/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230306.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 6, 2023, Vol. 27, No. 64 Headlines 1325 ATLANTIC: Exclusivity Period Extended to June 13 1600 HICKS ROAD: Seeks Approval to Hire DAS Inc as Accountant 1600 HICKS ROAD: Seeks to Tap David P. Lloyd as Bankruptcy Counsel 2 MARINES: Seeks to Hire Tyler Bartl & Ramsdell as Legal Counsel 29TH AVE: Voluntary Chapter 11 Case Summary 5904 FOSTER AVENUE: Case Summary & Six Unsecured Creditors AEARO TECHNOLOGIES: Seeks to Extend Plan Exclusivity to July 31 AFTERSHOCK COMICS: Taps Sacker Entertainment Law as Special Counsel ALLEGIANCE COAL: In Chapter 11 Due to Issues With Lessor, Lender ALTICE USA: S&P Lowers ICR to 'B' on Earnings Drop, Outlook Neg. AMERICAN AUTO: $180M Bank Debt Trades at 26% Discount AMERICANAS SA: Investors Want to Freeze Assets of Majority Holders ANYWHERE REAL ESTATE: S&P Cuts ICR to 'B+' on Elevated Leverage AQ SUNSHINE: Midcap Financial Marks $1.7M Loan at 58% Off ARETE REHABILITATION: Bid to Use Cash Collateral Denied as Moot ARETEC GROUP: S&P Upgrades ICR to 'B', Outlook Stable ARRAY MIDCO: $147M Bank Debt Trades at 15% Discount ASTRO ONE ACQUISITION: $155M Bank Debt Trades at 41% Discount ATLAS PURCHASER: $250M Bank Debt Trades at 30% Discount AVERY ASPHALT: Taps Law Offices of Lars Fuller as Special Counsel BAYTEX ENERGY: Fitch Alters Outlook on B+ LongTerm IDR to Positive BBB CANADA: Gets CCAA Stay Order; A&M Named Monitor BEER REPUBLIC: Files Emergency Bid to Use Cash Collateral BELTWAY PLAZA: Seeks to Hire McNamee Hosea as Bankruptcy Counsel BERKTREE LLC: Files Emergency Bid to Use Cash Collateral BIRCHINGTON LLC: Files Emergency Bid to Use Cash Collateral BRENTWOOD AUTO: Wins Final Cash Collateral Access BURTS CONSTRUCTION: Court OKs Cash Collateral Access Thru June 1 C&L AUTOMOTIVE: Seeks Cash Collateral Access CABLEVISION LIGHTPATH: S&P Alters Outlook to Neg, Affirms 'B' ICR CASH DEVELOPMENT: Unsecureds be Paid in Full via Quarterly Payments CASH ENVIRONMENTAL RESOURCES: Unsecureds to be Paid in Full in Plan CASH ENVIRONMENTAL: Unsecureds to be Paid in Full in Plan CASTLE BLACK: Case Summary & 20 Largest Unsecured Creditors CASTLE US HOLDING: $1.20B Bank Debt Trades at 29% Discount CELSIUS NETWORK: Retail Borrowers Want Right to File Plan CENTURY ALUMINUM: Posts $113.5 Million Net Loss in Fourth Quarter CHESTNUT RIDGE: Court OKs Access to Cash Collateral Thru March 10 CHURCH OF GOD: Seeks to Hire Joseph A. Altman as Special Counsel CITGO HOLDINGS: Fitch Affirms LongTerm IDR at CCC+, Outlook Stable CITY BREWING: $850M Bank Debt Trades at 52% Discount CLEVELAND-CLIFFS INC: Fitch Alters Outlook on 'BB-' IDR to Stable COASTAL LANDFILL: Unsecureds be Paid in Full via Quarterly Payments COMMUNITY HEALTH: S&P Downgrades Issuer Credit Rating to 'SD' COMPASS POINTE: Unsecured Claims, If Any, to Get 100% in 5 Years CORE SCIENTIFIC: Court OKs $70MM DIP Loan From B. Riley COULEE HILL: Gets OK to Hire SK Realty as Real Estate Broker CREATIVE INVESTORS: Seeks to Hire Joel M. Aresty P.A. as Counsel CROWN FINANCE: $3.33B Bank Debt Trades at 87% Discount CROWN FINANCE: $650M Bank Debt Trades at 87% Discount CURITEC LLC: Case Summary & 20 Largest Unsecured Creditors DELCATH SYSTEMS: Faces Suit Over Consulting Fee Dispute DEVILLE CORP: Court OKs Interim Cash Collateral Access DIOCESE OF NORWICH: Unsecureds to Recover 100% in Committee's Plan DIV005 LLC: Committee Seeks to Hire Macey Wilensky & Hennings as Co DOMTAR CORP: S&P Downgrades Senior Secured Notes Rating to 'BB' EDISON INT'L: Fitch Assigns BB Instrument Rating on 2053 Sub. Notes EYECARE PARTNERS: $250M Bank Debt Trades at 18% Discount FAST RADIUS: Gets Court Approval for Wind-Down Plan FMC CLINIC: Seeks to Hire Berman DeLeve as Bankruptcy Counsel FORGE BIOLOGICS: Midcap Financial Marks $26M Loan at 50% Off FOX SUBACUTE: April 25 Disclosure Statement Hearing Set FREEPORT LNG: Fitch Affirms LongTerm IDR at 'B-', Outlook Negative FRONTIER COMMUNICATIONS: Fitch Rates $750MM First Lien Notes 'BB+' FUEL DOCTOR: Incurs $102K Net Loss in 2022 FUELCELL ENERGY: Unit Further Expands Lease with 52nd Street FULTON FILMS LLC: Seeks to Hire Ronald D. Weiss as Legal Counsel FUTURE VALUE: Court OKs Deal on Cash Collateral Access GATEWAY US: Midcap Financial Marks $304,000 Loan at 47% Off GB001 INC: Midcap Financial Marks $28.8M Loan at 83% Off GLOBAL AVIATION: Court OKs Interim Cash Collateral Access GLOBAL CARE: Case Summary & Six Unsecured Creditors GLOBAL MIXED MARTIAL: Seeks to Hire Ruff & Cohen as Attorney GOPHER RESOURCE: $510M Bank Debt Trades at 24% Discount GREEN ENERGY: Unsecureds to be Paid in Full via Quarterly Payments GTT COMMUNICATIONS: $350M Bank Debt Trades at 48% Discount HERITAGE POWER: Seeks to Hire Haynes and Boone as Legal Counsel HERITAGE POWER: Taps Alvarez & Marsal as Financial Advisor HERON DEVELOPMENT: Unsecured Creditors to be Paid in Full in Plan HOLDINGS MANAGEMENT: Wins Cash Collateral Access Thru March 10 HOLLEY INC: $100M Bank Debt Trades at 19% Discount HOMER CITY: $145M Bank Debt Trades at 28% Discount HOMERENEW BUYER: Midcap Financial Marks $17.9M Loan at 17% Off HORNBLOWER SUB: $349.4M Bank Debt Trades at 36% Discount INFINERA CORP: Posts $33.5 Million Net Income in Fourth Quarter INFOGROUP INC: $250M Bank Debt Trades at 20% Discount INSTANT BRANDS: $450M Bank Debt Trades at 50% Discount INTERMEDIA HOLDINGS: $273M Bank Debt Trades at 23% Discount IXS HOLDINGS: $600.1M Bank Debt Trades at 16% Discount JERK TACO MAN: Taps William E. Jamison & Associates as Counsel JP INTERMEDIATE: $450M Bank Debt Trades at 34% Discount JRT340ASSOCIATES: Condo Owner in Chapter 11 to Stop Foreclosure JUST BELIEVE: Amends Administrative Claims Pay Details KEY DIGITAL: Case Summary & 18 Unsecured Creditors KNOW LABS: Phillip Bosua Reports 6.2% Stake KNS HOLDCO: S&P Alters Outlook to Negative, Affirms 'B' ICR KOPPERS HOLDINGS: Fitch Assigns First Time 'BB-' LongTerm IDR LIFESCAN GLOBAL: $1.48B Bank Debt Trades at 22% Discount LIGADO NETWORKS: $117M Bank Debt Trades at 73% Discount LUMEN TECHNOLOGIES: $5B Bank Debt Trades at 18% Discount MAGIC DESIGNS: Seeks Approval to Hire Terzian Law as Attorney MAR DESIGNS: Seeks Cash Collateral Access MARKHAM, IL: S&P Raises GO Bonds Rating to 'BB+', Outlook Stable MATCON CONSTRUCTION: Gets OK to Hire MGS Law as Special Counsel MATHESON FLIGHT: Exclusivity Period Extended to June 27 MAVENIR SYSTEMS: $585M Bank Debt Trades at 31% Discount MAVERICK GAMING: $310M Bank Debt Trades at 23% Discount MAXIM CRANE: S&P Places 'B-' ICR on Watch Neg. on Refinancing Risk MERIDIAN RESTAURANTS: Case Summary & 20 Top Unsecured Creditors MOBIQUITY TECHNOLOGIES: Lind Global Entities Report 9.9% Stake MOVIA ROBOTICS: Court OKs Cash Collateral Access Thru March 31 MRVANDY INC: Case Summary & 11 Unsecured Creditors NAVACORD CORP: Fitch Affirms LongTerm IDR at 'B', Outlook Stable NEXTERA ENERGY: Fitch Affirms IDR at 'BB+', Outlook Stable NGI EAST BAY: Case Summary & Six Unsecured Creditors NGL ENERGY: To Redeem $203.4 Million of 7.5% Senior Notes due 2023 NOBLE HEALTH: Case Summary & 20 Largest Unsecured Creditors NORTHERN REGIONAL HOSPITAL: S&P Cuts 2017 Rev. Bond Rating to 'BB+' NRG ENERGY: Fitch Affirms LongTerm IDR at 'BB+', Outlook Stable OAKWOOD DREAMS: SARE Files for Chapter 11 Bankruptcy OEM SYSTEMS: Hires Harris Law Practice as Bankruptcy Counsel PARLEE CYCLES: Court OKs Interim Cash Collateral Access PAXE LATITUDE LP: Ends in Filing Chapter 11 Bankruptcy Protection PERFORMANCE POWERSPORTS: Faces Judge's Pushback on Ch. 11 Releases PHYSIQ INC: Seeks to Hire Cozen O'Connor as Bankruptcy Counsel PLAYA HOTELS: Swings to $56.7 Million Net Income in 2022 PRECISION 1 CONTRACTING: Seeks to Hire SMG ABA LLC as Accountant PREMIER BRANDS: S&P Upgrades ICR to 'CCC', Outlook Negative PURCHASING POWER: Midcap Financial Marks $9M Loan at 50% Off QUANERGY SYSTEMS: Completes Chapter 11 Sale RANGER OIL: Fitch Puts 'B-' LongTerm IDR on Rating Watch Positive REALMARK MARINA: Taps Stichter Riedel Blain & Postler as Counsel REDSTONE HOLDCO: $450M Bank Debt Trades at 39% Discount REGIONAL HEALTH: Regains Compliance With NYSE American Listing Rule RENEWABLE ENERGY: Unsecureds be Paid in Full via Quarterly Payments REVLON CONSUMER: $1.8B Bank Debt Trades at 80% Discount REVLON INC: Exclusivity Period Extended to May 9 RIDER HOTEL: Unsecured Creditors Will Get 100% of Claims in Plan RIGHT CHOICE: Files Emergency Bid to Use Cash Collateral RISING TIDE: $400M Bank Debt Trades at 41% Discount RLI SOLUTIONS: Seeks to Hire Tetrick & Bartlett as Accountant ROBERTSHAW US: $110M Bank Debt Trades at 65% Discount ROCKLEY PHOTONICS: Amends Super Senior & Existing Notes Claims ROOSEVELT INN: Unsecured Creditors Will Get 95% of Claims in Plan SAN JORGE CHILDREN'S: Exclusivity Period Extended to March 21 SCF LLC: Exclusivity Period Extended to April 24 SECURUS TECHNOLOGIES: Midcap Financial Marks $7.1M Loan at 18% Off SELAH MOUNTAIN: Wins Cash Collateral Access Thru April 30 SHUTTERFLY LLC: $1.11B Bank Debt Trades at 44% Discount SI HOLDINGS: Midcap Financial Marks $3.4M Loan at 78% Off SIGNAL PARENT: $550M Bank Debt Trades at 29% Discount SONAR ENTERTAINMENT: Midcap Financial Marks $1.1M Loan at 21% Off SONAR ENTERTAINMENT: Midcap Financial Marks $1.5M Loan at 21% Off SOUND INPATIENT: $215M Bank Debt Trades at 31% Discount SUMMER AVE: Amends Plan to Include PSB Secured Claim Pay Details SUMMER AVE: Wins Cash Collateral Access Thru March 30 SURF OPCO: Midcap Financial Marks $16.6M Loan at 23% Off TEXAS COASTAL: Case Summary & 13 Unsecured Creditors THREE ARROWS: Liquidator Want to Sell Some Seized NFTs TIGA ADVERTISING: Seeks to Hire Coan Payton & Payne as Counsel TISSUE TECH: Midcap Financial Marks $17.5M Loan at 30% Off TPT GLOBAL: Hikes Authorized Common Shares to 4.5 Billion TRANSDERMAL SPECIALTIES: Amends Maryland Equity Secured Claims Pay TRC COS INC: $30M Bank Debt Trades at 15% Discount U.S. SILICA: Swings to $77.8 Million Net Income in 2022 US RENAL CARE: $1.60B Bank Debt Trades at 33% Discount US SILICA: S&P Upgrades ICR to 'B' on Lower Leverage Expectations VENUE CHURCH: Wins Cash Collateral Access Thru March 9 VERITAS US: $1.70B Bank Debt Trades at 22% Discount VERITAS US: EUR748.6M Bank Debt Trades at 20% Discount VMR CONTRACTORS: Court OKs Cash Collateral Access Thru March 13 WEST MARINE INC: Seeks Lender Support for Debt Deal WESTERN GLOBAL: Fitch Lowers LongTerm IDR to 'B-', On Watch Neg. WILLIAM HOLDINGS: Trustee Taps Hilco Real Estate as Broker WINTERFELL CONSTRUCTION: Seeks to Hire Burg Wynn as Legal Counsel WOUAFF WOUAFF: Amends Several Secured Claims Pay Details WPI WATER: Seeks Approval to Tap Leonard K. Welsh as Legal Counsel ZAYO GROUP: $4.96B Bank Debt Trades at 15% Discount ZENTUARY GROUP: Gets OK to Hire Franklin & Company as Accountant [^] BOND PRICING: For the Week from February 27 to March 3, 2023 ********* 1325 ATLANTIC: Exclusivity Period Extended to June 13 ----------------------------------------------------- Judge Nancy Hershey Lord of the U.S. Bankruptcy Court for the Eastern District of New York extended 1325 Atlantic Realty, LLC's exclusive period to file a plan and disclosure statement and time within which the company may solicit acceptances of such plan to June 13 and August 10, respectively. Judge Lord found that the relief requested is necessary and in the best interest of the debtor, its estate, and its creditors. About 1325 Atlantic Realty 1325 Atlantic Realty, LLC, a company in Lakewood, N.J., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-40277) on Feb. 16, 2022, with up to $50 million in assets and up to $10 million in liabilities. Esther Green, manager, signed the petition. Judge Nancy Hershey Lord oversees the case. Klestadt Winters Jureller Southard & Stevens, LLP and Levine & Associates, P.C. serve as the Debtor's bankruptcy counsel and special litigation counsel, respectively. 1600 HICKS ROAD: Seeks Approval to Hire DAS Inc as Accountant ------------------------------------------------------------- 1600 Hicks Road LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Haitham Nasir and DAS, Inc. as its accountants. DAS will perform bookkeeping services, reconcile accounts, prepare monthly debtor-in-possession reports, and prepare tax returns. DAS' fees for these services will based upon the amount of time required at standard billing rates of $150 per bank statement or credit card statement and $75 for every monthly statement thereafter, plus, out-of-pocket expenses. DAS Inc. is a "disinterested person" within the meaning of 11 U.S.C. 101(14), according to court filings. The firm can be reached through: Haitham M. Nasir DAS, Inc. 924 Ogden Ave Lisle, IL 60532 Phone: 708-369-1559 About 1600 Hicks Road Rolling Meadows, Ill.-based 1600 Hicks Road, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-13205) on Nov. 14, 2022. Anam Qadri, partner, signed the petition. At the time of the filing, the Debtor disclosed total assets of $1,930,100 and total liabilities of $2,700,000. Judge David D. Cleary oversees the case. David P. Lloyd, Esq. at David P. Lloyd, Ltd. represents the Debtor as counsel. 1600 HICKS ROAD: Seeks to Tap David P. Lloyd as Bankruptcy Counsel ------------------------------------------------------------------ 1600 Hicks Road LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire David P. Lloyd, Ltd. as its bankruptcy counsel. The Debtor requires the services of the firm to represent it in matters concerning negotiation with creditors, preparation of a Chapter 11 plan and disclosure statement, examining and resolving claims filed against the estate, and the preparation and prosecution of adversary matters. The firm charges $400 per hour for its services. The firm received a retainer in the amount of $10,000. David P. Lloyd can be reached through: David P. Lloyd, Esq. David P. Lloyd, Ltd. 615B S. LaGrange Rd. LaGrange IL 60525 Telephone: (708) 937-1264 Facsimile: (708) 937-1265 Email: info@davidlloydlaw.com About 1600 Hicks Road Rolling Meadows, Ill.-based 1600 Hicks Road, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-13205) on Nov. 14, 2022. Anam Qadri, partner, signed the petition. At the time of the filing, the Debtor disclosed total assets of $1,930,100 and total liabilities of $2,700,000. Judge David D. Cleary oversees the case. David P. Lloyd, Esq. at David P. Lloyd, Ltd. represents the Debtor as counsel. 2 MARINES: Seeks to Hire Tyler Bartl & Ramsdell as Legal Counsel ---------------------------------------------------------------- 2 Marines and a Truck, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Tyler, Bartl & Ramsdell, P.L.C as its legal counsel. The firm's services include: a. assisting with required bankruptcy schedules and related forms; b. representing the Debtor at creditors' meetings; c. advising the Debtor of its duties and responsibilities under the Bankruptcy Code; d. assisting in preparing monthly financial forms and in analyzing cash flow and financial matters; e. advising the Debtor in connection with executory contracts; f. drafting documents to reflect agreements with creditors; g. resolving motions for relief from stay and adequate protection; h. negotiating for obtaining financing and use of cash collateral, as necessary, and determining whether reorganization, dismissal or conversion is in the best interests of the Debtor and its creditors; i. working with creditors' committee and other counsel, if any; j. working on any disclosure statement and plan of reorganization; and k. handling other matters that arise in the normal course of administration of the Debtor's bankruptcy estate. The firm will be paid at the rate of $450 per hour for its services and will be reimbursed for its out-of-pocket expenses. The retainer fee is $21,738. Steven Ramsdell, Esq., a partner at Tyler, 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: Steven B. Ramsdell, Esq. Tyler, Bartl & Ramsdell, P.L.C. 300 N. Washington St., Suite 310 Alexandria, VA 22314 Tel: (703) 549-5003 Email: SRamsdell@TBRCLaw.com About 2 Marines and a Truck 2 Marines and a Truck, Inc. provides moving services to residents around the entire Washington D.C. Metro area. Services include local moving, long distance moving, packing, and storage. 2 Marines and a Truck, Inc. DBA Two Marines Moving filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 23-10237) on Feb. 15, 2023. The petition was signed by Nicholas E. Baucom as CEO. At the time of filing, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Steven B. Ramsdell, Esq. at TYLER, BARTL & RAMSDELL, PLC represents the Debtor as counsel. 29TH AVE: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 29th Ave LLC 14616 Hawthorne Ave Flushing NY 11354 Business Description: The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Eastern District of New York Case No.: 23-40745 Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Kevin Tung, Esq. KEVIN KERVENG TUNG, P.C. 136-20 38th Avenue Suite 3D Flushing NY 11354 Tel: 718-939-4633 Email: ktung@kktlawfirm.com Total Assets: $828,425 Total Liabilities: $1,132,290 The petition was signed by Jia Yun Wang as member. The Debtor filed an empty list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6BRU6CI/29th_Ave_LLC__nyebke-23-40745__0001.0.pdf?mcid=tGE4TAMA 5904 FOSTER AVENUE: Case Summary & Six Unsecured Creditors ---------------------------------------------------------- Debtor: 5904 Foster Avenue Trust, Lamor Whitehead, Trustee 5904 Foster Avenue Brooklyn NY 11234 Business Description: The Debtor is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). The Debtor owns and manages real estate located at 5904 Foster Avenue, Brooklyn, New York. Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Eastern District of New York Case No.: 23-40744 Judge: Hon. Nancy Hershey Lord Debtor's Counsel: Brian L. Ponder, Esq. BRIAN PONDER LLP 745 Fifth Avenue, Suite 500 New York, NY 10151 Tel: 646-450-9461 Fax: 646-607-9238 Email: brian@brianponder.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Lamor Whitehead, trustee of 5904 Foster Avenue Trust. A copy of the Debtor's list of six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ZTZIG3I/5904_Foster_Avenue_Trust_Lamor__nyebke-23-40744__0001.4.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ZCW5TIY/5904_Foster_Avenue_Trust_Lamor__nyebke-23-40744__0001.0.pdf?mcid=tGE4TAMA AEARO TECHNOLOGIES: Seeks to Extend Plan Exclusivity to July 31 --------------------------------------------------------------- Aearo Technologies LLC, together with its debtor affiliates, asks the U.S. Bankruptcy Court for the Southern District of Indiana to extend their exclusive right to file a chapter 11 plan to July 31 and to solicit votes thereon to September 29. The debtors also request entry of a bridge order extending the filing exclusivity period through May 15, and the solicitation exclusivity period through July 14, which would allow the balance of the relief requested to be heard at an omnibus hearing on May 10. The debtors explained that an extension of the exclusivity periods will provide them with additional time to participate in mediation and negotiate a chapter 11 plan, with the goal of reaching a fair, equitable, and final settlement, including the opportunity to use the chapter 11 tools of establishing a claims bar date and aggregate claims estimation to facilitate plan confirmation. This is the debtors' third motion to extend its exclusivity periods. About Aearo Technologies Aearo Technologies, LLC -- https://earglobal.com/en -- is a 3M company that designs, manufactures, and sells personal protection equipment. The Indianapolis-based company serves customers worldwide. To address claims related to the Combat Arms Earplugs Version 2, Aearo Technologies and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case No. 22-02890) on July 26, 2022. In the petition filed by John R. Castellano, as authorized signatory, Aearo Technologies listed $1 billion to $10 billion in both assets and liabilities. The Debtors tapped Kirkland & Ellis and Ice Miller, LLP as bankruptcy counsels; McDonald Hopkins, LLC as special counsel; Bates White, LLC as claims valuation consultant; AP Services, LLC as restructuring advisor; and Kroll, LLC as claims agent and noticing agent. John R. Castellano, managing director at AlixPartners LLP, an affiliate of AP Services, serves as the Debtors' chief restructuring officer. Judge Jeffrey J. Graham oversees the cases. The U.S. Trustee for Region 10 appointed two separate official committees to represent tort claimants in the Debtors' cases. The tort claimants assert claims related to the use of faulty combat arms earplugs and respirators manufactured by the companies. The tort committee related to use of combat arms version 2 earplugs tapped Otterbourg P.C. and KTBS Law, LLP as bankruptcy counsels; Rubin & Levin, P.C. as Indiana counsel; Brown Rudnick, LLP and Caplin & Drysdale, Chartered as special counsels; Houlihan Lokey Capital, Inc. as investment banker; Province, LLC as financial advisor; and Stretto, Inc. as information agent. Meanwhile, the other committee is represented by the law firm of Rochelle McCullough, LLP. AFTERSHOCK COMICS: Taps Sacker Entertainment Law as Special Counsel ------------------------------------------------------------------- Aftershock Comics, LLC and Rive Gauche Television seek approval from the U.S. Bankruptcy Court for the Central District of California to employ Sacker Entertainment Law P.C. as special counsel. The Debtors require a special counsel to help negotiate transactions concerning the acquisition, and potential conversion of the Debtors' intellectual property for use in film and television; and to draft agreements related to the transactions. The firm will be paid at a flat fee of $7,500 per month. Neil Sacker, Esq., a partner at Sacker Entertainment Law, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Neil A. Sacker, Esq. Sacker Entertainment Law, P.C. 10445 Wilshire Blvd, Apt 1201 Los Angeles, CA 90024-4663 Tel: (310) 709-4552 Fax: (310) 556-5900 Email: neil@sackerentlaw.com About Aftershock Comics AfterShock Comics, LLC -- https://Aftershockcomics.com -- is an American comic book publisher launched in 2015. The company is based in Sherman Oaks, Calif. AfterShock Comics and affiliate Rive Gauche Television filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. Lead C.D. Calif. Case No. 22-11456) on Dec. 19, 2022. At the time of the filing, AfterShock Comics reported $10 million to $50 million in both assets and liabilities while Rive Gauche reported $50 million to $100 million in assets and $10 million to $50 million in liabilities. Judge Martin R. Barash oversees the cases. The Debtors are represented by Levene, Neale, Bender, Yoo & Golubchik, LLP. The U.S. Trustee for Region 16 appointed two separate committees to represent unsecured creditors in the Chapter 11 cases of AfterShock omics, LLC and Rive Gauche Television. ALLEGIANCE COAL: In Chapter 11 Due to Issues With Lessor, Lender ---------------------------------------------------------------- Allegiance Coal USA Limited filed for chapter 11 protection in the District of Delaware. The Debtors' core business is mining and processing metallurgical coal for export to steel mills on the seaborne market. The Debtors operate two coal mines in the United States. Debtor New Elk Coal Company LLC ("NECC") operates the New Elk Coal mine located 25 miles west of Trinidad, Colorado. The New Elk Coal mine was acquired by the Debtors’ parent company in October 2020. The New Elk Coal mine was historically mined under the name of Allen Mine, which first began production in 1951. Debtor Black Warrior Minerals, Inc. ("BWM") operates the Black Warrior mine located 25 miles north of Birmingham, Alabama, which has been actively mined since 2009. The Debtors are all directly or indirectly owned and controlled by non-debtor affiliate Allegiance Coal Limited ("AHQ"), a publicly traded Australian corporation listed on the Australian Securities Exchange. The Debtors recently made the decision to pivot back from thermal coal to metallurgical coal production at both mines. Metallurgical coal, also known as steelmaking or coking coal, is a necessary ingredient to make steel. The Debtors' decision to return to metallurgical production is in response to the decline in thermal coal prices for coal delivered to Europe as well as the significant recovery in metallurgical coal prices in recent months. The New Elk Coal mine is currently transporting its last rail shipment of thermal coal and then adjustments will be made at the coal preparation plant to produce metallurgical coal. Production of metallurgical coal has already begun at Black Warrior mine. As of the Petition Date, the majority of the Debtors' liabilities consists of senior secured funded indebtedness: * On May 24, 2022, Debtor ACUSA and non-Debtor AHQ entered into a Convertible Note Agreement with Collins St Convertible Notes Pty Ltd ACN 657 773 754, as trustee for The Collins St Convertible Notes Fund ABN 30 216 289 383, dated May 24, 2022. Under the Collins Note Agreement, ACUSA issued to Collins two tranches of convertible notes (the "Collins Notes"): (i) Tranche 1, with a face value of A$30,700,000, and (ii) Tranche 2, with a face value of A$12,157,143. As of the Petition Date, the aggregate principal amount outstanding under the Collins Notes is approximately A$42,857,000. * On Oct. 26, 2020, NECC entered into a Promissory Note in favor of Cline Mining Corporation in the amount of US$35,120,671 (the "Cline Note"). The Cline Note has a maturity date of July 1, 2030. As of the Petition Date, the aggregate principal amount outstanding under the Cline Note is approximately US$26,000,000. Events Leading to Chapter 11 Jonathan Romcke, CEO of the Debtors, explain that the emergency filing of the chapter 11 cases was precipitated by two events: (1) the threatened termination of the lease for BWM's right to mine by the lessor of the Black Warrior mine and (2) Collins' notice of an event of default under the Collins Note Agreement and Guaranty and Security Agreement, demanding repayment of its debt in full (a value of no less than AU$42,857,143) within 5 business days. The recent turmoil began when the lessor of the mineral rights at the Black Warrior mine threatened to terminate the lease granting BWM the right to mine. BWM and Warrior Met Coal Land, LLC ("Warrior Met") are parties to a Surface Coal Mining Lease, dated March 17, 2009, pursuant to which Warrior Met, as lessor, granted to BWM the right to mine and remove, by surface mining methods only, the coal that existed in, on or under the property described in the Lease. In exchange, BWM agreed to pay Warrior Met certain royalties -- an actual-production royalty based on the sales price of the coal that it mines and a monthly minimum royalty if the actual-production royalty payment is less than a certain amount. On Friday, February 17, 2023, Warrior Met unexpectedly informed the Debtors that it was terminating the Lease effective immediately and ordered that all mining operations at Black Warrior cease. In August 2022, BWM requested that Warrior Met allow an alternative calculation to determine the amount of actual-production royalty payments owed because changes in BWM's sales model called for a more reasonable calculation for actual-production royalty payments. BWM stopped making actual-production royalty payments until an agreement as to the appropriate calculation was reached. During this time, BWM continued to operate the mine and the parties agreed to an extension of the Lease until December 31, 2023. BWM also continued to make the monthly minimum royalty payment. Despite the ongoing discussions regarding the actual-production royalty payments, Warrior Met abruptly issued a termination notice of the Lease. Three hours after issuing the notice, Warrior Met rescinded its termination until Monday, February 20, 2023, at 9:00 a.m. Concerned with preserving the Lease and the jobs of the approximately 80 employees at the Black Warrior mine, the Debtors negotiated extensively with Warrior Met over the weekend of February 18–19 to broker a deal that would allow the Debtors to continue operating the mine with the Lease intact. The Debtors kept Collins informed of the negotiations with Warrior Met in real time. Shortly before the Monday forbearance deadline, the Debtors reached an agreement with Warrior Met, whereby Warrior Met agreed to not terminate the Lease in exchange for the Debtors' payment of the actual-production royalty payments on an agreed-to payment schedule, with an initial payment to be made on February 22, 2023. Despite the Debtors' good-faith negotiations and resolution with Warrior Met, the Debtors' prepetition lender, Collins, sought to prevent payment to Warrior Met. Late on Feb. 20, 2023, Collins sent a formal notice to the Debtors' parent company, AHQ, calling an event of default under the Collins Note Agreement and Guaranty and Security Agreement. In particular, Collins asserted that an event of default had occurred, and was continuing, as a result of the Debtors' inability to pay their debts as they come due in connection with Warrior Met's February 17 termination letter and the termination of the Lease, even though a payment schedule had been reached and the termination rescinded. As a result of the alleged default, Collins demanded that the Debtors pay all funds due under the Collins Note Agreement (an amount no less than AU$42,857,143) within 5 business days. In accordance with the terms of the Collins Note Agreement, the notice of default increased the interest rate payable under the Collins Note Agreement from 10% to 15% retrospectively from the date the debt was first issued and imposed the default rate of interest going forward. The Debtors immediately requested that Collins withdraw the notice of default. To date, Collins has refused to do so. Therefore, AHQ had no alternative but to enter bankruptcy protection and appoint an administrator in Australia because AHQ and the Debtors are not able to repay Collins' prepetition debt in full on 5 business days' notice. Unfortunately, as a result of the foregoing recent events, the Debtors were forced to file these chapter 11 cases on an emergency basis. The Debtors perceived an imminent threat that, absent a bankruptcy filing and the imposition of the automatic stay, the Debtors would have to layoff substantially all their workforce and cease operating the mines to the detriment of the Debtors' creditors and stakeholders. The Debtors intend to make use of the breathing spell afforded to them by the imposition of the automatic stay to further evaluate their strategic alternatives with input from their various stakeholders. About Allegiance Coal USA Limited Allegiance Coal USA Limited -- https://www.allegiancecoal.com.au/ -- is a listed Australian company focused on seaborne met coal mine development and operations, with operating mines in southeast Colorado, central Alabama, as well as a development project in northwest British Columbia. Allegiance Coal USA Limited filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10234) on February 21, 2023. In the petition filed by Jonathan Romcke, as chief executive officer, the Debtor reported assets between $50 million and $100 million and liabilities between $10 million and $50 million. The Debtor is represented by: Robert J. Dehney, Esq. Morris, Nichols, Arsht & Tunnell 12250 Highway 12 Weston, CO 81091 Tel: (302) 658-9200 Email: rdehney@morrisnichols.com ALTICE USA: S&P Lowers ICR to 'B' on Earnings Drop, Outlook Neg. ---------------------------------------------------------------- S&P Global Ratings lowered all ratings on U.S.-based cable provider Altice USA Inc. one notch, including its issuer credit rating to 'B' from 'B+' with a negative outlook. The negative outlook reflects uncertainty around earnings and subscriber trends, as well as the potential for a more aggressive financial policy (which could include a take-private transaction), such that we could lower the rating if leverage rises above 7x or FOCF turns negative. Altice USA's earnings fell more than expected in the fourth quarter, resulting in debt to annualized EBITDA that breached its downgrade trigger of 6.5x. Credit metrics have come under increasing pressure from significant earnings declines. Debt to EBITDA was 6.6x for the last two quarters annualized, as significant reinvestments into the business have yet to translate into profitable broadband revenue growth. S&P said, "Fourth quarter 2022 EBITDA contracted 15.7% year over year, contributing to a full-year decline of 12.7%, which was weaker than we expected when we lowered our forecast in December 2022 (10.5% decline)." Top-line softness (revenues down 6% year over year in fourth-quarter) was felt across almost all of its services, including profitable broadband revenue down slightly (1% year over year). Furthermore, advertising revenue was surprisingly weak (down 11% in the fourth quarter) despite political advertising tailwinds (down 25% excluding political) due to cancelled campaigns and a general slowdown in spending amid the macroeconomic environment. Business services revenue, a source of growth for many other cable operators, was down 9% due to the loss of the Air-Strand fiber backhaul contract and elevated competition, particularly from Verizon (relatively flat excluding Air-Strand). Altice has been investing heavily in operating expenses (opex) with the goal of returning to growth longer term, rising 15% in 2022. Most of the increase has come from broadening sales and distribution channels to restore to pre-COVID-19 pandemic levels, as the company has doubled door-to-door salespeople and increased its retail store presence about 50% the past year. As a result of elevated costs and top-line declines, S&P Global Ratings-adjusted EBITDA margins declined to about 38% in the fourth quarter, which is weaker than S&P expected (about 40%). S&P said, "We expect earnings and cash flow to remain under pressure in 2023, resulting in leverage increasing further near term. We revised our forecast downward, with the biggest change being higher nonprogramming opex due to recent investments, which will remain elevated as Altice aims to improve the customer experience. Although we expect the growth rate in selling, general, and administrative costs to slow to about 1%-2% in 2023 (from 15% in 2022) since most investments have already been made, we believe it could take more time for Altice to increase broadband revenue, particularly considering its already high average revenue per user (ARPU)." The company operates in a more competitive environment that could prompt it to either become more promotional to gain subscribers or reduce price increases once promotions expire to reduce churn. Furthermore, the smaller business services and advertising segments could be constrained in 2023 by a likely recession and lack of political advertising that further reduce revenue about 4% in 2023. New management has outlined its turnaround strategy The deterioration in operating performance has resulted in margins returning only moderately above 2016 levels prior to the elimination of substantial costs. Ultimately, the aggressive cost-cutting strategy has resulted in market share losses, reputational damage, and significant executive turnover over the past year. Therefore, a new leadership team was installed to sharpen the focus on the company's customer-centric strategy and return to growth. New CEO Dennis Mathew has highlighted several initiatives: Improving customer experience: This does not require incremental investment, but rather modifying antiquated processes and redirecting resources into digital transformation, self-installations, and better customer tools. Accelerating go-to-market strategy: This involves evolving bundles and speed-tier strategies to focus on pricing, packaging, offers, and marketing for long-term customer value and growth. The company will take on a more hyper-local approach to marketing and carve a more meaningful role for its nascent mobile service in the broadband bundle. New management has scaled back fiber investment plans to preserve cash flow. S&P said, "We believe Altice's operating challenges stem primarily from high prices and low customer satisfaction rather than network quality. Therefore, we believe opting for a more surgical approach to FTTH is prudent given high leverage, EBITDA pressure, and reduced financial flexibility. Although fiber is the best technology available, upgrading coaxial is much more affordable (particularly in less densely populated western markets) and offers speeds similar to fiber." Altice USA will continue with its FTTH deployment in 2023, albeit at a slower pace. It now plans to pass 900,000 homes with fiber this year, down from its previous guidance of 1.6 million. This will reduce capital spending to about $1.7 billion from the previous guidance of about $2 billion. Beyond 2023, management will employ a more balanced approach to strategically deploy fiber in markets that offer the most attractive returns. This will involve an annual review process, compared with the prior management's August 2022 guidance of 6.5 million homes passed (about 65% of footprint) by the end of 2025. As of Dec. 31, 2022, Altice passed about 2.16 million homes with fiber. We estimate that to overbuild the more competitive eastern footprint with FTTH would equate to about 4 million homes and therefore model in similar capital expenditure (capex) for 2024 before it declines thereafter. There are early signs of improvement in customer metrics, but challenges remain. Broadband subscriber losses slowed to 8,000 in the fourth quarter from 43,000 in the third quarter, modestly better than S&P expected. Management attributed this to a few factors: -- More gross additions driven by investment in expanding its sales channels. -- Successful rebranding of SuddenLink to Optimum and improved brand perception. -- Customer service improvements, as transactional net promoter scores are up and troubleshooting and repeat calls are down. S&P said, "However, we await evidence that Altice can return to sustainable EBITDA growth. While data consumption trends point toward long-term increases in broadband ARPU, we believe near-term growth could be challenging as Altice reevaluates its pricing and packaging to compete more effectively with both fiber-based competition from Verizon and emerging fixed wireless competition. Unlike its larger incumbent cable peers, Altice USA has yet to prioritize mobile as a defensive tool. This will likely become a larger component of Altice's strategy to improve customer churn, but it could prove more difficult to utilize mobile aggressively given the state of its balance sheet and the start-up losses entailed in ramping up a new service. "We believe the capital structure remains sustainable longer term, and rising interest rates create more uncertainty. We expect EBITDA to reach a trough in 2023 (as operating expenses peak) before growing slightly in the following years. We also expect FOCF to bottom out over the next 1-2 years before improving meaningfully in 2025-2026, as capital investments subside. Under these assumptions, debt to EBITDA would approach a more manageable 5.5x in 2026 (from about 7x in 2023). However, repricing in the capital markets could pressure cash flow longer term as Altice will eventually need to refinance lower-cost debt. While there is time for the capital markets to recover (the company's weighted-average maturity is 5.7 years), we don't anticipate the cost of borrowing to approach levels from 2020 or 2021. As a result, these higher interest rates could weaken cash flows, which will in turn hurt credit quality. Therefore, we believe Altice will need to reduce leverage to preserve credit quality and restore historical cash flow metrics. "Still, we recognize that Altice has managed its debt portfolio well in recent years, reducing its exposure to rising interest rates while extending debt maturities opportunistically. Roughly 76% of its debt is fixed rate, and the company employs hedging strategies on its floating-rate debt. It has a floating rate lock of about 1.5% on $1.5 billion of principal through January 2025 and about 2.9% of $1.5 billion of principal through December 2026. Still, rising interest rates will increase its cash interest expense to about $1.5 billion in 2023 (from about $1.25 billion in 2022). Altice has a total of about $8.5 billion in floating-rate debt." The negative outlook reflects uncertainty around Altice's ability to stabilize operating trends since there is limited cushion for further deterioration in earnings or cash flow relative to S&P's base-case forecast. This includes debt to EBITDA of 6.9x in 2023. S&P could lower the rating if debt to EBITDA rises above 7x or FOCF turns negative due to elevated competition and an inability to increase profitable broadband revenue. S&P could revise the outlook to stable if the company expands broadband revenue such that there is greater visibility into deleveraging toward 6.5x in 2024 with further improvement thereafter. ESG credit indicators: E-2, S-2, G-5 Altice is owned by controlling shareholder Patrick Drahi, who holds about 92% of voting shares and about a 50% economic stake. Drahi has a track record of engaging in activity that prioritizes shareholder interests over those of creditors at other companies that he controls. For example, the 2021 take-private of European telecommunications assets highlighted governance concerns when take-private debt raised at a personal funding vehicle of Drahi was repaid using proceeds from Altice International S.a.r.l.'s 50.1% stake in French towers that were designated unrestricted shortly after the company was taken private. Given that Altice's stock price has declined substantially over the past year and a SuddenLink transaction is now off the table, S&P believes a take-private transaction could be considered in the U.S. AMERICAN AUTO: $180M Bank Debt Trades at 26% Discount ----------------------------------------------------- Participations in a syndicated loan under which American Auto Auction Group LLC is a borrower were trading in the secondary market around 74.3 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $180 million facility is a Term loan that is scheduled to mature on December 30, 2028. The amount is fully drawn and outstanding. American Auto Auction Group LLC operates physical, mobile, and digital auction venues in addition to various remarketing services that are expected to remain stable channels in the foreseeable future, despite the advent of alternate powertrains and electric vehicles. AMERICANAS SA: Investors Want to Freeze Assets of Majority Holders ------------------------------------------------------------------ Taís Fuoco of Bloomberg News reports minority shareholders of Americanas have filed a request for Sao Paulo court to freeze the assets of the majority shareholders, directors and executives responsible for approving the company's balance sheets, O Globo columnist Lauro Jardim said without revealing how he obtained the information. Among the majority shareholders that may be affected by the blockade are Jorge Paulo Lemann, Marcel Telles and Beto Sicupira, Americanas' reference shareholders. The request is for minority shareholders to be rewarded for the values of the shares they held until Jan. 11, according to the report. 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. ANYWHERE REAL ESTATE: S&P Cuts ICR to 'B+' on Elevated Leverage --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Anywhere Real Estate Group LLC to 'B+' from 'BB-'. The outlook is negative. At the same time, S&P lowered its issue-level rating on the company's senior secured debt to 'BB' from 'BB+' and lowered its issue-level rating on the company's senior unsecured debt to 'B' from 'B+'. The '1' recovery rating on the first-lien term loan and '5' recovery rating on the senior unsecured debt are unchanged. The negative outlook reflects the company's elevated leverage in 2023 due to significant weakness in the housing market and risk that leverage remains above the mid-5x area in 2024. Anywhere reported home sale transaction volume declined 14% in 2022 due primarily to rising 30-year mortgage rates and limited housing supply. S&P expects this trend will continue in 2023, with modest improvement in the back half of the year before home sale transactions return to double-digit percent growth in 2024. S&P said, "Existing home sales declined with rising mortgage rates in 2022, and we expect further declines in 2023 amid a high interest rate environment. In 2022, average 30-year mortgage rates in the U.S. rose by over 300 basis points while median home prices rose for both luxury and total existing homes, slowing home sale transaction volume by 14%. As a result, Anywhere's total revenue fell 13% in 2022. We expect average 30-year mortgage rates to stay above 6% for the coming year given the possibility that the Fed will raise the risk-free interest rate again to mitigate inflation in the U.S. economy. Existing home sale transactions were down over 30% in January 2023, and we expect transactions will be down over 20% in the first half of 2023 before improving in the back half of the year due to modest rate improvement, pent-up demand, and the lapping of lower transaction periods in the second half of 2022. Still, we expect overall existing home sale volumes to decline by about 15% year-over-year, resulting in Anywhere's revenue declining another 12%-15% in 2023. "Anywhere's leverage increased to 5.5x in 2022 and will rise further in 2023 with cost cuts partially offsetting the impact of volume declines. We expect leverage will increase to the mid-7x area in 2023 on lower volumes and a similar operating cost structure. Management executed on $150 million of planned cost savings in 2022 and identified another $200 million cost savings for 2023. We believe Anywhere will continue to find cost savings in its fixed operating cost structure through physical office closures and investments in tech-enabled services to agents and end customers, however, inflationary pressures on wages, litigation expenses, and software development costs could offset ongoing initiatives. Our base-case forecast for transaction volume decline of 15% will result in EBITDA declining over 25% in 2023." S&P believes elevated agent commission splits will pressure profitability even as housing transaction volumes recover. Anywhere's gross margins are a function of the commission split it pays out to agents. Competition for quality real estate agents has led brokerages to design recruitment and retention incentives that result in the most productive real estate agents commanding increasingly higher commission splits. In a low sales volume market, the highest producing agents contribute the majority of the commission revenue Anywhere earns from its owned brokerages and franchises, effectively lowering the company's gross margin, which have declined 750 basis points since 2019; S&P expects it to fall another 100 to 150 basis points in 2023. Long-term housing trends remain favorable, though the pace of Anywhere's performance improvement is uncertain. Nearly one quarter of the growing U.S. population are millennials who are entering the market as first-time homebuyers for the next several years. Many first-time home buyers were excluded from market participation due to low inventory or high prices in overvalued or quickly appreciating local markets over the last three years. S&P said, "We believe pent-up demand for home purchases will support rising transactions, and we currently forecast 15% volume improvement in 2024 which would result in Anywhere's leverage improving to the mid-5x area. However, volumes could stay depressed beyond 2023 if mortgage rates remain high, home prices stay above consumers' willingness to pay across many local or large markets, or new construction starts stay weak due to high labor and material costs or supply chain issues. Conversely, Anywhere's performance could exceed our base-case forecast due to falling mortgage rates, price moderation, or an faster-than-expected increase in housing supply." The company's strong liquidity and long-dated, mostly fixed-rate capital structure minimizes near-term risks. Despite weak performance, Anywhere ended 2022 with $214 million cash on the balance sheet and $750 million availability on its $1.1 billion revolver due in 2027, which it drew on at the end of 2022 to help repay its 2023 notes. S&P said, "Although we expect steep transaction declines in 2023, we forecast Anywhere will generate over $50 million to $75 million of free operating cash flow (FOCF) in 2023. Over 90% of Anywhere's debt is fixed rate, shielding the company from the cash flow impacts of high interest rate credit markets. We believe Anywhere's balance sheet action taken in recent years, such as limiting its variable interest rate exposure, refraining from share buybacks during a challenging operating environment, proactively extending maturities, and paying down higher-interest notes, reflect prudent financial policy." The negative outlook reflects the company's elevated leverage in 2023 due to significant weakness in the housing market and risk that leverage remains above the mid-5x area in 2024. S&P could lower the rating if we believe Anywhere Real Estate's S&P Global Ratings-adjusted leverage will be sustained above the mid-5x area, which could result from a combination of the following factors: -- A slower-than-expected recovery of home sale volumes; -- A rising operating cost base, including legal expenses; -- Continuous competitive pressures driving down broker commission splits; or -- A material deterioration in liquidity, evidenced by increased revolver draws or persistent negative FOCF generation. S&P could revise the outlook to stable if S&P believes the company's leverage will fall and be sustained below the mid-5x area, which could result from: -- A significant improvement in home sale volumes and significant permanent reductions to the overall cost base; and -- Realized benefits from Anywhere's higher-margin ancillary title, mortgage, and relocation services. ESG credit indicators: E-2, S-2, G-2 AQ SUNSHINE: Midcap Financial Marks $1.7M Loan at 58% Off --------------------------------------------------------- Midcap Financial Investment Corporation has marked its $1,785,000 loan extended to AQ Sunshine Inc. to market at $752,000 or 42% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt - Revolver to AQ Sunshine Inc. The loan accrues interest at a rate of 1.00 % (SOFR+625) per annum. The loan matures on April 15, 2024. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. AQ Sunshine Inc. is in the relation insurance industry. ARETE REHABILITATION: Bid to Use Cash Collateral Denied as Moot --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, denied as moot the Expedited Motion for Interim and Final Orders Authorizing the Use of Cash Collateral Nunc Pro Tunc filed by Arete Rehabilitation, Inc. as the case has been dismissed. The Court canceled the continued hearing set for March 15, 2023. About Arete Rehabilitation Arete Rehabilitation, Inc. -- https://www.areterehab.com/ -- specializes in older adult care, Arete Rehab provides physical, occupational, and speech therapy services in the northeast. Arete Rehabilitation filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 22-11661) on Nov. 15, 2022, with up to $1 million in assets and up to $10 million in liabilities. James S. LaMontagne has been appointed as Subchapter V trustee. The Debtor filed a prior Chapter 11 Case in the U.S. Bankruptcy Court for the District of New Hampshire (Bankr. D.N.H. Case No. 22-10477) on September 28, 2022, which was dismissed on Nov. 10, 2022. Judge Christopher J. Panos oversees the case. The Debtor is represented by Joshua A. Burnett, Esq. at Amann Burnett, PLLC. ARETEC GROUP: S&P Upgrades ICR to 'B', Outlook Stable ----------------------------------------------------- S&P Global Ratings said it raised its issuer credit rating on Aretec Group Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P raised its rating on the existing first-lien term loan to 'B' from 'B-' and the senior unsecured debt rating to 'CCC+' from 'CCC'. S&P also assigned our 'B' issue rating to the firm's new incremental first-lien term loan. Aretec's EBITDA has been boosted by increased cash sweep revenue from higher interest rates. S&P expects that this will continue to improve debt service capacity and lower Aretec's adjusted debt-to-EBITDA leverage. Aretec's announced acquisition of Securian Financial Group Inc.'s retail wealth management business will be funded by some of the proceeds from the issuance of an additional first-lien term loan of $750 million. Inclusive of this new debt and EBITDA, S&P expects its adjusted measure of Aretec's debt to EBITDA to be about 4x, down significantly from over 6x in the first quarter of 2022. S&P said, "The upgrade reflects the company's improved debt-to-EBITDA leverage and debt service capacity, which we now expect to be around 4.0x annually on a run-rate basis, down substantially from over 6.0x--at the beginning of 2022.This is driven predominantly by increased cash sweep revenue, which we expect on a run-rate basis to be approximately $400 million a year under current interest rate assumptions, significantly higher than the $12 million recorded in 2021. Since cash sweep revenue is non-compensable to the company's financial advisors and has little costs associated with it, it mostly falls to the bottom line. "Our ratings on Aretec reflect its private-equity ownership and what we consider to be aggressive financial management, including a high debt burden, negative tangible equity, and volatile debt-service coverage. This is partially offset by the firm's minimal exposure to credit and market risk.Given the sensitivity of EBITDA to interest rate conditions, we expect the company to prudently manage its liquidity and debt, including around the potential springing maturity of its new bank loan. Even though we expect leverage to decline, we continue to see the firm's private equity ownership and aggressive financial management as a rating constraint. "We believe Aretec's acquisition of Securian's retail wealth management business, with approximately 1,000 advisors and $47 billion in total client assets, will meaningfully grow the company's scale. Already one of the largest independent broker-dealers in the U.S., Aretec will operate with pro forma $365 billion in total client assets and approximately 9,000 financial advisors. Securian offers an attractive, productive, and primarily homegrown advisor network. We believe execution risk is limited given Aretec's experience integrating acquisitions, and Securian using the same clearing broker as Aretec, which should support realization of cost synergies within nine months of closing, similar to its acquisition of VFA in 2021." Aretec will fund the acquisition of Securian Financial's retail wealth management business with some of the proceeds of a non-fungible incremental first-lien term loan of $750 million, which will be pari passu with the existing senior secured bank loans. Under the new term loan springing maturity covenant, the new loan maturity would move to October 2025 or December 2028 if the existing senior secured bank loans (about $1 billion) are not paid down to less than $50 million or refinanced on different terms by either September 2025 or December 2028, respectively. S&P expects the $175 million revolving credit facility will remain undrawn. The revolver has a maximum 6.5x springing first-lien net leverage covenant, which is only applicable if the company draws over 35% of the revolver at the end of a quarter. S&P said, "We rate the first-lien term loans at the level of the issuer credit rating because they are Aretec's senior-most debt outstanding. We rate the senior unsecured notes two notches below the issuer credit rating reflecting the existence of considerable priority debt (in excess of 30% of adjusted assets). "The stable outlook reflects our expectation that Aretec's profitability and S&P Global Ratings-adjusted debt-to-EBITDA leverage should continue to benefit from higher short-term interest rates over the next 12 months, even as the company's private equity ownership and aggressive financial management constrain our assessment of capitalization. "Over the next 12 months, we could lower the ratings if we expect Aretec's interest coverage to substantially decline, liquidity to worsen, or adjusted debt to EBITDA to materially increase. "An upgrade is unlikely over the outlook horizon because of the private equity ownership. Over the longer term, we could upgrade Aretec if we expect it to sustain leverage across interest rate and market cycles well below 4x because of a demonstrated commitment to a reduced debt appetite and less volatile revenues." ARRAY MIDCO: $147M Bank Debt Trades at 15% Discount --------------------------------------------------- Participations in a syndicated loan under which Array Midco Corp is a borrower were trading in the secondary market around 84.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $147 million facility is a Term loan that is scheduled to mature on September 17, 2026. The amount is fully drawn and outstanding. Array Canada Marketing Inc., headquartered in Toronto, Ontario, is a designer, manufacturer and distributor of retail merchandising displays and fixtures for mass market and high-end cosmetics brands and retailers. The company has operations in North America, Europe and Asia. ASTRO ONE ACQUISITION: $155M Bank Debt Trades at 41% Discount ------------------------------------------------------------- Participations in a syndicated loan under which Astro One Acquisition Corp is a borrower were trading in the secondary market around 58.8 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $155 million facility is a Term loan that is scheduled to mature on October 25, 2029. The amount is fully drawn and outstanding. Founded in 2021 and based in the US, Astro One Acquisition Corporation is a merged entity of Petmate and Brody. Both companies engage in the production and distribution of pet products such as cat waste management products, toys, kennels, shelters, chews, and feeding and watering products. ATLAS PURCHASER: $250M Bank Debt Trades at 30% Discount ------------------------------------------------------- Participations in a syndicated loan under which Atlas Purchaser Inc is a borrower were trading in the secondary market around 70.5 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $250 million facility is a Term loan that is scheduled to mature on May 18, 2029. The amount is fully drawn and outstanding. Atlas Purchaser, Inc., which does business as Alvaria, Inc., acquired the assets of Aspect Software in a leveraged buyout in 2021. Aspect is a provider of call center software and solutions. AVERY ASPHALT: Taps Law Offices of Lars Fuller as Special Counsel ----------------------------------------------------------------- Avery Asphalt, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ the Law Offices of Lars Fuller, PC as special counsel. The firm's services include investigating potential claims against certain insiders who have been accused of, among other things, receiving undisclosed pre-bankruptcy transfers from the Debtor and operating a competing business during the pendency of the Debtor's bankruptcy case. The firm will be paid an hourly fee of $450. Lars Fuller, Esq., a partner at the Law Offices of Lars Fuller, PC, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Lars Fuller, Esq. Law Offices of Lars Fuller, PC 999 18th Street, Suite 1230 S Denver, CO 80202 Tel: (720) 201-4616 Email: lars@larsfullerlaw.com About Avery Asphalt Avery Asphalt, Inc. is the main operating company and installs, maintains, and improves roadways, parking lots, and other outdoor surfaces. Its affiliates, Avery Equipment, LLC and Avery Holdings, LLC, own the equipment and real estate used in its business, respectively. Another affiliate, LBLA Ventures, Inc. is the holding company for a non-operating Arizona asphalt company while 1401 S. 22nd Ave., LLC owns the real estate that was formerly used by Regional Pavement Maintenance of Arizona, Inc. in its business. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No. 21-10799) on Feb. 19, 2021, with up to $50,000 in assets and up to $10 million in liabilities. The bankruptcy was filed after a receiver was appointed for all the Debtors. The receivership hampered Avery Asphalt's ability to operate profitably. Judge Michael E. Romero oversees the cases. David J. Warner, Esq., at Wadsworth Garber Warner Conrardy, P.C. and the Law Offices of Lars Fuller, PC serve as the Debtor's bankruptcy counsel and special counsel, respectively. BAYTEX ENERGY: Fitch Alters Outlook on B+ LongTerm IDR to Positive ------------------------------------------------------------------ Fitch Ratings has affirmed Baytex Energy Corp.'s Long-Term Issuer Default Rating (IDR) at 'B+' and senior unsecured notes at 'BB-'/'RR3'. The Rating Outlook has been revised to Positive from Stable. The Positive Outlook follows the announcement that Baytex has agreed to acquire Eagle Ford trend producer, Ranger Oil Corporation in an equity and cash transaction. The transaction materially increases Baytex's production scale, as well as its absolute debt level by approximately CAD1.5 billion to CAD2.45 billion, while maintaining clear headroom under Fitch's upgrade EBITDA leverage sensitivity with leverage expected between 1.0x to 1.5x during Fitch's forecast. The Positive Outlook could be resolved as Baytex makes progress towards its CAD1.5 billion debt target, improves its liquidity position and demonstrates execution as an operator in the Eagle Ford trend. KEY RATING DRIVERS Scale Enhancing Merger: The acquisition of Ranger, which is expected to close in late 2Q23, values Ranger, including assumed debt, at CAD3.4 billion (USD2.5 billion) with Ranger shareholders receiving 7.49 Baytex shares and US13.31 cash for total consideration of US44.36 per share. Baytex projects the proforma company to produce 155-160mboepd with 85% liquids, which approximately maintains Baytex's favorable standalone liquids weighting and meaningfully increases its production scale to a level more typically of the 'BB' rating category. The acquisition of Ranger adds 160,000 net acres and increases the company's Eagle Ford inventory to 12-15 years at current production levels. A 174mmboe of Proved reserves addition to Baytex from the acquisition improves the overall credit profile as Baytex's standalone 264mmboe if Proved reserves is below typical 'B+' rated peers. There is low risk the acquisition will not close as Juniper Capital Advisors, who own approximately 54% of Ranger equity, has entered into an agreement to vote in favor of the transaction. Limited Synergies: Synergies from the Ranger acquisition are limited due to Baytex's standalone non-operating Eagle Ford position, which Marathon Oil is the operator for, and experienced a modest production decline in 2022 attributable to reduced activity levels. Additionally, since the acquired Ranger position is not adjacent the Baytex's it therefore does not provide opportunities for lateral drilling across the acreages. The acquisition of operated assets is beneficial to Baytex's credit profile as it will allow Baytex control over development pace and increases the company's percentage of operating assets in the Eagle Ford from zero to 70%. Gross Debt Increase: The transaction is expected to be funded by a US500 million (CAD675 million) bridge loan, a USD250 million term loan and increase in revolver drawings from YE 2022 of approximately USD284.6 million to USD659 million. Baytex's debt increase from YE 2022 is expected to be approximately CAD1.5 billion, bringing total debt to approximately CAD2.45 billion. Proforma leverage is expected to be approximately 1x in 2023, which continues Baytex's ample headroom below Fitch's positive EBITDA leverage sensitivity of 2.0x. Fitch expects Baytex's final capital structure and liquidity position at close of the Ranger acquisition may slightly change with the company indicating the bridge loan is expected to be replaced with a new issuance of debt securities prior to closing. Initially Weaker Liquidity: Baytex will increase its revolving credit facilities from US850 million to US1 billion with proforma $659 million drawn on its facilities. Fitch expects liquidity to improve during the forecast period as FCF, less the 50% FCF target distribution to shareholders, is used to reduce debt towards Baytex's newly established CAD1.5 billion gross debt target. Baytex management has a track record of adhering to gross debt reduction targets, having reduced standalone Baytex debt by almost 50% from approximately CAD1.8 billion at the beginning of 2021 to approximately $0.9 billion by YE 2022. Shareholder Distributions: As part of the announcement, Baytex is increasing its shareholder return target to 50% of free cash flow, which includes a CAD0.09 annual fixed dividend (approximately CAD80 million annual cost) with the remaining FCF attributable to shareholder returns being in the form of share buybacks. Under its stated financial policy shareholder distributions may increase to 75% of free cash flow, if Baytex meets its target of CAD1.5 total debt. Stand Alone Diversified Assets: Baytex has a meaningfully diverse asset base by geography and hydrocarbon. In 2022, 34% of production came from the Eagle Ford (80% liquids), and the remaining 66% was Canadian production (84% liquids). Baytex's Canadian production is roughly evenly split between light oil and heavy oil, with heavy oil prices being discounted due to quality and transportation differentials. The impact on Baytex's overall margins from this is softened by its Light Louisiana Sweet (LLS) priced Eagle Ford production and Mixed Sweet Blend (MSW) priced Viking production. Clearwater Play Upside: Baytex has grown production on its Clearwater play near Peavine, AB from zero at the beginning of 2021 to 12mboepd of approximately 100% oil weighted production in 4Q22. Baytex has been de-risking this play for several years, and has demonstrated positive results and strong economics, highlighted by seven wells in 2022 with IP30's of over 1,000bblpd of oil. This play is currently a modest contributor to Baytex's overall production, but is trending on a positive growth path as it receives outsized capital allocations, with an additional CAD85 million expected in 2023, for continued development and de-risking. Hedged Differentials and Commodity Prices: Helping provide cash flow visibility, Baytex stated it intends to have hedged approximately 40% of its proforma net oil exposure. This is approximately the same level of oil exposure hedged stand-alone Baytex had in 2022. Baytex also partially hedges Canadian differentials between Western Canadian Select and MSW to WTI. Baytex has U.S. dollar to Canadian dollar FX exposure due to its Eagle Ford assets, U.S. dollar-denominated debts and Canadian dollar reporting. Baytex has an ESG Relevance Score of '4' for Energy/Management, reflecting the company's relatively smaller scale and heavy oil exposure, which may expose the company to impending energy transition risks. These factors have a negative impact on the credit profile, and are relevant to the ratings in conjunction with other factors. DERIVATION SUMMARY Proforma the Ranger acquisition, Baytex will differentiate its self in size from Canadian peers MEG Energy Corp. (B+/Stable; 102mboed at 3Q22, 100% liquids) and Vermilion Energy Inc. (BB-/Stable; 84.2mboed at 3Q22, 54% liquids), whose 'BB-' rating benefits from its exposure to European benchmarked oil and gas. Compared to 'BB-'/Stable rated Matador Resources and SM Energy, which produced 105.3mboepd and 137.9mboepd, respectively in 3Q22, the proforma Baytex will be larger, but expected to generate weaker netbacks due to the stronger economic benefits from Matador and SM's Permian Basin exposure. A differentiating factor for Baytex has historically been is its non-operating status portion of its production relating to its Eagle Ford trend assets, which is not typical at the 'B+' rating level. However, this is expected to be less of a concern forward looking, as Baytex's proforma Eagle Ford operating status increases to 70%. KEY ASSUMPTIONS - WTI/bbl oil price USD81 in 2023, USD62 in 2024, USD50 in 2025 and longer term; - HHUB/mcf natural gas USD5 in 2023, USD4 in 2024, USD3 in 2025 and USD2.75 longer term; - AECO differentials steady as a percentage of Henry Hub during majority of forecast; - Ranger acquisition successfully occurs in late 2Q23; - Low single digit annual production growth through the forecast; - Modest dividend growth during forecast; - Bridge loan is replaced by senior unsecured debt in 2023; - Capex at or in excess of CAD1 billion annually during forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Meaningful progress towards management stated gross debt reduction financial policy; - Improved liquidity and reduced revolver utilization; - Production growth resulting in average daily production above 125 mboepd; - Mid-cycle EBITDA leverage below 2.0x; Factors that could, individually or collectively, lead to negative rating action/downgrade: - Failure to complete the Ranger acquisition largely as contemplated could result in a revision of the Outlook to Stable; - Sustained increased revolver borrowings and inability to live within cash flow over the next 12 to 18 months; - Loss of operational momentum or evidence of execution weaknesses on its operated Eagle Ford assets. - Mid-cycle EBITDA leverage sustained above 2.5x. LIQUIDITY AND DEBT STRUCTURE Proforma Liquidity Diminished: Related to the Ranger acquisition, Baytex is increasing its credit facilities to USD1 billion from USD850 million. The company is utilizing revolver drawings, a USD250 million 364 day term loan and a USD500 million bridge loan to partially finance the cash component of the Ranger acquisition. Proforma Baytex's credit facilities, including the term loan, are expected to be drawn USD659 million (CAD890 billion), resulting in a 66% utilization rate. Stand Alone Liquidity: Baytex holds minimal amounts of cash on its balance sheet and had CAD385 million drawn credit facilities and CAD15.7 million of letter of credit at YE 2022. Its credit facilities mature in 2026 and totalled US850 million, providing approximately CAD770 million of liquidity availability. Baytex's credit facilities are covenant based as opposed to reserve based, and as such do not have negative redetermination risk. At YE 2022 Baytex had USD410 million outstanding on its 8.75% 2027 senior unsecure issuance. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Baytex would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim and a 100% draw on its secured revolving facility, reflecting that Baytex's facilities are not affected by redetermination risk. Going-Concern (GC) Approach Baytex's GC EBITDA assumption reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. Baytex's bankruptcy scenario considers a structurally lower priced crude oil and natural gas environment, resulting in reduced operational and financial flexibility, in line with stress case assumptions beyond existing production hedged period. Fitch believes the lower price environment supports a lower capital program, modest production declines and negative FCFs. The GC assumption reflects Fitch's stressed case price deck, which assumes WTI oil prices of USD42 in 2023, USD32 in 2024, USD42 in 2025 and USD45 long-term. An EV multiple of 4.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: - The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x; - Selection of a 4x multiple is consistent with similarly rated Canadian peers, historically lower PDP reserves, lack of operator history in the Eagle Ford as well as exposure to lower-netback heavy oil in Canada. Liquidation Approach The liquidation estimate reflects Fitch's view of transactional and asset-based valuations, including recent transactions in the Canadian oil sands, Viking, Duvernay and the Eagle Ford basin on a CAD/boepd and CAD/acre, as well as Baytex's standardized measure of net cash flows (PV-10) estimates. This data was used to determine a reasonable sales price for the company's assets. The allocation of value in the liability waterfall results in a 'RR3' rating for the Baytex's senior secured second lien notes, notching up one level from Baytex's 'B+' IDR. The analysis also considered the proposed capital structure at close of the Ranger transaction and if the transaction closes the same as or materially near currently contemplated with the bridge loan being replaced by unsecured debt, the notching for the senior unsecured notes is expected to stay as is. ISSUER PROFILE Baytex Energy is mid-sized a Canadian E&P company with a production mix including heavy oil, light oil and condensate, NGLs and natural gas. Its operations in Canada are within the Western Canadian Sedimentary Basin and in the U.S. within the Eagle Ford trend. ESG CONSIDERATIONS Baytex has an ESG Relevance Score of '4' for Energy/Management, reflecting the company's relatively smaller scale and heavy oil exposure, which may expose the company to impending energy transition risks. These factors have a negative impact on the credit profile, and are 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 ----------- ------ -------- ----- Baytex Energy Corp. LT IDR B+ Affirmed B+ senior unsecured LT BB- Affirmed RR3 BB- BBB CANADA: Gets CCAA Stay Order; A&M Named Monitor --------------------------------------------------- BBB Canada Limited ("Company") made an application to the Ontario Superior Court of Justice (Commercial List) ("Court") and was granted an order ("Initial Order"), which, among other things, provides for a stay of proceedings pursuant to the Companies' Creditors Arrangement Act, as amended ("CCAA"). Although Bed Bath & Beyond Canada L.P. ("BBB LP" and together with the Company, "BBB Canada") is not an applicant in the CCAA Proceedings, the stay of proceedings and other benefits of the Initial Order were extended to BBB LP. Pursuant to the Initial Order, Alvarez & Marsal Canada Inc. was appointed as monitor ("Monitor") of the business and financial affairs of the Company. During the Stay Period, all parties are prohibited from commencing or continuing legal action against the Company and all rights and remedies of any party against or in respect of the Company or its assets are stayed and suspended except with the written consent of the Company and the Monitor or leave of the Court. According to court documents, The Bed Bath & Beyond Group has been in financial difficulty for the past several years, suffering significant net losses since 2018. Over this period, BBB Canada itself has seen dramatic declines in revenues. In an effort to improve the Bed Bath & Beyond Group's financial performance, former management embarked on a series of initiatives designed to transform the business. Unfortunately, the COVID-19 pandemic and the broader economic downturn significantly disrupted the Bed Bath & Beyond Group's operations, putting further financial strain on the entire enterprise, including BBB Canada, and hindering the transformational efforts of management. The Bed Bath & Beyond Group's situation significantly worsened throughout 2022, with declining year-over-year sales in both the United States and Canada, multiple credit rating downgrades, cash flow constraints, and significant inventory reductions. Cash constraints caused delays and stoppages of merchandise shipments to BBB Canada's stores, causing inventory levels to decrease dramatically. In June 2022, certain management of BBBI was replaced, and the new, current management embarked on an aggressive campaign to preserve cash, reduce costs and strengthen the balance sheet. By August 2022, the Bed Bath & Beyond Group believed it was well-positioned for success. However, less than one week after announcing its strategic and business update, BBBI's Chief Financial Officer passed suddenly and tragically. The CFO's death left the Bed Bath & Beyond Group with a significant leadership gap at a critical juncture in its restructuring efforts. The process of remedying the Bed Bath & Beyond Group's business and financial decline continued to be challenging through the Fall of 2022. The Bed Bath & Beyond Group announced that during the third quarter holiday period, it suffered from a lower in stock position of approximately 70%. The situation continued to decline in January 2023. On Jan. 5, 2023, in its notice of late filing with respect to its Form 10-Q for the three months ended Nov. 26, 2022, the Bed Bath & Beyond Group disclosed that there was substantial doubt about its ability to continue as a going concern. Shortly thereafter, the ABL Agent declared events of default and delivered notices of acceleration under both the ABL Facility and BBBI's then US $375 million FILO Facility, thereby causing the principal amount of such facilities, together with all accrued interest thereon and other fees and obligations, to become immediately due and payable. The ABL Agent also declared cash dominion, which restricted the entire Bed Bath & Beyond Group, including BBB Canada, from spending any cash on hand. A copy of the Initial Order and all materials filed in these proceedings may be obtained at the Monitor's website at https://www.alvarezandmarsal.com/BBBCanada or on request from the Monitor by calling 1-844-864-9548 or by emailing BBBCanada@alvarezandmarsal.com. Court-appointed Monitor: Alvarez & Marsal Canada Inc 200 Bay St. Toronto, Ontario M5J 2J1 Fax: 416-847-520 Al Hutchens Tel: 416-847-5159 Email: ahutchens@alvarezandmarsal.com Ryan Gruneir Email: rgruneir@alvarezandmarsal.com Nate Fennema Email: nfennema@alvarezandmarsal.com Connor Good Email: cgood@alvarezandmarsal.com Counsel to the Court-appointed Monitor: Bennett Jones LLP 3400 One First Canadian Place P.O. Box 130 Toronto, Ontario M5X 1A4 Fax: 416-863-1716 Kevin Zych Tel: 416-777-5738 Email: zychk@bennettjones.com Sean Zweig Tel: 416-777-6254 Email: zweigs@bennettjones.com Michael Shakra Tel: 416-777-6236 Email: shakram@bennettjones.com Joshua Foster Tel: 416-777-7906 Email: fosterj@bennettjones.com Counsel to the Company: Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place 100 King Street West, Suite 6200 Toronto, Ontario M5X 1B8 Fax: 416-862-6666 Marc Wasserman Tel: 416.862.4908 Email: MWasserman@osler.com Shawn Irving Tel: 416.862.4733 Email: SIrving@osler.com Dave Rosenblat Tel: 416-862-5673 Email: DRosenblat@osler.com Emily Paplawski Tel: 403-260-7071 Email: epaplawski@osler.com Blair McRadu Tel: 416-862-4204 Email: bmcradu@osler.com US Counsel to the Company: Kirklan & Ellis LLP 601 Lexington Avenue New York, New York 10022 Fax: 212-446-4900 Joshua Sussberg Tel: 1-212-446-4829 Email: joshua.sussberg@kirkland.com Derek Hunter Tel: 1-212-909-3371 Email: derek.hunter@kirkland.com Emily Geier Tel: 1-212-446-6429 Email: emily.geier@kirkland.com Ross J. Fiedler Tel: 1-212-390-4351 Email: ross.fiedler@kirkland.com Charles Sterrett Tel: 1-312-862-4069 Email: charles.sterrett@kirkland.com Max Freedman Tel: 1-312-862-4486 Email: max.freedman@kirkland.com BBB Canada Limited is a wholly-owned subsidiary of Bed Bath & Beyond Inc. ("BBBI"), a corporation incorporated pursuant to the laws of the State of New York with a head office in Union, New Jersey. BBBI is the ultimate parent corporation of the entire Bed Bath & Beyond Group. BBBI's shares are listed on the NASDAQ exchange. BEER REPUBLIC: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- Beer Republic Brewing, LLC asks the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, for authority to use cash collateral and provide adequate protection. The use of cash collateral by the Debtor is essential to: a) the continued operation of business of the Debtor; b) maintain the value of the Property; and c) an effective reorganization of the Debtor. Unless authorized to use cash collateral in the ordinary course of business, operations of the Debtor will be impaired and ability of the Debtor to reorganize will be jeopardized. Touchmark National Bank may assert liens and security interests in some or all of the property of the Debtor that is used in the Debtor's business operations. As of the Petition Date, the Debtor had not received any new orders for the production of beer and selzer products and was not actively producing new product for its customers and had terminated most of its employees. The Debtor has now received an order to produce new product for a customer and has received a $11,499 deposit to produce this product. It is the Debtor's business practice to request a deposit for some or all of its production prior to proceeding with same and, in this case, the deposit represents the entire sales price for this particular customer. Second, without prior notice, the Debtor received a payment in the amount of $78,500 from an insurance claim it had submitted, pre-petition, in connection with a pre production delivery of selzer product which was rejected by a customer as being defective. The Debtor disputed liability for this claim and sought compensation from its insurance company. The Debtor retains an additional insurance claim in the amount of approximately $20,000, which it hopes to recover shortly. The Debtor sought bankruptcy relief due to a combination of cash flow problems and a scheduled foreclosure sale scheduled for January 3, 2023. Having now received at least one order for contract brewing and with the additional funds received from the insurance claim, the Debtor believes it is in the best interests of the Bankruptcy Estate and its creditors to re-start operations, rehire certain employees and fund its operations. As adequate protection for a valid and perfected security interest that the Secured Creditors may have in cash collateral, to the extent necessary, the Debtor proposes: a) a replacement lien in the postpetition Property of the Debtor and the proceeds thereof to the same extent of any pre-petition liens that are valid, properly perfected, and enforceable and in the same relative priority and continuation of valid and properly perfected liens and security interests held by such party in its pre-petition collateral; and b) to use cash collateral only in accordance with the budgets to be approved by the Court and provision of monthly operating reports required by the U.S. Trustee and filed with the Court. As part of the negotiations with Touchmark Bank, the Debtor has agreed to make adequate protection payments to the Lender in the amount of $7,500 per month. A copy of the motion is available at https://bit.ly/3ZlsLd2 from PacerMonitor.com. About Beer Republic Brewing Beer Republic Brewing, LLC is an American microbrewery company in Lawrenceville, Ga. Beer Republic Brewing filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-50032) on Jan. 2, 2022, with $1 million to $10 million in both assets and liabilities. Gary Murphey has been appointed as Subchapter V trustee. Judge Paul W. Bonapfel oversees the case. The Debtor is represented by Henry F. Sewell, Jr., Esq., at the Law Offices of Henry F. Sewell, Jr., LLC. BELTWAY PLAZA: Seeks to Hire McNamee Hosea as Bankruptcy Counsel ---------------------------------------------------------------- Beltway Plaza Investment, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire McNamee Hosea, P.A., as its attorneys. The firm will render these services: a. prepare and file all necessary bankruptcy pleadings on behalf of the Debtor; b. negotiate with creditors; c. represent with respect to Adversary and other proceedings in connection with the Bankruptcy; d. prepare Debtor's disclosure statement and plan of reorganization; and e. any other matters related to the Bankruptcy and the Debtor's reorganization. McNamee Hosea will be paid at these rates: Craig M. Palik $425 per hour Justin P. Fasano $400 per hour Associates $300 to $350 per hour Paralegal $135 per hour As disclosed in court filings, McNamee Hosea is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Craig M. Palik, Esq. Justin P. Fasano, Esq. MCNAMEE, HOSEA, P.A. 6411 Ivy Lane, Suite 200 Greenbelt, Maryland 20770 Telephone: (301) 441-2420 Facsimile: (301) 982-9450 Email: cpalik@mhlawyers.com Email: jfasano@mhlawyers.com About Beltway Plaza Investment 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. BERKTREE LLC: Files Emergency Bid to Use Cash Collateral -------------------------------------------------------- Berktree, LLC and K Medical Supplies LLC ask the U.S. Bankruptcy Court for the Middle District of North Carolina, Durham Division, for authority to use cash collateral. The Debtors will require necessary funds for operating their business and other expenses. These expenses will include maintenance, insurance, purchase of inventory, and other operating expenses. Berktree was severely impacted by supply chain disruptions in early 2020 caused by the COVID-19 pandemic. This created a severe cash flow crunch that the company was not able to recover from. In addition, inventory was damaged by a water leak in the company's warehouse that caused substantial lost sales. All of this caused the company to incur several merchant cash advances that ultimately increased cash flow issues, leading to the reorganization. The Debtors are parties to several loan agreements including a Note dated as of September 25, 2019 between the Debtors and West Town Bank & Trust in the original principal amount of $1.6 million and a Note dated as of October 15, 2021, with Blue Ridge Bank, N.A. as lender in the original principal amount of $425,000. The Debtors seek authority to use cash collateral through and including the effective date of a confirmed plan of reorganization or liquidation, a sale of substantially all assets of the estate, or the conversion of the case to Chapter 7, whichever may first occur; provided, however, without further notice and hearing the Debtors may not use cash collateral for any purpose other than (i) operations in the ordinary course of business, (ii) adequate protection payments (if any) to secured creditors, or (iii) payment of allowed administrative fees, costs, or expenses. As adequate protection, the lien claimants will be granted a replacement lien equal in extent, validity, and priority to the lien held by the UCC Claimants as of the Petition Date. A copy of the motion and the Debtors' budget is available at https://bit.ly/3YgKdOr from PacerMonitor.com. The Debtors project $15,611 in total income and $5,990 in total expenses. About Berktree, LLC Berktree, LLC offers medical, health, rehab, dental, and laboratory supplies. Berktree, LLC and K Medical Supplies LLC sought protection under U.S. Bankruptcy Code (Bankr. M.D.N.C. Lead Case No. 23-80037) on February 28, 2023. In the petition signed by Stephen Kovacs as owner/managing member, the Debtor disclosed $100,000 in assets and up to $10 million in liabilities. James C. White, Esq., at J.C. White Law Group, PLLC, represents the Debtor as legal counsel. BIRCHINGTON LLC: Files Emergency Bid to Use Cash Collateral ----------------------------------------------------------- Birchington, LLC asks the U.S. Bankruptcy Court for the District of Columbia to use cash collateral and provide adequate protection. On May 2, 2019, the Debtor, by and through Bembridge and Sequar as manager, entered into a Real Estate Note with SSHCOF II Washington DC, LLC, a Georgia limited liability company, in the amount of $55 million. The amortization commencement date is May 3, 2022, on a 25-year amortization schedule, using LIBOR plus 875 basis points and at 11.00% per annum as the contract rate. The default rate is 5% above the Contract rate, absent a violation of law. The maturity date is May 3, 2022, subject to extension by Note provisions through May 3, 2023 or May 3, 2024. Payments are due on the first day of the month. Any unpaid interest under the Note may be recapitalized as principal at the discretion of the Lender. Late payments after 5 days accrue a 5% late fee on the unpaid amount, but in no event under applicable law will be less than $25 per event. Prepayment penalties exist and are explained in the Note. On October 21, 2021, the Debtor, by and through Bembridge and Sequar as Manager, with Lender entered into a First Modification of the Note. Thereby, the Debtor and the Lender amended the Note to provide for another $2 million in obligations for repayment, thus increasing the sum borrowed to $57 million. The Lender further imposed a 0.32 basis point premium upon the loan repayment balance. On December 29, 2021, the Debtor, by and through Bembridge and Sequar as Manager, entered into a Second Modification of the Note. Thereby, the Debtor and the Lender amended the Note to provide for another $2.2 million in obligations for repayment, thus increasing the sum borrowed to $59.2 million. The Lender further imposed a 0.49 basis point premium upon the loan repayment balance. On May 2, 2019, the Debtor, by and through Bembridge and Sequar as manager, entered into a Construction Loan Agreement. Therein, the Lender agreed to provide $55 million principal amount for construction of the 247 room hotel; namely, the Property, with an initial advance of $20.032 million. Completion was to occur in two years from the ratification date; namely, May 2, 2021; however, the Debtor could timely request a further two additional 12 months for an extension fee of $525,000. A private equity broker to be paid 1.5% initial fee at closing and 1% exist fee on the principal amount of the loan. On October 21, 2021, the Debtor, by and through Bembridge and Sequar as manager, entered into a Loan Modification Agreement. Therein, the Lender sought additional terms relative to the $2 million further principal advance made by the First Note Modification including a deed in lieu on the Property and other documents required to accommodate the Lender, and provisions were set forth on waiver of the automatic stay under 11 U.S.C. section 362(a) and waivers of exclusivity under 11 U.S.C. section 1121 in a Title 11 case commenced by the Debtor. The Modification Agreement annexes inter alia a fully executed warranty deed to the Property, an estoppel certificate and a pledge of the membership in Bembridge, LLC by Sequar. On December 29, 2021, the Debtor, by and through Bembridge and Sequar as manager, entered into a First Amendment to Loan Modification Agreement. Therein, the Lender sought additional terms relative to the $2.2 million further principal advance made by the Second Note Modification, and reincorporated prior agreements and provisions. On October 7, 2021, the Lender recorded a Modification of the DOT on the Property which incorporated the Loan Modification and the First Note Modification which added $2 million among other terms to the principal balance. On January 6, 2022, the Lender recorded a Second Modification of the DOT on the Property which incorporated the First Modification Agreement and the Second Note Modification which added $2.2 million among other terms to the principal balance. On September 8, 2022, the Lender issued by counsel a demand letter to the Debtor reciting a balance due as of date of issuance of $65.098 million under the Credit Facility. The alleged payoff of the Lender on the Petition Date was approximately $74.3 million including attorneys' fees of $6.523 million. The Lender in its Motion to Prohibit the Use of Cash Collateral avers that on February 20, 2023 its payoff was $67.680 million, a full $6.616 million increase in just 3 days. On December 1, 2022, the Debtor opened the Property for hotel business and has operated for the short but several months. Significant delays on the project occurred during the COVID-19 pandemic period, after the Note and DOT. Thus, construction and operations were significantly hampered by conditions outside the Debtor's control. Negotiations have ensued with the Lender as to further extensions and additional amendments to the Credit Facility; however, the Debtor avers that these discussions were unproductive. The Lender has only presented a receivership and has advised that the aforementioned deed in lieu annexed the Cumulative Loan Agreements would be recorded, thus divesting ownership of the Property from the Debtor. The 14-day budget envisions only expenses that are necessary to avoid immediate and irreparable harm to the estate. The gross receipts are $199,913 and the expenses are $271,450 with a starting cash position of $170,217 and an ending cash position of $98,690. Franchise fees are payable in this period at $23,300 as required by the Franchisor. Manager fees are payable in this period at $9,596. Importantly, there is no pre-petition payroll as the Debtor caused that to be released and satisfied prior to the Petition Date. Nonetheless, the expenses most importantly payroll and other critical expenses need be approved on March 8, 2023 so that they can be released by the Manager to the recipients including payroll no later than March 10, 2023. As adequate protection, the Debtor agrees under 11 U.S.C. section 361(2) to provide replacement liens under 11 U.S.C. section 552(b) restricted to the extent and in the priority held by the Lender prior to the Petition Date to the extent the use of the rents, issues, profits or proceeds results in a decrease in the value of such entity's interest in such property. Thirdly, expenditures to operate and then to reorganize the Property promptly will create further value in the Property for the Bank as will result in the realization of indubitable equivalent of the Bank's interest in the Property under 11 U.S.C. section 361(3). A copy of the motion is available at https://bit.ly/3L42rj4 from PacerMonitor.com. About Birchington, LLC Birchington, LLC operates a hotel in Washington, DC. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. D.C. Case No. 23-00057) on February 20, 2023. In the petition signed by Habte Sequar, manager, the Debtor disclosed $500,000 in assets and up to $100 million in liabilities. Judge Elizabeth L. Gunn oversees the case. John D. Burns, Esq., at the Burns Law Firm, Inc., represents the Debtor as legal counsel. BRENTWOOD AUTO: Wins Final Cash Collateral Access ------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee, Nashville Division, authorized Brentwood Auto Brokers, LLC to use cash collateral on a final basis in accordance with the budget. As previously reported by the Troubled Company Reporter, the Debtor requires immediate use of cash collateral to continue winding down its business operations, and avoid immediate and irreparable harm to the estate pending a final hearing on the request. NextGear Capital, Inc., City Auto Finance, Claritas Private Credit Fund, I, LP and the Small Business Administration are the only entities the Debtor is aware of that may rightfully claim a security interest in cash collateral. As for adequate protection, the Secured Creditors are granted a replacement liens in accordance with 11 U.S.C. sections 361(2) and 552(b) to the extent of cash collateral actually expended, and on the same assets and in the same order of priority as currently exists. The replacement liens and security interests granted will be deemed perfected upon entry of the Order without the necessity of the Secured Creditors taking possession of any collateral or filing financing statements or other documents. A copy of the order is available at https://bit.ly/3SPAaij from PacerMonitor.com. About Brentwood Auto Brokers, LLC Brentwood Auto Brokers, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-00272) on January 26, 2023. In the petition signed by Sam Karaman, its principal dealer, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Randal S. Mashburn oversees the case. Robert Gonzales, Esq., at EmergeLaw, PLC, is the Debtor's legal counsel. NextGear Capital, Inc., as lender, is represented by Bryan J. Sisto, Esq. at Frost Brown Todd LLP. City Auto Finance, as lender, is represented by Evan Nahmias, Esq., at City Enterprises, LLC. Claritas Private Credit Fund I, LLC, as lender, is represented by Paul G. Jennings, Esq., at Bass, Berry & Sims PLC. BURTS CONSTRUCTION: Court OKs Cash Collateral Access Thru June 1 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Burts Construction, Inc. to use cash collateral on an interim basis in accordance with the budget. The Debtor is permitted to use cash collateral to meet its postpetition obligations in the ordinary course of business. On January 9, 2017, the Debtor executed a Promissory Note in the original principal amount of $1,500,000 payable to Allegiance Bank. On February 2, 2022, the Debtor executed a Change in Terms Agreement with Allegiance with regards to the Note. Under the Change in Terms Agreement, the balance of the Note, $686,405.61, was payable as an interest only note. The maturity date on the Note was changed to a balloon payment due on August 2, 2022. The Note is secured by a blanket lien on all of the Debtor's assets by virtue of a UCC-1 Financing Statement filed with the Texas Secretary of State on May 11, 2020. The current balance due on the Note is $611,405.61 with interest only payments in the amount of $3,250.89 Interest is charged at the rate of 5.5% per annum. As adequate protection, Allegiance Bank is granted valid, perfected, and enforceable replacement security interests in and liens and mortgages upon all categories of property of the Debtor and its estate upon which the Lender held valid, perfected, prepetition liens, security interests, and mortgages, and all proceeds, rents, products, or profits thereof. To the extent the replacement liens and adequate protection payments provided in the Interim Order are insufficient to adequately protect the Lender's interests in its Collateral, the Lender will be entitled to a superpriority administrative claim in an amount equivalent to any diminution in the overall value of its Collateral (both Prepetition and Postpetition Collateral) during the term of the Interim Order, pursuant to section 507(b) of the Bankruptcy Code. As additional adequate protection to Allegiance Bank, on or before their due date(s) pursuant to the Allegiance Bank loan documents, the Debtor will pay Allegiance Bank the amounts shown on the Interim Budget. The sums received by the Lender will be applied to the balance. The Order will terminate at the conclusion of the Final Hearing except to the extent the provisions thereof are continued in effect after the Final Hearing. The continued hearing on the matter is set for June 1, 2023 at 10:30 a.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3KUvx4w from PacerMonitor.com. The Debtor projects total cash paid out, on a weekly basis, as follows: $5,440 for the week ending March 11, 2023; $5,711 for the week ending March 18, 2023; $3,858 for the week ending March 25, 2023; $5,550 for the week ending April 1, 2023; $3,480 for the week ending April 8, 2023; $5,026 for the week ending April 15, 2023; $4,513 for the week ending April 22, 2023; and $3,615 for the week ending April 29, 2023. About Burts Construction, Inc. Burts Construction, Inc. is a family-owned general contractor that offers, among other services, land clearing, demolition, site preparation, soil stabilization, underground utilities, and paving services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-31700) on June 20, 2022. In the petition signed by Katherine Burts, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Christopher M. Lopez oversees the case. Julie M. Koenig, Esq., at Cooper and Scully, PC is the Debtor's counsel. Attorneys for Allegiance Bank: Ted L. Walker, Esq. The Walker Firm 125 N. Main PO Box 62 Jasper, TX 75951 Tel: (409) 384-8899 E-mail: twalker@walker-firm.com C&L AUTOMOTIVE: Seeks Cash Collateral Access -------------------------------------------- C&L Automotive & Towing, Inc. asks the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, for authority to use cash collateral. The Debtor requires the use of cash collateral to meet post-petition contractual and tax obligations related to payroll, inventory and equipment owned by the Debtor and ongoing business operations. The Debtor executed a Promissory Note and Chattel Mortgage and Security Agreement to On Deck Capital, Inc. in the original principal amount of $100,000 in which the rents, accounts receivables, chattel paper, contracts, documents, cash, bank accounts, etc. were pledged as collateral. The receivables, rents and other property are property of the Chapter 11 estate of the Debtor pursuant to 11 U.S.C. section 541(a)(1) and (6) and were collaterally pledged to the lender to ensure payment of the pre-petition obligations. The Debtor estimates the value of the cash and accounts receivable to be approximately $51,930 based on a current aging report of receivables less than 90 days old. The Debtor is willing to enter into an agreement with the primary secured creditor to provide a post-petition replacement lien of a continuing nature on all post-petition accruing cash collateral to the secured creditor. A copy of the Debtor's motion and budget is available at https://bit.ly/3YoxPvQ from PacerMonitor.com. The Debtor projects $60,000 in total sales revenue and $32,217 in total operating expenses for March 2023. About C&L Automotive & Towing, Inc. C&L Automotive & Towing, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 3:23-bk-00437) on March 1, 2023. In the petition signed by Lisa Hood, president/secretary/director, the Debtor disclosed up to $500,000 in both assets and liabilities. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP, represents the Debtor as legal counsel. CABLEVISION LIGHTPATH: S&P Alters Outlook to Neg, Affirms 'B' ICR ----------------------------------------------------------------- S&P Global Ratings has lowered its issuer credit rating (ICR) on Altice USA Inc. to 'B' from 'B+'. The outlook is negative. At the same time, S&P revised its outlook on Cablevision Lightpath LLC to negative from stable because its rating on Lightpath cannot be higher than its parent. S&P has affirmed 'B' ICR on the company. The negative outlook reflects the possibility that S&P could lower its ratings at Lightpath if it lowered its ratings at Altice USA any further. Lightpath's stand-alone credit metrics remain in line with expectations, but its parent Altice USA Inc. has experienced credit stress. S&P said, "We could potentially downgrade Lightpath by one-notch based on our view of the group credit profile (GCP). We lowered the GCP, which is primarily driven by our ratings at Altice given its considerable earnings contribution to the group, to 'b' from 'b+', in line with our recent downgrade of Altice. The negative outlook on Altice reflects uncertainty around earnings and subscriber trends for the next 12-18 months that could potentially result in a lower GCP, which would trigger a one-notch downgrade at Lightpath. "We do not consider Lightpath to be an insulated subsidiary. We believe financial stress at Altice could affect the creditworthiness of Lightpath because there is a degree of operational overlap. Furthermore, we do not believe that there is a strong economic basis for Altice to preserve Lightpath's credit strength. In a credit-stress scenario, we believe that Lightpath could transfer assets to the parent or be sold. Still, under the existing credit agreement, we recognize there are restrictions on upstreaming cash that could limit the size in 2023. However, over time, and in a scenario of diverging credit trajectories between Lightpath and its parent, we believe the likelihood and potential scope for asset transfers could increase. "The company's elevated capital spending for its fiber expansion will likely cause its net leverage to remain in the low-6x area through 2023, which is supportive of Lightpath's SACP. We believe Lightpath will need $40 million-$60 million of incremental balance sheet cash as its capital expenditure (capex) to revenue ratio increases to the 40% area (from about 33% in 2022) on success-based spending to support projects in Boston and New York. Our base case forecast assumes a low-single-digit percent increase in the company's earnings will be offset with modestly higher adjusted net debt on lower cash balances, keeping S&P Global Ratings-adjusted net leverage at about 6.1x through 2023. "The negative outlook reflects the potential for further deterioration in the credit profile of Altice USA, which would negatively affect our ratings at Lightpath given that the ICR is subject to a cap at the level of the GCP. "We will lower our ratings at Lightpath one notch to the level of the GCP if we lower our ratings at Altice USA. "Although less likely, we could lower the SACP if debt to EBITDA were to rise above 7x from greater competition, higher churn, or pricing pressure, leading to lower-than-expected EBITDA. "We will revise our ratings back to stable if we revise our rating outlook at Altice USA to stable." ESG credit indicators: E-2, S-2, G-2 CASH DEVELOPMENT: Unsecureds be Paid in Full via Quarterly Payments ------------------------------------------------------------------- Cash Development, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Disclosure Statement for Plan of Reorganization dated February 28, 2023. Debtor is a Georgia limited liability company formed in 1998 to operate a waste management and landfill operation in the North Georgia and Central West Florida areas. The Debtor specializes in hauling, disposal, and recycling of construction demolition waste. On December 28, 2021, Debtor and its affiliates entered into a refinancing transaction with Comerica Bank whereby the Debtor and its affiliates consolidated all existing debt on real property, machinery, vehicles and equipment with Comerica pursuant to those certain Comerica Loan Documents. On February 3, 2022, Comerica asserted that the Debtor was in default of certain provisions of the Comerica Loan Documents. In April 2022, the parties entered into a forbearance agreement which was set to expire on August 31, 2022. Debtor filed the instant bankruptcy to reorganize its financial affairs without the threat of collection from Comerica. Debtor had the following assets as of the Filing Date: (i) Real Property with a Fair Market Value of $9,000,000.00, (ii) Bank Accounts with a value of $57,294.34, (iii) Accounts Receivable with a value of $67,817.95, and (iv) Machinery, Equipment and Vehicles with a fair market value of $2,352,522.00. Debtor has liabilities consisting of (i) secured claims in the approximate amount of $9,055,633.71, (ii) priority claims in the amount of $30,262.17 and (iii) unsecured claims in the amount of $390,238.00. The Plan contemplates the reorganization and ongoing business operations of Debtor and the resolution of the outstanding Claims against and Interests in Debtor pursuant to sections 1129(b) and 1123 of the Bankruptcy Code. The Plan classifies all Claims against and Interests in Debtor into separate Classes. Class 6 shall consist of the general unsecured claims. Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on January 15, 2024 and continuing for the 12 quarters following the such date the Debtor shall pay the General Unsecured Creditors equal quarterly prorata payments in the total amount of $27,874.14. On the April 15, 2027, the Debtor shall make a final distribution to Class 6 Creditors of any outstanding principal and interest due. The allowed unsecured claims total $334,489.62. The holders of Class 6 Claims are impaired. Class 7 shall consist of unsecured claims less than or equal to $5,000.00. Holders of Allowed Class 7 Claims shall be paid in full on the first anniversary of the Effective Date plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. The amount of claim in this Class total $28,809.95. The Claim of any Class 7 Creditor is Impaired. The source of funds for the payments pursuant to the Plan is the operations of the Debtor and its affiliates. After the Confirmation Date, Debtor is authorized to sell or refinance its assets free and clear of liens, claims and encumbrances (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is only authorized to sell or refinance such property for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property (the "Release Amount"). The Release Amount, after payment of customary closing costs including broker fees and other items customarily attributed to the seller (in a sale) and borrower (in a refinancing), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the particular asset and (ii) then secured claims in order of priority. Any net proceeds from any such sale available after closing shall be paid to fund Debtor's other obligations as set forth in the Plan. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3EYAaH8 from PacerMonitor.com at no charge. Attorneys for Debtor: Cameron M. McCord, Esq. Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: cmccord@joneswalden.com About Cash Development Cash Development, LLC specializes in hauling, disposal, and recycling of construction demolition waste with its headquarters located at 2859 Paces Ferry Road, Suite 1150, Atlanta, Ga. Cash Development sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41007) on Aug. 26, 2022. In the petition filed by its authorized representative, Carson Cash King, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Barbara Ellis-Monro oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC and Baker Donelson Bearman Caldwell & Berkowitz, PC serve as the Debtor's bankruptcy counsel and special counsel, respectively. Windham Brannon, LLC is the Debtor's accountant. CASH ENVIRONMENTAL RESOURCES: Unsecureds to be Paid in Full in Plan ------------------------------------------------------------------- Cash Environmental Resources, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Disclosure Statement for Plan of Reorganization dated February 28, 2023. Debtor is a Georgia limited liability company formed in 1999 to manage the businesses of its affiliates, which operate waste management and landfill operations in the North Georgia area and in Florida. The Debtor's affiliates specialize in hauling, disposal, and recycling of construction demolition waste. On December 28, 2021, Debtor and its affiliates entered into a refinancing transaction with Comerica Bank whereby the Debtor and its affiliates consolidated all existing debt on real property, machinery, vehicles and equipment with Comerica pursuant to those certain Comerica Loan Documents. On February 3, 2022, Comerica asserted that the Debtor was in default of certain provisions of the Comerica Loan Documents. In April 2022, the parties entered into a forbearance agreement which was set to expire on August 31, 2022. Debtor filed the instant bankruptcy to reorganize its financial affairs without the threat of collection from Comerica. Debtor's only asset is the stock of Coastal Landfill Disposal of Florida, LLC, a Georgia limited liability company (Case No. 22 41009). Debtor has liabilities consisting of (i) secured claims in the approximate amount of $9,055,633.71, (ii) priority claims in the amount of $22,500.00 and (iii) unsecured claims in the amount of $259,309. The Plan contemplates the reorganization and ongoing business operations of Debtor and the resolution of the outstanding Claims against and Interests in Debtor pursuant to sections 1129(b) and 1123 of the Bankruptcy Code. The Plan classifies all Claims against and Interests in Debtor into separate Classes. Class 5 shall consist of the general unsecured claims. Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on January 15, 2024 and continuing for the 12 quarters following the such date the Debtor shall pay the General Unsecured Creditors equal quarterly prorata payments in the total amount of $18,612.83. On the April 15, 2027, the Debtor shall make a final distribution to Class 5 Creditors of any outstanding principal and interest due. The allowed unsecured claims total $223,354.97. The holders of Class 5 Claims are impaired. Class 6 shall consist of unsecured claims less than or equal to $10,000.00. Holders of Allowed Class 6 Claims shall be paid in full on the first anniversary of the Effective Date plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. The amount of claim in this Class total $17,455.24. The Claim of any Class 6 Creditor is Impaired. The source of funds for the payments pursuant to the Plan the operations of the Debtor's affiliates and management fees paid to the Debtor. After the Confirmation Date, Debtor is authorized to sell or refinance its assets free and clear of liens, claims and encumbrances (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is only authorized to sell or refinance such property for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property (the "Release Amount"). The Release Amount, after payment of customary closing costs including broker fees and other items customarily attributed to the seller (in a sale) and borrower (in a refinancing), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the particular asset and (ii) then secured claims in order of priority. Any net proceeds from any such sale available after closing shall be paid to fund Debtor's other obligations as set forth in the Plan. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3KS9bAN from PacerMonitor.com at no charge. Attorneys for Debtor: Cameron M. McCord, Esq. Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: cmccord@joneswalden.com About Cash Environmental Resources Cash Environmental Resources, LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41006) on Aug. 26, 2022. In the petition filed by Carson Cash King, authorized representative, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Barbara Ellis-Monro oversees the case. The Debtor tapped Cameron M. McCord, Esq., at Jones & Walden, LLC as bankruptcy counsel and Windham Brannon, LLC as accountant. CASH ENVIRONMENTAL: Unsecureds to be Paid in Full in Plan --------------------------------------------------------- Cash Environmental Holdings, LLC filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Disclosure Statement for Plan of Reorganization dated February 28, 2023. Debtor is a Georgia limited liability company formed in 2021 to act as a holding company for the businesses of its affiliates, which operate waste management and landfill operations in the North Georgia area and in Florida. The Debtor's affiliates specialize in hauling, disposal, and recycling of construction demolition waste. On December 28, 2021, Debtor and its affiliates entered into a refinancing transaction with Comerica Bank whereby the Debtor and its affiliates consolidated all existing debt on real property, machinery, vehicles and equipment with Comerica pursuant to those certain Comerica Loan Documents. On February 3, 2022, Comerica asserted that the Debtor was in default of certain provisions of the Comerica Loan Documents. In April 2022, the parties entered into a forbearance agreement which was set to expire on August 31, 2022. Debtor filed the instant bankruptcy to reorganize its financial affairs without the threat of collection from Comerica. Debtor's assets consist of the stock of (i) Cash Environmental Resources, LLC, (ii) Renewable Energy Holdings of Georgia, LLC, and (iii) Green Energy Transport, LLC. Debtor has liabilities consisting of (i) secured claims in the approximate amount of $9,055,050.00, (ii) priority claims in the amount of $200.00 and (iii) unsecured claims in the amount of $19,712.47. The Plan contemplates the reorganization and ongoing business operations of Debtor and the resolution of the outstanding Claims against and Interests in Debtor pursuant to sections 1129(b) and 1123 of the Bankruptcy Code. The Plan classifies all Claims against and Interests in Debtor into separate Classes. Class 5 shall consist of the general unsecured claims. On the 1st day of the 6th month following the Effective Date, Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. Debtor anticipates, but does not warrant, the following Holders of Class 5 General Unsecured Claims and the following distributions: Drew Eckl Farnham ($15,000.00); and Windham Brannon ($3,500.00). The holders of Class 5 Claims are impaired and entitled to vote to accept or reject the Plan. Class 6 consists of Interest Claims. The stock of the Debtor shall be retained. The source of funds for the payments pursuant to the Plan is operations of Debtor's subsidiaries and contributions from the Debtor's principals. After the Confirmation Date, Debtor is authorized to sell or refinance its assets free and clear of liens, claims and encumbrances (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is only authorized to sell or refinance such property for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property (the "Release Amount"). The Release Amount, after payment of customary closing costs including broker fees and other items customarily attributed to the seller (in a sale) and borrower (in a refinancing), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the particular asset and (ii) then secured claims in order of priority. Any net proceeds from any such sale available after closing shall be paid to fund Debtor's other obligations as set forth in the Plan. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3ZmnGRx from PacerMonitor.com at no charge. Attorneys for Debtor: Cameron M. McCord, Esq. Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: cmccord@joneswalden.com About Cash Environmental Holdings Cash Environmental Holdings, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41008) on Aug. 26, 2022. In the petition filed by Carson Cash King, authorized representative, the Debtor disclosed up to $50,000 in both assets and liabilities. Judge Barbara Ellis-Monro oversees the case. The Debtor tapped Cameron M. McCord, Esq., at Jones & Walden, LLC as bankruptcy counsel and Windham Brannon, LLC as accountant. CASTLE BLACK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Castle Black, Inc. DBA Castle Black Properties DBA Castle Black Construction 231 S. Parkway W. Memphis, TN 38109-1646 Business Description: Castle owns in fee simple title seven properties located in Memphis, TN, valued at $1.48 million. Chapter 11 Petition Date: March 2, 2023 Court: United States Bankruptcy Court Western District of Tennessee Case No.: 23-21064 Judge: Hon. M. Ruthie Hagan Debtor's Counsel: Toni Campbell Parker, Esq. LAW FIRM OF TONI CAMPBELL PARKER 45 N. Third Ave., Ste. 201 Memphis, TN 38103 Tel: 901-683-0099 Fax: 866-489-7938 Email: tparker002@att.net Total Assets: $2,150,234 Total Liabilities: $5,314,032 The petition was signed by Jonathan Logan as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ILUBHYQ/Castle_Black_Inc__tnwbke-23-21064__0001.0.pdf?mcid=tGE4TAMA CASTLE US HOLDING: $1.20B Bank Debt Trades at 29% Discount ---------------------------------------------------------- Participations in a syndicated loan under which Castle US Holding Corp is a borrower were trading in the secondary market around 70.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.20 billion facility is a Term loan that is scheduled to mature on January 29, 2027. The amount is fully drawn and outstanding. Castle US Holding Corporation provides database tools and software to public relations and communications professionals. CELSIUS NETWORK: Retail Borrowers Want Right to File Plan --------------------------------------------------------- The Ad Hoc Group of Withhold Account Holders and Other Transferees on March 1, 2023, filed a renewed objection to the second motion of Celsius Network LLC to extend the exclusive periods during which only the Debtors may file and solicit acceptances of a chapter 11 plan. Having reviewed the Debtors' presentation regarding what their plan might eventually look like (assuming that many moving pieces fall into place -- which, to date, they appear not to have done), the Ad Hoc Group continues to oppose any further extension of the Debtors' exclusive periods to file a plan or solicit acceptances thereof. "We are now more than seven months past the petition date. No plan is yet on file. No approvals from regulators have yet been obtained. The Debtors' and Committee's professionals continue to burn cash at a truly alarming rate. The bleeding must stop," the Ad Hoc Group said in court filings. "It is time to allow the Debtors' customers to propose their own plan for the assets that they were defrauded into investing with Celsius. The Debtors' exclusive right to control these cases must give way to the rights of the Debtors' customers." The Ad Hoc Group requests that the Court enter an order modifying exclusivity from March 8, 2023 through and including April 28, 2023 to permit the Committee, the Ad Hoc Group, or any other ad hoc committee represented by counsel in the Chapter 11 cases to propose a plan, with the exclusive time to solicit such plan(s) extended 60 days from filing. The Official Committee of Unsecured Creditors on the other hand says it believes Celsius Network's proposed transaction with NovaWulf Digital Management, LP, is the best, actionable alternative at this time. Thus the Committee supports extending the Debtors' exclusive period to March 31, 2023 to allow the Debtors to file a plan of reorganization and disclosure statement reflecting the NovaWulf Transaction and that are acceptable to the Committee. On Feb. 14, 2023, the Debtors filed a presentation outlining certain terms of a potential plan of reorganization developed in consultation with the Committee. At the Committee's insistence, the proposed plan framework contemplated that the Debtors would distribute liquid cryptocurrency to all Earn creditors. The framework also contemplated that the Debtors would contribute certain of their liquid and illiquid assets to a new, public reporting company ("NewCo") that would be: (1) 100% owned by creditors, (2) operated by qualified and experienced management, and (3) overseen by a board of directors with the majority of members appointed by creditors. On Feb. 28, 2023, the Debtors, the Committee, and proposed plan sponsor, NovaWulf Digital Management, LP, entered into a Plan Sponsor Agreement (the "PSA"). Under the PSA, the Debtors and the Committee have agreed to support the NovaWulf Transaction as a stalking horse proposal. Importantly, the NovaWulf Transaction will be subject to a competitive auction process. The Committee intends to further engage with third parties that are interested in pursuing a better transaction (and, indeed, recently received an alternative proposal). If a better transaction is proposed, the PSA allows each of the Committee and the Debtors to exercise a "fiduciary out" to pursue that better transaction. Thus, while the PSA is an important step toward resolving these cases, it is not the end of the road. With that said, the Committee believes that the NovaWulf Transaction currently presents the best option to maximize value for account holders and unsecured creditors. The Committee notes that the NovaWulf Transaction offers several potential benefits and opportunities to creditors. The Committee notes there is the potential to increase creditors' recoveries over time through the creation of NewCo under the NovaWulf Transaction. The Debtors' Bitcoin mining business has suffered numerous setbacks, but could be lucrative and developed into one of the largest mining operations in the world, if it is managed properly. NovaWulf has also indicated that it plans for NewCo to operate its own validator nodes with respect to the Debtors' staked Ethereum, the Debtors' largest illiquid asset. The rehabilitation and operation of those diversified businesses, and other opportunities that NovaWulf intends to develop inside NewCo, could generate value over time and increase recoveries to creditors. The NovaWulf Transaction would also provide an option for borrowers who have outstanding loans to agree to a structured settlement of their claims against the Debtors. At the end of the settlement term, electing borrowers would receive a significant portion of the digital assets they initially transferred to the Debtors. The interest paid by those borrowers and the return on the staked Ethereum that would be set aside to fund the ultimate repayment of NewCo's obligations to electing borrowers would benefit general Earn creditors, as 100% owners of NewCo. WHITE & CASE LLP is serving as counsel to the Creditors' Committee. TROUTMAN PEPPER HAMILTON SANDERS LLP, led by Deborah Kovsky-Apap, is counsel to the Ad Hoc Group of Withhold 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. CENTURY ALUMINUM: Posts $113.5 Million Net Loss in Fourth Quarter ----------------------------------------------------------------- Century Aluminum Company reported a net loss of $113.5 million on $529.9 million of total net sales for the three months ended Dec. 31, 2022, compared to net income of $60.4 million on $659.1 million of total net sales for the three months ended Dec. 31, 2021. For the 12 months ended Dec. 31, 2022, the Company reported a net loss of $14.1 million on $2.77 billion of total net sales compared to a net loss of $167.1 million on $2.21 billion of total net sales for the 12 months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $1.47 billion in total assets, $410.7 million in total current liabilities, $662 million in total noncurrent liabilities, and $399.3 million in total shareholders' equity. 574.4 million in total current liabilities, $601.5 million in total noncurrent liabilities, and $421 million in total shareholders' equity. Century's liquidity position at Dec. 31, 2022, was $245.0 million, an increase of $29.9 million from the third quarter of 2022. For the full year 2022, shipments of primary aluminum decreased by 2 percent sequentially. Net sales for the full year 2022 increased by $564.8 million sequentially, primarily driven by aluminum prices and regional premiums, offset by lower volume of shipments. "As we enter 2023, we have begun to see an abatement in the high-cost environment that marked much of 2022," commented President and Chief Executive Officer Jesse Gary. "Global energy prices have reduced markedly since last summer, most significantly in the energy markets in which our U.S. smelters operate. At the same time, aluminum prices have remained buoyant, as long-term decarbonization trends continue to drive growth in global aluminum demand. Combined, these trends leave our businesses well situated to deliver excellent performance in 2023." "In Iceland, our billet casthouse project at Grundartangi remains on schedule for completion by year-end and we are seeing strong demand for our first deliveries of Natur-Al green billet products in the first quarter of 2024," continued Mr. Gary. "We are very proud of the excellent job the Grundartangi team has done progressing this project safely and on-budget during the challenging market conditions we experienced in 2022." A full-text copy of the press release is available for free at: https://www.sec.gov/Archives/edgar/data/949157/000094915723000020/exhibit99120221231q4earnin.htm About Century Aluminum Company Chicago, Illinois-based Century Aluminum Company -- http://www.centuryaluminum.com-- owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Chicago, IL. Century Aluminum reported a net loss of $167.1 million for the year ended Dec. 31, 2021, a net loss of $123.3 million for the year ended Dec. 31, 2020, a net loss of $80.8 million for the year ended Dec. 31, 2019, and a net loss of $66.2 million for the year ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $1.58 billion in total assets, $406.1 million in total current liabilities, $660.9 million in total noncurrent liabilities, and $516.6 million in total shareholders' equity. CHESTNUT RIDGE: Court OKs Access to Cash Collateral Thru March 10 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, granted Chestnut Ridge Associates, LLC interim authority to use cash collateral in accordance with the budget, with a 10% variance, through March 10, 2023. The Debtor requires the use of cash collateral to continue the operation of its business. As adequate protection to Kingsgate Partner LLC for any diminution in value of the Lender's collateral resulting from the Debtor's use of cash or cash equivalents including rents and other cash proceeds, the Lender is granted replacement liens in the Debtor's unencumbered assets in the amount of such diminution in value, including but not limited any unencumbered cash or cash equivalents that do not constitute Cash Collateral, with the Replacement Liens having the same level of priority as the Lender's liens and security interests in the Debtor's real and personal property as existed as of the Petition Date. If, notwithstanding the grant of Replacement Liens, the Debtor's use of cash collateral results in a diminution in value of the Lender's collateral, including but not limited to its interest in the cash collateral and real property collateral, such that any portion of the Lender's claim is unsecured, such unsecured claim will constitute a super-priority claim under 11 U.S.C. section 507(b) that is superior in priority to all other claims in the case. The Replacement Liens are subject and subordinate to a carve-out of funds for all fees required to be paid to: (i) the Clerk of the Bankruptcy Court, and (ii) the Office of the United States Trustee. The Replacement Liens will be, valid, perfected, enforceable and effective as of the Petition Date without the need for any further action by the Debtor or the Lender, or the necessity of execution or filing of any instruments or agreements. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3Yi0AdF from PacerMonitor.com. The Debtor projects $160,171 in total income and $24,392 in total operating costs for the two-week period ending March 10, 2023. About Chestnut Ridge Associates LLC Chestnut Ridge Associates LLC is primarily engaged in renting and leasing real estate properties. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90069) on February 5, 2023. In the petition signed by Andrew Schreer, managing member, the Debtor disclosed up to $50 million in both assets and liabilities. Judge David R. Jones oversees the case. Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represents the Debtor as legal counsel. CHURCH OF GOD: Seeks to Hire Joseph A. Altman as Special Counsel ---------------------------------------------------------------- Church of God of Corona, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Joseph A. Altman, P.C. as special counsel. The Debtor needs the firm's legal assistance to appeal two orders of the Queens County Supreme Court in the foreclosure proceedings (Index No. 2022-08214, and Index No. 2022-04160) commenced by a certain Junetta Smith. The firm will be paid at these rates: Attorney $350 per hour Paraprofessionals $150 per hour Joseph Altman, Esq., a partner at Joseph A. Altman, P.C., 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: Joseph A. Altman, Esq. Law Offices of Joseph A. Altman, P.C. 654 North Terrace Ave. Fleetwood, NY 10552 Tel: (718) 328-0422 About Church of God of Corona Church of God of Corona, Inc., also known as Cathedral of Life Church, Inc., filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42488) on Oct. 6, with $1.3 million in assets and $753,122 in liabilities. Blanca Giron, president of Church of God of Corona, signed the petition. Judge Nancy Hershey Lord oversees the case. H. Bruce Bronson, Esq., at Bronson Law Offices P.C. and Joseph A. Altman, P.C. serve as the Debtor's bankruptcy counsel and special counsel, respectively. CITGO HOLDINGS: Fitch Affirms LongTerm IDR at CCC+, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of CITGO Petroleum Corp. (Opco) at 'B' and CITGO Holding, Inc. (Holdco, or CITGO) at 'CCC+'. Opco's senior secured notes and industrial revenue bonds were affirmed at 'BB'/'RR1', and Holdco's senior secured notes at 'B+'/'RR1'. The Rating Outlook for both entities is Stable. The ratings are negatively affected by operational risks and contagion effects from U.S. sanctions on CITGO's ultimate parent, Petroleos de Venezuela S.A. (PDVSA), and the upcoming maturity wall of 2024-2026. The ratings are supported by the quality of refining assets, significant scale, and the recent reduction in gross debt and leverage due to strong refining margins in 2022. Opco and Holdco ratings are based on their standalone IDRs and reflect Holdco's dependence on dividends from Opco, which may potentially be constrained by the debt covenants at Opco level and sanctions-related policies. KEY RATING DRIVERS Exceptional Performance in 2022: CITGO's cash flow generation dramatically improved in 2022 on record refined products crack spreads driven by low inventories, concerns around Russian export volumes, restrictions in China and previous refinery shutdowns in the U.S. and worldwide. Fitch expects above-average but lower crack spreads in 2023 with a normalization around 2024. FCF generated by CITGO in 2022 allowed it to reduce gross debt significantly. Fitch projects the company's EBITDA leverage to increase after 2023, primarily due to lower EBITDA. Lower Rating of Holdco: The rating for Holdco reflect the sanctions-related risks, its structural subordination to Opco and its reliance on Opco to provide dividends to cover its significant debt service requirements coupled with significant standalone debt at Holdco level. Dividends from Opco provide the majority of debt service capacity at Holdco and are driven by refining economics and the restricted payments basket. Holdco's pledged security includes roughly $40 million in run-rate EBITDA from midstream assets available for interest payments. Restrictive Opco Covenants: Opco bond indentures contain multiple covenants that make sure Opco level lenders are protected from excessive upstreaming of cashflows to Holdco. The covenants safeguarding dividend payments to Holdco include positive dividend basket, maximum net debt to cap of 55% and minimum $500 million in liquidity pro forma post distribution. At Sept. 30, 2022, the dividend basket was positive but Fitch believes the company has adequate flexibility to make payments through its tax allocation agreement even when the basket is negative. Standalone Opco and Holdco Ratings: Fitch views Opco as the stronger entity of the two, given nearly all of CITGO's assets and EBITDA are held at Opco rather than Holdco, with the exception of a small basket of midstream assets. Based on its PSL analysis, Fitch views Opco and Holdco's ratings on a standalone basis, given the insulated legal ring-fencing through Opco's bond covenants, which limit the ability of the direct parent to dilute its subsidiary's credit quality; additional separations created by Office of Foreign Assets Control (OFAC) restrictions; and our insulated assessment of the access and control factor. Bond covenants include restrictions on dividends (R/P basket), incurrence tests (maximum net debt/capitalization of 55% and a minimum $500 million in liquidity, pro forma post distribution) restrictions on asset sales, and the incurrence of additional indebtedness. Opco also does not guarantee Holdco debt and a Holdco default does not guarantee or have a cross default with Opco debt. Change of Control Risks: The financial weakness of CITGO's indirect parent PDVSA, which is owned by the government of Venezuela, means there are a few paths that could trigger change of control clauses and a forced refinancing in CITGO's debt. These include creditor lawsuits against PDVSA and its affiliates seeking to obtain judgements for litigation/arbitration awards in U.S. courts and attach to CITGO's assets; actions by PDVSA's secured exchange note holders to collect on pledge of 50.1% of CITGO Holding's capital stock; and any future actions by OFAC to unblock current restrictions and allow a share sale to proceed without sanctions. Change of control trigger will depend on the balance between the size of claims and CITGO's equity value. Double Trigger: Fitch notes in the event such actions were allowed to proceed, the refineries remain primary pledged assets under lender agreements and would require consent to take action. In particular, CITGO's notes contain a two-part test (less than majority ownership by PDVSA and a failure by rating agencies to affirm ratings within 90 days). Fitch believes CITGO's credit profile would likely improve under different ownership, which should limit bondholder incentives to put bonds if change of control was triggered. Nonetheless, this risk remains a key overhang on the credit. All of CITGO's drawn debt contains this double trigger. Access to Capital: The legacy effects of PDVSA ownership, including change of control risks, as well as the impact of various OFAC sanctions on entities doing business with Venezuela, are also an overhang for the company in terms of capital market access. In 2019, CITGO had to replace revolver liquidity with a drawn term loan, given bank concerns about OFAC sanctions against Venezuelan entities. CITGO still has one of the largest bond market participants among its investors. Departure of Juan Guaido from the Venezuelan opposition government and transfer of Venezuelan foreign assets management to a five-person commission does not lead to a material change in CITGO's credit profile but adds an additional layer of uncertainty about the future of the sanctions carve-out framework. Medium-Term Refinancing Needs: CITGO Holdco's $1.4 billion bond matures in August 2024 and Opco's undrawn $500 million receivables securitization facility expires in September 2024. Opco should also repay $1.2 billion debt in 2025 and $650 million in 2026. The 2024-2026 maturities represent nearly all of the company's outstanding debt. CITGO considers different options to refinance the forthcoming maturity wall. Fitch believes the company has time to push maturities through refinancing or permanent debt reduction, but medium-term debt repayment schedule and uncertainty around the effect of PDVSA sanctions and related court proceeding offset the positive developments around the financial performance and debt reduction by the company. DERIVATION SUMMARY At 769 kb/d day of crude refining capacity, CITGO is smaller than PBF Holding (BB-/Stable) at 973 kb/d. However, it is larger than HF Sinclair Corporation (BBB-/Stable) at 678 kb/d and CVR Energy (BB-/Stable) at 207 kb/d. CITGO is less diversified compared with refining peers who have ancillary businesses including logistics master limited partnerships, chemicals, renewables, retail, and lubricants/specialty product. However, CITGO's core refining asset profile is strong and relatively flexible, given the higher complexity of its refineries than for most of their peers, which allows it to process a large amount of discounted heavy and light shale crudes. Legacy PDVSA ownership/governance and related capital markets access issues remain key overhangs on the issuer despite its relatively good asset profile. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - West Texas Intermediate (WTI) oil prices of $81/b in 2023, and $62/b in 2024 and $50/b thereafter; - Refinery throughput around 770 kb/d in 2023-2025; - Capex, turnaround and catalyst costs averaging $750 million in 2023-2025; - Dividend paid by Opco to Holdco of $1 billion in 2023. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that CITGO Corporation would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern Approach The GC EBITDA estimate of $1.05 billion reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation (EV). This value reflects the quality of underlying business and focused on mid-cycle crack spreads rather than exceptionally favorable market conditions of 2022. An EV multiple of 5.0x was applied to the GC EBITDA to calculate a post-reorganization EV of $5.25 billion. This is modestly below the median 5.3x exit multiple for energy in Fitch's Energy, Power and Commodities Bankruptcy Enterprise Value and Creditor Recoveries (Fitch Case Studies -- September 2022). PBF Holdings has a weaker asset profile, evidenced by higher operating costs and heavy import competition, which resulted in the idling of portions of its East Coast refining system during the pandemic. In contrast, Fitch believes CITGO's portfolio of scaled, higher complexity refineries could make it potentially attractive to buyers. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. For liquidation value, Fitch used an 80% advance rate for the company's inventories since crude and refined products are standardized and easily re-sellable in a liquid market to peer refiners, traders or wholesalers. Fitch applied a 50% advance rate to CITGO's property, plant and equipment and a 80% advance rate to CITGO's receivables. The maximum of these two approaches was the going concern approach of $5.25 billion. A standard waterfall approach was then applied. This resulted in a three-notch recovery (RR1) for all of CITGO Petroleum's secured instruments. A residual value of approximately $1.8 billion remained after this exercise. This was applied in a second waterfall at CITGO Holdco, whose debt is subordinated to that of Opco. The $1.8 billion was added to approximately $320 million in going concern value associated with the midstream assets ($40 million in assumed run-rate midstream using an 8x multiple), as well as $145 million in restricted cash associated with a debt service reserve account for the benefit of secured Holdco debt. No administrative claims were deducted in the second waterfall. Holdco secured debt also recovered at the 'RR1' level. RATING SENSITIVITIES CITGO Petroleum Corp. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Reduced overhang associated with legacy PDVSA ownership issues; - Mid-cycle EBITDA leverage below 3.0x. Factors that could, individually or collectively, lead to negative rating action/upgrade: - Deterioration in liquidity/market access; - Mid-cycle EBITDA leverage above 4.0x; - Weakening or elimination of key covenant protections in the CITGO senior secured debt documentation. CITGO Holding, Inc. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Reduced overhang associated with legacy PDVSA ownership issues; - Alleviation of restrictions on R/P basket or otherwise increased ability to upstream dividends from Opco; - Mid-cycle EBITDA leverage below 4.5x. Factors that could, individually or collectively, lead to negative rating action/upgrade: - Deterioration in liquidity/market access; - Sustained inability of Holdco to upstream dividends due to R/P basket or other restrictions; - Weakening or elimination of key covenant protections in Holdco senior secured debt documents; - Mid-cycle EBITDA leverage above 5.5x. LIQUIDITY AND DEBT STRUCTURE Opco Liquidity Adequate: At Sept. 30, 2022, Opco's liquidity included unrestricted cash of $2.1 billion and an undrawn $500 million receivables securitization facility that expires in 2024. CITGO does not have an ABL facility but can use available cash to cover short-term funding needs, including working capital movements. It did not have any short-term debt. Most of its debt matures in 2025-2026. Fitch projects that its liquidity will be supported by positive FCF generation. Sufficient Holdco Liquidity: Holdco has weaker liquidity than Opco due to its structural subordination, small standalone EBITDA, restrictive covenants at the Opco level, and shorter debt maturities. Standalone liquidity at the Holdco level was sufficient, and included cash available to Holdco of $54 million, as well as approximately $127 million in restricted cash associated with the debt service reserve account to meet Holdco debt payments, as well as small FCF from midstream assets owned directly by Holdco. Due to one-off exceptional profit in 2022, Opco should be able to distribute funds to Holdco, if needed, as Opco rebuilt its dividend basket. Additionally, it should have flexibility to make payments through its tax allocation agreement. In 3Q22, Holdco repaid its $500 million loan due 2023 one year ahead of maturity, and Opco repaid its own $1.1 billion loan in late 2022. Holdco's consolidated debt declined by a third in 2022, which is positive for the credit profiles of Holdco and Opco. However, Holdco still faces a large $1.4 billion bond maturity in August 2024. ISSUER PROFILE CITGO Petroleum Corporation (Opco) is a US based refiner which owns and operates three large, high-quality refineries with total rated crude processing capacity of 769 kb/d. Its refineries are located on the gulf coast, including Lake Charles, LA (425 kb/d), Corpus Christi, TX (167 kb/d) and Lemont, Illinois (177 kb/d). CITGO also has access to a retail network of 4,200 independently owned and operated CITGO branded retail outlets east of the Rockies. Assets have above-average complexity which maximizes the company's ability to run a range of discounted crudes, with a focus on heavy and sour crudes. CITGO also has a distribution network and 30 storage terminals. Five of these terminals are directly owned by CITGO Holding Inc. (Holdco), which is the direct parent of Opco. ESG CONSIDERATIONS CITGO has an Environmental, Social and Corporate Governance (ESG) Relevance Score of '4' under Environmental Factors, which reflects its material exposure to extreme weather events (hurricanes), which periodically lead to extended shutdowns. Two out of three of CITGO's refineries are located on the Gulf Coast, including the largest, Lake Charles at 425 thousand barrels per day (kb/d). CITGO also has a Score of '4' under Governance Factors related to the effects the legacy PDVSA ownership issues still have on the issuer. The risk centers around contagion through change of control clauses associated with a PDVSA default and the overhang legacy ownership creates in terms of capital markets access, as well as frequent changes in board composition. Both factors have negative impacts on the credit profile and are relevant to the rating 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 ----------- ------ -------- ----- CITGO Holding, Inc. LT IDR CCC+ Affirmed CCC+ senior secured LT B+ Affirmed RR1 B+ CITGO Petroleum Corp. LT IDR B Affirmed B senior secured LT BB Affirmed RR1 BB CITY BREWING: $850M Bank Debt Trades at 52% Discount ---------------------------------------------------- Participations in a syndicated loan under which City Brewing Co LLC is a borrower were trading in the secondary market around 47.7 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $850 million facility is a Term loan that is scheduled to mature on April 5, 2028. The amount is fully drawn and outstanding. City Brewing Company, LLC operates as a brewery company. The Company produces beverages by contract, including beer, malts, teas, and energy drinks. CLEVELAND-CLIFFS INC: Fitch Alters Outlook on 'BB-' IDR to Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) for Cleveland-Cliffs, Inc. (Cliffs) and its subsidiary, Cleveland Cliffs Steel Corporation at 'BB-'. Fitch has also affirmed Cliffs' ABL at 'BB+'/'RR1', Cliffs' first lien secured notes at 'BB+'/'RR2', Cliffs' guaranteed unsecured notes at 'BB-'/'RR4', and Cliffs' unsecured notes not benefiting from a guarantee and Cleveland-Cliffs Steel Corporation's unsecured notes at 'B+'/'RR5'. In addition, Fitch has revised the Rating Outlook to Stable from Positive. The Stable Outlook reflects Fitch's expectation for lower FCF generation which will lead to relatively modest further debt repayment and that EBITDA leverage will be sustained between 2.5x-3.5x. KEY RATING DRIVERS Significant Debt Repayment: Cliffs' benefitted from a period of highly elevated steel prices in 2021-2022, which led to over $7.8 billion in EBITDA and $3.3 billion in Fitch-calculated FCF, combined over the two-year period. The company used cashflow primarily for debt repayment, paying down roughly $2 billion from YE 2020. In addition, Cliffs' allocated roughly $1.25 billion to share repurchases and made a roughly $790 strategic acquisition. Fitch expects EBITDA leverage, 1.5x at Dec. 31, 2022, to be slightly elevated in 2023 in line with Fitch's expectations for lower margins and economic weakness, but to decline thereafter and be within levels consistent for the rating category. High-Value Add Focus: Cliffs is the largest supplier of steel to the automotive sector and one of a few North American steel producers capable of producing some of the most sophisticated grades of advanced high-strength steels and value-added stainless steel products. The company is also the only producer of grain oriented electrical steel in the U.S., used in the production of transformers, which can be used to facilitate the modernization of the electrical grid and currently the only producer of non-oriented electrical steel in the U.S., a critical component of motors used in hybrid/electric vehicles. Cliffs' produces steel grades critical to automotive light-weighting steel trends, and it is well positioned longer-term to benefit from the auto recovery and the transition to electric cars. Fitch believes U.S. auto demand is supported by consumers' post-pandemic preference for personal modes of transportation over mass transit, the average vehicle age at nearly 12 years, low unemployment and growing electric vehicle demand. Solid Operational Profile: Cliffs has significant size and scale as the largest flat-rolled steel producer and largest iron ore pellet producer in North America. Fitch views Cliffs' vertically integrated business model and self-sufficiency in iron ore requirements as benefiting margins. In addition, Cliffs' has a 1.9 million tonne HBI facility, which produces a high-quality and low-carbon intensive HBI product that can be used in Cliffs' facilities as a premium scrap alternative. Cliffs' also benefits from a higher proportion of fixed price contracts, leading to less price volatility compared with other players in the industry. Fitch believes the company's focus on higher value-added products, which have barriers to entry and are higher priced, also benefit margins. Pension Obligation Improvement: Through the AM USA acquisition, Cliff's acquired a significant amount of pension obligations. However, Cliffs reduced its net pension and other post-employment benefits (OPEB) liabilities by roughly $3.4 billion since the AM USA acquisition in 2020. Pension obligations were underfunded by approximately $300 million at YE 2022 and Cliffs expects pension/OPEB cash needs to be approximately $100 million in 2023. Fitch views the liability reduction positively and views cash needs as manageable currently. However, the associated fixed costs can wear on cash flow and can be particularly detrimental during low points in the cycle. Ferrous Processing Acquisition: In 4Q21, Cliffs acquired Ferrous Processing and Trading Company (FPT) for approximately $780 million. FPT is one of the largest processors and distributors of prime scrap in the U.S., representing roughly 15% of the domestic prime scrap market and processing approximately three million tons of scrap per year. Fitch does not expect a material amount of EBITDA contribution from the acquisition, but views it positively and strategic, as it further secures Cliff's raw materials for its steelmaking facilities. DERIVATION SUMMARY Cleveland-Cliffs is comparable in size but less diversified compared with integrated majority blast furnace steel producer United States Steel Corporation (BB/Stable). Cleveland-Cliffs is larger compared with EAF long steel producer Commercial Metals Company (BB+/Positive) in terms of steel capacity, although Cleveland-Cliffs has historically had less favorable credit metrics. Cleveland-Cliffs is also larger in terms of annual capacity, although has less favorable credit metrics compared with EAF producers Steel Dynamics, Inc. (BBB/Stable) and smaller with weaker credit metrics compared with EAF steel producer Nucor (A-/Stable). KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Annual steel shipments decline in 2023, then recover to around 15 million tons on average; - Relatively flat average selling prices; - EBITDA margins compress in 2023 and recover thereafter; - Lower capex in 2023, which remains roughly flat over the rating horizon; - No additional acquisitions and relatively minimal share repurchases with excess cash. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Mid-cycle EBITDA leverage expected to be sustained below 2.5x; - EBITDA margins sustained above 10%. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA leverage sustained above 3.5x; - EBITDA margins sustained below 8.5%; - Significantly weaker steel fundamentals resulting in materially lower than expected FCF generation. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: As of Dec. 31, 2022, Cliffs had $26 million in cash and cash equivalents, and $2.486 billion available under its $4.5 billion ABL credit facility due 2025. The ABL credit facility matures March 13, 2025, or 91 days prior to the stated maturity date of any portion of existing debt if the aggregate amount of existing debt that matures on the 91st day is greater than $100 million. The ABL credit facility is subject to a springing 1.0x minimum fixed-charge coverage covenant when availability is less than the greater of (i) 10% of the lesser of (a) the maximum ABL amount (currently $4.5 billion) and (b) the borrowing base; and (ii) $100 million. Cliffs has no material maturities until 2026. ISSUER PROFILE Cleveland-Cliffs is a majority blast furnace producer of steel, the largest flat-rolled producer of steel and largest producer of iron ore pellets in North America. 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 ----------- ------ -------- ----- Cleveland-Cliffs Inc. LT IDR BB- Affirmed BB- senior unsecured LT B+ Affirmed RR5 B+ senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR2 BB+ senior secured LT BB+ Affirmed RR1 BB+ Cleveland-Cliffs Steel Corporation LT IDR BB- Affirmed BB- senior unsecured LT B+ Affirmed RR5 B+ COASTAL LANDFILL: Unsecureds be Paid in Full via Quarterly Payments ------------------------------------------------------------------- Coastal Landfill Disposal of Florida, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Disclosure Statement for Plan of Reorganization dated February 28, 2023. Debtor is a Georgia limited liability company formed in 1998 to operate a waste management and landfill operation in Pasco County, Florida. The Debtor and its affiliates specialize in hauling, disposal, and recycling of construction demolition waste. On December 28, 2021, Debtor and its affiliates entered into a refinancing transaction with Comerica Bank whereby the Debtor and its affiliates consolidated all existing debt on real property, machinery, vehicles and equipment with Comerica pursuant to those certain Comerica Loan Documents. On February 3, 2022, Comerica asserted that the Debtor was in default of certain provisions of the Comerica Loan Documents. In April 2022, the parties entered into a forbearance agreement which was set to expire on August 31, 2022. Debtor filed the instant bankruptcy to reorganize its financial affairs without the threat of collection from Comerica. Debtor had the following assets as of the Filing Date: (i) a joint interest in Real Property with an approximate Fair Market Value of $9,000,000.00, (ii) Bank Accounts with a value of $181,593.44, (iii) Accounts Receivable with a value of $327,957.12, (iv) Machinery, Equipment and Vehicles with a fair market value of $248,400.00, and (v) Office Furniture with a value of $2,500.00. Debtor has liabilities consisting of (i) secured claims in the approximate amount of $9,055,050.00, (ii) priority claims in the amount of $17,992.39 and (iii) unsecured claims in the amount of $453,921.81. The Plan contemplates the reorganization and ongoing business operations of Debtor and the resolution of the outstanding Claims against and Interests in Debtor pursuant to sections 1129(b) and 1123 of the Bankruptcy Code. The Plan classifies all Claims against and Interests in Debtor into separate Classes. Class 5 shall consist of the general unsecured claims. Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on January 15, 2024 and continuing for the 12 quarters following the such date the Debtor shall pay the General Unsecured Creditors equal quarterly prorata payments in the total amount of $32,785.40. On the April 15, 2027, the Debtor shall make a final distribution to Class 5 Creditors of any outstanding principal and interest due. The allowed unsecured claims total $393,424.75. The holders of Class 5 Claims are impaired. Class 6 shall consist of unsecured claims less than or equal to $10,000.00. Holders of Allowed Class 6 Claims shall be paid in full on the first anniversary of the Effective Date plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. The amount of claim in this Class total $60,497.06. The Claim of any Class 6 Creditor is Impaired by the Plan. The source of funds for will be the Debtor's post-petition operations. After the Confirmation Date, Debtor is authorized to sell or refinance its assets free and clear of liens, claims and encumbrances as set forth herein (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is only authorized to sell or refinance such property for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property (the "Release Amount"). The Release Amount, after payment of customary closing costs including broker fees and other items customarily attributed to the seller (in a sale) and borrower (in a refinancing), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the particular asset and (ii) then secured claims in order of priority. Any net proceeds from any such sale available after closing shall be paid to fund Debtor's other obligations as set forth in the Plan. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3SMaumK from PacerMonitor.com at no charge. Attorneys for Debtor: Cameron M. McCord, Esq. Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: cmccord@joneswalden.com About Coastal Landfill Disposal of Florida Coastal Landfill Disposal of Florida, LLC, is a Georgia limited liability company formed in 1998 to operate a waste management and landfill operation in Pasco County, Florida. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41009) on Aug. 26, 2022, with up to $50,000 in assets and up to $500,000 in liabilities. Carson Cash King, authorized representative, signed the petition. Judge Barbara Ellis-Monro oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC, Shelly May Johnson, P.A. and Windham Brannon, LLC serve as the Debtor's bankruptcy counsel, special counsel and accountant, respectively. COMMUNITY HEALTH: S&P Downgrades Issuer Credit Rating to 'SD' ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Community Health Systems Inc. to 'SD' (selective default) from 'B-'. At the same time, S&P lowered its issue-level rating on the affected junior-priority secured notes to 'D' from 'CCC'. S&P's issue-level ratings on the other obligations are unchanged. It expects to revise the rating from 'SD' over the next few business days. That rating may be influenced by this transaction if it concludes that there is an increased risk of similar transactions occurring in the future. Community Health recently completed open-market and privately negotiated repurchases at below par of a number of notes. The downgrade reflects Community Health's latest below par debt repurchases. S&P said, "This is the fourth time since 2018 that we have lowered the rating to 'SD'. Community Health has repurchased approximately $597 million of the junior-priority secured notes maturing 2029 and 2030. We view the repurchase of the junior-priority secured notes as a distressed transaction because noteholders received materially less value than originally promised (depending on the tranche, an average of approximately 54 cents on the dollar) and given the context of the high-leverage and relatively low creditworthiness as reflected by the 'B-' rating. The repurchases were done both in the open market and in privately negotiated transactions throughout the second half of 2022." S&P said, "We plan to reassess our issuer credit rating on the company and our issue-level ratings on both the affected junior-priority secured debt, and other issue-level ratings, over coming days. "Although these transactions resulted in a modest reduction of debt outstanding, we may conclude that there is an increased risk of similar transactions occurring in the future, and our ratings intend to incorporate both the long-term sustainability of Community Health's capital structure and the potential risk of further distressed exchange transactions." ESG credit indicators: E-2, S-2, G-2 COMPASS POINTE: Unsecured Claims, If Any, to Get 100% in 5 Years ---------------------------------------------------------------- Compass Pointe Off Campus Partnership B, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of California an Amended Disclosure Statement describing Plan of Reorganization. Compass owns the Fully Entitled property ("Property") located at 3700 Horizons Avenue, Merced, California, near U.C. Merced on which it is currently build off campus housing for the ever-growing UC student population in the greater Merced area. Compass received a hard money from Dakota Note, LLC to continue its housing project, but the note came due without intermediary financing in place and after two paid forbearances went dry, Dakota Note recommenced foreclosure proceedings against the Property and noticed a trustee sale on or about May 10, 2022. In order to ensure that the Property was not lost to foreclosure, Debtor was forced to file for bankruptcy protection. Debtor expects to continue in possession of its Property located and to remain in control of its affairs as a Chapter 11 Debtor-In-Possession; in short, Debtor filed the Chapter 11 to provide it breathing space within which to promote the best interests of its estate. The identity and fair market value of the estate's asset As-Is is approximately $6,505,000; with the final confirmed value being available via the Appraisal ordered and received by Debtor on or about August of 2022. Class 1 consists of the Secured Claim of Dakota Note, LLC. This Class was paid in full via DIP Financing on or about October 20, 2022. Class 2 consists of the Secured Claim of Merced DIP Lender LLC (DIP Lender). The Class 2 Secured Claim in the amount of $24,375,000 shall be paid in full after a 13-month period either by: * Sale of the property by the Debtor or; * Fannie Mae refinance by the Debtor via Walker Dunlop; * Both methods having been approved by Legalist, Inc., the Lender. Class 3 consists of General Unsecured Claims. Debtor estimates that the total amount of Class 3 general unsecured claims to be approximately $00.00. If there be any, the Debtor shall repay 100% of Allowed Unsecured Claims in equal monthly installments over 5 years from the effective date of the Plan. Interest on Allowed Unsecured Claims shall accrue at the rate of 4.25% per annum. On the first day of the month following the month in which the effective date of the Plan occurs, Debtor shall begin monthly payments, consisting of principal and interest. The Plan will be funded by DIP financing paid pursuant to a DIP order. The Debtor shall be responsible for post-confirmation management. The Debtor shall be the disbursing agent for all Distributions under the Plan. The Disbursing Agent shall serve without bond and shall receive no compensation for distribution of services rendered and expenses incurred pursuant to the Plan. A full-text copy of the Amended Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3J7JGdp from PacerMonitor.com at no charge. Attorney for Debtor: Noel Knight, Esq. The Knight Law Group 800 J. St., Ste. 441 Sacramento, CA 95814 Telephone: (510) 435-9210 Facsimile: (510) 281-6889 Email: lawknight@theknightlawgroup.com About Compass Pointe Compass Pointe Off Campus Partnership B, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101 (51B)). Compass Pointe filed its voluntary petition for Chapter 11 protection (Bankr. E.D. Cal. Case No. 22-10778) on May 8, 2022, disclosing $1 million to $10 million in assets. David Sowels, manager, signed the petition. Judge Jennifer E. Niemann presides over the case. Noel Knight, Esq., at The Knight Law Group serves as the Debtor's counsel. CORE SCIENTIFIC: Court OKs $70MM DIP Loan From B. Riley ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Core Scientific, Inc. and its debtor-affiliates to use cash collateral and enter into a senior secured non-priming superpriority replacement postpetition financing, on a final basis. B. Riley Commercial Capital, LLC, serves as administrative agent and collateral agent under this replacement DIP loan, which is a multiple-draw term-loan facility in an aggregate principal amount of up to $70 million, of which (i) $35 million was available following Bankruptcy Court approval pursuant to the Interim DIP Order, and (ii) $35 million was made available following the Final DIP Order. The Bankruptcy Court on February 2, 2023, entered an interim order authorizing, among other things, the Debtors to obtain the Replacement DIP Facility. Loans under the Replacement DIP Facility will bear interest at a rate of 10% which will be payable in kind in arrears on the first day of each calendar month. The Administrative Agent received an Upfront Payment equal to 3.5% of the aggregate commitments under the Replacement DIP Facility on February 3, 2023, payable in kind, and the Replacement DIP Lenders will receive an Exit Premium equal to 5% of the amount of the Loans being repaid, reduced or satisfied, payable in cash. The Replacement DIP Credit Agreement includes representations and warranties, covenants applicable to the Debtors, and events of default. If an Event of Default under the Replacement DIP Credit Agreement occurs, the Administrative Agent may, among other things, permanently reduce any remaining commitments and declare the outstanding obligations under the Replacement DIP Credit Agreement to be immediately due and payable. The maturity date of the Replacement DIP Credit Agreement is December 22, 2023, which can be extended, under certain conditions, by an additional three months to March 22, 2024. The Replacement DIP Credit Agreement will also terminate on the date that is the earliest of: (i) the effective date of any chapter 11 plan of reorganization with respect to the Borrowers or any other Debtor; (ii) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to section 363 of the Bankruptcy Code; (iii) the date of the acceleration of the Loans and the termination of the Commitments (whether automatically, or upon any Event of Default or as otherwise provided in the Replacement DIP Credit Agreement); and (iv) conversion of the Chapter 11 Cases into cases under chapter 7 of the Bankruptcy Code. The Debtors have an immediate and critical need to obtain the Replacement DIP Facility and use cash collateral in order to, among other things, (i) repay the Original DIP Facility to avoid an event of default thereunder and the exercise of remedies by the Original DIP Lenders, (ii) permit the orderly continuation and operation of their businesses, (iii) maintain business relationships with customers, vendors and suppliers, (iv) make payroll, (v) make capital expenditures, (vi) pay the expenses of the Chapter 11 Cases (including by funding the Carve-Out), (vii) satisfy working capital and operational needs of the Debtors, and (viii) for general corporate purposes, in each case, in accordance with and subject to the terms and conditions of the Interim Order and the Replacement DIP Loan Documents, including the Approved Budget. Core Scientific has issued to B. Riley Commercial Capital, LLC as holder: (x) the $60 million Bridge Promissory Note dated April 7, 2022 and (y) the $15 million Bridge Promissory Note also dated April 7, 2022. In connection with the Bridge Notes, Core Scientific and the Bridge Noteholder executed a Fee Letter, dated as of April 7, 2022. As of the Petition Date, Core Scientific owed the Bridge Noteholder $49 million on account of principal amounts outstanding under the Bridge Note Documents. Certain of the Debtors are also parties to (x) the Secured Convertible Note Purchase Agreement, dated as of April 19, 2021, by and among Core Scientific (f/k/a Core Scientific Holding Co.), the guarantors party thereto from time to time, the "Initial Purchasers" and any "Additional Purchasers" party thereto from time to time and U.S. Bank National Association, as note agent and collateral agent, and (y) all other agreements, guarantees, pledge, collateral and security documents, instruments, certificates, promissory notes and other documents executed and/or delivered in connection therewith. As of the Petition Date, the Prepetition April NPA Notes Obligors were indebted to the Prepetition April NPA Secured Parties in the aggregate amount of approximately $239.6 million on account of principal amounts outstanding6 under the Prepetition April NPA Secured Notes. Pursuant to (x) the Secured Convertible Note Purchase Agreement, dated as of August 20, 2021, by and among Core Scientific (f/k/a Core Scientific Holding Co.), the guarantors party thereto from time to time, the "Initial Purchasers" and any "Additional Purchasers" party thereto from time to time and U.S. Bank National Association, as note agent and collateral agent, and (y) all other agreements, guarantees, pledge, collateral and security documents, instruments, certificates, promissory notes and other documents executed and/or delivered in connection therewith, Core Scientific issued convertible notes, and each of the Prepetition August NPA Guarantors, among other things, jointly and severally, irrevocably and unconditionally guaranteed the due and punctual payment and performance in full in cash of all Prepetition August NPA Secured Notes Obligations. As of the Petition Date, the Prepetition August NPA Notes Obligors were indebted to the Prepetition August NPA Secured Parties in the aggregate amount of approximately $325.9 million on account of principal amounts outstanding under the Prepetition August NPA Secured Notes. The Prepetition Secured Parties are entitled to adequate protection against any post-petition diminution in value of the Prepetition Secured Parties' respective liens and interests in the Prepetition Secured Notes Collateral resulting from, among other things, (i) the use, sale or lease by the Debtors of Prepetition Secured Notes Collateral, (ii) the imposition of the automatic stay, (iii) the imposition of the Carve-Out, and (iv) any other cause or reason to the maximum extent provided under the Bankruptcy Code and applicable law. A copy of the B. Riley Credit Agreement is available at https://tinyurl.com/y6v6cmu6 A copy of the order is available at https://bit.ly/3SOeenJ from PacerMonitor.com. About Core Scientific Core Scientific, Inc. (OTC: CORZQ) is the largest U.S. publicly traded Bitcoin mining company in computing power. Core Scientific, which was formed following a business combination in July 2021 with blank check company XPDI, is a large-scale operator of dedicated, purpose-built facilities for digital asset mining colocation services and a provider of blockchain infrastructure, software solutions and services. Core mines Bitcoin, Ethereum and other digital assets for third-party hosting customers and for its own account at its six fully operational data centers in North Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core was formed following a business combination in July 2021 with XPDI, a blank check company. In July 2022, one of the Company's largest customers, Celsius Mining LLC, filed for Chapter 11 bankruptcy in New York. With low Bitcoin prices depressing mining revenue to a record low, Core Scientific first warned in October 2022 that it may have to file for bankruptcy if the company can't find more funding to repay its debt that amounts to over $1 billion. Core Scientific did not make payments that came due in late October and early November 2022 with respect to several of its equipment and other financings, including its two bridge promissory notes. Core Scientific Inc. and its affiliates filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-90340) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific had total assets of US$1.4 billion and total liabilities of US$1.3 billion. Judge David R. Jones oversees the cases. The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT Partners, LP as investment banker; and AlixPartners, LLP as financial advisor. Stretto is the claims agent. A group of Core Scientific convertible bondholders has retained restructuring lawyers at Paul Hastings. B. Riley Commercial Capital, LLC, as Administrative Agent under the Replacement DIP facility, may be reached at: Perry Mandarino B. Riley Commercial Capital, LLC 11100 Santa Monica Blvd., Suite 800 Los Angeles, CA 90025 Telephone: 646-367-2402 E-mail: pmandarino@brileyfin.com The Administrative Agent is represented by: John Ventola, Esq. Choate, Hall & Stewart LLP Two International Place Boston, MA 02110 Telephone: 617-248-5085 E-mail: jventola@choate.com COULEE HILL: Gets OK to Hire SK Realty as Real Estate Broker ------------------------------------------------------------ Coulee Hill Ranch, Inc. received approval from the U.S. Bankruptcy Court for the District of Montana to employ SK Realty, Inc. to market for sale its real property in Golden Valley, Mont. The real estate broker will be paid a commission of 6 percent of the gross purchase price. Steve Krutzfeldt, owner of SK Realty, 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: Steve Krutzfeldt SK Realty, Inc. 4927 Indian Ridge Rd Billing, MT 59105 Tel: (406) 580-4207 About Coulee Hill Ranch Ryegate, Mont.-based Coulee Hill Ranch, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mont. Case No. 21-10010) on Feb. 3, 2021, with $1 million to $10 million in both assets and liabilities. Anthony L. Zinne, vice president of Coulee Hill Ranch, signed the petition. Judge Benjamin P. Hursh oversees the case. The Debtor tapped Patten Peterman Bekkedahl and Green, PLLC as legal counsel and Ed Satterfield as accountant. CREATIVE INVESTORS: Seeks to Hire Joel M. Aresty P.A. as Counsel ---------------------------------------------------------------- Creative Investors, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Joel M. Aresty, P.A. The Debtor requires legal counsel to: a. give advice with respect to the powers and duties of the Debtor and the continued management of its business operations; b. advise the Debtor with respect to its 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 interest of the Debtor in all matters pending before the court; and e. represent the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. The firm will be paid an hourly fee of $440 and will be reimbursed for out-of-pocket expenses incurred. The retainer fee is $5,000. Joel Aresty, Esq., a partner at Joel M. Aresty, P.A., 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: Joel M. Aresty, Esq. Joel M. Aresty, P.A. 309 1st Ave S Tierra Verde, FL 75202 Telephone: (305) 904-1903 Facsimile: (800) 899-1870 Email: Aresty@Mac.com About Creative Investors Creative Investors, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10171) on Jan. 10, 2023, with $500,001 to $1 million in assets and $100,001 to $500,000 in liabilities. Judge Laurel M. Isicoff oversees the case. Joel M. Aresty, P.A. is the Debtor's legal counsel. CROWN FINANCE: $3.33B Bank Debt Trades at 87% Discount ------------------------------------------------------ Participations in a syndicated loan under which Crown Finance US Inc is a borrower were trading in the secondary market around 13 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $3.33 billion facility is a Term loan that is scheduled to mature on February 28, 2025. About $2.63 billion of the loan is withdrawn and outstanding. Crown Finance US, Inc. operates as a movie theater. CROWN FINANCE: $650M Bank Debt Trades at 87% Discount ----------------------------------------------------- Participations in a syndicated loan under which Crown Finance US Inc is a borrower were trading in the secondary market around 12.9 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $650 million facility is a Term loan that is scheduled to mature on September 20, 2026. The amount is fully drawn and outstanding. Crown Finance US, Inc. operates as a movie theater. CURITEC LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Curitec, LLC 24 Waterway Ave STE 755 The Woodlands, TX 77380 Business Description: Curitec is a Medicare accredited Part B provider of durable medical supplies (DMEPOS). Its services include the delivery of advanced wound care products as well as ostomy, urological, and tracheostomy supplies to long term care facilities and hospice. Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Southern District of Texas Case No.: 23-90108 Judge: Hon. Christopher M. Lopez Debtor's Counsel: Casey Doherty, Esq. DENTONS 1221 McKinney Street Suite 1900 Houston, TX 77010 Tel: 1-713-658-4643 Email: Casey.Doherty@dentons.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Nicholas Percival as manager and chief operating officer. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/T7CI54Y/Curitec_LLC__txsbke-23-90108__0001.0.pdf?mcid=tGE4TAMA DELCATH SYSTEMS: Faces Suit Over Consulting Fee Dispute ------------------------------------------------------- Lachman Consultant Services, Inc., on Jan. 24, 2023, served Delcath Systems, Inc. with a Complaint naming Delcath as the defendant, Lachman Consultant Services, Inc. v. Delcath Systems, Inc., Index No. 650103-2023 (New York Supreme Court, New York County. LCS' suit arises from a dispute over consulting fees LCS alleges that Delcath purportedly owes it for completed consulting work. Delcath filed its Answer on Feb. 22, 2023 and plans to vigorously defend this lawsuit. The amount in controversy is $871,470.05 plus interest, costs and attorneys' fees. About Delcath Systems Headquartered in New York, NY, Delcath Systems, Inc. -- http://www.delcath.com-- is an interventional oncology company focused on the treatment of primary and metastatic liver cancers. The Company's lead product candidate, the HEPZATO KIT (melphalan hydrochloride for injection/hepatic delivery system), is a drug/device combination product. HEPZATO is designed to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects. Delcath Systems reported a net loss of $25.65 million for the year ended Dec. 31, 2021, compared to a net loss of $24.16 million for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $20.23 million in total assets, $25.47 million in total liabilities, and a total stockholders' deficit of $5.25 million. New York, NY-based Marcum LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 30, 2022, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. DEVILLE CORP: Court OKs Interim Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized Deville Corp. to use cash collateral on an interim basis, in accordance with the budget, with a 10% variance. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court, including payments to the US Trustee for quarterly fees; (b) the current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by FLA-Nash, LLC and and H.I. Resorts Nashville, LLC, as successor-in-interest to Savannah Capital, LLC. FLA-Nash, LLC has agreed to extend the maturity date of its loan from March 1, 2023, through and including May 1, 2023. Consistent with the Budget, the Debtor will continue to pay to FLA-Nash, LLC regular mortgage payment. The Debtor and FLA-Nash, LLC are authorized, but not required, to enter into reasonable and customary documents to document the extension consistent with the Order. Each creditor with a security interest in the cash collateral will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the prepetition lien, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Secured Creditors. A continued hearing on the matter is set for April 28, 2023 at 9:30 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/3kRKqdb from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $8,147 for February 2023; $3,940 for March 2023; and $3,190 for April 2023. About Deville Corp. Deville Corp. is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Deville Corp. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04930) on Dec. 14, 2022. In the petition filed by Edgar L.T. Gay, as president and director, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. Judge Catherine Peek McEwen oversees the case. The Debtor is represented by Daniel R. Fogarty, Esq. at Stichter, Riedel, Blain & Postler, P.A. DIOCESE OF NORWICH: Unsecureds to Recover 100% in Committee's Plan ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of The Norwich Roman Catholic Diocesan Corporation, filed with the U.S. Bankruptcy Court for the District of Connecticut a Disclosure Statement for Chapter 11 Plan of Reorganization for the Debtor dated February 28, 2023. The Roman Catholic Church is comprised of territories, known as dioceses, each of which is subject to the authority and control of a bishop. Every Catholic entity, including the Diocese, is subject to church law also called Canon Law. The Diocese is structured and operates in accordance with Canon Law and is a juridic person under Canon Law. In this bankruptcy case, approximately 68 Proofs of Claim have been filed against the Diocese by Abuse Claimants alleging that they had been sexually abused by Br. McGlade when they resided as children at Mount St. John's School, many of which involved rape or other acts of extreme violence, and occurred repeatedly and over significant periods of time. Similarly, approximately 16 Proofs of Claim have been filed against the Diocese involving acts of child sexual abuse committed by Br. Alford at Mount St. John's School. Abuse Claimants also filed approximately 22 Proofs of Claims against the Diocese for acts of child sexual abuse committed against them by distinct perpetrators at Mount St. John's School. The Committee Plan provides the means for settling and paying all Claims asserted against the Debtor while providing for the Diocese's emergence from bankruptcy. The Committee Plan requires the Diocese to contribute certain assets to fund distributions to Abuse Claimants (significantly greater in amount than provided for in the Diocese Plan), and satisfy or otherwise leave unimpaired other creditors, while establishing a platform through which other potentially responsible parties, including certain parishes within the Diocese, and the Diocese's Insurers, may participate in the Committee Plan and resolve their liability with respect to the Abuse Claims. With respect to the other primary parties to this Bankruptcy Case, unless substantial and meaningful compensation from the Diocese's Catholic Entities is provided, the Committee Plan will not grant releases or the benefit of injunctions to them, and, if confirmed, the Abuse Claimants can pursue their Abuse Claims against the Catholic Entities liable for such abuse. Similarly, the Committee insists that the Debtor's Insurers provide fair and reasonable settlement payments to the Estate to fund the Trust for the benefit of Abuse Claimants consistent with the terms and extent of coverage provided by the Insurance Policies purchased from them over decades by the Diocese and the Catholic Entities. Through the Committee Plan, the Committee seeks to establish a platform for the Diocese to reorganize and continue its mission and support its ministries, and also to compel the Diocese to contribute a fair and equitable amount of its assets to fund distributions to Abuse Claimants. The rights of the holders of secured claims and general unsecured claims against the Diocese would not be impaired under the Committee's Plan. The expeditious reorganization of the Diocese would also significantly reduce the further diminishment of the Diocese's resources to pay for fees and expenses incurred by Professionals employed in this case, and other bankruptcy related costs. The Diocese owed its ordinary course vendors approximately $27,318.92 as of the Petition Date, for the delivery of goods and services to the Diocese, which are used in the operation of the Diocese's business, including providing support for its ministries and other outreach programs. These creditors are essential to the Diocese's operations, as they provide the items and services necessary to continue the Diocese's mission. Class 4 consists of Abuse Claims (Other Than Unknown Abuse Claims). On and after the Effective Date, and subject to the Plan provisions, the Trust shall pay all Abuse Claims (except Unknown Abuse Claims) in accordance with and under the Plan and Trust Documents. The payment of the Class 4 Claims by the Trust is not a release, accord or novation of the Debtor's or the Participating Parties' liability because of the Class 4 Claims. Under no circumstance shall the Abuse Claims Reviewer's review of a Class 4 Claim affect the rights of a Non-Settling Insurer. Class 4 Claimants shall have their Claims treated under the Trust Distribution Plan. Neither the Trust nor the Diocese have any obligation to take any action to enforce an Insurance Policy of a Non-Settling Insurer, including any obligation to commence and prosecute any action against any Non-Settling Insurer or to defend an action commenced by a Non-Settling Insurer, though the Trust (or the Diocese, as applicable), may choose to do so. Class 5 consists of Unknown Abuse Claims. The Unknown Abuse Claims Trust will be funded by the Debtor on the Effective Date pursuant to the provisions of the Committee Plan. On and after the Effective Date, the Unknown Abuse Claims Trust shall pay all Unknown Abuse Claims in accordance with and the Plan and Unknown Abuse Claims Trust Documents. The payment of the Unknown Abuse Claims by the Unknown Abuse Claims Trust is not a release, accord or novation of the Debtor's or the Participating Parties' liability because of the Unknown Abuse Claims. Class 6 consists of General Unsecured Claims. Class 6 is unimpaired under the Plan. Except to the extent that a Class 6 Claimant agrees to less favorable treatment of their Class 6 Claim, in exchange for full and final satisfaction of such Allowed General Unsecured Claim, at the sole option of the Reorganized Diocese: (a) each Class 6 Claimant shall receive payment in Cash in an amount equal to such Allowed General Unsecured Claim, payable on or as soon as reasonably practicable after the last to occur of (i) the Effective Date, (ii) the date on which such General Unsecured Claim becomes an Allowed General Unsecured Claim, and (iii) the date on which the Class 6 Claimant and the Diocese or Reorganized Diocese, as applicable, shall otherwise agree in writing; or (b) satisfaction of such Allowed General Unsecured Claim in any other manner that renders the Allowed General Unsecured Claim Unimpaired, including Reinstatement. This Class will receive a distribution of 100% of their allowed claims. Class 7 consists of Abuse Related Contribution Claims. Claims in Class 7 against the Debtor shall be disallowed in accordance with Section 502(e)(1) of the Bankruptcy Code, and Class 7 Claims will receive no distribution under the Plan. Notwithstanding the disallowance of an Abuse Related Contribution Claim, an Abuse Claimant who liquidates their claim in an amount greater than $0, consents to application of its portion of the reserve established by the Trustee under the Trust Agreement to pay any Co-Defendant for its contribution, reimbursement, and/or indemnity claim, if any, against the Debtor. Under the terms of the Committee Plan, the Diocese will transfer certain cash and assets to the Trust. On the Confirmation Date, the Trust shall be established under the Trust Documents and the Unknown Abuse Claims Trust shall be established under the Unknown Abuse Claims Trust Documents. The Trust Documents and Unknown Abuse Claims Trust Documents, including the Trust Agreement and Unknown Abuse Claims Trust Agreement, are incorporated herein by reference. The Trust will be funded as follows: * Transferred Cash. On or before the Effective Date, the Debtor shall transfer or cause to be transferred on its behalf by wire transfer to the Trust $1.3 million in good and immediately available funds. * Transferred Real Estate. The Debtor shall transfer to the Trust all pieces and parcels of Real Property described in subsection 4 of Section 7.1(a) of the Committee Plan. * Transferred Causes of Action. The Causes of Action of the Diocese are automatically and without further act or deed assigned and transferred to the Trust on the Effective Date. * Transferred Receivables. The Transferred Receivables of the Diocese are automatically and without further act or deed assigned and transferred to the Trust on the Effective Date, including, but not limited to, all receivables identified in Exhibit I to the Committee Plan. * Transferred Insurance Interests. The Insurance Claims and the Insurance Recoveries against Non-Settling Insurers deemed assigned to the Trust pursuant to and to the extent provided by Section IX of the Committee Plan. * Settled Insurer and Participating Party Contributions. The Unknown Abuse Claims Trust shall be funded by the Debtor and the Reorganized Debtor by transferring to the Unknown Abuse Claims Trust the amounts directed and within the time frames required by the Unknown Claims Representative. On the Effective Date, the Debtor shall make all payments and effectuate all transfers required to be performed on the Effective Date pursuant to the Committee Plan, including by transferring the Trust Assets due on the Effective Date to the Trust on the Effective Date. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3EWwPbg from PacerMonitor.com at no charge. The firm can be reached through: Stephen M. Kindseth, Esq. Eric A. Henzy, Esq. Daniel A. Byrd, Esq. Zeisler & Zeisler, PC 10 Middle Street, 15th Floor Bridgeport, CT 06604 Telephone: (203) 368-4234 Email: skindseth@zeislaw.com ehenzy@zeislaw.com dbyrd@zeislaw.com About The Norwich Roman Catholic Diocesan Corporation The Norwich Roman Catholic Diocesan Corporation is a nonprofit corporation that gives endowments to parishes, schools, and other organizations in the Diocese of Norwich, a Latin Church ecclesiastical territory or diocese of the Catholic Church in Connecticut and a small part of New York. The Norwich Roman Catholic Diocesan Corporation sought Chapter 11 protection (Bankr. D. Conn. Case No. 21-20687) on July 15, 2021, with $10 million to $50 million in assets against liabilities of more than $50 million. Judge James J. Tancredi oversees the case. The Debtor tapped Ice Miller, LLP, Robinson & Cole, LLP and Gellert Scali Busenkell & Brown, LLC as bankruptcy counsel, Connecticut counsel and special counsel, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. On July 29, 2021, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Chapter 11 case. The committee tapped Zeisler & Zeisler, PC as its legal counsel. The Debtor filed its proposed Chapter 11 plan of reorganization and disclosure statement on Jan. 17, 2023. DIV005 LLC: Committee Seeks to Hire Macey Wilensky & Hennings as Co ------------------------------------------------------------------- The official committee of unsecured creditors of Div005, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Macey, Wilensky & Hennings as its legal counsel. The firm's services include: a. providing the committee with legal advice with respect to the Debtor's Chapter 11 case; b. preparing legal matters; c. assisting in the examination of the Debtor's Chapter 11 plan and underlying financial documentation; d. evaluating and participating in any sale process; e. assisting the committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor and participating in reviewing a plan of reorganization, and any other matters relevant to the case; f. attending meetings of the committee and the Debtors, and participating in negotiations with the Debtors and other parties, as requested by the committee; g. taking all necessary action to protect and preserve the interests of the committee, including possible prosecution of actions on its behalf and investigations concerning litigation in which the Debtor is involved; h. assisting the committee in the review, formulation, analysis, and negotiation of any plan of reorganization; and i. other necessary legal services. The firm will be paid at these rates: Attorney Todd E. Hennings, Esq. $520 per hour Frank B. Wilensky, Esq. $600 per hour Clayton Smith, Esq. $275 per hour Christie Hennings, Esq. $300 per hour Paralegal Heather E. Crowder $120 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Todd Hennings, Esq., a partner at Macey, Wilensky & Hennings, 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: Todd E. Hennings, Esq. Macey, Wilensky & Hennings 5500 Interstate North Parkway, Suite 435 Atlanta, GA 30328 Tel: (404) 584-1234 Facsimile: (404)-681-4355 Email: thennings@maceywilensky.com About Div005 LLC Div005, LLC is primarily engaged in manufacturing iron and steel pipe and tube, drawing steel wire, and rolling steel shapes, from purchased steel. The company is based in Winder, Ga. Div005 sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-21202) on Nov. 23, 2022. In the petition signed by its manager, Harold Lerner, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge James R. Sacca oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC and Merbaum & Becker, P.C. serve as the Debtor's bankruptcy counsel and special counsel, respectively. The U.S. Trustee for Region 21 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by the law firm of Macey, Wilensky & Hennings. DOMTAR CORP: S&P Downgrades Senior Secured Notes Rating to 'BB' --------------------------------------------------------------- S&P Global Ratings downgraded Domtar Corp.'s senior secured notes to 'BB' from 'BB+' and revised the recovery rating to '3' from '2' following the announced completion of the acquisition of Resolute Forest Products (Resolute) by Domtar. The capital structure upon close of the acquisition includes a higher proportion of secured claims than was previously the case and contributes to weaker recovery prospects, in its view. S&P's other ratings on the company, including its 'BB' long-term issuer credit rating, with a negative outlook, and its 'BB' issue-level rating on the company's unsecured notes, are unchanged. Resolute is now a 100% owned subsidiary of Domtar operating under the Resolute Forest Products name. Debt financing for the acquisition resulted in a net increase to secured debt of about US$666 million in addition to a $US210 million draw under an asset-based loan (ABL) revolving credit facility that was recently upsized to US$1 billion. S&P said, "The revised recovery rating to '3' on the secured debt indicates our expectation for meaningful (50%-70%; rounded estimate of 65%) recovery in a hypothetical default scenario and reflects Domtar's updated capital structure. Our analysis incorporates higher priority claims from the upsized ABL revolving credit facility (that we assume is 60% drawn at default), US$666 million of additional secured debt, and a significant increase in pension-related claims assumed from Resolute." ISSUE RATINGS-RECOVERY ANALYSIS Key analytical factors: -- S&P has updated its recovery analysis on Domtar to reflect the completion of its acquisition of Resolute and updated capital structure that includes its US$1.0 billion ABL (about US$210 million drawn at close), about US$640 million of 6.75% secured notes due 2028, US$1.3 billion of secured term loans (including US$950 million of farm credit term loans), and about US$265 million of unsecured notes. -- S&P's 'BB' issue-level rating and '3' recovery rating on Domtar's senior secured term loans and notes reflect our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a default. -- S&P's 'BB' issue-level rating and '4' recovery rating on Domtar's senior unsecured notes reflect its expectation for average (30%-50%; rounded estimate: 30%) recovery in the event of a default. -- S&P assumes all of Resolute's debt outstanding was repaid and that the collateral securing Domtar's secured notes and term loans will be the material U.S. subsidiaries of Domtar and Resolute. -- S&P values Domtar (which now includes Resolute) on a going-concern basis, with gross enterprise value of US$2.4 billion based on emergence EBITDA of about US$440 million and a valuation multiple of 5.5x. -- The valuation multiple of 5.5x is slightly above the average for forest and paper products companies, consistent with that of the company's closest peer (Sylvamo Corp.) and incorporates Domtar's stronger business risk characteristics compared with those of most speculative-grade issuers in this industry. -- S&P's simulated default scenario considers a payment default in 2028 amid a significant and protracted deterioration in macroeconomic conditions in North America that mainly leads to sharply lower paper and lumber demand and prices. In this scenario, S&P assumes Domtar exhausts its available liquidity and files for creditor protection in the U.S. and Canada. -- S&P reduces its gross enterprise valuation on the company by 50% of estimated pension liabilities (from Resolute) and administrative costs. S&P then deducts ABL priority claims (assumed 60% drawn at default). -- S&P assumes Domtar's subsidiaries that guarantee the company's secured debt account for about 60% of total enterprise value. -- The residual secured claims not covered by guarantor assets rank equally (on a pro rata basis) with Domtar's unsecured noteholders with respect to the approximately 40% of the company's remaining assets not pledged as collateral (that is, non-guarantor subsidiaries). Simulated default assumptions: -- Simulated year of default: 2028 -- EBITDA at emergence: About US$440 million -- EBITDA multiple: 5.5x Simplified waterfall: -- Gross enterprise value: US$2.4 billion -- Obligor/non-obligor valuation split: About 60%/40% -- Pension deficit: About US$100 million at guarantor subsidiaries and US$300 million at nonguarantor subsidiaries -- Net enterprise value (after 5% administrative costs and pension deficit claims): US$0.9 billion at guarantor subsidiaries and US$0.4 billion at nonguarantor subsidiaries -- Value distributed to ABL priority claims: About US$614 million -- Value available to secured claims: About US$0.9 billion (includes residual value after priority claims and pro rata share of value not pledged as security/nonguarantors) -- Estimated secured claims at default: US$1.8 billion --Recovery range: 50%-70% (rounded estimate: 65%) -- Value available to unsecured claims: About US$385 million -- Estimated unsecured notes and pari passu claims at default: US$1.2 billion (about US$275 million from unsecured notes and US$0.9 billion in deficiency claims of secured creditors) --Recovery range: 30%-50% (rounded estimate: 30%) *All debt amounts include six months of prepetition interest. Ratings List ISSUE-LEVEL RATINGS AFFIRMED; RECOVERY RATINGS UNCHANGED DOMTAR CORP. Senior Unsecured BB Recovery Rating 4(30%) ISSUE-LEVEL RATINGS LOWERED; RECOVERY RATINGS REVISED TO FROM DOMTAR CORP. Senior Secured BB BB+ Recovery Rating 3(65%) 2(70%) EDISON INT'L: Fitch Assigns BB Instrument Rating on 2053 Sub. Notes ------------------------------------------------------------------- Fitch Ratings has assigned a 'BB' instrument rating to Edison International's (EIX) fixed-to-fixed reset rate junior subordinated notes due 2053. The securities receive 50% equity credit under Fitch's "Corporate Hybrids and Notching" criteria. Proceeds from the issuance of the preferred securities will be used to repay CP borrowings and for general corporate purposes. EIX's Issuer Default Rating (IDR) is 'BBB-'/Outlook Positive. In May 2022, Fitch affirmed EIX's Long-Term IDR at 'BBB-' and revised the Rating Outlook to Positive from Stable. The rating affirmation and Positive Outlook primarily reflect the meaningful decline in utility-linked wildfires in EIX subsidiary Southern California Edison Co's (SCE; BBB-/Stable) service territory post-2018. SCE is EIX's core utility operating subsidiary accounting for virtually all of EIX's consolidated earnings and cash flows. KEY RATING DRIVERS Wildfire Risk Update: Fitch believes wildfire risk at subsidiary SCE remains a key challenge to EIX creditworthiness along with higher leverage due to large third-party wildfire liability funding claims under inverse condemnation stemming from the 2017-2018 wildfire and mudslide events. SCE estimates gross losses from the 2017-2018 wildfire and mudslide events of $8.8 billion. Nonetheless, progress made by SCE to improve fire resilience is, in Fitch's opinion, evident in materially reduced wildfire activity over the past four years. Post-2018 wildfires in SCE's service territory where its equipment may have been involved have been significantly smaller and exposures in terms of third-party liabilities expected to be more manageable from a credit perspective compared to the Thomas and Koenigstein Fires and Montecito Mudslides (TKM) and Woolsey liabilities. With the large majority of 2017/2018 liabilities resolved, Fitch expects SCE's credit metrics to improve meaningfully in 2022 and 2023 compared with 2021, even without cost recovery of such liabilities. Post-2018 Wildfires Less Destructive: The significant reduction in the number of structures destroyed by SCE-linked wildfires during 2019-2022 compared to 2017-2018 combined with SCE's ongoing efforts to enhance wildfire resilience, credit supportive elements of wildfire legislation enacted in California and improving projected credit metrics support the utility's and EIX's ratings and Positive Outlook. While Fitch believes efforts underway to minimize wildfire destruction may be taking root, sustained recurrence of similarly destructive firestorm activity as 2017-2018 cannot be ruled out and would result in adverse credit rating actions. Credit Supportive Legislation Enacted: Assembly Bill (A.B.) 1054, Senate Bill (S.B.) 901 and a number of other laws were enacted in California to protect the public against deadly wildfires. A.B. 1054 creates a $21 billion wildfire insurance fund for the three large electric investor-owned utilities (IOUs) in California, including SCE, to defray prudently incurred wildfire related liabilities under inverse condemnation (IC) in excess of $1 billion. California applies IC to IOUs when their equipment is deemed to have ignited a wildfire, holding them strictly liable even if they complied with all rules and regulations. Importantly from a credit perspective, the legislation modified California's prudence standard with regard to wildfire liabilities although the new standard is yet to be implemented and is subject to interpretation risk in Fitch's opinion. Wildfire Insurance Fund: California applies IC to IOUs when their equipment is deemed to have ignited a wildfire, holding them strictly liable even if they complied with all rules and regulations. Under IC, payments to wildfire victims are made relatively quickly and may not be recovered by IOUs until long after payments have been made, if at all. The A.B. 1054 insurance fund is designed to address this mismatch in cash recovery and liability payments, providing a robust source of funds to buffer SCE and the other large IOUs from liquidity and funding challenges associated with large firestorm-related liabilities. The legislation also authorized a wildfire mitigation certification process to support IOU efforts to enhance resilience, a more balanced prudence standard and securitization of certain wildfire-related costs. Premature exhaustion of the A.B. 1054 fund due to elevated wildfire activity and related claims is a concern. Securitization of Wildfire Costs: Both S.B. 901 and A.B.1054 include provisions authorizing use of securitization of wildfire costs in certain circumstances to minimize their impact on customer rates. SCE issued $871 million of securitization bonds in 2021 and 2022 and management plans to issue approximately $775 million of securitization bonds to repay certain wildfire-related expenditures as authorized under California law. Timing of the new securitization issuance will depend on regulatory approval. Fitch adjusts its financial ratios removing securitization related revenue, amortization, interest expense and debt from EIX's and SCE's financials reflecting protections and commitments granted by state law creating a transferable, nonbypassable special tariff to a ring-fenced SPE with no recourse to the utility. Under state law, securitization issuance by SCE is capped at $1.6 billion. Uncertain Wildfire Cost Recovery Prospects: Fitch believes recovery of prudently incurred 2017-2018 wildfire liabilities in future rate proceedings could materially strengthen SCE's credit profile within the investment grade category. However, recovery of 2017-2018 wildfire liabilities in regulatory proceedings before the California Public Utilities Commission (CPUC) is subject, in Fitch's view, to a high degree of uncertainty and, accordingly, no recovery is reflected in our projections. SCE currently plans to file for rate recovery of pending liabilities in multiple future applications. SCE is targeting 3Q23 for the first of such cost recovery applications, which would be for TKM. EIX Debt: Fitch believes EIX's consolidated balance-sheet debt is manageable, totaling $36 billion as of Dec. 31, 2022, including holding company and utility preferred and preference securities of approximately $3.9 billion. EIX parent-only debt and preferred was $6.5 billion or 18% of total EIX consolidated debt and preferred securities. EIX parent-only debt has increased sharply from approximately $400 million at YE 2013. Higher EIX debt is due to funding requirements primarily at SCE for capex and catastrophic wildfire costs and, to a lesser extent, payments to creditors of former subsidiary Edison Mission Energy under its bankruptcy court-approved reorganization plan. Balanced Rate Regulation: Fitch believes rate regulation is generally balanced in California. Constructive CPUC regulatory practices include regularly scheduled general rate cases based on forward test years with subsequent attrition year rate increases in years two through four. GRCs are bifurcated from cost of capital proceedings and filed on a four-year cycle. Capex and long-term power procurement costs are preapproved. Fitch believes these practices along with adoption by the CPUC of cost recovery mechanisms for certain large unavoidable costs provides SCE, in the normal course of business, with a reasonable opportunity to earn its authorized ROE, which have consistently been above the industry average. Coronavirus Impacts: Fitch does not expect impacts of the coronavirus to result in adverse credit rating actions for SCE or its corporate parent. The CPUC has approved the COVID-19 Pandemic Protections Memorandum Account (CPPMA) to track coronavirus-related costs for future recovery. Bad debt and other coronavirus-related costs are expected to be deferred and recovered through SCE's Residential Uncollectibles Balancing Account, CPPMA and Catastrophic Event Memorandum Account. DERIVATION SUMMARY EIX compares favorably with peer utility holding company PG&E Corp. (PCG; BB/Positive) and is similarly positioned to Cleco Corporate Holdings (Cleco; BBB-/Stable) and Puget Energy Inc. (PE; BBB-/Stable). Both EIX's and PCG's business risk profiles are seriously challenged by outsized wildfire-related liabilities with significantly greater adverse effect for PCG. Post-2018 wildfires in SCE's service territory have been smaller and more manageable than the 2017-2018 wildfires and the 2021 Dixie Fire which occurred in PG&E's service territory. EIX, PCG, Cleco and PE are single utility-holding companies operating in parts of California (PCG and EIX), Washington (PE) and Louisiana (Cleco). EIX and PCG are significantly greater in size and scale than PE or Cleco and parent-only debt is significantly lower - less than 20% for EIX and PCG versus 30% for PE and 50% for Cleco. Virtually all of EIX's, PCG's and PE's consolidated EBITDA is provided by regulated operations and approximately 75% for Cleco. Fitch estimates EIX FFO leverage will average just under 5.0x in 2022-2026 better than Fitch's estimate of 5.0x-6.0x for PE and Cleco. EIX credit metrics are in line with estimated PCG leverage of just under 5.0x in 2022 and 2023. Uncertainty regarding the magnitude, frequency and destructive force of California wildfires and associated third-party liabilities heighten regulatory and operating risks for EIX and PCG, in Fitch's view, in comparison to its peers. KEY ASSUMPTIONS - No rate recovery of 2017-2018 wildfire liabilities; - SCE pays approximately $8.8 billion of total wildfire-related third-party liabilities; - No equity return on the first $1.6 billion of wildfire mitigation plan capex; - Capex spend during 2022-2025 of approximately $6 billion per year on average; - Credit supportive federal and state economic regulation; - Securitization of approximately $1.2 billion of AB 1054 capital costs 2022-2023; - Timely recovery of memo account balances 2022-2025; - Balanced funding of SCE's capex program. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - FFO leverage of 5.0x or better on a sustained basis and continued credit improvement at SCE. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Significantly greater than expected debt issuance; - A downgrade of SCE; - FFO leverage of greater than 5.5x on a sustained basis. LIQUIDITY AND DEBT STRUCTURE Fitch believes EIX has ample consolidated liquidity. EIX has negotiated $4.9 billion of consolidated revolving credit facilities (RCFs) composed of a $1.5 billion revolver at the corporate parent and a $3.4 billion revolver at SCE. On a consolidated basis, EIX had total available borrowing capacity of $4.1 billion and cash and cash equivalents of $914 million YE 2022. EIX had borrowings outstanding totaling $0.1 billion on its $1.5 billion RCF and the corporate parent had $148 million of cash on hand at the end of 2022. SCE ended the year with $2.7 billion available to be borrowed under its RCF and $766 million of cash on hand. Like most utilities, SCE is expected to be FCF negative based on Fitch's assumptions and its large capex program. Negative FCF is a function of high capex driven by spending to mitigate catastrophic wildfire activity and meet California's greenhouse gas reduction goals. Fitch expects cash shortfalls to be funded with a balanced mix of debt and equity. EIX and SCE have access to debt capital markets and Fitch believes debt maturities are manageable. ISSUER PROFILE Holding company EIX's core utility, SCE, is one of the largest investor-owned electric utilities in the U.S. SCE provides electricity services to 15 million people through five million customer accounts across a 50,000 square-mile service territory in Central, Southern and Coastal California. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch adjusts EIX's financials to remove securitization-related revenue, interest and amortization expense and debt. ESG CONSIDERATIONS EIX has an ESG Relevance Score (RS) of '4' for exposure to environmental impacts, reflecting the constructive impact of AB 1054, including creation of the wildfire fund, and ongoing efforts by EIX, SCE and the State of California to mitigate catastrophic wildfire activity. The ESG RS for exposure to environmental factors is relevant to the companies' ratings and has a negative impact on EIX's and SCE's ratings in combination with other factors. EIX has an ESG Relevance Scores (RS) of '4' for exposure to social impacts which are also related to wildfire activity and its adverse impact on the utility's relationship with customers and is relevant to the ratings and has a negative impact on EIX's and SCE's ratings in combination 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 ----------- ------ Edison International junior subordinated LT BB New Rating EYECARE PARTNERS: $250M Bank Debt Trades at 18% Discount -------------------------------------------------------- Participations in a syndicated loan under which Eyecare Partners LLC is a borrower were trading in the secondary market around 82.1 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $250 million facility is a Term loan that is scheduled to mature on November 15, 2028. About $249.4 million of the loan is withdrawn and outstanding. EyeCare Partners, LLC, headquartered in St. Louis, Missouri, is the largest medically-focused eye care services provider. EyeCare Partners, LLC is vertically integrated, providing optometry, ophthalmology and retail products. Pro forma for the acquisitions, EyeCare Partners, LLC will have more than 600 locations across 18 states. FAST RADIUS: Gets Court Approval for Wind-Down Plan --------------------------------------------------- Vince Sullivan of Law360 reports that 3D parts printer Fast Radius Inc. has garnered wide support for its Chapter 11 wind down. 3D parts printer Fast Radius Inc. received court approval from a Delaware bankruptcy judge for its Chapter 11 plan that had the support of nearly all of its creditor constituencies and includes settlements of large claims against the estate. Legacy FSRD, Inc. (f/k/a Fast Radius, Inc., et. al), and its debtor-affiliates submitted a Revised Combined Disclosure Statement and Joint Chapter 11 Plan dated January 12, 2023. On Dec. 7 and Dec. 8, 2022, the Debtors conducted an auction, and at the conclusion of the auction, SyBridge Digital Solutions LLC was named the successful bidder of the Debtors. The Debtors estimate that the SyBridge going-concern transaction generates a total estimated value of nearly $17 million, inclusive of more than $13 million of cash, offers to more than 75% of the Debtors' employees, the proposed assumption of more than 100 contracts and up to more than $2.4 million of liabilities, among other things. On December 12, 2022, the Bankruptcy Court approved the sale transaction, and on Dec. 16, 2022, the Debtors and the purchaser consummated the sale transaction. On the closing date, the Debtors distributed $7.8 million of cash to Silicon Valley Bank ("SVB") and $2.0 million to SVB Innovation Credit Fund VIII, L.P. ("SVB Capital") while escrowing the remaining $2.0 million of cash consideration paid by the Purchaser. The Debtors also escrowed $1.5 million pursuant to the Sale Order in respect of Lincoln's potential fees. The Plan implements key settlements with every major stakeholder in these chapter 11 cases. The Plan already enjoys support from all of the Debtors' major stakeholders, including the Committee, SVB Bank, SVB Capital, Palantir, UPS, and a landlord. Each Holder of an Allowed General Unsecured Claim shall receive its pro rata share of $750,000. The amount of claim in this Class total $21.0 to $24.0 million. This Class will receive a distribution of 6% to 8% of their allowed claims. A full-text copy of the Revised Combined Disclosure Statement and Plan dated January 12, 2023, is available at https://bit.ly/3ZBMo0O from Stretto, Inc., claims agent. About Fast Radius Fast Radius, Inc. (OTCMKTS: FSRDQ) is a cloud manufacturing and digital supply chain company in Chicago, Ill. Fast Radius, Inc. and affiliates, Fast Radius Operations, Inc. and Fast Radius PTE Ltd., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11051) on Nov. 7, 2022. In the petition signed by Patrick McCusker, authorized signatory, Fast Radius, Inc. disclosed $69.329 million in assets and $55.212 in liabilities. The Debtors tapped DLA Piper LLP (US) and Bayard, P.A., as legal counsel; Lincoln Partners Advisors, LLC, as investment banker; Alvarez & Marsal North, America, LLC as financial advisor; and Stretto, Inc. as claims and noticing agent and administrative advisor. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Nov. 18, 2022. The committee is represented by Potter Anderson Corroon, LLP. FMC CLINIC: Seeks to Hire Berman DeLeve as Bankruptcy Counsel ------------------------------------------------------------- FMC Clinic LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Missouri to hire Berman, DeLeve, Kuchan & Chapman, LLC, as its attorneys. The firm's services include: (a) advising the Debtor with respect to their rights and obligations as Debtor and Debtor-in-Possession and regarding compliance with the Bankruptcy Code; (b) preparing and filing of any and all petitions, schedules, statement of affairs, motions, applications, plan of reorganization and any and all other pleadings and documents which may be required in this proceeding; (c) representing the Debtor at the meeting of creditors, confirmation, and related hearings and any continued or adjourned hearings thereof; (d) solicitating consents to the Debtor's proposed plan of reorganization; disclosures and communications with creditors relating thereto; and securing confirmation of said plan; (e) representing the Debtor with respect to any m matters that may arise in connection with the Debtor's reorganization proceeding and the conduct and operation of the Debtor's business; and (f) examining claims of creditors in order to determine their validity, priority, and amount; giving advice and counsel to the applicants in connection with legal problems, including securing Debtor-in-Possession financing, the use of cash collateral, the sale of property of the estate, the assumption and/or rejection of unexpired leases and executory contracts, and the protection of applicant's interests with respect to any contested or adversary matters. The hourly rate currently charged by Ronald S. Weiss, Esq., and Joel Pelofsky, Esq., is $325 per hour. Paralegals and document maintenance personnel charge $125 per hour and $75 per hour, respectively. Mr. Weiss disclosed in a court filing that he and his firm are "disinterested persons" as defined in Section 101(14) of the Bankruptcy Code. Berman can be reached through: Ronald S. Weiss, Esq. Joel Pelofsky, Esq. Berman, DeLeve, Kuchan & Chapman, LLC 1100 Main, Suite 2850 Kansas City, MO 64105 Phone: (816) 471-5900 Fax: (816) 842-9955 Email: rweiss@bdkc.com Email: jpelofsky@bdkc.com About FMC Clinic FMC Clinic is engaged in activities related to real estate. The Debtor has equitable interest in a property located at 850 S Hospital Dr Fulton, MO, 65251 valued at $7.9 million. FMC Clinic LLC filed its voluntary petition for relief under Chapter 11 of Bankruptcy Code (Bankr. W.D. Mo. Case No. 23-20052) on Feb. 10, 2023. The petition was signed by Zev M. Reisman as general manager/corporate secretary. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Ronald Weiss, Esq. at BERMAN DELEVE KUCHAN AND CHAPMAN as its counsel. FORGE BIOLOGICS: Midcap Financial Marks $26M Loan at 50% Off ------------------------------------------------------------ Midcap Financial Investment Corporation has marked its $26,667,000 loan extended to Forge Biologics, Inc. to market at $13,333,000 or 50% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt Loan to Forge Biologics, Inc. The loan accrues interest at a rate of .50% (SOFR+675) per annum. The loan matures on December 3, 2026. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Forge Biologics is a gene therapy development engine, focused on enabling access to life-changing gene therapies and helping bring them from an idea into reality. The company partners with innovators in the gene therapy community: scientists, physicians, biotech/pharma companies, and patient groups. It was founded in 2020 and headquartered in Grove City, Ohio. FOX SUBACUTE: April 25 Disclosure Statement Hearing Set ------------------------------------------------------- Judge Henry W. Van Eck has entered an order within which April 25, 2023 at 09:30 AM at Sylvia H. Rambo US Courthouse, Bankruptcy Courtroom No. 8 (4th Floor), 1501 N. 6th St, Harrisburg, PA 17102 is the hearing to consider approval of the amended disclosure statement of Fox Subacute at Mechanicsburg, LLC. Judge Van Eck further ordered that April 3, 2023 is fixed as the last day for filing and serving written objections to the amended disclosure statement. A copy of the order dated February 27, 2023 is available at https://bit.ly/3ZDdXGg from PacerMonitor.com at no charge. The Debtor's counsel: Robert E. Chernicoff, Esq. CUNNINGHAM, CHERNICOFF & WARSHAWSKY, P.C. 2320 North Second Street, P. O. Box 60457 Harrisburg, PA 17106-0457 Tel: (717) 238-6570 E-mail: rec@cclawpc.com About Fox Subacute at Mechanicsburg Fox Subacute At Mechanicsburg, LLC is a skilled nursing facility in Pennsylvania that specializes in pulmonary, neurological, and rehabilitative care for patients with degenerative neurological and neuromuscular disease; and pulmonary care and ventilator requirements with an emphasis on vent weaning. Its facilities are located in Plymouth Meeting, Warrington, Mechanicsburg and Philadelphia, Pa., and are licensed by the PA Department of Health. On Nov. 1, 2019, Fox Subacute at Mechanicsburg and its affiliates sought Chapter 11 protection (Bankr. M.D. Pa. Lead Case No. 19-04714). Fox Subacute at Mechanicsburg was estimated to have $1 million to $10 million in assets and liabilities as of the bankruptcy filing. Judge Henry W. Van Eck oversees the cases. The Debtors tapped Cunningham, Chernicoff & Warshawsky, P.C., as their legal counsel, Kennedy P.C. as special counsel, Isdaner & Company, LLC as accountant, and Three Twenty-One Capital Partners, LLC as investment banker. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Dec. 11, 2019. The committee is represented by Flaster/Greenberg P.C. FREEPORT LNG: Fitch Affirms LongTerm IDR at 'B-', Outlook Negative ------------------------------------------------------------------ Fitch Ratings has affirmed Freeport LNG Investments, LLLP's (FLNGI) Long-Term Issuer Default Rating (IDR) at 'B-' and secured debt rating at 'B'/'RR3'. The ratings were removed from Rating Watch Negative (RWN) where they were placed on June 22, 2022 and assigned a Negative Rating Outlook. The RWN resolution reflects the partial resumption of operations at Freeport Development L.P.'s (Freeport LNG) liquified natural gas (LNG) facilities, marking a major milestone. The plants have been offline since June 2022 following the ignition of a natural gas vapor cloud from a ruptured LNG transfer line at the Texas LNG facility. FLNGI is structurally subordinated to several levels of senior secured debt instruments that have cash traps. The cash traps at the operating subsidiaries and holding company stopped all dividends to FLNGI and debt service payment have been owner equity funded. Fitch will continue to evaluate operational and financial matters regarding FLNGI's liquidity condition and if long-term cash flows can return to levels incorporated into the prior 'B' IDR. KEY RATING DRIVERS Partial Restart Completed: Train 3 resumed operations in February 2023, and the company has regulatory approval to restart Train 2, following the completion of Phase 1 construction in 2022. Management's most recent expectation is the three LNG trains will restart operations by the end of March 2023, and full operations of all facilities will be three months later. These estimates are almost three months later than Fitch's expectations from September 2022. FLNGI engaged Kiewit Energy Group, a contractor with LNG construction experience, for the reconstruction. It also entered into a consent agreement with PHMSA (US Dept - Pipeline and Hazardous Materials Safety Administration). While further delays are possible given the operational complexity of a natural gas liquefaction plant, potential supply chain issues, and regulatory approvals required for resumption, Fitch believes the resumption of service is a major milestone in reaching full operations. Addressing Cash Flow Issues: FLNGI's main tool to mitigate catastrophic loss is a LOC-backed reserve fund equal to two quarterly debt service payments. The loan agreement also permits up to two equity cures in a consecutive four quarter period and five equity cures total. The operating subsidiaries and holding company have business interruption insurance. The quarterly debt service payments since the incident were funded by an owner equity cure. Fitch expects additional equity cures for the interest and principal payments through 2023. The lenders provided waivers for up to four additional equity cures, covering the 2023 payments. Liquidated damages (LD) permitted under the long-term contract are being assessed. In this event, LDs are credited against invoices once production resumes and preclude distributions until the credits are settled. The resumption of partial operations will produce LNG to fulfill the foundation customer requirements and minimal excess capacity for market sales. Fitch expects 2023 debt service payments will be through equity cures and will continue to monitor FLNGI's financial flows in making timely debt service payments. Customers: The Freeport Plant has five long-term customers, representing almost all nameplate capacity. These customers have arrangements with the Freeport Plant for 20-year long-term agreements (LTA) under take-or-pay payment terms. The customers are large global energy companies with ratings of 'BBB-' or better. Evidencing their skill set, the customers bear the risk of natural gas supply under tolling agreements. The investigation indicated the event is not a force majeure, triggering LDs. The long-term demand for LNG remains robust, especially given concerns over energy security and acceleration of the energy transition. Given the customers' long-term view of global energy flows, Fitch believes all five will continue to work with management under the terms of the long-term contracts and recovery plan. Structural Subordination: The primary rating concern for FLNGI is that its sole source of revenue is dividends from the three liquefaction plants, owned by three operating companies (opcos). In parallel, FLNGI's debt is structurally subordinate to the cash flow needs at the opcos, which have approximately $12 billion of project debt. FLNGI's debt is also structurally subordinated to an approximately $1.2 billion note at FLEX Intermediate Holdco, LLC (FLEX), an intermediate holding company. FLNGI holds an indirect 63.5% limited partnership interests in FLEX. The multiple indentures of the opcos and FLEX contain provisions preventing upstream distributions ultimately to FLNGI if debt service coverage ratios (DSCR) fall below 1.25x and 1.15x, respectively. Low Coverage: A concern stemming from the incident is low interest coverage offsetting the expected stability of a 20-year take-or-pay payment stream from strong customers. In 2021, Fitch forecasted standalone funds flow from operations fixed charge coverage (FFO FCC) would be approximately 2.0x. The IDR had minimal cushion under the 1.5x FFO FCC threshold to trigger a negative rating action if this level was sustained, given its high leverage and deep structural subordination. Fitch expects this metric will be below 1.5x in 2022 and 2023. Excess Capacity Sales: Once the trains are fully online, excess capacity not sold under long-term contracts provide additional revenue generating opportunities. Fitch includes the uncontracted revenues in the base case. These revenues vary based on demand, global production, weather and government policy. The market basis differential between HH gas and Title Transfer Facility, the European LNG hub, reached historic highs in 2022, and provide the basis for the operating margin for these sales. Fitch believes that under its price deck, the upside from these sales will taper compared to the current experience and will provide additional, but volatile, revenues. Fitch will evaluate if financial performance, once the plants are fully operational in mid-2023, can return to levels consistent with Fitch's original base case, buoyed at the margin, by these short term, market-based sales. Consent Order: The Consent Agreement with PHMSA establishes a schedule for assessment and inspection of new operating procedures, control systems and training. While Freeport LNG functioned properly and financial flows were as forecast prior to the June 8 incident, the plants experienced operational issues during this period. Not meeting the requirements of the Consent Order may result in a change to its ESG relevance scores for Governance, Management & Strategy. DERIVATION SUMMARY FLNGI's consolidated operations are supported by long-term, take-or-pay contracts to supply LNG for export. Its holding company debt structure, contract tenor and stable cash flow profile compares favorably with midstream energy peer, Cheniere Energy Inc. (CEI; BBB-/Stable). Debt obligations at both companies are secured by dividend streams derived from opcos, are subordinate to opco debt and are at risk of dividend lock-ups. Fitch notes that FLNGI's contract duration is similar in duration to the contracts at Cheniere's wholly owned operating subsidiaries, Sabine Pass Liquefaction (SPL) and Cheniere Corpus Christi Liquification (CCL), averaging 17 years remaining. The contracts at both operators are with investment grade counterparties. Operationally, CEI is a seasoned operator compared to FLNGI. CEI's has nine liquefaction trains with 45 metric tonnes per annum (mtpa) of capacity, operating since 2016 and 2018, respectively, at SPL and CCL. It has implemented debottlenecking processes to improve capacity and are proven to be reliable. In contrast, FLNGI's three liquefaction trains with 15 mtpa capacity have been online for less than two years before the incident and have not yet returned to full operations following the incident. The main driver of the rating difference is the size and leverage. CEI's cash flow is more than 10 times greater than FLNGI. At Cheniere, Fitch expects stabilized leverage of 4x-4.5x after 2024 compared to FLNGI's leverage over 11.0x in 2022-2023. Fitch projects FLNGI's leverage to decline, approaching the positive sensitivity of 7.0x, by 2024. The significantly smaller scale, level of seasoning and higher leverage at FLNGI accounts for the difference in the ratings. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Equity cure to pay the remaining quarterly coupons in 2023. - LDs are credited against invoices when production resumes. - Starting mid-2023, the project returns to its base case performance. - Fitch price deck informs the short-term market prices. - Interest expense reflects a base rate as per the Fitch Global Economic Outlook. Through the Fitch forecast, interest rate risk is limited by a high level of hedging in place since around the inception of the loans. Fitch assumed a mid-cycle going-concern EBITDA of approximately $217 million, up from previous assumption of $212 million. Fitch calculated administrative claims to be 10%, which is the standard assumption. For the Recovery Rating, Fitch's estimates the company's going-concern value was greater than the liquidation value. The going-concern multiple used was a 6.0x EBITDA multiple, which is in the range of most multiples seen in recent reorganizations in the energy sector. There have been a limited number of bankruptcies within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In its recent Bankruptcy Case Study Report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries", published in September 2021, the median enterprise valuation exit multiple for the 51 energy cases with sufficient data to estimate was 5.3x, with a wide range of multiples observed. RATING SENSITIVITIES The Negative Outlook may be revised to Stable when the company has received all required regulatory approvals and operations are fully restored and sustained without incident. Factors that could, individually or collectively, lead to positive rating action/upgrade: - FLNGI distributions received are expected to be restored to near-normal levels in line with those forecast before the incident. - An increase in dividends to FLNGI that results in leverage, as measured by expected standalone total debt to distributions, decreasing below 7.0x on a sustained basis; Factors that could, individually or collectively, lead to negative rating action/downgrade: - Any significant diminution of FLNGI's currently strained liquidity resources. A negative rating action related to this sensitivity may potentially include a multiple-notch downgrade. - Any significant shortfall against Fitch's expectations for hitting milestones related to bringing the Freeport Plant back to an operating condition approximately the same as had been achieved in 1Q22. - A multi-notch downgrade or financial distress of any LTA counterparty. - An increase in debt at the opcos or FLEX. - FFO fixed-charge coverage sustained below 1.5x, or other conditions that raise a concern for liquidity. LIQUIDITY AND DEBT STRUCTURE Challenged Liquidity but Stable: FLNGI's liquidity consists of a LOC to fund a debt service reserve equal to six months of debt service under both the term loan A and term loan B. The reserve is part of the collateral package of FLNGI, and supports a shortfall in cash fall to pay debt service in the case of calamitous events. If drawn, the obligation to repay the letter of credit is an obligation of FLNGI. The LOC is fully available. While FLNGI's debt is structurally subordinate to the opco and FLEX debt, the next upcoming maturity is FLNGI's $1.2 billion term loan A due December 2026, followed by the $1.2 billion term loan B due in December 2028. Both loans feature amortizations before final maturity. The LTAs remain in place until 2038 and will generate stable cashflow to support refinancing of the loans in 2026 and 2028. ISSUER PROFILE Freeport LNG Investments, LLLP holds Mr. Michael Smith's 55.25% limited partnership interest in Freeport LNG Development L.P (FLNG). FLNG operates an approximately 15 mtpa natural gas liquefaction and LNG export facility consisting of three 5+ mpta trains located near Freeport, TX. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch utilizes combined financial statements of Freeport LNG Investments, LLLP (FLNGI) and FLNGI Option HoldCo, LLC collectively to evaluate FLNGI. Additionally, Fitch adjusts the financial statements to reflect the dividends from Freeport Development as revenue. As an equity owner of Freeport Development, dividends to FLNGI are reported on the cash flow statement as "Distributions from Freeport LNG Development, L.P." not operating revenue. Fitch views FLNGI's financial condition by, among other methods, looking at standalone, or de-consolidated HoldCo, credit metrics and proportional consolidation metrics. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Freeport LNG Investments, LLLP LT IDR B- Affirmed B- senior secured LT B Affirmed RR3 B FRONTIER COMMUNICATIONS: Fitch Rates $750MM First Lien Notes 'BB+' ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB+'/'RR2' rating to Frontier Communications Holdings, LLC's proposed $750 million first lien notes issuance. Proceeds are expected to be used to fund capital investments and operating costs arising from the company's fiber build. Fitch has also affirmed Frontier Communications Parent, Inc. and its rated subsidiary's Long-Term Issuer Default Ratings (IDRs) at 'BB-'. The Rating Outlooks on these entities are revised to Negative from Stable. The outlook revision reflects Fitch's view that Frontier's leverage will be near or exceed its thresholds for the rating as the company spends aggressively to deploy its fiber network, leaving it with limited flexibility for execution or other challenges that could arise. KEY RATING DRIVERS Elevated Leverage: Fitch expects Fitch-calculated EBITDA leverage to be in the mid-to-high 4x range through its forecast period, exceeding or providing limited headroom to the negative sensitivity at the 'BB-' level. Frontier's leverage has gradually increased due to heavy capital spending required to fund its fiber network deployment, which Fitch views as carrying some execution risk related to both subscriber adoption and build cost. Frontier has flexibility to adapt the pace of its capital spending, but this is somewhat constrained by the need to offset revenue erosion from its copper network and certain legacy services. Capital Allocation: Frontier's capital allocation policy has gained clarity following its April 2021 emergence from bankruptcy as the company has accelerated plans to invest in fiber to the home as well as to target fiber deployment to small and medium businesses, enterprises and the wholesale market. The company's financial policy targets a long-term net leverage ratio in the mid-3x range, which provides for the flexibility to invest, although the company has temporarily exceeded this range following the acceleration of its fiber build in 2022. Frontier's aggressive investment plan will broadly expand the deployment of fiber to more than 10 million locations, or two-thirds of its footprint. As of Dec. 31, 2022, the company has passed approximately 5.2 million locations and is targeting more than 6.5 million locations by the end of 2023. Penetration rates on the base fiber network are 43%; penetration rates in new build areas are lower on average with a target penetration rate of 25%-30% after 24 months, but are expected to reach similar penetration to the base network over time. Fiber Opportunity Mitigates Risks: The company faces execution risk related to growing fiber-based revenues. However, this is somewhat mitigated by recent success in adding fiber customers, as demonstrated by 13 consecutive quarters of net adds with lower churn (1.41% at Sept. 30, 2022 compared to 1.76% for Frontier's copper network). The opportunity to capture additional broadband share is highlighted by a footprint that has only one or no competitors in approximately 85% of its markets. The new locations to be served by fiber have material upside, as penetration rates for the company's legacy, less-competitive copper broadband network are in the low-teens percentage range. FCF: Frontier experienced a Fitch-calculated FCF deficit of more than $1 billion in 2022 due to heavy capital spending on fiber deployment, with capex increasing to $2.7 billion in 2022 from $1.7 billion in 2021. Fitch expects that the company's FCF deficits, could exceed $1 billion annually on average over 2023-2025, depending on the pace of the fiber build and success-based capital. Fitch expects that Frontier, following its proposed notes issuance, will be well funded to support this negative FCF generation in 2023 and into 2024, which could provide comfort to vendors and give Frontier an advantage in markets that are being targeted by overbuilders. Operating Environment Improving: Frontier's accelerated fiber deployments are leading to improvements in operating profitability. Revenues from fiber services for both consumer (including video) and business are growing in the mid-to-high single-digits partly offsetting the declines in revenues from legacy copper products. Excluding video services, revenue growth rates for consumer broadband services are growing in the mid-teens. The proportion of EBITDA from fiber services exceeds 60% and Fitch expects this will continue to increase. This should support improved EBITDA generation given the higher EBITDA margin profile from the company's fiber services. The company's revenue from regulatory sources is expected to be relatively stable in 2023 and over the forecast horizon. Frontier and other incumbent local exchange carriers experienced revenue pressure in 2022 due to the loss of certain government subsidies, that will only be partly offset by the generation of broadband support through the Rural Digital Opportunity Fund (RDOF); Frontier won $37 million annually (over a 10-year period beginning in 2022) in the RDOF auction. Secured Debt Notching: For rated entities with IDRs of 'BB-' or above, Fitch does not perform a bespoke analysis of recovery upon default for each issuance. Instead, Fitch uses notching guidance whereby an issuer's first-lien secured debt can be notched upward one or to two rating levels. Frontier's secured first-lien debt is notched up two levels from the Long-Term IDR to 'BB+'/'RR2'. The recovery is limited to 'RR2' given the first-lien debt is primarily secured by equity pledges and there is material subsidiary-level debt. The first mortgage bonds of Frontier Southwest Inc. are also notched up two levels from the IDR to 'BB+'/'RR1', the security provided by a first lien on substantially all of its assets supporting the 'RR1' recovery. Nonfirst-Lien Debt Notching: For corporate entities rated 'BB-' and above, the ratings assigned to an issuer's nonfirst-lien debt (second lien, unsecured and subordinated debt) are capped at 'RR4' and there is no notching above the IDR. This leads to 'BB-'/'RR4' ratings for Frontier's second-lien debt and subsidiary unsecured debt, except for Frontier Florida LLC. The 'B+'/'RR5' rating assigned to Frontier Florida's unsecured debt reflects that Frontier Florida is a guarantor of Frontier's secured credit facility. Parent-Subsidiary Relationship: Fitch links the IDRs of Frontier and its subsidiaries based on a strong parent/weak subsidiary approach. The IDRs are equalized under Fitch's criteria based on an analysis incorporating high strategic and operational incentives and low legal incentives. DERIVATION SUMMARY Frontier has a higher exposure to the consumer market compared with wireline peer Lumen Technologies, Inc. (BB/Stable), and to some extent Windstream Services, LLC (B/Stable). The consumer market continues to face secular challenges, with successful fiber deployment expected to offset legacy revenue declines, in time. Incumbent wireline operators face competition for broadband customers from cable operators, including Comcast Corp. (A-/Stable) and Charter Communications Inc. (Fitch rates Charter's indirect subsidiary CCO Holdings, LLC (BB+/Stable). Fitch views Frontier's aggressive fiber investments positively, with successful execution key to supporting the longer-term credit profile. Frontier needs to improve its competitive position in the enterprise market, although the company's enterprise business has some differences compared to the larger companies as it is less exposed to large enterprise accounts. In this market, Frontier is smaller than AT&T Inc. (BBB+/Stable), Verizon Communications Inc. (A-/Stable) and Lumen. All three companies have an advantage with national or multinational companies given their extensive footprints in the U.S. and abroad. Windstream Services, LLC is somewhat smaller than Frontier and is a hybrid in that it operates as an incumbent in rural markets and as a business services provider with its enterprise and wholesale units, which compete nationally. Compared with Frontier, AT&T and Verizon have wireless offerings that provide more service diversification. As investment grade operators, AT&T and Verizon have leverage profiles considerably lower than Frontier, given the latter's significant debt funding of its fiber build plan. Frontier's leverage profile is also moderately higher than Lumen's gross leverage. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenues increase in the low single digit area in 2023 and 2024 with strong double-digit consumer fiber broadband revenue growth largely offset by declining copper broadband, TV, and voice / other revenues, and approximately flat revenues in the business space. - The Fitch-calculated EBITDA margin improves to approximately 35% in 2023 from 34% in 2022, due primarily to incremental contributions from higher margin fiber broadband. - Capital spending under Fitch's rating case reflects spending of approximately $2.8 billion in 2023, currently at the high end of company guidance. Fitch expects capex to moderate slightly in 2024, however, this is highly dependent on the pace of the buildout and the rate of increase in penetration levels. - Fitch assumes nominal cash taxes in 2023-2025. - Fitch assumes Frontier's average interest costs rise in 2023, approaching 7%. - Pension contributions of more than $150 million in each year from 2023-2025. - $1 billion in incremental financing in 2023, $250 million in 2024, and $900 million in 2025. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage, defined as total debt with equity credit/operating EBITDA, expected to be sustained at or below 3.0x, while consistently generating positive FCF margins in the mid-single digits; - Successful execution on cost-reduction plans; - Consistent gains in revenues from anticipated investments in fiber and broadband product areas; - Demonstrated stable EBITDA and FCF growth. Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A weakening of operating results, including deteriorating margins and an inability to stabilize revenue erosion in key product areas or offset EBITDA pressure through cost reductions; - Discretionary management decisions, including but not limited to execution of M&A activity that increases EBITDA leverage beyond 4.5x, in the absence of a credible deleveraging plan. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: At Dec. 31, 2022, Frontier had $2.1 billion of unrestricted cash and short-term investments, as well as $683 million available on its $900 million RCF, after LOCs. The RCF is due April 2025; under the terms of the proposed amendments to the RCF, the maturity would be extended to April 2028. Fitch expects Frontier to have a greater than $1 billion FCF deficit in 2023, a meaningful portion of which will be funded through the company's proposed notes issuance. First-lien debt at Frontier Communications Holdings totals $5.363 billion, second-lien debt totals $2.75 billion and subsidiary debt totals $850 million. The next major maturities are not until 2027, once the proposed amendment to the revolver is concluded, extending the maturity to 2028 from 2025. ISSUER PROFILE Frontier is the nation's fourth largest incumbent local exchange carrier providing data and Internet services (59% of 2021 total revenue), wireline voice (26%), and wireline video service (9%) to residential and business customers. The company had 2022 revenue of $5.8 billion. 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 ----------- ------ -------- ----- Frontier North Inc. LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- Frontier Florida LLC LT IDR BB- Affirmed BB- senior unsecured LT B+ Affirmed RR5 B+ Frontier California, Inc. LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- Frontier Communications Holdings, LLC LT IDR BB- Affirmed BB- senior secured LT BB+ Affirmed RR2 BB+ Senior Secured 2nd Lien LT BB- Affirmed RR4 BB- senior secured LT BB+ New Rating RR2 Frontier Communications Parent, Inc. LT IDR BB- Affirmed BB- Frontier Southwest Inc. LT IDR BB- Affirmed BB- senior secured LT BB+ Affirmed RR1 BB+ Frontier West Virginia Inc. LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- FUEL DOCTOR: Incurs $102K Net Loss in 2022 ------------------------------------------ Fuel Doctor Holdings, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $102,223 on $0 of revenues for the year ended Dec. 31, 2022, compared to a net loss of $17,537 on $0 of revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $107,064 in total assets, $55,144 in total liabilities, and $51,920. Garden City, New York-based Liebman Goldberg & Hymowitz, LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated Feb. 21, 2023, citing that the Company anticipates that during 2023, it will not have sufficient capital. Furthermore, the Company's losses from operations and working capital deficiency raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1459188/000101738623000067/fdoc_2022dec31-10k.htm About Fuel Doctor Tel Aviv, Israel-based Fuel Doctor Holdings, Inc., is currently attempting to locate and negotiate with eligible portfolio companies to acquire an interest in them. In addition to acquiring an interest in them, the Company intends to assist these portfolio companies with raising capital and offer them substantial managerial assistance needed to succeed. FUELCELL ENERGY: Unit Further Expands Lease with 52nd Street ------------------------------------------------------------ Versa Power Systems Ltd., a wholly owned subsidiary of FuelCell Energy, Inc., and 52nd Street Business Centre LP, by its General Partner, 52nd Street Business Centre GP Inc. (the "Landlord") entered into a Lease Expansion and Amending Agreement - Short Term to the existing lease between the parties, which was originally entered into on May 20, 2005 by the Landlord's predecessor in interest, Westpen Properties Ltd., amended on April 20, 2006, renewed on Nov. 11, 2010, extended and amended on Oct. 29, 2013, Nov. 9, 2016, and Jan. 10, 2020, and expanded, extended and amended on Jan. 5, 2023, and which relates to the premises comprised of approximately 32,000 square feet located at 4800 - 52nd Street SE, Calgary, Alberta, Canada and currently used as an office, research and development center and cell stack manufacturing facility for the Company's solid oxide platform. As previously reported, in January 2023, Versa and the Landlord extended the term of the Lease through Sept. 30, 2028 and expanded the space to be leased by Versa under the Lease to include an additional space located at the same address and consisting of approximately 48,000 square feet. The Lease Expansion and Amendment includes a corrected Schedule A to such January 2023 Lease Expansion, Extension and Amending Agreement, which corrects a mistake in the pictorial identification of the Additional Premises and replaces the original Schedule A. The Additional Premises will be used to accelerate research and development efforts, create additional manufacturing capacity for solid oxide fuel cell stacks and establish a center of excellence for solid oxide cell and stack research and manufacturing supporting hydrogen generation, hydrogen power generation, long duration hydrogen storage, and multi-fuel distributed power generation. Under the Lease Expansion and Amendment, the parties agreed to further expand the space to be leased by Versa under the Lease to include, on a short-term basis, an additional space located at the same address and consisting of approximately 18,627 square feet, on the same general terms and conditions as contained in the Lease for the Original Premises and the Additional Premises. Subject to the Landlord's ability to obtain vacant possession of the Temporary Premises on March 31, 2023, the term of the Lease with respect to the Temporary Premises will commence on April 1, 2023 and expire on July 31, 2024. The Temporary Premises is expected to be used for short term expansion of solid oxide fuel cell and stack production and commissioning of newly purchased production equipment. As of Feb. 20, 2023, the Temporary Premises was occupied by a third party pursuant to a lease that expires on March 31, 2023. The Landlord has agreed to use commercially reasonable efforts to obtain vacant possession of the Temporary Premises on March 31, 2023. However, under the terms of the Lease Expansion and Amendment, the Landlord will not be responsible for any liabilities, losses, costs, damages or expenses whatsoever resulting from a delay in obtaining vacant possession of the Temporary Premises, and, in the event of such a delay, the commencement of the lease term with respect to the Temporary Premises will be delayed by a corresponding number of days until the day immediately following the date on which the Landlord obtains vacant possession of the Temporary Premises. Under the Lease Expansion and Amendment, beginning on April 1, 2023, Versa is obligated to pay annual base rent for the Temporary Premises of approximately C$149,000 per year. Versa will also be responsible for its proportional share of operating expenses, real estate taxes and other charges with respect to the Temporary Premises, as provided for in the Lease. About FuelCell Energy Headquartered in Danbury, Connecticut, FuelCell Energy, Inc. -- http://www.fuelcellenergy.com-- is a global developer of distributed baseload power solutions through its proprietary fuel cell technology. The Company's current commercial technology produces electricity, heat, hydrogen, and water while separating carbon for utilization and/or sequestration. FuelCell reported a net loss of $147.23 million for the year ended Oct. 31, 2022, a net loss of $101.02 million for the year ended Oct. 31, 2021, a net loss of $89.11 million for the year ended Oct. 31, 2020, a net loss of $77.57 million for the year ended Oct. 31, 2019, and a net loss of $47.33 million for the year ended Oct. 31, 2018. FULTON FILMS LLC: Seeks to Hire Ronald D. Weiss as Legal Counsel ---------------------------------------------------------------- Fulton Films, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Ronald D. Weiss, P.C. as counsel. The firm's services include: a. legal advice with respect to the powers and duties of the Debtor in the continued management of its property; b. representing the Debtor before the bankruptcy court and at all hearings on matters pertaining to its affairs, including contested matters that may arise during the Chapter 11 case; c. advising and assisting the Debtor in the preparation and negotiation of a plan of reorganization with its creditors; d. preparing legal papers; and e. other necessary legal services. The firm will be paid at these rates: Attorneys $450 per hour Paralegals $250 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The firm received from the Debtor a retainer of $25,000, plus $1,738 filing fee. Michael Farina, Esq., a partner at Ronald D. Weiss, 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: Michael Farina, Esq. Ronald D. Weiss, P.C. 734 Walt Whitman Road, Melville NY 11747 Tel: (631) 271-3737 Fax: (631) 271-3784 Email: weiss@ny-bankruptcy.com About Fulton Films Fulton Films, LLC is a Brooklyn-based company engaged in activities related to real estate. It is the fee simple owner of a real property located at 1156 Fulton St., Brooklyn, N.Y., with an appraised value of $960,000. Fulton Films filed its voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 23-40094) on Jan. 12, 2023, with $963,845 in assets and $12,991,779 in liabilities. Florian Senfter, sole member of Fulton Films, signed the petition. Judge Elizabeth S. Stong oversees the case. Michael Farina, Esq., at Ronald D. Weiss, P.C. serves as the Debtor's legal counsel. FUTURE VALUE: Court OKs Deal on Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of California authorized Future Value Construction Inc. to use cash collateral on an interim basis in accordance with its agreement with Roberta Korda, as Trustee of the Survivor's Trust created under the Robert and Rosina Living Trust dated August 29, 2022. The Debtor is a party to a secured promissory note it executed in favor of Robert Korda, as Trustee of the Survivor's Trust created under the Robert and Rosina Korda Living Trust dated August 28, 2002. The initial loan proceeds were used to pay an existing $1.73 million loan, plus an eight-point loan fee and approximately 13 months of interest reserve, together with additional miscellaneous lender charges and escrow fees. As of Petition Date, the Debtor is obligated to the Secured Creditor under the Note and Deeds of Trust in the principal amount of $2.6 million exclusive of accrued interest, late fees, attorneys' fees and other expenses. The Debtor requires the use of cash collateral to pay critical expenses in its Chapter 11 case. The parties agreed that the Secured Creditor will release and advance pursuant to its Note and Deeds of Trust the sum of $45,000 from the cash collateral directly to San Joaquin Engineering to satisfy the Debtor's pre-petition date obligation for the Debtor to obtain the claim necessary for final City of Bakersfield approval for release of the Debtor's "Phase" Development Lots located at the Lakeview at Real Bravo subdivision. The Debtor is also authorized to use balance of the cash collateral to pay the expenses to obtain the "final map" from the City of Bakersfield as set forth in the budget for the period through and including June 30, 2023, or until a later date as may be agreed in writing by the Secured Creditor, or as ordered by the Court. The Debtor may be authorized to pay the expenses set forth the Budget as may be agreed in writing by Secured Creditor or further order of the Court. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3y7PhtY from PacerMonitor.com. The Debtor projects $6,402 in total monthly operating expenses. About Future Value Construction Future Value Construction, Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D. Calif. Case No. 22-12016) on Nov. 28, 2022, with up to $50,000 in assets and up to $10 million in liabilities. Judge Jennifer E. Niemann oversees the case. The Debtor is represented by the Law Office of D. Max Gardner. GATEWAY US: Midcap Financial Marks $304,000 Loan at 47% Off ----------------------------------------------------------- Midcap Financial Investment Corporation has marked its $304,000 loan extended to Gateway US Holdings, Inc to market at $162,000 or 53% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt - Revolver Loan to Gateway US Holdings, Inc. The loan accrues interest at a rate of .75% (SOFR+650) per annum. The loan matures on September 22, 2026. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Gateway, Inc. markets personal computers and related products and services. The Company provides notebooks, desktops, monitors, and replacement parts and accessories. GB001 INC: Midcap Financial Marks $28.8M Loan at 83% Off -------------------------------------------------------- Midcap Financial Investment Corporation has marked its $28,839,000 loan extended to GB001, Inc to market at $4,845,000 or 17% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt Loan to GB001, Inc. The loan accrues interest at a rate of 2% (L+700) per annum. The loan matures on January 1, 2025. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. GB001, Inc, a wholly owned subsidiary of Gossamer Bio, Inc., which operates as a biopharmaceutical company. The Company focuses on discovering, acquiring, and developing therapeutics in the disease areas of immunology, inflammation, and oncology. GLOBAL AVIATION: Court OKs Interim Cash Collateral Access --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas authorized Global Aviation Technologies LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to fund continued operations. GAT began operating in 2002 and has operated through many ebbs and flows of the aircraft industry impacted by the U.S. economy. However, the changes to the U.S. economy from the COVID-19 pandemic, including how the Federal Aviation Authority administered its regulations, caused GAT's operations to suffer significant cash-flow issues. To address those cash-flow problems, GAT took full advantage of government-backed loan programs that were made available in connection with the Coronavirus Aid. Relief, and Economic Security Act, including the Payroll Protection Program Loan and the Economic Injury Disaster Loan. Despite obtaining the relief through the CARES Act, GAT continued to suffer cash-flow and other financial problems from a variety of factors, including changes made by the United States Department of Defense in the administration of certain programs for the maintenance of aircraft and the manufacturing of aircraft parts for the U.S. Government. To address those cash-flow issues, GAT obtained several merchant capital advance loans from various lenders, including Credibly of Arizona, LLC, Front Capital, WebBank, OKD Capital, LLC, Payroll Funding Company, LLC, and Wynwood Capital Group LLC. Conway Bank and the U.S. Small Business Administration claim lien in all assets owned by GAT. As of the Petition Date, Conway was owed approximately $3.2 million by GAT on the notes associated with Conway's lien, with approximately $2.7 million subject to a guaranty from the SBA. The SBA may claim a separate security interest in GAT's assets as a result of the EIDL that GAT obtained in November 2021. The balance due on the SBA's EIDL is approximately $2 million. Additionally, the MC Lenders claim liens on all GAT's assets and specifically GAT's account receivables. On the Petition Date, the MC Lenders are owed: Lender Amount Owed ------ ----------- Credibly $273,906 Front $176,800 WebBank (2 loans) $191,980 OnDeck $292,632 PFC $138,370 Wynwood $127,765 ----------- Total $1,201,000 To the best of GAT's knowledge, there are no other lien claimants who assert rights in cash collateral. As of the filing date, GAT claims the value of its assets totals $4.850 million, including: $2,258,000 value of inventory $570,000 value of accounts receivable $9,652 balance in its operating account with Conway $43,386 balance in its operating account with Fidelity Bank The total value of the Cash Collateral claimed by GAT is $2.9 million. Conway and the SBA are the only parties with an interest in cash collateral as the lien Conway and the SBA maintain on GAT's cash collateral and other assets is equal to or exceeds the value of GAT's assets. The MC Lenders' potential interest in cash collateral is wholly unsecured. These events constitute an "Event of Default": 1) The failure to make any adequate protection payments to Conway as set out on the Budget; 2) Expenditures in excess of the Budget with the variances as specified in the Motion; 3) Expenditures not included in the Budget and not otherwise approved by Conway and the SBA in writing; 4) Incurrence after the Petition Date of credit or indebtedness that is (i) secured by a security interest, mortgage, or other lien on all or any portion of Conway's and the SBA's Collateral which is equal or senior to any security interest or other lien of Conway or the SBA, or (ii) entitled to priority administrative status which is equal or senior to that granted to Conway, the SBA, or both; 5) Entry of a Court order, other than the Interim Cash Collateral Order, granting relief from or modifying the automatic stay 11 U.S.C. Section 362 (i) to allow any creditor to execute upon or enforce a lien on or security interest in any cash collateral, or (ii) with respect to any lien of or the granting of any lien on any cash collateral to any state or local environmental or regulatory agency or authority, which in either case would have a material adverse effect on the business, operations, property, assets, or condition, financial or otherwise, of GAT; 6) Dismissal of the case or conversion of the case to Chapter 7 case, or appointment of a Chapter 11 trustee or examiner with enlarged powers or other responsible person; 7) Upon written notice from Conway or the SBA of any material misrepresentation of a material fact made after the Petition Date by GAT about its financial condition, the nature, extent, location or quality of any Collateral, or the disposition or use of any Collateral, including cash collateral; 8) The sale after the Petition Date of any portion of any of GAT's assets outside the ordinary course of its business unless otherwise approved by GAT in writing or by the Bankruptcy Court; 9) The failure of GAT to keep Conway's and the SBA's Collateral insured against casualty loss, naming Conway or the SBA as loss payee: 10) The failure by GAT to perform, after notice from Conway, the SBA, or both, in any respect, any of the material terms, provisions, conditions, covenants, or obligations under the Interim Order; and 11) The failure by GAT to perform, after notice from Conway, the SBA, or both, in any respect, any of the terms, provisions, conditions, covenants, or obligations under Conway's and the SBA's loan documents, excluding the terms, provisions, conditions, covenants, or obligations under any personal guaranty by the owners of GAT maintained by Conway or the SBA. In addition to the adequate protection payments specified in the Budget of $15,500 a month, Conway and the SBA will receive an 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 final hearing on the matter is set for March 15, 2023 at 9 a.m. A copy of the court's order and the Debtor's budget is available at https://bit.ly/3mnH5mE from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $193,481 for March 2023; $193,481 for April 2023; $193,481 for May 2023; $193,481 for June 2023; $193,481 for July 2023; and $193,481 for August 2023. 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. Judge Mitchell L. Herren oversees the case. Nicholas R. Grillot, Esq., at Hinkle Law Firm LLC, represents the Debtor as legal counsel. GLOBAL CARE: Case Summary & Six Unsecured Creditors --------------------------------------------------- Debtor: Global Care Administrators, Inc. 19720 Jetton Road 3rd Floor Cornelius, NC 28031 Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Western District of North Carolina Case No.: 23-30160 Judge: Hon. J. Craig Whitley Debtor's Counsel: John C. Woodman, Esq. ESSEX RICHARDS, P.A. 1701 South Blvd. Charlotte, NC 28203 Tel: 704-377-4300 Fax: 704-372-1357 Email: jwoodman@essexrichards.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Bowers, chief restructuring officer. A full-text copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/L4JMEBI/Global_Care_Administrators_Inc__ncwbke-23-30160__0001.0.pdf?mcid=tGE4TAMA GLOBAL MIXED MARTIAL: Seeks to Hire Ruff & Cohen as Attorney ------------------------------------------------------------ Global Mixed Martial Arts Academy, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to hire Ruff & Cohen, P.A. as its attorney. The firm will render these services: a. advise and counsel the debtor-in-possession concerning the operation of its business in compliance with the Chapter 11, the operating guidelines of the Office of the U.S. Trustee, and orders of the Bankruptcy Court; b. prosecute and defend any causes of action on behalf of the debtor-in-possession, including motions for use of cash collateral and for payment of critical vendors; c. prepare, on behalf of the debtor-in-possession, all necessary applications, motions, reports, and other legal papers; d. assist in the formulation of a Chapter 11 plan of reorganization an a disclosure statement; e. assist in obtaining confirmation of the plan; and f. assist in obtaining a discharge and a final decrees. Ruff & Cohen will be paid at the hourly rates of $300. Ruff & Cohen will be paid a retainer in the amount of $7,500, and $1,738 filing fee. Ruff & Cohen will also be reimbursed for reasonable out-of-pocket expenses incurred. Lisa C. Cohen, partner of the Law Firm of Ruff & Cohen, P.A., assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Ruff & Cohen can be reached at: Lisa C. Cohen, Esq. LAW FIRM OF RUFF & COHEN, P.A. 4010 W Newberry Rd. Gainesville, FL 32607 Tel: (352) 376-3601 About Global Mixed Martial Arts Academy 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. GOPHER RESOURCE: $510M Bank Debt Trades at 24% Discount ------------------------------------------------------- Participations in a syndicated loan under which Gopher Resource LLC is a borrower were trading in the secondary market around 75.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $510 million facility is a Term loan that is scheduled to mature on March 6, 2025. About $470.5 million of the loan is withdrawn and outstanding. Gopher Resource, LLC provides recycling services. The Company offers lead, plastic, and household waste recycling services. Gopher Resource serves customers in North America. GREEN ENERGY: Unsecureds to be Paid in Full via Quarterly Payments ------------------------------------------------------------------ Green Energy Transport LLC filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Disclosure Statement for Plan of Reorganization dated February 28, 2023. Debtor is a Georgia limited liability company formed in 2015 to operate a waste management and landfill operation in the North Georgia and Central West Florida areas. The Debtor specializes in hauling, disposal, and recycling of construction demolition waste. On December 28, 2021, Debtor and its affiliates entered into a refinancing transaction with Comerica Bank whereby the Debtor and its affiliates consolidated all existing debt on real property, machinery, vehicles and equipment with Comerica pursuant to those certain Comerica Loan Documents. On February 3, 2022, Comerica asserted that the Debtor was in default of certain provisions of the Comerica Loan Documents. In April 2022, the parties entered into a forbearance agreement which was set to expire on August 31, 2022. Debtor filed bankruptcy to reorganize its financial affairs without the threat of collection from Comerica. Debtor had the following assets as of the Filing Date: (i) Real Property with a Fair Market Value of $1,100,000.00, (ii) Bank Accounts with a value of $54,185.09, (iii) Lease Security deposit with a value of $8,148.32; (iv) Accounts Receivable with a value of $92,476.06, and (v) Machinery, Equipment and Vehicles with a fair market value of $2,621,140.00. The Plan contemplates the reorganization and ongoing business operations of Debtor and the resolution of the outstanding Claims against and Interests in Debtor pursuant to sections 1129(b) and 1123 of the Bankruptcy Code. The Plan classifies all Claims against and Interests in Debtor into separate Classes. Class 6 shall consist of the general unsecured claims. Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on January 15, 2024 and continuing for the 16 quarters following the such date the Debtor shall pay the General Unsecured Creditors equal quarterly prorata payments in the total amount of $51,798.09. On April 15, 2028, the Debtor shall make a final distribution to Class 6 Creditors of any outstanding principal and interest due. The allowed unsecured claims total $1,296,769.57. Class 7 shall consist of unsecured claims less than or equal to $10,000.00. Holders of Allowed Class 7 Claims shall be paid in full with 50% of the claim on the first anniversary of the Effective Date and 50% of the claim on the second anniversary of the Effective Date plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. The amount of claim in this Class total $70,755.04. The source of funds for the payments pursuant to the operations of the Debtor and its affiliates. After the Confirmation Date, Debtor is authorized to sell or refinance its assets free and clear of liens, claims and encumbrances (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is only authorized to sell or refinance such property for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property (the "Release Amount"). The Release Amount, after payment of customary closing costs including broker fees and other items customarily attributed to the seller (in a sale) and borrower (in a refinancing), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the particular asset and (ii) then secured claims in order of priority. Any net proceeds from any such sale available after closing shall be paid to fund Debtor's other obligations as set forth in the Plan. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3ZkA0lx from PacerMonitor.com at no charge. Attorneys for Debtor: Cameron M. McCord, Esq. Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: cmccord@joneswalden.com About Green Energy Transport Green Energy Transport, LLC, is a Georgia limited liability company formed in 2015 to operate a waste management and landfill operation in the North Georgia and Central West Florida areas. Green Energy Transport sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41010) on Aug. 26, 2022. In the petition filed by Carson Cash King, authorized representative, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Barbara Ellis-Monro oversees the case. The Debtor tapped Cameron M. McCord, Esq., at Jones & Walden, LLC as bankruptcy counsel and Windham Brannon, LLC as accountant. GTT COMMUNICATIONS: $350M Bank Debt Trades at 48% Discount ---------------------------------------------------------- Participations in a syndicated loan under which GTT Communications Inc is a borrower were trading in the secondary market around 52.5 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $350 million facility is a Pik Term loan that is scheduled to mature on June 30, 2028. The amount is fully drawn and outstanding. GTT Communications, Inc., formerly Global Telecom and Technology, is a multinational telecommunications and internet service provider company with headquarters in McLean, Virginia, and incorporated in Delaware. HERITAGE POWER: Seeks to Hire Haynes and Boone as Legal Counsel --------------------------------------------------------------- Heritage Power, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Haynes and Boone, LLP as their legal counsel. The firm's services include: a. advising the Debtors of their rights, powers, and duties under the Bankruptcy Code; b. performing all legal services for and on behalf of the Debtors that may be necessary or appropriate in the administration of their Chapter 11 cases and business; c. advising the Debtors concerning, and assisting in, the negotiation and documentation of financing agreements and debt restructurings; d. reviewing the nature and validity of agreements relating to the Debtors' interests in real and personal property and advising the Debtors of their corresponding rights and obligations; e. advising the Debtors concerning preference, avoidance, recovery, or other actions that they may take to collect and to recover property for the benefit of the estates and their creditors, whether or not arising under Chapter 5 of the Bankruptcy Code; f. preparing legal documents and reviewing all financial reports to be filed in the Debtors' cases; g. advising the Debtors concerning, and preparing responses to, legal papers that may be filed and served in their cases; h. counseling the Debtors in connection with the formulation, negotiation, and promulgation of a plan of reorganization and related documents; i. working with and coordinating efforts among other professionals to attempt to preclude any duplication of effort among those professionals and to guide their efforts in the overall framework of the Debtors' reorganization; j. working with professionals retained by other parties in interest in the Chapter 11 cases to structure a consensual plan of reorganization, or other resolution for the Debtors; and k. other necessary legal services. The firm will be paid at these rates: Partners $950 to $1,550 per hour Counsel $950 to $1050 per hour Associates $550 to $820 per hour Paraprofessionals $450 to $525 per hour Haynes and Boone received payments totaling $1,339,986.64 from the Debtors prior to the petition date. Of this amount, $250,000 was a retainer advanced by the Debtors for work to be performed in connection with the preparation, filing, and prosecution of their Chapter 11 cases. Charles Beckham, Jr., Esq., a partner of Haynes and Boone, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Haynes and Boone disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: The firm has represented the Debtors in the past two months prior to the petition date. Haynes and Boone used the below the following hourly rates for prepetition services: partners, $950 to $1,550; counsel, $950 to $1,050; associates, $550 to $820; and paraprofessionals, $525 per hour. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Haynes and Boone is developing a prospective budget and staffing plan for these Chapter 11 cases. The firm and the Debtors will review such budget following the close of the budget period to determine the budget for the next period. The firm can be reached through: Charles A. Beckham, Jr., Esq. Haynes and Boone, LLP 1221 McKinney Street, Suite 4000 Houston, TX 77010 Tel: (713) 547-2000 Fax: (713) 547-2600 About Heritage Power Heritage Power, LLC and affiliates are a power company with a focus on power generation activities in Pennsylvania, New Jersey and Ohio. The Debtors own or operate sixteen power generation assets with 13 in Pennsylvania, two in New Jersey and one in Ohio. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90032) on Jan. 24, 2023, with $50 million to $100 million in assets and $500 million to $1 billion in liabilities. David Freysinger, president of Heritage Power, signed the petitions. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Haynes and Boone, LLP as legal counsel; Alvarez and Marsal North America, LLC as restructuring and financial advisor; and Epiq Corporate Restructuring, LLC as notice, claims and solicitation agent. The counsel to the ad hoc group of prepetition lenders is Milbank, LLP. The ad hoc group of prepetition lenders also retained Porter Hedges, LLP, Ross Aronstam & Moritz, LLP and Ducera Partners, LLC as advisors. Jefferies Finance, LLC, as administrative agent, is represented by Latham & Watkins, LLP. MUFG, collateral agent, is represented by Thompson Hine, LLP. J. Aron & Company, LLC, counterparty under an ISDA Master Agreement, is represented by Cleary Gottlieb Steen & Hamilton, LLP. HERITAGE POWER: Taps Alvarez & Marsal as Financial Advisor ---------------------------------------------------------- Heritage Power, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Alvarez & Marsal North America, LLC as financial advisor. The firm's services include: a. assistance to the Debtors in the preparation of financial-related disclosures required by the court, including the Debtors' schedules of assets and liabilities, statements of financial affairs and monthly operating reports; b. assistance to the Debtors with information and analyses required pursuant to the Debtors' financing needs, including the use of cash collateral and budgeting related thereto; c. assistance in the identification and implementation of short-term cash management procedures; d. assistance in the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; e. assistance to the Debtors’ management team and counsel focused on the coordination of resources related to the ongoing reorganization effort; f. assistance in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which court approval is sought; g. attendance at meetings and assistance in discussions with potential investors, banks, and other secured lenders, any official committees appointed in these Chapter 11 Cases, the United States Trustee, other parties in interest and professionals hired by same, as requested; h. analysis of creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track such claims; i. assistance in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in these Chapter 11 Cases, including information contained in the disclosure statement; j. assistance in the preparation of a valuation analysis to be included in the disclosure statement; k. assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; l. assistance in the analysis or preparation of information necessary to assess the tax attributes related to the confirmation of a plan of reorganization in these Chapter 11 cases, including the development of the related tax consequences contained in the disclosure statement; m. litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Debtors; and n. other general business consulting services. The firm will be paid at these rates: Managing Director $1,025 to 1,375 per hour Director $775 to 975 per hour Associate $575 to 775 per hour Analyst $425 to 550 per hour Alvarez & Marsal received from the Debtor a retainer of $200,000. In the 90 days prior to the petition date, the firm received retainers and payments totaling $1,363,153.43 for services performed for the Debtors. Brian Corio, a managing director at Alvarez & Marsal, 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: Brian Corio Alvarez & Marsal North America, LLC 600 Madison Avenue, 8th Floor New York, NY 10022 Tel: (212) 759-4433 Fax: (212) 759-5532 About Heritage Power Heritage Power, LLC and affiliates are a power company with a focus on power generation activities in Pennsylvania, New Jersey and Ohio. The Debtors own or operate sixteen power generation assets with 13 in Pennsylvania, two in New Jersey and one in Ohio. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90032) on Jan. 24, 2023, with $50 million to $100 million in assets and $500 million to $1 billion in liabilities. David Freysinger, president of Heritage Power, signed the petitions. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Haynes and Boone, LLP as legal counsel; Alvarez and Marsal North America, LLC as restructuring and financial advisor; and Epiq Corporate Restructuring, LLC as notice, claims and solicitation agent. The counsel to the ad hoc group of prepetition lenders is Milbank, LLP. The ad hoc group of prepetition lenders also retained Porter Hedges, LLP, Ross Aronstam & Moritz, LLP and Ducera Partners, LLC as advisors. Jefferies Finance, LLC, as administrative agent, is represented by Latham & Watkins, LLP. MUFG, collateral agent, is represented by Thompson Hine, LLP. J. Aron & Company, LLC, counterparty under an ISDA Master Agreement, is represented by Cleary Gottlieb Steen & Hamilton, LLP. HERON DEVELOPMENT: Unsecured Creditors to be Paid in Full in Plan ----------------------------------------------------------------- Heron Development, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Indiana a Disclosure Statement describing Chapter 11 Plan dated February 28, 2023. Heron Development LLC is a company which was formed in 2013 to develop 280 acres of real estate in Auburn, Indiana. The company proposed a Planned Unit Development which was approved by the City of Auburn in 2017. The initial problems arose when the lender changed course internally and opted to pass on financing the subsequent phases of the development. A local group, Marquee Investments, purchased the interest of the original lender but it failed to honor certain commitments. The resulting impasse led to a foreclosure action and judgment in favor of Marquee Investments. The Debtor resisted the foreclosure because Marquee wanted to appropriate the project and avoid obligations to those who participated in the early phases of the development. That led to the filing of this bankruptcy case in July, 2021. During this Chapter 11 proceeding, the Debtor sought and obtained interim financing from Legalist DIP GC, LLC. The court-approved interim financing allowed the Debtor to satisfy the claims of Marquee Investments, as well as all other pre-bankruptcy secured lenders. Further, with the court's approval, the Debtor repaid those individuals who had placed deposits on lots but wanted out of the contracts because of delays in the development. The long-term financing will allow the Debtor to repay the interim financing and satisfy all other pre-petition claims other than the Insider Claims held by companies connected with the members of Heron Development LLC. The Plan of Reorganization proposed by Heron Development promises full payment, at or shortly after closing of the long-term financing, of the interim financing funded by Legalist as well as all remaining administrative and general unsecured claims. The Debtor anticipates a long-term financing commitment of $14 million. From those funds, it will repay Legalist's claim in full, as well as other remaining claims which would not exceed $200,000. Other funds from the long-term financing will support the continued development and marketing of the Heron Lake project. Class 5 consists of General Unsecured Creditors. The general unsecured creditors in Class 5 are: (a) Claim 2 of West Bend, Insurance filed in the amount of $3,335.55 (b) Claim 9 of Burt, Blee, Dixon and Sutton in the amount of $57,839.73 and (c) the Scheduled Claim number 3.10 of Hawk, Haynie, Kammeyer & Smith in the amount of $25,000. These claims will be paid in full at the closing of the Long-Term Financing or such date thereafter as may be agreed upon by the Debtor and, if necessary, the provider of the Long-Term Financing. This Class is Unimpaired. Class 6 consists of Insider Claims. Insider Claims held by members of Heron Development, LLC, or businesses connected to them, will be subordinated to the Long-Term Financing and resolved among them as they shall agree. The Debtor will fund plan payments through Long-Term Financing. All Plan payments will be made at closing of the Long-Term Financing, or at such later date as may be agreed upon by the claimants, the Debtor and, if necessary, the provider of the Long-Term Financing. The Plan Proponent believes that the Debtor will have enough cash on hand on the effective date of the Plan to pay all the claims and expenses that are entitled to be paid on that date. The Debtor contemplate long-term financing of at least $14,000,000 to fund the plan payments. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3J872Q6 from PacerMonitor.com at no charge. Counsel for Debtor: R. William Jonas, Jr., Esq. Jon R. Rogers, Esq. May Oberfell Lorber 4100 Edison Lakes Parkway, Suite 100 Mishawaka, IN 46545 Phone: +1 574-243-4100 Email: RJonas@maylorber.com About Heron Development Auburn, Ind.-based Heron Development, LLC filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Ind. Case No. 21-10912) on July 21, 2021, listing up to $10 million in assets and up to $50 million in liabilities. Stephen D. Brown, managing member of Heron Development, signed the petition. Judge Robert E. Grant oversees the case. R. William Jonas, Jr., Esq., at May Oberfell Lorber represents the Debtor as legal counsel. HOLDINGS MANAGEMENT: Wins Cash Collateral Access Thru March 10 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland, Baltimore Division, authorized Holdings Management Company to use cash collateral on an interim basis in accordance with the budget. The Debtor is permitted to use cash collateral to pay reasonable and ordinary operating expenses until the earlier of (i) March 10, 2023, or (ii) a final hearing on the Debtor's Motion. The Debtor is permitted to fund and pay the Pre-Petition Payroll in the ordinary course of business, provided that no employee will be paid pre-petition wages in excess of the priority cap set forth in U.S.C. section 507(a)(4). As adequate protection, Sandy Spring Bank is granted a security interest of the same priority and to the same extent as its pre-petition security interests in the Collateral and all profits, offspring and proceeds of the Collateral hereafter acquired, to the extent of the Debtor's use of such cash collateral. The security interests will become and are 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 such security interest, will survive the conversion of the case to a case under Chapter 7 of the Bankruptcy Code, and will be binding upon any subsequently appointed trustee and upon all creditors of the Debtor and its bankruptcy estate. A final hearing on the matter is set for March 16 at 10 a.m. A copy of the court's order and the Debtor's budget is available at https://bit.ly/3ZE2eHG from PacerMonitor.com. The Debtor projects $472,757 in total income and $10,700 in total expenses for the two-week period ending March 10, 22023. About Holdings Management Company Holdings Management Company is a Maryland corporation and commercial manufacturer of custom architectural millwork packages and acoustic building materials. The company was founded in 2019 to play an active role in the next era of manufacturing innovation, growth, and development. As a 100% woman-owned, small business, Holdings Management is contracted by large and mid-size construction managers, general contractors, product designers, architects, procurement managers, supply chain buyers, origin manufacturers, resellers, and wholesalers. Holdings Management sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-11233) on February 24, 2023. In the petition signed by Kara Anne DiPietro, its president, the Debtor disclosed up to $10 million in assets and up to $10 million in liabilities. Judge Nancy V. Alquist oversees the case. Joseph M. Selba, Esq., at Tydings & Rosenberg LLP, as legal counsel. HOLLEY INC: $100M Bank Debt Trades at 19% Discount -------------------------------------------------- Participations in a syndicated loan under which Holley Inc is a borrower were trading in the secondary market around 81 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $100 million facility is a Delay-Draw Term loan that is scheduled to mature on November 18, 2028. About $57 million of the loan is withdrawn and outstanding. Holley Inc. operates as an automobile company. The Company designs, manufactures, and distributes carburetors, fuel pumps, fuel injection and nitrous oxide injection systems, superchargers, exhaust headers, mufflers, ignition components, engine tuners, and automotive performance plumbing products for car and truck enthusiasts. HOMER CITY: $145M Bank Debt Trades at 28% Discount -------------------------------------------------- Participations in a syndicated loan under which Homer City Generation LP is a borrower were trading in the secondary market around 71.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $145 million facility is a Term loan that is scheduled to mature on April 6, 2023. About $137 million of the loan is withdrawn and outstanding. Homer City Generation L.P. is a special purpose company that owns a 1,884 MW coal-fired plant in Homer City, Pa. HOMERENEW BUYER: Midcap Financial Marks $17.9M Loan at 17% Off -------------------------------------------------------------- Midcap Financial Investment Corporation has marked its $17,968,000 loan extended to HomeRenew Buyer, Inc. to market at $14,991,000 or 83% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt Loan to HomeRenew Buyer, Inc. The loan accrues interest at a rate of 1% (SOFR+650) per annum. The loan matures on November 23, 2027. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. HomeRenew Buyer, Inc. is an installer of kitchen siding, roofing windows tech difficult clients communication materials troubleshooting vinyl, vinyl siding, carpentry. HORNBLOWER SUB: $349.4M Bank Debt Trades at 36% Discount -------------------------------------------------------- Participations in a syndicated loan under which Hornblower Sub LLC is a borrower were trading in the secondary market around 64 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $349.4 million facility is a Payment in kind Term loan that is scheduled to mature on April 27, 2025. The amount is fully drawn and outstanding. Hornblower Sub, LLC is a charter yacht and public dining cruise operator. INFINERA CORP: Posts $33.5 Million Net Income in Fourth Quarter --------------------------------------------------------------- Infinera Corporation reported net income of $33.46 million on $485.94 million of total revenue for the three months ended Dec. 31, 2022, compared a net loss of $33.07 million on $400.26 million on total revenue for the three months ended Dec. 25, 2021. For the 12 months ended Dec. 31, 2022, the Company reported $76.04 million on $1.57 billion of total revenue compared to a net loss of $170.78 million on $1.42 billion of total revenue for the 12 moths ended Dec. 25, 2021. As of Dec. 31, 2022, the Company had $1.67 billion in total assets, $703.94 million in total current liabilities, $667.72 million in long-term debt, $16.87 million in long-term accrued warranty, $23.17 million in long-term deferred revenue, $2.35 million in long-term deferred tax liability, $45.86 million in long-term operating lease liabilities, $29.57 million in other long-term liabilities, and $179.65 million in total stockholders' equity. Infinera CEO David Heard said, "Our fourth quarter revenue and operating profit beat consensus expectations and contributed to record performance for Infinera on many fronts. In the fourth quarter we grew product revenue by 26% and overall revenue by 21% compared to the same quarter a year ago, while operating profit improved approximately three-fold compared to the same quarter a year ago. We delivered these results despite the significant impact of elevated supply chain costs on our financial results. We expanded ICE6 revenue in the quarter, continued to win in the metro, deployed new line systems and advanced the qualification of our 400G ZR+ software-defined pluggables." "For the full year of 2022, we ramped ICE6 to exceed our 25% of product revenue annual goal, grew total revenue by 10%, and improved operating margin by 230 basis points. Furthermore, we introduced our first subsystems products, which positions us well to access a new multibillion-dollar market that we believe can drive incremental growth, profitability and earnings per share as we focus on achieving our target business model." A full-text copy of the press release is available for free at: https://www.sec.gov/Archives/edgar/data/1138639/000113863923000024/infn-022323xex991.htm About Infinera Corp. Headquartered in Sunnyvale, Calif., Infinera Corp. -- www.infinera.com -- is a global supplier of innovative networking solutions that enable carriers, cloud operators, governments, and enterprises to scale network bandwidth, accelerate service innovation, and automate network operations. The Infinera end-to-end packet-optical portfolio delivers industry-leading economics and performance in long-haul, submarine, data center interconnect, and metro transport applications. Infinera reported a net loss of $170.78 million for the year ended Dec. 25, 2021, a net loss of $206.72 million for the year ended Dec. 26, 2020, and a net loss of $386.62 million for the year ended Dec. 28, 2019. As of Sept. 24, 2022, the Company had $1.50 billion in total assets, $578.18 million in total current liabilities, $667.07 million in long-term debt, $18.21 million in long-term accrued warranty, $22.59 million in long-term deferred revenue, $1.94 million in long-term deferred tax liability, $47.29 million in long-term operating lease liabilities, $50.20 million in other long-term liabilities, and $114.20 million in total stockholders' equity. INFOGROUP INC: $250M Bank Debt Trades at 20% Discount ----------------------------------------------------- Participations in a syndicated loan under which infoGroup Inc is a borrower were trading in the secondary market around 80.5 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $250 million facility is a Term loan that is scheduled to mature on April 3, 2023. About $236.3 million of the loan is withdrawn and outstanding. Infogroup Inc., headquartered in Omaha, Nebraska, is a provider of proprietary business and consumer data and multi-channel marketing solutions to enterprise and SMB customers. INSTANT BRANDS: $450M Bank Debt Trades at 50% Discount ------------------------------------------------------ Participations in a syndicated loan under which Instant Brands Holdings Inc is a borrower were trading in the secondary market around 50 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $450 million facility is a Term loan that is scheduled to mature on April 12, 2028. About $399.5 million of the loan is withdrawn and outstanding. Instant Brands Holdings Inc. designs, manufactures and markets kitchen products. The Company offers bakeware, dinnerware, kitchen, and household tools for storage and cutlery. INTERMEDIA HOLDINGS: $273M Bank Debt Trades at 23% Discount ----------------------------------------------------------- Participations in a syndicated loan under which Intermedia Holdings Inc is a borrower were trading in the secondary market around 77.2 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $273 million facility is a Term loan that is scheduled to mature on July 19, 2025. The amount is fully drawn and outstanding. Based in Sunnyvale, CA, Intermedia is a provider of cloud-based communications, collaboration, security and productivity software solutions for businesses. Products include cloud voice, Contact Center as a Service (CCaaS), web/video/content sharing and conferencing, file backup, sync and share, business e-mail, archiving and security. IXS HOLDINGS: $600.1M Bank Debt Trades at 16% Discount ------------------------------------------------------ Participations in a syndicated loan under which IXS Holdings Inc is a borrower were trading in the secondary market around 83.8 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $600.1 million facility is a Term loan that is scheduled to mature on March 5, 2027. The amount is fully drawn and outstanding. IXS Holding, Inc., headquartered in Huntsville, Ala., is a parent company of Innovative Accessories & Services LLC. Through its subsidiaries, IXS provides protective coatings for pick-up truck beds, as well as a wide range of other up-fit services and accessories to automotive manufacturers. JERK TACO MAN: Taps William E. Jamison & Associates as Counsel -------------------------------------------------------------- Jerk Taco Man Holdings, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ William E. Jamison & Associates as its legal counsel. The Debtor requires legal counsel to: a. give legal advice with respect to the powers and duties of the Debtor in the continued operation of its business; b. assist the Debtor in the negotiation, formulation, drafting and confirmation of a plan of reorganization; c. assist the Debtor in investigating and pursuing all rights and claims in connection with preserving the value of its assets and rehabilitating property of the estate, including the prosecution of any claims against any insurer of the Debtor's property; d. take necessary actions with respect to any claims that may be asserted against the Debtor and prepare legal papers; and e perform all other legal services for Debtor which may be required in connection with its Chapter 11 proceeding. William Jamison, Jr., Esq., will be paid at the rate of $400 per hour. His firm received $15,000 as an advance retainer. Mr. Jamison 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: William E. Jamison, Jr., Esq. William E. Jamison & Associates 53 W. Jackson, Blvd. Suite #801 Chicago, IL 60604 Tel: (312) 226 – 8500 Email: wjami39246@aol.com About Jerk Taco Man Holdings Jerk Taco Man Holdings, LLC, a Chicago-based company, filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Ill. Case No. 23-00901) on Jan. 24, 2023, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Julius B. Thomas, manager and member, signed the petition. Judge Deborah L. Thorne oversees the case. William E. Jamison & Associates serves as the Debtor's legal counsel. JP INTERMEDIATE: $450M Bank Debt Trades at 34% Discount ------------------------------------------------------- Participations in a syndicated loan under which JP Intermediate B LLC is a borrower were trading in the secondary market around 66.2 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $450 million facility is a Term loan that is scheduled to mature on November 20, 2025. About $360 million of the loan is withdrawn and outstanding. JP Intermediate B, LLC retails vitamins and nutritional supplements. JRT340ASSOCIATES: Condo Owner in Chapter 11 to Stop Foreclosure --------------------------------------------------------------- JRT340ASSOCIATES LLC filed for chapter 11 protection in the Southern District of New York. JRT340ASSOCIATES is a limited liability corporation which owns a condominium located at 340 West 86th Street, Unit 5A. Prior to the filing of the instant bankruptcy case, the Debtor was a defendant in a litigation entitled Stormfield Capital Funding I LLC vs. JRT340ASSOCIATES LLC et al. with the Supreme Cout of the State of New York Couty of New York Index 850223/2019 ("State Court Litigation). On Feb. 22, 2023, a foreclosure sale was scheduled arising of the State Court Litigation. The Debtor attempted to negotiate a resolution of this matter with the plaintiff, however, said negotiations failed. The Debtor filed the instant Chapter 11 case to preserve its most significant asset, the Condominum. According to court filings, JRT340ASSOCIATES estimates between $1 million and $10 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 24, 20232 at 2:00 p.m. About JRT340ASSOCIATES LLC JRT340ASSOCIATES LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10235) on Feb. 21, 2023. In the petition filed by Michael Trencher, as manager, the Debtor reported assets and liabilities between $1 million and $10 million. The Debtor is represented by: Clifford A. Katz, Esq. PLATZER, SWERGOLD, GOLDBERG, KATZ & JASLOW, LLP 475 Park Avenue South 18th Floor New York, NY 10016 Tel: 212-593-3000 Email: ckatz@platzerlaw.com JUST BELIEVE: Amends Administrative Claims Pay Details ------------------------------------------------------ Just Believe Recovery Center of Port Saint Lucie, LLC and Just Believe Recovery Center, LLC submitted a Third Amended Joint Disclosure Statement dated February 27, 2023. The creditors will be paid from the sale of the assets contemplated in the Debtor's Emergency Motion to Approve Sale Contract with Medicorum Acquisition Fund, LLC (the "Sale Motion"). The Debtor submits that there will be sufficient net sales proceeds to make all distributions to Classes 1-4, as well as a pro rata distribution to Classes 6 and 7 as reflected in the Disclosure Statement. The Motion was approved by this Court on a hearing on November 1, 2022 and by way of the Order Granting Just Believe Recovery Center of Port Saint Lucie, LLC's Emergency Motion to Approve Sale Contract with Medicorum Acquisition Fund LLC. In the event that the pending sale does not close on or before the April 14, 2023 closing deadline, or any further deadline agreed by Debtor, purchaser and Texas Capital Bank, and approved by the court, the Debtor shall file a motion to approve bidding and auction procedures for the sale of the Port Saint Lucie property. In the event that the sale of the Port Saint Lucie property is not expected to generate sufficient sales proceeds to satisfy the Allowed Secured Claim of Texas Capital Bank, the Debtor shall file a motion to approve the sale or auction procedures for the sale of the Jensen Beach property. Administrative Claims The administrative claimants include Debtor's attorney and the Office of the U.S. Trustee. Payment of the administrative claims for Debtor's counsel is subject to set off for pre-petition retainers, as well as approval by the Court of very detailed fee applications. The Confirmation Order will set forth a deadline for the filing of all administrative claims, including all professional's fee applications, which will be paid on or before the Effective Date from sale proceeds to the extent there are funds available after payment in full of Texas Capital Bank, any other secured claims and closing costs, and thereafter on a monthly basis from the Promissory Note payments made by purchaser. Counsel for the Debtor has agreed to defer payment of its legal fees subject to the terms and conditions. At the time of the filing of this Plan, Debtors' counsel has incurred approximately $209,000.00 in unpaid fees and cost in this highly complex and convoluted case, and such fees and costs will continue to accrue until this case is closed. As Debtors' counsel is a small boutique-sized bankruptcy law firm, this large receivable is a significant burden on the law firm. It is acknowledged that there is a pending Sale Contract on the PSL Property that should generate net funds to pay the administrative claims. However, as with all sale transactions, there is a risk that the Debtors will be unable to pay all outstanding administrative fees from the sale closing proceeds. It should be noted that a Realtor has been approved by the Court and the Jensen Beach Property is also listed in the MLS for sale at this time. In order to induce Debtors' counsel to remain in the cases as counsel for the Debtors, in the event that the proposed closing on the sale of the PSL Property does not occur on or before April 14, 2023, then the Debtors are forthwith directed and authorized to execute a Note and Mortgage in the amount $250,000.00 to counsel for Debtors, with the Note to be secured by a Mortgage on the real property located at 4030 NE Indian River Drive, Jensen Beach, Florida, which Mortgage shall only be subordinate to the Mortgage of Texas Capital Bank. This Mortgage will be satisfied upon full payment and applied to the administrative fees and costs to counsel for the Debtors, pursuant to the terms of the Mortgage and Note. In the event the Debtor does not execute the Note and Mortgage, Kelley, Fulton, Kaplan & Eller, P.L. shall be entitled to and is hereby granted an equitable lien on the real property located at 4030 NE Indian River Drive, Jensen Beach, Florida, subordinated only to Texas Capital Bank, to secure payment for the valuable services the law firm has provided to both Debtors. Kelley, Fulton, Kaplan, & Eller, P.L. is authorized to file a Notice of Interest in Land upon confirmation and shall be entitled to all legal and equitable rights pursuant to the lien. Class Five consists of the claim of Ocean Breeze Station, LLC. Upon information and belief, Ocean Breeze Station, LLC is in negotiations with a new tenant to lease this space. Accordingly, upon execution of a new lease with another tenant, and waiver of all contingencies in such lease, the lease between the Ocean Breeze Station and the Debtor shall be terminated and JBRC-Jensen Beach, and the guarantor, Cynthia Bellino, shall not be liable for any further rent. Notwithstanding the foregoing, JBRC-Jensen Beach and Cynthia Bellino, as guarantor, shall remain liable for the arrearage of $185,500.00, which shall be paid at a rate of $3,000.00 per month, without interest, until paid in full. In the event the Debtor fails to make the $3,000.00 per month payment, Ocean Breeze Station shall be entitled to the full arrearage of $276,417.12, plus reasonable attorney's fees and costs, less any amounts actually received. In the event of a default by the Debtor, nothing herein shall waive the right of Ocean Breeze Station from seeking collection against any non-Debtor parties to the Fifth Amendment to Lease for the amount due. This claim is impaired. Like in the prior iteration of the Plan, undisputed general unsecured claims shall receive a pro rata distribution from the net proceeds of the sale over a period of 18 months beginning 120 days after Closing. Debtor's primary assets shall be liquidated and there shall be no further operations. In the event that the pending sale does not close on or before the April 14, 2023 closing deadline, or any further deadline agreed by Debtor, purchaser and Texas Capital Bank, and approved by the court, the Debtor shall file a motion to approve bidding and auction procedures for the sale of the Port Saint Lucie property. In the event that the sale of the Port Saint Lucie property is not expected to generate sufficient sales proceeds to satisfy the Allowed Secured Claim of Texas Capital Bank, the Debtor shall file a motion to approve the sale or auction procedures for the sale of the Jensen Beach property. The payments to be made pursuant to the Plan by Debtor shall be in full settlement and satisfaction of all claims against Debtor, provided that Texas Capital Bank's liens and claims against the Debtors and the assets of Just Believe Recovery Center of Port Saint Lucie, LLC or Just Believe Recovery Center, LLC shall not be deemed released unless and until its liens and claims have been paid in full. The payments of new value contributions and other post-bankruptcy contributions by the principals of Debtor, as necessary to fund operations, shall be in full settlement and satisfaction of all claims against the principal, provided that Texas Capital Bank's claims against the principals of the Debtor shall not be deemed released unless and until its liens and claims are paid in full. Additionally, the claim of the Ocean Breeze Landlord in Claim 5 shall not be released until the amount of the arrears settlement claim set forth therein is paid in full. A full-text copy of the Third Amended Joint Disclosure Statement dated February 27, 2023 is available at https://bit.ly/41CNIS9 from PacerMonitor.com at no charge. Attorneys for the Debtor: Dana Kaplan, Esq. KELLEY, FULTON, KAPLAN & ELLER, P.L. 1665 Palm Beach Lakes Blvd. The Forum - Suite 1000 West Palm Beach, FL 33401 Telephone: (561) 491-1200 Facsimile: (561) 684-3773 About Just Believe Recovery Center Just Believe Recovery Center of Port Saint Lucie -- https://justbelieverecoverycenter.com/ -- is a drug and alcohol addiction rehabilitation and detox facility with locations in Florida and Pennsylvania. Just Believe Recovery Center of Port Saint Lucie sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-15739) on July 27, 2022, listing up to $50,000 in assets and up to $10 million in liabilities. Its affiliate, Just Believe Recovery Center, LLC filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 22-16046) on Aug. 4, 2022, listing up to $50,000 in assets and up to $10 million in liabilities. The cases are jointly administered under Case No. 22-15739. Judge Mindy A. Mora oversees the cases. Kelley Fulton Kaplan & Eller, P.L. is the Debtors' legal counsel. KEY DIGITAL: Case Summary & 18 Unsecured Creditors -------------------------------------------------- Debtor: Key Digital Systems Inc. 521 East Third Street Mount Vernon, NY 10553 Business Description: Key Digital develops and manufactures digital A/V connectivity and control technology solutions for commercial and residential application. Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Southern District of New York Case No.: 23-22176 Debtor's Counsel: Dawn Kirby, Esq. KIRBY AISNER & CURLEY LLP 700 Post Road Suite 237 Scarsdale, NY 10583 Tel: (914) 401-9500 Email: dkirby@kacllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Mikhail Tsinberg as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 18 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ZETE3IA/Key_Digital_Systems_Inc__nysbke-23-22176__0001.0.pdf?mcid=tGE4TAMA KNOW LABS: Phillip Bosua Reports 6.2% Stake ------------------------------------------- Phillip A. Bosua disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Jan. 23, 2023, he beneficially owns 4,634,600 shares of common stock of Know Labs, Inc., representing 6.2% (9.6% on a fully diluted basis) of the Shares outstanding, calculated based on 48,207,937 shares issued and outstanding as of Dec. 31, 2022 and Feb. 14, 2023. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1074828/000116169723000139/sc_13g.htm About Know Labs Know Labs, Inc. is focused on the development and commercialization of proprietary biosensor technologies which, when paired with its AI deep learning platform, are capable of uniquely identifying and measuring almost any material or analyte using electromagnetic energy to detect, record, identify and measure the unique "signature" of said materials or analytes. Know Labs call this its "Bio-RFID" technology platform, when pertaining to radio and microwave spectroscopy, and its "ChromaID" technology platform, when pertaining to optical spectroscopy. The data obtained with the Company's biosensor technology is analyzed with its trade secret algorithms which are driven by its AI deep learning platform. Know Labs reported a net loss of $20.07 million for the year ended Sept. 30, 2022, a net loss of $25.36 million for the year ended Sept. 30, 2021, a net loss of $13.56 million for the year ended Sept. 30, 2020, and a net loss of $7.61 million for the year ended Dec. 31, 2019. As of Dec. 31, 2022, the Company had $10.71 million in total assets, $3.66 million in total current liabilities, $45,993 in total non-current liabilities, and $7.01 million in total stockholders' equity. In its recent Quarterly Report, Know Labs, Inc. said the Company anticipates that it will record losses from operations for the foreseeable future. The Company believes that it has enough available cash to operate until at least Feb. 15, 2024. As of Dec. 31, 2022, the Company's accumulated deficit was $105,220,597. The Company has had limited capital resources and intends to seek additional cash via equity and debt offerings. KNS HOLDCO: S&P Alters Outlook to Negative, Affirms 'B' ICR ----------------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based KNS Holdco LLC to negative from stable and affirmed its 'B' issuer credit rating. S&P said, "We also affirmed our 'B' issue-level ratings on the company's revolving credit facility and senior secured first-lien term loan. The recovery rating is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. "The negative outlook reflects our expectation that margins will be pressured in 2023 as the company vies for consumer attention in the highly fragmented and competitive health and wellness industry, which we expect to be a challenging space as consumers tighten their budgets in a weaker macroeconomic environment." Cost pressures for key inputs such as food and packaging, as well as increased spending on media advertising will compress margins over the next year. S&P said, "In 2022 inflation across the company's supply chain had a $19 million profit impact, headlined by an increase in food costs(11%), paper (38%), coolers (40%), labor (32%), and freight (38%). While we recognize that the environment for freight and logistics costs has moderated significantly, we expect this will only partially offset continued inflation for key raw materials. Direct food and active ingredient costs comprise slightly more than 50% of the company's cost structure, while freight costs make up about 20%. Many of the company's food vendors implement annual pricing and purchase obligations, which results in a lag for moderation of these costs. We believe management can achieve its stated target of $20 million in cost savings and acquisition synergies associated with the Adaptive Health and New Vitality transactions, but we expect the majority of these savings will not be realized until fiscal 2024. Moreover, we expect the market for advertising to remain competitive over the next year as many consumer products companies invest in marketing to acquire customers, maintain brand loyalty, and stimulate growth amidst waning consumer spending. Because of this, we expect media ad rates to be slightly less productive in 2023 compared to a relatively favorable environment in 2022. Digital and TV advertising is the company's main engine for growth, and we expect the company will continue to invest heavily for its portfolio of brands." Macroeconomic uncertainty and continued high inflation weighing against consumers is a headwind to maintaining the company's recent return to sales growth. The core age group for KNS products are older consumers, many of whom are on fixed incomes (approximately one-third are 65 or older) and are disproportionately affected by inflation. In 2022, KNS estimated that financial vulnerability in this demographic resulted in $22 million and $9 million of lost revenue and EBITDA, respectively--a trend we believe will continue in 2023. S&P Global economists expect a shallow recession in the U.S. this year driven by high interest rates and stubbornly high inflation. This, coupled with intense competition in the health, wellness, and weight management industries, leads us to believe that KNS will have to invest heavily in higher-priced media advertisements to keep its current growth trajectory in the low-single-digit percentage area. S&P said, "We estimate that selling, general, and administrative (SG&A) expenses will be a 170 basis point (bps) headwind in 2023. Overall, we expect about 200 bps of margin degradation this fiscal year, leading to S&P Global Ratings-adjusted leverage in the high-6x area." Historically aggressive financial policies and the potential for debt-financed mergers and acquisitions (M&A) could limit deleveraging prospects. Management and financial sponsor Kainos Capital have expressed that they intend to operate KNS as a platform for acquisitions in the health and wellness space. S&P said, "We expect the company will continue to add brands to its portfolio, primarily through tuck-in acquisitions that are debt financed. While we believe the current interest rate environment and unattractive multiples could stifle M&A activity in the near-term, we cannot rule out the possibility of acquisitions that inhibit progress toward deleveraging." The negative outlook reflects S&P's expectation than KNS will incur higher costs in 2023 in order to sustain its return to top-line growth, and it forecasts S&P Global Ratings-adjusted leverage will be in the high-6x area at year end. S&P could lower the rating if the company is not able to deleverage in line with its 2024 expectations such that S&P Global Ratings-adjusted leverage is sustained above 6.5x and EBITDA cash interest coverage approaches 1.5x. This could occur if: -- Consumer demand for discretionary weight management products decreases further, or competition from peers in the space increases; -- High media ad rates continue to pressure margins and the company must sustain higher investment to grow the top-line; Cost savings initiatives and acquisition synergies do not materialize as S&P expects; or -- The company transacts material debt-financed M&A. S&P could revise the outlook to stable if demand for the company's products increases and operating costs are managed effectively, such that leverage remains below 6.5x and EBITDA cash interest coverage is near or above 2x. This could occur if: -- Media ad rates decline such that the company's marketing spend results in higher returns on investment; -- The recently deployed e-commerce re-platform, analytics capabilities, and price discovery efforts have an outsized impact on volume performance; -- Commodity food cost inflation moderates, or the benefits from moderating logistics expenses outweigh other cost headwinds; and -- Cost savings initiatives and acquisition synergies are fully realized in 2023. ESG Credit Indicators: E-2, S-2, G-3 KOPPERS HOLDINGS: Fitch Assigns First Time 'BB-' LongTerm IDR ------------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'BB-' to Koppers Holdings Inc. and its wholly owned issuing subsidiary Koppers Inc. Fitch has also assigned long-term issue ratings of 'BB+'/'RR1' to Koppers Inc.'s new $400 million first lien senior secured term loan B (TL-B) and existing $800 million first lien senior secured revolver. Proceeds from the TL-B issuance are intended to refinance existing debt. The Rating Outlook is Stable. The ratings reflect the company's leading competitive positions in stable markets, solid FCF generation, healthy leverage profile, and high degree of vertical integration. The rating is constrained by a narrow product focus, with earnings being highly correlated to the infrastructure and repair and remodel markets. Fitch recognizes that the company's exposure to these end markets has correspondingly enabled lower earnings and FCF volatility compared to issuers with more commoditized or cyclical product offerings. The Stable Outlook reflects Fitch's expectations for EBITDA leverage to trend around 3.5x over the forecast horizon. KEY RATING DRIVERS Stable Earnings Profile: Koppers has historically maintained a stable earnings profile through the cycle, supported by the company's leading market positions and a product portfolio heavily geared towards the steadily growing infrastructure and repair and remodel markets. This earnings resiliency is evidenced by a track record of consistent revenue growth since 2017 and Koppers maintaining an average Fitch-calculated EBITDA margin of around 11% through the 2008-2009 Housing Crisis. While EBITDA margins declined to 11.6% in YE 2022 as a result of higher raw materials costs, Fitch expects upcoming price increases, increased asset utilization, new product development, and solid demand to drive improved earnings performance through the forecast horizon. A key source of stability for Koppers' earnings profile is its Railroad and Utility Products and Services (RUPS) business, which benefits from approximately 74% of North American segment sales being under long-term contracts and an adequate ability to pass through costs. The segment currently supplies all seven of the North American Class I railroads. Vertically Integrated Market Leader: Koppers is one of the largest providers of wood preservation technologies in North America, with number one supplier positions for both crossties to Class I railroads and utility poles in the Eastern U.S. The company also holds a number two supplier position for utility poles in the U.S., behind Stella-Jones Inc., and is a key supplier of creosote to the railroad industry in North America. Supporting Koppers' competitive positions is its vertically integrated and strategically located manufacturing footprint, whereby direct access to its major customers' rail lines and an ability for its RUPS business to fully source its creosote requirements through its Carbon Materials and Chemicals (CMC) business provides for surety of supply to its customers. The company further entrenches itself in its customers' requirements by providing ancillary services such as recovery of used utility poles and a business related to the inspection of utility poles. Improved Leverage: Fitch calculated EBITDA Leverage for Koppers pro forma for the refinancing is 3.6x, compared with 4.6x at YE 2019. This improvement stems from around $90 million in debt reduction since YE 2019 and solid EBITDA growth over the same time period. As the company continues to execute on its various operating initiatives to improve profitability, Fitch believes its EBITDA margin profile will continue to improve compared to recent periods. The company has a net leverage target range of 2x-3x, which Fitch expects to be achieved around 2025 assuming continued EBITDA growth and modest debt repayments. Fitch expects EBITDA Leverage to be around 3.5x over the medium term. Average Margins, Solid FCF Generation: Though the company's EBITDA margin profile, typically around the 11%-12% range, is weaker than certain similarly rated peers, Koppers' moderate capital and working capital requirements have supported stable FCF generation averaging around $30 million annually since 2019. While capex have increased to the $100 million range since 2021 due to various initiatives aimed at improving EBITDA margin, Koppers retains the ability to reduce certain growth projects and manage working capital in order to preserve FCF generation and liquidity during weaker periods. Fitch projects annual FCF generation to average around $40 million throughout the forecast horizon. Balanced Capital Allocation: With the company near its net leverage target of 2x-3x, Fitch expects FCF to be allocated in a balanced manner between growth investments, both organic and inorganic, and measured share repurchases over the forecast horizon. The company has around $70 million in availability under its $100 million share repurchase program, and Fitch projects around $5 million in annual regular dividend payments. Fitch views these shareholder activities as manageable given the company's strong generation of cash flow from operations (CFO), which averages around $165 million annually through the forecast horizon. Fitch also expects the company to remain disciplined but active in M&A, with its base case projections including tuck-in acquisitions funded with FCF generation. Fitch assumes that any leveraging transaction will be followed up with a prioritization toward gross debt reduction back within the company's respective rating tolerances. Narrow Product Focus: Koppers' narrow product portfolio focused on wood preservation technologies results in slower earnings growth and low diversification compared to similarly rated peers, while correspondingly driving lower earnings volatility. Around 40% of the company's sales are generated in the RUPS segment, where rail traffic has remained stable and demand for utility poles has grown at a strong pace. Fitch views trends of increased infrastructure spending stemming from the Infrastructure Investment and Jobs Act, growing global energy consumption, and expansion of the global telecommunication industry as meaningful potential tailwinds for future volume growth for the company. Demand for the company's PC segment (approximately 30% of sales) is generally correlated with repair and remodelling activity, with the segment supplying nine of the ten largest lumber treating companies in the world. Fitch's 2023 Outlook for North American Building Products and Materials points to residential repair and remodelling expenditures declining by low-single digits in 2023, as broad inflation amid middling wage growth is expected to drive slowing demand for both DIY projects and bigger-ticket professionally installed remodelling projects. Fitch's base case forecast assumes lower remodelling activity leads to earnings declines for PC, coupled with lower volumes in the CMC segment, partially offset by continued stability in the RUPS segment. Parent-Subsidiary Linkage Considerations: Under its parent-subsidiary linkage criteria, Fitch has equalized the IDRs of Koppers Holdings Inc. and its wholly owned issuing subsidiary, Koppers Inc., at 'BB-.' The equalization reflects open legal ring-fencing and open access and control between the stronger subsidiary and Koppers Holdings Inc. DERIVATION SUMMARY Koppers' credit profile is supported by leading market positions and exposure to healthy end markets, similar to 'BB' rated peers Ingevity Corporation (BB/Stable) and H.B. Fuller Company (BB/Stable). The company also operates with a similar financial structure to these peers, with EBITDA leverage expected to trend around 3.5x through the forecast horizon, compared with around 3.5x for H.B. Fuller and 3.0x for Ingevity. Koppers' EBITDA margins are forecast to trend around 11%-12% through the forecast, which compares unfavourably to Ingevity but similarly to H.B. Fuller. When compared to 'B' rated peers Aruba Investments, Inc. (Angus; B/Stable) and ASP Unifrax Holdings, Inc. (B/Stable), Koppers demonstrates relatively greater operational scale, and greater stability in FCF generation, supported by the company's high exposure to the stable infrastructure and repair and remodel markets. Koppers also benefits from a more conservative financial structure compared to these peers, as EBITDA leverage for Angus and Unifrax is expected to be around 7.0x and 8.0x, respectively, in the near term. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer: - Revenues slightly decline in 2023 due to weak repair and remodel demand driving lower sales for PC, partially offset by stability in RUPS. Revenues steadily grow at around 3% annually thereafter, supported by increased infrastructure investment and demand recoveries in the PC and CMC segments; - EBITDA margins gradually improve to above 12% through the forecast; - Capex around $105 million annually, including various growth projects aimed at expanding and optimizing operations; - Excess FCF primarily applied toward measured share repurchases and tuck-in acquisitions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Greater operational scale and realized benefits from capital projects, evidenced by more robust cash flow generation; - Continued EBITDA margin improvement towards the mid-teens on a sustained basis, supported by the successful execution of ongoing efficiency initiatives and product portfolio enhancement; - EBITDA leverage durably below 3.25x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA leverage sustained above 4.25x, potentially caused by an inability to adequately pass through costs; - Sustained weak FCF generation, potentially stemming from poor working capital management or higher than anticipated capital spending; - More aggressive than expected financial policy, representing a departure from historical norms. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: Pro forma for the transactions, the company has approximately $33 million in cash and cash equivalents and $365 million in availability under the recently upsized $800 million senior secured revolving credit facility maturing in 2027. Fitch projects annual FCF generation to average around $40 million throughout the forecast horizon, which should provide the company with adequate liquidity. With the senior unsecured notes due 2025 being fully repaid at close of the refinancing, Koppers has no material debt maturities through 2026. ISSUER PROFILE Koppers Holdings Inc. (NYSE: KOP) is a leading integrated global provider of treated wood products, wood preservation chemicals and carbon compounds. The company operates three business segments: Railroad and Utility Products and Services, Performance Chemicals and Carbon Materials and Chemicals. 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 ----------- ------ -------- Koppers Holdings Inc. LT IDR BB- New Rating Koppers Inc. LT IDR BB- New Rating senior secured LT BB+ New Rating RR1 LIFESCAN GLOBAL: $1.48B Bank Debt Trades at 22% Discount -------------------------------------------------------- Participations in a syndicated loan under which LifeScan Global Corp is a borrower were trading in the secondary market around 77.9 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.48 billion facility is a Term loan that is scheduled to mature on October 1, 2024. The amount is fully drawn and outstanding. Lifescan Global Corporation is a provider of blood glucose monitoring systems for home and hospital us. LIGADO NETWORKS: $117M Bank Debt Trades at 73% Discount ------------------------------------------------------- Participations in a syndicated loan under which Ligado Networks LLC is a borrower were trading in the secondary market around 26.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $117.6 million facility is a Term loan that is scheduled to mature on May 27, 2023. The amount is fully drawn and outstanding. Ligado Networks LLC operates as a special purpose entity. The Company provides mobile satellite coverage, as well as develops innovative solutions that will accelerate 5G and IoT network deployments. LUMEN TECHNOLOGIES: $5B Bank Debt Trades at 18% Discount -------------------------------------------------------- Participations in a syndicated loan under which Lumen Technologies Inc is a borrower were trading in the secondary market around 81.8 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $5 billion facility is a Term loan that is scheduled to mature on March 15, 2027. About $4.85 billion of the loan is withdrawn and outstanding. Lumen Technologies, Inc., headquartered in Monroe, Louisiana, is an integrated communications company that provides an array of communications services to large enterprise, mid-market enterprise, government and wholesale customers in its larger Business segment. The company's smaller Mass Markets segment primarily provides broadband services to its residential and small business customer base. MAGIC DESIGNS: Seeks Approval to Hire Terzian Law as Attorney ------------------------------------------------------------- Magic Designs, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Terzian Law Group as its attorney. The firm will render these services: Professional services Terzian Law will render are: a. advise the Debtor with regard to the Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules and assistance regarding compliance with the requirements of the Office of the United States Trustee; b. advise the Debtor with regards to certain rights and remedies of their bankruptcy estate and rights, claims and interest of creditors; c. represent the Debtor in any proceedings or hearings in the Bankruptcy Court involving their estates unless the Debtor is represented in such proceeding or hearing by other special counsel; d. conduct examinations of witnesses, claimants or adverse parties and to prepare and assist in the preparation of reports, accounts and pleadings; e. prepare and assist the Debtor in the preparation of reports, applications, pleadings and other including, but not limited to, applications to employ professionals, interim statements, operating reports, initial filing requirements, schedules and statement of financial affairs, lease pleadings, cash collateral pleadings, financial pleadings; f. assist the Debtor in negotiation, formulation, confirmation and implementation of a Chapter 11 plan and implementation of a plan or reorganization; g. perform any other services which may be appropriate of the firm's representation of the Debtor during his bankruptcy case. Tamar Terzian, Esq., founder and President of Terzian Law Group, attests that his Firm does not hold any interest in nor is materially adverse to the Debtor and thus constitutes a disinterested person as contemplated by 11 U.S.C. Sec. 327 and defined in Section 101(14) of the Bankruptcy Code. Terzian Law's regular hourly rates are: Tamar Terzian $450 Associates $250 Law clerks/paralegals $175 The firm can be reached through: Tamar Terzian, Esq. Terzian Law Group 315 W. Arden Avenue Suite 28 Glendale, CA 91203 Phone: 818-242-1100 E-mail: terzbklaw@gmail.com About Magic Designs Magic Designs, Inc. is a clothing manufacturer. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13987) on July 23, 2022. In the petition signed by Xanlhyl Zuleika Nuno Aquiono, president, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Neil W. Bason oversees the case. Tamar Terzian, Esq., at Epps and Coulson, LLP is the Debtor's counsel. MAR DESIGNS: Seeks Cash Collateral Access ----------------------------------------- M.A.R. Designs & Construction, Inc. asks the U.S. Bankruptcy Court for the Southern District of Texas, McAllen Division, for authority to use cash collateral and provide adequate protection. The Debtor requires immediate authority to use cash collateral to continue operating its business without interruption toward the objective of formulating an effective reorganization plan. The Debtor does not concede that any party has a perfected security interest in cash collateral except for Zarsky Lumber Company, LLC, relating to the proceeds of any sale of real property in Hidalgo County. However, the Debtor presumes Comack Investments, L.P. and Zarsky each have a perfected interest. During 2012 to 2015, the Debtor began increasing its land development work, by investing approximately $2.5 million obtained from the Debtor's representatives oil field business, into land acquisition. Between 2013 and 2019, the Debtor regularly obtained loans from Comack to fund the building of structures on real estate lots the Debtor owned, and as standard practice, pledged and granted as collateral the particular the real estate lot for each individual note. On May 1, 2020, in an effort to infuse additional needed capital, separate and apart from the already existing notes executed with Comack, the Debtor and Comack executed a valid and enforceable written contract in the form of a promissory note, in exchange for the sum of $1.285 million in cash. The Debtor entered the contract or executed the note of $1.285 million because it needed such funds to continue operating its business and protect its real estate portfolio. The $1.285 million note carries a maturity date of May 1, 2023, carries a 2.7% annual interest on outstanding principal requiring monthly payments of "interest on the outstanding principal balance" only and called for a balloon payment on May 1, 2023 of all unpaid principal and interest. Comack did not advance the entire $1.285 million as it was required to do, even though the purported agreement required Comack to advance or provide the Debtor with that sum at least according to the combination of the 1.285 Million Note, the Deed of Trust, and the HUD statement. Additionally, Comack regularly billed Movant interest charges of $2,850 per month as interest on the entire $1.285 million loan ostensibly, and late fees of $142 per month. In February 2021 and July 2021, Comack filed Lis Pendens on various properties of the Debtor including properties in MAR Subdivision and in Sunset Meadows Subdivision. Eventually, the lawsuit was amended to include other issues, including the issues surrounding the $1.285 Million note. After Comack moved the Court to appoint an accountant, the court-appointed C.P.A. Noel Garza testified that from the time of his appointment to the day of his testimony, he had not received information from Comack as to where they had applied the $1 million that was not disbursed to the Debtor. The lis pendens covered some properties that Comack had no interest in, yet they did not release them until approximately October 2022. As adequate protection for the use of cash collateral, the Debtor contends that based on the County's recent appraisals, Comack and Zarsky's roughly $1.305 million equity cushion in its collateral is more than sufficient adequate protection. The Debtor submits that Comack and Zarsky are already adequately protected and thus grounds exist to allow the Debtor to use cash collateral. Only if the Court finds that additional adequate protection is necessary, the Debtor will grant the Comack and Zarsky replacement perfected security interests under section 361(2) of the Bankruptcy Code (i) to the extent Comack and Zarsky’s cash collateral is used by Debtor, and (ii) to the extent and with the same priority in Debtor's postpetition collateral, and proceeds thereof, that Comack and Zarsky hold in Debtor's prepetition collateral. The replacement liens that Comack and Zarsky receive by Court order shall be deemed to be perfected automatically upon entry of the Interim Order. A copy of the motion is available at https://bit.ly/3ZAqbzw from PacerMonitor.com. A copy of the budget is available at https://bit.ly/41JENhL from PacerMonitor.com. The Debtor projects $11,486 in total expenses for a period of 90 days. About M.A.R. Designs & Construction M.A.R. Designs & Construction, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-70001) on Jan. 1, 2023, with as much as $1 million in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. Antonio Martinez, Jr., Esq., and Carr Riggs & Ingram, LLC serve as the Debtor's legal counsel and accountant, respectively. MARKHAM, IL: S&P Raises GO Bonds Rating to 'BB+', Outlook Stable ---------------------------------------------------------------- S&P Global Ratings raised its rating on Markham, Ill.'s outstanding general obligation (GO) bonds to 'BB+' from 'B.' "The upgrade reflects the city's steadily improving financial management policies and practices, budget improvements, and prospects for stronger tax revenue growth," said S&P Global Ratings credit analyst Helen Samuelson. The outlook on all ratings is stable. Markham is located about 24 miles south of Chicago. Its location near two interstates is attracting developments such as a new $300 million facility that will generate potentially $6 million in property tax revenue and already is generating sales taxes, about $600,000 on an annualized basis. MATCON CONSTRUCTION: Gets OK to Hire MGS Law as Special Counsel --------------------------------------------------------------- Matcon Construction Services, Inc. received approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ MGS Law, P.A. as special counsel. The Debtor needs the firm's legal assistance in connection with construction law-related issues, analysis of construction contracts, bonding issues, and general and subcontractor rights, including lien rights. The firm will be paid at these rates: Michael G. St. Jacques, II, Esq. $350 per hour Paralegal $175 per hour In addition, the firm will be reimbursed for out-of-pocket expenses incurred. The retainer fee is $20,000. Michael St. Jacques, Esq., a partner at MGS Law, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael St. Jacques, II, Esq. MGS Law, P.A. 601 Heritage Drive, Suite 229 Salt Lake City, UT 84111 Jupiter, FL 33458 Tel: (561) 207-7373 Email: michael@mgs2law.com About Matcon Construction Services Matcon Construction Services, Inc. provides general contracting, solar solutions and development services. The company is based in Tampa, Fla. Matcon Construction Services sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00215) on Jan. 20, 2023. In the petition signed by Derek Mateos, president, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Roberta A. Colton oversees the case. The Debtor tapped Scott Underwood, Esq., at Underwood Murray, P.A. as bankruptcy counsel; MGS Law, P.A. as special counsel; and Small Business CFO as accountant. MATHESON FLIGHT: Exclusivity Period Extended to June 27 ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California extended Matheson Flight Extenders, Inc.'s exclusivity period for filing a Chapter 11 plan and disclosure statement to June 27. About Matheson Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc. provide short and long-haul transportation, logistics and ground handling services. The companies are based in Sacramento, Calif. Matheson Flight Extenders and Matheson Postal Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Calif. Case Nos. 22-21148 and 22-21149) on May 5, 2022. On July 14, 2022, Matheson Trucking, Inc., an affiliate, filed for Chapter 11 protection (Bankr. E.D. Calif. Case No. 22-21758). The cases are jointly administered under Case No. 22-21148. In the petitions signed by Charles J. Mellor, chief restructuring officer, the Debtors disclosed up to $50 million in both assets and liabilities. Judge Christopher M. Klein oversees the cases. Nuti Hart, LLP and Development Specialists, Inc. serve as the Debtors' bankruptcy counsel and financial advisor, respectively. Donlin, Recano & Company, Inc. is the Debtors' claims, noticing and solicitation agent, and administrative advisor. The U.S. Trustee for Region 17 appointed an official committee of unsecured creditors in the Debtors' cases. The committee is represented by Felderstein Fitzgerald Willoughby Pascuzzi & Rios, LLP. MAVENIR SYSTEMS: $585M Bank Debt Trades at 31% Discount ------------------------------------------------------- Participations in a syndicated loan under which Mavenir Systems Inc is a borrower were trading in the secondary market around 68.9 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $585 million facility is a Term loan that is scheduled to mature on August 18, 2028. About $577.7 million of the loan is withdrawn and outstanding. Mavenir Systems, Inc. provides software-based networking solutions. The Company offers internet protocol based voice, videos, communication, and messaging services, as well as multimedia subsystem, evolved packet core, and session border controller. MAVERICK GAMING: $310M Bank Debt Trades at 23% Discount ------------------------------------------------------- Participations in a syndicated loan under which Maverick Gaming LLC is a borrower were trading in the secondary market around 77.5 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $310 million facility is a Term loan that is scheduled to mature on September 7, 2026. The amount is fully drawn and outstanding. Maverick Gaming LLC provides gaming, hospitality, and entertainment services. The Company offers slot machines, table games, and hotel rooms. Maverick Gaming serves customers in the United States. MAXIM CRANE: S&P Places 'B-' ICR on Watch Neg. on Refinancing Risk ------------------------------------------------------------------ S&P Global Ratings placed its 'B-' issuer credit rating on Maxim Crane Works Holdings Capital LLC on CreditWatch with negative implications. S&P also revised its liquidity assessment on Maxim Crane to less than adequate from adequate. The CreditWatch placement reflects the possibility that S&P could lower its ratings on Maxim if the company is unable to address the refinancing of its upcoming debt maturities over the next several months. The CreditWatch placement reflects the refinancing risk given the company's maturity wall in 2024. While Maxim Crane's performance has improved materially over the last 12 months, weaker macroeconomic conditions have led to tighter capital markets. S&P said, "Although we believe the company's current operating performance is likely to support Maxim's ability to refinance its capital structure and avoid an exchange that we would consider to be distressed and tantamount to a default, the longer the company waits to refinance the notes increases the risk that capital market conditions will weaken further, limiting the company's options and putting more pressure on a successful refinancing. "While the recent extension of the ABL modestly increases the company's flexibility, it is unlikely that the company will refinance its senior secured notes before it becomes current in early May, in our view. As a result of significant debt maturities over the next 14 months, we believe Maxim Crane is reliant upon access to the debt capital market to refinance its upcoming maturities. In addition, the uncertainty related to the current economic backdrop could complicate Maxim Crane's ability to refinance its senior secured notes and we believe the company may not be able to absorb high-impact, low-probability events. We understand the company is currently evaluating various options. "We expect Maxim's operating performance will continue to improve in 2023. We believe that the company's focus on strategic initiatives to improve its pricing and profitability will allow Maxim Crane to continue to reduce leverage. We believe S&P adjusted debt to EBITDA was in the high-6x at the end of 2022, down from almost 9x at the end of 2021, and we believe it will continue to improve in 2023. The refinancing will likely increase Maxim Crane's cost of borrowing in the second half of the year, which, along with investments in the company's fleet, will limit the company's free operating cash flow generation in 2023. We expect it to improve in 2024. "The CreditWatch placement reflects the possibility that we could lower our ratings on Maxim Crane if the company is unable to address the refinancing of its upcoming debt maturities. We will continue to monitor capital market conditions and could lower the rating if the environment weakens, if performance is worse than our expectations, or other factors that make a refinancing more difficult. Regardless of market conditions, we would likely lower the rating if a refinancing does not occur over the next several months." ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of Maxim Crane, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding periods, and focus on maximizing shareholder returns." MERIDIAN RESTAURANTS: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Seven affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Meridian Restaurants Unlimited, LC 23-20731 5929 Fashion Point Drive, Suite 501 South Ogden, UT 84430 LoveLoud Restaurants, L.C. 23-20732 5929 Fashion Point Drive, Suite 501 Ogden, UT 84403 AZM Restaurants, L.C 23-20733 5929 Fashion Point Drive, Suite 501 Ogden, UT 84403 HR Restaurants, L.C. 23-20736 MR Restaurants, L.C. 23-20737 NDM Restaurants, L.C. 23-20738 NKS Restaurants, L.C. 23-20739 Business Description: The Debtors own and operate restaurants in Utah. Chapter 11 Petition Date: March 2, 2023 Court: United States Bankruptcy Court District of Utah Debtors' Counsel: Michael R. Johnson, Esq. RAY QUINNEY & NEBEKER P.C. 36 South State Street, Suite 1400 Salt Lake City, UT 84111 Tel: 801-323-3363 Email: mjohnson@rqn.com Meridian Restaurants' Estimated Assets: $10 million to $50 million Meridian Restaurants' Estimated Liabilities: $10 million to $50 million LoveLoud's Estimated Assets: $10 million to $50 million LoveLoud's Estimated Liabilities: $10 million to $50 million AZM Restaurants' Estimated Assets: $1 million to $10 million AZM Restaurants' Estimated Liabilities: $10 million to $50 million The petitions were signed by James Winder, manager for PSCP Meridian, LLC. Full-text copies of three of the Debtors' petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UYAKBNQ/Meridian_Restaurants_Unlimited__utbke-23-20731__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/VYRWTAA/LoveLoud_Restaurants_LC_a_Utah__utbke-23-20732__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/25AHCTI/AZM_Restaurants_LC_a_Utah_limited__utbke-23-20733__0001.0.pdf?mcid=tGE4TAMA List of Meridian Restaurants' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Banclease Acceptance Corp $106,716 8221 Tristar Drive Irving, TX 75063 2. City National Bank $46,434,767 PO Box 60938 Los Angeles, CA 90060-0938 3. Corrigo Incorporated $16,824 PO Box 120439 Dept 0439 Dallas, TX 75312-0439 4. DTIQ $178,010 PO Box 269078 Oklahoma City, OK 73126 5. EBA&M $469,972 Employee Benefits Administration & Mana 118002 Cowan 18 Irvine, CA 92614 6. EBA&M $28,500 Corporation 18002 Cowan Irvine, CA 92614 7. Gardaworld Cashlink, LLC $160,912 Lockbox #1948 PO Box 95000 Philadelphia, PA 19195-0001 8. Garnett Captive $65,475 KRP Managers, LLC 604 E Baltimore Pike Media, PA 19063 9. HireRight $14,414 PO Box 847891 Dallas, TX 75284 10. LinkedIn Corp $19,605 62228 Collections Center Drive Chicago, IL 60693-0622 11. Nationwide $50,870 PO Box 77210 Minneapolis, MN 55480-7200 12. Now CFO Utah III, LLC $51,378 5251 S Green Street Ste 350 Murray, UT 84123 13. Robert Half Executive Search $84,560 P.O. Box 743295 Los Angeles, CA 90074-3295 14. Sicom Systems, Inc. $179,000 PO Box 930157 Atlanta, GA 91193-0157 15. Snell & Wilmer $14,312 One Arizona Center 400 E Van Buren, Ste 1900 Phoenix, AZ 85004-2202 16. Store Capital $2,326,874 8377 E Hartford Dr Ste 100 Scottsdale, AZ 85255 17. Tanner Key Bank Tower $21,500 At City Creek 36 South State Street, Ste 600 Salt Lake City, UT 84111 18. VFI Corporate Finance $2,085,746 2800 East Cottonwood Parkway 2nd Floor Salt Lake City, UT 84121 19. West Star Plaza $42,148 at Fashion Pointe, LLC 1752 East Combe Road Suite #2 Ogden, UT 84403 20. Wyoming Depart $26,916 of Revenue List of LoveLoud Restaurants' Three Unsecured Creditors: Entity Nature of Claim Claim Amount 1. BK Royalty $0 5505 Blue Lagoon Drive Miami, FL 33126 2. Burger King $0 Corporation 5505 Blue Lagoon Drive Miami, FL 33126 3. City National Bank $0 P.O. Box 60938 Los Angeles, CA 90060-0938 MOBIQUITY TECHNOLOGIES: Lind Global Entities Report 9.9% Stake -------------------------------------------------------------- Lind Global Fund II LP, Lind Global Partners II LLC, and Jeff Easton disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Feb. 16, 2023, they beneficially owned 1,505,000 shares of Mobiquity Technologies, Inc., representing 9.9 percent of the Shares outstanding. The reporting persons' ownership consists of (i) 1,080,000 shares of common stock, (ii) 640,430 warrants to purchase shares of common stock, and (iii) 1,720,430 warrants to purchase shares of common stock; however, due to the exercise limitations of the Warrants, the reporting persons' beneficial ownership has been limited to 1,505,000 shares in the aggregate. Each of the Warrants includes a provision limiting the holder's ability to exercise the Warrants if such exercise would cause the holder to beneficially own greater than 9.99% of the Company. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1084267/000092963823000674/schedule13g.htm 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. In its Quarterly Report filed on December 9, 2022, Mobiquity Technologies said it has incurred significant losses since its inception and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. Without sufficient revenues from operations and if the Company does not obtain additional capital, the Company will be required to reduce the scope of its business development activities or cease operations. These factors create substantial doubt about the Company's ability to continue as a going concern within the 12-month period subsequent to December 9, 2022. MOVIA ROBOTICS: Court OKs Cash Collateral Access Thru March 31 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut, Hartford Division, authorized Movia Robotics, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through March 31, 2023. The Debtor requires the use of cash collateral to pay business expenses. The U.S. Small Business Administration, Clean Feet Investors I, LLC, and Webster Bank, N.A. assert an interest in the Debtor's cash collateral. In exchange for the preliminary use of cash collateral by the Debtor and as adequate protection, the SBA, Clean Feet, and Webster Bank are granted replacement or substitute liens as provided in 11 U.S.C. section 361(1) in all post-petition assets of the Debtor and proceeds thereof, excluding any bankruptcy avoidance causes of action. The replacement liens will have the same validity, extent and priority that the SBA, Clean Feet, and Webster Bank possessed on the Petition Date. The Debtor will also provide to the SBA, Clean Feet, and Webster Bank monthly statements reflecting the financial activity of the Debtor. The liens of the SBA, Clean Feet, and Webster Bank and any replacement thereof, and any priority to which the SBA, Clean Feet, and Webster Bank may be entitled or become entitled under section 507(b), will be subject and subordinate to a carve-out of such liens for amounts payable by the Debtor for (i) fees of the United States Trustee under 28 U.S.C. section 1930(a)(6); (ii) wages due the Debtor's employees and (iii) court-approved fees of the Debtor's professionals. A final hearing on the matter is set for March 30 at 12:30 p.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3SPp5xu from PacerMonitor.com. The Debtor projects $79,388 in total revenue and $ 104,784 in total expenses. About Movia Robotics, Inc. Movia Robotics, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Conn. Case No. 23-20024) on January 18, 2023. In the petition signed by Timothy Gifford, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge James J. Tancredi oversees the case. Timothy D. Miltenberger, Esq., at Cohn Birnbaum & Shea, P.C., represents the Debtor as legal counsel. MRVANDY INC: Case Summary & 11 Unsecured Creditors -------------------------------------------------- Debtor: MRVandy Inc. d/b/a Waters Edge Winery d/b/a Waters Edge Winery & Bistro d/b/a Waters Edge Peoria Heights 4450 N. Prospect Road, Suite S-12 Peoria Heights, IL 61616 Business Description: Waters Edge Winery is a craft winery in Central Illinois making eco friendly, low sulfite, international wines. Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Central District of Illinois Case No.: 23-80142 Judge: Hon. Thomas L. Perkins Debtor's Counsel: Sumner A. Bourne, Esq. RAFOOL & BOURNE, P.C. 401 Main Street, Suite 1130 Peoria, IL 61602 Tel: (309) 673-5535 Fax: (309) 673-5537 Email: notices@rafoolbourne.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael R. Vandy as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 11 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PEVTV5I/MRVandy_Inc__ilcbke-23-80142__0001.0.pdf?mcid=tGE4TAMA NAVACORD CORP: Fitch Affirms LongTerm IDR at 'B', Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) for Navacord Corp. and its wholly owned borrower subsidiary, Jones DesLauriers Insurance Management Inc. at 'B'. The Rating Outlook is Stable. In addition, Fitch has downgraded Jones DesLauriers Insurance Management Inc.'s senior revolving credit facility to 'B+'/'RR3' from 'BB'/'RR1', first lien CAD term loans to 'B+'/'RR3' from 'BB-'/'RR2', and has affirmed its senior unsecured notes at 'CCC+'/'RR6'. The downgrades reflect Navacord's high senior secured debt relative to Fitch's assessment of the company's recovery value. The revolving credit facility will now be senior secured versus super senior and will rank pari passu with Navacord's first lien term loans and new senior secured notes. Fitch has assigned a 'B+'/'RR3' rating to the new USD notes being issued by Jones DesLauriers Insurance Management Inc.. Proceeds from the new issuance will be used to partially repay the company's outstanding first lien term loans and fund M&A activities. Navacord's 'B' IDR reflects its resilient organic growth profile and strong operating margin profile. Rating constraints include the company's aggressive financial policy and elevated leverage profile. KEY RATING DRIVERS Solid Market Position: Navacord's position in the Canadian insurance distribution market is solid as the fourth largest commercial brokerage and benefits firm in Canada. The insurance brokerage industry is highly fragmented and competitive, but Navacord realized solid organic revenue growth at least in the mid-single digit range since 2017 (double digit organic growth from 2019-2022). This compares favorably against other Fitch-rated brokers in North America. Fitch expects the industry to grow low-to mid-single digits over time, but certain higher growth brokers such as Navacord may exceed this growth rate. Navacord also sustained solid EBITDA margins in the high-20% to mid-30% range in the past five years. High Leverage: Fitch views high leverage as a limiting factor for the IDR and will likely constrain the rating to the 'B' rating category in the near term. Pro forma for M&A and the pending secured notes issuance, reported EBITDA leverage (debt/EBITDA) is 7.7x while net leverage is in the mid-6.0x range. Fitch expects Navacord will continue to maintain an elevated leverage profile due to its aggressive M&A strategy. Well-managed insurance brokerage firms can tolerate a higher degree of financial leverage versus other Corporates sectors given the industry's high degree of stability throughout the economic cycle, with large brokers having only experienced organic sales declines in the low-single digit range following the 2008 global financial crisis. However, Navacord's leverage is higher versus other Fitch-rated peers. Diversification: Navacord benefits from broad client, broker, and carrier diversification, although it solely operates in Canada. It operates throughout the country, with more than 50,000 commercial clients and its top 20 customers only comprise 4% of revenue. The company's top 10 producers represent less than 10% of revenue, and it is also diversified by insurance carrier partners. Revenue is also fairly well diversified by lines of business, with a mix of commercial property & casualty (P&C), personal P&C, and benefits offerings. Navacord's geographic concentration does not constrain the rating to its current IDR, given its strong market position. However, Fitch believes the company could expand outside Canada over time. Stable Business Model: Navacord operates a fairly predictable business model in an industry that performs well throughout the economic cycle. It was founded in 2014 and has a more limited operating history versus other Fitch-rated brokers, but Fitch expects the industry to exhibit much lower revenue and earnings declines in a recession versus other sectors given the highly sticky nature of insurance. Many large global insurance brokers grew organically each year since 2007, except for a modest decline during 2009, and also grew during the 2020 coronavirus pandemic. However, Navacord faces more unique risk given its geographic exposure solely to the Canadian market. Cash Flow Ratios Constrained: Fitch-defined FCF will likely be constrained over the ratings horizon due to debt-financed M&A that has led to high financial leverage and rising interest costs. Interest coverage is also low in the near term and near Fitch's negative sensitivity threshold for the 'B' IDR. Much of the constrained FCF is a derivative of its M&A roll-up strategy, and Fitch views the underlying cash generation profile of the business as healthy. If the company were to significantly slow its M&A strategy, Fitch believes CF generation would improve materially unless all of excess CF were then diverted to shareholder capital returns. DERIVATION SUMMARY Navacord competes in a fragmented landscape of insurance brokerage and benefits services providers that includes other local/regional companies, national agents and large multi-national brokers. Fitch rates numerous companies in the insurance brokerage industry that are comparable in terms of scale, operating profile and business model. Navacord maintains a top four position among commercial brokers in Canada and has established reasonable size with revenue of more than CAD500 million and annual premium near CAD3.0 billion. However, it remains relatively small and has meaningfully higher financial leverage versus larger global brokers such as Marsh & McLennan Companies, Inc. (A-), Aon plc (BBB+), among others. The 'B' rating is reflective of the company's strong historic growth profile, solid profitability, and diversification among its customers and business segments. This is offset by an aggressive, debt-financed M&A strategy, that has led to high gross leverage. KEY ASSUMPTIONS - Organic revenue growth in the mid-single digit percentage range over the ratings horizon plus contributions from incremental M&A through FY25. - EBITDA margins estimated in the low-30% range, with some forecasted pressures from cost/wage inflation and additional growth investments. Also, Fitch expects further cost normalization as the company returns to post-COVID working practices. - Cash taxes and working capital remain a modest use of cash flow in the next few years. - Fitch assumes Navacord will continue its growth-driven M&A strategy and will incur cash outflows related to purchase and integration costs. Fitch assumes this remains the primary use of cash flow and incremental M&A is funded via internal cash flow and incremental debt. Recovery Analysis - For entities rated 'B+' and below, where default is closer and recovery prospects are more meaningful to investors, Fitch undertakes a tailored, or bespoke, analysis of recovery upon default for each issuance. The resulting debt instrument rating includes a Recovery Rating or published 'RR' (graded from 'RR1' to 'RR6'), and is notched from the Issuer Default Rating accordingly. In this analysis, there are three steps: (i) estimating the distressed enterprise value (EV); (ii) estimating creditor claims; and (iii) distribution of value. - Fitch assumes Navacord would emerge from a default scenario under the going concern approach liquidation. Key assumptions used in the recovery analysis are as follows: (i) Going concern EBITDA - Fitch estimates a going concern EBITDA of approximately CAD138 million, or below the company's current run-rate EBITDA. This lower level of EBITDA considers competitive and/or company-specific pressures that hurt earnings in the future while also considering that its M&A strategy could lead to a much higher EBITDA base before any risk of bankruptcy. (ii) EV Multiple - Fitch assumes a 6.5x multiple, which is validated by historic public company trading multiples, industry M&A and past reorganization multiples Fitch has seen across various industries. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA Leverage, or Debt/EBITDA, sustained below 6.5x; - (CFO-capex)/Debt sustained in low double digits. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Deterioration in operating fundamentals that lead to weaker revenue trends, margin underperformance, and compression of cash flows; - Interest Coverage, or EBITDA/Interest paid, sustained below 1.5x; - (CFO-capex)/Debt sustained near 0% or below; - EBITDA Leverage sustained above 8.0x. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: Navacord has a fairly well-positioned balance sheet pro forma for the new senior notes issuance. The company had roughly CAD $170 million of unrestricted cash on its balance sheet as of October 2022 and is projected to have more following the debt raise. Navacord also has full access to its upsized CAD $150 million senior secured revolving credit facility. Cash needs are fairly minimal given the nature of its business, which has low capital intensity and working capital needs, along with fairly manageable debt amortization and cash taxes. This should provide sufficient liquidity to both operate its current business as well as invest for organic growth and M&A. Debt Structure: Pro forma for the upcoming senior notes issuance, the company's debt capital consists of: (i) a CAD $150 million senior secured revolver (previously super senior priority); (ii) CAD $440 million of senior secured first lien term loans; (iii) USD $500 million of senior secured notes; and (iv) USD $300 million of senior unsecured notes. Its revolver and term loans are floating rate while the senior notes will have a fixed coupon. There are no near-term maturities with the first lien debt maturing in 2028 while the senior notes will mature in 2030. Fitch expects its debt will grow in the future as the company continues its M&A driven growth strategy. ISSUER PROFILE Navacord Corp. is a top 4 commercial insurance broker and benefits provider in Canada, with approximately $3.0 billion of annual premium. It has a network of over 40 offices serving more than 50,000 commercial clients. 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 ----------- ------ -------- ----- Jones Deslauriers Insurance Management Inc. LT IDR B Affirmed B senior secured LT B+ New Rating RR3 senior unsecured LT CCC+ Affirmed RR6 CCC+ senior secured LT B+ Downgrade RR3 BB- super senior LT B+ Downgrade RR3 BB Navacord Corp. LT IDR B Affirmed B NEXTERA ENERGY: Fitch Affirms IDR at 'BB+', Outlook Stable ---------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDR) of NextEra Energy Partners, LP (NEP) and its subsidiary, NextEra Energy Operating Partners, LP (NEP Opco) at 'BB+' with a Stable Rating Outlook. Due to strong legal ties, the IDRs of the two entities are the same. Fitch has also affirmed the 'BB+'/'RR4' rating for the senior unsecured notes at NEP Opco. The 'RR4' denotes average recoveries in an event of default. The senior unsecured notes are absolutely and unconditionally guaranteed by NEP. The notes also have an upstream guarantee from NextEra Energy US Partners Holdings, LLC (US Holdings), which is a subsidiary of NEP Opco. US Holdings is the borrower on the revolving credit facility, which is guaranteed by NEP Opco. NEP's ratings are driven by relatively stable cash flows generated by its portfolio of long-term contracted wind, solar and natural gas pipeline assets and sponsor affiliation with NextEra Energy, Inc. (NextEra; A-/Stable). NEP's ratings also take into account the financial complexity and structural subordination of Holdco debt resulting from limited recourse project debt financings, tax equity and convertible equity portfolio financing (CEPF) structures deployed by the company across its project subsidiaries. The ratings also reflect management's commitment to manage Holdco Debt/Parent Only FFO ratio in a 4.0x-5.0x range. Fitch expects NEP's Holdco FFO leverage ratio to be around 4.0x through 2024. KEY RATING DRIVERS Contractual Cash Flows and Asset Diversity: Fitch views favorably NEP's portfolio of wind, solar and natural gas pipeline assets, which have long-term offtake arrangements with creditworthy counterparties and minimal exposure to either volumetric or commodity risks. As of Dec. 31, 2022, the renewable energy and pipeline projects had a total weighted average remaining contract term of approximately 14 years. The distributions that NEP receives from its project subsidiaries are well diversified by fuel and geography. The distributions are split as approximately 58% from wind assets, 21% from solar and 21% from natural gas pipeline assets based upon 2022 run rate project level cash available for distribution (CAFD). The high proportion of wind in NEP's portfolio is of modest concern given intermittency of the wind resource. However, a wide geographic footprint of its wind portfolio mitigates NEP's exposure somewhat. Overall, the portfolio derives 39% of its CAFD from Western U.S., 14% from Midwest, 18% from South, 24% from Texas and 5% from Northeastern U.S. The concentration risk of the portfolio has materially decreased as NEP's size and scale has increased. NEP currently operates more than 80 projects, of which the top five projects (i.e. NET Mexico Pipeline, Meade Pipeline, Genesis solar, Tusk Wind and Desert Sunlight solar projects) contribute approximately 34% of CAFD. Robust Outlook for Wind and Solar Generation: In Fitch's view, the accelerating decarbonization trend in power generation and customer demand for cleaner generation should continue to drive wind and solar generation in the U.S. The enhanced federal tax incentives provided by the Inflation Reduction Act are expected to support and drive significant growth in renewable technologies for at least a decade. As a result, NEP should find no scarcity of renewable assets to acquire from third parties or its sponsor, NextEra. NextEra currently has more than 19GW of renewables backlog. At the same time, the renewable industry has increasingly become very competitive and equipment costs have increased due to inflation and supply chain issues. Despite recent increases in costs, contracted renewables remain competitive given the increase in natural gas and power prices. In addition, NEP continues to have a competitive cost of capital, which alleviates its concern around spread compression. Increased Complexity with CEPF Financings: NEP is increasingly reliant upon CEPFs to finance its growth and has, since 2018, entered into seven such transactions with large institutional investors to raise approximately $5.4 billion in total proceeds. Fitch views CEPFs as an efficient way for NEP to issue equity, layer in equity issuances over time and limit its exposure to any underperformance of the asset portfolio. A competitive cost of capital is critical to fund acquisitions to meet NEP's 12%-15% distribution growth rate target, which is fairly aggressive compared with the growth rate targeted by its peers. However, the increased use of CEPFs has added financial complexity to the organizational structure and makes NEP reliant on the stability of capital markets and strength of its unit price to execute the buyouts in a timely and cost-effective manner. While NEP has the ability to issue non-recourse project debt to fund the investor buyout in cash as a significant amount of assets in the CEPFs are unencumbered, doing so will negatively affect Parent FFO. Fitch believes it will be prudent for management to maintain sufficient headroom in its Holdco leverage metrics to absorb the resulting leverage creep. In late 2021, NEP successfully completed the early buyout of the 2018 CEPF for approximately $885 million, consistent with stated intention, where 70% of the buyout was financed with equity and the remaining cash with the non-recourse debt. Fitch assumes NEP will continue to use CEPF financing in the future. Counterparty Credit Quality Improving: NEP's portfolio of assets consists of long-term contracted projects with credit worthy counterparties. The weighted average counterparty credit is 'BBB+', based upon Fitch and other rating agencies' ratings an improvement from 'BBB-' in 2021. However, the average counterparty rating has declined from 'A-' since 2017, driven in large part due to the downgrade in ratings for the California investor owned utilities. PG&E and Southern California Edison Company comprise 25% of expected 2022 run rate CAFD. The ratings for Pemex, which comprises 9% of expected 2021 run rate CAFD, have also declined to 'BB-' from 'BBB+' in 2016. Both California utilities have been recently placed on a positive outlook and NEP also continues to add new off-takers with high investment grade ratings. The contracted renewables portfolio of wind and solar assets acquired in late 2022 has an average customer credit rating of 'A'. Metrics in Line: The ratings of NEP and NEP Opco reflect the structural subordination of their debt to the limited recourse debt or tax equity at the project level. The project debt for renewable projects is typically sized to yield a debt service coverage ratio (DSCR) greater than 1.2x and generate a low 'BBB-'/'BBB' rating. The debt typically matures within the expiration date of the long-term contracts on any project. Most recent DSCRs provided to Fitch by NEP indicate that all projects with limited recourse project debt financings are performing well in excess of their DSCR thresholds. Fitch expects Holdco Debt/Parent Only FFO ratio to be around 4.0x through 2024, which compares favorably with management's target of 4.0x-5.0x. Fitch defines Parent Only FFO as run rate project distributions less Holdco G&A expenses, fee for management service agreement, credit fees and Holdco debt service costs. In its calculation of Holdco debt, Fitch includes all debt held at intermediate holding companies. At present, this adjustment includes $205 million of Holdco financing at STX Holdings as well as a $270 million revolver upon draw, which is expected to fund the cash portion of the buyout for STX Midstream CEPF in 2023. Fitch assumes NEP will issue non-recourse project debt at the asset level to fund the cash buyout portions of other CEPFs, which is not included in our Holdco debt calculation. Strong Sponsor Support: NEP benefits from its affiliation with NextEra, which is the largest renewable developer in the U.S. Aside from the drop down of 990MWs at IPO, NEP has purchased approximately 5.0GWs of additional wind and solar assets from NextEra (about 1.2 GW of long-term contracted renewables and storage was acquired in 2022). NextEra has demonstrated other forms of sponsor support such as the structural modification to the Incentive Distribution Rights (IDR) fee structure executed in 2022, where fees were flattened at $157 million as of 3Q22, providing NEP with more flexibility to finance its future growth. NextEra provides to NEP its management, operational and administrative services via various service agreements and also financial management services through a cash sweep and credit support agreement. These agreements will continue to exist subject to the determination by NEP Board. The management service agreement (MSA) between NextEra and NEP has a 20-year contract life and cannot be terminated, except for cause. However, NEP's board will have the ability to oversee the MSA. NEP's Structural Tax Advantages: Even though NEP is a C corporation for U.S. federal income tax purposes, it is not expected to pay meaningful federal income taxes for at least 15 years because of NOLs generated through MACRS depreciation benefits. NEP distributions up to an investor's outside basis are expected to be characterized as non-dividend distributions or return of capital for at least the next eight years. This makes NEP competitive to Master Limited Partnerships as a yield plus growth vehicle. DERIVATION SUMMARY Fitch views NEP's ratings to be positively positioned compared to those of Atlantica Sustainable Infrastructure Plc (Atlantica; BB+/Stable) and Terraform Power (TERPO; BB-/Stable) due to favorable geographic exposure, long-term contractual cash flows with minimal regulatory risk, and association with a strong sponsor. These factors more than offset NEP's relative higher leverage, aggressive distribution growth strategy and weaker asset composition owing to a larger concentration of wind assets. All three have strong parent support. Fitch considers NEP best positioned owing to NEP's association with NextEra, which is the largest renewable developer in the U.S. This provides visibility to NEP's LP distribution per unit growth targets, which at 12%-15% are more aggressive than those of Atlantica's (5%-8%). TERPO has been taken private and is no longer subject to public growth targets. TERPO benefits from having Brookfield Asset Management (BAM; A-/Stable) as a sponsor. Algonquin Power & Utilities Corp. (BBB/Stable) has 44.2% ownership interest in Atlantica. Atlantica's portfolio benefits from a large proportion of solar generation assets that exhibit less resource variability. In comparison NEP's portfolio consists of a larger exposure to wind MWs. TERPO's utility scale portfolio consists of 43% solar and 57% wind. NEP's concentration in wind is mitigated to certain extent by its diverse geographic footprint. Fitch views NEP's geographic exposure in the U.S. (100%) favorably as compared to TERPO's (68%) and Atlantica's (30%). Atlantica's long-term contracted fleet has a remaining contracted life of 15 years, higher than NEP's 14 years and TERPO's 13 years. NEP's forecasted credit metrics are stronger than TERPO's but weaker than Atlantica's. Fitch forecasts NEP's Holdco debt to Parent Only FFO ratio of 4.0x through 2024 compared with mid-5.0x for TERPO and 3.5x-3.8x for Atlantica. Fitch rates NEP, Atlantica and TERPO based on a deconsolidated approach since their portfolio comprises assets financed using non-recourse project debt or with tax equity. KEY ASSUMPTIONS Fitch has used P50 to determine its rating case production assumption and P90 to determine its stress case production assumption; Buyout right exercised with CEPF and NEP to pay 70% of the buyout for STX Midstream and CEPF 2 in common units with the balance paid in cash; NEP Pipeline buyout at 100% in common units; Acquisition of operational and contracted assets over 2023-2024 to meet 12% to 15% distribution per unit growth; Acquisition CAFD toward the lower end of 8%-10% range; Acquisitions funded with CEPFs and Holdco debt such that target capital structure is maintained; Intermediate holding company debt treated as on credit, which includes $200 million at STX Holdings and $270 million non-recourse revolving credit facility; None of the project debt treated on-credit, which includes Fitch's assumption of future project debt issuances to fund the cash portion of CEPFs buyout. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - The structural subordination of the Holdco debt to the non-recourse project debt, tax equity and CEPFs, as well as management's 4.0x-5.0x target Holdco leverage ratio caps the IDR at 'BB+'. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Growth strategy underpinned by aggressive acquisitions, addition of assets in the portfolio that bear material volumetric, commodity or interest rate risks; - Material underperformance in the underlying assets that lends variability or shortfall to expected cash flow for debt service; - Lack of access to equity markets to fund growth that may cast uncertainty regarding NEP's financial strategy; - Higher than expected use of cash to fund the buyout of investors in CEPFs; - Distribution payout ratio approaching or exceeding 100%; - Holdco leverage ratio exceeding 5.0x on a sustainable basis. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: NEP has a $2.5 billion (increased from $1.25 billion in May 2022) revolving credit facility that matures in February 2027 (in February 2022, the maturity date was extended from February 2026). The credit facility provides for up to $400 million of LC borrowing capacity. NEP has an accordion in its revolving facility up to a total commitment size of $2.0 billion. The facility provides flexibility for NEP to finance acquisitions partly through revolver borrowings, which can be subsequently termed out through equity and debt capital market issuances. As of Dec. 31, 2022, NEP had no outstanding issuance under its revolving credit facility. During the fourth quarter, NEP entered into a new CEPF for approximately $805 million with an implied cash coupon of roughly 2.8%. In December, NEP raised approximately $500 million in new convertible notes with a 2.5% coupon. ISSUER PROFILE NEP is a growth-oriented limited partnership that acquires, manages and owns contracted clean energy projects with stable long-term cash flows. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch includes debt held at intermediate holding companies in its Holdco debt calculations. 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 ----------- ------ -------- ----- Nextera Energy Operating Partners, LP LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ NextEra Energy Partners, LP LT IDR BB+ Affirmed BB+ NGI EAST BAY: Case Summary & Six Unsecured Creditors ---------------------------------------------------- Debtor: NGI East Bay Portfolio, LLC 490 43rd Street, Unit 118 Oakland, CA 94609 Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-40243 Judge: Hon. William J. Lafferty Debtor's Counsel: Chris Kuhner, Esq. KORNFIELD, NYBERG, BENDES, KUHNER & LITTLE P.C. 1970 Broadway, Ste 600 Oakland, CA 94612 Tel: 510-763-1000 Fax: 510-273-8669 Total Assets: $1,249 Total Liabilities: $13,166,567 The petition was signed by Randall Miller as managing member. 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/PKRZTDI/NGI_East_Bay_Portfolio_LLC__canbke-23-40243__0001.0.pdf?mcid=tGE4TAMA NGL ENERGY: To Redeem $203.4 Million of 7.5% Senior Notes due 2023 ------------------------------------------------------------------ NGL Energy Partners LP announced that it intends to call for redemption, all $203,400,000 aggregate outstanding principal amount of its 7.5% Senior Notes due 2023. On March 31, 2023, registered holders of such Notes will receive a redemption payment of equal to 100% of the principal amount of such Notes; and accrued and unpaid interest on such Notes, if any, to the Redemption Date. Upon payment in full on the Redemption Date, interest on the Notes will cease to accrue on and after the Redemption Date. Following the payment on the Redemption Date, there will be no Notes that remain outstanding. About NGL Energy NGL Energy Partners LP is a diversified midstream energy partnership that transports, treats, recycles and disposes of produced water generated as part of the energy production process as well as transports, stores, markets and provides other logistics services for crude oil and liquid hydrocarbons. Originally formed in September 2010, the Company is a Delaware master limited partnership and its business is currently organized into the following three segments: (a) Water Solutions segment; (b) Crude Oil Logistics segment; and (c) Liquids Logistics segment. NGL Energy reported a net loss of $184.10 million for the year ended March 31, 2022, a net loss of $639.19 million for the year ended March 31, 2021, and a net loss of $398.78 million for the year ended March 31, 2020. * * * As reported by the TCR on Nov. 25, 2022, S&P Global Ratings lowered its issuer credit rating (ICR) on NGL Energy Partners L.P. (NGL) to 'CCC+' from 'B-'. S&P said, "The downgrade reflects our expectation that although NGL has sufficient cash flow to pay down the $400 million of 2023 senior unsecured notes before they mature, liquidity is tight." NOBLE HEALTH: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Noble Health Real Estate II LLC 850 S Hospital Dr. Fulton, MO 65251 Business Description: The Debtor is engaged in activities related to real estate. Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Western District of Missouri Case No.: 23-20100 Judge: Hon. Dennis R. Dow Debtor's Counsel: Ronald S. Weiss, Esq. Joel Pelofsky, Esq. BERMAN DELEVE KUCHAN & CHAPMAN, LLC 1100 Main, Suite 2850 Kansas City, MO 64105 Tel: (816) 471-5900 Fax: (816) 842-9955 Email: rweiss@bdkc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Zev M. Reisman as general manager/corporate secretary. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: https://www.pacermonitor.com/view/LZ4WBHY/Noble_Health_Real_Estate_II_LLC__mowbke-23-20100__0001.0.pdf?mcid=tGE4TAMA NORTHERN REGIONAL HOSPITAL: S&P Cuts 2017 Rev. Bond Rating to 'BB+' ------------------------------------------------------------------- S&P Global Ratings lowered its long-term rating on Northern Hospital District of Surry County (NHDSC), N.C.'s (d.b.a. Northern Regional Hospital) series 2017 revenue bonds to 'BB+' from 'BBB'. The outlook is negative. "The lower rating is driven by continued deterioration in NHDSC's financial profile, with operating losses widening and unrestricted reserves continuing to decline from our last review," said S&P Global Ratings credit analyst Patrick Zagar. This contrasts with management's expectation for its financial improvement initiatives and accounts receivable normalization to improve key financial measures by fiscal 2022 year-end (ended Sept. 30). "NHDSC finished the year in violation of its 1.0x debt service coverage covenant and, though a waiver is expected to be formally granted imminently, this also underpins the downgrade and negative outlook," added Mr. Zagar. NRG ENERGY: Fitch Affirms LongTerm IDR at 'BB+', Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' Long-Term Issuer Default Rating of NRG Energy, Inc. The Rating Outlook is Stable. Fitch has assigned a 'BB-'/'RR6' rating to NRG's issuance of $650 million series A fixed-rate reset cumulative redeemable perpetual preferred stock. Additionally, Fitch has assigned 'BBB-'/'RR1 ratings to NRG's issuance of $740 million senior secured first lien notes due 2033. The affirmation of NRG's rating considers the company's integrated retail platform, reduction in commodity sensitive business, and substantial cash generating ability. The rating also incorporates NRG's announced $2.6 billion ($12 per share) all-cash acquisition of Vivint Smart Home, Inc. (not rated), which will be predominately debt financed and the assumption of $2.7 billion in Vivint debt. The transaction is expected to close in March 2023. Today's issuance is consistent with Fitch's expectations for financing the transaction. Post-acquisition, Fitch expects NRG to allocate FCF as necessary to return and maintain EBITDA gross leverage to within Fitch's specified rating threshold of 3.0x-3.5x. KEY RATING DRIVERS Allocation of Equity Credit: The Series A preferred stock will receive 50% equity credit based upon Fitch's "Corporate Hybrids Treatment and Notching Criteria" dated Nov. 12, 2020. The features supporting 50% equity credit include an ability to defer dividend payments for at least five years and cumulative feature of deferred dividends. Ongoing Business Transition: Fitch believes NRG's proposed acquisition of Vivint is another step in the company's transformation of its business model from less commodity-based to more customer-focused. Vivint is a smart home technology and service company, with a suite of product offerings, some of which are directly complementary to NRG's customer facing energy marketing platform. Over the years, NRG has significantly transitioned from its origins as a power generation company. Vivint Largely Debt Financed: NRG plans to fund its $2.6 billion all-cash purchase of Vivint through mix of debt, hybrid securities and excess cash-on-hand. Vivint will become a restricted, non-guarantor subsidiary of NRG and its existing capital structure will remain in place. While NRG debt is technically subordinated to Vivint debt, Fitch does not anticipate significant restrictions in NRG's ability to upstream cash. As a result, Fitch has evaluated NRG's credit metrics on a consolidated basis. While 2023 EBITDA gross leverage is expected to be above the downgrade threshold of 3.5x, the metric is expected to improve to be within the downgrade rating threshold over 2024-2025. NRG recently announced that it is targeting $500 million in asset sales during 2023. Improved Cash Flow Quality: NRG's acquisition of Vivint is a near-term leveraging transaction; however, Fitch views the combination as qualitatively positive. The acquisition will add almost two million subscribers, many in additional geographic regions. As a result, NRG's concentration in Texas, which is its largest market will decline to 45% in terms of residential customers from its current 53%. NRG's business mix will also be more diversified. Fitch expects Vivint to contribute approximately 22% of the combined company's EBITDA. Also, favorably, generation will continue to decline to less than 20% of total EBITDA. Vivint's significantly longer contractual customer arrangements and longer contract tenors are also a positive. Expected Balanced Use of FCF: Fitch expects NRG to continue its publicly articulated capital allocation strategy of returning 50% of excess cash to equity investors in the form of dividends or stock buybacks with the balance used for business growth. Fitch expects NRG to continue reducing debt as necessary to maintain or improve its current rating. NRG has publicly stated its intention to achieve what it considers investment-grade metrics of net debt/adjusted EBITDA of 2.50x-2.75x by late 2025-2026. Commodity Exposure: As an integrated energy marketer, NRG seeks to hedge its expected load with either owned-generation or third-party suppliers. NRG is considered short generation in most of its markets. Unexpected differences in load forecasts, wholesale power markets, commodity prices, and plant operations could have significant impact on the company's cash flow. Fitch expects NRG to appropriately manage such risks. Failure to do so in a manner that significantly reduces cash generating ability is likely to result in a rating action. Criteria Variation for P-Caps: Fitch excludes NRG's pre-capitalized trust securities (P-Caps) issued by Alexander Funding Trust from Fitch's leverage and interest coverage metrics, which is a variation from the Corporate Rating Criteria's definition of total debt. Absent the exercise of the issuance right, P-Caps are treated as off-balance sheet for analytical purposes. If NRG were to exercise issuance rights, the amount of debt issued to the trust would be included in NRG total debt calculation and therefore its credit metrics. The P-Caps serve as a supplemental form of liquidity for NRG. Sustainability Focus: The company has expanded its sustainability program and is accelerating its greenhouse gas (GHG) emissions reduction goals to align with the Intergovernmental Panel on Climate Change 1.5 degree imperative. In September 2019, NRG announced its pledge to achieve a 50% reduction in GHG by 2025 and net-zero by 2050, from a 2014 baseline. To underscore its commitment to GHG reduction, the company has amended its corporate credit agreement to include a sustainability-linked metric and issued sustainability-linked bonds. DERIVATION SUMMARY NRG is well positioned relative to Vistra (BB+/Negative) and Calpine Corporation (B+/Stable). NRG's acquisition of Vivint will continue the company's transformation from its origins as a power generator and provide additional revenue channels. The acquisition further diversifies NRG's revenue stream compared with its two peers. As a result, NRG's concentration in Texas, which is its largest market, will decline to 45% in terms of residential customers from its current 53%. Vistra's portfolio is less diversified geographically, with 70% of its consolidated EBITDA coming from operations in Texas. Like NRG, Vistra benefits from ownership of large and well-entrenched retail electricity businesses in Texas. Calpine's retail business is much smaller. NRG is short generation compared to Vistra and Calpine, and serves load from sources other than its own generation. NRG's leverage will increase as a result of the Vivint acquisition. Fitch expects the company's 2023 EBITDA gross leverage to be above the downgrade threshold of 3.5x. Fitch expects NRG to allocate FCF as necessary to return and maintain leverage within rating thresholds of 3.0x-3.5x. Fitch projects Vistra's leverage to decline to 3.5x and Calpine's leverage to be in mid-to high-4.0x range in 2022. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer: - Completion of Vivint acquisition for $2.6 billion and assumption of $2.7 billion debt; - Acqusition funded with $2.3 billion debt and $600 million cash; - Dividend growth of 7%-9% as per management's publicly stated forecast; - NRG retail gross margins remain in-line with current expectations; - Continued practice of hedging retail energy load at signing; - Return to service of W.A. Parish Unit 8 by end of 2Q23; - Capacity revenues per past auction results; - Debt pay down of $900 million in 2023, thereafter consistent with publicly stated target net debt/adjusted EBITDA of 2.50x-2.75x. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade - EBITDA gross leverage under 3.0x on a sustainable basis; - Successful integration of newly acquired business and ability to meet synergy targets; - Balanced allocation of FCF that maintains balance sheet flexibility and leverage within stated goal. Factors that could, individually or collectively, lead to negative rating action/downgrade - EBITDA gross leverage exceeding 3.5x on a sustainable basis; - Weaker than expected power prices or capacity auctions in core regions; - Inadequate liquidity sources to meet potential collateral and working capital needs; - Unfavorable changes in regulatory constructs or rules in NRG's markets; - Aggressive growth or capital allocation strategy that reduces stability of cash flow; - Failure to appropriately hedge retail sales obligations; - Unexpected governance factors at operating subsidiaries and/or pre-acquisition obligations that prohibit the free flow of cash to NRG. LIQUIDITY AND DEBT STRUCTURE NRG amended its revolving credit agreement in February 2023, increasing the capacity by $600 million and extending the maturity of a portion of commitments to February 2028. The incremental commitment brings the total capacity of the revolving credit facility to $4.275 billion. As of Dec. 31, 2022, NRG had a consolidated cash balance of $430 million. As of the same date, the company had no borrowings outstanding and $4.0 billion letters of credit issued under its revolving credit facility and collective collateral facilities. NRG has a $600 million senior secured first lien note maturing in 2024 and $500 million maturing in 2025. ISSUER PROFILE NRG is an unregulated, integrated power company producing and selling electricity, natural gas, and related products in major competitive power markets in the U.S. and Canada. Criteria Variation Fitch looks to its Corporate Rating Criteria dated Oct. 28, 2022, which outlines and defines a variety of quantitative measures used to assess credit risk. As per criteria, Fitch's definition of total debt is all encompassing. However, Fitch's criteria is designed to be used in conjunction with experienced analytical judgment, and as such, adjustments may be made to the application of the criteria that more accurately reflects the risks of a specific transaction or entity. In 2020, NRG established Alexander Funding Trust, a Delaware statutory trust (SPV) that issued $900 million of P-Caps redeemable Nov. 15, 2023. The trust invested the sale of the P-Caps in a treasury portfolio. Under a three-year put option agreement, NRG has the right, from time to time, to issue to the trust and to require the trust to purchase from NRG, on one or more occasions up to $900 million aggregate principal amount of NRG's 1.841% senior secured first lien notes due 2023. NRG pays the SPV a periodic premium in exchange for the issuance by the SPV of cash collateralized LCs on NRG's behalf. As of Dec. 31, 2021, $873 million LCs were issued on the LC agreement. Under GAAP accounting the SPV is considered off balance sheet. In addition to being used for LC postings, P-Caps can be used as a contingent source of liquidity; however, NRG nor Fitch expects this to occur. Fitch does not consider NRG's P-Caps debt, which is a variation from the Corporate Rating Criteria's definition of total debt. Absent the exercise of the issuance right, P-Caps are treated as off-balance sheet for analytical purposes and excluded from Fitch's leverage and interest coverage metrics. If NRG were to exercise issuance rights, the amount of debt issued to the trust would be included in NRG total debt calculation and therefore its credit metrics. 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 ----------- ------ -------- ----- NRG Energy, Inc. LT IDR BB+ Affirmed BB+ senior secured LT BBB- New Rating RR1 senior unsecured LT BB+ Affirmed RR4 BB+ senior secured LT BBB- Affirmed RR1 BBB- preferred LT BB- New Rating RR6 Alexander Funding Trust senior secured LT BBB- Affirmed RR1 BBB- OAKWOOD DREAMS: SARE Files for Chapter 11 Bankruptcy ---------------------------------------------------- Oakwood Dreams LLC filed for chapter 11 protection in the Middle District of Arizona. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor later filed an amended petition to (i) disclose that it is a Single Asset Real Estate, and (ii) remove its election to proceed under Subchapter V. According to court filings, Oakwood Dreams disclosed total assets of $3,914,700 against total liabilities of $2,493,877 owed to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is slated for March 28, 2023 at 9:00 a.m. About Oakwood Dreams Oakwood Dreams LLC owns a single-family home located at 21 E. Oakwood Hills Drive, Chandler, AZ valued at $3.41 million based on estimate provided by Zillow. Oakwood Dreams LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-01008) on Feb. 20, 2023. In the petition filed by Dallas Baldry, Trustee of Bella Vita Ventures Trust, the Debtor reported total assets of $3,914,700 and total liabilities of $2,493,877. The Debtor is represented by: Chris D. Barski, Esq. BARSKI LAW PLC 9375 E. Shea Blvd., Ste. 100 Scottsdale, AZ 85260 Tel: (602) 441-4700 Fax: (602) 680-4305 Email: cbarski@barskilaw.com OEM SYSTEMS: Hires Harris Law Practice as Bankruptcy Counsel ------------------------------------------------------------ OEM Systems Company Inc. seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Harris Law Practice LLC as its bankruptcy attorneys. The firm's services include: (a) examining and preparing the records and reports as required by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, and Local Bankruptcy Rules; (b) preparing applications and proposed orders to be submitted to the court; (c) identifying and prosecuting claims and causes of action asserted by the Debtor on behalf of the estate; (d) examining proofs of claim anticipated to be filed and the possible prosecution of objections to certain of such claims; (e) advising the Debtor and preparing documents in connection with the contemplated ongoing operation of the Debtor's business, if any; (f) advising and preparing a plan of reorganization and related documents; and (g) assisting the Debtor in performing other official functions. The firm's hourly rates are as follows: Stephen R. Harris, Esq. $550 per hour Norma Guariglia, Esq. $400 per hour Paraprofessional $150 - $300 per hour The Debtor paid $5,000 to the firm as a retainer fee. Mr. Harris, the firm's attorney 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. The firm can be reached at: Stephen R. Harris, Esq. Harris Law Practice, LLC 6151 Lakeside Drive, Suite 2100 Reno, NV 89511 Tel: (775) 786-7600 Email: steve@harrislawreno.com About OEM Systems Company OEM Systems Company Inc. -- https://oemsystems.com -- manufactures custom install speakers and accessories including in-wall, in-ceiling, landscape, cabinet, LCRS and theatre speakers. OEM Systems Company Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-50049) on January 27, 2023. In the petition filed by Tony L. Gable, as president, the Debtor reported assets and liabilities between $1 million and $10 million each. The case is overseen by Honorable Bankruptcy Judge Natalie M Cox. Nathan F. Smith is the Subchapter V trustee appointed in the case. The Debtor is represented by Stephen R. Harris, Esq. at Harris Law Practice LLC. PARLEE CYCLES: Court OKs Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, authorized Parlee Cycles, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. Bank Gloucester, Mass Growth Capital Corp., and the U.S. Small Business Association assert liens on all assets of the Debtor. As adequate protection, Bank Gloucester, MGCC and the SBA are granted continuing replacement liens and security interests to the same validity, extent and priority that each would have had in the absence of the bankruptcy filing. The Debtor will make monthly adequate protection payments on account of its obligations to Bank Gloucester in the amount of $7,309, MGCC in the amount of $369 and the SBA in the amount of $3,372 in accordance with the terms of the Budget. A further hearing on the matter is set for May 4, 2023 at 10:30 a.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3Jk7Amd from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $29,775 for the week ending March 3, 2023; $36,767 for the week ending March 10, 2023; $97,759 for the week ending March 17, 2023; $51,795 for the week ending March 24, 2023; and $34,134 for the week ending March 31, 2023. About Parlee Cycles, Inc. Parlee Cycles, Inc. was founded in 2000 by its principal, Bob Parlee. Parlee Cycles, a manufacturer of high-performance bikes located in Beverly, Massachusetts, pioneered a unique process to create the first fully customizable carbon-fiber road racing frames. Parlee prides itself on leading the industry with breakthrough designs and innovations to improve the ride quality and performance of road bicycles. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Banker. D. Mass. Case No. 23-10161) on February 6, 2023. In the petition signed by Robert K. Parlee, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Christopher J. Panos oversees the case. David B. Madoff, Esq., at Madoff & Khoury LLP, represents the Debtor as legal counsel. PAXE LATITUDE LP: Ends in Filing Chapter 11 Bankruptcy Protection ----------------------------------------------------------------- Paxe Latitude LP filed for chapter 11 protection in the District of New Jersey. According to Paxe Latitude, its business is "single asset real estate." That asset is a property in the City of Columbus containing two residential apartment towers, now known as Latitude Five25. Paxe Latitude purchased the property in 2021, funded through a nearly $16 million loan from Lument's predecessor-in-interest. In addition to an advance of purchase money for the acquisition, the loan made more than $3 million available to Paxe Latitude for the repair and upgrade of Latitude Five25 (which Paxe Latitude has not drawn). Paxe Latitude secured the loan with, among other things, a mortgage granting a first lien on the Latitude Five25 property. Lument Commercial Mortgage Trust is the current mortgagee of record and holder of all of the lender's rights and obligations. Despite the influx of available cash, Paxe Latitude oversaw the deterioration of Latitude Five25 and repeatedly defaulted on its loan obligations. These failures prompted two lawsuits against Paxe Latitude over the course of 2022. In January, the City brought an action for preliminary and injunctive relief in the Franklin County Municipal Court, Environmental Division. Among other things, the City sought a declaration that Latitude Five25 is a public nuisance and an order that Paxe Latitude take steps to improve the property. In October, Lument filed a lawsuit in the Court of Common Pleas of Franklin County, Ohio, seeking, among other relief, foreclosure of the mortgage and the appointment of a receiver to protect and preserve Latitude Five25 and the health and safety of its tenants. After Paxe Latitude's Chapter 11 filing, the City of Columbus and Lument Commercial Mortgage Trust immediately filed motions to dismiss the Debtor's Chapter 11 case. "This debtor is not a disaster waiting to happen. It is a disaster that has already happened. And it must be fixed. Now. The only way to do that is to dismiss the case, or grant broad relief from the automatic stay to allow the City of Columbus, Ohio, and Lument Commercial Mortgage Trustto remediate and repair the debtor's sole property through the appointment of a receiver," Lument said in court filings. "Held in contempt by an Ohio court and facing the imminent appointment of a receiver to oversee its only asset, debtor Paxe Latitude LP has rushed across the country in a last-ditch effort to avoid the dire consequences of its own misconduct. Although Chapter 11 is meant to provide relief to distressed entities and an opportunity to reorganize their affairs, its protections cannot be invoked where the debtor is unable to take advantage of the opportunity bankruptcy offers and merely seeks a tactical advantage in ongoing litigation. Bankruptcy protections are all the more inappropriate where the bankruptcy is delaying the remediation of a public nuisance and the ongoing harm to tenants that the debtor's actions have created. That is exactly what we have here." According to court filings, Paxe Latitude estimates between $10 million and $50 million in debt owed to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is slated for March 16, 2023 at 11:00 a.m. About Paxe Latitude LP Paxe Latitude LP is a Single Asset Real Estate as defined in 11 U.S.C. Section 101(51B). Paxe Latitude LP filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 23-11337) on Feb. 21, 2023. In the petition filed by David Goldwasser, Member of Manager of General Partner, reported assets and liabilities between $10 million and $50 million each. The Debtor is represented by: Eric H. Horn, Esq. A.Y. STRAUSS LLC 101 Eisenhower Parkway, Suite 412 Roseland, NJ 07068 Tel: 973-287-5006 Email: ehorn@aystrauss.com PERFORMANCE POWERSPORTS: Faces Judge's Pushback on Ch. 11 Releases ------------------------------------------------------------------ Becky Yerak of THe Wall Street Journal reports that Performance Powersports Group Inc. won court approval for some chapter 11 financing and its sale procedures, after it revised them when a bankruptcy judge pushed back against "aggressive" requests from the company. The dirt bike and all-terrain vehicle supplier, which sought protection from creditors last January 2023, had been seeking a liability release for its owner, private-equity firm Kinderhook Industries LLC, as part of a final financing package the investment firm offered. On Feb. 27, 2023, the Court entered an order approving, among other things, the Stalking Horse Purchase Agreement and the Bidding Procedures, which establish the key dates and times related to the transaction and the auction, if necessary, to determine the successful bidder. Absent higher and better offers CPS USA Acquisition, LLC, the stalking horse bidder, has agreed to purchase the Debtors' assets for (i) a credit bid of the outstanding obligations under the DIP Credit Agreement in the amount of $10,000,000, (b) the payment of an amount in cash equal to $500,000, (c) the assumption by the Buyer of the outstanding obligations under the Prepetition First Lien Credit Agreement; (d) the assumption by Buyer of certain assumed liabilities; and (e) the Wind-Down Amount of up to $600,000. The deadline to submit a qualified bid is March 7, 2023 at 5:00 p.m. (prevailing Eastern Time). If the Debtors receive at least one additional qualified bid which includes terms that are higher or otherwise better than those contemplated by the Stalking Horse Purchase Agreement prior to the bid deadline, then an auction will commence on March 9, 2023, at 10:00 a.m. (prevailing Eastern Time) at the offices of Klehr Harrison Harvey Branzburg LLP, at 919 N. Market Street, Suite 100, Wilmington, Delaware 19801. A hearing to consider the proposed transaction will be held before the Court no later than March 20, 2023 at 10:00 a.m. (prevailing Eastern Time), or such other date as determined by the Court, at 824 North Market Street, 3rd Floor, Wilmington, Delaware 19801. On Feb. 27, 2023, the Court entered an order authorizing the Debtors to access a junior secured "new money" term loan credit facility from Tankas Funding VI, LLC, in an aggregate principal amount of $10 million. About Performance Powersports Group Investor Performance Powersports Group Investor, LLC -- https://colemanpowersportsusa.com/ -- is a leading producer of entry-level powersports equipment sold through "Big Box" retailers. Performance Powersports is in the business of adventure, selling dirt bikes, go-karts, ATVs, golf carts, and the like to retailers throughout the US. PPGI and three affiliates, including Performance Powersports Group Holdings, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10047) on Jan. 16, 2023. In the petition signed by its chief financial officer, Ken Vanden Berg, PPGI disclosed $100 million to $500 million in both assets and liabilities. The petition states that funds will be available to unsecured creditors. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Klehr Harrison Harvey Branzburg LLP as legal counsel and Omni Agent Solutions as claims, noticing and administrative agent. Triple P RTS, LLC and Triple P Securities, LLC, wholly owned firms by Portage Point Partners, LLC, are the Debtors' restructuring advisor and investment banker, respectively. Tankas Funding VI, LLC, as DIP lender, is represented by Kirkland & Ellis LLP. PHYSIQ INC: Seeks to Hire Cozen O'Connor as Bankruptcy Counsel -------------------------------------------------------------- PhysIQ Inc. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Cozen O'Connor as its counsel. The firm's services include: (a) advising the Debtor with respect to its rights, powers and duties in connection with the administration of its estate and the operation of its business; (b) advising the Debtor with respect to asset dispositions, including sales, abandonment, and assumption or rejection of executory contracts and unexpired leases, and taking necessary actions to effectuate those dispositions; (c) assisting the Debtor in the negotiation, formulation and drafting of a Chapter 11 plan; (d) taking necessary actions with respect to claims that may be asserted against the Debtor and property of its estate; (e) preparing legal documents; (f) representing the Debtor with respect to inquiries and negotiations concerning creditors and property of its estate; (g) initiating, defending or otherwise participating in all proceedings before the bankruptcy court or any other court of competent jurisdiction; and (h) performing other necessary legal services. The firm's hourly rates are as follows: Thomas J. Francella, Jr., Partner $755 Robert M. Fishman, Partner $995 Peter J. Roberts, Partner $735 Marla S. Benedek, Associate $560 Sandi Shidner, Paralegal $335 Robert Fishman, Esq., one of the firm's attorneys who will be handling the case, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Robert M. Fishman, Esq. Marla S. Benedek, Esq. Cozen O'Connor 123 North Wacker Drive, Suite 1800 Chicago, IL 60606 Tel.: (312) 382-3100 Fax: (312) 382-8910 Telephone: (302) 295-2000 E-mail: tfrancella@cozen.com E-mail: mbenedek@cozen.com About PhysIQ Inc. PhysIQ Inc. -- https://www.physiq.com/ -- aims to deliver on the promise of scalable personalized medicine by applying artificial intelligence to physiological data and patient reported outcomes, collected in near real-time, from any wearable biosensor. PhysIQ Inc. sought protection under Subchapter V of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10102) on January 26, 2023. In the petition filed by Gary W. Conkrigth, as CEO, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The Honorable Bankruptcy Judge Brendan Linehan Shannon handles the case. Natasha Songonuga of Gibbons, P.C., has been appointed as Subchapter V trustee. The Debtor is represented by Thomas Joseph Francella, Jr., Esq. at Cozen O'Connor. PLAYA HOTELS: Swings to $56.7 Million Net Income in 2022 -------------------------------------------------------- Playa Hotels & Resorts N.V. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing net income of $56.71 million on $856.26 million of total revenue for the year ended Dec. 31, 2022, compared to a net loss of $89.68 million on $534.64 million of total revenue for the year ended Dec. 31, 2021. For the three months ended Dec. 31, 2022, the Company reported a net loss of $14.34 million on $210.80 million of total revenue compared to net income of $202,000 on $176.80 million of total revenue for the three months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $2.07 billion in total assets, $1.40 billion in total liabilities, and $664.86 million in total shareholders' equity. Bruce D. Wardinski, chairman and CEO of Playa Hotels & Resorts, commented, "The fourth quarter of 2022 capped off the best year in Playa's history, further confirming our view that there is a growing market for the attractive value proposition of the all-inclusive category. Our fourth quarter results showed broad-based strength across all our geographies with the most notable standout for Playa being the acceleration of the recovery in Jamaica. Adjusting for changes in the portfolio, underlying ADR growth compared to 2019 in Jamaica during the fourth quarter made meaningful headway versus our other segments, but still has room to grow, as this was our best performing segment prior to the pandemic. "In the Dominican Republic, following the disruption and subsequent repair work at our resorts due to hurricane Fiona, the resorts were reopened as planned during the fourth quarter with minimal impact on booking demand for 2023. We have also added two properties to the Playa managed portfolio in the Dominican Republic, the Jewel Palm Beach and Jewel Punta Cana, which were previously owned by Playa and managed by a third-party. While there will be some disruption during the first half of 2023 related to the transition of these properties, we believe they will ramp nicely as we progress through the year and execute our sales strategy. "Demand has remained robust so far in 2023, with our weekly bookings for our Playa owned and managed resorts reaching new highs. Our revenue on the books for the first half of 2023 at our Playa owned and managed resorts, excluding the recently repositioned Jewel Punta Cana and Jewel Palm Beach, is up over 30%, with ADR growth driving roughly one-third of the increase. Early indications for the summer also look fantastic, with ADR continuing to show year-over-year growth. "Finally, we continued to repurchase shares of our company in a meaningful way during the fourth quarter, taking advantage of, what we believe to be, a very attractive market valuation for the company. While we intend to continue pursuing high ROI projects and enhancing our resorts to deliver an exceptional guest experience, the hurdle for new projects is higher now when compared to the risk-adjusted return of buying our stock." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1692412/000169241223000038/plya-20221231.htm About Playa Hotels & Resorts Playa Hotels & Resorts N.V. is an owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. As of Dec. 31, 2022, Playa owned and/or managed a total portfolio consisting of 25 resorts (9,352 rooms) located in Mexico, Jamaica, and the Dominican Republic. In Mexico, Playa owns and manages Hyatt Zilara Cancun, Hyatt Ziva Cancun, Wyndham Alltra Cancun, Wyndham Alltra Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa and Jewel Paradise Cove Beach Resort & Spa. In the Dominican Republic, Playa owns and manages the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana, Hyatt Ziva Cap Cana and Jewel Punta Cana. Playa owned one resort in the Dominican Republic that was managed by a third-party until Jan. 6, 2023 but is now managed by Playa. The Company also manages eight resorts on behalf of third-party owners. Playa's strategy is to leverage its globally recognized brand partnerships and proprietary in-house direct booking capabilities to capitalize on the growing popularity of the all-inclusive resort model and reach first-time all-inclusive resort consumers in a cost-effective manner. The Company believes that this strategy should position the Company to generate attractive returns for its shareholders, build lasting relationships with its guests, and enhance the lives of its associates and the communities in which the Company operates. * * * This concludes the Troubled Company Reporter's coverage of Playa Hotels until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. PRECISION 1 CONTRACTING: Seeks to Hire SMG ABA LLC as Accountant ---------------------------------------------------------------- Precision 1 Contracting, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire SMG ABA LLC as its accountants. The services that SMG will provide include preparation of local, state and federal tax returns, payroll tax returns and remittances, bank account reconciliations, reparation of monthly operating reports and miscellaneous bookkeeping services. SMG proposes to charge the Debtor a flat monthly fee in the amount of $2,000 for services rendered. In addition, SMG will charge the Debtor $3,000 for the preparation of state, local and federal tax returns. Gregory Scotto, CPA, a partner of SMG, disclosed in the court filings that SMG is a "disinterested person" as that term is defined in Bankruptcy Code Sec. 101(14). The firm can be reached through: Gregory M. Scotto, CPA SMG ABA LLC 300 Corporate Plaza Islandia, NY 11749 Phone: +1 631-481-8600 Email: Gregory@smgaba.com About Precision 1 Contracting Precision 1 Contracting, Inc. operates an HVAC contracting business in Port Chester, N.Y. Precision 1 Contracting filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22003) on Jan. 4, 2023, with $36,521 in assets and $3,000,526 in liabilities. Corinne Pasqualini, president of Precision 1 Contracting, signed the petition. Judge Sean H. Lane presides over the case. Scott A. Steinberg, Esq., at Meltzer Lippe Goldstein & Breitstone, LLP represents the Debtor as counsel. PREMIER BRANDS: S&P Upgrades ICR to 'CCC', Outlook Negative ----------------------------------------------------------- S&P Global Ratings raised its issuer credit rating to 'CCC' from 'SD' (selective default), which reflects its view that the company is likely to default in the next 12 months without favorable business and economic conditions to meet its financial obligations. S&P said, "In addition, we raised our issue-level rating on the company's first-lien term loan to 'CCC-' from 'D'. The recovery rating on this debt is '5', indicating our expectation for modest (0%-10%, rounded estimate: 10%) recovery. "The negative outlook indicates that we could lower our ratings over the next 12 months if a default becomes imminent." Premier Brands has amended and extended the maturities and terms of its capital structure, but liquidity remains less than adequate because its cash balance and asset-based lending (ABL) availability is limited under its now more restrictive credit agreements. The company's revised capital structure alleviates our previous refinancing concerns, but S&P thinks the company remains dependent on favorable business and economic conditions to meet its financial obligations. The company extended the maturities of its capital structure to 2026 from 2024, which addresses our previous refinancing concerns given that its ABL facility and first-lien term loan would have become current this year in March without the extension. However, the company may not have enough liquidity to fund its operations for the next 12 months in light of negative, unforeseen developments. The company has a low cash balance of $5.2 million as of Oct. 1, 2022. Also, new and stricter terms tied to net leverage ratio, excess availability, and inventory limit the company's ability to fund itself through its revolver given higher stands for covenant compliance. In addition, debt buybacks are no longer permissible under its revised capital structure, which limits opportunities for debt reduction. As such, S&P thinks liquidity could be further constrained if near-term cash flow generation is lower than expected because additional revolver draws may be inaccessible. S&P believes excess inventory clearance and a mild recession will weigh on performance in 2023. S&P said, "While we estimate about 27% of revenue growth in fiscal 2022 compared with the previous year due to strength in the company's Kasper segment, we think apparel demand is likely to weaken this year primarily due to a mild recession and inflation negatively affecting consumers' discretionary income. The company is still working through its excess inventory, with $255 million of inventory as of Oct. 1, 2022, increasing 122% compared with last year. Furthermore, if the company is unable to reduce its inventory levels, it could breach its maximum inventory covenant on its term loan. Given the challenging retail environment, we think additional discounting will be necessary to ultimately bring inventories back to more normal levels. Although supply chain-related costs have eased from last year, we expect flat EBITDA margin growth in 2023 primarily driven by weaker sales. Therefore, we estimate leverage to be in the low-6x area as of the last 12 months ended Dec. 31, 2022, and forecast leverage to be within a similar range over the next 12 months. "The negative outlook indicates that we could lower our ratings over the next 12 months if earnings or cash flow did not improve due to adverse shifts in consumer demand and worsening macroeconomic conditions, leading to heightened risk of near-term default or bankruptcy within the next six months." S&P could lower its ratings if Premier Brands: -- Violated any of its financial covenants. -- Missed a debt service payment, filed for bankruptcy protection, or initiated another debt restructuring. S&P could raise its ratings if Premier Brands: -- Improved its operations and profitability, leading to positive free operating cash flow generation such that it met its financial obligations over the next 12 months. -- Successfully reduced its inventory level, alleviating concerns over its compliance with its maximum inventory covenant. ESG credit indicators:E2, S3, G3 PURCHASING POWER: Midcap Financial Marks $9M Loan at 50% Off ------------------------------------------------------------ Midcap Financial Investment Corporation has marked its $9,113,000 loan extended to Purchasing Power Funding I, LLC to market at $4,556,000 or 50% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt - Revolver Loan to Purchasing Power Funding I, LLC. The loan accrues interest at a rate of 0% (L+650) per annum. The loan matures on February 24, 2025. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Purchasing Power, LLC, is a voluntary benefit fintech company that offers the leading employee purchase program through the convenience of payroll deduction. QUANERGY SYSTEMS: Completes Chapter 11 Sale ------------------------------------------- Quanergy Systems Inc. announced that a group of investors that includes former Quanergy Systems, Inc. board member Tamer Hassanein has emerged as the winning bidder for Quanergy's assets in an auction administered by the United States Bankruptcy Court for the District of Delaware. Following a competitive process that started with five bidders, the investors' company was confirmed by the Bankruptcy Court as the winning bidder, thus successfully completing Quanergy's Chapter 11 sale. The company, which also acquired the Quanergy name brand, will remain a leading provider of LiDAR sensors and smart 3D solutions and will build on Quanergy's achievements and momentum to automate critical processes in key markets. In addition to venture capital, the investors bring decades of expertise in key areas including investment banking, business restructuring, business development, IT and digitalization project management, go-to-market, product development, engineering and technology strategy. Tamer Hassanein, director of the board, Quanergy, said: "We are extraordinarily excited about Quanergy's future. It has confirmed product market fit in the security market and a superlative list of Fortune 100 customers, and it has established a clear technology lead over industrial incumbents. We are committed to helping the company's management team support and grow the hundreds of customers and partners that have chosen Quanergy, while continuing to invest further in innovative LiDAR solutions." Enzo Signore, CEO, Quanergy, said: "Quanergy at its core is a solution company that has helped customers around the world solve complex automation processes by integrating our high-resolution M-Series LiDAR sensors with Qortex™, our highly accurate perception software. This is a very exciting new chapter for Quanergy, and we are committed to continuing offering the industry's best price/performance LiDAR solutions in the security, smart spaces and industrial automation market." Quanergy's solutions are targeted to high-growth, multi billion dollar markets: Physical Security – Integrated with over 30 VMS, PSIM and camera vendors. Quanergy solutions have been deployed at over 100 critical infrastructure sites such as major datacenters, airports, utilities, prisons and transportation authorities. These solutions have been proven to increase security, reduce false alarms and slash operating costs. Smart Spaces/Smart Cities – Deployed at some of the busiest public spaces in the globe, Quanergy flow management solutions are designed to increase retail revenues, improve real-estate utilization and reduce queueing time, while offering superior price/performance versus cameras and preserving personal privacy. Industrial automation – Quanergy's long range, leading angular resolution and accuracy M-Series LIDAR sensors help robots to operate faster, smarter and more accurately. They have been extensively deployed in challenging port automation and innovative mobile robotics applications around the world, by providing superior price/performance when compared with incumbent suppliers. About Quanergy Systems Quanergy Systems, Inc., designs, develops and markets Light Detection and Ranging (LiDAR) sensors and 3D perception software solutions that enable intelligent, real-time detection, tracking and classification of objects such as people and vehicles in mission-critical markets such as security, smart cities and industrial automation. The company is based in Sunnyvale, Calif. Quanergy Systems sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Delaware Case No. 22-11305) on Dec. 13, 2022, with $10 million to $50 million in both assets and liabilities. Larry Perkins, chief restructuring officer of Quanergy Systems, signed the petition. The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley, LLP as bankruptcy counsels; Seward & Kissel, LLP as special counsel; SierraConstellation Partners as restructuring advisor; FTI Consulting, Inc. as financial Advisor; and Raymond James Financial, Inc. as investment Banker. Bankruptcy Management Solutions, Inc., doing business as Stretto, Inc., is the claims, noticing and solicitation agent. RANGER OIL: Fitch Puts 'B-' LongTerm IDR on Rating Watch Positive ----------------------------------------------------------------- Fitch Ratings has placed Ranger Oil Corporation's and Penn Virginia Holdings, LLC's (collectively "Ranger") 'B-' Long-Term Issuer Default Ratings (IDRs) on Ratings Watch Positive. In addition, Fitch has placed the issue-level ratings of Penn Virginia Holdings, LLC's 'BB-'/'RR1' reserve-based lending credit facility (RBL) and 'B'/ 'RR3' senior unsecured notes on Rating Watch Positive. This follows the announcement that Baytex Energy Corp. will acquire Ranger in a transaction expected to close in 2Q23. The Positive Watch reflects the acquisition by higher-rated Baytex Energy Corp., which will result in a pro forma company with increased production size and scale. Fitch expects to resolve the Rating Watch upon completion of the transaction, which will likely result in a ratings upgrade. Ranger's standalone rating reflects the company's liquids-weighted assets in the Eagle Ford, which support margins; advantaged Gulf Coast market access, which leads to generally higher unhedged realized prices versus peers; strong hedge book and liquidity profile; expectations for mostly positive FCF and forecast sub-1.0x leverage metrics. KEY RATING DRIVERS Scale Enhancing Merger: The acquisition of Ranger, which is expected to close in late 2Q23, values Ranger (including assumed debt) at CAD3.4 billion (USD2.5 billion). Ranger shareholders are to receive 7.49 Baytex shares and US13.31 cash for total consideration of US44.36 per share. Baytex projects the proforma company to produce 155-160mboepd with 85% liquids, which approximately maintains Baytex's favorable standalone liquids weighting and meaningfully increases its production scale to a level more in line with the 'BB' rating category. The acquisition of Ranger adds 160,000 net acres and increases the company's Eagle Ford inventory to 12-15 years at current production levels. A 174mmboe of Proved reserves addition to Baytex from the acquisition, improves the overall credit profile as Baytex's stand-alone 264mmboe of Proved reserves is below typical 'B+' rated peers. There is low risk the acquisition will not close as Juniper Capital Advisors, who own approximately 54% of Ranger equity, has entered into an agreement to vote in favor of the transaction. Limited Synergies: Synergies from the Ranger acquisition are limited due to Baytex's standalone non-operating Eagle Ford position, which Marathon Oil is the operator for, and experienced a modest production decline in 2022 due to reduced activity levels. Additionally, since the acquired Ranger position is not adjacent the Baytex's, it therefore does not provide opportunities for lateral drilling across the acreages. The acquisition of operated assets is beneficial to Baytex's credit profile as it will allow Baytex control over development pace and increases the company's percentage of operating assets in the Eagle Ford from zero to 70%. Standalone Liquids-Rich Asset, Improving Long-Term Inventory: Fitch believes Ranger's asset base is well positioned given its concentrated, liquids-rich footprint in the Eagle Ford and advantaged Gulf Coast pricing. Management has identified approximately 1,000 drilling locations at YE 2021, which assuming approximately 60-65 gross well spuds per year, implies an inventory life of approximately 16 years. Approximately two-thirds of those locations, representing approximately 11 years of inventory life, are estimated to have a breakeven economics of $50/bbl or lower. Fitch believes the company has sufficient acreage to maintain operational momentum in the medium term, but recognizes the uncertainties around maintenance of unit economics of the bottom third of inventory in addition to resource life extension in the medium and long term. Standalone Positive FCF, Sub-1.0x Leverage: Fitch's base case forecasts FCF generation over the rating horizon given the company's strong hedge book and its disciplined, returns-focused drilling program, which should result in high single-digit production growth rates. Fitch forecasts Ranger's capital program to be approximately $525 in 2022 with growth-linked increases thereafter, as the company will look to continue its operational momentum and expand the PDP base. Fitch-calculated gross debt/EBITDA is forecast to remain sub-1.0x through the rating horizon with FCF allocated between reducing RBL borrowings and shareholder returns. Standalone Strong Hedge Book Supports Cash Flow Visibility: Fitch expects the company will continue to hedge future production at similar levels to reduce pricing volatility, support FCF generation and improves overall financial flexibility. Ranger is currently hedging approximately 35% of its 2023 oil production at an average price of approximately $75 WTI and 50% of 2023 gas production at $3.80/MMBtu. DERIVATION SUMMARY Ranger's 3Q22 production was 42.6 mboepd (87% liquids) which is larger than Eagle Ford peer BlackBrush Oil & Gas L.P. (CCC+; ~11 mboepd) and Midland basin peer HighPeak Energy, Inc. (B-/Stable; 26.2 mboepd), but is materially smaller than Permian operators Callon Petroleum Company (B/Stable; 107.3 mboepd) and SM Energy Company (BB-/Stable; 137.9 mboepd, 59% liquids). Ranger's oily acreage footprint in the northeast part of the Eagle Ford supports their peer-leading 87% liquids mix and strong margin profile. The company benefits from strong gulf coast pricing and more advantaged market access, which typically leads to unhedged realized prices higher than Fitch's E&P peer average. Fitch-calculated operating costs of $15.1/boe were higher than SM Energy ($13.5/boe) in 3Q22, but remain consistent with the Eagle Ford peer average. Fitch expects Ranger to maintain its conservative leverage metrics with Fitch-calculated debt/EBITDA less than 1.0x. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer: - Closing of the contemplated acquisition in 2Q23; - WTI (USD/bbl) of $81 in 2023, $62 in 2024 and $50 thereafter; - Henry Hub (USD/mcf) of $5.00 in 2023, $4.00 in 2024, $3.00 in 2025 and $2.75 thereafter; - Standalone organic production growth in high single digits; - Standalone annual capex of approximately $525 million in fiscal 2023; RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Completion of the Baytex acquisition of Ranger under the proposed terms and favorable treatment of Ranger's debt; - Production growth resulting in average daily production approaching 50 Mboepd while maintaining adequate inventory life; - Mitigate future liquidity and refinance risks through cash retention and/or economic reserve life extension; - Mid-cycle debt/EBITDA sustained at or below 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Failure to complete the contemplated acquisition of Ranger will result in the removal of the Positive Watch; - Loss of operational momentum resulting in average daily production approaching 20 Mboepd; - Inability to mitigate future liquidity and refinance risks through cash retention and/or economic reserve life extension; - Mid-cycle debt/EBITDA sustained at or above 3.0x. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity, Clear Maturity Profile: As of Sept. 30, 2022, Ranger had $20.3 million of cash on hand and approximately $285 million of availability under the $500 million RBL credit facility (borrowing base of $950 million). Fitch expects that Ranger will maintain adequate liquidity throughout the rating case given the forecast positive FCF profile. Simple Debt Structure and Long-date Maturities: The company's debt consists of a $500 million senior secured RBL facility and a $400 million 9.25% unsecured note which matures in 2025 and 2026, respectively. The unsecured note has a bullet repayment at maturity. ISSUER PROFILE Ranger Oil Corporation is an independent oil and gas company engaged in the exploration, development and production of oil, NGLs and natural gas in the Eagle Ford Shale in South Texas. ESG CONSIDERATIONS Ranger Oil Corporation has an ESG Relevance Score of '4' for energy management that reflects the company's cost competitiveness and financial and operational flexibility due to scale, business mix, and diversification. This factor 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 ----------- ------ -------- ----- Ranger Oil Corporation LT IDR B- Rating Watch On B- Penn Virginia Holdings, LLC LT IDR B- Rating Watch On B- senior secured LT BB- Rating Watch On RR1 BB- senior unsecured LT B Rating Watch On RR3 B REALMARK MARINA: Taps Stichter Riedel Blain & Postler as Counsel ---------------------------------------------------------------- Realmark Marina Grill, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Stichter, Riedel, Blain & Postler, P.A. as its legal counsel. The firm's services include: a. rendering legal advice with respect to the Debtor's powers and duties; b. preparing legal papers; c. appearing before the court and the United States Trustee to represent and protect the interests of the Debtor; d. assisting with and participating in negotiations with creditors and other parties in interest in preparing a Chapter 11 plan and taking necessary legal steps to confirm such a plan; e. representing the Debtor in all adversary proceedings, contested matters, and matters involving administration of the Debtor's Chapter 11 case; and f. other necessary legal services. The firm will be paid based upon its normal and usual hourly billing rates and will be reimbursed for out-of-pocket expenses incurred. The firm received an advance payment of $85,214. Harly Reidel, Esq., a partner at Stichter, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Harly E. Reidel, Esq. Stichter, Riedel, Blain & Postler, P.A 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (516) 496-7100 Email: hreidel@srbp.com About Realmark Marina Grill Realmark Marina Grill, L.L.C. and two affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 22-01229) on Dec. 12, 2022. At the time of filing, Realmark Marina Grill listed $1 million to $10 million in assets and up to $50,000 in liabilities. Judge Caryl E. Delano presides over the case. The Debtor tapped Stichter Riedel Blain & Postler, P.A. as bankruptcy counsel; GrayRobinson, P.A. as special litigation counsel; Hancock Askew & Co., LLP as accountant; and McHale, P.A. as financial advisor. REDSTONE HOLDCO: $450M Bank Debt Trades at 39% Discount ------------------------------------------------------- Participations in a syndicated loan under which Redstone Holdco 2 LP is a borrower were trading in the secondary market around 60.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $450 million facility is a Term loan that is scheduled to mature on August 6, 2029. The amount is fully drawn and outstanding. Redstone Holdco 2 LP and Redstone Buyer LLC were formed as part of the buyout of the RSA Security business from Dell Inc. REGIONAL HEALTH: Regains Compliance With NYSE American Listing Rule ------------------------------------------------------------------- Regional Health Properties, Inc. announced it received a notice from the NYSE American LLC on Feb. 21, 2023 that the Company has regained compliance with the continued listing standard set forth in Section 704 of the NYSE American Company Guide. Specifically, the Company has resolved the continued listing deficiency with respect to its failure to hold an annual meeting of shareholders for the fiscal year ended December 31, 2021. In the notification, the Exchange informed the Company that the below compliance indicator ceased to be disseminated on Feb. 22, 2023. The Company was removed from the list of issuers noncompliant with NYSE American corporate governance listing standards posted on https://www.nyse.com/regulation/noncompliant-issuers and the BC indicator was removed from the profile, data and news pages of the Company's security. 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. RENEWABLE ENERGY: Unsecureds be Paid in Full via Quarterly Payments ------------------------------------------------------------------- Renewable Energy Holdings of Georgia, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Disclosure Statement for Plan of Reorganization dated February 28, 2023. Debtor is a Georgia limited liability company formed in 2016 to operate a waste management and landfill operation in the North Georgia area. The Debtor specializes in hauling, disposal, and recycling of construction demolition waste. On December 28, 2021, Debtor and its affiliates entered into a refinancing transaction with Comerica Bank whereby the Debtor and its affiliates consolidated all existing debt on real property, machinery, vehicles and equipment with Comerica pursuant to those certain Comerica Loan Documents. On February 3, 2022, Comerica asserted that the Debtor was in default of certain provisions of the Comerica Loan Documents. In April 2022, the parties entered into a forbearance agreement which was set to expire on August 31, 2022. Debtor filed the instant bankruptcy to reorganize its financial affairs without the threat of collection from Comerica. Debtor had the following assets as of the Filing Date: (i) Real Property with a Fair Market Value of $4,330,000.00, (ii) Bank Accounts with a value of $24,049.13, (iii) Accounts Receivable with a value of $375,220.00, (iv) Machinery, Equipment and Vehicles with a fair market value of $2,833,510.00, and (v) Office Furniture with a value of $2,500.00. Debtor has liabilities consisting of (i) secured claims in the approximate amount of $9,278,679.21, (ii) priority claims in the amount of $1,486.68 and (iii) unsecured claims in the approximate amount of $1,997,889.10. The Plan contemplates the reorganization and ongoing business operations of Debtor and the resolution of the outstanding Claims against and Interests in Debtor pursuant to sections 1129(b) and 1123 of the Bankruptcy Code. The Plan classifies all Claims against and Interests in Debtor into separate Classes. Class 6 shall consist of the general unsecured claims. Debtor shall pay the General Unsecured Creditors in full plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of payment. Beginning on January 15, 2024 and continuing for the 16 quarters following the such date the Debtor shall pay the General Unsecured Creditors equal quarterly prorata payments in the total amount of $120,521.94. On the April 15, 2028, the Debtor shall make a final distribution to Class 6 Creditors of any outstanding principal and interest due. The allowed unsecured claims total $1,928,351.10. The holders of Class 6 Claims are impaired. Class 7 shall consist of unsecured claims less than or equal to $10,000.00. Holders of Allowed Class 7 Claims shall be paid in full with 50% of the claim on the first anniversary of the Effective Date and 50% of the claim on the second anniversary of the Effective Date plus interest accruing at the annual rate of 4.25% from the Effective Date until the date of such payment. The amount of claim in this Class total $69,538. The source of funds for the payments will be the operations of the Debtors and affiliates. After the Confirmation Date, Debtor is authorized to sell or refinance its assets free and clear of liens, claims and encumbrances (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is only authorized to sell or refinance such property for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property (the "Release Amount"). The Release Amount, after payment of customary closing costs including broker fees and other items customarily attributed to the seller (in a sale) and borrower (in a refinancing), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the particular asset and (ii) then secured claims in order of priority. Any net proceeds from any such sale available after closing shall be paid to fund Debtor's other obligations as set forth in the Plan. Attorneys for Debtor: Cameron M. McCord, Esq. Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: cmccord@joneswalden.com About Renewable Energy Holdings of Georgia Renewable Energy Holdings of Georgia, LLC specializes in hauling, disposal and recycling of construction demolition waste with its principal place of business located at 375 Industrial Park Road, Cartersville, Ga., and its headquarters located at 2859 Paces Ferry Road, Suite 1150, Atlanta, Ga. Renewable Energy Holdings of Georgia sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41005) on Aug. 26, 2022, with up to $50,000 in assets and up to $10 million in liabilities. Carson Cash King, authorized representative, signed the petition. Judge Barbara Ellis-Monro oversees the case. The Debtor tapped Cameron M. McCord, Esq., at Jones & Walden, LLC as bankruptcy counsel; Lawrence M. Merlin, Esq., at Merlin & Associates, LLC as special counsel; and Windham Brannon, LLC as accountant. REVLON CONSUMER: $1.8B Bank Debt Trades at 80% Discount ------------------------------------------------------- Participations in a syndicated loan under which Revlon Consumer Products Corp is a borrower were trading in the secondary market around 20.3 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.80 billion facility is a Term loan that is scheduled to mature on September 7, 2023. About $862.5 million of the loan is withdrawn and outstanding. Revlon, Inc., is an American multinational company dealing in cosmetics, skin care, fragrance, and personal care. REVLON INC: Exclusivity Period Extended to May 9 ------------------------------------------------ Judge David S. Jones of the U.S. Bankruptcy Court for the Southern District of New York extended Revlon Inc's exclusive periods to file a Chapter 11 plan and solicit acceptances for the plan to May 9, 2023. Judge Jones found that the legal and factual bases set forth in the debtor's motion and hearing to extend its exclusive periods establish just cause for the relief granted. 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. RIDER HOTEL: Unsecured Creditors Will Get 100% of Claims in Plan ---------------------------------------------------------------- Rider Hotel, LLC filed with the U.S. Bankruptcy Court for the District of Delaware a Disclosure Statement in connection with Chapter 11 Plan of Reorganization dated February 28, 2023. The Debtor owns a 7-floor, 100,000 square foot building that hosts bike-themed hotel property in Milwaukee, Wisconsin, commonly known as the Iron Horse Hotel. Rider Hotel is fully owned by Rider Hotel Mezzanine, LLC. The Debtor was incorporated as a Delaware limited liability company in 2015. Multiple factors contributed to the Debtor's need to commence the chapter 11 case. These include the Debtor's dispute with Aparium, which cost the Debtor significant revenue and legal fees. The pandemic and its effect on the hotel and restaurant industry also had a devastating effect on the revenue of the Debtor. The Debtor's loss of income due to the pandemic caused the Debtor to miss payments owed to its secured lender, RSS. In filing this chapter 11 case, the Debtor sought to use the breathing spell afforded by the Bankruptcy Code to develop a comprehensive restructuring plan that would permit it to satisfy outstanding obligations to creditors while remaining in operation. The Iron Horse Hotel has remained open and operational during the pendency of the Chapter 11 Case. Despite any headwinds that might be related to the filing of a chapter 11 bankruptcy and the pandemic, the Debtor's hotel revenues for 2022 increased to $8,925,216 (as compared to $6,719,149 in fiscal year 2021 and $3,415,819 in fiscal year 2020). The Debtor has made all agreed or court-ordered adequate protection payments to RSS. The Debtor has also made regular payments to its counsel, financial advisors and its ordinary course creditors on account of its post-petition obligations to such parties. Class 4 consists of General Unsecured Claims. Each Holder of an Allowed Class 4 General Unsecured Claim will receive, in full and final satisfaction of its Allowed General Unsecured Claim, payments of Cash totaling the amount of its Allowed General Unsecured Claim, according to the following schedule: approximately 33% of its Allowed General Unsecured Claim on, or as soon as reasonable practicable following the later of the Effective Date or the allowance of such claim, and the remaining amount of its Allowed General Unsecured Claim on or as soon as reasonably practicable following December 31, 2024. Distributions made on account of any Allowed General Unsecured Claim of PA Management, LLC shall be deferred until after payment in full of all other Allowed Claims under the Plan. Class 4 is Impaired. The allowed unsecured claims total $726,797.00. This Class will receive a distribution of 100% of their allowed claims. Class 5 consists of all Equity Interests in the Debtor. Class 5 is Impaired by the Plan. All Holders of Equity Interests in the Debtor shall retain their Equity Interests in the Reorganized Debtor. The Plan Sponsor shall, on each anniversary of the Effective Date, receive an 8% interest payment on the total amount of the Equity Injection in the pro rata amount that each Plan Sponsor provided the funds for the Equity Injection. After all clams are paid in full, the Reorganized Debtor shall repay the Equity Injection in full. Cash payments on and after the Effective Date on account of Allowed Other Secured Claims, Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims and Allowed General Unsecured Claims under the Plan, and any Cure required under the Plan, shall be made from the Debtor's Cash and the Equity Injection. The Debtor shall reserve sufficient Cash on the Effective Date to pay or satisfy all such Other Secured, Administrative, Priority Tax and Priority Non-Tax Claims, and any Cure amounts, in the Maximum Amount. Any Cash remaining after all Other Secured, Administrative Claims, Priority Tax and Priority Non-Tax Claims, and any Cure amounts, have been either Disallowed or Allowed and paid in accordance with the Plan will vest in Reorganized Debtor. Such remaining funds and Cash generated from the ongoing operations of the Reorganized Debtor shall be used to (i) fund payment of Allowed Claims of General Unsecured Creditors as set forth herein and (ii) used to fund the RSS Secured Claim in accordance with the treatment. Additionally, the Equity Reserve shall be available to make any Plan payments which the Reorganized Debtor cannot make in the ordinary course of its business. Notwithstanding the foregoing, the Balloon Payment may be paid from the proceeds of a refinance of the mortgage on the Real Property or an investment into the Reorganized Debtor. A full-text copy of the Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3kOdang from Stretto, claims agent. Counsel for Debtor: Kurt M. Carlson, Esq. Martin J. Wasserman, Esq. C. Douglas Moran, Esq. Carlson Dash, LLC 10411 Corporate Dr., Suite 100 Pleasant Prairie, WI 53158 Tel: (262) 857-1600 Email: kcarlson@carlsondash.com mwasserman@carlsondash.com cdmoran@carlsondash.com Mark Minuti, Esq. Monique B. DiSabatino, Esq. SAUL EWING LLP 1201 N. Market Street, Suite 2300 P.O. Box 1266 Wilmington, Delaware 19899 Telephone: (302) 421-6840 mark.minuti@saul.com monique.disabatino@saul.com -and- Michael L. Gesas, Esq. Barry A. Chatz, Esq. 161 North Clark Street, Suite 4200 Chicago, IL 60601 Telephone: (312) 876-7100 michael.gesas@saul.com barry.chatz@saul.com About Rider Hotel Rider Hotel, LLC owns The Iron Horse Hotel located at 500 W. Florida St., in Milwaukee, Wis. The hotel, which opened in 2008, has about 100 rooms, two banquet facilities and two restaurants; and features a motorcycle theme and decor building off the nearby Harley-Davidson Museum. Rider Hotel sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10522) on June 9, 2022, listing between $10 million and $50 million in both assets and liabilities. Timothy J. Dixon, president of Rider Hotel, signed the petition. Judge John T. Dorsey oversees the case. The Debtor tapped Carlson Dash, LLC and Saul Ewing Arnstein & Lehr, LLP as legal counsels; and GlassRatner Advisory & Capital Group, LLC, doing business as B. Riley Advisory Services, as financial advisor. Stretto is the claims, noticing and administrative agent. RIGHT CHOICE: Files Emergency Bid to Use Cash Collateral -------------------------------------------------------- Right Choice Vending/Coffee, LLC asks the U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, for authority to use cash collateral in accordance with the budget, with a 20% variance and provide adequate protection. The Debtor seeks to use cash collateral retroactive to the Petition Date, in which Spartan Business Solutions, LLC d/b/a Spartan Capital, Unique Funding Solutions LLC and Fox Capital Group, Inc., d/b/a Fox Business Funding, may assert a lien and security interest. The Debtor will need to use cash collateral to conduct its operation, including, but not limited to, payment of employees, insurance, utilities, suppliers, and outside services. On April 28, 2022, Spartan Business Solutions, LLC d/b/a Spartan Capital, and the Debtor entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $195,000 worth of receivables. On May 19, 2022, Spartan Capital and the Debtor (and other non-debtor entities) entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $195,000 worth of receivables. On June 3, 2022, Spartan Capital and the Debtor (and other non-debtor entities) entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $195,000 worth of receivables. According to the Debtor's records, approximately $102,000 remains due and owing to Spartan Capital. On June 30, 2022, Unique Funding Solutions LLC and the Debtor (and other non-debtor entities) entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other nondebtor entities) $469,000 worth of receivables. According to the Debtor's records, approximately $227,000 remains due and owing to Unique Funding. On August 5, 2022, Fox Capital Group, Inc. d/b/a Fox Business Funding and the Debtor (and other non-debtor entities) entered into the Future Receivables Sale and Purchase Agreement for the purchase of the Debtor's (and other non-debtor entities) $125,000 worth of receivables. According to the Debtor's records, approximately $63,000 remains due and owing to Fox Capital. The Debtor is prepared to make adequate protection payments to creditors in the following amounts through confirmation of a Chapter 11 Plan, or until entry of an order modifying the amount of the payments: a. $8,000 to Spartan Capital; b. $16,000 to Unique Funding; and c. $6,000 to Fox Capital. In addition, (a) Spartan Capital; (b) Unique Funding; and (c) Fox Capital will all be adequately protected in that the Debtor's proposed Budget illustrates that the Debtor will be operating on a cash-flow positive basis and the Debtor agrees to grant (a) Spartan Capital; (b) Unique Funding; and (c) Fox Capital replacement liens on post-petition assets to the extent that they have a valid lien on cash collateral, and to the extent that its pre-petition collateral is diminished by the Debtor's use of cash collateral. A copy of the motion is available at https://bit.ly/3Zh9kSw from PacerMonitor.com. A copy of the budget is available at https://bit.ly/41IeRTO from PacerMonitor.com. The Debtor projects $1.8 million in total revenue and $1.640 million in total expenses for the period from February 19, 2023 through April 3, 2023. About Right Choice Vending/Coffee, LLC Right Choice Vending/Coffee, LLC operates a vending machine business with machines located throughout the State of Florida. Right Choice Vending/Coffee is in the business of providing drinks, snacks and food to various businesses, industries, schools, universities, hospital systems and governmental agencies. This is accomplished by providing and servicing vending machines, micro self-service markets, various coffee makers and direct delivery of products to its clients. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11331) on February 19, 2023. In the petition signed by Nicholas Depasquale, the Debtor disclosed up to $50,000 in both assets and liabilities. Mark S. Roher, Esq., at the Law Office of Mark S. Roher, P.A., represents the Debtor as legal counsel. RISING TIDE: $400M Bank Debt Trades at 41% Discount --------------------------------------------------- Participations in a syndicated loan under which Rising Tide Holdings Inc is a borrower were trading in the secondary market around 58.8 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $400 million facility is a Term loan that is scheduled to mature on June 1, 2028. The amount is fully drawn and outstanding. Rising Tide (d/b/a West Marine) retails recreational and commercial boating supplies, apparel, and other related merchandise. The company operates as a specialty retailer in the marine aftermarket, serving the repair and replacement outfitting needs of active marine enthusiasts and professional customers. Rising Tide is also involved in the wholesale distribution of products to commercial customers and other retailers through its port supply business line and stores. RLI SOLUTIONS: Seeks to Hire Tetrick & Bartlett as Accountant ------------------------------------------------------------- RLI Solutions Company seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Tetrick & Bartlett, PLLC as its accountants. The accountants will provide these services: a. prepare monthly reports required by the Bankruptcy Rules; b. prepare overdue tax returns; and c. prepare future tax returns. d. assist in preparing projections and assist in the preparation of the Plan of Reorganization. Tetrick & Bartlett will be paid at these hourly rates: General Rate Tax Rate Partner $275 $325 Manager $150 $180 Staff Accountant $100 $120 Tetrick & Bartlett does not have an adverse interest of the Debtor or the estate, according to court filings. The firm can be reached through: Ryan Nestor, CPA Tetrick & Bartlett, PLLC 122 N Oak St Clarksburg, WV 26301 Phone: +1 304-624-5564 Email: rnestor@tb.cpa About RLI Solutions Company RLI Solutions Company, doing business as Ronald Lane Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21375) on July 17, 2022, listing as much as $10 million in both assets and liabilities. Christopher Lane, president of RLI Solutions Company, signed the petition. Judge Thomas P. Agresti oversees the case. Donald R. Calaiaro, Esq., at Calaiaro Valencik is the Debtor's legal counsel. ROBERTSHAW US: $110M Bank Debt Trades at 65% Discount ----------------------------------------------------- Participations in a syndicated loan under which Robertshaw US Holding Corp is a borrower were trading in the secondary market around 35.1 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $110 million facility is a Term loan that is scheduled to mature on February 28, 2026. The amount is fully drawn and outstanding. Robertshaw US Holding Corp. designs and manufactures electro-mechanical solutions, mechanical combustion systems, and electrical controls primarily for use in residential and commercial appliances, HVAC and transportation applications. ROCKLEY PHOTONICS: Amends Super Senior & Existing Notes Claims -------------------------------------------------------------- Rockley Photonics Holdings Limited submitted an Amended Prepackaged Plan of Reorganization dated January 27, 2023. The Debtor seeks to consummate the Restructuring Transactions on the Effective Date of the Plan. This Plan is supported by the Prepetition Noteholders who collectively hold Super Senior Notes in aggregate principal amount of approximately $90.65 million and Existing Notes in aggregate principal amount of approximately $29.31 million. Class 3 consists of all Super Senior Notes Claims. In full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Super Senior Notes Claim, each Holder of an Allowed Super Senior Notes Claim shall receive, on the Effective Date: * its Pro Rata share and interest in a distribution of Reorganized Rockley Equity (subject to dilution by the Management Incentive Plan and the Prepetition Noteholder Private Placement) which will constitute 75.82 % of Reorganized Rockley Equity; * the right to purchase its Pro Rata share of $15.87 million of the Exit Financing; * its Pro Rata share of $5.08 million of the Exit Financing; and * the right to participate in the Prepetition Noteholder Private Placement to acquire its Pro Rata share of up to 75.82% of $20 million of Reorganized Rockley Equity at a 20% discount to Agreed Equity Value. Class 4 consists of all Existing Notes Claims. In full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Existing Notes Claim, each Holder of an Allowed Existing Notes Claim shall receive, on the Effective Date: * its Pro Rata share and interest in a distribution of Reorganized Rockley Equity (subject to dilution by the Management Incentive Plan and the Prepetition Noteholder Private Placement) which will constitute 24.18% of Reorganized Rockley Equity; and * the right to participate in the Prepetition Noteholder Private Placement to acquire its Pro Rata share of up to 24.18% of $20 million of Reorganized Rockley Equity at a 20% discount to Agreed Equity Value. The Amended Plan does not alter the proposed treatment for unsecured creditors and the equity holder: * each General Unsecured Claim shall receive, at the election of the Debtor (with the consent of the Prepetition Noteholders): (i) payment in full in Cash of the amount of its Allowed General Unsecured Claim plus postpetition interest to the extent necessary under applicable law to render such Unsecured Claim Unimpaired on the later of (A) the Effective Date and (B) the date such Allowed General Unsecured Claim becomes payable in the ordinary course of business in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured Claim; (ii) Reinstatement of such Allowed General Unsecured Claim; or (iii) such other treatment rendering its Allowed General Unsecured Claim Unimpaired in accordance with section 1124 of the Bankruptcy Code. * On the Effective Date, all Allowed Interests in the Debtor shall be cancelled, extinguished, and released, as of the Effective Date. The Debtor shall fund distributions under the Plan, as applicable, with (1) the issuance of the Reorganized Rockley Equity; (2) proceeds from issuance of the Exit Financing; (3) proceeds from issuance of the Reorganized Rockley Equity pursuant to the Prepetition Noteholder Private Placement; and (4) Cash on hand. Counsel for the Debtor: PILLSBURY WINTHROP SHAW PITTMAN LLP John A. Pintarelli, Esq. Dania Slim, Esq. Kwame O. Akuffo, Esq. Alana A. Lyman, Esq. 31 West 52nd Street New York, NY 10019-6131 Phone: (212) 858-1000 Fax: (212) 858-1500 Email: john.pintarelli@pillsburylaw.com dania.slim@pillsburylaw.com kwame.akuffo@pillsburylaw.com alana.lyman@pillsburylaw.com PILLSBURY WINTHROP SHAW PITTMAN LLP Joshua D. Morse, Esq. Jonathan Doolittle, Esq. Four Embarcadero Center, 22nd Floor San Francisco, CA 94111-5998 Phone: (415) 983-1000 Fax: (415) 983-1200 Email: joshua.morse@pillsburylaw.com jonathan.doolittle@pillsburylaw.com About Rockley Photonics Rockley Photonics Holdings Limited specializes in the research and development of integrated silicon photonics chipsets. The Company has developed a ground-breaking versatile, application specific, third generation silicon photonics platform specifically designed for the optical integration challenges facing numerous mega-trend markets. The Company has partnered with multiple tier-1 customers across markets to deliver complex optical systems required for transformational sensors, communications, and medical product realization. Rockley Photonics filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y Case No. 23 10081) on Jan. 23, 2023. In the petition signed by Richard A. Meier, chief executive officer, the Debtor disclosed $90,880,000 in assets and $120,733,000 in liabilities. The Debtor tapped PILLSBURY WINTHROP SHAW PITTMAN LLP as bankruptcy counsel; JEFFERIES LLC as investment banker; and ALVAREZ & MARSAL, LLC as financial advisor. WALKERS LAW FIRM is the Cayman Islands counsel. KROLL, LLC, is the claims agent. ROOSEVELT INN: Unsecured Creditors Will Get 95% of Claims in Plan ----------------------------------------------------------------- Roosevelt Inn, LLC, and Roosevelt Motor Inn, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania a First Amended Disclosure Statement with respect to First Amended Plan of Reorganization dated February 28, 2023. The RI Debtor was formed in the State of Delaware on November 10, 1999. The Roosevelt Inn operated by the Debtors is located at 7600 Roosevelt Boulevard, Philadelphia, Pennsylvania. It is a two-story hotel with 105 rooms available for rent. The real property where the hotel is located was purchased by the RMI Debtor in 1960 and the Roosevelt Inn was built by the RMI Debtor on or about 1962. On or about 1980, the RMI Debtor was dissolved into a partnership among, the Cion Family Partnership, Trust B UWO Joseph Jacobson and Trust UWO Henriette Jacobson, which was subsequently converted into the limited liability company that is today the RI Debtor. Since the commencement of these cases, the Debtors have advocated for a global resolution of the Tort Claims and the insurance coverage disputes. Without a determination of the extent of insurance coverage available to the Debtors to fund a defense of the Tort Claims, and should the Tort claimants prevail, indemnification coverage available for any awards entered in favor of the holders of Tort Claims, it is cost prohibitive for the Debtors to address the 15 Tort Claims on a case-by-case basis without jeopardizing their limited assets and their ability to continue to operate their hotel. The prior efforts to mediate a global resolution among the Debtors, the holders of Tort Claims and the Insurance Companies did not result in a settlement. After the global mediation was suspended, negotiations continued between the Debtors and the holders of Tort Claims. As of the filing of this Disclosure Statement, negotiations are continuing between the Debtors and the holders of Tort Claims in an effort to resolve outstanding issues relating to the terms of the Plan, Settlement Trust and Trust Distribution Procedures. The Plan allows the Debtors to equitably compensate the holders of Tort Claims and to ensure that the Debtors emerge from bankruptcy with the ability to continue the operation of their hotel. Generally, the features of the Plan provide that on the Effective Date, as follows: * The Equity Security Holders will make a cash contribution of $1,100,000 to the Reorganized Debtors in consideration of the Channeling Injunction and releases being provided under the Plan; * The Reorganized Debtors will procure an Exit Loan from the Exit Lender for an amount adequate to fund the additional monies required to be paid under the Plan on the Effective Date which is estimated to be approximately $1,800,000; * The Reorganized Debtors will contribute to the Settlement Trust (a) the amount of $1,587,500; (b) the Insurance Assignment, and (c) the Settlement Trust Causes of Action. Thereafter, the Settlement Trust shall fund distributions on account of and satisfy compensable Tort Claims in accordance with the Trust Distribution Procedures from the Settlement Trust Assets; and * The Reorganized Debtors shall fund the Professional Fee Reserve and the GUC Fund. After the Effective Date, the general features of the Plan provide for distributions as follows: * the Reorganized Debtors shall fund Distributions on account of holders of Allowed Class 1 Claims (Secured Claims) and Allowed Class 2 (Priority Non-Tax Claims) which are estimated to be paid in full; * the Reorganized Debtors shall fund Distributions on account of and satisfy Allowed Class 3 (General Unsecured Claims) exclusively from the GUC Fund with an estimated recovery of 95%; * holders of Allowed Class 4 Claims (Non-Tort Litigation Claims) will be paid in accordance with the terms of the Plan and Confirmation Order; * the Reorganized Debtors shall fund Distributions on account of and satisfy all other Allowed Claims with Cash on hand on or after the Effective Date in accordance with the terms of the Plan and the Confirmation Order; and * the Settlement Trust shall fund distributions on account of and satisfy compensable Tort Claims (holders of Allowed Class 5 (Direct Tort Claims) and holders of Allowed Class 6 (Indirect Tort Claims) in accordance with the Trust Distribution Procedures from the Settlement Trust Assets. Class 3 consists of General Unsecured Claims. Each holder of an Allowed General Unsecured Claim shall receive, its Pro Rata Share of the GUC Fund up to the full amount of such Allowed General Unsecured Claim. The allowed unsecured claims total $43,000. This Class will receive a distribution of 95% of their allowed claims. On the Effective Date of the Plan, the Settlement Trust will be established for the benefit of holders of Tort Claims. From and after the Effective Date, all Tort Claims shall be channeled to the Settlement Trust, which will be funded by the Settlement Trust Assets. The Settlement Trust will administer the Settlement Trust Assets and process, liquidate, and pay Tort Claims in accordance with the applicable Trust Distribution Procedures. The purpose of the Settlement Trust is to assume liability for all Tort Claims, to administer the Settlement Trust Assets, and to direct the processing, liquidation, and payment of all compensable Tort Claims. The Settlement Trust will resolve Tort Claims through the Trust Distribution Procedures. The Trust Distribution Procedures are designed to permit the Settlement Trustee to provide substantially similar treatment to holders of legally valid and factually supported, similar Tort Claims and will be the sole and exclusive method by which the holder of a Tort Claim may seek allowance and resolution of his or her Tort Claim. Distributions under the Plan shall be funded from the following sources: * the Reorganized Debtors shall fund (a) the Professional Fee Reserve on account of and satisfy Allowed Professional Fee Claims, (b) the Settlement Trust Contribution and (c) the GUC Fund, from the proceeds from any or all of the following sources, the Exit Financing Facility, the Equity Security Holders Contribution and Cash on hand on or after the Effective Date in accordance with the terms of the Plan and Confirmation Order; * the Reorganized Debtors shall fund Distributions on account of and satisfy Allowed General Unsecured Claims exclusively from the GUC Fund; * the Settlement Trust shall fund distributions on account of and satisfy compensable Tort Claims (holders of Allowed Class 5 (Direct Tort Claims) and holders of Allowed Class 6 (Indirect Tort Claims) in accordance with the Trust Distribution Procedures from the Settlement Trust Assets; and * the Reorganized Debtors shall fund Distributions on account of and satisfy all other Allowed Claims with Cash on hand on or after the Effective Date in accordance with the terms of the Plan and the Confirmation Order. A full-text copy of the First Amended Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3JbkRgP from PacerMonitor.com at no charge. Attorneys for Debtors: Aris J. Karalis, Esq. Karalis PC 1900 Spruce Street Philadelphia, PA 19103 Tel: (215) 546-4500 Email: akaralis@karalislaw.com About Roosevelt Inn Roosevelt Inn, LLC is a Philadelphia-based company that operates in the traveler accommodation industry. Roosevelt Inn and its affiliate, Roosevelt Motor Inn, Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Lead Case No. 21-11697) on June 16, 2021, listing as much as $10 million in both assets and liabilities. Anthony Uzzo, manager, signed the petitions. Judge Ashely M. Chan presides over the cases. The Debtors tapped Karalis, PC as bankruptcy counsel; Asterion, Inc. as financial advisor; A. Uzzo & Company, CPA's PC as bookkeeper; and Blank Rome, LLP and Reed Smith, LLP as special counsel. SAN JORGE CHILDREN'S: Exclusivity Period Extended to March 21 ------------------------------------------------------------- Judge Maria de los Angeles Gonzalez of the U.S. Bankruptcy Court for the District of Puerto Rico extended San Jorge Children's Hospital, Inc.'s exclusive periods to file a chapter 11 plan and to solicit acceptances to March 21 and May 20, respectively. Judge Gonzalez found that the extention is in the best interest of the debtor's estate, its creditors, and other parties in interest. 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. SCF LLC: Exclusivity Period Extended to April 24 ------------------------------------------------ Judge Jimmy L. Croom of the U.S. Bankruptcy Court for the Western District of Tennessee further extended SCF, LLC's exclusive periods to file its disclosure statement and plan and to obtain acceptance of said plan to April 24 and May 24, respectively. The exclusivity time period to file the debtor's disclosure statement and plan was previously set to January 23. SCF, LLC is represented by: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 40 S. Main Street, Suite 2210 Memphis, TN 38103-2555 Tel: (901) 525-1455 About SCF LLC SCF, LLC provides integrated logistics and barge transportation services on the U.S. The company is based in Adamsville, Tenn. SCF sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-10809) on July 27, 2022. In the petition filed by its chief financial officer, Doug Blaylock, the Debtor listed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Jimmy L. Croom oversees the case. Steven N. Douglass, Esq., at Harris Shelton Hanover & Walsh, PLLC is the Debtor's counsel. EmergeLaw, PLLC represents the official committee of unsecured creditors appointed in the Debtor's Chapter 11 case. SECURUS TECHNOLOGIES: Midcap Financial Marks $7.1M Loan at 18% Off ------------------------------------------------------------------ Midcap Financial Investment Corporation has marked its $7,128,000 loan extended to Securus Technologies Holdings, Inc. to market at $5,845,000 or 82% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a Second Lien Secured Debt to Securus Technologies Holdings, Inc. The loan accrues interest at a rate of 1.00% (L+825) per annum. The loan matures on November 1, 2025. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Based in Dallas, Texas, Securus Technologies Holdings, Inc. is one of the largest providers of telecommunication services to correctional facilities, with a presence in 50 states, Washington DC, and Canada. Securus is owned and controlled by the private equity firm Platinum Equity, LLC. SELAH MOUNTAIN: Wins Cash Collateral Access Thru April 30 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Selah Mountain Pharmacy, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral to continue operating its business. On July 22, 2022, the Debtor entered into a Forward Purchase Agreement (Fixed ACH Delivery), Security Agreement, and Guaranty with Strategic Funding Source, Inc. d/b/a Kapitus LLC, for a loan in the original principal balance of $188,000, which the FPA Agreement states for the purchase of $248,160 in receipts, as defined in the FPA Agreement. The Debtor asserts the $188,000 was provided as a loan. As of petition date, the Debtor owed Kapitus approximately $194,763. The Debtor acknowledges that other creditors hold or claim liens against collateral that may constitute cash collateral pursuant to 11 U.S.C. section 363(a): (a) Fox Capital Group, Inc., which entered into a Future Sale and Purchase Agreement with the Debtor for a loan in the original principal balance of $70,000. A UCC-1 was filed September 12,2022. (b) ROC Funding Group, which entered into a loan with the Debtor in the original principal of $30,000. A UCC-1 was filed November 2, 2022. (c) Emerald Group Holdings, LLC d/b/a VitalCap Fund, which entered into a loan with Debtor in the original principal balance of $126,000. A UCC-1 was filed December 29, 2022. As of the Petition Date, the Debtor claims it has approximately $252 in its accounts. As of the Petition Date, the Debtor claims it has approximately $618,453 in accounts receivable, of which approximately $233,890 is collectible. As adequate protection for the Debtor's use of cash collateral, the Debtor will pay to Kapitus, as the asserted first-position lienholder: $5,000 on March 27, 2023, and $5,000 on April 24, 2023. These adequate protection payments will be applied to the Debtor's obligations to Kapitus. As adequate protection, the Secured Creditors and other cash collateral claimants are granted liens and security interests in the Pre-Petition Collateral, to the same extent, validity and priority as existed before the Petition Date. In addition, Kapitus and the other Cash Collateral Claimants are granted liens against property of the same type as the Pre-Petition Collateral acquired by the Debtor post-petition, including cash or other proceeds generated post-petition by Pre-Petition Collateral to the extent provided by 11 U.S.C. section 361(2). These events constitute an "Event of Default": (a) The failure by the Debtor to perform, in any material respect, any of the terms, provisions, conditions, covenants, or obligations under the Stipulated Order; (b) The entry of a Court order granting any other party (i.e. not the Parties hereto) relief from or modifying the automatic stay under Bankruptcy Code section 362(a); (c) Dismissal of the chapter 11 case or conversion of this chapter 11 case to a chapter 7 case; (d) A material default by the Debtor in reporting financial or operational information as and when required under the Stipulated Order, or the Local Bankruptcy Rules of the District of Colorado; and/or (e) The Debtor's failure to timely pay all necessary use and occupancy expenses during the post-petition period. Unless otherwise agreed to in writing by Kapitus, the Debtor's authorization to use cash collateral pursuant to the Stipulated Order terminates upon the earlier of the occurrence of: (i) April 30, 2023 or: (ii) an uncured Event of Default. A copy of the order is available at https://bit.ly/41KXBgB from PacerMonitor.com. About Selah Mountain Pharmacy, LLC Selah Mountain Pharmacy, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-10375) on February 3, 2023. In the petition signed by John D. Kutzko, managing member, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Joseph G. Rosania, Jr. oversees the case. Jeffrey S. Brinen, Esq., at Kutner Brinen Dickey Riley, P.C., is the Debtor's legal counsel. SHUTTERFLY LLC: $1.11B Bank Debt Trades at 44% Discount ------------------------------------------------------- Participations in a syndicated loan under which Shutterfly LLC is a borrower were trading in the secondary market around 56.4 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.11 billion facility is a Term loan that is scheduled to mature on September 25, 2026. About $1.09 billion of the loan is withdrawn and outstanding. Shutterfly, LLC is an American photography, photography products, and image sharing company, headquartered in Redwood City, California. SI HOLDINGS: Midcap Financial Marks $3.4M Loan at 78% Off --------------------------------------------------------- Midcap Financial Investment Corporation has marked its $3,413,000 loan extended to SI Holdings, Inc. to market at $744,000 or 22% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt - Revolver to SI Holdings, Inc. The loan accrues interest at a rate of 1.00 % (L+600) per annum. The loan matures on July 25, 2024. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. SI Holdings, Inc. designs and develops application software. SIGNAL PARENT: $550M Bank Debt Trades at 29% Discount ----------------------------------------------------- Participations in a syndicated loan under which Signal Parent Inc is a borrower were trading in the secondary market around 70.9 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $550 million facility is a Term loan that is scheduled to mature on April 1, 2028. About $541.8 million of the loan is withdrawn and outstanding. Signal Parent, Inc. provides interior design services. SONAR ENTERTAINMENT: Midcap Financial Marks $1.1M Loan at 21% Off ----------------------------------------------------------------- Midcap Financial Investment Corporation has marked its $1,179,000 loan extended to Sonar Entertainment, Inc.to market at $937,000 or 79% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt - Revolver to Sonar Entertainment, Inc. The loan accrues interest at a rate of 1.25%(L+760) per annum. The maturity date for this loan was November 15, 2021. The loan is expected to be paid down in a series of payments subsequent to the stated maturity date. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Sonar Entertainment, Inc. owns and operates an entertainment studio. The Company develops, produces, acquires, finances, packages, and distributes film products. Sonar Entertainment serves customers globally. SONAR ENTERTAINMENT: Midcap Financial Marks $1.5M Loan at 21% Off ----------------------------------------------------------------- Midcap Financial Investment Corporation has marked its $1,564,000 loan extended toSonar Entertainment, Inc. to market at $1,243,000 or 79% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt to Sonar Entertainment, Inc. The loan accrues interest at a rate of 1.25%v(L+760) per annum. The maturity date for this loan was November 15, 2021. The loan is expected to be paid down in a series of payments subsequent to the stated maturity date. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Sonar Entertainment, Inc. owns and operates an entertainment studio. The Company develops, produces, acquires, finances, packages, and distributes film products. Sonar Entertainment serves customers globally. SOUND INPATIENT: $215M Bank Debt Trades at 31% Discount ------------------------------------------------------- Participations in a syndicated loan under which Sound Inpatient Physicians Holdings LLC is a borrower were trading in the secondary market around 69.2 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $215 million facility is a Term loan that is scheduled to mature on June 28, 2026. The amount is fully drawn and outstanding. Sound Inpatient Physicians Holdings, LLC operates as a holding company. The Company, through its subsidiaries, provides healthcare services. SUMMER AVE: Amends Plan to Include PSB Secured Claim Pay Details ---------------------------------------------------------------- Summer Ave LLC submitted a Modified Third Amended Chapter 11 Plan of Reorganization for Small Business under Subchapter V dated February 27, 2023. Each Holder of an Allowed Claim or Allowed Interest shall receive under the Plan the treatment in full and final satisfaction, settlement, release, and discharge of and in exchange for such Allowed Claim or Allowed Interest, except to the extent different treatment is agreed to by the Debtor and the holder of such Allowed Claim or Allowed Interest. Class 3 consists of PSB's Allowed Secured Claim. The secured claim of PSB will be a total of $900,000. Although the value of the property is listed in the Debtor’s schedules is $775,000, and the senior secured claims in Class One and Two should be deducted from the value to calculate the value of the collateral as it concerns PSB, the Plan will utilize this amount as an accommodation to PSB. This will be paid directly to PSB, and paid as follows: (i) interest only at 7.35%, for 6 months (with these monthly payments totaling $5,125.50 per month), (ii) then to be paid based upon an amortization over a 30 years term with interest at 7.35% with these payments totaling $6,200.75, and (iii) a balloon payment after 2 years after the Effective Date, which the Debtor calculates at $886,944.93. The balloon payment due after two years can be extended for 2 years by a payment of $50,000.00 (to be applied against outstanding principal). If Summer Avenue is sold, while PSB (or its successors and/or assigns) holds its first mortgage on Summer Ave, PSB will be entitled to $100,000.00 in addition to the payments. To the extent that any default under the contract(s) with PSB, exists, upon the Effective Date and the payment of any post-petition arrears, any such default shall be deemed cured. PSB shall retain the Lien securing the Class 3 Claim until payment in full of the Allowed Class 3 Claim. Class 3 is impaired. The Modified Third Amended Plan does not alter the proposed treatment for unsecured creditors and the equity holder: * In full and complete satisfaction, settlement, release and discharge of the Class 6 Claims, each holder of the Allowed Class 6 Claim shall receive cash in an amount equal to such Claim's pro rata share of $5,000. The $5,000 shall be funded 1 year after the Effective Date. If the Debtor were to sell its real estate prior to one year after the Effective Date, these claims would be paid upon the sale of the property. To the extent that the Debtor produces any disposable income on a yearly basis, the Debtor will pay that amount on the second and third anniversary of the confirmation of the plan. * On the Effective Date, each holder shall retain their Interests in the Debtor in the same proportions that existed on the Petition Date. As part of the Plan, the equity interest holder (and manager), Louis Masaschi, will be providing the necessary funds for the initial distributions. These include approximately $7,650 for Class 6 Convenience Creditors, $10,000 for the Trustee, and $1,000 for Class 1 and any other claims. This Plan will be funded from cash on hand, working capital, and cash from ongoing business operations. The Debtor will continue to operate in the ordinary course of business. Pursuant to § 1190(2) of the Code, the Plan provides for the submission of all or such portion of the future earnings of the Debtor as is necessary for the execution of the Plan. To the extent necessary, the Debtor's principal, Louis Masaschi, will make additional contributions to account for any shortfalls. Pursuant to the Debtor's Financial Projections, the Debtor's projected Disposable Income will be used to make payment distributions under the Plan; after payment of operating expenses, the Debtor will use most, if not all of its disposable funds to pay PSB. The Debtor believes that its forecast is a reasonable reflection of its past and anticipated future performance. A full-text copy of the Modified Third Amended Plan dated February 27, 2023 is available at https://bit.ly/3yqgfxb from PacerMonitor.com at no charge. Counsel for the Debtor: Louis S. Robin, Esq. Law Offices of Louis S. Robin 1200 Converse Street Longmeadow, MA 01106 Tel. (413) 567-3131 Fax (413) 565-3131 Email: louis.robin@prodigy.net About Summer Ave, LLC Summer Ave, LLC, is a limited liability company that owns commercial property, consisting of three buildings and two parking lots, each on a separate parcel, with building addresses of (i) 431-435 White Street, (ii) 429 White Street and 752 Sumner Avenue, and (iii) 760 Sumner Avenue, Springfield, Massachusetts. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-30140) on April 28, 2022. In the petition signed by Louis Masaschi, manager, the Debtor disclosed $778,100 in assets and $4,058,600 in liabilities. Judge Elizabeth D. Katz oversees the case. The Law Offices of Louis S. Robin represents the Debtor as counsel. SUMMER AVE: Wins Cash Collateral Access Thru March 30 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Western Division, authorized Summer Ave LLC to use cash collateral under the same terms and conditions as the previous order through March 30, 2023. As previously reported by the Troubled Company Reporter, the creditors that claim security interests in the Debtors' properties are Community Loan Servicing, LLC and Belvidere Capital, LLC. As adequate protection for any diminution in value as a result of the Debtor's use of cash collateral, all secured creditors were granted replacement liens and security interest to the same extent, validity, and enforceability of their perfected security interests as of the petition date not subject to avoidance. A further hearing on the matter is set for March 30 at 12 p.m. A copy of the order is available at https://bit.ly/41He31w from PacerMonitor.com. About Summer Ave, LLC Summer Ave, LLC is a limited liability company that owns commercial property, consisting of three buildings and two parking lots, each on a separate parcel, with building addresses of (i) 431-435 White Street, (ii) 429 White Street and 752 Sumner Avenue, and (iii) 760 Sumner Avenue, Springfield, Massachusetts. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-30140) on April 28, 2022. In the petition signed by Louis Masaschi, manager, the Debtor disclosed $778,100 in assets and $4,058,600 in liabilities. Judge Elizabeth D. Katz oversees the case. The Law Offices of Louis S. Robin represents the Debtor as counsel. SURF OPCO: Midcap Financial Marks $16.6M Loan at 23% Off -------------------------------------------------------- Midcap Financial Investment Corporation has marked its $16,667,000 loan extended to Surf Opco LLC to market at $12,891,000 or 77% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt - Revolver Loan to Surf Opco LLC. The loan accrues interest at a rate of 1.00% (L+400) per annum. The loan matures on March 17, 2026. Midcap Financial Investment Corporation is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Surf Opco LLC, does business as Wave Electronics. It is a distributor of consumer electronics and home automation/integration products. TEXAS COASTAL: Case Summary & 13 Unsecured Creditors ---------------------------------------------------- Debtor: Texas Coastal Group, LLC 340 Royal Poinciana Way Suite 317-397 Palm Beach, FL 33480 Business Description: Texas Coastal is a Single Asset Real Estate as defined in 11 U.S.C. Section 101(51B). The Debtor is the fee simple owner of a property located at St. Hwy. 361 & Mustang Blvd. valued at $51.1 million. Chapter 11 Petition Date: March 3, 2023 Court: United States Bankruptcy Court Southern District of Florida Case No.: 23-11704 Judge: Hon. Erik P. Kimball Debtor's Counsel: John E. Page, Esq. SHRAIBERG PAGE PA 2385 NW Executive Center Dr Suite 300 Boca Raton, FL 33431 Tel: 561-443-0800 Email: jpage@slp.law Total Assets: $51,072,272 Total Liabilities: $9,542,913 The petition was signed by Craig J. Millard, Sr. as member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XAZCR4Y/Texas_Coastal_Group_LLC__flsbke-23-11704__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 13 Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Berry Odom Legal Fees $2,047 611 9th Ave Fort Worth, TX 76104 2. Builders Designs Web services $1,350 125 S. Kansas Ave Olathe, KS 66061 3. Florida Dept of Revenue $0 POB 6668 Tallahassee, FL 32314 4. Internal Revenue Service $0 POB 7346 Philadelphia, PA 19114 5. Internal Revenue Service $0 Attn: Special Procedures POB 34045 STOP 572 Jacksonville, FL 32202 6. Klindworth & Co Consult Fees $13,976 2929 Buffalo Speedway #224 Houston, TX 77098 7. Office of Attorney General $0 State of Florida The Capitol PL-01 Tallahassee, FL 32399-1050 8. Palm Beach County $0 Tax Collector 301 North Olive Ave West Palm Beach, FL 33401 9. SEC Headquarters $0 100 F Street, NE Washington, DC 20549 10. Securities and $0 Exchange Commission 801 Brickell Ave., #1950 Miami, FL 33131 11. United States $0 Attorney General's Office US Department of Justice 950 Pennsylvania Ave Washington, DC 20530-0001 12. US Attorney $0 Southern District of Florida 500 East Broward Blvd Fort Lauderdale, FL 33394 13. US Small Business Disaster Loan $150,000 Admin Processing and Disbursement Ctr 14925 Kingsport Rd Fort Worth, TX 76155 THREE ARROWS: Liquidator Want to Sell Some Seized NFTs ------------------------------------------------------ Suvashree Ghosh of Bloomberg News reports that liquidators of bankrupt hedge fund Three Arrows Capital Ltd. said they will take steps to sell some of the firm's nonfungible tokens as part of their recovery efforts. "The purpose of the sale is to realize the value of the NFTs for the purposes of the liquidation," Christopher Farmer, senior managing director at advisory firm Teneo wrote in a notice on Wednesday, February 33, 2023. The steps will commence after March 23, 2023 the notice said. The document did not provide details of the NFTs up for sale, but clarified that these do not include the popular "Starry Night" Portfolio. About Three Arrows Capital Three Arrows Capital Ltd. was an investment firm engaged in short-term opportunities trading, and is heavily invested in cryptocurrency, funded through borrowings. As of April 2022, the Debtor was reported to have over $3 billion of assets under its management. Three Arrows Capital Ltd. was incorporated as a business company under the laws of the British Virgin Islands. Its sole shareholder owning all of its "management shares" is Three Arrows Capital Pte. Ltd., which previously operated as a regulated fund manager in Singapore until 2021, when it shifted its domicile to the BVI, as part of a global corporate plan to relocate operations to Dubai. The Debtor borrowed digital and fiat currency from multiple lenders to fund its cryptocurrency investments. After cryptocurrency lost 99% of its value, and then prices of other cryptocurrencies had rapid declines, the Debtor reportedly defaulted on its obligations. On June 24, 2022, one of the Debtor's many creditors -- DRB Panama Inc. -- filed an application to appoint joint provisional liquidators -- and thereafter, full Liquidators -- in the Eastern Caribbean Supreme Court in the High Court of Justice (Commercial Division) located in BVI. The application was assigned claim number VIHCOM2022/0117. Subsequently, on June 27, 2022, the Debtor filed its own application for the appointment of joint liquidators before the BVI Commercial Court. On June 29, 2022, the Honorable Mr. Justice Jack of the BVI Commercial Court appointed Russell Crumpler and Christopher Farmer of Teneo (BVI) Limited as joint liquidators of Three Arrows Capital Ltd. TIGA ADVERTISING: Seeks to Hire Coan Payton & Payne as Counsel -------------------------------------------------------------- Tiga Advertising, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Colorado to hire Coan, Payton & Payne, LLC as its counsel. The firm will render these services: a. provide Debtor with legal advice with respect to its powers and duties under the Bankruptcy Code and otherwise; b. aid Debtor in the development of a plan of reorganization under Subchapter V; c. file the necessary petitions, schedules, pleadings, reports, and actions which may be required in the continued administration of Debtor's property under chapter 11 and in the course of these chapter 11 proceedings; and d. perform any and all other legal services for the Debtor. The firm will charge its regular hourly rates of $395 for attorneys and $100 to $195 for paralegals. The firm received a retainer in the amount of $10,000, inclusive of the $1,738 filing fee. As disclosed in the court filings, Coan, Payton & Payne represents no interest adverse to the estate, is a "disinterested person" within the meaning of 11 U.S.C. 101(14). The firm can be reached through: Steven T. Mulligan, Esq. Coan, Payton & Payne, LLC 999 18th Street, Suite S 3100 Denver, CO 80202 Telephone: 303-861-8888 Email: smulligan@cp2law.com About Tiga Advertising Tiga Advertising, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-10553) on Feb. 17, 2023, listing $100,001 to $500,000 in both assets and liabilities. Steven T Mulligan, Esq. at Coan, Payton & Payne, LLC represents the Debtor as counsel. TISSUE TECH: Midcap Financial Marks $17.5M Loan at 30% Off ---------------------------------------------------------- Midcap Financial Investment Corporation has marked its $17,500,000 loan extended to TissueTech, Inc. to market at $12,250,000 or 70% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Midcap Financial's Form 10-K for the transition period from April 1, 2022 to December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. Midcap Financial is a participant in a First Lien Secured Debt to TissueTech, Inc. The loan accrues interest at a rate of 1% (SOFR+575) per annum. The loan matures on April 1, 2027. Midcap Financial is a Maryland corporation incorporated on February 2, 2004. It is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Apollo Investment Management, L.P. is the investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (AGM). Apollo Investment Administration, LLC, an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. TissueTech Inc. provides medical research services. The Company operates in the State of Florida. TPT GLOBAL: Hikes Authorized Common Shares to 4.5 Billion --------------------------------------------------------- Effective Feb. 14, 2023, the Board of Directors of TPT Global Tech, Inc., in accordance with the provisions of the Articles of Incorporation, as amended, and by-laws of the Company, amended the Articles of Incorporation to increase the authorized number of common shares by 2,000,000,000 which increase will then make the total authorized common shares to be 4,500,000,000 with all common shares having the then existing rights powers and privileges as per the existing amended Certificate of Incorporate and Bylaws of the Company. About TPT Global Tech TPT Global Tech Inc. (OTC:TPTW) based in San Diego, California, is a technology-based company with divisions providing telecommunications, medical technology and product distribution, media content for domestic and international syndication as well as technology solutions. It offers Software as a Service (SaaS), Technology Platform as a Service (PAAS), Cloud-based Unified Communication as a Service (UCaaS). TPT Global Tech offers carrier-grade performance and support for businesses over its private IP MPLS fiber and wireless network in the United States. TPT Global Tech's cloud-based UCaaS services allow businesses of any size to enjoy all the latest voice, data, media and collaboration features in today's global technology markets. It also operates as a Master Distributor for Nationwide Mobile Virtual Network Operators (MVNO) and Independent Sales Organization (ISO) as a Master Distributor for Pre-Paid Cell phone services, Cell phone Accessories and Global Roaming Cell phones. TPT Global reported a net loss attributable to shareholders of $4.02 million for the year ended Dec. 31, 2021, compared to a net loss attributable to shareholders of $8.07 million for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $8.55 million in total assets, $32.03 million in total liabilities, $58.25 million in total mezzanine equity, and a total stockholders' deficit of $81.73 million. Draper, UT-based Sadler, Gibb & Associates, LLC, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 14, 2022, citing that the Company has suffered recurring losses from operations and has a net capital deficiency which raises substantial doubt about its ability to continue as a going concern. TRANSDERMAL SPECIALTIES: Amends Maryland Equity Secured Claims Pay ------------------------------------------------------------------ Transdermal Specialties Global, Inc. ("TSG"), BKR IP Holdco, LLC ("BKR IP Holdco"), and Transdermal Specialties, Inc. ("TSI") submitted a Second Amended Disclosure Statement describing Second Amended Reorganization Plan dated February 28, 2023. The Debtor's plan is a 100% plan and, therefore, the Creditors will be better off in this plan versus a conversion to chapter 7 bankruptcy. The unsecured creditors claims are estimated at $2,700,000.00 and, therefore, the value of claims exceed the value of any of the Debtor's assets. Class 5 consists of Secured Claims of the Maryland Equity Partnership Investment Fund, LLC in the amount of $250,000.00. The Class 5 Claim is impaired under the Plan. The Class 5 Claim is secured by the Debtor's equipment, as further set forth in the Proof of Claim filed by Maryland Equity Partnership Investment Fund, LLC. The Class 5 Secured Claim will be paid based upon a 24-month amortization. Interest will accrue, pursuant to the Plan, at Prime plus 3% per annum. The Debtor shall make a one-time initial payment of $120,000.00 on the effective date. Beginning on the first day of the first month following the effective date, the Debtor will make level payments to the State of Maryland (of the balance of $130,000.00) which shall include principal and interest over the 24-month period. Class 5 shall retain its lien position until the Class 5 secured claim is paid. The Second Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors: * Class 1 consists of the Unsecured Claims as to BKR IP Holdco. Class 1 is Impaired. Class 1 Claims as to BKR Holdco is estimated at $2,700,000.00. The Debtor proposes to pay all Allowed Unsecured Claims a total payment of 100% of the claim to be paid over 36 months. The Debtor proposes to make a payment of $100,000.00 on the effective date. Thereafter, the Debtor shall make a pro-rata distribution every 6 months until the anniversary of the 36-month of the effective date. * Class 3 consists of Allowed Unsecured Claims as to TSI. Class 3 is impaired. Class 3 Claims are estimated at $2,700,000.00. The Debtor proposes to pay all Allowed Unsecured Claims a total payment of 100% of their claim to be paid over 36 months. The Debtor proposes to make a payment of $100,000.00 on the effective date. Thereafter, the Debtor shall make a pro-rata distribution every 6 months until the anniversary of the 36-month of the effective date. * Class 6 consists of Allowed Unsecured Claims of TSG. Class 6 is impaired. Class 6 Claims as to TSG are estimated at $2,700,000. The Debtor proposes to pay all Allowed Unsecured Claims a total a payment of 100% of their claim to be paid over 36 months. The Debtor proposes to make a payment of $100,000.00 on the effective date. Thereafter, the Debtor shall make a pro-rata distribution every 6 months until the anniversary of the 36-month on the effective date. The TSI Debtor is in the final stages of negotiating purchase orders with major medical aesthetic companies with regard to the production and distribution of the U-Wand Product. This is not a license agreement but product sales only through purchase order. The U-Wand Product's intellectual property is held by BKR IP Holdco but is licensed to TSI for use and distribution. Specifically, the U-Wand 101 is designed for scalp treatment with disposable sonic caps. The Sonic Caps would also be produced and sold separately. The U-Wand 102 is a separate product, utilizing the same technology and is designed for ant-wrinkle. Lastly, the U-Pen is a miniaturized utilization of the same technology for pinpoint treatment of laugh linens and wrinkles on the face, neck and hands. The Debtor's Plan shall be funded by the proceeds of the Sale of U-wand technology. In addition to the revenue from operations, the Debtors are currently seeking their options, including, but not limited to sale of the technology, license agreements and/or other investment options with large pharmaceutical companies. The financing related to the TSG trial will provide working capital to cover expenses during the pendency of the Plan. In addition to the Plan Funding, the owners of BKR IP Holdco shall infuse an additional cash infusion of $50,000.00 in exchange for 100% of the new issued membership interests in the Debtor. A full-text copy of the Second Amended Disclosure Statement dated February 28, 2023 is available at https://bit.ly/3Ylp1H7 from PacerMonitor.com at no charge. Attorneys for the Debtor: CIARDI CIARDI & ASTIN Albert A. Ciardi, III, Esq. Daniel S. Siedman, Esq. 1905 Spruce Street, Philadelphia, PA 19103 About Transdermal Specialties Global Transdermal Specialties Global, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-11425) on May 19, 2021. At the time of the filing, the Debtor had $1 million to $10 million in both assets and liabilities. Judge Magdeline D. Coleman oversees the case. Ciardi Ciardi & Astin serves as the Debtor's legal counsel. TRC COS INC: $30M Bank Debt Trades at 15% Discount -------------------------------------------------- Participations in a syndicated loan under which TRC Cos Inc/Delaware is a borrower were trading in the secondary market around 84.6 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $30 million facility is a Delay-Draw Term loan that is scheduled to mature on December 9, 2029. TRC Companies, Inc. operates as an engineering and construction management firm. The Firm offers communications, engineering, environmental testing, coal ash, energy efficiency, hurricane disaster recovery, and air quality management services. TRC serves power, oil and gas, environmental, and infrastructure market. U.S. SILICA: Swings to $77.8 Million Net Income in 2022 ------------------------------------------------------- U.S. Silica Holdings, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing net income of $77.84 million on $1.52 billion of total sales for the year ended Dec. 31, 2022, compared to a net loss of $34.32 million on $1.10 billion of total sales for the year ended Dec. 31, 2021. As of Dec. 31, 2022, U.S. Silica had $2.21 billion in total assets, $1.51 billion in total liabilities, and $704.69 million in total stockholders' equity. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1524741/000162828023005026/slca-20221231.htm About U.S. Silica Headquartered in Katy, Texas, U.S. Silica Holdings, Inc. -- http://www.ussilica.com-- is a global performance materials company and a producer of commercial silica used in a wide range of industrial applications and in the oil and gas industry. In addition, through its subsidiary EP Minerals, LLC, the Company produces products derived from diatomaceous earth, perlite, engineered clays, and non-activated clays. * * * This concludes the Troubled Company Reporter's coverage of U.S. Silica Holdings, Inc. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. US RENAL CARE: $1.60B Bank Debt Trades at 33% Discount ------------------------------------------------------ Participations in a syndicated loan under which US Renal Care Inc is a borrower were trading in the secondary market around 67.1 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.60 billion facility is a Term loan that is scheduled to mature on July 26, 2026. About $1.55 billion of the loan is withdrawn and outstanding. U.S. Renal Care is a dialysis provider available for people living with chronic and acute renal disease. US SILICA: S&P Upgrades ICR to 'B' on Lower Leverage Expectations ----------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Katy, Texas-based frac sand and commercial silica producer U.S Silica Co. to 'B' from 'B-'. At the same time, S&P assigned its 'B+' issue-level rating and '2' recovery rating to the company's proposed $950 million term loan B (TLB). The existing issue-level ratings on the current TLB will be withdrawn upon full repayment. The stable outlook reflects S&P's expectation that demand in the oil and gas proppant segment and favorable prices will spur earnings growth and substantial free cash flow generation to support further debt repayment over the next 12 months. U.S Silica is pursuing a refinancing of its capital structure comprising a $100 million revolving credit facility (RCF) and a $950 million term loan (new senior secured credit facilities). The proposed refi transaction will result in lower debt levels and extend U.S. Silica's maturity profile. U.S. Silica plans to raise new senior secured credit facilities comprising a $100 million five-year RCF (unfunded at close) and $950 million seven-year TLB. The transaction proceeds, together with cash from the balance sheet, will be used to pay off the existing TLB with $1.059 billion outstanding as of Dec. 31, 2022, and transaction-related fees. The company voluntarily repaid $150 million of TLB in 2022 and are on course to repay another $100 million with the proposed transaction, which would result in a $250 million reduction in gross debt over the last 9 months. The proposed transaction will also improve the company's debt maturity profile with the revolver maturity extended to 2028 (existing maturity is May 2023) and TLB extended to 2030 (previously May 2025). U.S. Silica's adjusted leverage will improve to 2x-3x in 2023 through a combination of improved earnings and lower debt levels. S&P said, "The combination of improved earnings and a 25% reduction in adjusted debt should result in adjusted leverage below 3.0x in 2023, which compares favorably with 3.3x for 2022 and our previous forecast. We forecast U.S. Silica will end fiscal 2022 with adjusted EBITDA of $330 million-$360 million, which will be an increase of about 20% from our previous estimate and almost 45% better than in fiscal 2021. The improvement in EBITDA was spurred by higher prices and robust demand in the oil and gas proppant segment, as elevated oil prices continue to spur drilling and well completion in the oil and gas industry. We expect the West Texas Intermediate (WTI) price will soften by 10.5% in 2023 to $85 per barrel(/bbl) which is still above historical lows of below $40 in 2020 and continue to support robust Permian activity. As result, we anticipate strong demand for proppant, along with supply tightness in the industry, will support higher prices in 2023, leading us to forecast EBITDA of $370 million-$420 million. Our EBITDA forecast in 2023 is also supported by the introduction of higher-margin products in the industrial specialty products (ISP) segment that will help improve EBITDA margins to 22%-23% over the next 24 months, from 20.5% in 2021." Robust cash flow generation will support management's deleveraging drive. When the proposed transaction is finalized, U.S. Silica would have made about $250 million in voluntary debt repayments within 12 months, using free operating cash flows (FOCF) generated in 2022. S&P said, "We expect FOCF generation will remain robust in 2023, in line with our expectation of an increase in earnings and a 10% increase in capital expenditure (capex). We do not expect any significant increase in capex in the next 12-24 months, as the company does not plan to significantly increase capacity, especially in the oil and gas proppant segment. With a commitment to bring net leverage below 2.0x, U.S. Silica will continue with its zero-dividend policy in 2023 and has no plans to make significant acquisitions. Therefore, we expect discretionary cash flow (DCF) of about $180 million-$220 million will be available for voluntary debt repayment." S&P said, "The stable outlook reflects our expectation that a sustained rally in demand, especially in the oil and gas proppant segment, and favorable prices for frac sand should spur robust earnings and substantial free cash flow generation over the next 12 months to fund operations. We also expect that the majority of the DCF generated will be allocated toward debt reduction in line with the company's financial policy, which will increase the cushion in its credit metrics and solidify its adjusted leverage below 3x. "We could lower our ratings on U.S. Silica if the company pursues a large debt-financed acquisition or its earnings deteriorate due to unexpected operational issues, including the risk of increased competition due to low barriers to entry in the industry. In such scenarios, we would expect adjusted leverage to approach 5.0x." An upgrade is contingent on the company establishing a track record of maintaining leverage below 3.0x and increasing the buffer in its financial metrics during this period of elevated prices, especially in the oil and gas proppant segment. S&P could also upgrade U.S. Silica if it demonstrates that it could sustain adjusted leverage in the 3.0x-4.0x range through a cycle. ESG credit indicators: E-3, S-2, G-2 VENUE CHURCH: Wins Cash Collateral Access Thru March 9 ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Tennessee, Southern Division, authorized Venue Church, Inc. to continue using cash collateral through March 9, 2023. Venue Church received and accepted an offer to sell its Lee Highway campus (subject to Court approval), for $3.625 million, an amount sufficient to fully satisfy all amounts owed to First Citizens National Bank. An Order approving the sale was entered on December 8, 2022. A further hearing on the matter is set for March 9 at 10:30 a.m. A copy of the order is available at https://bit.ly/3L125tT from PacerMonitor.com. About Venue Church Inc. Venue Church Inc. is a megachurch in Tennessee. Venue Church Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tenn. Case No. 22-11829) on August 23, 2022. In its petition, it listed estimated assets less than $5 million and more than $3 million in mortgage, auto loan, and credit card debt. The case is overseen by the Hon. Bankruptcy Judge Shelley D. Rucker. The Debtor is represented by W. Thomas Bible, Jr, Esq. at Tom Bible Law as counsel. VERITAS US: $1.70B Bank Debt Trades at 22% Discount --------------------------------------------------- Participations in a syndicated loan under which Veritas US Inc is a borrower were trading in the secondary market around 78.4 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.70 billion facility is a Term loan that is scheduled to mature on September 1, 2025. The amount is fully drawn and outstanding. Veritas US Inc. designs and develops enterprise software solutions. VERITAS US: EUR748.6M Bank Debt Trades at 20% Discount ------------------------------------------------------ Participations in a syndicated loan under which Veritas US Inc is a borrower were trading in the secondary market around 80.2 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The EUR748.6 millionfacility is a Term loan that is scheduled to mature on September 1, 2025. The amount is fully drawn and outstanding. Veritas US Inc. designs and develops enterprise software solutions. VMR CONTRACTORS: Court OKs Cash Collateral Access Thru March 13 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized VMR Contractors Inc. to use cash collateral on an interim basis in accordance with the budget, through March 13, 2023. The Court held that, to the extent the Debtor's use of cash collateral under the order diminishes the value of the claimants' interests in cash collateral as of the petition date, the claimants are granted a post-petition security interest on the same type or form of collateral that secured the claimants' prepetition claims as of the petition date. The post-petition liens will have the same priority, validity, and enforceability that existed as of the petition date, without the need to create, file, record, or serve any financing statements or other documents or take any other action that state or federal law may require to validate or perfect the liens. The Debtor will make an adequate protection payment of $2,500 to the IRS by March 13, 2023. The Debtor will also make an adequate protection payment of $1,471 to Old National Bank by March 13, 2023. As previously reported by the Troubled Company Reporter, several entities may claim an interest in the Debtor's cash collateral. Those potential claimants are: 1. The State of Illinois, which recorded state tax liens on April 28 and June 14, 2022, in the total amount of $32,346. 2. the Internal Revenue Service, which recorded federal tax liens with the Illinois Secretary of State, including a lien dated November 16, 2016, in the amount of $424,956. Other tax liens also have been recorded; the IRS has asserted it is owed $819,234. The Debtor disputes a large portion of this amount, including an obligation from 2015 of $560,027, which appears to be clearly erroneous because it is wholly disproportionate to the Debtor's operations. 3. Old National Bank, whose predecessor, Bridgeview Bank Group, filed on August 1, 2018, a financing statement with the Illinois Secretary of State as document number 023614561. The amount owed to Old National is approximately $160,633. A further hearing on the matter is set for March 13 at 10 a.m. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3y5FJjb from PacerMonitor.com. The Debtor projects $509,023 in total income and $508,384 in total expenses for the two-week period ending March 13, 2023. About VMR Contractors VMR Contractors supplies and installs rebar for road construction projects. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14211) on December 8, 2022. In the petition signed by Vincent Roberson, its president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Benjamin Goldgar oversees the case. William J. Factor, Esq., at Factor Law, is the Debtor's legal counsel. WEST MARINE INC: Seeks Lender Support for Debt Deal --------------------------------------------------- Reshmi Basu of Bloomberg News reports that, according to people familiar with the situation, West Marine Inc. is soliciting lender support for a deal that would see its private equity owner, L Catterton, push down its own debt holdings in the repayment line and inject new money into the boating retailer. The proposal would see first-lien lenders receive most of their interest in-kind, and second-lien lenders receive all of their interest in-kind, until at least the end of the year, said the people, who asked not to be identified because the matter is private. About West Marine Inc. West Marine, Inc. is a leading omni-channel specialty retailer in its industry, serving people who enjoy recreating on or around the water. WESTERN GLOBAL: Fitch Lowers LongTerm IDR to 'B-', On Watch Neg. ---------------------------------------------------------------- Fitch Ratings has downgraded Western Global Airlines, Inc.'s (WGA) Long-Term Issuer Default Rating (IDR) to 'B-' from 'B+ and placed the rating on Negative Watch. Fitch has also downgraded the senior unsecured notes to 'B'/'RR3' from 'BB-'/'RR3'. The downgrade is mainly driven by heightened near-term liquidity risks. While management's focus on liquidity is appropriate, the soft market outlook, challenged pilot environment, and fully drawn revolver elevate execution risk. The Rating Watch reflects these execution risks and the need to de-risk its deteriorating financial flexibility, particularly ahead of its $21 million August coupon payment. Another consideration is the elevated risk of a distressed debt exchange. Fitch understands management is enhancing working capital management and rationalizing capex to improve FCF, while exploring additional liquidity options. The unsecured bond indenture provides approximately $40 million of additional secured debt capacity that could help alleviate near-term liquidity risks, but potentially place pressure on WGA's unsecured ratings. Fitch currently expects to resolve the Watch prior to WGA's upcoming unsecured coupon payment. KEY RATING DRIVERS Heightened Liquidity, Execution Risks: Fitch views WGA's liquidity to be constrained due to a fully drawn revolver and weaker FCF profile following recent operational challenges in China and a softer air cargo environment. The company has approximately $4 million of quarterly payments in interest expenses and principal amortization related to its secured debt and larger $21 million semi-annual coupons on the unsecured bonds (next payment due Aug. 23). Fitch believes Q1 cash levels will be very low, while FCF for the remainder of the year will be challenged by ongoing weakness in the air cargo environment and the pilot shortage. These risks heighten further as the August coupon payment approaches. Fitch believes WGA has limited room for operational disruptions amid a constrained liquidity condition. The company faces execution risks from rising competition for pilots and a weakening air cargo market. Fitch believes staffing levels at WGA will continue to be pressured in 2023 representing an obstacle to bring operations to a normalized level that optimizes asset utilization and block hours. The return of belly-hold capacity is also expected to place further pressure on block hour rates. Contingent Liquidity Options: Fitch understands that WGA has roughly $40 million of secured debt capacity (net of outstanding revolver and term loans) under its bond indenture. The issuance is dependent on WGA having Fixed Charge Coverage Ratio below 2x, which may be achievable as management continues to rationalize its maintenance capex. The potential issuance of additional secured debt could alleviate near-term liquidity concerns, but would likely pressure the unsecured bond rating. WGA could also sell non-core assets to further support liquidity. Leverage Exceeding Sensitivity: Fitch currently forecasts EBITDAR leverage to remain elevated in the low 4x range in 2022 and 2023, which is above 'B+' rating tolerances. Fitch forecasts leverage could improve to mid 3x in 2024 on improving air cargo and pilot market conditions. Fitch remains cautious on non-reimbursable fuel costs for ferry flights, and faster normalization of freight rates, which can keep leverage metrics elevated. WGA's two scheduled 777 freighter deliveries could be pushed back or cancelled given its potential FCF and funding constraints. DERIVATION SUMMARY Relative to a larger air cargo airline Rand Parent (Atlas Air; BB/Stable), WGA faces higher liquidity risks with its revolver fully drawn and greater operational challenges to compete for pilots. WGA also has weaker credit metrics than Atlas. WGA's EBITDAR leverage at low 4x in 2022 and 2023 is higher than Atlas's high 2x-low 3x leverage range. WGA's EBITDAR fixed-charge coverage is weaker at high 2.5x than 3.4x at Atlas. In terms of fleet diversification, WGA has a smaller fleet than Atlas which increases its operating risks associated with aircraft downtime. WGA's contracts with customers are shorter, which fits with WGA's strategy to cater to high margin last minute demand; however, shorter duration of contracts increases WGA's exposure to freight rates. Relative to passenger airlines such as American Airlines 'B-', Hawaiian Holdings 'B-', and WestJet 'B-', WGA faces liquidity challenges while the passenger airlines currently hold ample liquidity. WGA's EBITDAR fixed-charge coverage and EBITDAR leverage are slightly stronger than the 'B-' rated passenger airline peers. WGA is exposed to freight rates and pilot recruitment while the company benefits from fuel pass through built into its contract structure, compared with the passenger airlines that are typically exposed to fuel price fluctuation. KEY ASSUMPTIONS - Fitch assumes utilization rates at 41% and gradually increase to an estimate of 45% in 2024 and 47% in 2025; - Block hour rates are assumed to decline by 9% and 2% in 2023 and 2024, as demand weakens and belly space continues to recover. Fitch illustrates a rate decline to $8,300 per hour in 2024, assuming demand/supply conditions rebalance. This is slightly above 2019 levels of $8,200 per hour; - EBITDA margins contract in 2022 due to operational and pilot challenges, increased salaries and maintenance costs. Margins are improving in 2023 and 2024 as WGA reduces aircraft downtime and has completed heavy C-check and conformity of new aircraft. In 2025, Fitch has illustrated an additional $15 million of opex, the high end of early estimates of incremental unionization costs; - Voluntary debt prepayment is not assumed; - Increased investment into account receivables as WGA increases business in the military segment; - Revolver is not repaid in full until 2024. Recovery Analysis The recovery analysis for WGA reflects Fitch's expectation that the enterprise value of the company, and recovery rates for creditors, would be maximized as a going concern rather than through liquidation. Fitch has assumed a 10% administrative claim. A going concern EBITDA estimate of approximately $100 million reflects Fitch's view of a sustainable post-reorganization EBITDA. Fitch considers a bankruptcy scenario that could be caused by increased competitive pressures, the loss of a large customer and aircraft maintenance challenges driving higher downtime. An enterprise value multiple of 4.0x is used to calculate the post-reorganization valuation. The multiple considers the recent buyout of a larger peer Atlas World Wide at 5x. Additionally, Fitch considered various other airline bankruptcies which have historically reorganized around 3.1x-6.8x EBITDA with most of the airline multiples below the 6.1x cross-sector corporate median. RATING SENSITIVITIES Factors that could lead, collectively or individually, to the resolution of Rating Watch - FCF generation, increased revolver availability or procurement of additional liquidity within the next six months sufficient to alleviate near-term liquidity risks; - Normalizing operations, including pilot retention; - Adjusted debt/EBITDAR sustained around 4.25x; or a Fitch-calculated fixed-charge coverage ratio sustained at 2.5x. Factors that could, individually or collectively, lead to a positive rating action/upgrade: - Normalizing operations including successful pilot recruitment and increased aircraft utilization rates; -- Implementation of a credible refinancing plan alleviating the 2025 maturity profile; - Revolver availability of 50% or more; - Adj. debt/EBITDAR sustained below 4.0x or a fixed-charge coverage ratio sustained around 3x. Factors that could, individually or collectively, lead to a negative rating action/downgrade: - Heightened liquidity risk due to inability to generate positive FCF and inability to execute on contingent liquidity options; - Structural operating challenges driving adjusted debt/EBITDAR above 4.5x and/or fixed-charge coverage toward 2x; - Heightened refinance risks or potential for a distressed debt exchange. LIQUIDITY AND DEBT STRUCTURE Constrained Liquidity: Total liquidity was below normal levels at 3Q22, standing at $27 million of cash on the balance sheet. The $47.5 million revolver due 2025 is currently fully drawn. Fitch expects liquidity to be challenged in 2023 due to large financial obligations, including the $21 million semi-annual coupon bond payments and $4 million interest and TL amortization on the secured facilities, while FCF is expected to be challenged. Heightened Refinance Risks: WGA has roughly $100 million of secured debt and $400 million of unsecured debt maturities in 2025. Fitch believes operational execution is crucial to increase EBITDA and bring leverage metrics down. This would alleviate future challenges to refinance the debt in capital markets before 2025. ISSUER PROFILE WGA is an international cargo airline. WGA provides air freight services to large e-commerce, express, airlines, logistics companies as well as governments and NGOs. It has a vertically integrated model with significant heavy maintenance and engine capabilities through its in-house MRO facility 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 ----------- ------ -------- ----- Western Global Airlines, Inc. LT IDR B- Downgrade B+ senior unsecured LT B Downgrade RR3 BB- WILLIAM HOLDINGS: Trustee Taps Hilco Real Estate as Broker ---------------------------------------------------------- Howard M. Ehrenberg, Chapter 11 Trustee of the bankruptcy estate of William Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Hilco Real Estate, LLC as its real estate agent. The firm will perform real estate consulting and advisory services and to market and sell the four remaining properties in which the Debtor has an interest: -- 3256 Dos Palos Drive, Los Angeles, California 90068, which is a two unit townhouse; -- 5617 Virginia Avenue, Los Angeles, California 90038, which is a six unit apartment building; -- 6821 Ben Avenue, Los Angeles, Los Angeles, CA 91605, which is a seven unit apartment building; and -- 7135 Hollywood Blvd., #701, Los Angeles, CA 90046, which is a single condominium unit. Hilco will be paid a commission of 5 percent from the sale of the properties. As disclosed in court filings, Hilco is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Sarah Baker Hilco Trading, LLC 5 Revere Drive, Suite 206 Northbrook, IL 60062 Tel: +91 84750 91100 About William Holdings William Holdings, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-14708) on Aug. 29, 3033. In the petition filed by its chief executive order, Kameron Segal, the Debtor reported $10 million to $50 million in both assets and liabilities. Judge Deborah J. Saltzman oversees the case. The Debtor is represented by the Law Offices of Michael Jay Berger. WINTERFELL CONSTRUCTION: Seeks to Hire Burg Wynn as Legal Counsel ----------------------------------------------------------------- Winterfell Construction, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to employ Burg Wynn, PA to handle its Chapter 11 case. The firm's services include: a. providing the Debtor with legal advice with respect to its powers and duties and with respect to the continued operation of its business and the management of its property; b. preparing legal papers; c. conducting examinations incidental to the administration of the Debtor's estate; d. taking necessary actions instant to the proper preservation and administration of the estate; e. assisting the Debtor in the preparation and filing of a statement of affairs, schedules, list of executory contracts and list of income and expenditures; and f. other necessary legal services. Burg Wynn will be paid at these rates: Attorney $300 to $425 per hour Legal Assistant $135 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The firm received from the Debtor a non-refundable retainer in the amount of $80,000. As disclosed in court filings, Burg Wynn is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael A. Wynn, Esq. Burg Wynn, PA 4436 Clinton Street, Marianna, FL 32447 Tel: (850) 526-3520 Fax: (850) 526-5210 Email: Michael@BurgWynn.com About Winterfell Construction Winterfell Construction, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-50015) on Jan. 31, 2023, with as much as $500,000 in both assets and liabilities. Judge Karen K. Specie oversees the case. Michael A. Wynn, Esq., at Burg Wynn, PA is the Debtor's legal counsel. WOUAFF WOUAFF: Amends Several Secured Claims Pay Details -------------------------------------------------------- Wouaff Wouaff, LLC, submitted a Second Amended Plan of Reorganization for Small Business. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $1,243,333.00/ This final Plan payment is expected to be paid on March 1, 2028. This Plan of Reorganization proposes to pay creditors of the Debtor from operations or future income. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 100 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 3 consists of the secured claims of Daimler Trust (Claims 8 & 9) secured by 2 vehicle leases which will be paid in accordance with their terms. Class 4 consists of the claim of Channel Partners. Channel Partners' claim is secured by one vehicle; the second vehicle was released by Court-approved payment of $20,000.00 during the pendency of this case after application of the $20,000.00, the secured portion of Channel Partners' claim was reduced to $58,242.91 which shall be paid over 3.5 years at 8.0% interest, which is estimated to be $1,594.51 per month. The unsecured portion of Channel Partners' claim in the amount of $18,444.13 shall be treated as unsecured claim and paid without interest over 5 years. Class 5 consists of the secured claim of Mercedes Benz secured by 5 leases on 5 vehicles which have 5 separate leases and 5 separate maturity dates. The parties agreed to a comprehensive agreement which provides for extending 2 of the leases to cover administrative claims and payment of the administrative claims on the remaining 3 leases over 8 months. The Debtor shall pay a total, including all additional charges, late charges, property taxes, sales taxes, and attorney's fees, of administrative claim of $238,768.15. It is anticipated that the final payment of the last lease will occur on May 13, 2027. Class 6 consists of the secured claim of Small Business Administration, secured by blanket lien on all personal property of the Debtor. This claim will be paid in full with contract interest of 3.75% over the 30 year term of the note. Class 7 is comprised of entities that hold claims against the Debtor based upon agreements with the Debtor under which the Claimants purchased a percentage of the Debtor's future accounts, contract rights and other entitlements arising from or relating to the payment of money by the Debtor's customers and/or third-party payors for payments due to the Debtor as the result of the sale of goods and services. The members of this class are Prospereum which shall be paid $39,775.83 with 0% interest over the term of 60 months; Fox Capital Group which shall receive $36,750.00 at 0% interest over the term of 60 months; Bluevine which shall be paid $60,568.00 at 0% interest over the term of 60 months; Fortress which shall receive $97,875.00 at 0% interest over the term of 60 months; Cloud Fund which shall receive $152,360.00 at 0% interest over the term of 60 months; Loan Builder which shall receive $80,866.00 at 0% over the term of 60 months; and Rapid Finance which shall receive $55,000.00 at 0% interest over the term of 60 months. Like in the prior iteration of the Plan, non-priority unsecured claims shall be provided promissory notes for 100% of their allowed claims payable over 60 months in monthly payments starting the 15th of each month following the effective date of the Plan. A full-text copy of the Second Amended Plan dated February 27, 2023 is available at https://bit.ly/3IODSEa from PacerMonitor.com at no charge. Attorney for the Debtor: Marshall G. Reissman, Esq. THE REISSMAN LAW GROUP, P.A. 1700 66th St. N., Suite 405 St. Petersburg, FL 33710 Telephone: (727) 322-1999 Facsimile: (727) 327-7999 About Wouaff Wouaff Wouaff Wouaff, LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 8:22-bk-01595) on April 21, 2022, with up to $50,000 in assets and up to $500 million in liabilities. Julian M. Mackenzie, managing member, signed the petition. Judge Michael G. Williamson oversees the case. Marshall G. Reissman, Esq., at Reissman Law Group, P.A., is the Debtor's counsel. WPI WATER: Seeks Approval to Tap Leonard K. Welsh as Legal Counsel ------------------------------------------------------------------ WPI Water Resources Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ the Law Offices of Leonard K. Welsh to serve as legal counsel in its Chapter 11 case. The firm's services include: a. consulting with the Debtor about its financial situation and goals and the efficacy of various forms of bankruptcy as a means to achieve its goals; b. preparing the documents necessary to administer the Debtor's bankruptcy case; c. advising the Debtor concerning its duties in a Chapter 11 case; d. helping the Debtor formulate a Chapter 11 plan of reorganization, drafting the plan, and prosecuting legal proceedings to obtain confirmation of the plan; and e. preparing and prosecuting pleadings such as complaints to avoid preferential transfers or transfers deemed fraudulent to creditors, objections to claims, and motions for authority to borrow money, sell property or compromise claims. The hourly rates charged by the firm are as follows: Attorneys $250 - $400 per hour Legal Assistants $125 per hour The firm received from the Debtor a retainer of $20,000, and will be reimbursed for out-of-pocket expenses incurred. Leonard Welsh, Esq., 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: Leonard K. Welsh, Esq. Law Offices of Leonard K. Welsh 1800 30th Street, Fourth Floor Bakersfield, CA 93301 Tel: (661) 328-5328 Fax: (661) 760-9900 Email: lwelsh@lkwelshlaw.com About WPI Water Resources WPI Water owns and operates a water well drilling and repair business in Tulare County, California. The Debtor filed Chapter 11 Petition (Bankr. E.D. Cal. Case No. 23-10219) on February 6, 2023. Hon. Rene Lastreto II oversees the case. Leonard K. Welsh, Esq. of LAW OFFICE OF LEONARD K. WELSH is the Debtor's Counsel. In the petition signed by Amanda Jensen, chief executive officer, the Debtor disclosed $72,631 in assets as of Feb. 6, 2023 and $1,186,605 in liabilities as of Feb. 6, 2023. ZAYO GROUP: $4.96B Bank Debt Trades at 15% Discount --------------------------------------------------- Participations in a syndicated loan under which Zayo Group Holdings Inc is a borrower were trading in the secondary market around 84.9 cents-on-the-dollar during the week ended Friday, March 3, 2023, according to Bloomberg's Evaluated Pricing service data. The $4.96 billion facility is a Term loan that is scheduled to mature on March 9, 2027. The amount is fully drawn and outstanding. Zayo Group Holdings, Inc., or Zayo Group, is a privately held company headquartered in Boulder, Colorado, with European headquarters in London, England. The company provides communications infrastructure services. ZENTUARY GROUP: Gets OK to Hire Franklin & Company as Accountant ---------------------------------------------------------------- Zentuary Group, LLC received approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Franklin & Company, LLC. The Debtor requires an accountant to prepare tax returns and periodic monthly operating reports and provide other accounting services. The firm will be paid at these rates: John Franklin $225 per hour Madeleine Rees $180 per hour John Franklin, a certified public accountant and partner at Franklin & Company, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: John Franklin, CPA Franklin & Company, LLC 4314 Lamson Avenue, Spring Hill, FL 34608 Tel: (352) 684-3535 About Zentuary Group Zentuary Group LLC, doing business as Farmacy Vegan Kitchen, is a quick service restaurant offering a well-rounded, 100% plant-based menu. Zentuary Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02594) on June 28, 2022, with up to $50,000 in assets and up to $1 million in liabilities. Charles Rumph, president of Zentuary Group, signed the petition. Judge Caryl E. Delano oversees the case. James W Elliott, Esq., at McIntyre Thanasides Bringgold Elliott Grimaldi Guito & Matthews, P.A. and Franklin & Company, LLC are the Debtor's legal counsel and accountant, respectively. [^] BOND PRICING: For the Week from February 27 to March 3, 2023 ---------------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 99 Escrow Issuer Inc NDN 7.500 45.466 1/15/2026 99 Escrow Issuer Inc NDN 7.500 45.703 1/15/2026 99 Escrow Issuer Inc NDN 7.500 45.636 1/15/2026 Accelerate Diagnostics AXDX 2.500 91.609 3/15/2023 Air Methods Corp AIRM 8.000 5.793 5/15/2025 Air Methods Corp AIRM 8.000 5.813 5/15/2025 Audacy Capital Corp CBSR 6.500 12.941 5/1/2027 Audacy Capital Corp CBSR 6.750 12.417 3/31/2029 Audacy Capital Corp CBSR 6.750 13.299 3/31/2029 Avaya Inc AVYA 6.125 28.562 9/15/2028 Avaya Inc AVYA 8.000 26.750 12/15/2027 Avaya Inc AVYA 6.125 26.772 9/15/2028 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bed Bath & Beyond Inc BBBY 5.165 13.241 8/1/2044 Bed Bath & Beyond Inc BBBY 3.749 32.083 8/1/2024 Bed Bath & Beyond Inc BBBY 4.915 13.014 8/1/2034 Clovis Oncology Inc CLVS 1.250 12.750 5/1/2025 Clovis Oncology Inc CLVS 4.500 19.875 8/1/2024 Clovis Oncology Inc CLVS 4.500 11.827 8/1/2024 Crockett Cogeneration CROCOG 5.869 100.713 3/30/2025 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 9.971 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 9.837 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 3.468 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 2.526 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 3.468 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 10.355 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 2.527 8/15/2027 Endo Finance LLC / Endo Finco Inc ENDP 5.375 5.250 1/15/2023 Endo Finance LLC / Endo Finco Inc ENDP 5.375 4.912 1/15/2023 Energy Conversion Devices Inc ENER 3.000 0.764 6/15/2013 Envision Healthcare EVHC 8.750 23.156 10/15/2026 Envision Healthcare EVHC 8.750 23.681 10/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 16.340 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 30.000 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 10.000 29.530 7/15/2023 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 14.947 7/15/2026 Federal Home Loan Banks FHLB 1.300 96.577 3/21/2023 GNC Holdings Inc GNC 1.500 0.819 8/15/2020 Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022 Gossamer Bio Inc GOSS 5.000 29.550 6/1/2027 Hanesbrands Inc HBI 4.625 99.776 5/15/2024 Invacare Corp IVC 5.000 6.000 11/15/2024 Invacare Corp IVC 4.250 6.000 3/15/2026 Lannett Co Inc LCI 7.750 21.862 4/15/2026 Lannett Co Inc LCI 4.500 16.658 10/1/2026 Lannett Co Inc LCI 7.750 21.874 4/15/2026 Liberty Media Corp LMCA 2.125 96.629 3/31/2048 Liberty University Inc FLAMES 3.338 100.000 3/1/2034 Liberty University Inc FLAMES 2.246 100.000 3/1/2024 Liberty University Inc FLAMES 5.100 106.009 3/1/2042 Lightning eMotors Inc ZEV 7.500 59.500 5/15/2024 Lumbermens Mutual Casualty Co KEMPER 8.450 0.905 12/1/2097 MAI Holdings Inc MAIHLD 9.500 35.334 6/1/2023 MAI Holdings Inc MAIHLD 9.500 35.334 6/1/2023 MAI Holdings Inc MAIHLD 9.500 35.334 6/1/2023 MBIA Insurance Corp MBI 16.052 6.775 1/15/2033 MBIA Insurance Corp MBI 16.244 6.775 1/15/2033 Mashantucket Western Pequot Tribe MASHTU 7.350 41.779 7/1/2026 Morgan Stanley MS 1.800 72.961 8/27/2036 National CineMedia LLC NATCIN 5.750 2.066 8/15/2026 OMX Timber Finance Investments II LLC OMX 5.540 0.850 1/29/2020 Party City Holdings PRTY 8.750 18.750 2/15/2026 Party City Holdings PRTY 10.130 18.500 7/15/2025 Party City Holdings PRTY 8.750 19.000 2/15/2026 Party City Holdings PRTY 6.625 0.750 8/1/2026 Party City Holdings PRTY 6.625 0.010 8/1/2026 Party City Holdings PRTY 10.130 15.461 7/15/2025 Photo Holdings Merger Sub Inc SFLY 11.000 40.834 10/1/2027 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rite Aid Corp RAD 7.700 40.557 2/15/2027 RumbleON Inc RMBL 6.750 35.702 1/1/2025 Shift Technologies Inc SFT 4.750 12.125 5/15/2026 Talen Energy Supply TLN 10.500 38.000 1/15/2026 Talen Energy Supply TLN 6.500 37.750 6/1/2025 Talen Energy Supply TLN 6.500 29.146 9/15/2024 Talen Energy Supply TLN 10.500 38.113 1/15/2026 Talen Energy Supply TLN 6.500 29.146 9/15/2024 Talen Energy Supply TLN 10.500 33.000 1/15/2026 Team Inc TISI 5.000 75.388 8/1/2023 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 9.375 5/15/2027 US Renal Care Inc USRENA 10.625 30.269 7/15/2027 US Renal Care Inc USRENA 10.625 31.002 7/15/2027 UpHealth Inc UPH 6.250 30.622 6/15/2026 WeWork Cos Inc WEWORK 7.875 50.455 5/1/2025 WeWork Cos Inc WEWORK 7.875 51.956 5/1/2025 WeWork Cos LLC / WW Co-Obligor Inc WEWORK 5.000 42.099 7/10/2025 WeWork Cos LLC / WW Co-Obligor Inc WEWORK 5.000 43.985 7/10/2025 Wesco Aircraft Holdings Inc WAIR 13.125 8.130 11/15/2027 Wesco Aircraft Holdings Inc WAIR 8.500 48.250 11/15/2024 Wesco Aircraft Holdings Inc WAIR 8.500 49.500 11/15/2024 Wesco Aircraft Holdings Inc WAIR 13.125 8.000 11/15/2027 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. 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