820 Grand Rapid, MI 49504 Phone: 616-379-4047 About TSS Acquisition Company TSS Acquisition Company is a manufacturing company with locations in West Chester, Ohio; and in Carlsbad and Oakland, Calif. TSS Acquisition sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 22-12154) on Dec. 19, 2022. In the petition signed by its chief restructuring officer, Sumner M. Saeks, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Beth A. Buchanan oversees the case. Patricia J. Friesinger, Esq., at Coolidge Wall Co., L.P.A., is the Debtor's legal counsel while Sumner Saeks, president of New Growth Advisors, is the Debtor's chief restructuring officer. TSS ACQUISITION: Taps Thompson Auctioneers to Sell Properties ------------------------------------------------------------- TSS Acquisition Company seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Thompson Auctioneers, Inc. The Debtor requires an auctioneer to sell properties including office equipment and software licenses, which it used to operate its business. Thompson will receive a fee capped at $18,000 for its services. In addition, Thompson will receive a buyer's premium from the purchasers of the assets at auction equal to 15 percent buyer's premium for compensation of the auctioneer and 3 percent buyer's premium for the bidding platform known as www.bidspotter.com of the sale price. As disclosed in court filings, Thompson is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Steve Thompson Thompson Auctioneers, Inc. 3519 State Route 235 Fairborn, OH 45324 Tel: 937-426-8446 Email: sthompson@thompsonauctioneers.com About TSS Acquisition Company TSS Acquisition Company is a manufacturing company with locations in West Chester, Ohio, and in Carlsbad and Oakland, Calif. TSS Acquisition sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 22-12154) on Dec. 19, 2022. In the petition signed by its chief restructuring officer, Sumner M. Saeks, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Beth A. Buchanan oversees the case. Patricia J. Friesinger, Esq., at Coolidge Wall Co., L.P.A., is the Debtor's legal counsel. UNCLE DAN'S TIRE: Court OKs Cash Collateral Access Thru June 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized Uncle Dan's Tire World, Inc. to use cash collateral on a final basis in accordance the budget, with a 10% variance, through June 30, 2023. The Debtor requires the use of cash collateral to continue operating its business. CFG Merchant Solutions appears to have a purchase of 15% of the Debtor's receivables as of the petition date and the Debtor and trustee assert that CFG's interest should be offset by any post-petition money CFG has taken. The Internal Revenue Service also appears to have a security interest in the cash collateral based upon filing 93400456 filed on December 7, 2022. As adequate protection, the IRS will be granted adequate protection in the form of a replacement lien, dollar for dollar, in post-petition accounts and accounts receivable to replace their security interest in collateral to the extent of pre-petition cash collateral utilized by Debtors during the pendency of the bankruptcy proceeding. The Court's order provides that the automatic stay of section 362 of the Bankruptcy Code is modified as necessary to permit the IRS to perfect the adequate protection lien granted to them thereunder; provided, however, that the IRS will not be required to record any document with any filing officer or take any other action to perfect such lien, such lien being hereby deemed to be perfected without any such further action. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3KvN9n9 from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $43,660 for January 2023; $43,660 for February 2023; $43,660 for March 2023; $43,660 for April 2023; $43,660 for May 2023; and $43,660 for June 2023. About Uncle Dan's Tire World, Inc. Uncle Dan's Tire World, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ore. Case No. 23-30137) on January 23, 2023. In the petition signed by Daniel Svihla, president, the Debtor disclosed up to $100,000 in assets and up to $500,000 in liabilities. Judge Teresa H. Pearson oversees the case. Ted A. Troutman, Esq., at Troutman Law Firm P.C., is the Debtor's legal counsel. USA ROOFING: Bid to Use Cash Collateral Denied ---------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, denied the motion to use cash collateral filed by USA Roofing Partners. The Court held a hearing on the matter on February 21, 2023. The Court tackled both the Debtor's request to use cash collateral as well as Ruth Lake Investments' Emergency Motion to Resolve Discovery Dispute. Evidentiary hearing was held on both cash collateral and discovery dispute motions. Direct and cross examination was conducted. For the reasons announced on the record, the Court finds the Debtor is not in compliance with Court's previous interim cash collateral order. The Court withdrew the use of cash collateral without prejudice. The Court instructed counsel to file formal discovery requests and response. All further hearings on cash collateral will be in person. A copy of the order is available at https://bit.ly/3XOD6fP from PacerMonitor.com. About USA Roofing Partners, LLC USA Roofing Partners, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-33691) on December 9, 2022. In the petition signed by Kevin Jones, partner, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Jeffrey P. Norman oversees the case. Reese W. Baker, Esq., at Baker & Associates, is the Debtor's legal counsel. VANTAGE SPECIALTY: S&P Alters Outlook to Pos., Affirms 'B-' ICR --------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on Vantage Specialty Chemicals Inc. and revised the outlook to positive from stable. S&P affirmed its 'B-' issue-level rating on the company's first-lien revolving credit facility. S&P also assigned a 'B-' issue-level rating to the proposed first-lien term loan. It assigned a '3' recovery rating to the proposed first-lien term facility, and the '3' recovery rating on the revolving credit facility is unchanged. S&P will withdraw its ratings on the existing first lien and second lien term loans when the refinancing transaction closes. The positive outlook reflects the potential for a higher rating within the next few quarters if Vantage sustains this improvement in profitability and leverage. The proposed transaction will extend Vantage's significant near-term debt maturities by up to two years, reducing refinancing risk. This makes the proposed transaction credit positive. Based on preliminary debt agreements, we expect interest margins will be largely unchanged. The proposed first-lien term loan will be upsized to $820 million (from the outstanding amount of $655 million) to refinance existing term loans and cover transaction fees as well as an original issue discount. S&P anticipates that credit metrics will remain at the stronger end of the 'B-' rating category over the next 12 months. Vantage has increased revenue, earnings, and cash flows in recent periods, driven by successful pass-through of higher input and inflationary costs via pricing actions with a record year in 2022. An improving product mix also benefits the company's margin along with investments in restructuring initiatives to improve productivity. S&P said, "As a result, we expect leverage to remain higher than historical levels with weighted-average S&P Global Ratings-adjusted debt to EBITDA of 5x-6x and weighted-average funds from operations (FFO) to debt of low-double-digit percentages. We note that 2022 credit metrics are stronger than these levels." The positive outlook reflects the potential for a higher rating if Vantage establishes a track record of maintaining metrics near these levels. S&P expects positive free cash flow and adequate liquidity over the next 12 months, despite high exposure to interest rate movements. S&P said, "We expect the company to generate positive free cash flow in forecast years driven by strength in earnings. We expect this to offset year-over-year lower FFO in the next 12 months which is expected due to higher average benchmark interest rates and the company's largely floating-rate debt structure. We anticipate liquidity will remain adequate for the next 12 months supported by available cash balances, positive free operating cash flow, and the proposed upsized $100 million revolving credit facility. While we expect the springing financial covenant on the amended revolving credit facility to remain in place post-amendment, Vantage will remain compliant with ample cushion in the next 12 months. With the proposed extension of debt maturities by up to two years, we believe the company will have an improved debt maturity profile for the short term." Vantage continues to improve its product mix and focus on higher-margin consumer end markets, but geographic and customer concentration risks remain. Over the years, the company has expanded with multiple acquisitions that increased its end-market diversity and presence in segments including food and personal care. This is in line with its strategy to increase focus on profitability versus the top line, while shedding volumes from lower-margin businesses. With the acquisition of JEEN International and Botanicals Plus (collectively JEEN) in March 2022, the company further expanded into personal care. While Vantage has production facilities outside the U.S., its revenues and EBITDA remain primarily concentrated in the U.S., posing a strong geographic concentration risk. S&P said, "We believe this risk is heightened due to the weakness in the U.S. macroeconomy anticipated through at least the first half of 2023, which should impair consumer spending. This is partially mitigated by Vantage's portfolio having relatively less inherent cyclicality. Its key operating facilities are concentrated in Illinois. Disruption of operations at any one of these locations would hurt operating results, which we view as a risk factor. Vantage has long-standing relationships with its top customers." Vantage maintains relatively weak margins, albeit better than historical levels, but its position in niche markets is strong and benefits from high barriers to entry. In 2022, the company's pricing in response to inflation coupled with benefits from operational improvement initiatives has supported margin execution in a record year. S&P said, "We expect margins to normalize. Due to relatively constrained pricing power, albeit improved from historical levels, Vantage has lower margins than commodity chemical peers such as LSB Industries Inc. Given the relatively large investments required in a small niche market, high barriers to entry should help protect Vantage's market positions. Vantage's business also benefits from the high proportion of contractual sales, with cost pass-throughs in its commodity-like oleochemical business and demonstrated ability to pass on cost increases in its specialty derivatives business. However, as a result of Vantage's relatively low margins and size and moderate customer and low geographic diversification, we continue to assess its business risk as weak." S&P said, "The positive outlook on Vantage's ratings reflects our expectation that earnings stability will continue in the next 12 months, with an improved financial profile following the proposed extension in debt maturities. In our base-case scenario, we expect earnings and cash flow generation to help leverage such that weighted-average FFO to debt will be about the low-double-digit percentage area and weighted-average debt to EBITDA in the 5x-6x range. We note that leverage may be better for some period. The outlook reflects the company's demonstrated ability to pass on higher input costs to support earnings growth despite higher raw material costs as well as its growing focus on higher-value product applications. We consider the company's key end markets to be relatively less cyclical, which somewhat mitigates macroeconomic weakness. "We expect the company to generate positive free cash flow and maintain adequate liquidity over the next 12 months. We have not factored into our analysis any distributions to shareholders or significant debt-funded capital spending or acquisitions. We note that the current financial sponsor has owned the company for over five years." S&P could consider an outlook revision over the next 12 months if: -- Vantage's margins decline significantly as the result of weaker-than-expected end-market demand due to macroeconomic weakness, the company not being able to adequately pass-through increases in raw material costs, a large debt-funded acquisition or shareholder rewards such that weighted-average debt to EBITDA approaches 6x on a sustained basis or weighted-average FFO to debt decreases to the mid-single-digit percentages; or -- Liquidity weakens such that sources are below 1.2x uses or free cash flows turn negative; and -- Any debt maturities become current (under 12 months). S&P could take a positive rating action over the next couple of quarters if: -- Improved profitability leads to EBITDA margins approaching the high-teen percent area on a consistent basis, such that FFO to debt is sustained in the low-double-digit percent area consistently and weighted-average debt to EBITDA is sustained consistently at the lower end of the 5x-6x range; and -- It sustains positive free cash flow generation, liquidity remains adequate over the next 12 months, and financial sponsors remain supportive of maintaining credit metrics at these levels. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance is a moderately negative consideration in our credit rating analysis on Vantage, as is the case for most rated entities owned by private-equity sponsors. We view financial sponsor-owned companies with highly leveraged financial risk profiles as demonstrating corporate decision-making that prioritizes the interests of controlling owners, typically with finite holding periods and a focus on maximizing shareholder returns." VOIP-PAL.COM INC: Incurs $616K Net Loss in First Quarter -------------------------------------------------------- VoIP-PAL.COM Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a loss and comprehensive loss of $615,583 for the three months ended Dec. 31, 2022, compared to a loss and comprehensive loss of $301,540 for the three months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $354,727 in total assets, $287,886 in total liabilities, and $66,841 in stockholders' equity. As of Dec. 31, 2022, the Company had an accumulated deficit of $70,692,162 as compared to an accumulated deficit of $66,685,703 at Dec. 31, 2021. As of Dec. 31, 2022, the Company had a working capital deficit of $267,184 as compared to a working capital deficit of $118,104 at Dec. 31, 2021. The decrease in the Company's working capital of $149,080 is due to ongoing operating expenses and less equity raised during the period. Net cash used by operations for the three months ending Dec. 31, 2022 and 2021 was $374,986 and $269,328 respectively. The increase in net cash used for operations for the three months ending Dec. 31, 2022 as compared to the three months ending Dec. 31, 2021 was primarily due to stock-based compensation and an increase in legal fees and professional services. Net cash used in investing activities for the three months ending Dec. 31, 2022 and 2021 was $Nil and $Nil, respectively. Net cash provided from financing activities for the three months ending Dec. 31, 2022 and 2021 was $89,000 and $139,000, respectively. The decrease in net cash provided by financing activities of $50,000 was due to lower amounts of equity raised and less cash proceeds from private placements and no exercise of warrants during the three months ending Dec. 31, 2022. The Company primarily finances its operations from cash received through the private placements of its common stock and the exercise of warrants from investors and through the payment of stock-based compensation. The Company said that while there can be no assurance that capital will be available as necessary to meet continued developments and operating costs or, if the capital is available, that it will be on terms acceptable to the Company, the Company believes its resources are adequate to fund its operations for the next 12 months. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1410738/000149315223004696/form10-q.htm About VOIP-PAL.com Since March 2004, VOIP-PAL.com has developed technology and patents related to Voice-over-Internet Protocol (VoIP) processes. All business activities prior to March 2004 have been abandoned and written off to deficit. The Company operates in one reportable segment being the acquisition and development of VoIP-related intellectual property including patents and technology. Vancouver, Canada-based Davidson & Company LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated Dec. 23, 2022, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. WHO DAT?: Taps Enlign Business Brokers as Financial Advisor ----------------------------------------------------------- Who Dat?, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Enlign Business Brokers, Inc. as its financial advisor. The Debtor requires a financial advisor to get professional opinion as to what its assets will yield at liquidation according to commonly accepted professional standards; and as to what the present value is for any proposed distribution of property other than cash. The Debtor may also require additional services, including but not limited to, deposition support, incremental discussions with its professionals, and expert witness services. Enlign will charge an initial flat fee of $5,000 due upon engagement. The firm's current customary rate is $525 per hour. As disclosed in court filings, Enlign does not have an interest materially adverse to the interest of the Debtor's estate, creditors or equity security holders. The firm can be reached through: Jeff Snell Enlign Business Brokers, Inc. 2009 Caminos Dr Raleigh, NC 27607 Phone: (919) 624-1124 Email: jsnell@enlign.com About Who Dat? Inc. Who Dat?, Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D. La. Case No. 21-10292) on March 8, 2021, with as much as $1 million in both assets and liabilities. Lugenbuhl Wheaton Peck Rankin & Hubbard and Intellectual Property Consulting serve as the Debtor's bankruptcy counsel and special counsel, respectively. [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re Alexander H. Alperovich Bankr. W.D. Tenn. Case No. 23-10203 Chapter 11 Petition filed February 13, 2023 represented by: C. Jerome Teel, Jr., Esq. In re The Madison Clinic for Applied Behavior Analysis LLC Bankr. N.D. Ala. Case No. 23-80259 Chapter 11 Petition filed February 14, 2023 See https://www.pacermonitor.com/view/YSJ3LRQ/The_Madison_Clinic_for_Applied__alnbke-23-80259__0001.0.pdf?mcid=tGE4TAMA represented by: Stuart M. Maples, Esq. MAPLES LAW FIRM, PC E-mail: kpickett@mapleslawfirmpc.com In re EVinfinite Bankr. M.D. Ga. Case No. 23-10113 Chapter 11 Petition filed February 14, 2023 See https://www.pacermonitor.com/view/PAU5CZQ/EVinfinite__gambke-23-10113__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re DET Medical P.C. Bankr. E.D.N.Y. Case No. 23-40497 Chapter 11 Petition filed February 14, 2023 See https://www.pacermonitor.com/view/QJCJJSY/DET_Medical_PC__nyebke-23-40497__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Kathy J. Ostrander Bankr. W.D.N.Y. Case No. 23-20072 Chapter 11 Petition filed February 14, 2023 represented by: Mark Weiermiller, Esq. In re Charles V. Long, Jr. Bankr. W.D. Okla. Case No. 23-10316 Chapter 11 Petition filed February 14, 2023 represented by: Stephen J. Moriarty, Esq. FELLERS, SNIDER ET AL E-mail: smoriarty@fellerssnider.com In re 5 Star Customs LLC Bankr. E.D. Tex. Case No. 23-40278 Chapter 11 Petition filed February 14, 2023 See https://www.pacermonitor.com/view/D43GLLI/5_Star_Customs_LLC__txebke-23-40278__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Stage Commander Bankr. E.D. Cal. Case No. 23-20461 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/UND4MPQ/Stage_Commander__caebke-23-20461__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Gnangni Homes, LLC Bankr. D.C. Case No. 23-00055 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/XSQYVVA/Gnangni_Homes_LLC__dcbke-23-00055__0001.0.pdf?mcid=tGE4TAMA represented by: Daniel Press, Esq. CHUNG & PRESS, P.C. E-mail: dpress@chung-press.com In re W T Pinnick Trust Bankr. M.D. Fla. Case No. 23-00541 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/LGNRGIQ/W_T_Pinnick_Trust__flmbke-23-00541__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Scott Seligson Bankr. S.D. Fla. Case No. 23-11189 Chapter 11 Petition filed February 15, 2023 represented by: Joel Aresty, Esq. In re Bryan Leslie Scheets Bankr. D. Kan. Case No. 23-20125 Chapter 11 Petition filed February 15, 2023 In re Sahene Construction LLC Bankr. M.D. La. Case No. 23-10096 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/XWDXQWY/Sahene_Construction_LLC__lambke-23-10096__0001.0.pdf?mcid=tGE4TAMA represented by: Ryan J. Richmond, Esq. STERNBERG, NACCARI & WHITE, LLC E-mail: ryan@snw.law In re Butcher and the Artist, LLC Bankr. D. Minn. Case No. 23-40278 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/JNJTSKA/Butcher_and_the_Artist_LLC__mnbke-23-40278__0001.0.pdf?mcid=tGE4TAMA represented by: Ronald Walsh, Esq. WALSH LAW E-mail: ron@walshlawmn.com In re Roman House Specialist Inc. Bankr. E.D.N.Y. Case No. 23-40503 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/XIM2QLY/Roman_House_Specialist_Inc__nyebke-23-40503__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Throop Ventures LLC Bankr. E.D.N.Y. Case No. 23-40510 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/X5K2H5A/Throop_Ventures_LLC__nyebke-23-40510__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Roland E. Senecal Bankr. E.D.N.C. Case No. 23-00419 Chapter 11 Petition filed February 15, 2023 represented by: J.M. Cook, Esq. In re Refresh2O Water Systems, Inc. Bankr. M.D. Pa. Case No. 23-00327 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/ANPBWMI/Refresh2O_Water_Systems_Inc__pambke-23-00327__0001.0.pdf?mcid=tGE4TAMA represented by: Gary J. Imblum, Esq. IMBLUM LAW OFFICES PC E-mail: gary.imblum@imblumlaw.com In re Boston BioPharm Inc. Bankr. N.D. Tex. Case No. 23-40429 Chapter 11 Petition filed February 15, 2023 See https://www.pacermonitor.com/view/MRY4JUQ/Boston_BioPharm_Inc__txnbke-23-40429__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Krollmotion Technologies, Inc. dba Anytime Fitness Bankr. C.D. Cal. Case No. 23-10113 Chapter 11 Petition filed February 16, 2023 See https://www.pacermonitor.com/view/XDWOJHY/Krollmotion_Technologies_Inc_dba__cacbke-23-10113__0001.0.pdf?mcid=tGE4TAMA represented by: Michael Jay Berger, Esq. LAW OFFICES OF MICHAEL JAY BERGER E-mail: michael.berger@bankruptcypower.com In re Artemisa Orozco Bankr. D. Nev. Case No. 23-10559 Chapter 11 Petition filed February 16, 2023 represented by: Michael Harker, Esq. In re JJJCC & K Management Corp Bankr. E.D.N.Y. Case No. 23-40520 Chapter 11 Petition filed February 16, 2023 See https://www.pacermonitor.com/view/HAJJ6AQ/JJJCC__K_Management_Corp__nyebke-23-40520__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Bella Restaurant & Bar, Inc. Bankr. S.D.N.Y. Case No. 23-35110 Chapter 11 Petition filed February 16, 2023 See https://www.pacermonitor.com/view/LWAWDSY/Bella_Restaurant__Bar_Inc__nysbke-23-35110__0001.0.pdf?mcid=tGE4TAMA represented by: Anne Penachio, Esq. PENACHIO MALARA, LLP E-mail: frank@pmlawllp.com In re All-Dry, Inc. Bankr. M.D. Tenn. Case No. 23-00569 Chapter 11 Petition filed February 16, 2023 See https://www.pacermonitor.com/view/XSEX6WQ/All-Dry_Inc__tnmbke-23-00569__0001.0.pdf?mcid=tGE4TAMA represented by: Denis Graham "Gray" Waldron, Esq. DUNHAM HILDEBRAND, PLLC E-mail: gray@dhnashville.com In re NM Motors LLC Bankr. E.D. Va. Case No. 23-30518 Chapter 11 Petition filed February 16, 2023 See https://www.pacermonitor.com/view/BUVTLGA/NM_MOTORS_LLC__vaebke-23-30518__0001.0.pdf?mcid=tGE4TAMA represented by: James E. Kane, Esq. KANE & PAPA, P.C. E-mail: jkane@kaneandpapa.com In re South Town Holdings, LLC Bankr. W.D. Ark. Case No. 23-70208 Chapter 11 Petition filed February 17, 2023 See https://www.pacermonitor.com/view/56WKCYA/South_Town_Holdings_LLC__arwbke-23-70208__0001.0.pdf?mcid=tGE4TAMA represented by: Michael D. Collins, Esq. Michael D Collins PA E-mail: michael@collinspa.com In re Tiga Advertising, Inc. Bankr. D. Colo. Case No. 23-10553 Chapter 11 Petition filed February 17, 2023 See https://www.pacermonitor.com/view/I7DT4XQ/Tiga_Advertising_Inc__cobke-23-10553__0001.0.pdf?mcid=tGE4TAMA represented by: Steven T. Mulligan, Esq. COAN, PAYTON & PAYNE, LLC E-mail: smulligan@cp2law.com In re Louis A. Telerico Bankr. N.D. Ohio Case No. 23-50212 Chapter 11 Petition filed February 17, 2023 represented by: Anthony DeGirolamo, Esq. In re T Love Trucking LLC Bankr. W.D. Pa. Case No. 23-20348 Chapter 11 Petition filed February 17, 2023 See https://www.pacermonitor.com/view/DDYHMWI/T_Love_Trucking_LLC__pawbke-23-20348__0001.0.pdf?mcid=tGE4TAMA represented by: Shawn N. Wright, Esq. LAW OFFICE OF SHAWN N. WRIGHT E-mail: shawn@shawnwrightlaw.com In re Right Choice Vending/Coffee, LLC Bankr. S.D. Fla. Case No. 23-11331 Chapter 11 Petition filed February 19, 2023 See https://www.pacermonitor.com/view/UV2PINA/Right_Choice_VendingCoffee_LLC__flsbke-23-11331__0001.0.pdf?mcid=tGE4TAMA represented by: Mark S. Roher, Esq. LAW OFFICE OF MARK S. ROHER, P.A. E-mail: mroher@markroherlaw.com In re D&D Baker Enterprise LLC Bankr. S.D. Ind. Case No. 23-00563 Chapter 11 Petition filed February 20, 2023 See https://www.pacermonitor.com/view/YDSK45I/DD_Baker_Enterprise_LLC__insbke-23-00563__0001.0.pdf?mcid=tGE4TAMA represented by: Preeti Gupta, Esq. PREETI (NITA) GUPTA, ATTORNEY E-mail: nita07@att.net In re James Allen Kunitzer and Bethzaida Kunitzer Bankr. N.D. Ill. Case No. 23-02187 Chapter 11 Petition filed February 20, 2023 represented by: Abraham Michelson, Esq. In re Mulch and Stone, L.L.C. Bankr. D. Md. Case No. 23-11088 Chapter 11 Petition filed February 20, 2023 See https://www.pacermonitor.com/view/E27ORIA/Mulch_and_Stone_LLC__mdbke-23-11088__0001.0.pdf?mcid=tGE4TAMA represented by: Daniel Staeven, Esq. FROST LAW E-mail: daniel.staeven@frosttaxlaw.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. 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