/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230309.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 9, 2023, Vol. 27, No. 67 Headlines 14 EAST WASHINGTON: U.S. Trustee Unable to Appoint Committee 225 BOWERY LLC: Seeks to Hire Alston & Bird as Legal Counsel 57-36 MYRTLE AVE: Seeks Cash Collateral Access ADDISON DATA SERVICES: Billing's 2nd Amended Complaint Dismissed ADVANCED GAS: Court OKs Deal on Cash Collateral Access AEARO TECHNOLOGIES: UST Says Case, Like LTL's, Should Be Tossed ALLYNE HEALTH: Proposes Immaterial Modifications to Plan AMERICAN CAR CENTER: Closes Business After Pulling Bond Sale APPLIED DNA: Inks Amended Office, Lab Leases With Long Island BEST VIDEO: Summary Judgment in Favor of the Bank Affirmed CANOO INC: Court Validates Restated Certificate of Incorporation CENTRAL FLORIDA CIVIL: Bid to Use Cash Collateral Denied as Moot CENTRIC BRANDS: Alicia Allen's Appeal Dismissed as Equitably Moot CHASE CUSTOM HOMES: U.S. Trustee Appoints Creditors' Committee CLEARPOINT NEURO: Incurs $16.4 Million Net Loss in 2022 CORIZON HEALTH: Proceedings in Jenkins Suit Are Stayed CUENTAS INC: Granted Until April 6 to Regain Nasdaq Compliance CYTODYN INC: Discloses Unregistered Sales of Securities DELPHI BEHAVIORAL: $11MM DIP Loan from Brightwood Wins Final OK DIOCESE OF NORWICH: Abuse Claimants to Propose Competing Plan DUNBAR PARTNERS: Enters Chapter 11 to Save Contract ENERGY HARBOR: S&P Places 'BB+' Credit Rating on Watch Negative FOGO DE CHAO: S&P Alters Outlook to Positive, Affirms 'B-' ICR FUNDAMENTAL LONG TERM: Payment of Genovese's Fees Affirmed GRAY TELEVISION: S&P Rates New Senior Secured Term Loan E 'BB' HERON DEVELOPMENT: April 20 Disclosure Statement Hearing Set HUMANIGEN INC: Nasdaq Grants Request to Appeal Delisting Decision HYRECAR INC: Files for Chapter 11 Bankruptcy to Pursue Sale ILLINOIS INSTITUTE: Moody's Lowers Issuer & Debt Ratings to Ba2 INTERNATIONAL LAND: Valued by EMCO Hannover at $53 Million KROLLMOTION TECHNOLOGIES: Has Deal on Cash Collateral Access LRM PACKAGING: Files Subchapter V Case for Wind Down M & J DUMP TRUCKING: Files Subchapter V Case, Sues BMO MBIA INC: Incurs $203 Million Net Loss in 2022 MERISOL VILLAGES: Amends Capstone Secured Claim Pay Details MICHAEL ROBERT WIGLEY: Relief From 2013 Judgment Affirmed on Appeal MICROVISION INC: Incurs $13.5 Million Net Loss in Fourth Quarter MIRAGE INTERNATIONAL: Files Emergency Bid to Use Cash Collateral MPH ACQUISITION: Moody's Cuts CFR to B3 & Sec. 1st Lien Debt to B1 NS FOA: Wins Cash Collateral Access Thru March 10 NUTEX HEALTH: Posts $14.8 Million Net Loss in Fourth Quarter OMAHA BEACH: U.S. Trustee Unable to Appoint Committee OUTPOST PINES: Files for Chapter 11 Bankruptcy PENTECOSTAL ASSEMBLIES: April 6 Plan & Disclosure Hearing Set PERFORMANCE FOOD: Moody's Alters Outlook on 'Ba3' CFR to Positive PETROLIA ENERGY: Posts $909K Net Loss in Second Quarter RENAISSANCE HOLDING: S&P Alters Outlook to Pos., Affirms 'B-' ICR RICH'S DELICATESSEN: Court OKs Cash Collateral Access Thru April 5 RIOT PLATFORMS: Widens Net Loss to $509.6 Million Net Loss in 2022 SLM CORP: Moody's Alters Outlook on 'Ba1' Issuer Rating to Stable SPIRIPLEX INC: Seeks Cash Collateral Access STANADYNE LLC: U.S. Trustee Appoints Creditors' Committee STARRY GROUP: U.S. Trustee Appoints Creditors' Committee SUZANNE FERRY: Summary Judgment Reversed on Appeal TEHUM CARE SERVICES: U.S. Trustee Appoints New Committee Member TELEXFREE LLC: Fabio Faria's Motion to Dismiss Denied TPC GROUP: Move to Interpret Plan Injunction Granted in Part TRU GRIT: Court OKs Final Cash Collateral Access TUFF TURF: Unsecured Creditors to Get Share of Income for 5 Years UNLIMITED REC-REP: Summary Judgment Vacated, Case Remanded VPR BRANDS: Licensee Prepays $500K Monthly Royalty WILDFLOWER GROUP: Unsecureds Will Get 5% of Claims over 3 Years YS GARMENTS: S&P Lowers ICR to 'B-' on Potential Repayment Risk [^] Recent Small-Dollar & Individual Chapter 11 Filings ********* 14 EAST WASHINGTON: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of 14 East Washington, LLC, according to court dockets. About 14 East Washington 14 East Washington, LLC owns in fee simple title an office-mid-rise-commercial building located at 14 East Washington St., Orlando, Fla., valued at $10.5 million. 14 East Washington sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03988) on Nov. 5, 2022, with $10,803,120 in total assets and $7,721,700 in total liabilities. Antonio Luiz Romano, manager, signed the petition. Judge Lori V. Vaughan oversees the case. The Debtor tapped Nardella & Nardella, PLLC as bankruptcy counsel; Commenda Real Estate, LLC as financial advisor; and Walsh Banks, PLLC, doing business as Walsh Banks Law, as special counsel. 225 BOWERY LLC: Seeks to Hire Alston & Bird as Legal Counsel ------------------------------------------------------------ 225 Bowery, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Alston & Bird, LLP as its legal counsel. The firm's services include: a. advising the Debtor with respect to its powers and duties in the continued management and operation of its businesses and property; b. advising and consulting the Debtor on the conduct of its Chapter 11 case, including all of the legal and administrative requirements of operating in Chapter 11; c. advising the Debtor in connection with a restructuring of its financial obligations, including attending meetings and negotiating with representatives of creditors and other parties in interest; d. taking all necessary actions to protect and preserve the Debtor's estate, including prosecuting actions on the Debtor's behalf, defending any action commenced against the Debtor, and representing the Debtor's interests in negotiations concerning litigations in which the Debtor is involved, including objections to the claims filed against the Debtor's estate; e. preparing pleadings; f. representing the Debtor in connection with obtaining authority to continue using cash collateral and procuring post-petition financing; g. advising the Debtor in connection with potential asset sales; h. appearing before the bankruptcy court and any appellate courts; i. advising the Debtor regarding tax matters; j. taking any necessary action to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan and all documents related thereto; k. preparing organizational documents and other corporate documents in connection with the Debtor's restructuring efforts; and l. other necessary legal services, including: (i) analyzing the Debtor's contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of liens against the Debtor; and (iii) advising the Debtor on corporate and litigation matters, including adversary proceedings. The firm will be paid at these rates: Partners $995 to $1,540 per hour Counsel $1,085 to $1,210 per hour Associates $705 to $995 per hour Paraprofessionals $415 per hour Alston & Bird received $50,000 from Omnia Properties, LLC; $100,000 from CAHE-ACHMN, LLC; and $550,000 from BHT Management, LLC before or on the petition date. Gerard Catalanello, Esq., a partner at Alston & Bird, disclosed in a court filing that his firm neither represents nor holds any interest adverse to the Debtor and its bankruptcy estate or creditors. The firm can be reached through: Gerard S. Catalanello, Esq. James J. Vincequerra, Esq. Dylan S. Cassidy, Esq. Kimberly J. Schiffman, Esq. Alston & Bird LLP 90 Park Avenue New York, NY 10016 Telephone: (212) 210-9400 Facsimile: (212) 210-9444 Emails: gerard.catalanello@alston.com james.vincequerra@alston.com dylan.cassidy@alston.com kimberly.schiffman@alston.com About 225 Bowery 225 Bowery, LLC is a New York-based company operating in the traveler accommodation industry. 225 Bowery sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10094) on Jan. 24, 2023. In the petition signed by its chief restructuring officer, Nat Wasserstein, the Debtor reported $50 million to $100 million in both assets and liabilities. Judge Brendan L. Shannon oversees the case. Alston & Bird LLP and Young Conaway Stargatt and Taylor, LLP represent the Debtor as legal counsel while Nat Wasserstein of Lindenwood Associates, LLC serves as the Debtor's chief restructuring officer. Bank Hapoalim B.M., as lender, is represented by Scott S. Balber, Esq., at Herbert Smith Freehills New York, LLP. 57-36 MYRTLE AVE: Seeks Cash Collateral Access ---------------------------------------------- 57-36 Myrtle Ave, LLC asks the U.S. Bankruptcy Court for the Southern District of New York for authority to use cash collateral and provide adequate protection to TD Bank, N.A. The Debtor seeks to use the funds in its bank account and the revenues it collects to fund its ongoing operations and to enable it to reorganize. The Secured Lender entered into a loan agreement with the Debtor loaning $1.120 million to the Debtor. The Debtor defaulted on the Secured Loan due to a loss of its tenant and inability to lease the Property due to the COVID-19 pandemic. The Debtor now has a quality lessee paying approximately $11,000 per month rent. Further, the Debtor estimates that the value of the Property is $1.5 million which exceeds the Secured Lender's claimed amount due, providing further assurance of payment. The Debtor will pay the Secured Lender the monthly amount set forth in the proposed monthly budget, and its operating expenses which consist mainly of insurance and property tax and any additional proceeds will be utilized as a reserve. In addition to the proposed payments to the Secured Lender it will also receive replacement liens in all of the Debtor's pre-petition and post-petition assets and proceeds, only to the extent that Secured Lender has a valid security interests in the pre-petition assets on the Petition Date and in the continuing order of priority that existed as of the Petition Date. The Replacement Liens will be subject and subordinate only to: (a) United States Trustee fees payable under 28 U.S.C. section 1930 and 31 U.S.C. section 3717; (b) professional fees of duly retained professionals in the Chapter 11 case as may be awarded pursuant to 11 U.S.C. Sections 330 or 331 or pursuant to any fee order entered in the Debtor's Chapter 11 case; (c) the fees and expenses of a hypothetical Chapter 7 trustee to the extent of $10,000; and (d) the recovery of funds or proceeds from the successful prosecution of avoidance actions of the Bankruptcy Code. A copy of the motion is available at https://bit.ly/3ZMzIU7 from PacerMonitor.com. About 57-36 Myrtle Ave, LLC 57-36 Myrtle Ave, LLC is a lessor of non-residential building. The Debtor owns a property located at 5736 Myrtle Ave, Ridgewood, NY 11385-4940 valued at $1.5 million. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-40482) on February 13, 2023. In the petition signed by Paul Amato, managing member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Jil Mazer-Marino oversees the case. H. Bruce Bronson, Esq., at Bronson Law Office, P.C., represents the Debtor as legal counsel. ADDISON DATA SERVICES: Billing's 2nd Amended Complaint Dismissed ---------------------------------------------------------------- In the case styled BILLING ASSOCIATES NORTHWEST, LLC, a Washington limited liability company, Plaintiff, v. ADDISON DATA SERVICES, LLC, a Texas limited liability company; LESLIE W. KREIS, Jr., a Texas resident; MENEDOZA LINE CAPITAL, LLC, a limited liability company; DAVID DURHAM, KORENVAES HORIZON PARTNERS, L.P, a limited partnership; CHRISTOPHER HARPER, a Texas resident; CORBETT CAPITAL LLC, a limited liability company; PAT CRAINE, a Texas resident; JOE CRAINE, a Texas resident; and JOHN/JANE DOES, fictitious names for persons receiving constructive trust property, Defendants, Case No. C20-1854RSM, (W.D. Wash.), District Judge Ricardo S. Martinez grants the Motion to Dismiss the Second Amended Complaint filed by Addison Data Services and Defendants LLC Members and dismisses Billing Associates Northwest's claims without leave to amend. This case was originally filed on Nov. 28, 2020. The Court dismissed all claims with leave to amend. On Nov. 16, 2022, the Court again dismissed all claims with leave to amend. In its Nov. 16 Order, the Court found it highly likely that Billing Associates released its claims by signing a Settlement Agreement and Release that were subsequently approved by the Bankruptcy Court. The Court also found that the applicable statute of limitations barred Billing Associates' claims and that its failure to take available actions to equitably toll the deadline also supported dismissal. Finally, the Court found that the claims against the Defendants LLC Members were similarly barred by the statute of limitations and for failure to show a duty owed by the Defendants LLC Members to Billing Associates rather than to the bankruptcy Trustee. The Court finds that Billing Associates' Second Amended Complaint fails to add sufficient new alleged facts to alter this finding. The Court determines that the allegation in the Second Amended Complaint that "during the discussions among the Trustee, Billing Associates, and the common attorney, both the Trustee and the common attorney understood and represented that Billing Associates was not releasing ADS or the non-ADS Defendants," is not plausible given the fact that Billing Associates received a liquidated claim in ADS's bankruptcy and the previous pleading history of this litigation, and in any event such is contrary to the final language of the Release. As such, the Court continues to find that dismissal of ADS is appropriate based on the Release for the reasons stated in its prior Order. ADS continues to assert that Billing Associates recovered its damages once already through the parties' Release and thus cannot attempt to recover again through a breach of fiduciary duties as claimed herein. The Court agrees that Billing Associates fails to plead sufficient facts to allege how its current claim is related to an injury distinct from what was resolved during the bankruptcy proceedings. The Court further finds that Billing Associates' claims against the Defendants LLC Members are likewise barred by the statute of limitations even after amendment. As the Defendants LLC Members argue, all of the claims against them have statutes of limitations that run at four years or less and Billing Associates was aware or should have been aware of claims against these Defendants given the bankruptcy proceedings. Finally, the Court finds that after multiple opportunities to amend, the above deficiencies cannot be cured and that leave to amend will not be granted. A full-text copy of the Order dated Feb. 22, 2023 is available at https://tinyurl.com/2p8tuh2t from Leagle.com. ADVANCED GAS: Court OKs Deal on Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, authorized Advanced Gas Products, Inc. to use cash collateral on an interim basis in accordance with its agreement with the U.S. Small Business Administration. As previously reported by the Troubled Company Reporter, the parties agreed that the Debtor may continue using cash collateral through May 9, 2023, to pay ordinary and necessary expenses provided in the budget. Pre-petition, on May 18, 2020, the Debtor executed a U.S. Small Business Administration Note, pursuant to which the Debtor obtained a loan in the amount of $150,000. On August 6, 2021, the Note was modified increasing the SBA Loan to a cumulative total of $293,900. The terms of the Modified Note require the Debtor to pay principal and interest payments of $1,488 every month beginning 24 months from the date of the Note over the 30-year term of the SBA Loan. The SBA Loan has an annual rate of interest of 3.75% and may be prepaid at any time without notice or penalty. As of the Petition Date, the amount due on the SBA Loan was $313,921. As adequate protection, retroactive to February 10, 2023, the SBA will receive a replacement lien(s) that is deemed valid, binding, enforceable, non-avoidable, and automatically perfected, effective as of the Petition Date, on all postpetition revenues of the Debtor to the same extent, priority and validity that its lien attached to the Personal Property Collateral. The Debtor will remit adequate protection payments to the SBA in the amount of $1,488 and pursuant to the terms as set forth in the applicable SBA Loan documents, and continuing until May 9, 2023, or further Court order regarding interim or final use of cash collateral, or the entry of an order confirming the Debtor's plan of reorganization, whichever occurs earlier. Adequate protection payments will include the Debtor's SBA Loan number and be sent to the payment address on the SBA Proof of Claim. The SBA will be entitled to a super-priority claim over the life of the Debtor's bankruptcy case, which claim will be limited to any diminution in the value of SBA's collateral, pursuant to the SBA Loan, as a result of the Debtor's use of cash collateral on a post-petition basis. The Debtor agreed to maintain insurance on the Personal Property Collateral and to designate the SBA as a loss payee or additional insured in accordance with the SBA Loan and related loan documents and agrees to provide proof of insurance within seven days upon written request of the SBA. A status conference is set in the case for March 15, 2023 at 10 a.m. A copy of the order is available at https://bit.ly/3L7VA8E from PacerMonitor.com. About Advanced Gas Products Advanced Gas Products, Inc. is a locally owned and family-operated packaged gas and welding supply dealer in Huntington Beach, Calif. Advanced Gas Products filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11918) on Nov. 9, 2022. At the time of filing, the Debtor estimated $100,001 to $500,000 in assets and $1,000,001 to $10 million in liabilities. Judge Theodor Albert presides over the case. Angela A Schmidt, Esq., at the Law Office of Angela Schmidt represents the Debtor as counsel. AEARO TECHNOLOGIES: UST Says Case, Like LTL's, Should Be Tossed --------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that the Justice Department said that 3M Co. unit Aearo Technologies LLC should be thrown out of bankruptcy court, citing the recent dismissal of a similar case involving a Johnson & Johnson subsidiary. Aearo's Chapter 11 case is an "abuse of the bankruptcy system" that was engineered to benefit its highly solvent corporate parent and avoid ongoing litigation stemming from allegedly faulty earplugs, the Justice Department's bankruptcy oversight program -- the US Trustee -- told the US Bankruptcy Court for the Southern District of Indiana. The US Court of Appeals for the Third Circuit ruled last January 2023 that Johnson & Johnson's specially-created talc liability unit, LTL Management LLC, doesn't belong in bankruptcy. The court reasoned that LTL isn't in financial distress due to an uncapped funding agreement from its parent company. Although situated in another circuit, the Indiana court should toss Aearo's case for the same reason and force the company to resume litigation in the tort system, the US Trustee said in a February 25, 2023 filing. "This court should reject the Aearo Debtors' and 3M's machinations and stop the abuse of the bankruptcy system by this bad faith, 'surrogate' bankruptcy of Aearo for 3M's benefit," the US Trustee said. 3M said in a news release earlier this month that the LTL ruling is inapplicable in Aearo's case, and that dismissal "would needlessly disrupt the well-established Chapter 11 process to return to protracted litigation in the mass tort system." The government's motion to dismiss the case follows a similar request filed February 2, 2023 by a committee representing over 230,000 veterans and contractors with claims against 3M and Aearo. They contend that their claims that the company's Combat Arms Version 2 Earplugs caused hearing loss should be litigated in the tort system. Aearo and 3M are facing mounting difficulties in their bid to resolve the lawsuits in bankruptcy court. A Florida federal judge has already ruled that 3M has full potential liability for hearing loss claims, and US Bankruptcy Judge Jeffrey J. Graham ruled in August that Aearo's bankruptcy protections against ongoing litigation don't extend to 3M. Those rulings are being appealed. About Aearo Technologies Aearo Technologies -- https://earglobal.com/en -- is a 3M company that designs, manufactures, and sells personal protection equipment. The Company offers prescription and non-prescription safety eye wear, face shields, hard hats, and respirators. Aearo serves customers worldwide. To address claims related to the Combat Arms Earplugs Version 2, Aearo Technologies LLC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case No. 22-02890) on July 26, 2022. In the petition filed by John R. Castellano, as authorized signatory, Aearo Technologies estimated assets and liabilities between $1 billion and $10 billion each. 3M is not a debtor in the Chapter 11 cases. 3M has committed $1 billion to fund a trust allocated for Combat Arms claims. Kirkland & Ellis LLP is serving as legal counsel and AlixPartners LLP is serving as restructuring advisor to Aearo Technologies. Ice Miller LLP, is serving as bankruptcy co-counsel to the Debtors. Kroll is the claims agent. PJT Partners is serving as financial advisor and White & Case LLP is serving as legal counsel to 3M. ALLYNE HEALTH: Proposes Immaterial Modifications to Plan -------------------------------------------------------- Allyne Health, Inc., submitted a Modification to Plan of Reorganization dated March 2, 2023. In accordance with Sections 1125 and 1127 of the Bankruptcy Code, Debtor further modifies the Plan as set forth herein. The changes do not materially and adversely affect the rights of any parties in interest which have not had notice and an opportunity to be heard with regard thereto. Section 7.2.2 of the Plan is modified to add the following: After the Confirmation Date and prior to the date 30 months from the Effective Date, Debtor shall sell the stock in ALLtrand, Inc. (the "Stock") free and clear of liens, claims and encumbrances as set forth herein (the "Sale Procedures"). Debtor shall sell such Stock for any amount (a release amount) that is at least equal to the outstanding amount of Allowed Secured Claims securing such property "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), shall be paid at closing as follows: (i) first to cover any ad valorem property taxes associated with the Property and (ii) then secured claims in order of priority, to the extent of available proceeds. 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. In the event Debtor has been unable to sell the Stock by private sale pursuant to these provisions within 24 months of the Effective Date, Debtor shall conduct a public auction sale of the Stock. Any Allowed Secured Claim secured by the Stock shall be entitled to credit bid at such auction up to the amount of its debt owed at the time of such auction sale. Debtor shall file tax returns which are past due within 12 months of the Effective Date. A full-text copy of the Modified Plan dated March 2, 2023 is available at https://bit.ly/3mtpPwl from PacerMonitor.com at no charge. Attorney for Debtor: Leon S. Jones, Esq. Jones & Walden, LLC 699 Piedmont Ave NE Atlanta, GA 30308 Phone: (404) 564-9300 Email: ljones@joneswalden.com About Allyne Health, Inc. Allyne Health, Inc., a company in Mineral Bluff, Ga., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. Nd Ga. Case no. 22-21063) on Oct 17, 2022, with up to $50,000 in assets and up to $10 million in liabilities. Donald Gasgarth, chief executive officer, signed the petition. Judge James R. Sacca oversees the case. Jones & Walden, LLC is the Debtor's legal counsel. AMERICAN CAR CENTER: Closes Business After Pulling Bond Sale ------------------------------------------------------------ Carmen Arroyo of Bloomberg Law reports that American Car Center told employees the business was closing its doors, a day after it pulled a $222 million bond sale from the market, according to people familiar with the matter. The used car retailer, which tends to target consumers regardless of their credit history, said in an email to employees on Friday, February 24, 2023, the firm was ceasing all operations, closing its headquarters in Memphis, Tennessee, and that all employees would be terminated by the end of the business day, the people said. About American Car Center American Car Center operates a privately held, integrated automotive lease and financing business under the name American Car Center. APPLIED DNA: Inks Amended Office, Lab Leases With Long Island ------------------------------------------------------------- Applied DNA Sciences, Inc., on Feb. 24, 2023, entered into that certain Amended and Restated Lease Agreement with Long Island High Technology Incubator, Inc. with respect to the Company's office space consisting of 30,000 gross rentable square feet in the building known as LIHTI 2 located at 50 Health Sciences Drive, Stony Brook, New York 11790. Also on Feb. 24, 2023, the Company entered into that certain Amended and Restated Lease Agreement with the Landlord with respect to the Company's laboratory space consisting of an aggregate of 2,500 gross rentable square feet located at 25 Health Sciences Drive, Stony Brook, New York 11790. The term of the Office Lease commenced on Feb. 1, 2023 and expires on Jan. 31, 2026, unless terminated prior to such expiration date as provided in the Office Lease. The term of the Laboratory Lease commenced on Feb. 1, 2023 and expires on Jan. 31, 2024, unless terminated prior to such expiration date as provided in the Laboratory Lease. Under the Office Lease, beginning on Feb. 1, 2023 and ending on Jan. 31, 2024, the base rent will be $48,861.17 per month. Beginning on Feb. 1, 2024, the base rent under the Office Lease shall be increased in February of each year by a percentage equal to the percentage change in the Consumer Price Index statistics published by the United States Bureau of Labor Statistics. Under the Laboratory Lease, beginning on Feb. 1, 2023 and ending on Jan. 31, 2024, the base rent will be $8,750 per month. About Applied DNA Applied DNA Sciences, Inc. -- http//www.adnas.com -- is a biotechnology company developing technologies to produce and detect deoxyribonucleic acid ("DNA"). Using the polymerase chain reaction ("PCR") to enable both the production and detection of DNA, the Company operates in three primary business markets: (i) the manufacture of DNA for use in nucleic acid-based therapeutics; (ii) the detection of DNA in molecular diagnostics testing services; and (iii) the manufacture and detection of DNA for industrial supply chain security services. Applied DNA reported a net loss of $8.27 million for the year ended Sept. 30, 2022, a net loss of $14.28 million for the year ended Sept. 30, 2021, and a net loss of $13.03 million for the year ended Sept. 30, 2020. As of Dec. 31, 2022, the Company had $20.30 million in total assets, $11.14 million in total liabilities, and $9.16 million in total equity. In its Annual Report for the year ended Sept. 30, 2022, Applied DNA Sciences said it has alleviated the substantial doubt of a going concern through the cash received from the August 2022 public offering and the warrant exercises as well as collection of its accounts receivable. The Company estimated that it will have sufficient cash and cash equivalents to fund operations for the next 12 months from the date of filing of the Annual Report. * * * This concludes the Troubled Company Reporter's coverage of Applied DNA Sciences until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. BEST VIDEO: Summary Judgment in Favor of the Bank Affirmed ---------------------------------------------------------- In the appealed case captioned as JP Morgan Chase Bank, N.A. v. Svetlana Ustinova, Appellant, Case No. 344 EDA 2022, (Pa. Super. Ct.), the Pennsylvania Superior Court affirms the order granting summary judgment in favor JP Morgan Chase Bank, N.A. JP Morgan Chase Bank, N.A. commenced the instant action by filing a complaint, which averred the following: on July 31, 2017, Best Video Studio LLC (Borrower) executed a "Promissory Note," in favor of the Bank, for the amount of $200,000. On the same day, the Appellant executed a "Commercial Guaranty," which provided that she "absolutely and unconditionally guarantees and promises to pay" the indebtedness of Borrower. It is undisputed that Borrower defaulted on the promissory note. Thus, the Bank demanded judgment against the Appellant in the amount of $203,896. On Dec. 15, 2021, the trial court granted the Bank's motion for summary judgment and directed judgment to be entered in its favor in the requested amount $204,686. This appeal followed. On appeal, the Appellant avers the trial court erred in granting summary judgment where: (1) discovery was not completed; (2) the guaranty contract was ambiguous, and this issue of ambiguity should have been submitted to a jury to resolve; (3) the contract was unconscionable because Appellant did not fully understand its terms; (4) the contract was impossible to perform; and (5) parol evidence should have been admitted to show she did not understand the terms of the contract. The trial court reviewed the discovery in this matter. The trial court pointed out that the Appellant had not alleged any deficiencies in Bank's responses, "never sought to extend" the discovery deadline, and did not explain why additional discovery was not taken before the Bank's September 16th filing of the summary judgment motion. The Appellant does not address, let alone dispute, any of this discussion by the trial court. She has not -- in the trial court proceedings nor on appeal -- identified any issue of fact that requires additional discovery. The Court finds the Appellant's assertion -- that she was signing the guaranty contract on behalf of the Borrower and not herself -- not logical. As the trial court summarized, a guaranty is "a promise to pay the debt of another when the creditor is unable, after due prosecution, to collect the amount owed by the debtor." The Court determines that the trial court correctly pointed out that in her pleadings, the Appellant did not identify any contract term as allegedly unconscionable. Instead, she argued that the contract was unconscionable solely because "there is a dispute over whether she fully understood the term she was signing." To this end, Appellant failed to establish both prongs of an unconscionable-contract claim. Moreover, it is only on appeal that the Appellant asserts -- for the first time -- that the contract terms are "unreasonably favorable to the drafter." Because this argument was not raised before the trial court, it is waived. The Court also notes that the Appellant has not identified what parol evidence she wished to introduce. Additionally, because the trial court found the guaranty contract terms are clear and unambiguous, it properly precluded any parol evidence as to any contrary interpretation Appellant had. As such, the trial court properly pointed out that the Appellant raised no claim -- there is a genuine issue of material facts as to whether this clause "clearly set out the intent of the parties." A full-text copy of the Non-Precedential Decision dated Feb. 22, 2023 is available at https://tinyurl.com/2npzs5x5 from Leagle.com. About Best Video Studio Best Video Studio, LLC -- https://igotoffer.com/ -- owns an online business providing the service for consumers to exchange their used Apple products, such as iPhone, iPad, MacPro, etc. for cash, through the company's virtual platform. Best Video Studio filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 19-45523) on Sept. 13, 2019. The Hon. Nancy Hershey Lord oversees the case. At the time of filing, the Debtor had $200,510 total assets and $1,143,830 total liabilities. Alla Kachan, Esq. of LAW OFFICES OF ALLA KACHAN, P.C., is the Debtor's counsel. CANOO INC: Court Validates Restated Certificate of Incorporation ---------------------------------------------------------------- The Delaware Court of Chancery, on Feb. 27, 2023, granted Canoo Inc.'s petition and issued an order in the Section 205 Action validating the Company's Second Amended and Restated Certificate of Incorporation and validating and declaring effective all shares of capital stock issued in reliance on the effectiveness of the Company's Second Amended and Restated Certificate of Incorporation. A full-text copy of the Final Order is available for free at: https://www.sec.gov/Archives/edgar/data/1750153/000121390023015467/ea174436ex99-1_canooinc.htm About Canoo Torrance, California-based Canoo Inc. -- www.canoo.com -- is a mobility technology company with a mission to bring electric vehicles to everyone and provide connected services that improve the vehicle ownership experience. The Company is developing a technology platform that it believes will enable the Company to rapidly innovate and bring new products, addressing multiple use cases, to market faster than its competition and at lower cost. Canoo reported a net loss and comprehensive loss of $346.77 million in 2021 following a net loss and comprehensive loss of $86.69 million in 2020. For the nine months ended Sept. 30, 2022, the Company reported a net loss and comprehensive loss of $407.46 million. As of Sept. 30, 2022, the Company had $444.78 million in total assets, $216.91 million in total liabilities, and $227.87 million in total stockholders' equity. "We require substantial additional capital to develop our EVs and services and fund our operations for the foreseeable future. We will also require capital to identify and commit resources to investigate new areas of demand. Until we can generate sufficient revenue from vehicle sales, we are financing our operations through access to private and public equity offerings and debt financings. Management believes substantial doubt exists about the Company's ability to continue as a going concern for twelve months from the date of issuance of the financial statements included in this Quarterly Report on Form 10-Q," Canoo stated in its Form 10-Q filed with the Securities and Exchange Commission on Nov. 9, 2022. CENTRAL FLORIDA CIVIL: Bid to Use Cash Collateral Denied as Moot ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, denied as moot the motion to use cash collateral filed by Central Florida Civil, LLC based on the confirmation of the Chapter 11 Plan dated March 3, 2023. As previously reported by the Troubled Company Reporter, the Debtor requires the use of cash collateral to continue operating the business and pay salaries. As of the Petition Date, the Debtor owed $150,000 each to Mulligan Funding, LLC and the Fundworks, LLC. The Debtor's obligation is evidenced by a Promissory Note, Security Agreement, Financing Statement, and Chattel Mortgage executed November 22, 2021, to Mulligan and January 5, 2022, to Fundworks. A copy of the order is available at https://bit.ly/3yl4yaR from PacerMonitor.com. About Central Florida Civil, LLC Central Florida Civil, LLC provides a full range of services relating to site preparation for commercial projects. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Court (Bankr. M.D. Fla. Case No. 22-01736) on August 31, 2022. In the petition signed by Chad M. Converse, manager, the Debtor disclosed $2,469,641 in assets and $4,873,621 in liabilities. Judge Jason A. Burgess oversees the case. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP, is the Debtor's counsel. CENTRIC BRANDS: Alicia Allen's Appeal Dismissed as Equitably Moot ----------------------------------------------------------------- District Judge Vincent L. Briccetti for the Southern District of New York has dismissed as moot the appealed case titled In Re: Centric Brands Inc., Debtor. Alicia Allen, Appellant, v. Centric Brands Inc., Appellee, Case No. 22 CV 2702 (VB), (S.D.N.Y.). Allen separated from employment with Centric Brands on March 1, 2020. She had signed a letter agreement memorializing the terms of her separation. Under the Separation Agreement, Centric Brands would pay Allen $25,047 representing twelve weeks of her base salary, to be paid on the same timeline as her normal salary for twelve weeks following termination, plus three months of reimbursement for COBRA payments. On July 2, 2020, Allen filed a proof of claim in Centric Brands' bankruptcy in the amount of $11,137 for "Contractual Balance of Unpaid Severance Payments" and on Aug. 5, she filed a second proof of claim, this time in the amount of $2.4 million for "Forgone wages and other cost due to wrongful termination and injuries." Allen sought priority treatment for both claims. The bankruptcy court agreed with Centric Brands and granted its objection to Allen's claims "that only $5,330 of Severance Payments remained unpaid." The bankruptcy court also determined Allen knowingly and voluntarily released the claims she purported to seek compensation for in the Second Claim by executing the Separation Agreement. Thus, the bankruptcy court determined to reduce and allow the First Claim in the amount of $5,330 and to disallow and expunge the Second Claim. The Court agrees with Centric Brands argument that the Appeal should be dismissed as equitably moot and disagrees with Allen's argument that the Court can grant her effective relief without unwinding the Plan because Centric Brands could reinstate her employment as "alternative equitable relief." The Court points out the granting Allen the relief sought in the Appeal -- by allowing the First Claim in the additional amount of $5,807 and the Second Claim in the amount of $2.4 million -- would require clawing back either distributions made to hundreds of Centric Brands' priority unsecured creditors or a substantial portion of the $5.8 million pool that was distributed pro rata to over 800 general unsecured claimants nearly a year ago. Thus, the Court maintains that granting Allen's requested relief "could cause . . . millions of dollars in previously satisfied claims to spring back to life, thereby potentially requiring the bankruptcy court to reopen the plan of reorganization. Accordingly, the Court holds that it would be inequitable to grant Allen the relief she seeks, and the Appeal is therefore moot. A full-text copy of the Opinion and Order dated Feb. 21, 2023 is available at https://tinyurl.com/28fk62j7 from Leagle.com. About Centric Brands Centric Brands Inc. designs, produces, merchandises, manages and markets kidswear, accessories, and men's and women's apparel under owned, licensed and private label brands. Currently, the company and its affiliates license over 100 brands, including AllSaints, BCBG, Buffalo, Calvin Klein, Disney, Frye, Herve Leger, Jessica Simpson, Joe's, Kate Spade, Kenneth Cole, Marvel, Michael Kors, Nautica, Nickelodeon, Spyder, Timberland, Tommy Hilfiger, Under Armour, and Warner Brothers. The companies sell licensed products through both retail and wholesale channels. Centric Brands and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22637) on May 18, 2020. As of March 31, 2020, Debtors disclosed $1,855,722,808 in total assets and $2,014,385,923 in total liabilities. Judge Sean H. Lane oversees the cases. The Debtors tapped Ropes & Gray, LLP as bankruptcy counsel; PJT Partners, Inc. as investment banker; Alvarez & Marsal, LLC as financial advisor; and Prime Clerk, LLC as notice, claims and balloting agent. CHASE CUSTOM HOMES: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------------- The U.S. Trustee for Region 1 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Chase Custom Homes & Finance, Inc. The committee members are: 1. Bangor Savings Bank 20 Marginal Way Portland, ME 04101 Attention: Michael Hahn 2. M & T Bank Special Assets Department 125 Daniel Webster Highway Nashua, NH 03060 Attention: Chris Droznick 3. Jeffrey Zamboni 220 Portland Avenue P.O. Box 568 Old Orchard Beach, ME 04064 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Chase Custom Homes & Finance Chase Custom Homes & Finance Inc. -- https://cchfi.com -- specializes in new home construction, home renovations & remodeling in Portland, Maine. Chase Custom Homes & Finance filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 23-20032) on Feb. 16, 2023. In the petition filed by Terina Chase as authorized party, the Debtor reported between $10 million and $50 million in both assets and liabilities. The Debtor tapped Bernstein Shur Sawyer & Nelson as counsel, and Purdy, Powers & Company, P.A., as accountant. CLEARPOINT NEURO: Incurs $16.4 Million Net Loss in 2022 ------------------------------------------------------- ClearPoint Neuro, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $16.44 million on $20.55 million of total revenue for the year ended Dec. 31, 2022, compared to a net loss of $14.41 million on $16.30 million of total revenue for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $55.49 million in total assets, $18.60 million in total liabilities, and $36.88 million in total stockholders' equity. ClearPoint stated, "We have incurred losses since our inception, and we may continue to incur losses. If we fail to generate significant revenue from sales of our products and services, we may never achieve or sustain profitability. "We have incurred losses in each year since our inception in 1998 that have resulted principally from costs incurred in connection with our sales and marketing activities, research and development efforts, manufacturing activities and other general and administrative expenses associated with our operations, and we may continue to incur losses as we continue to invest capital in the sales and marketing of our ClearPoint platform products and services, and growth of our business generally. "As a result of the numerous risks and uncertainties associated with developing medical devices and with our biologic and drug delivery customers' development of safe and effective drugs, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Our profitability will depend on revenues from the sale of our products and services. Additionally, increases in our various costs that may be the result of inflationary pressures could further reduce our sales and profitability. We cannot provide any assurance that we will ever achieve profitability and, even if we achieve profitability, that we will be able to sustain or increase profitability on a quarterly or annual basis. Further, because of our relatively limited commercialization history, we have limited insight into the trends that may emerge and affect our business. We may make errors in predicting and reacting to relevant business trends, which could harm our business and financial condition. Any failure to achieve and maintain profitability would continue to have an adverse effect on our stockholders' equity and working capital and could result in a decline in our stock price Financial Results - Quarter Ended December 31, 2022 Total revenue was $5.2 million for the three months ended Dec. 31, 2022, and $4.3 million for the three months ended Dec. 31, 2021, which represents an increase of $0.9 million, or 21%. Functional neurosurgery navigation and therapy revenue increased 7% to $2.3 million for the three months ended Dec. 31, 2022, from $2.1 million for the same period in 2021. The growth was driven by higher service revenue. Biologics and drug delivery revenue, which includes sales of disposable products and services related to customer-sponsored pre-clinical and clinical trials utilizing our products, increased 37% to $2.3 million for the three months ended Dec. 31, 2022, from $1.7 million for the same period in 2021. This increase is attributable to a $0.7 million increase in service revenue, partially offset by a slight decrease in product revenue. Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software, and of related services, increased 25% to $0.6 million for the three months ended Dec. 31, 2022, from $0.5 million for the same period in 2021 due to an increase in the placements of ClearPoint capital and software. Gross margin for the three months ended Dec. 31, 2022, was 64%, as compared to a gross margin of 77% for the three months ended Dec. 31, 2021. The decrease in gross margin was due primarily to higher overhead expenses and inventory reserves. Operating expenses for the fourth quarter of 2022 were $7.8 million, compared to $7.3 million for the fourth quarter of 2021. The increase was mainly driven by the increase in headcount across the organization and share-based compensation. At Dec. 31, 2022, the Company had cash and cash equivalents and short-term investments totaling $37.5 million compared to $54.1 million at Dec. 31, 2021, with the decrease resulting primarily from the use of cash in operating activities of $16.2 million. Business Outlook "We are pleased with our performance in 2022, growing revenue 26% year-over-year, achieving FDA clearance for key new products, adding services and capabilities to support our more than 50 biologics partners, and executing against all four pillars of our growth strategy," commented Joe Burnett, president and CEO at ClearPoint Neuro. "We continue to expect growth of more than 20% in 2023, given the competitiveness of our laser system and the cadence of our pharma partners' continuing progress through the global regulatory process for new gene and cell therapies. We are reiterating our 2023 revenue forecast of between $25 and $27 million." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1285550/000128555023000020/clpt-20221231.htm About ClearPoint Neuro ClearPoint Neuro, Inc. formerly MRI Interventions, Inc. -- http://www.clearpointneuro.com-- is a medical device company that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain under direct, intra-procedural magnetic resonance imaging, or MRI, guidance. Applications of the Company's current product portfolio include deep-brain stimulation, laser ablation, biopsy, neuro-aspiration, and delivery of drugs, biologics, and gene therapy to the brain. Clearpoint Neuro reported a net loss of $6.78 million for the year ended Dec. 31, 2020, a net loss of $5.54 million for the year ended Dec. 31, 2019, and a net loss of $6.16 million for the year ended Dec. 31, 2018. CORIZON HEALTH: Proceedings in Jenkins Suit Are Stayed ------------------------------------------------------ District Judge William T. Moore, Jr. for the Southern District of Georgia has issued an order to stay the proceedings against the Defendant Corizon Health, Inc. in the case captioned as JEMME J. JENKINS, Individually, and JULIANNE GLISSON, Administrator of the Estate of Jimmie L. Alexander, Sr.; Plaintiffs, v. CORIZON HEALTH INC., a Delaware Corporation; GUY AUGUSTIN, M.D.; Victoria Neilser, LPN; and MARK DAMBACH, LPN; Defendants, Case No. CV418-099, (S.D. Ga.). The proceedings against Corizon must be stayed until the Bankruptcy Court grants relief from the stay, closes the bankruptcy case, or dismisses the bankruptcy petition. A full-text copy of the Order dated Feb. 21, 2023 is available at https://tinyurl.com/bdhk89cj from Leagle.com. Corizon Health, formed by a 2011 merger of Correctional Medical Services, Inc. and Prison Health Services, Inc., is a privately held prison healthcare contractor in the United States. CUENTAS INC: Granted Until April 6 to Regain Nasdaq Compliance -------------------------------------------------------------- Cuentas, Inc. announced that it received on February 23 formal notification from The Nasdaq Stock Market LLC Hearings Panel that the Panel had determined to grant the Company's request for continued listing on The Nasdaq Capital Market, pursuant to an extension through April 6, 2023, to evidence compliance with Nasdaq Listing Rule 5550(a)(2). The Company is taking definitive steps to timely evidence compliance with the terms of the Panel's decision; however, there can be no assurance that it will be able to do so by April 6, 2023, or that the Panel will grant a further extension if required. As previously disclosed, on June 21, 2022, the Nasdaq Listing Qualifications Staff issued the Company a delist letter citing its failure to comply with the minimum bid price requirement under Listing Rule 5550(a)(2). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until Dec. 19, 2022, to regain compliance with Rule 5550(a)(2). On Dec. 20, 2022, Staff notified the Company that it had determined to delist the Company as it did not comply with bid price requirement for listing on the Exchange. On Dec. 27, 2022, the Company requested a hearing, which was held on Feb. 9, 2023. About Cuentas Headquartered in Miami, Florida, Cuentas, Inc. -- http://www.cuentas.com-- currently focuses on the business of using proprietary fintech technology to provide e-banking and e-commerce services for delivering mobile banking, prepaid debit and digital content services to the unbanked, underbanked and underserved Latino, Hispanic and immigrant communities. The Company's proprietary software platform enables Cuentas to offer comprehensive financial services and robust functionality that is absent from other Mobile Apps through the use of its Prepaid Debit Mastercard/General-Purpose Reloadable cards. Cuentas reported a net loss attributable to the company of $10.73 million for the year ended Dec. 31, 2021, a net loss attributable to the company of $8.10 million for the year ended Dec. 31, 2020, a net loss attributable to the company of $1.32 million for the year ended Dec. 31, 2019, and a net loss of $3.56 million for the year ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $7.41 million in total assets, $2.81 million in total liabilities, and $4.60 million in total stockholders' equity. CYTODYN INC: Discloses Unregistered Sales of Securities ------------------------------------------------------- CytoDyn Inc. provided a disclosure via a Form 8-K filed with the Securities and Exchange Commission because, as of Feb. 24, 2023, its unregistered sales of equity securities that were not previously reported, in the aggregate, exceeded 5% of the shares of its common stock outstanding as of Feb. 1, 2023. Private Placement of Common Stock and Warrants through Placement Agent In January and February 2023, the Company continued a private offering to accredited investors of units through a placement agent. Each unit will consist of one share of common stock and one warrant to purchase one share of common stock. The final purchase price per unit will be equal to 90% of (i) the intraday volume weighted average price of the common stock as of the first closing, which occurred on Jan. 12, 2023, and (ii) the intraday volume weighted average price of the common stock on the date of the final closing in the Placement Agent Offering, whichever is lower; provided that the purchase price will not be higher than $0.23 per unit. From February 1 to Feb. 24, 2023, the Company had received binding subscription agreements to purchase units at a total purchase price of approximately $3.6 million, or an estimated total of approximately 15.7 million units, based on an assumed purchase price of $0.23 per unit. The warrants to be issued in the Placement Agent Offering will have a five-year term and an exercise price of $0.50 per share. The warrants will be exercisable in full when issued. As previously disclosed on the Company's Form 8-K filed on Feb. 1, 2023, the Company has agreed to pay a cash fee equal to 12% of the gross proceeds received from qualified investors in the Placement Agent Offering, a one-time non-accountable expense fee of $25,000 in the aggregate for all closings in the Placement Agent Offering, and has also agreed to issue to the placement agent or its designees warrants with a 10-year term to purchase 15% of the total number of shares of common stock sold to qualified investors in the Placement Agent Offering. The Company has agreed to use commercially reasonable efforts to prepare and file with the Securities and Exchange Commission, and cause the SEC to declare effective, a registration statement under the Securities Act of 1933, as amended covering the resale of the shares and warrants to purchase shares of common stock sold in the Offering. The Company is relying on the exemption provided by Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act in connection with the Placement Agent Offering. Direct Investment by Dr. Cyrus Arman, President of the Company On Feb. 13, 2023, the Company accepted a $100,000 direct investment from Dr. Cyrus Arman, the president of the Company. This investment was made directly with the Company, with no placement agent serving as an intermediary. The terms of the investment will be identical to those of the Placement Agent Offering. Based on an assumed purchase price of $0.23 per unit, Dr. Arman would receive 434,782 units upon closing of his investment. The Company is relying on the exemption provided by Section 4(a)(2) of the Securities Act in connection with the direct investment. Warrant Issuance to Dr. David F. Welch, or One or More Affiliates As previously reported in the Company's Current Report on Form 8-K filed on Feb. 17, 2022, the Company entered into a Surety Bond Backstop Agreement with David Fairbank Welch, both individually and in his capacity as trustee of a revocable trust, LRFA, LLC, a Delaware limited liability company, and certain other related parties, effective Feb. 14, 2022. Under the agreement, the Indemnitors agreed to assist the Company in obtaining a surety bond for posting in connection with the Company's ongoing litigation with Amarex Clinical Research, LLC, by, among other things, agreeing to indemnify the issuer of the Surety Bond with respect to the Company's obligations under the Surety Bond. As previously reported in the Company's Current Report on Form 8-K filed on Dec. 6, 2022, the Company entered into a second amendment to the Surety Bond Backstop Agreement effective Dec. 1, 2022. The Second Amendment provided for the extension of the obligation of the Indemnitors to indemnify the Surety and also provided, among other things, for the issuance of a second warrant to the Indemnitors covering up to 7,500,000 shares of common stock with an exercise price of $0.10 per share. The ultimate number of shares to be covered by the second warrant was to be calculated based on a formula relating to how quickly the Company relieved the balance of cash collateral pledged by the Indemnitors. As of Feb. 28, 2023, the second warrant has been determined to cover the full 7,500,000 shares of common stock. About CytoDyn Inc. Headquartered in Vancouver, Washington, CytoDyn Inc. -- http://www.cytodyn.com-- is a clinical-stage biotechnology company focused on the development and commercialization of leronlimab, an investigational humanized IgG4 monoclonal antibody (mAb) that is designed to bind to C-C chemokine receptor type 5 (CCR5), a protein on the surface of certain immune system cells that is believed to play a role in numerous disease processes. CytoDyn is studying leronlimab in multiple therapeutic areas, including infectious disease, cancer, and autoimmune conditions. Cytodyn reported a net loss of $210.82 million for the year ended May 31, 2022, compared to a net loss of $176.47 million for the year ended May 31, 2021. As of Nov. 30, 2022, the Company had $7.07 million in total assets, $123.04 million in total liabilities, and a total stockholders' deficit of $115.97 million. San Jose, California-based Macias Gini & O'Connell LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated Aug. 15, 2022, citing that the Company incurred a net loss of approximately $210,820,000 for the year ended May 31, 2022 and has an accumulated deficit of approximately $766,131,000 through May 31, 2022, which raises substantial doubt about its ability to continue as a going concern. DELPHI BEHAVIORAL: $11MM DIP Loan from Brightwood Wins Final OK --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, authorized Delphi Behavioral Health Group, LLC and its debtor-affiliates to use cash collateral and obtain postpetition financing, on a final basis. Delphi Intermediate Healthco, LLC obtained postpetition financing in the aggregate principal amount of $11 million pursuant to and subject to the terms of a Superpriority Secured Debtor-in-Possession Credit Agreement with certain pre-Petition Date lenders and Brightwood Loan Services, LLC, as administrative agent. All Obligations under the DIP facility are due and payable in full in cash, unless otherwise agreed to by the Required Lenders, on the earliest of: (i) June 6, 2023, which is 120 days after the Prepetition Date; (ii) if the Final DIP Order has not been entered, 25 calendar days after the Petition Date; (iii) the acceleration of the Loans and the termination of the Commitments thereunder; (iv) the effective date of any plan of reorganization; (v) the date the Bankruptcy Court converts any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code; (vi) the date the Bankruptcy Court dismisses any of the Chapter 11 Cases; (vii) any Event of Default; and (viii) the date an order is entered in any Bankruptcy Case appointing a Chapter 11 trustee or examiner with enlarged powers. The Debtors require the use of cash collateral and DIP financing for working capital and other general corporate purposes. Brightwood serves as administrative agent for the Senior Secured Lenders under a Credit Agreement, dated as of April 8, 2020, as amended from time to time. The Prepetition Credit Facility consisted of: (a) term loans in the aggregate principal amount of $14 million, (b) initial protective advances in the aggregate principal amount of $7.5 million, (c) priming protective advances in the aggregate principal amount of $10.5 million, and (d) super priming protective advances in the aggregate principal amount of $5 million, plus all accrued but unpaid interest, fees, expenses, and all other obligations expressly provided for thereunder, or incurred in connection therewith. DR Parent, LLC, the managing member of DR Sub, LLC, which wholly owns Delphi Intermediate Healthco, LLC, also entered into a credit agreement dated April 8, 2020, with the Senior Secured Lenders and the Prepetition Agent pursuant to which HoldCo was indebted and liable to the Senior Secured Lenders in respect of the obligations under the HoldCo Loan Agreement for term loans in the aggregate amount of $12.5 million, plus all accrued but unpaid interest, fees, expenses, and all other obligations expressly provided for thereunder, or incurred in connection therewith. The Debtors are unconditionally liable, without defense, counterclaim, offset or setoff of any kind, with respect to the HoldCo Loan Obligations. As adequate protection for the use of cash collateral, the Senior Secured Lenders are granted a valid, binding, enforceable, non-avoidable and automatically and properly perfected replacement security interest in and lien upon all of the DIP Collateral and an allowed superpriority administrative expense claim in each of the Chapter 11 Cases and any Successor Cases. The Debtors are required to comply with these milestones: a. No later than February 11, five business days after the Petition Date, the Bankruptcy Court will have entered the Interim Order; b. No later than February 16, which is 10 business days after the Petition Date, the Debtors will have filed a disclosure statement and corresponding liquidating plan; c. No later than March 6, which is 28 calendar days after the Petition Date, the Bankruptcy Court will have entered the Final DIP Order; d. The Debtors will establish a date that is no later than March 23, 45 calendar days after the Petition Date, as the deadline for the submission of binding bids with respect to the assets and operations related to the Sellers under an Asset Purchase Agreement; e. No later than April 4, 57 calendar days after the Petition Date, the Debtors will commence an auction for the Acquired Assets, in accordance with the Bid Procedures; provided that if there is no higher or better offer submitted in comparison to the stalking horse bid(s), no auction will be held; f. No later than April 4, 57 calendar days after the Petition Date, the Bankruptcy Court will have entered an order approving the disclosure statement; g. No later than April 4, 57 calendar days after the Petition Date, the Bankruptcy Court will have entered an order -- which will be in form and substance acceptable to Required DIP Lenders -- approving the winning bid resulting from the sale of the Acquired Assets; h. Consummation of the sale of the Acquired Assets will occur no later than April 19, which is 72 calendar days after the Petition Date; i. No later than May 12, 95 days after the Petition Date, the Bankruptcy Court will have entered an order confirming the Liquidating Plan; and j. No later than May 17, 100 days after the Petition Date, the Liquidating Plan Effective Date will have occurred. A copy of the order is available at https://bit.ly/41W6zaS from PacerMonitor.com. About Delphi Behavioral Health Group, LLC Delphi Behavioral Health Group, LLC and several affiliated entities sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-10945) on February 6, 2023. In the petition signed by Edward A. Phillips, interim chief executive officer, the Debtors disclosed up to $10 million in assets and up to $10 million in liabilities. Delphi Behavioral Health Group provides a range of inpatient and outpatient behavioral healthcare services in the substance use disorder, addiction and mental health treatment space. Headquartered in Fort Lauderdale, Florida, Delphi and its affiliates operated 12 clinical facilities and two recovery residences prior to the Petition Date, throughout California, Florida, Maryland, Massachusetts and New Jersey. The levels of care provided at the clinical facilities range from inpatient and residential to outpatient (partial hospitalization), intensive outpatient programming and outpatient programming. Judge Peter D. Russin oversees the case. The Debtors tapped Berger Singerman LLP as legal counsel, Getzler Henrich and Associates as restructuring services provider, and Epiq Corporate Restructuring, LLC as notice and claims agent. Brightwood Loan Services, LLC, the Administrative Agent for the Prepetition Lenders and the Administrative Agent for the DIP Lenders, is represented by King & Spalding LLP. DIOCESE OF NORWICH: Abuse Claimants to Propose Competing Plan ------------------------------------------------------------- Evan Ochsner of Bloomberg Law reports that sex abuse claimants of the Norwich Roman Catholic Diocesan Corp. secured court approval to file their own proposal on how to restructure the bankrupt church operator, teeing up a potential showdown as they seek a higher victim payout. The US Bankruptcy Court for the District of Connecticut's Feb. 24 order came as abuse survivors said negotiations with the organization over how to resolve its Chapter 11 case reached an impasse. The Connecticut diocese recently submitted a proposed plan that would provide about $29 million for the 142 survivors. 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. 2:21-bk-20687) on July 15, 2021. The Debtor estimated $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 as bankruptcy counsel and Robinson & Cole, LLP as Connecticut counsel. Epiq Corporate Restructuring, LLC is the claims and noticing agent. DUNBAR PARTNERS: Enters Chapter 11 to Save Contract --------------------------------------------------- Dunbar Partners BSD LLC filed for chapter 11 protection in the Eastern District of New York. The Debtor is currently in the process of obtaining financing to acquire the property located at 2802 Frederick Douglass Boulevard, New York, New York pursuant to a Contract between the Debtor as buyer and Dunbar Owner LLC as seller. The Debtor filed for chapter 11 protection to obtain additional time to close under the Contract and believes that over the 60-day period provided under Section 108 of the Bankruptcy Code it will be able to close on the Contract and pay all of its creditors. Jeffrey Zwick & Associates P.C. is serving as the Debtor's real estate counsel. According to court filings, Dunbar Partners has $92,395,00 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 27, 2023 at 11:00 a.m. at the Office of U.S. Trustee. About Dunbar Partners BSD LLC Dunbar Partners BSD LLC is engaged in activities related to real estate. The Debtor is a limited liability company that is the purchaser pursuant to a contract of sale and certain amendments thereto between it and Dunbar Owner LLC as seller for the real property and improvements thereon located at 2802 Frederick Douglass Boulevard, New York, NY. Dunbar Partners BSD LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40575) on February 21, 2023. In the petition filed by David Goldwasser, Sole Member of Preston Ct. Shares, sole member of the Debtor, it reported assets of $95,500,000 and liabilities amounting to $92,395,00. Judge Nancy Hershey Lord oversees the case. The Debtor is represented by: Fred R. Ringel, Esq. LEECH TISHMAN ROBINSON BROG, PLLC 875 Third Avenue New York, NY 10022 Tel: (212) 603-6300 ENERGY HARBOR: S&P Places 'BB+' Credit Rating on Watch Negative --------------------------------------------------------------- S&P Global Ratings placed its 'BB+' issuer credit rating on Energy Harbor Corp. (EH) on CreditWatch with negative implications. The 'BBB-' issue-level rating on EH's senior secured debt is unchanged, because it does not expect the transaction to have any effect on the debt. EH announced that it has entered into a definitive agreement to be acquired by Vistra Corp. (Vistra; BB/Stable/--) for about $3 billion cash and 15% equity interest in Vistra's newly formed subsidiary, Vistra Vision (VV). S&P said, "The CreditWatch placement reflects our expectation that EH's assets will merge with those of VV upon close of the transaction. We expect to resolve the CreditWatch placement after the proposed acquisition closes, which is expected to occur in third-quarter 2023 subject to customary regulatory approvals. "The CreditWatch placement reflects our expectation that, upon the close of the acquisition, EH will be fully integrated in Vistra, through its newly formed subsidiary, VV. We would view VV as a core subsidiary of Vistra. Both companies' boards have approved the transaction, which is still subject to customary closing conditions and regulatory approvals. "We expect to resolve the CreditWatch at or near the transaction closing, in third-quarter 2023, subject to customary regulatory approvals. We expect that Vistra will fully integrate EH into its business following the acquisition." ESG credit indicators: E-3, S-2, G-2 FOGO DE CHAO: S&P Alters Outlook to Positive, Affirms 'B-' ICR -------------------------------------------------------------- S&P Global Ratings revised its rating outlook on U.S.-based restaurant operator Fogo de Chao Inc. to positive from stable and affirmed its 'B-' issuer credit rating. At the same time, S&P affirmed its 'B-' issue-level rating and '3' recovery rating (rounded estimate: 50%) to the company's existing first-lien debt. The positive outlook reflects the potential for a higher rating over the next 12 months if Fogo executes its aggressive growth strategy profitably and successfully addresses its current capital structure maturities. The positive outlook reflects Fogo's good revenue growth, expanding EBITDA base, and our expectation for further deleveraging. As of third quarter 2022, Fogo generated consolidated year-to-date SSS growth of roughly 16% as consumer demand for dining out remained positive despite inflationary pressures. The company's average unit volumes (AUV) surpassed $10 million last year driven by growing customer traffic and higher menu prices. Fogo generates above average profit margins due to its high sales volumes and unique service model, which has lower labor costs. S&P said, "We expect Fogo to strengthen credit metrics in 2023 primarily through EBITDA growth. Our forecast assumes Fogo's AUV expands modestly this year, with profitability benefiting from revenue growth and easing commodity costs. Still, we project Fogo will generate only modestly positive FOCF in 2023 due to elevated capital investments in restaurant openings." Fogo's aggressive growth plans carry execution risk and will consume operating cash. The company is targeting 20 new unit openings in 2023, representing year-over-year growth of roughly 28%. S&P said, "As a result, we expect it will pour the majority of its operating cash into new restaurant openings this year, with capital expenditures (capex) of about $70 million. Greater competition than expected or a drop in demand, due to factors such as a recession leading consumers to dine out less, could raise leverage and hurt cash generation below our base-case forecast. Based on these risks, we apply a negative comparable rating analysis modifier." The recent incremental term-loan extension resolves the company's nearest term maturity, but Fogo will need to approach debt facilities due in 2024 and 2025 in the near term. Fogo extended and slightly upsized its incremental first-lien term loan due August 2023 to $33.475 million from $32.5 million, and it will mature concurrently with its existing first-lien term loan due April 2025. Following the transaction, the company's nearest maturity will be its undrawn revolving credit facility due April 2024, followed by $345 million in first-lien term loans in April 2025 and an $11 million bank loan due December 2025. Fogo updated its S-1 SEC filing in November 2022 as it continues to position itself for an IPO once market conditions improve. Still, the company's financial-sponsor ownership raises the risk of a leveraging transaction if the prospects of completing a public offering dim. The positive outlook reflects the potential for a higher rating over the next 12 months if Fogo executes its aggressive growth strategy profitably and successfully addresses its upcoming capital structure maturities. S&P could raise its rating over the next 12 months if: -- The company sustains solid operating momentum and successfully executes its growth initiatives; and -- S&P believes Fogo will successfully address its upcoming 2024 revolver maturity and 2025 first-lien debt maturities. S&P could take a negative rating action if: -- Operating performance weakens, possibly due to worsening economic conditions, increased competition, or execution missteps; or -- Fogo pursues a more-aggressive financial policy. ESG credit indicators: E-2, S-2, G-3 FUNDAMENTAL LONG TERM: Payment of Genovese's Fees Affirmed ---------------------------------------------------------- In the appealed case is In re: Fundamental Long Term Care, Inc. ESTATE OF JUANITA JACKSON, et al., Appellants, v. ROBERT F. ELGIDELY, et al., Appellees, Case No. 8:21-cv-1127-SDM, (M.D. Fla.), District Judge Steven D. Merryday affirms the bankruptcy court's order approving payment of an hourly fee to Genovese Joblove & Battista, P.A. In February 2016, the bankruptcy court approved the Trustee's retained Genovese Joblove & Battista, P.A -- as special litigation counsel to pursue a claim against Troutman Sanders. Soon after, Troutman Sanders settled the claim. And in December 2016, the Trustee moved for approval of the $6.5 million settlement with Troutman Sanders. Under an "additional consideration to estate" provision in the settlement, Genovese agreed to apply to the bankruptcy court for payment of Genovese's "reasonable hourly fees" incurred in pursuing approval of the settlement and defending any appeal. Troutman Sanders agreed to pay the first $200,000 of any approved fee. The probate estates of Juanita Jackson, Joseph Webb, Elvira Nunziata, Arlene Anne Townsend, Opal Lee Sasser, and James Henry Jones objected to the Trustee's motion for approval of the settlement but failed to challenge the "additional consideration to estate" provision of the settlement agreement (either the fact of the fee or the $200,000 amount). The bankruptcy court approved the settlement, and the probate estates twice appealed. The bankruptcy court's approval of the settlement was affirmed on appeal, and the settlement became final in January 2021. In February 2021, Genovese applied in accord with the "additional consideration" provision of the settlement agreement for the agreed $200,000 in additional hourly fees and costs incurred in pursuing approval of the settlement and defending the appeals. The probate estates objected. The bankruptcy court overruled the probate estates' objections and approved Genovese's application. The order reasons that, because "the settlement agreement conspicuously provided that Troutman would pay the Trustee. . . additional consideration of up to $200,000" to reimburse an additional fee to Genovese, res judicata bars each of the probate estates' objections. After concluding that the $200,000 fee constitutes "reasonable compensation," the order approves the fee. The probate estates appeal and challenge that the additional fee is "per se unreasonable" because the "additional consideration" provision (1) pays Genovese for work that the contingency fee already compensates, (2) creates a conflict of interest, and (3) renders Genovese not a "disinterested" party under Section 328(c). The Court finds each of these grounds to object to the settlement existed when the probate estates opposed the settlement between the Trustee and Troutman Sanders. Thus, the probate estates waived these objections by failing to raise them in opposition to the motion for approval of the settlement and in the earlier appeal -- which bars the probate estates from asserting these objections in response to Genovese's application for payment in accord with the approved settlement. As explained by the bankruptcy court and by Genovese in the answer brief, the probate estates cannot belatedly attack a core provision of a settlement -- both approved by the bankruptcy court and affirmed on appeal -- under the guise of an opposition to the application for payment of fees in accord with the settlement. As the bankruptcy court correctly concludes -- a conclusion that neither party challenges -- the record resoundingly answers this question in the affirmative. Accordingly, the order of the bankruptcy court is affirmed. A full-text copy of the Order dated Feb. 21, 2023 is available at https://tinyurl.com/5b4yjc6p from Leagle.com. GRAY TELEVISION: S&P Rates New Senior Secured Term Loan E 'BB' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '1' recovery rating to Gray Television Inc.'s proposed senior secured term loan E maturing in 2026. The company plans for a cashless exchange of its term loan C maturing in 2026 ($1.2 billion outstanding) for a new term loan E to transition the debt's base rate to SOFR from LIBOR. The '1' recovery rating indicates S&P's expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default. Our 'B+' issuer credit rating and stable outlook on Gray Television are unchanged because the proposed transaction is neutral for leverage. HERON DEVELOPMENT: April 20 Disclosure Statement Hearing Set ------------------------------------------------------------ Judge Robert E. Grant of the U.S. Bankruptcy Court for the Northern District of Indiana has entered an order within which April 20, 2023 at 10:50 am in Room 2127, Federal Building, 1300 South Harrison Street, Fort Wayne, Indiana is the hearing to consider the approval of the Disclosure Statement of Heron Development, LLC. Judge Grant further ordered that any objection to the Disclosure Statement shall be filed with the Clerk of the Bankruptcy Court no later than 7 days prior to the hearing. A copy of the order dated March 2, 2023 is available at https://bit.ly/3IZr3XL 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, is the Debtor's legal counsel. HUMANIGEN INC: Nasdaq Grants Request to Appeal Delisting Decision ----------------------------------------------------------------- Humanigen, Inc. confirmed March 2, 2023, that its request for a hearing before a Nasdaq Hearings Panel to appeal the determination from the Nasdaq Listing Qualifications Department previously reported in the Company's Current Report on Form 8-K filed on Feb. 24, 2023 has been granted. The Company's hearing before the Panel has been scheduled for April 6, 2023. On Feb. 21, 2023, the Company received a letter from the Staff of Nasdaq notifying the Company that it had not regained compliance with the minimum bid price requirement as of Feb. 20, 2023 and that it was not eligible for a second 180 day extension period. The Nasdaq Staff's letter specifically noted that the Company does not comply with the stockholders' equity initial listing requirement for The Nasdaq Capital Market. The total market value of the Company's listed securities also remains below the $35 million requirement for continued listing on The Nasdaq Capital Market. The Nasdaq Staff's letter informed the Company that, unless the Company were to request a hearing to appeal Nasdaq's delisting determination by 4:00 p.m. Eastern Time on Feb. 28, 2023, the Company's securities would be suspended from trading on and delisted from The Nasdaq Capital Market at the opening of business on March 2, 2023. About Humanigen Inc. Based in Brisbane, Calif., Humanigen, Inc. (OTCQB: HGEN), formerly known as KaloBios Pharmaceuticals, Inc. -- http://www.humanigen.com -- is a clinical-stage biopharmaceutical company focused on developing lenzilumab, a first-in-class antibody that binds to and neutralizes granulocyte-macrophage colony-stimulating factor. Humanigen is developing lenzilumab as a treatment for chronic myelomonocytic leukemia and acute graft versus host disease. Humanigen is also exploring use of lenzilumab to prevent toxicities associated with CAR-T therapy through investigator-initiated trials. Humanigen is also developing an antibody drug conjugate (ADC) utilizing its EphA-3 targeted monoclonal antibody ifabotuzumab (ifab) for solid tumors. Humanigen reported a net loss of $236.65 million for the 12 months ended Dec. 31, 2021, a net loss of $89.53 million for the 12 months ended Dec. 31, 2020, and a net loss of $10.29 million for the 12 months ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $25.97 million in total assets, $78.37 million in total liabilities, and a total stockholders' deficit of $52.40 million. Ridgeland, Mississippi-based Horne LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Feb. 28, 2022, citing that the Company has suffered recurring losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. HYRECAR INC: Files for Chapter 11 Bankruptcy to Pursue Sale ----------------------------------------------------------- HyreCar Inc. files for Chapter 11 bankruptcy protection in the District of Delaware to complete a sale of its assets. The company reports estimated liabilities between $10 million and $50 million and estimated assets between $10 million and $50 million. The petition states that funds will be available to unsecured creditors. The Debtor entered a Chapter 11 Case in rather unique circumstances. On the one hand, the Debtor has experienced laudable operational success in the last year. During that time, the Debtor has increased revenue by 15% with successive quarters of record revenue while improving profit margins by 12% year-over-year and by 18% in the fourth quarter of 2022 versus the same period of 2021. The Debtor also reduced headcount by 20% while acquiring top talent, resulting in $2.6 million in cost savings while reducing operating expenses by $2.9 million on an annual run-rate basis. The Debtor's unique car-sharing marketplace and the offer of quality insurance coverage to its customers has led to its emergence as a leader in the car-sharing and car rental market. The Debtor's current management team worked to capitalize on the Debtor's strongest qualities through expansion of the marketplace and refinement of a robust driver underwriting process. Unfortunately, at the same time that the Debtor has improved its operational performance, the Debtor experienced an unprecedented liquidity crisis on account of events largely outside the Debtor’s control, including: (a) a failed joint venture with AmeriDrive Holdings, Inc. intended to substantially increase the fleet of vehicles utilized on the Debtor platform; (b) an $8 million debenture transaction that never closed; and (c) mounting legal fees from numerous lawsuits and investigations, including lawsuits/investigations relating to stock sales that occurred in 2021. Prior to the Petition Date, the Debtor utilized the services of Northland Capital Markets, which was initially engaged in November 2022 to assist in raising capital. As the Company's liquidity became a dire issue, and discussions changed from an out-of-court stock purchase by the Holmes Group, which would have resulted in payment in full to the Preferred Equity Holders, to an in-court section 363 sale, in which the Preferred Equity Holders hold a lower distribution priority, the Debtor determined that Northland could no longer be an unbiased investment banker. As such, the Debtor has filed a motion seeking to reject its prior engagement agreement with Northland nunc pro tunc to the Petition Date which is scheduled for hearing on March 16, 2023. In connection with the marketing of the sale in this Chapter 11 Case, the Debtor engaged Zukin Partners as its investment banker. Leading up to the Petition Date, the Debtor’s management met with numerous potential purchasers some of which have expressed an interest in submitting an overbid in connection with the proposed sale. The Debtor now seeks to promptly effectuate a sale of its assets, subject to a competitive bidding process that is consistent with both the timing of the Chapter 11 Case and the Debtor's fiduciary duties to maximize value for its estate, stakeholders, and parties in interest. To preserve and maximize the value of the Debtor’s assets and promising operational outlook, the Debtor, in consultation with its advisors, determined that a sale of the Debtor's assets through this Chapter 11 Case is the best path forward. The Debtor has negotiated the Asset Purchase Agreement dated as of March 2, 2023 with the Stalking Horse Bidder, and looks forward to a robust and competitive sale process Under the Stalking Horse APA, Holmes Motors Inc. has agreed to purchase the Debtor's assets or $7.75 million in cash, subject to higher and better offers. To ensure that the highest or otherwise best offer is received for the assets, the Debtor crafted the proposed Bid Procedures to govern the submission of competing bids. To comply with the milestones, the Debtor has proposed a bid deadline of April 27, 2023 at 4:00 p.m., and an auction (if necessary) on May 2, 2023 at 1:00 p.m. About HyreCar Inc. HyreCar Inc. is a nationwide leader operating a carsharing marketplace for ridesharing and food and package delivery nationwide via its proprietary technology platform. HyreCar Inc. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10259) on February 25, 2023. In the petition filed by Mark Allen, as manager, the Debtor reported assets and liabilities between $1 million and $10 million. Andrew J. Roth-Moore, Esq., at Cole Schotz, P.C., is the Debtor's legal counsel. ILLINOIS INSTITUTE: Moody's Lowers Issuer & Debt Ratings to Ba2 --------------------------------------------------------------- Moody's Investors Service has downgraded Illinois Institute of Technology's (Illinois Tech) issuer and debt ratings to Ba2 from Baa3. The bonds were issued through the Illinois Finance Authority. Illinois Tech had $195 million of debt outstanding as of May 31, 2021. The outlook has been revised to negative from ratings under review. This concludes the review for downgrade initiated on January 5, 2023. RATINGS RATIONALE The downgrade of the issuer rating to Ba2 is largely driven by rapid escalation of significant operating deficits. While deficit mitigation initiatives are in place, meaningful structural operating deficits are likely to continue through at least fiscal 2024. The materiality of the deficits and speculative risk regarding return on spending for various strategic initiatives reflects a deterioration of the university's financial strategy and risk management practices, as well as management credibility, key factors under Moody's ESG framework and a driver of this rating action. A relatively high faculty tenure rate, elevated capital expenditures and a STEM oriented curriculum that demands ongoing investment to remain competitive will limit expense flexibility. The university consumed an estimated $62 million of its financial reserves in fiscal 2022 due to a large fiscal 2022 deficit and capital expenditures and future reduction of liquidity due to deficit spending would even more materially impair the university's financial flexibility. The university's debt structure, which includes reliance on working capital lines of credit and includes various covenants, adds credit risk and contributes to the downgrade. A debt service coverage waiver from one of its lending banks and restructuring of the covenant moving forward will defray some of the immediate debt structure risks, but acceleration risks remain if Illinois Tech is unable to stabilize operations. Further, the university must maintain unrestricted liquidity of at least $40 million. With weakening of operating performance in fiscal years 2022 and 2023 and ongoing investment market volatility, compliance with this covenant is also uncertain. If the covenants are missed and waiver from the bank is not received, the outstanding principal and interest can be accelerated, which could also trigger acceleration of the outstanding Series 2019 bonds. The university will also be reliant on more frequent extensions of its lines of credit that, if not renewed, would further stress the university's liquidity position. The Ba2 issuer rating further reflects Illinois Tech's sound overall wealth and prospects for enrollment success given its established brand, STEM focus and urban location. Full time equivalent (FTE) enrollment grew 7.8% in fall 2022 and fiscal 2023 net tuition revenue growth is projected to grow a commensurate 6.3%. However, a highly competitive student market and challenging demographic environment may constrain the university from achieving its near term enrollment targets. Estimated fiscal 2023 net tuition per student of $19,263 further highlights the competitive student market and limited pricing power. Delayed publishing of the fiscal 2022 audit, which management now expects to be available by the end of March 2023, highlights a rise in compliance and reporting risks as well, although management has favorably been proactive in providing investors with preliminary disclosures. The Ba2 revenue bond rating reflects the credit characteristics associated with the issuer rating and the unsecured general obligation nature of the payment obligation. RATING OUTLOOK The negative outlook reflects prospects for further credit deterioration if the university is not able to make observable improvement in operating performance and stabilization of unrestricted liquidity beyond fiscal 2023. It also incorporates debt structures risks with relative short extension on working capital lines of credit. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Significant and sustained improvement in operating performance, reflecting stronger student generated revenues and successful expense controls -- Material and lasting growth in the university's total wealth and unrestricted liquidity FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Evidenced escalation of debt structure risks, including inability to obtain waivers in the event a missed covenant or inability to renew lines of credit -- Inability to improve operating performance beginning in fiscal 2024 or materially worse than expected results in fiscal 2023 -- Further reduction in available liquidity -- Failure to meet enrollment targets for fall 2023 or targets related to growth in net tuition revenue, which would indicate deterioration of brand and strategic position LEGAL SECURITY Illinois Tech's outstanding bonds are unsecured general obligations of the university. PROFILE Illinois Institute of Technology (Illinois Tech) is a private, not-for-profit university located in Chicago, IL. In fiscal 2021, Illinois Tech generated operating revenue of approximately $274 million (Moody's adjusted) and enrolled 5,885 full-time equivalent (FTE) students as of fall 2022. METHODOLOGY The principal methodology used in these ratings was Higher Education Methodology published in August 2021. INTERNATIONAL LAND: Valued by EMCO Hannover at $53 Million ---------------------------------------------------------- International Land Alliance, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it received on Feb. 24, 2023, an independent appraisal by EMCO Hannover Group. The Appraisal indicated an underlying market value of $53,000,000, given its six properties in various stages of residential development and sale. In determining its underlying value, a Residential Market Capitalization Rate ("CAP") of 6.31% was used versus the Southern California Market rate of 4.89%. About International Land Alliance International Land Alliance, Inc. -- https://ila.company -- is an international land investment and development firm based in San Diego, California. The Company is focused on acquiring attractive raw land primarily in Northern Baja California, often within driving distance from Southern California. The Company's principal activities are purchasing properties, obtaining zoning and other entitlements required to subdivide the properties into residential and commercial building lots, securing financing for the purchase of the lots, improving the properties' infrastructure and amenities, and selling the lots to homebuyers, retirees, investors and commercial developers. International Land reported a net loss of $5.06 million for the year ended Dec. 31, 2021, compared to a net loss of $2.67 million for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $6.05 million in total assets, $6.05 million in total liabilities, $293,500 in preferred stock series B, and a total stockholders' deficit of $291,246. Irvine, California-based Haskell & White LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company has experienced recurring losses from operations, has limited financial resources to repay its obligations and will require substantial new capital to execute its business plans, which raise substantial doubt about its ability to continue as a going concern. KROLLMOTION TECHNOLOGIES: Has Deal on Cash Collateral Access ------------------------------------------------------------ Krollmotion Technologies, Inc., dba Anytime Fitness, and Live Oak Banking Company advised the U.S. Bankruptcy Court for the Central District of California, Northern Division, that they have reached an agreement regarding the Debtor's use of cash collateral and now desire to memorialize the terms of this agreement into an agreed order. On March 6, 2020, the Debtor gave to Live Oak a note in the amount of $675,000 to be paid at 7.65% with a 10-year maturity date. Concurrently, the Debtor signed a security agreement securing the Note with certain property of the Debtor, including property meeting the definition of "Cash Collateral" under 11 U.S.C. section 363(a). Live Oak perfected its security interest with the March 9, 2020 filing of a UCC Financing Statement with the California Secretary of State as instrument number 20-7766924962. At hearing on February 21, the Court granted interim use of cash collateral, predicated on an adequate protection payment of $1,000 due March 1, 2023, with a continued hearing on March 8, 2023. The Parties have agreed to resolve the Cash Collateral Motion through a stipulated order allowing use of Cash Collateral for three months, predicated on an adequate protection payment of $1,000 due on the first of each month. The Debtor will make three adequate protection payments to Live Oak Bank of $1,000 each on March 7, 2023, April 1, 2023, and May 1, 2023. Unless further extended by the Court, the authorization to use the cash collateral will expire automatically on the earlier of (i) the close of May 31, 2023; or (ii) the conversion or dismissal of the Case. A copy of the stipulation is available at https://bit.ly/3F6lvth from PacerMonitor.com. About Krollmotion Technologies Krollmotion Technologies operates a 24-hour fitness center featuring exercise machines and free weights, and offers monthly memberships in addition to personal training, small group workout classes, and dietary consultation. Members can use the facilities at any time, any day of the year. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10113) on February 16, 2023. In the petition signed by George P. Kroll, chief executive officer, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. Michael Jay Berger, Esq., at Law Offices of Michal Jay Berger, represents the Debtor as legal counsel. LRM PACKAGING: Files Subchapter V Case for Wind Down ---------------------------------------------------- LRM Packaging Inc. filed for chapter 11 protection in the Middle District of Florida as part of its plans to wind down operations. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor has signed a deal to sell its customer list and certain equipment to JJM Packaging LLC for $83,500 cash, absent higher and better offers. The Debtor has filed proposed bidding procedures for the sale of substantially all assets of the Debtor. Under the proposed timeline, initial bids will be due April 14, 2023, and an auction will be held April 17. Packaging Company Until recently, the Debtor was a full-service contract packaging company, with over 50 years' experience in the food, supplements, and specialty packaging industries. Shortly before the bankruptcy filing, the Debtor ceased accepting new business orders and began the process of winding down its operations. In recent years, in the face of increasingly challenging business conditions (including the Covid-19 pandemic and the inability to college a large receivable), the Debtor has contacted a number of potential merger partners, but has found that its pension liability in excess of $3 million makes such a transaction prohibitive. During 2022, the Debtor solicited a number of industry participants to gauge interest in purchasing the Debtor's business assets, including, without limitation, its packaging equipment. In the fall of 2022, the Debtor and JJM Packaging commenced negotiations concerning the latter's interest in acquiring some or all of the Debtor's business assets. JJM has agreed to acquire certain of the assets of the Debtor. The assets to be acquired by JJM are not substantially all of the Debtor's assets. The assets to be acquired by JJM are encumbered by a security interest held by John Natali, Sr (the Debtor's founder) and Margaret Natali, which secures loan indebtedness owing from the Debtor Mr. Natali, Sr., and Mrs. Natali of $840,000. About LRM Packaging LRM Packaging Inc. is a full-service contract packaging company with over 50 years of experience in the food, supplements and specialty packaging industries. Packaging Powder and granular product is the Company's expertise, as well as snack foods, dry food products and liquids. LRM Packaging Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 23-11455) on Feb. 24, 2023. In the petition filed by John Natali, Jr. as president, the Debtor reported total assets of $1,766,502 and total liabilities of $1,524,298. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for March 31, 2023, at 10:00 AM at Telephonic. Proofs of claim are due by May 4, 2023. The Debtor is represented by: Douglas J. McGill, Esq. WEBBER MCGILL LLC 100 E. Hanover Avenue Suite 401 Cedar Knolls, NJ 07927 Tel: (973) 739-9559 Fax: (973) 739-9575 Email: dmcgill@webbermcgill.com M & J DUMP TRUCKING: Files Subchapter V Case, Sues BMO ------------------------------------------------------ M & J Dump Trucking LLC filed for chapter 11 protection in the Middle District of Tennessee. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. M & J Dump Trucking immediately filed an adversary proceeding against BMO Transportation Finance and BMO Harris Bank, N.A. According to the lawsuit, BMO is in possession of the Debtor's 2017 Volvo VHD84B Dump Truck (VIN: 4V5K99EH0HN988297), 2017 Volvo VHD84B Dump Truck (VIN: 4V5K99EH0HN988299), 2020 Freightliner (VIN: 1FVMG3DVXLHLS6595), and 2020 Freightliner (VIN: 3ALMGNDR4LDMC6689), which are property of the bankruptcy estate. The Debtor asserts that BMO has refused to release the vehicles and its continued exercise of control over said property of the estate violates 11 U.S.C. Sec. 542 and said vehicles should be returned to the Debtor immediately. According to court filings, M & J Dump Trucking 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. About M & J Dump Trucking M & J Dump Trucking LLC is a construction company providing dump truck, belly dump & side dump hauling. M & J Dump Trucking LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-00643) on February 23, 2023. In the petition filed by Janice Allardice , as majority shareholder, the Debtor reported assets and liabilities between $1 million and $10 million. Glen Coy Watson has been appointed as Subchapter V trustee. The Debtor is represented by: Steven L. Lefkovitz, Esq. LEFKOVITZ AND LEFKOVITZ, PLLC 1240 Liberty Lane Gallatin, TN 37066 MBIA INC: Incurs $203 Million Net Loss in 2022 ---------------------------------------------- MBIA Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $203 million on $154 million of total revenues for the year ended Dec. 31, 2022, compared to a net loss of $445 million on $189 million of total revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $3.37 billion in total assets, $4.25 billion in total liabilities, and a total deficit of $876 million. As of Dec. 31, 2022, MBIA Inc.'s liquidity position totaled $230 million, consisting primarily of cash and cash equivalents and other liquid invested assets. Statement from Company Representative Bill Fallon, MBIA's chief executive officer stated, "During the fourth quarter of 2022, the restructuring of the Puerto Rico Highways and Transportation Authority (HTA) bonds was implemented and National's insured HTA exposure has been extinguished. Further, we reached an agreement concerning PREPA, our last significant Puerto Rico exposure, which has been incorporated into the Amended Plan of Adjustment filed by the Puerto Rico Financial Oversight and Management Board. The Title III court has scheduled that Plan for confirmation hearings this summer. In the meanwhile, we continue to explore potential strategic alternatives for the Company with our advisor, Barclays Capital. We intend to disclose additional information regarding this process when such is deemed necessary and/or appropriate." Fourth Quarter Results The Company recorded a consolidated GAAP net loss of $52 million, or $(1.05) per diluted common share, for the fourth quarter of 2022 compared with a consolidated net loss of $155 million, or $(3.12) per diluted common share, for the fourth quarter of 2021. The lower net loss for the fourth quarter of 2022 was primarily due to lower losses and LAE at National, primarily due to its Puerto Rico exposure and a favorable comparison of losses and LAE at MBIA Corp., primarily related to fourth quarter of 2021 losses related to CDOs. The Company reported an Adjusted Net Income for the fourth quarter of 2022 of $15 million or $0.30 per share compared with an Adjusted Net Loss of $106 million or $(2.13) per share for the fourth quarter of 2021. The favorable result for 2022 as compared to 2021 was largely due to reduced losses and LAE for National, primarily related to National's Puerto Rico exposure. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/814585/000119312523054064/d387374d10k.htm#toc387374_2 About MBIA MBIA's primary business has been to provide financial guarantee insurance to the United States' public finance markets through its indirect, wholly-owned subsidiary, Public Finance Guarantee Corporation, whose financial guarantee insurance policies provide investors with unconditional and irrevocable guarantees of the payment of the principal, interest or other amounts owing on insured obligations when due. MERISOL VILLAGES: Amends Capstone Secured Claim Pay Details ----------------------------------------------------------- Merisol Villages, LLC, submitted an Amended Disclosure Statement for Amended Plan of Reorganization dated March 5, 2023. As of the Petition Date, the Debtor had inventory consisting of 11 existing finished and platted lots the "Developed Lots"). An addition 62 Lots are available for future development, including 20 lakefront lots and 42 canal lots. According to a January 2022 appraisal by Property Analytix, the "as is" value of the Real Property was $11,240,000 as of January 7, 2022. The Debtor filed an adversary proceeding against the Conditional Optionees seeking, among other relief, a declaration that the Conditional Option Agreement is not enforceable. The Conditional Optionees filed a motion seeking dismissal of the adversary proceeding. Prior to trial, the parties settled all disputes. On February 5, 2023, the Court entered its order approving the settlement. The most important term of the settlement is the release of the Conditional Option Agreement, removing the impediment to title that had prevented the Debtor from consummating prior Lot sales and debt refinancings. The Debtor intends to sell Lots free and clear of liens, claims and interests to provide liquidity to service the payment obligations proposed in the Plan. The Debtor demonstrated the ability to attract buyers for Lots pre-petition. Those sales did not close due to the title issues resulting from the Conditional Option. As a result of the release of the Conditional Option Agreement the Debtor proposes to sell the Developed Lots free and clear of liens, claims and interest. The Debtor has an existing inventory of 11 Lots that can be sold as is. Those lots have an average value of $150,000 per Lot, for a collective gross value of $1.65 million. If the Debtor succeeds in selling those 11 Lots in that price range, it will generate approximately $1.1 to $1.2 million to pay to the Class 2 Creditor and $300,000 to $400,000 for payment of other Allowed Claims and for operating expenses. The Debtor and the Conditional Optionees agreed to settle all disputes among them. On January 5, 2023 the Court approved the settlement and the parties have executed all documents necessary to consummate the settlement. As part of the settlement, (i) the Conditional Option Adversary will be dismissed with prejudice, (ii) the various motions and objections described above, are released or withdrawn as appropriate. (iii) the parties entered into a mutual and global release of claims, (iv) the Conditional Optionees released the Conditional Option Agreement, (v) the Debtor released the Option Agreement, and (vi) the Conditional Optionees granted the Debtor an option to acquire an undivided interest in a portion of the property which was subject to the Option Agreement on certain terms and conditions. Class 2 consists of the Secured Claim of Capstone. The Allowed secured claim of Capstone will be paid in full over 18 months from the Effective Date from cash proceeds from ongoing sales of the Real Property, with interest accruing at the non-default interest rate prescribed in the Capstone Note, or such other rate as is determined by the Court not to exceed 12%. All remaining principal, interest and costs will be due and payable on the 15th day of the 18th month from the Effective Date. Lender will retain its liens on the collateral currently pledged to Lender. This Class is impaired. The Debtor shall be entitled to close any sale of Lots provided the gross sale price is greater than or equal to the Release Price. Sales of lots shall be free and clear of any and all liens, claims or interests in the Real Property. Distribution of Sale Proceeds. Proceeds from the sale of Lots shall be distributed as follows: * Payment of brokers fees and commissions and other usual and customary costs of closing attributable to the Lot; * Eighty percent of the balance of the sale proceeds to Capstone to be applied first to collection costs and interest and then to pay the principal amount of the Allowed Class 2 Claim. * The remaining sales proceeds shall be distributed to the Debtor for payment of other Allowed Claims in accordance with the terms of the Plan and for payment of the Debtor's ongoing and estimated future operating costs. The Debtor may prepay the Class 2 Claim at any time without pre-payment penalties or interest. The Debtor, with the consent of the holder of the Class 2 Claim may refinance, renew, extend, change, or alter the Capstone Note, including increasing the Capstone Note balance to provide additional development financing, provided that such refinancing is sufficient to pay all Allowed Class 1, Class 3 and Priority Tax Claims in full. The Debtor may refinance the Class 2 Claim with a third party at any time without the consent of the Class 2 Creditor provided that such refinancing is sufficient to pay all Allowed Class 1, Class 3 and Priority Tax Claims in full. Like in the prior iteration of the Plan, each holder of an Allowed Class 3 General Unsecured Claim shall receive 100.00% of their total Allowed Class 3 General Unsecured Claim, plus interest fixed at the Federal judgment rate as of the Confirmation Date, in full satisfaction of the Class 3 Allowed Claims. The Plan contemplates that the Debtor will continue to operate and generate sufficient operating cash flow from the sale of Lots free and clear of liens and interests, including, but not limited to the Conditional Option. The 80% of the net proceeds generated from Lot sales after payment of customary closing costs will be distributed first to pay the Class 2 Claim. The remaining proceed will be used to pay Priority Tax Claims and Unsecured Claims in accordance with the terms of the Plan and remaining funds will be used to pay operating expenses of the Debtor. The Debtor may seek to refinance the Class 2 Claim in an amount sufficient to pay the Class 2 Claim in full and use additional loan proceeds to satisfy all remaining Allowed Claims with the balance of proceeds from the refinancing to be used to fund future development costs associated with the Real Property. A full-text copy of the Amended Disclosure Statement dated March 5, 2023 is available at https://bit.ly/3mAUtnC from PacerMonitor.com at no charge. Attorneys for the Debtor: Raymond W. Battaglia, Esq. Law Offices of Ray Battaglia, PLLC 66 Granburg Circle San Antonio, TX 78218 Telephone: (210) 601-9405 Email: rbattaglialaw@outlook.com About Merisol Villages Merisol Villages, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner of 25.559 acres located in Port Aransas, Texas, valued at $9.62 million. Merisol Villages sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-20135) on May 31, 2022. In the petition filed by Charles J. Castor, Jr., sole member, the Debtor listed assets and liabilities between $1 million and $10 million. Judge David R. Jones oversees the case. Raymond Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC is the Debtor's counsel. MICHAEL ROBERT WIGLEY: Relief From 2013 Judgment Affirmed on Appeal ------------------------------------------------------------------- In the appealed case Lariat Companies Inc., Appellant, v. Barbara Wigley, Respondent, Michael Wigley, Defendant, Case No. A22-1118, (Minn. Ct. App.), the Court of Appeals of Minnesota affirms the district court's order granting Barbara Wigley relief from judgment. Lariat Companies, Inc. appeals the district court's order granting Barbara Wigley (wife) relief from judgment. The district court determined that the wife had satisfied a 2013 judgment against both wife and her codefendant-husband Michael Wigley (husband) for fraudulent transfer of funds husband owed to Lariat. In November 2011, Lariat filed a lawsuit against the wife alleging violations of the Minnesota Uniform Fraudulent Transfer Act (MUFTA). In November 2013, the district court found the Wigleys liable under MUFTA and entered judgment against both husband and wife, jointly and severally, for $788,488. The wife moved the district court for amended findings, but her motion was stayed when husband filed for voluntary bankruptcy under Chapter 11 in February 2014. Lariat filed a proof of claim in husband's bankruptcy proceedings seeking payment for the entire amount of the unpaid rent judgment and the entire MUFTA judgment. The Eighth Circuit's Bankruptcy Appellate Panel (B.A.P.) concluded that Lariat's proof of claim was limited by federal law, which caps the amount a landlord can recover in damages during a bankruptcy proceeding. In her 2021 motion for affirmative relief from the MUFTA judgment, wife argued that the MUFTA judgment had been satisfied by husband's bankruptcy payment, her own bankruptcy payment, and various "post-judgment collections activity in the form of garnishments and levies." But Lariat contended before the district court, and now on appeal, that collateral estoppel precludes wife from arguing that husband's bankruptcy payment applies to the judgment. Lariat contends that collateral estoppel precludes wife's claim that husband's bankruptcy payment should be credited towards the MUFTA judgment. The district court rejected this argument. In rejecting this argument, the district court determined that wife did not have an opportunity to be heard on her request for relief by full satisfaction at any time before her 2021 motion, and thus, no court had yet decided the issue. The district court observed that in 2016 -- when wife first moved to vacate the MUFTA judgment -- she, herself, had not yet declared Chapter 11 bankruptcy and had yet to make her own bankruptcy payment to Lariat. That payment was only made in the spring of 2020. Therefore, the district court reasoned, because the relief from judgment requested in 2021 "was not previously available" to wife, "the issue of satisfaction through payment in full cannot have been previously litigated and decided on the merits." The Court discerns no error in the district court's determination that the husband's bankruptcy payment should be credited toward the MUFTA judgment. In ruling in 2013 that husband and wife were liable in the MUFTA action, the district court found that husband fraudulently transferred assets to wife to avoid paying Lariat unpaid rent. During husband's bankruptcy proceedings, Lariat attempted to recover the full amount of both the unpaid rent judgment and the MUFTA judgment. But the B.A.P. stated that MUFTA did "not create a new claim," and instead "merely confered an alternate remedy for protecting preexisting creditor rights." The B.A.P. specifically determined Lariat failed to show additional damages stemming from the fraudulent transfers beyond what was already owed in unpaid rent. Given the duplicative nature of these two judgments -- and the fact that husband's bankruptcy payment fully satisfied his debt to Lariat -- the Court finds and concludes that the husband's bankruptcy payment applied to both the unpaid rent judgment and the MUFTA judgment. A full-text copy of the Opinion dated Feb. 21, 2023 is available at https://tinyurl.com/ajrbukey from Leagle.com. The bankruptcy case is in re: Michael Robert Wigley (Bankr. D. Minn. Case No. 16-4075). MICROVISION INC: Incurs $13.5 Million Net Loss in Fourth Quarter ---------------------------------------------------------------- MicroVision, Inc. reported a net loss of $13.47 million on $0 of total revenue for the three months ended Dec. 31, 2022, compared to a net loss of $12.62 million on $557,000 of total revenue for the three months ended Dec. 31, 2021. For the 12 months ended Dec. 31, 2022, the Company reported a net loss of $53.09 million on $664,000 of total revenue compared to a net loss of $43.20 million on $2.50 million of total revenue for the 12 months ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $115 million in total assets, $25.25 million in total liabilities and $89.74 million in total stockholders' equity. "2022 was a transformational year for MicroVision. We announced the joining of forces with Ibeo Automotive which closed in January 2023 and uniquely positions us in the market," said Sumit Sharma, MicroVision's chief executive officer. "Our expanded product portfolio now includes the dynamic view MEMS-based scanning lidar for long-range highway pilot, flash-based short-range lidar for automotive and non-automotive applications, and a validation software suite for OEMs and Tier 1s." "MicroVision continues to strategically deploy capital, emerging as one of the strongest lidar companies on the market," continued Sharma. "I am pleased with how quickly our engineering teams from the U.S. and Germany came together to integrate MAVINTM DR with mature perception software. This early demonstration of synergies, combining MAVIN with perception, advances our positioning in existing RFIs and RFQs as well as others that are expected this year and beyond from several OEMs across the globe. We expect to accelerate our 2023 revenue in the range of $10-15 million from our expanded product suite. Our very competitive cost structure combined with our superior design and technology positions us well relative to our peers." A full-text copy of the press release is available for free at: https://www.sec.gov/Archives/edgar/data/65770/000119312523053941/d472382dex991.htm About MicroVision Microvision, Inc. -- http://www.microvision.com-- is an automotive lidar and ADAS solutions company, focused on delivering safe mobility at the speed of life. Founded in 1993, MicroVision is a pioneer in laser beam scanning, or LBS, technology, which is based on its patented expertise in micro-electromechanical systems, or MEMS, laser diodes, opto-mechanics, electronics, algorithms and software and how those elements are packaged into a small form factor. Throughout its history, the Company has combined its proprietary technology with its development expertise to create innovative solutions to address existing and emerging market needs, such as augmented reality microdisplay engines; interactive display modules; consumer lidar components; and, most recently, automotive lidar sensors and solutions for the automotive market. MicroVision reported a net loss of $43.20 million for the year ended Dec. 31, 2021, a net loss of $13.63 million for the year ended Dec. 31, 2020, a net loss of $26.48 million for the year ended Dec. 31, 2019, and a net loss of $27.25 million for the year ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $109.39 million in total assets, $23.77 million in total liabilities, and $85.62 million in total shareholders' equity. * * * This concludes the Troubled Company Reporter's coverage of Microvision, Inc. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. MIRAGE INTERNATIONAL: Files Emergency Bid to Use Cash Collateral ---------------------------------------------------------------- Mirage International, Inc. asks the U.S. Bankruptcy Court for the Western District of Oklahoma for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to fund its business operations and pay present operating expenses. The Debtor alleges that the Oklahoma Tax Commission and Internal Revenue Service hold validly perfected and enforceable liens on and security interests in, among other things, the Debtor's accounts, inventory, equipment, machinery and general intangibles, and all proceeds thereof, all as more particularly described and evidenced by those several Tax Warrants filed by the OTC and Notices of Federal Tax Lien filed by the IRS on various dates. As adequate protection for the Debtor's use of cash collateral, the Debtor proposes to grant Secured Creditors a validly perfected first priority lien on and security interests in the Debtor's post-petition Collateral subject to existing valid, perfected and superior liens in the Collateral held by other creditors, if any, and the Carve-Out. In the event of, and only in the case of Diminution of Value of the Secured Creditors' interests in the Collateral, grant a super-priority claim that will have priority in the Debtor's bankruptcy case over all priority claims and unsecured claims against the Debtor and its estate. Starting 30 days after the Petition Date, the Debtor will make postpetition monthly payments to IRS in an agreed upon amount or as ordered by the Court. Additionally, starting 30 days after the Petition Date, the Debtor will make postpetition monthly payments to OTC in an agreed upon amount or as ordered by the Court. A hearing on the matter is set for March 20, 2023 at 10 a.m. A copy of the Debtor's motion and budget is available at https://bit.ly/3Yv4mjO from PacerMonitor.com. The Debtor projects $27,000 in total income and $23,192 in total expenses. About Mirage International, Inc. Mirage International, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 23-10499) on March 6, 2023. In the petition signed by Charles Michael Laws, president, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. Gary D Hammond, Esq., at Hammond Law Firm, represents the Debtor as legal counsel. MPH ACQUISITION: Moody's Cuts CFR to B3 & Sec. 1st Lien Debt to B1 ------------------------------------------------------------------ Moody's Investors Service downgraded MPH Acquisition Holdings LLC's ("MultiPlan") Corporate Family Rating to B3 from B2, the Probability of Default Rating to B3-PD from B2-PD. Moody's also downgraded the ratings on the company's senior secured first lien credit facilities and senior secured notes to B1 from Ba3 and senior unsecured notes to Caa1 from B3. The company's Speculative Grade Liquidity ("SGL") Rating is unchanged at SGL-1. The outlook remains stable. The ratings downgrades reflect a deterioration in operating performance in the second half of 2022 and Moody's expectations of additional pressure in 2023 and beyond from contract renegotiations with several of the company's larger customers. As such, Moody's expects financial leverage to increase from 6.4x at the end of 2022 to the mid 7x range by the end of 2023. Moody's anticipates leverage will remain elevated above 7.0x over the next 12-18 months. Additionally, while Moody's expects MultiPlan's liquidity to remain very good (SGL-1), Moody's expects free cash flow to fall materially from 2018-2022 levels in 2023 and 2024. Downgrades: Issuer: MPH Acquisition Holdings LLC Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured 1st Lien Term Loan B, Downgraded to B1 (LGD2) from Ba3 (LGD2) Senior Secured 1st Lien Revolving Credit Facility, Downgraded to B1 (LGD2) from Ba3 (LGD2) Senior Secured Notes, Downgraded to B1 (LGD2) from Ba3 (LGD2) Senior Unsecured Notes, Downgraded to Caa1 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: MPH Acquisition Holdings LLC Outlook, Remains Stable RATINGS RATIONALE The B3 CFR reflects MultiPlan's high financial leverage with debt/EBITDA of 6.4x at December 31, 2022 and Moody's expectation that it will rise into the mid 7x range in 2023. The rating also reflects the very high customer concentration, with approximately half of the company's revenue generated from two customers. MultiPlan's rating is supported by the company's strong market position in the healthcare cost management industry, robust operating margins, and positive free cash flow. The company also benefits from high barriers to entry in the preferred provider organization (PPO) industry and switching costs for its data-driven analytics business. Moody's believes that the analytics and payment integrity businesses have good growth prospects going forward but the company's network business faces more modest growth prospects. The Speculative Grade Liquidity Rating of SGL-1 reflects the company's very good liquidity, as Moody's expects MultiPlan will generate ample positive free cash flow in 2023 and 2024. Further, liquidity is supported by access to a $450 million revolving credit facility expiring in 2026, which Moody's expects will remain undrawn, and no near-term debt maturities. The company had cash of $341 million at December 2022 and no funded debt maturities until 2027. The stable outlook reflects Moody's expectation that leverage will increase to the mid 7x range in 2023 and remain elevated and above 7.0x over the next 12-18 months. ESG CONSIDERATIONS MultiPlan's ESG credit impact score is highly negative (CIS-4) reflecting highly negative exposure to both social (S-4) and governance (G-4) considerations. As a cost containment company with significant revenue generated from the repricing of out of network medical bills, MultiPlan is at risk of a change in legislation that could impact the way medical bills are repriced. Furthermore, MultiPlan has aggressive financial policies and is largely controlled by private equity funds. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company demonstrates less aggressive financial policies and Moody's expects debt to EBITDA to be sustained below 6.5x. Furthermore, an upgrade would require the company to maintain stable earnings, revenue growth, and good liquidity. The ratings could be downgraded if operating performance weakens or liquidity deteriorates. Any material customer losses or pricing pressure could also result in a downgrade. MultiPlan operates in the healthcare benefits field as a provider of healthcare cost management solutions. Through its Network-Based Services (23% of 2022 revenue), MultiPlan is one of the largest independent PPOs, providing networks of contracted healthcare providers for health plans to use. MultiPlan operates two other segments: Analytics-Based Solutions (66%) - its largest business - and Payment and Revenue Integrity Services (11%). MultiPlan uses data and technology to determine a fair price for out of network claims and identify improper and unnecessary charges before or after claims are paid. More than 90% of the company's revenues are generated as a percentage of savings realized by their payor customers. MultiPlan is a public company and its largest shareholder is Hellman & Friedman. The company generated $1.1 billion in revenue in 2022. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. NS FOA: Wins Cash Collateral Access Thru March 10 ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, authorized NS FOA LLC to use the cash collateral of the U.S. Small Business Administration on an interim basis in accordance with the budget, with a 10% variance, through March 10, 2023. As adequate protection for the use of cash collateral and for any diminution in value of the Lender's prepetition collateral, the Lender is granted a valid, perfected lien upon, and security interest in, to the extent and in the order of priority of any valid lien pre-petition, all cash generated post-petition by the "Property" and all collateral acquired post-petition. The postpetition liens and security interests granted to the Lender will be valid and perfected post-petition, to the same extent, validity, and priority of the Lender's prepetition lien(s), without the need for execution or filing of any further documents or instruments otherwise required to be filed or be executed or filed under non-bankruptcy law. These events constitute an "Event of Default": a. If a trustee is appointed in the Chapter 11 Case; b. If the Debtor breaches any term or condition of the Order or any of the Lender's loan documents, other than defaults existing as of the Petition Date; c. If the Case is converted to a case under Chapter 7 of the Bankruptcy Code; d. If the case is dismissed; or e. If any violation or breach of any provision of the Order occurs. A copy of the order is available at https://bit.ly/3ISVgYu from PacerMonitor.com. About NS FOA LLC NS FOA LLC owns the largest covered shrimp farm in the United States, supplying fresh-frozen shrimp year round. The Company distributes products, including fresh-frozen ballyhoo (rigged and unrigged), bonita strips and more. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11183) on February 14, 2023. In the petition signed by Congwei "Allan" Xu as managing member, the Debtor disclosed $1,180,942 in assets and $931,850 in liabilities. Judge Mindy A. Mora oversees the case. Aaron A. Wernick, Esq., at Wernick Law, PLLC, is the Debtor's legal counsel. NUTEX HEALTH: Posts $14.8 Million Net Loss in Fourth Quarter ------------------------------------------------------------ Nutex Health Inc. announced fourth quarter and fiscal year 2022 financial results for the twelve months ended Dec. 31, 2022. Nutex Health reported a net loss attributable to the Company of $14.75 million on $53.72 million of total revenue for the three months ended Dec. 31, 2022, compared to net income attributable to the Company of $13.98 million on $63.40 million of total revenue for the three months ended Dec. 31, 2021. For the year ended Dec. 31, 2022, the Company reported a a net loss attributable to the Company of $424.78 million on $219.29 million of total revenue compared to net income attributable to the Company of $132.59 million on $331.53 million of total revenue for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $431.75 million in total assets, $311.42 million in total liabilities, and $120.33 million in total equity. "Several factors affected our operating and financial results in 2022, including a significant non-cash goodwill impairment charge recognized in our third quarter, lower net revenue per patient visit due to the No Surprises Act and lower patient volumes due to fewer Covid-related visits," stated Jon Bates, chief financial officer of Nutex Health. "We had a challenging 2022 but emerged as a stronger organization. Looking forward, we remain focused on strategic and operating initiatives that we believe will yield positive results in the future. First, we have solidified our revenue cycle management efforts specifically to cope with the IDR process related to NSA. Second, we are increasing efforts to collect co-pays and co-insurance. Third, we are making efforts to sign favorable contracts with insurers. Fourth, we are accelerating contracting with local physicians to join our IPAs. Fifth, we are ramping up our marketing efforts. And finally, our Board has started a portfolio rationalization initiative to review a few underperforming facilities," stated Tom Vo, M.D., MBA, Chairman and chief executive officer of Nutex Health. "We are intensely focused on executing on our long-term growth strategy. On the micro-hospital side, one new facility went operational about three weeks ago. We expect to open 5-6 more facilities this year, then 7-8 new facilities in 2024 and at least 5 more in 2025. On the independent practice association ("IPA") side, we are happy to report that over 45 primary care physicians have joined our IPA in Houston, over 25 have joined in South Florida and we are just getting underway in Phoenix. We also plan to increase our investor relations efforts in 2023 by attending more healthcare investor conferences. We would also like to note that we now have two banking analysts covering our Company and stock," stated Warren Hosseinion, M.D., president of Nutex Health. A full-text copy of the press release is available for free at: https://www.sec.gov/Archives/edgar/data/1479681/000155837023002711/nutx-20230302xex99d1.htm About Nutex Headquartered in Houston, Texas and founded in 2011, Nutex Health, Inc. is a healthcare services company with approximately 1500 employees nationwide and is partnered with over 800 physicians. The Company has two divisions: a Hospital division and a Population Health Management division. The Hospital division owns and operates 21 facilities in eight different states. The division implements and operates different innovative health care models, including micro hospitals, specialty hospitals and hospital outpatient departments (HOPDs). The Population Health Management division owns and operates provider networks such as Independent Physician Associations (IPAs). Through its Management Services Organizations (MSOs), the Company provides management, administrative and other support services to its affiliated hospitals and physician groups. The Company's cloud-based proprietary technology platform aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers. Nutex reported a net loss of $13.67 million for the year ended Dec. 31, 2021, a net loss of $5.65 million for the year ended Dec. 31, 2020, and a net loss of $7.12 million for the year ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $434.52 million in total assets, $301.99 million in total liabilities, and $132.53 million in total equity. * * * This concludes the Troubled Company Reporter's coverage of Nutex Health, Inc. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. OMAHA BEACH: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Omaha Beach 3017, LLC (DE), according to court dockets. About Omaha Beach 3017 Omaha Beach 3017, LLC (DE) sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10666) on Jan. 27, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Laurel M Isicoff presides over the case. Joel M. Aresty, Esq., at Joel M. Aresty, P.A. represents the Debtor as counsel. OUTPOST PINES: Files for Chapter 11 Bankruptcy ---------------------------------------------- Outpost Pines LLC filed for chapter 11 protection in the Eastern District of New York. Outpost Pines LLC owns, and through non-debtor affiliates, operates properties in the Fire Island Pines community. The Pines is the largest LGBTQ+ resort in the United States and welcomes over 250,000 people each season. The Properties are mixed-use and account for about 80% of the Pines commercial district. In season, the Debtor's non-debtor affiliates employ 120 workers, entertainers, DJs and other artists. The Debtor's affiliates provide the major source of food, beverage, shopping, entertainment and community to the homeowners and renters that surround the Debtor's Properties. At 49 & 56 Picketty Ruff Walk, an affiliate runs the Blue Whale restaurant and bar, and the Hotel featuring 21 guestrooms and two retail stores. 37 Fire Island Boulevard is the Pavilion building. The ground floor features a gym and juice bar, two retail stores and administrative offices. The upper floor features the Pavilion nightclub and outside bar. Fire Island Boulevard is a three-bedroom two-bathroom house that serves as a staff accommodation. Atlantic Walk is a 16-bedroom/eight-bathroom residence built in 1975 and renovated in 2016 that also houses resort staff in the summer season. The Properties also feature about 320 feet of frontage along the harbor, with room for 9 boat slips with an average size of 35 feet. $8 Million Loan to Lender On March 31, 2015, the Debtor borrowed $8 million from Progressive Credit Union under an agreement to acquire and renovate the Properties. The Loan Agreement has a ten-year term, the interest rate is 3% and has a five-year extension option. The Loan was assigned to Pentagon Federal Credit Union and then to ECapital Loan Fund III LP (the "Lender" or the "Mortgagee"). The Debtor paid the Lender timely until the pandemic-related government- ordered shutdown of the hospitality industry. The travel restrictions and quarantine requirements caused the Debtor to delay its 2020 seasonal opening and to dramatically curtail operations when it did open on May 29, 2020. When the government lifted restaurant and bar seating and social distancing requirements in June 2021, the Debtor and Debtor affiliates resumed reduced operations for the 2021 season and full operations for the 2022 season. Income rebounded and exceeded pre-pandemic levels. Meanwhile, in March 2020, the Debtor reached out to the Lender when it could not reopen in April 2020. Pentagon Federal Credit Union had just taken over Progressive Credit Union, the initial Lender, in an emergency merger. The Debtor promptly provided all documentation the Lender requested. The Debtor's counsel conveyed many verbal settlement proposals to Lender's counsel. The Lender agreed to defer debt service for the months of May 2020 through September 2020 and thus extended the Loan maturity date from April 1, 2025 to October 1, 2025. At the Lender's request, on August 6, 2021, the Debtor made a formal written restructuring proposal, and then another on April 7, 2022. By then, the Lender had accelerated its Loan and demanded payment in full of all amounts due including principal, interest, default interest and other charges. On January 19, 2022, the Lender commenced a foreclosure action in the Supreme Court of Suffolk County. The case was largely dormant while counsel to the parties continued to negotiate. The Debtor repeatedly offered to reinstate the Loan once its business rebounded and it had access to sufficient cash. The Lender repeatedly refused tender unless the Debtor paid five times the amount of the overdue interest. The Lender finally agreed to an in-person meeting on July 26, 2022, followed by telephonic meetings on Oct. 7, 2022. On Oct. 7, a loan modification was agreed upon subject only to Lender’s senior management approval. Then the Lender went silent. The last communication from the Lender before its sale of the Loan to ECapital Loan Fund III LP was an Oct. 12, 2022 email from the Lender stating that senior management was still reviewing the modification terms. Since accruing 16% default interest made the loan easier to sell, it now seems obvious that the Lender was delaying the Debtor while marketing the paper. Indeed, the Lender engaged a national broker to market the Loan and obtained a real estate collateral appraisal in January 2022 establishing a $13,500,000 fair market asset value, far more than the amount owed to the Lender under any analysis. On November 4, 2022, the Debtor was notified that ECapital Loan Fund III acquired the Loan. Since November 4, 2022, ECapital has repeated Pentagon Federal Credit Union’s negotiate, delay and disappear strategy. For example, the Debtor was promised an updated settlement proposal on February 3, 2023 and since then Lender has not communicated with Debtor despite multiple emails and voice messages. Fearing the ex-parte appointment of receiver who likely could not preserve and protect the value of the Debtor's unique operation, the Debtor commenced this Chapter 11 case to save its business and over 120 jobs. No Interest Due to Lender The Debtor filed a Chapter 11 Plan and a Disclosure Statement. The Debtor estimates that $7,347,551 of principal is due on the Loan. Although the Lender has not provided a current payoff letter, the Debtor projects that as of February, 2023, the Lender will assert that the Debtor owes about $2,385,000 for 16% default interest, as compared to about $532,000 for 3% regular interest. Amortization payments are due as well. Based on old payoff letters, the Debtor projects that the Lender will also demand escrow replenishments of about $218,000, legal fees of $25,000 and late charges of $14,764, none of which the Debtor is in a position to concede absent more detail and analysis. The Debtor projects that the ultimate cure cost to reinstate the Loan will be between $1,254,674 and $3,108,142 for interest, amortization, escrow replenishments, legal fees and late fees. Aside from mortgage debt, the Debtor's obligations include an insider loan of about $1,549,221, an SBA disaster assistance loan of about $161,941 and vendor claims of about $8,200. The Plan invokes Section 1124(2) of the Bankruptcy Code, under which a creditor may be compelled to reinstate an obligation in default even if the obligation could not be reinstated under state law. Under the plan, the Debtor asserts that it should not have to pay default interest as a condition to reinstatement. The Debtor assumes that the Lender will disagree. To advance the issue, the Debtor is including a preview of its argument, that there is compelling case law supporting reinstatement without payment of default interest. E.g., In re Taddeo, 685 F.2d 24 (2d Cir.1982); accord, In re Forest Hills Associates, 40 B.R. 410 (Bankr. S.D.N.Y. 1984); In re Manville Forest Products Corp., 43 B.R. 293 (Bankr. S.D.N.Y. 1984); In re Kizzac Management Corp., 44 B.R. 496 (Bankr. S.D.N.Y. 1984). About Outpost Pines Outpost Pines LLC is engaged in activities related to real estate. The Debtor owns in fee simple title properties located in Sayville, NY, valued at $13.5 million. Outpost Pines LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-70617) on Feb. 23, 2023. In the petition filed by Patrick J. McAteer, as authorized signatory, the Debtor reported total assets of $13,979,967 and total liabilities of $11,815,019. The petition states that funds will be available to unsecured creditors. The Honorable Bankruptcy Judge Robert E. Grossman handles the case. The Debtor is represented by: Mark Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 800 Third Avenue New York, NY 10022 Tel: (212) 593-1100 Fax: (212) 644-0544 Email: mfrankel@bfklaw.com PENTECOSTAL ASSEMBLIES: April 6 Plan & Disclosure Hearing Set ------------------------------------------------------------- On Feb. 26, 2023, Pentecostal Assemblies, Inc. filed with the U.S. Bankruptcy Court for the Southern District of Florida a Disclosure Statement with respect to a Plan. On March 2, 2023, Judge Scott M. Grossman conditionally approved the Disclosure Statement and ordered that: * April 6, 2023 at 9:30 a.m. in the U.S. Courthouse, 299 E. Broward Blvd., Courtroom 308, Fort Lauderdale, FL 33301 is the hearing to consider final approval of the disclosure statement and confirmation of the Plan. * March 30, 2023 is the deadline for filing ballots accepting or rejecting plan. * April 3, 2023 is the deadline for objections to confirmation. * April 3, 2023 is the deadline for objections to final approval of the Disclosure Statement. A copy of the order dated March 2, 2023 is available at https://bit.ly/4250rgS from PacerMonitor.com at no charge. Attorneys for Debtor: Edward M. Shahady, Esq. Edward M. Shahady, P.A. 7900 Peters Road, Ste. B-200 Fort Lauderdale, FL 33324 Tel: (954) 442-1000 Email: ed@shahady-law.com About Pentecostal Assemblies Pentecostal Assemblies, Inc., is a religious organization and/or church established as nonprofit corporation in the State of Florida. Pentecostal Assemblies sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-18288) on Oct. 26, 2022, with up to $50,000 in assets and up to $500,000 in liabilities. Judge Scott M. Grossman oversees the case. Edward M. Shahady, PA, is the Debtor's legal counsel. PERFORMANCE FOOD: Moody's Alters Outlook on 'Ba3' CFR to Positive ----------------------------------------------------------------- Moody's Investors Service changed the outlook for Performance Food Group, Inc. (PFG) to positive from stable. Concurrently, Moody's affirmed the company's Ba3 corporate family rating, Ba3-PD probability of default rating and B2 senior unsecured notes rating. The speculative grade liquidity rating (SGL) remains SGL-1. The change in outlook to positive from stable reflects PFG's significant deleveraging to 3.9x Moody's-adjusted debt/EBITDA, Moody's expectation for continued solid operating performance, which will further reduce leverage, and very good liquidity. Moody's took the following rating actions for Performance Food Group, Inc.: Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5) Backed Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5) Outlook, Changed to Positive from Stable RATINGS RATIONALE PFG's Ba3 CFR is supported by the company's scale and market position as one of the largest distributors in the foodservice and convenience store industry in North America. PFG's operations in the stable food distribution industry and its diversified customer base provide relative earnings stability. The company has substantially reduced debt/EBITDA to 3.9x (3.3x based on the company's definition) from an estimated 5.1x at the time of the 2021 Core-Mark acquisition, as it benefited from growth in new accounts and private label penetration, passing through product cost inflation, and the post-pandemic recovery in volumes across all segments. Moody's expects earnings growth to continue in 2023, driven by market share gains and solid execution, partly offset by declines in inventory holding gains and inflationary wage increases. Over the next 12-18 months, Moody's projects debt/EBITDA to decline to 3.4-3.7x from 3.9x as of December 31, 2022, and EBITA/interest expense to be in the 3.5-3.9x range, from 3.6x. The ratings also benefit from governance considerations, specifically PFG's balanced financial strategy, which includes a 2.5-3.5x leverage target (based on the company's definition) outside of major acquisitions and the company's use of a mix of equity and debt to finance transactions. Liquidity is very good including solid positive free cash flow, ample excess revolver capacity and lack of near-term debt maturities. The credit profile is constrained by PFG's modest operating margins relative to its larger peers and the intensely competitive nature of the food distribution industry. PFG also has an acquisitive business strategy, which creates increased event, debt and execution risk, however these risks are mitigated by PFG's good track record of integrating targets and deleveraging after transactions. The ratings also incorporate environmental and social considerations, including risks associated with the distribution of tobacco products to its convenience store customers. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include a sustained improvement in earnings while maintaining a balanced financial strategy that results in debt/EBITDA sustained below 3.75x and EBITA/interest expense sustained above 3.25x. Factors that could lead to a downgrade include sustained declines in operating performance or the adoption of a more aggressive financial strategy that results in debt/EBITDA maintained above 4.5x or EBITA/interest expense below 2.75x. A deterioration in liquidity for any reason could also lead to a downgrade. Headquartered in Richmond, Virginia, Performance Food Group, Inc., a wholly owned subsidiary of Performance Food Group Company (PFGC), is a food distributor with revenue of approximately $56 billion as of December 31, 2022. The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. PETROLIA ENERGY: Posts $909K Net Loss in Second Quarter ------------------------------------------------------- Petrolia Energy Corporation has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to common stockholders of $908,586 on $1.14 million of total revenue for the three months ended June 30, 2022, compared to a net loss attributable to common stockholders of $1.04 million on $1.25 million of total revenue for the three months ended June 30, 2021. For the six months ended June 30, 2022, the Company reported a net loss attributable to common stockholders of $740,135 on $2.97 million of total revenue compared to a net loss attributable to common stockholders of $1.48 million on $2.33 million of total revenue for the six months ended June 30, 2021. As of June 30, 2022, the Company had $8.66 million in total assets, $10.47 million in total liabilities, and a total stockholders' deficit of $1.81 million. Petrolia Energy said, "The Company has suffered recurring losses from operations and currently has a working capital deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company plans to generate profits by reworking its existing oil or gas wells, as needed, funding permitting. The Company also needs to resolve its ongoing litigation, particularly in Canada with the Utikuma asset. "The Company will need to raise funds through either the sale of its securities, issuance of corporate bonds, joint venture agreements and/or bank financing to accomplish its goals. The Company does not have any commitments or arrangements from any person to provide the Company with any additional capital. "If additional financing is not available when needed, the company may need to cease operations. The Company may not be successful in raising the capital needed to drill and/or rework its existing wells. Any additional wells that the Company may drill may be non-productive. Management believes that actions presently being taken to secure additional funding for the reworking of its existing oilfield infrastructure will provide the opportunity for the Company to continue as a going concern. Since the Company has an oil producing asset, its goal is to increase the production rate by optimizing its current infrastructure. The Company is also actively working to resolve its ongoing litigation in both the U.S. and Canada. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. No adjustments to the financial statements have been made to account for this uncertainty." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1368637/000149315223006549/form10-q.htm About Petrolia Petrolia Energy Corporation is engaged in the exploration and development of oil and gas properties. Since 2015, the Company has established a strategy to acquire, enhance and redevelop high-quality, resource in place assets. As of 2018, the Company has included strategic acquisitions in western Canada while actively pursuing the strategy to execute low-cost operational solutions, and affordable technology. Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 9, 2022, citing that the company has an accumulated deficit at Dec. 31, 2021 and 2020 and has a working capital deficit at Dec. 31, 2021, which raises substantial doubt about its ability to continue as a going concern. RENAISSANCE HOLDING: S&P Alters Outlook to Pos., Affirms 'B-' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on K-12 education software provider Renaissance Holding Corp. to positive from stable and affirmed its 'B-' issuer credit rating, its 'B-' issue-level rating on its first-lien term loan, and its 'CCC' issue-level rating on its second-lien term loan. The positive outlook reflects Renaissance's high level of recurring revenue, strong profitability, 100%+ net retention rates, and improving financial metrics following its equity-funded acquisition of GL Education. S&P expects the company will generate positive free cash flow and deleverage to the mid-7x area over the next 12 months. Renaissance has been improving its business by expanding and diversifying its product offerings. The company has transformed its learning platform, expanding it from just Star Assessments and Accelerated Reader to a diverse product offering that includes Freckle, Nearpod, myON, Schoolzilla, and Lalilo products. Renaissance has also more than doubled its revenues to greater than $650 million (from $270 million in 2017 revenues), while expanding the proportion of its total revenue that it derives from international sales to more than 15%. S&P said, "In addition, school budget funding levels have been fairly resilient over the past few years, which we expect will support further increases in the company's sales. Therefore, we expect Renaissance to continue to expand its revenue through cross-selling opportunities and further M&A." S&P said, "We expect Renaissance's financial policy to be more conservative going forward. We don't expect any debt funded acquisitions over the next 12 to 24 months and expect the company to focus on improving its financial metrics. Also, the sponsors' willingness to fund GL Education with a significant equity check points to the possibility that they could be preparing the company for an IPO when markets become more favorable. "We expect the company to generate sufficient free cash flow in 2023 and 2024 despite rising interest expense.We expect rising interest rates will limit Renaissance's ability to generate free cash flow in 2023. Nonetheless, we still expect the company will generate positive free cash flow, with projected free cash flow to debt of about 2% in fiscal year 2023 improving to about 5% in fiscal year 2024. The company's recurring revenue, strong retention rates, above-average profitability, moderate capital expenditure, and favorable industry fundamentals support our free cash flow estimates. We expect Renaissance will maintain an EBITDA margin in the mid- to high-30% area over the next 12 months." The positive outlook reflects Renaissance's high level of recurring revenue, strong profitability, 100%+ net retention rates, and improving financial metrics following its equity-funded acquisition of GL Education. S&P expects the company will generate positive free cash flow and deleverage to the mid-7x area over the next 12 months. S&P could revise its outlook on Renaissance to stable if it executes a debt-funded acquisition or sustains S&P Global Ratings-adjusted leverage of more than 8x over the next 12-24 months. S&P could upgrade Renaissance over the next 12 months if it continues to organically increase its revenue, reduces its gross leverage to the mid-7x area, and improves its reported free cash flow to debt to about 4%. ESG credit indicators: E-2, S-2, G-3. S&P said, "Governance is a moderately negative consideration in our credit analysis of Renaissance, as is the case for most rated entities owned by private-equity sponsors. We believe Renaissance's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of its controlling owners. This also reflects private-equity owners' generally finite holding periods and focus on maximizing shareholder returns." RICH'S DELICATESSEN: Court OKs Cash Collateral Access Thru April 5 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized Rich's Delicatessen and Liquors, Inc. to use cash collateral on an interim basis under the same terms and conditions as set forth in the previous order. The Debtor is permitted to use funds in its checking accounts as well as the payroll account to pay actual, ordinary course of business, subject to the budget. The terms of the order will expire on April 5, 2023 at 5 p.m. A continued hearing on the matter is set for April 4 at 1:30 p.m. A copy of the order is available at https://bit.ly/3L283uf from PacerMonitor.com. About Rich's Delicatessen and Liquors, Inc. Rich's Delicatessen and Liquors, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-13693) on November 28, 2022. In the petition signed by Izabela Machnicki, secretary-vice president, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Jacqueline Cox oversees the case. David Herzog, Esq., at David Herzo Law, is the Debtor's legal counsel. RIOT PLATFORMS: Widens Net Loss to $509.6 Million Net Loss in 2022 ------------------------------------------------------------------ Riot Platforms, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $509.55 million on $259.17 million of total revenue for the year ended Dec. 31, 2022, compared to a net loss of $15.44 million on $213.24 million of total revenue for the year ended Dec. 31, 2021. The 2022 net loss included $415.0 million in non-cash items, primarily consisting of an impairment of goodwill of $335.6, impairments of Bitcoin of $147.4, depreciation and amortization of $108.0 million, and impairment of miners of $55.5 million, partially offset by $156.9 of net Bitcoin revenue and the change in fair value of our derivative asset of $71.4 million. As of Dec. 31, 2022, the Company had $1.32 billion in total assets, $168.52 million in total liabilities, and $1.15 billion in total stockholders' equity. As of Dec. 31, 2022, the Company had working capital of approximately $321.8 million, which included cash and cash equivalents of $230.3 million. During the year ended Dec. 31, 2022, the Company sold 3,425 Bitcoin for proceeds of approximately $79.5 million. The Company monitors its balance sheet on an ongoing basis and continuously evaluates the level of Bitcoin retained from monthly production in consideration of the cash requirements and its ongoing operations and expansion. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1167419/000155837023002704/riot-20221231x10k.htm About Riot Platforms Headquartered in Castle Rock, Colorado, Riot Platforms (formerly Riot Blockchain, Inc.) -- www.riotplatforms.com -- is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. The Company has Bitcoin mining data center operations in central Texas, Bitcoin mining operations in central Texas, and electrical switchgear engineering and fabrication operations in Denver, Colorado. Riot Blockchain reported a net loss of $12.67 million for the year ended Dec. 31, 2020, a net loss of $20.30 million for the year ended Dec. 31, 2019, and a net loss of $60.21 million for the year ended Dec. 31, 2018. SLM CORP: Moody's Alters Outlook on 'Ba1' Issuer Rating to Stable ----------------------------------------------------------------- Moody's Investors Service has affirmed the ratings and assessments of SLM Corporation (SLM) and its bank subsidiary, Sallie Mae Bank. SLM's ratings include long-term issuer and senior unsecured ratings of Ba1, a senior unsecured shelf rating of (P)Ba1, a non-cumulative preferred stock rating of Ba3(hyb) and a non-cumulative preferred shelf rating of (P)Ba3. Sallie Mae Bank's ratings include a Baseline Credit Assessment (BCA) and adjusted BCA of baa3, a long-term issuer rating of Ba1, long- and short-term bank deposit ratings of Baa1/Prime-2, long- and short-term Counterparty Risk Ratings of Baa3/Prime-3, and long- and short-term Counterparty Risk Assessments of Baa2(cr)/Prime-2(cr). The outlooks on SLM's long-term issuer and senior unsecured ratings and Sallie Mae Bank's long-term issuer and long-term bank deposit ratings were changed to stable from positive. RATINGS RATIONALE The affirmation of Sallie Mae Bank's baa3 BCA and of all ratings and assessments for both SLM and Sallie Mae Bank reflects Moody's unchanged view of the bank's standalone credit profile, which remains positioned three notches below the current a3 median BCA of Moody's US-rated regional banks. The baa3 BCA incorporates the benefits to creditors from SLM's leading private student lending franchise, which underpins its strong historical profitability, and its disciplined underwriting. The BCA also reflects the risks to creditors stemming from SLM's elevated exposure to economic shocks from its student loan concentration, typically leading to higher-than-average charge-offs compared to the more diversified loan portfolios of US regional bank peers, its relatively weak funding structure, and its high regulatory and legislative risks. SLM is the largest originator of private education loans in the US with a dominant market share of more than 50%. As of December 31, 2022, SLM reported $28.8 billion of total assets and $20.3 billion of private education loans outstanding. Moody's believes that SLM's leading private student lending franchise drives its strong position as one of the most profitable Moody's-rated US banks, despite recent weakening. In the fourth quarter of 2022, SLM reported a net loss of -$81 million due to an increase in net charge-offs and reserve build in anticipation of a weakening macroeconomic environment. SLM's funding structure is weak relative to its rated bank peers because of its higher reliance on brokered deposits and savings accounts. Brokered deposits enable SLM to obtain funding with longer maturities that are better matched to the seven-year average life of the company's loan portfolio, but they are often less 'sticky' and therefore pose greater refinancing risk and higher cost than branch-based deposits or transaction accounts. The change in outlooks on SLM and Sallie Mae Bank's ratings to stable from positive follows the recent weakening in the company's asset quality, which is weighing on its profitability, and declining capitalization. SLM's private education loan net charge-offs increased to 3.15% in the fourth quarter from 2.67% in the third quarter and 1.58% in the fourth quarter of 2021. In addition, the company recently parted ways with important senior leaders, including its President and Chief Operating Officer and the Head of Collections, and faced understaffing in its collections unit. Although management took steps to address the problem, fully training new personnel takes time and credit performance could possibly continue to suffer in the meantime. Regarding capitalization, Moody's estimates that SLM's tangible common equity (TCE) plus loan loss reserves to risk-weighted assets (RWA) was 11.9% as of December 31, 2022. Although solid, this measure of capital has declined from 13.1% at the end of 2021 and 12.5% at the end of 2019. Moody's would view any further deterioration in this measure as credit negative. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Sallie Mae Bank's baa3 BCA could be upgraded if the firm continues to achieve solid profitability, strengthens asset quality performance, and capitalization improves such that TCE plus loan loss reserves to RWA increases and remains above 12.5%. In addition, the BCA could be upgraded if the company continues to improve its funding profile by increasing its direct deposits and reducing its dependence on confidence-sensitive wholesale funding and brokered deposits, further lowering its refinancing risk. A higher BCA would likely lead to an upgrade of the ratings. The BCA could be downgraded if capitalization continues to weaken, such that TCE plus loan loss reserves to RWA declines and remains below 11.5%. In addition, the BCA could be downgraded in the event that asset quality performance is weaker than Moody's currently expects or if liquid resources decline materially, making the firm more vulnerable to market shocks. A lower BCA would likely lead to a downgrade of the ratings. The principal methodology used in these ratings was Banks Methodology published in July 2021. SPIRIPLEX INC: Seeks Cash Collateral Access ------------------------------------------- Spiriplex, Inc. asks the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, for authority to use cash collateral in accordance with the budget, with a 10% variance and provide adequate protection. The Debtor requires the use of cash collateral to continue operating its business, manage its financial affairs, and effectuate an effective reorganization. The Debtor's purported secured creditor is the Small Business Administration, which is owed about $300,000. The Debtor, as of the Petition Date, held bank accounts totaling approximately $52,396, accounts receivable of approximately $330,539, and inventory valued at approximately $12,744 at cost. The Debtor proposes to use cash collateral and provide adequate protection to the SBA upon these terms and conditions: A. The Debtor will permit the SBA to inspect, upon reasonable notice, and within reasonable business hours, the Debtor's books and records; B. The Debtor will maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage; C. The Debtor will, upon reasonable request, make available to the SBA evidence of that which purportedly constitutes their collateral or proceeds; D. The Debtor will properly maintain the collateral and properly manage the collateral; and E. The Debtor will grant a replacement lien to the SBA to the extent of its prepetition lien, and attaching to the same assets of the Debtor in which the SBA asserted pre-petition liens. A hearing on the matter is set for March 14, 2023 at 1 p.m. A copy of the motion is available at https://bit.ly/3kSYiUL from PacerMonitor.com. About Spiriplex, Inc. Spiriplex, Inc. specializes in micro-sample allergenic diagnostics, providing clinical laboratory services throughout the U.S. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-02773) on March 1, 2023. In the petition signed by David C. Fleisner, CEO, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves as counsel to the Debtor. STANADYNE LLC: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------- The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Stanadyne, LLC and its affiliates. The committee members are: 1. Pension Benefit Guaranty Corporation Attn: Michael Strollo and Carl Charlotin 445 12th Street Southwest, Washington, DC 20024-2101 Phone: 202-229-4907/202-229-6611 Email: strollo.michael@pbgc.gov charlotin.carl@pbgc.gov 2. Navistar, Inc. Attn: Kevin O’Connor and Karin Reichensperger 2701 Navistar Drive, Building 7 Lisle, IL 60532 Phone: 331-332-5216 Email: kevin.r.oconnor@navistar.com karin.reichensperger@navistar.com 3. Standard Motor Products Attn: Erin Pawlish 37-18 Northern Blvd Long Island City, NY 11101 Phone: 718-316-4188 Email: erin.pawlish@smpcorp.com 4. 3B Supply Attn: Jonathan Leissler 11470 Euclid Avenue, #470 Cleveland, OH 44106 Phone: 440-8677-8996 Email: Jonathan.Leissler@3BSupply.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Stanadyne LLC Stanadyne, LLC is a global automotive technology offering engine-based fuel and air management systems. Stanadyne is a developer and manufacturer of fuel pumps and fuel injectors for diesel and gasoline engines. The company is based in Jacksonville, N.C. Stanadyne and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10207) on Feb. 16, 2023. In the petition signed by John Pinson, chief executive officer, the Debtor disclosed up to $500 million in both assets and liabilities. Judge John T. Dorsey oversees the case. The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Hughes Hubbard and Reed LLP as co-general bankruptcy counsel, Kroll, LLC as financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, abd balloting agent and administrative advisor. STARRY GROUP: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Starry Group Holdings, Inc. and its affiliates. The committee members are: 1. AEP Ventures, LLC Attn: Marilyn McConnell Willis American Electric Power 1 Riverside Plaza, 29th Floor Columbus, OH 43215 Phone: (614) 917-3390 Email: mmcconnell@aep.com 2. Shenzhen Sayes Technology Co., Ltd. Attn: Stephen Ouyang, 3rd Floor No. 8-1, Kukeng TongFuYu Industrial Zone, Kukeng Community Guanlan Street, Longhua District, Shenzhen Phone: +86(0755)28062196 Fax: +86(0755)28062190 Email: stephen@sayestech.com 3. Crown Castle USA Inc. Attn: Kenneth Freedman 2000 Corporate Drive Canonsburg, PA 15317 Phone: (978) 268-9458 Email: Kenneth.Freedman@crowncastle.com 4. SBA Structures LLC Attn: Kaleb Bell 8051 Congress Ave. Boca Raton, FL 33487-1307 Phone: (561) 226-9268 Email: kbell@sbasite.com 5. Abside Networks, Inc. Attn: Laurent Perraud 16 Heritage Road Acton, MA 01720 Phone: (978) 393-1975 Email: laurent.perraud@abside-networks.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Starry Group Boston-based Starry Group Holdings, Inc. (NYSE: STRY) is a licensed fixed wireless technology developer and internet service provider. It is an early-stage growth company. Starry Group Holdings and 11 affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10219) on Feb. 20, 2023. As of Sept. 30, 2022, Starry Group had $270.6 million in total assets against $309.7 million in total liabilities. The petitions were signed by William J. Lundregan as authorized officer. The Hon. Karen B. Owens oversees the cases. Lawyers at Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP serve as counsel to the Debtors; PJT Partners, LP serves as their investment banker; FTI Consulting, Inc. as their financial advisor; and Kurtzman Carson Consultants, LLC as their claims and noticing agent. SUZANNE FERRY: Summary Judgment Reversed on Appeal -------------------------------------------------- In the appealed case styled In Re: Suzanne V. Ferry, Debtor. E-Z Cashing, LLC, Appellant/Cross-Appellee, v. Suzanne V. Ferry, Appellee/Cross-Appellant, Case No. 8:20-cv-1179-VMC, (M.D. Fla.), District Judge Virginia M. Hernandez Covington affirms in part and reverses in part the decision of the Bankruptcy Court as to its order on the cross-motions for summary judgment. At issue in this appeal is whether E-Z Cashing, LLC is estopped from collecting default interest on the Loan. Suzanne Ferry acknowledges that E-Z Cashing is entitled to at least $980,331. She disputes, however, E-Z Cashing's right to the remaining proceeds from the sale of the property located at 550 Corey Avenue, St. Pete Beach, Florida. The elements of equitable estoppel are (1) a representation as to a material fact that is contrary to a later-asserted position, (2) reliance on that representation, and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon. The bankruptcy court determined that Ms. Ferry met this standard of proof. However, after reviewing the record, the Court finds that there is a genuine dispute of fact as to whether Ms. Ferry reasonably relied on the Estoppel Letter or that her reliance on the Estoppel Letter led her to detrimentally change her position. The Court agrees that these facts demonstrate Ms. Ferry detrimentally changed her position. However, the Court points out that "a reasonable jury could also determine that Ms. Ferry did not suffer a detriment due to her reliance on the Estoppel Letter. . . In her motion seeking permission to sell 550 Corey, she stated that the sale price of $1.5 million was fair and equitable. She has introduced no evidence demonstrating that she sold 550 Corey for less than fair market value or at a reduced price to meet the terms of the Stay Relief Order. In fact, she sold 550 Corey several months after the deadline under the Stay Relief Order to repay the Loan." Because there is a factual dispute regarding Ms. Ferry's affirmative defense of equitable estoppel, the Court reverses the bankruptcy court's order granting Ms. Ferry's motion for summary judgment and affirms its order denying E-Z Cashing's cross-motion for summary judgment. In her cross-appeal, Ms. Ferry argues that she is entitled to attorney's fees and costs related to the adjudication of E-Z Cashing's motion for summary judgment. Because the Court has reversed the bankruptcy court's order granting summary judgment in favor of her, Ms. Ferry is no longer a prevailing party. Therefore, the Court dismisses as moot Ms. Ferry's cross-appeal regarding her motion for attorney's fees. A full-text copy of the Order dated Feb. 21, 2023 is available at https://tinyurl.com/yrvvtyny from Leagle.com. Suzanne Ferry sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-01854) on Feb. 1, 2011. On June 29, 2012, the Court confirmed the Debtor's Fourth Amended Plan of Reorganization. TEHUM CARE SERVICES: U.S. Trustee Appoints New Committee Member --------------------------------------------------------------- The U.S. Trustee for Region 7 appointed Latricia Revell as new member of the official committee of unsecured creditors in the Chapter 11 case of Tehum Care Services, Inc. As of March 6, the members of the committee are: 1. St. Luke's Health System, Ltd. 190 E. Bannock Street Boise, ID 83712 Attention: David Barton Phone: (208) 493-0560 Email: bartond@slhs.org 2. Capital Region Medical Center 1125 Madison St. Jefferson City, MO 65101 Attention: Tom Luebbering Phone: (573) 632-5001 Email: tluebbering@crmc.org 3. Maxim Healthcare Staffing Services, Inc. 7227 Lee Deforest Drive Columbia, MD 21046 Attention: Neil M. Williamson Phone: (410) 910-6191 Email: newillia@maximstaffing.com 4. Saint Alphonsus Health System, Inc. 1055 N. Curtis Road Boise, ID 83706 Attention: Stephanie Westermeier Phone: (208) 367-6325 Email: stephanie.westermeier@trinity-health.org 5. Truman Medical Center, Inc. d/b/a University Health 2301 Holmes Street Kansas City, MO 63108 Attention: Claire Hillman Phone: (816) â€“ 404-3617 Email: Claire.hillman@uhkc.org 6. Rachell Garwood 31956 West Cranston Street New Haven, MI 48048 Phone: (586) 260-8325 Email: rachellgarwood@yahoo.com 7. Latricia Revell 1568 Sterling Place Brooklyn, NY 11212 Phone: (929) 234-1835 Email: Latriciarevell227@gmail.com About Tehum Care Services Tehum Care Services Inc., doing business as Corizon Health Services Inc., is a privately held prison healthcare contractor in the United States. It is based in Brentwood, Tenn. Tehum Care Services filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-90086) on Feb. 13, 2023. In the petition filed by Russell A. Perry, as chief restructuring officer, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. Judge Christopher M. Lopez oversees the case. The Debtor is represented by Jason S Brookner, Esq., at Gray Reed & McGraw, LLP. TELEXFREE LLC: Fabio Faria's Motion to Dismiss Denied ----------------------------------------------------- Bankruptcy Judge Elizabeth D. Katz for the District of Massachusetts denies the motion to dismiss filed by Fabio Faria. Steven Darr, the Chapter 11 trustee in the jointly administered bankruptcy cases of Telexfree, LLC, Telexfree, Inc., and Telexfree Financial, Inc. filed the instant adversary proceeding against James Merrill, Carlos Wanzeler, and Carlos Costa (the Principals), various individuals allegedly related to or affiliated with the Principals and deemed by the Trustee to have received more from the Scheme than they invested, and certain Manual Credit Recipients, including Fabio Faria, alleged by the Trustee to have facilitated the Principals' implementation of the Scheme. Each of the Debtors operated a Ponzi and pyramid scheme that raised money from individuals who purchased membership plans in Telexfree. In the complaint, the Trustee alleges that Faria received and monetized "up to" $990,702 in Manual Credits for the benefit of himself and the Principals and alleges that by doing so, Faria participated in a civil conspiracy to implement and profit from the Scheme and aided and abetted the Principals' tortious conduct that left the Debtors with close to $1 billion in liabilities. The Trustee also alleges that all Manual Credit Recipients, which include Faria, sold Manual Credits to other Participants and distributed some or all of those sale proceeds to the Principals or for their benefit. Faria responded to the Trustee's complaint by filing the instant Motion to Dismiss. The Court finds that the Trustee has sufficiently pled factual allegations to support the plausible inference that Faria had an agreement with another person to engage in, implement. and further the Scheme and sold Manual Credits received for no consideration for profit in furtherance of the Scheme. While Faria argues that he was "unwittingly ensnared in the Scheme," the allegation that Faria disbursed at least some of his Manual Credit sale proceeds to the Principals or for their benefit supports an inference that Faria was an active participant, rather than merely engaged in "parallel conduct that could just as well be independent action." The Court further finds that the Trustee's factual allegations provide a strong inference that Faria had actual knowledge of the Principals' receipt of constructive and fraudulent transfers and that Faria provided substantial assistance to the Principals in breach of their fiduciary duties. The adversary proceeding is titled In re: TELEXFREE, LLC, TELEXFREE, INC., TELEXFREE FINANCIAL, INC., Chapter 11, Debtors. STEPHEN DARR, CHAPTER 11 TRUSTEE, Plaintiff, v. CARLOS WANZELER, JAMES MERRILL, CARLOS COSTA, PRISCILA FREITAS COSTA, FABIO WANZELER, LYVIA MARA CAMPISTA WANZELER, MARIA EDUARDA WANZELER DE ALMEIDA E SOUZA, DRUCILA WANZELER, MARISA MACHADO WANZELER SALGADO, RENATO ALVES, ANA COSTA, NATHANA SANTOS REIS, FABIO FARIA, LELIO CELSO RAMIRES FARIAS, SANDERLY RODRIGUES, VAGNER ROZA, ROBERT BOURGUIGNON, REGINA CELIA, MICHAEL CALAZANS, FABIO DE ARRAZ CRISPIM, SHEFFA MONTOYA, LUIS FERREIRA, SANDRES LEVIS, FEBE WANZELER DE ALMEIDA E SOUZA, and BRUNO RANGEL CARDOZO, Defendants, Case Nos. 14-40987, 14-40988, 14-40989, Jointly Administered, Adversary Proceeding No. 16-04032, (Bank. D. Mass.). A full-text copy of the Memorandum of Decision dated Feb. 22, 2023 is available at https://tinyurl.com/3xfdje8p from Leagle.com. About TelexFree, LLC TelexFREE -- http://www.TelexFREE.com/-- is a telecommunications business that uses multi-level marketing to assist in the distribution of voice over internet protocol telephone services. TelexFREE's retail VoIP product, 99TelexFREE, allows for unlimited international calling to seventy countries for a flat monthly rate of $49.90. TelexFREE had over 700,000 associates or promoters worldwide. TelexFREE though was facing accusations of operating a $1 billion-plus pyramid scheme. TelexFREE LLC and two affiliates sought bankruptcy protection (Bankr. D. Nev. Lead Case No. 14-12525) on April 13, 2014. TelexFREE estimated $50 million to $100 million in assets and $100 million to $500 million in liabilities. Alvarez & Marsal North America, LLC, is serving as restructuring advisor and Greenberg Traurig, LLP and Gordon Silver are serving as legal advisors to TelexFREE. Kurtzman Carson Consultants LLC serves as claims and noticing agent. In May 2014, the Nevada bankruptcy court approved the motion by the U.S. Securities & Exchange Commission to transfer the venue of the Debtors' cases to the U.S. Bankruptcy Court for the District of Massachusetts (Bankr. D. Mass. Case Nos. 14-40987, 14-40988 and 14-40989). On June 6, 2014, Stephen Darr was appointed as Chapter 11 trustee. TPC GROUP: Move to Interpret Plan Injunction Granted in Part ------------------------------------------------------------ Bankruptcy Judge Craig T. Goldblatt for the District of Delaware grants in part the motion to interpret plan injunction filed by the Supporting Sponsors. The Debtors' confirmed plan of reorganization embodied a global settlement. Under that settlement, $30 million was set aside to pay the claims of general unsecured creditors, including those of the Tort Plaintiffs. The Debtors released any causes of action their estates may have had against the Supporting Sponsors. That release is backed by an injunction against the assertion of such a released cause of action. While the Tort Plaintiffs granted consensual third-party releases to some non-debtor parties, whatever direct claims the Tort Plaintiffs may have against the Supporting Sponsors are not subject to that release. The Tort Plaintiffs remain free to pursue them. The dispute now before the Court presents the question whether the claims the Tort Plaintiffs intend to pursue against the Supporting Sponsors are claims that belonged to the Debtors' estates (and therefore are released and enjoined), or are claims that belong to the Plaintiffs themselves, such that they may be pursued in the MDL litigation. At the time of confirmation, the Tort Plaintiffs and the Supporting Sponsors identified that issue as one over which they disagreed. The plan expressly provides that this Court would resolve it after confirmation. The Court emphasizes that its role is simply to police the enforcement of the injunction reflected in the confirmed plan of reorganization (which the Tort Plaintiffs themselves supported). Neither this ruling nor any subsequent determination that a further revised complaint may (or may not) be filed purports to venture any opinion about whether the remaining claims for negligent undertaking or otherwise are valid or invalid under Texas law. Those merits issues are left entirely, as they must be, to the Texas state court. The Court concludes that in the context of this case, any claim to pierce the corporate veil would be an estate cause of action that has been settled and released. On the other hand, a claim that alleges that the Supporting Sponsors had sufficient substantive involvement in the operation of the Debtors' business -- that they undertook responsibility for managing the safety function and were negligent in the manner in which they carried it out -- is a direct claim against the Supporting Sponsors that is not affected by the Debtors' settlement or the plan injunction. The challenge presented by the current motion is that while the tort Plaintiffs argue that their proposed Sixth Amended Complaint asserts only claims that are for negligent undertaking, the complaint nevertheless asserts that the "corporate separateness should be disregarded." Indeed, it appears that the Plaintiffs have endeavored to say as much as they could about efforts to "hide behind the corporate veil" while retaining the ability to maintain that the action is not really a claim for veil piercing that would be barred by this Court's injunction. In the Court's view, however, the Sixth Amended Complaint crosses the line. To comply with the plan injunction, the Court recommends that this ambiguity must be removed. The Court holds that the only claims Plaintiffs may assert against the Supporting Sponsors are those that are based on their own allegedly tortious conduct. Accordingly, the Plaintiffs are directed to submit to the Court a revised complaint that complies with the plan injunction. The Supporting Sponsors may, within ten days of such a filing, submit a letter brief identifying any portion of the complaint that they contend fails to comply with the terms of this ruling. The Court will thereupon determine whether the proposed complaint comports with the terms of the plan injunction. A full-text copy of the Memorandum Opinion dated Feb. 22, 2023 is available at https://tinyurl.com/3xhkrwxr from Leagle.com. About TPC Group TPC Group, headquartered in Houston, is a producer of value-added products derived from petrochemical raw materials such as C4 hydrocarbons, and provider of critical infrastructure and logistics services along the Gulf Coast. The Company sells its products into a wide range of performance, specialty and intermediate markets, including synthetic rubber, fuels, lubricant additives, plastics and surfactants. With an operating history of more than 75 years, TPC Group has a manufacturing facility in the industrial corridor adjacent to the Houston Ship Channel and operates product terminals in Port Neches, Texas and Lake Charles, Louisiana. TPC Group Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group estimated assets and debt of $1 billion to $10 billion to $10 billion. The Hon. Craig T. Goldblatt is the case judge. Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn & Tunnell LLP is the co-counsel; Moelis & Company LLC is the investment banker; and FTI Consulting is the financial advisor. Simpson Thacher & Bartlett LLP is the special finance counsel. Kroll Restructuring Administration is the claims agent. Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd. Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as counsel to the Ad Hoc Noteholder Group that supports the Debtors' restructuring. Evercore Group L.L.C., is the Group's financial advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to the Ad Hoc Noteholder Group. The Supporting Noteholders are funds controlled by FIG LLC and Fortress Capital Finance III(A) LLC, Monarch Alternative Capital LP., PGIM Inc., Redwood Capital Management LLC, and Strategic Value Partners LLC. Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of Non-Consenting Noteholders, led by Bayside Capital, Inc., and Cerberus Capital Management, L.P. Milbank LLP previously served as the group's counsel but was later replaced by Pachulski and SGE. TRU GRIT: Court OKs Final Cash Collateral Access ------------------------------------------------ The U.S. Bankruptcy Court for the District of Nevada authorized Tru Grit Fitness LLC to use cash collateral on a final basis in accordance with its agreement with EFP Funding Solutions, LLC, through April 21, 2023. The Debtor requires the use of cash collateral to provide funding and liquidity for the ongoing operation of the Debtor's business and to fund the expenses of its Chapter 11 Case. EFP asserts a security interest in the Debtor's cash collateral. Prior to the Petition Date, the Debtor and EFP are parties to multiple Transaction Documents, regarding loans made by EFP (and its predecessors) to Tru Grit. Pursuant to the Transaction Documents, the current principal balance outstanding owed to EFP by the Debtor is $52.437 million, which amount does not include interest, accruing costs, and attorneys' fees. The Debtor has failed to make certain payments to EFP and is in default under the terms of the Transaction Documents. On February 21, 2021, EFP filed a UCC-1 Financing Statement with the Secretary of State of Nevada (filing number 2021157505-4), as amended by a UCC-1 Financing Statement filed with the Secretary of State of Nevada on August 20, 2021 (filing number 2021188962-9). Based on a search of the Nevada Secretary of State's records conducted on November 18, 2022, EFP is the only consensual secured creditor with a claim for payment against the Debtor. The Debtor and EFP agreed that as of the Petition Date: (a) the Transaction Documents, including but not limited to the RMA, and PrePetition Liens on the Collateral are valid, binding, enforceable, non-avoidable and properly perfected and were granted to, or for the benefit of, EFP for fair consideration and reasonably equivalent value; (b) the Pre-Petition Liens are senior in priority over any and all other liens on the Collateral, subject only to certain potential liens senior in certain items of Collateral by operation of law or otherwise permitted by the Transaction Documents; (c) the debt created by and associated with the Transaction Documents constitutes legal, valid, binding, and non-avoidable obligations of the Debtor, enforceable in accordance with the terms of the applicable Transaction Documents; (d) no offsets, recoupments, challenges, objections, defenses, claims or counterclaims of any kind or nature to any of the Pre-Petition Liens or associated debt exist, and no portion of the Pre-Petition Liens or associated debt is subject to any challenge or defense, including avoidance, disallowance, disgorgement, recharacterization, or subordination (equitable or otherwise) pursuant to the Bankruptcy Code or applicable nonbankruptcy law; (e) the Debtor and its estate have no claims, objections, challenges, causes of action, and/or choses in action, including avoidance claims under Chapter 5 of the Bankruptcy Code or applicable state law equivalents or actions for recovery or disgorgement, against EFP or any of its respective affiliates, agents, attorneys, advisors, professionals, officers, directors and employees arising out of, based upon or related to the Transaction Documents or otherwise; and (f) the Debtor waives, discharges, and releases any right to challenge any of the Transaction Documents, associated debt, and Pre-Petition Liens, the priority of the Debtor's obligations thereunder, and the validity, extent, and priority of the liens securing the debts of the Debtor to EFP. The Debtor further acknowledges and agrees that prior to the Petition Date, an event of default had occurred and was continuing under the Transaction Documents. As adequate protection to EFP for the Debtor's use of cash collateral, EFP is granted a post-petition security interest and replacement lien to the same extent and priority as the Pre-Petition Liens in the Collateral. The replacement liens and security interests will be deemed valid, automatically perfected, continuing, unavoidable and enforceable, not subject to subordination, impairment or avoidance, without any additional action by EFP. As further adequate protection, EFP is granted a superpriority claim in the amount of the Debtor's cumulative use of cash collateral pursuant to any order of the Court to the extent the aforementioned Replacement Liens are insufficient to provide adequate protection against the diminution, if any, in the value of EFP's interest in any Collateral resulting from the Debtor's use of cash collateral. A copy of the order is available at https://bit.ly/3J1RoEH from PacerMonitor.com. About Tru Grit Fitness LLC Tru Grit Fitness LLC offers fitness equipment. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 22-14320) on December 7, 2022. In the petition signed by Brandon Hearn, chief executive officer, the Debtor disclosed up to $50 million in assets and up to $100 million in liabilities. Judge August B. Landis oversees the case. Samuel A. Schwartz, Esq., at Schwartz Law, PLLC, is the Debtor's legal counsel. TUFF TURF: Unsecured Creditors to Get Share of Income for 5 Years ----------------------------------------------------------------- Tuff Turf, Inc., filed with the U.S. Bankruptcy Court for the District of Kansas a Small Business Plan of Reorganization dated March 2, 2023. The Debtor provides residential and commercial landscaping, snow removal and grounds maintenance in the metropolitan Kansas City area. It is headquartered in Merriam, KS and is currently operated by Matt Nelson. Due to the pandemic, Tuff Turf was able to obtain some relief through the United States Small Business Administration ("SBA") with a Secured Disaster Note, originally incurred in May of 2020 and modified in June of 2021 to add additional relief. Tuff Turf obtained Paycheck Protection Program ("PPP") loans as well. The PPP loans were forgiven, but the Secured Disaster Loan requires a long term payback until 2050. Merchant cash advance loans are fixed sums in exchange for a percentage of future sales. As part of these loan arrangements, some but not all lenders received a security agreement and filed the necessary Uniform Commercial Code ("UCC") financing statements to perfect liens on assets of Tuff Turf. The Debtor decided to attempt a reorganization with reduced payroll to assist in a turnaround. The primary driver of the bankruptcy filing was the split in ownership with Mr. Williamson departing and Mr. Nelson assuming control of day to day operations. Class 6 consists of General Unsecured Claims. This Class includes CNH Industrial America LLC (Claim #2) Marlin (Claim #6); Johnson County Wastewater (Claim #7), Verimore Bank (First Missouri Bank) (Claim #8); Verizon Wireless (Claim #9) and the unsecured portion of the claim from the Internal Revenue Service (Claim #13). For the unsecured claims, General Unsecured Creditors shall share in payments from disposable monthly income following years 1-5. The Debtor does not anticipate having funds available to pay general unsecured creditors in Year 1 of the plan due to administrative costs. Based on current claims, debtor anticipates paying unsecured claims in full with pro rata payments during years 2 and 3 of the plan. Years 4 and 5 are available if necessary for surplus claims. Class 7 consists of Equity Interest Holders: Matt Nelson. Retain ownership interest in the Corporation. Upon Confirmation of the Plan, the Debtor shall make direct payments to all the secured, priority and general unsecured creditors per the provisions above, unless otherwise noted, from its income and any contributions from the Debtor's principal. Debtor believes the market for its services continues to stabilize following lifting of the restrictions from the COVID-19 pandemic. Upon Confirmation of the Plan, all property of the Debtor, tangible and intangible, including, without limitation, licenses, furniture, fixtures and equipment, will revert, free and clear of all Claims and Equitable Interests except as provided in the Plan, to the Debtor. The Debtor expects to have sufficient cash on hand to make the payments required on the Effective Date. A full-text copy of the Plan of Reorganization dated March 2, 2023 is available at https://bit.ly/3Jo83nn from PacerMonitor.com at no charge. Attorney for Debtor: Jeffrey L. Wagoner, Esq. Ryan A. Blay, Esq. Wagoner Bankruptcy Group, P.C. dba W M Law 15095 W. 116th St. Olathe, KS 66062 Telephone: (913) 422-0909 Facsimile: (913) 428-8549 Email: bankruptcy@wagonergroup.com blay@wagonergroup.com About Tuff Turf Inc. Tuff Turf, Inc. -- https://www.tuffturfkc.com/ -- provides landscaping services. It is based in Shawnee, Kan. Tuff Turf filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 22-21176) on Dec. 2, 2022, with between $500,000 and $1 million in assets and between $1 million and $10 million in liabilities. Kent L. Adams has been appointed as Subchapter V trustee. Judge Dale L. Somers oversees the case. The Debtor is represented by Wagoner Bankruptcy Group, P.C., doing business as W M Law. UNLIMITED REC-REP: Summary Judgment Vacated, Case Remanded ---------------------------------------------------------- In the appealed case styled FIRST RECOVERY, LLC, and DYLAN BROOKS, Plaintiffs, v. UNLIMITED REC-REP, LLC, f/k/a UNLIMITED RECOVERY REPOSSESSION DIVISION, LLC, KEITH SANDERS, individually, and RITCHIE, INC. d/b/a SUNBELT OF RALEIGH, Defendants, Case No. COA22-495, (N.C. Ct. App.), the North Carolina Court of Appeals vacates the trial court's Feb. 1, 2022 Order Granting Summary Judgment and remands this matter for further proceedings. On Feb. 2, 2016, First Recovery LLC and Dylan Brooks commenced this action against Unlimited Rec-Rep, LLC, f/k/a Unlimited Recovery Repossession Division, LLC and Keith Sanders alleging claims of breach of contract, breach of warranty, fraud, and unfair and/or deceptive trade practices arising from the sale of URR to Plaintiffs from Sanders. Then in August 2016, the Plaintiffs filed an Amended Complaint adding Richie, Inc. d/b/a Sunbelt of Raleigh -- the broker in the sale of the business -- as a defendant. On Sept. 21, 2017, URR filed a Chapter 7 bankruptcy proceeding. In January 2020, the Plaintiffs filed an Adversary Proceeding against Sanders seeking to have the alleged debt owed to the Plaintiffs arising from the sale of URR deemed non-dischargeable based on fraud and/or misrepresentation. Following evidentiary hearings, the bankruptcy court issued an Order concluding that the Plaintiffs in that action had failed to present sufficient evidence of either justifiable or reasonable reliance to establish a prima facie case of fraud or misrepresentation for non-dischargeability. The bankruptcy court, thus, entered judgment for Sanders and dismissed the Adversary Proceeding. In December 2020, Richie filed a Motion for Summary Judgment which was denied. Almost a year after, Richie filed a second Motion for Summary Judgment, this time contending the bankruptcy court's ruling collaterally estopped the Plaintiffs from asserting claims of fraud and misrepresentation against Richie. The bankruptcy court granted Richie's Motion for Summary Judgment which alleged Plaintiffs were collaterally estopped from re-litigating issues of fraud and misrepresentation by the Bankruptcy Court's Order. On appeal to this Court, the Plaintiffs contend that the trial court erred in granting Summary Judgment because the Bankruptcy Court's Order should not be deemed to collaterally estop their claims in this action. During the pendency of this appeal, the Plaintiffs appealed the bankruptcy court's Order in the adversary proceeding. On Jan. 9, 2023, the District Court vacated the bankruptcy court's Order and remanded the case for a new trial. The District Court's Order and Judgment vacating the bankruptcy court's Order and remanding for a new trial alters the posture of this case -- a vacated order is null and void, and has no legal force or effect on the parties or the matter in question. Put another way, the bankruptcy court's Order no longer stands unreversed. Thus, in this case, the bankruptcy court's Order no longer retains any preclusive effect it may have had on the issues in this case between the Plaintiffs and Richie. Therefore, collateral estoppel arising from the vacated Bankruptcy Court Order does not bar the Plaintiffs claims against Richie. Consequently, Richie is not entitled to Summary Judgment on this basis. A full-text copy of the Order dated Feb. 21, 2023 is available at https://tinyurl.com/4nr45cr7 from Leagle.com. VPR BRANDS: Licensee Prepays $500K Monthly Royalty -------------------------------------------------- Elf Brand LLC, a licensee of the VPR Brands, LLP, prepaid a monthly royalty payment of $500,000 pursuant to that certain License Agreement, dated Jan. 2, 2023, by and between the Company and EBL, according to VPR's Form 8-K filed with the Securities and Exchange Commission. The License Agreement was entered into in the ordinary course of business. Pursuant to the terms of the License Agreement, the Company granted to EBL (i) the exclusive right to use U.S. trademark 5,486,616 for the mark ELF in International Class 34 for use in connection with electronic cigarette lighters; electronic cigarettes; smokeless cigarette vaporizer pipe, and all additional marks that the Company may obtain, use and notify EBL of from time to time; (ii) the non-exclusive right to use U.S. patent number 8,205,622, in connection with electronic cigarettes, smokeless cigarette vaporizers and related products in the U.S.; and (iii) the right to manufacture, have manufactured for it, market, promote, advertise, use, sell and distribute the Licensed Articles subject to the terms and conditions of the License Agreement. In exchange for the license, EBL agreed to pay to the Company a royalty equal to 5% of gross sales of the Licensed Articles, as provided in the License Agreement. The license is exclusive with respect to use of the Mark if EBL meets a minimum monthly royalty payment of $500,000 within six months after sales commence. The Company may elect to cancel exclusivity if EBL does not meet the minimum royalty expectations. The License Agreement provided for a term effective as of the start of sales within 90 days of Jan. 2, 2023 and receipt of the first month's royalty, and renewing monthly with payment of the additional minimum $500,000 monthly payment of minimum royalties within six months after sales commence to maintain exclusivity with respect to use of the Mark, unless sooner terminated in accordance with the terms of the License Agreement. About VPR Brands Headquartered in Ft. Lauderdale, FL, VPR Brands, LP -- http://www.VPRBrands.com-- is company engaged in the electronic cigarette and personal vaporizer business. As of June 30, 2022, the Company had $1.26 million in total assets, $3.45 million in total liabilities, and a total partners' deficit of $2.19 million. As of Sept. 30, 2022, the Company had $1.12 million in total assets, $3.36 million in total liabilities, and a total partners' deficit of $2.24 million. Los Angeles, California-based Paris Kreit & Chiu CPA's LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 15, 2022, citing that the Company has an accumulated deficit of $10,214,999 and a working capital deficit of $1,834,867 at Dec. 31, 2021. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. WILDFLOWER GROUP: Unsecureds Will Get 5% of Claims over 3 Years --------------------------------------------------------------- The Wildflower Group LLC and TWG Konnect LLC filed with the U.S. Bankruptcy Court for the District of New Jersey a First Modified Plan of Reorganization dated March 2, 2023. The Debtors are limited liability companies of the State of New Jersey. The Debtors are award winning license and e-commerce service providers working to increase sales and brand awareness of well-respected and iconic brands in manufacturing, retail, and entertainment. In the approximate 9 months prior to the commencement of the bankruptcy proceedings, based upon unsolicited overtures from various merchant credit lenders, the Debtors were provided with the opportunity to borrow significant sums to help offset the substantial declines in sales suffered during calendar year 2022. Unfortunately, the Debtors' declining revenue base did not allow them to timely satisfy the anticipated repayment obligations of those credit merchants. One such credit merchant, Amerifi Capital, LLC, obtained a pre judgment writ of attachment allowing it to levy on the Debtors' bank accounts and other assets prior to judgment. In order to stop Amerifi Capital from effectively shutting down the Debtors' business operations, the Debtors elected to commence the Chapter 11 bankruptcy cases. Filing the bankruptcy proceedings was also believed by the Debtors to be a necessary step to protect the senior priority position of the SBA, whose loan is critical to the Debtors' operations. The Debtors are seeking to reorganize in an effort to substantially improve their balance sheets and achieve financial stability. The Plan provides for the Debtors to substantively consolidate such that upon Confirmation, there shall be only one corporate reorganized Debtor entity, The Wildflower Group LLC. The Plan also provides for payments to be made from the Debtors' ongoing business operations. The US Small Business Administration (the "SBA") holds an Allowed Secured Claim as of the Petition Date in the amount of $529,482.12 and shall continue receiving monthly payments in accordance with the applicable pre-petition loan documents. Priority Tax Claims, if any are Allowed, are proposed to be paid in full over a period of 3 years through quarterly payments with interest at the lower of 5% per annum or the applicable statutory interest rates. Unsecured creditors are proposed to be paid a total of $150,000 in quarterly distributions over a period of 3 years. The Debtors estimate that the aggregate amount of Unsecured Claims is approximately $2,877,958. This estimation does not include an estimation of the rejection damage claims of the leases and executory contracts. Thus, Unsecured Creditors are projected to realize just over 5% of their Allowed Claims over the three-year period of payments under the Plan. The amounts the Debtors are proposing to be paid under the Plan constitute all of the Debtors' projected excess disposable income. A full-text copy of the First Modified Plan dated March 2, 2023 is available at https://bit.ly/3mxj6lc from PacerMonitor.com at no charge. Counsel to Debtors: RABINOWITZ, LUBETKIN & TULLY, LLC Jay L. Lubetkin, Esq. 293 Eisenhower Parkway, Suite 100 Livingston, NJ 07039 (973) 597-9100 About The Wildflower Group The Debtors design and operate websites, and market the availability of licensed products through their proprietary websites. The Wildflower Group LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 22-18793) on Nov. 4, 2022. In the petition signed by Michael Carlisle, member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Jay L. Lubetkin, Esq., at Rabinowitz, Lubetkin & Tully, LLC, represents the Debtor as legal counsel. YS GARMENTS: S&P Lowers ICR to 'B-' on Potential Repayment Risk --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on YS Garments LLC (d/b/a Next Level Apparel) to 'B-' from 'B', and the outlook is negative. Consequently, S&P lowered its issue-level rating on the company's nonextended portion of its senior secured debt due in 2024 to 'B-' from 'B'. The '3' recovery rating is unchanged and indicates its expectation of meaningful (50%-70%; rounded estimate: 65%). S&P revised its rounded recovery estimate to 65% from 60%. Additionally, S&P assigned the same ratings to the extended tranches of the revolver and term loan due in 2026. The negative outlook reflects the risk of a downgrade if operating performance and working capital continue to deteriorate over the next 12 months, leading to weaker liquidity and the inability to repay its remaining term loan maturity in 2024. The downgrade reflects S&P's expectation of near-term repayment risk despite Next Level's recent amend-and-extend of most of its revolving credit facility and term loan, partially alleviating liquidity concerns. In March 2023, Next Level amended and extended most of its capital structure that was slated to mature in 2024. This included the bifurcation of its revolving credit facility and first-lien term loan into nonextended and extended portions. Under the company's $50 million revolving credit facility, approximately $1.3 million will remain due in February 2024, with the remaining $48.7 million extended by two years to February 2026. Similarly, approximately $17 million of the company's $330 million first-lien term loan remains due in August 2024, with the remaining $259 million (based on $276 million outstanding as of Dec. 31, 2022) extended by two years to August 2026. This partially alleviates our concerns regarding potential refinancing risk as these tranches became current. S&P expects the $17 million nonextended portion of its term loan will be repaid with cash generation at maturity in 2024, which could further stress the company's liquidity. Its current cash balance of about $8.4 million as of Dec. 31, 2022, is low. S&P said, "The remaining $17 million due in 2024 poses a lingering, potential near-term repayment risk. We believe Next Level's peak working capital use of $20 million over the next 12 months would be manageable without additional need to draw from its revolver given our forecast for $60 million of funds from operations (FFO) in 2023. We expect Next Level to have sufficient liquidity in 2024 to cover the repayment of the portion of its term loan due in 2024, but this is dependent on the company improving its working capital position and cash flow generation as forecasted, primarily in the second half of 2023. Its recent weak performance in 2022 and our expectation of a weaker macroeconomic landscape over the next year could slow the road to recovery and cause the company to not meet our forecast. "We also note that as part of Next Level's amend-and-extend, its applicable margin under the revolving facility and term loan was increased to 750 basis points (bps) under both facilities. This will increase its annual interest expense approximately $6 million and weaken interest coverage metrics to about 3x for 2023. "We believe elevated leverage is temporary and will improve to 3x over the next 12 months; however, Next Level's financial sponsor ownership constrains our ratings. "Next Level underperformed our expectations in fiscal 2022, and we estimate leverage to be in the low-4x area as of the last 12 months ended Dec. 31, 2022 (based on preliminary financials), compared to our previous forecast of 2.2x for the end of 2022. We forecast leverage to be about 3x over the next 12 months, driven by EBITDA improvements, dropping further into the mid-2x area in 2024 from a combination of EBITDA gains and lower debt balance as it repays the nonextended portion of its term loan due in 2024. In 2022, the company's key distributors had elevated inventories and sold down its Next Level inventory and did not repurchase more in an attempt to normalize inventory. We expect this difference will continue to narrow and believe most of the inventory rebalancing was completed last year. However, we expect a mild recession in 2023, which may disproportionately impair demand for apparel. As such, we expect weak macroeconomic conditions to lead to high-single-digit percentage annual revenue growth, driven by higher unit volumes. We forecast EBITDA margin in 2023 to expand about 450 bps compared to the prior year due to normalized cotton prices and freight costs. "Additionally, we think Next Level has strong relationships with its top three distributors and can maintain its price increases of the last two years. Given the company's financial sponsor ownership, we believe low leverage will most likely be unsustainable, as financial sponsors typically use leverage capacity in their portfolio companies to distribute debt-funded dividends or make acquisitions. Therefore, we believe a releveraging event is more likely in the next 12 months given Blue Point Capital Partners' ownership of five years. "Though we positively view Next Level's latest acquisition of Stedman GmbH, international expansion, and operational synergies will ultimately take time. "Next Level recently acquired Stedman for $4.9 million on Dec. 30, 2022. Stedman designs and manufactures casual and sportswear basic apparel for promotional applications primarily to distributors across 40 countries. Though pro forma EBITDA contribution is small relative to the total size of Next Level's business, we think the acquisition will serve as a necessary steppingstone into the European printwear market. Stedman has complimentary products and long-standing relationships with key European distributors. However, we believe integration across companies will take time to significantly accelerate international growth and capture potential cross-selling opportunities given that this transaction is the first of its kind for Next Level under Blue Point Capital Partners' ownership." The negative outlook reflects the risk of a downgrade over the next 12 months. S&P could lower its ratings if Next Level cannot improve its cash generation ability and working capital position over the next 12 months, leading to insufficient liquidity to address the portion of its term loan maturity in 2024. This could occur if: -- The macroeconomic picture worsens and consumer demand continues to weaken and it cannot reduce its inventory balance as expected, leading to increasingly constrained working capital and materially weaker free operating cash flow (FOCF) or; -- Raw material or freight costs increase materially above our base-case forecast, and the company cannot offset the increases with price increases or cost-saving initiatives. S&P could revise its outlook to stable if the company winds down its inventory, leading to revenue and EBITDA growth as well as a reversal in working capital as expected. This would allow for the ability to repay its upcoming maturity of a portion of its term loan without constraining liquidity. 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 YS Garments. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and a focus on maximizing shareholder returns." [^] Recent Small-Dollar & Individual Chapter 11 Filings ------------------------------------------------------- In re 65 Team LLC Bankr. S.D. Fla. Case No. 23-11588 Chapter 11 Petition filed February 28, 2023 See https://www.pacermonitor.com/view/IZOQKNI/65_Team_LLC__flsbke-23-11588__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Maria Evelina Cruz Bankr. N.D. Ill. Case No. 23-02646 Chapter 11 Petition filed February 28, 2023 represented by: Ben Schneider, Esq. 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W.D. Pa. Case No. 23-20478 Chapter 11 Petition filed March 6, 2023 represented by: Brian Thompson, Esq. In re Sub Alpine Society Bankr. W.D. Pa. Case No. 23-20479 Chapter 11 Petition filed March 6, 2023 See https://www.pacermonitor.com/view/T3K2EVI/Sub_Alpine_Society__pawbke-23-20479__0001.0.pdf?mcid=tGE4TAMA Filed Pro Se In re Hispanic Family Christian Network, Inc. Bankr. N.D. Tex. Case No. 23-30448 Chapter 11 Petition filed March 6, 2023 See https://www.pacermonitor.com/view/5WPSSDA/Hispanic_Family_Christian_Network__txnbke-23-30448__0001.0.pdf?mcid=tGE4TAMA represented by: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC E-mail: joyce@joycelindauer.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. 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