/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230322.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 22, 2023, Vol. 27, No. 80 Headlines 34 SUMMER REALTY: Condo Units Owner Files for Chapter 11 ACCURIDE CORP: $363M Bank Debt Trades at 20% Discount AD1 URBAN: Seeks to Hire CR3 Partners as Financial Advisor AD1 URBAN: Seeks to Hire Stretto as Administrative Advisor AD1 URBAN: Taps Faegre Drinker Biddle & Reath as Bankruptcy Counsel AEQUOR MGT: Seeks to Extend Plan Exclusivity to August 3 AG BROTHERS': Gets OK to Hire Duran Business Group as Accountant AQUAVISTA WATERSIDE: Barings Private Marks Loan at 21% Off ASURION LLC: $1.64B Bank Debt Trades at 16% Discount AT HOME GROUP: $600M Bank Debt Trades at 21% Discount ATLAS HEAVY: Scott Chernich Appointed as Subchapter V Trustee ATLAS HEAVY: Seeks Cash Collateral Access AVAYA HOLDINGS: $350M Bank Debt Trades at 73% Discount AVEANNA HEALTHCARE: $415M Bank Debt Trades at 36% Discount BAUSCH HEALTH: $2.50B Bank Debt Trades at 24% Discount BETTER NUTRITIONALS: Committee Seeks Chapter 11 Trustee Appointment BLOCKFI INC: Says It's 'Fine' Despite Its $227M SVB Exposure BLOCKFI INC: Wants to Pause Securities Lawsuits Against Top Execs BURRELL FARMS: Starts Subchapter V Bankruptcy Case BW NHHC HOLDCO: $195M Bank Debt Trades at 65% Discount CANO HEALTH: $644M Bank Debt Trades at 21% Discount CANWEST AEROSPACE: Gets CCAA Initial Stay Order CASTLE BLACK: Files Subchapter V Case CONVERGEONE HOLDINGS: $1.11B Bank Debt Trades at 40% Discount CORE SCIENTIFIC: Barings Private Marks $16.7M Loan at 63% Off CROWN FINANCE: EUR607M Bank Debt Trades at 87% Discount CURITEC LLC: In Chapter 11 After CMS Suspension DIRECT TRAVEL: Barings Private Marks $5.5M Loan at 21% Off ELEVATE TEXTILES: $125M Bank Debt Trades at 88% Discount ENVISION HEALTHCARE: $1B Bank Debt Trades at 81% Discount ENVISION HEALTHCARE: $5.45B Bank Debt Trades at 79% Discount EQUINOX HOLDINGS: $150M Bank Debt Trades at 16% Discount EYECARE PARTNERS: $750M Bank Debt Trades at 16% Discount FAAVEE LLC: Taps Watters International as Realtor FENIX GROUP: Gets OK to Hire Silver Law as Special Counsel FREE SPEECH: Sandy Hook Families Sue Jones Over Debt Discharge FTX GROUP: Judge Worried About SBF's 'Inventive' Bail Workarounds FTX TRADING: Asks for Six More Months to File Plan GEOSTELLAR INC: Trustee's Motion to Dismiss Appeal Denied in Part GIRARDI & KEESE: Probe Shows Corrupt California State Bar GLOBAL AVIATION: Court OKs Final Cash Collateral Access GOBO LTD: Files for Chapter 11 to Stop Foreclosure GOBO LTD: Seeks Cash Collateral Access GOLDEN ENTERTAINMENT: S&P Places 'B+' ICR on CreditWatch Positive HEALTHCHANNELS INTERMEDIATE: Bank Debt Trades at 39% Discount HEXION INC: $425M Bank Debt Trades at 16% Discount HIE HOLDINGS: Trustee Taps Gigaisland as IT Consultant HORNBLOWER SUB: $349M Bank Debt Trades at 40% Discount IEH AUTO PARTS: Seeks to Hire Jackson Walker as Legal Counsel IEH AUTO PARTS: Taps Law Office of Liz Freeman as Co-Counsel IEH AUTO PARTS: Taps Portage Point as Restructuring Advisor INDRA HOLDINGS: $50M Bank Debt Trades at 54% Discount ISAGENIX INTERNATIONAL: $375M Bank Debt Trades at 62% Discount ITI INTERMODAL: Barings Private Marks $6,000 Loan at 17% Off IVANTI SOFTWARE: $1.75B Bank Debt Trades at 16% Discount JDI DATA: Court OKs Cash Collateral Access Thru April KABBAGE INC: Debtor's Liquidation Plan Approved by Court LIFESCAN GLOBAL: $275M Bank Debt Trades at 36% Discount LISTRAC BIDCO: Barings Private Marks $1.8M Loan at 25% Off LISTRAC BIDCO: Barings Private Marks $61,000 Loan at 26% Off LOYALTY VENTURES: $500M Bank Debt Trades at 84% Discount LOYALTYONE CO: Seeks Restructuring Under CCAA LTL MANAGEMENT: 3rd Circ. Grants Amicus Bids of Ex-Judge, Law Profs LUCKY BUCKS: $555M Bank Debt Trades at 68% Discount LUMEN TECHNOLOGIES: $5B Bank Debt Trades at 30% Discount MAGENTA BUYER: $3.18B Bank Debt Trades at 15% Discount MARINE WHOLESALE: Court OKs Cash Collateral Access Thru July 31 MARSHALL MEDICAL CENTER: Fitch Affirms IDR at 'BB+', Outlook Stable MEDPLAST HOLDINGS: Barings Private Marks $9.3M Loan at 15% Off META SPECIAL: $310M Bank Debt Trades at 17% Discount MOLD-RITE PLASTIC: Barings Private Marks $13.9M Loan at 25% Off MONITRONICS INTERNATIONAL: $822M Bank Debt Trades at 62% Discount NARDA ACQUISITIONCO: $106,000 Revolver Loan Has Steep Discount NEW FORTRESS: Fitch Affirms LongTerm IDR at 'BB-', Outlook Stable NEWELL BRANDS: S&P Downgrades ICR to 'BB+', Outlook Negative PACIFIC BEND: Files for Chapter 11 Due to Dispute With Performance PG&E CORP: Fitch Hikes IDR to 'BB+', Outlook Stable PLANDAI BIOTECHNOLOGY: Incurs $4.7 Million Net Loss in 2016 POINDEXTER PROPERTIES: $16M Bank Debt Trades at 16% Discount POWER STOP: $395M Bank Debt Trades at 31% Discount PURE BIOSCIENCE: Incurs $1.1 Million Net Loss in Second Quarter R1 HOLDINGS: Barings Private Marks $472,000 Loan at 15% Off RANDYS HOLDING: Barings Private Marks $367,000 Loan at 19% Off RITCHIE BROS: S&P Assigns 'BB+' Rating on Senior Secured Debt RIVERBED TECHNOLOGY: $900M Bank Debt Trades at 67% Discount ROBERTSHAW US: $110M Bank Debt Trades at 72% Discount RYZE RENEWABLES: Wants to Sell Las Vegas Refinery in June Auction S-TEK 1 LLC: Confirmation Procedures Denied, Converted Under Ch. 7 SAFETY PRODUCTS: Barings Private Marks $159,000 Loan at 24% Off SCREENVISION LLC: $175M Bank Debt Trades at 38% Discount SIGNAL PARENT: $550M Bank Debt Trades at 33% Discount SILICON VALLEY BANK: Federal Reserve Starts Probe After Collapse SPEEDBOAT JV: Returns to Chapter 11 to Stop Foreclosure T.G. HOLDINGS: Wins Cash Collateral Access Thru June 14 TELESAT LLC: $1.91B Bank Debt Trades at 49% Discount TEXAS COASTAL: Files for Chapter 11 to Stop Foreclosure TIMBERSTONE 4038T: SARE Starts Subchapter V Bankruptcy Case TUESDAY MORNING: Drops Invictus, Gets New DIP Financing TV AZTECA S.A.B.: Involuntary Chapter 11 Case Summary UNITED FURNITURE: Trustee Taps B. Riley as Real Estate Advisor UNITED FURNITURE: Trustee Taps Harper as Financial Advisor UNITED ROAD: $331M Bank Debt Trades at 66% Discount VERITAS US: EUR748M Bank Debt Trades at 24% Discount VOYAGER DIGITAL: Government's Bid to Stay Confirmation Order Denied WOODLAND FOOD: Barings Private Marks $125,000 Loan at 26% Off ZAYO GROUP: $4.96B Bank Debt Trades at 18% Discount ********* 34 SUMMER REALTY: Condo Units Owner Files for Chapter 11 -------------------------------------------------------- 34 Sumner Realty LLC filed for chapter 11 protection in the District of Massachusetts. The Debtor is a limited liability company which owns at least 30 condominiums, as many as 25 parking places, one commercial unit, and one storage unit (that is divided into eight subunits). All these units are located at 34 Sumner Avenue, Springfield, Massachusetts. The first mortgage on the 34 Sumner Avenue Property (save perhaps one condominium and certain parking places), was originally held by Security Mutual Insurance Company of New York, and was transferred to Mooring in May/June, 2022. Security Mutual took possession of the 34 Sumner Avenue Property approximately three years ago, and Mooring has continued to possess the property, receiving rents. There is a second mortgage held by Belvidere Capital LLC. According to court filings, 34 Sumner Realty 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 34 Sumner Realty 34 Sumner Realty LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). 34 Sumner Realty LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 23-30073) on March 2, 2023. In the petition filed by Louis Masaschi, as manager, the Debtor reported assets and liabilities between $1 million and $10 million each. The Debtor is represented by: Louis S. Robin, Esq. Law Offices of Louis S. Robin 34 Sumner Street Springfield, MA 01108 ACCURIDE CORP: $363M Bank Debt Trades at 20% Discount ----------------------------------------------------- Participations in a syndicated loan under which Accuride Corp is a borrower were trading in the secondary market around 79.7 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $363 million facility is a Term loan that is scheduled to mature on November 10, 2023. About $344.9 million of the loan is withdrawn and outstanding. Accuride Corporation is a diversified manufacturer and supplier of commercial vehicle components in North America. Based in Livonia, Michigan, the company designs, manufactures and markets commercial vehicle components. Accuride's brands are Accuride Wheels, Gunite Wheel End Components, and KIC Wheel End Components. AD1 URBAN: Seeks to Hire CR3 Partners as Financial Advisor ---------------------------------------------------------- AD1 Urban Palm Bay, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ CR3 Partners, LLC as their financial advisor. The Debtors require a financial advisor to: a. develop a 13-week cash flow forecasting model and track against a budget. b. prepare the Debtors' schedules of assets and liabilities and statements of financial affairs, and liaise with the Debtors' legal counsel regarding preparation for hearings, testimony, and creditor meetings; c. prepare monthly operating reports and respond to requests from parties in interest; and d. provide other general business consulting services. The firm will be paid at these rates: Partners $795 to $995 per hour Sr. Directors $695 to $795 per hour Directors $595 to $695 per hour Managers/Senior Associates $395 to $550 per hour Winston Mar, a partner at CR3 Partners, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Winston Mar CR3 Partners, LLC 6171 W. Century Blvd Suite 350 Los Angeles, CA 90045 Tel: (800) 728-7176 Email: winston.mar@cr3partners.com About AD1 Urban Palm Bay AD1 Urban Palm Bay, LLC operates in the traveler accommodation industry. The company is based in Hollywood, Fla. AD1 Urban Palm Bay and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10074) on Jan. 22, 2023. In the petition signed by Alex Fridzon, as responsible fiduciary, AD1 Urban Palm Bay disclosed $10 million to $50 million in both assets and liabilities. Judge Karen B. Owens oversees the cases. The Debtors tapped Ian J. Bambrick, Esq., at Faegre Drinker Biddle and Reath, LLP as legal counsel; RobertDouglas as investment banker; CR3 Partners, LLC as financial advisor; and Stretto, Inc. as claims and noticing agent and administrative advisor. AD1 URBAN: Seeks to Hire Stretto as Administrative Advisor ---------------------------------------------------------- AD1 Urban Palm Bay, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Stretto, Inc. as administrative advisor. The Debtors require an administrative advisor to: a. assist with, among other things, solicitation, balloting, and tabulation of votes, and prepare any related reports in support of confirmation of a Chapter 11 plan; b. prepare an official ballot certification and, if necessary, testify in support of the ballot tabulation results; c. assist with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs and gather data in conjunction therewith; d. manage and coordinate any distributions pursuant to a Chapter 11 plan if designated as distribution agent under such plan; and e. provide such other solicitation, balloting and other administrative services. The firm received from the Debtors an advance retainer of $20,000. Sheryl Betance, a senior managing director at Stretto, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Sheryl Betance Stretto, Inc. 410 Exchange, Ste. 100 Irvine, CA 92602 Tel: (714) 716-1872 Email: Sheryl.betance@stretto.com About AD1 Urban Palm Bay AD1 Urban Palm Bay, LLC and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10074) on Jan. 22, 2023. In the petition signed by Alex Fridzon, as responsible fiduciary, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Karen B. Owens oversees the cases. The Debtor tapped Ian J. Bambrick, Esq., at Faegre Drinker Biddle and Reath, LLP as legal counsel; RobertDouglas as investment banker; CR3 Partners, LLC as financial advisor; and Stretto, Inc. as claims and noticing agent and administrative advisor. AD1 URBAN: Taps Faegre Drinker Biddle & Reath as Bankruptcy Counsel ------------------------------------------------------------------- AD1 Urban Palm Bay, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Faegre Drinker Biddle & Reath, LLP as their legal counsel. The firm's services include: a. advising the Debtors with respect to their powers and duties in the continued management and operation of their businesses and properties; b. advising and consulting on the conduct of the Debtors' Chapter 11 cases, including all of the legal and administrative requirements of operating in Chapter 11; c. attending meetings and negotiating with representatives of creditors and other parties in interest; d. taking all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which they are involved, including objections to claims filed against the estates; e. preparing pleadings; f. representing the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; g. advising the Debtors in connection with any potential sale of assets; h. appearing before the bankruptcy court and any appellate courts to represent the interests of the Debtors' estates; i. taking any necessary action to negotiate, prepare, and obtain confirmation of a Chapter 11 plan and related documents; and j. other necessary legal services. Faegre will be paid at these rates: Partner $815 to $1,170 per hour Associates $580 to $735 per hour Paralegals $420 per hour As disclosed in court filings, Faegre is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm received from the Debtors a retainer of $150,000. Scott Gautier, Esq., a partner at Faegre, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Scott F. Gautier, Esq. Maria J. Cho, Esq. Faegre Drinker Biddle & Reath, LLP 1800 Century Park East, Suite 1500 Los Angeles, CA 90067 Tel: 310 203 4000 Fax: 310 229 1285 Email: scott.gautier@faegredrinker.com maria.cho@faegredrinker.com About AD1 Urban Palm Bay AD1 Urban Palm Bay, LLC operates in the traveler accommodation industry. The company is based in Hollywood, Fla. AD1 Urban Palm Bay and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10074) on Jan. 22, 2023. In the petition signed by Alex Fridzon, as responsible fiduciary, AD1 Urban Palm Bay disclosed $10 million to $50 million in both assets and liabilities. Judge Karen B. Owens oversees the cases. The Debtors tapped Ian J. Bambrick, Esq., at Faegre Drinker Biddle and Reath, LLP as legal counsel; RobertDouglas as investment banker; CR3 Partners, LLC as financial advisor; and Stretto, Inc. as claims and noticing agent and administrative advisor. AEQUOR MGT: Seeks to Extend Plan Exclusivity to August 3 -------------------------------------------------------- Aequor Mgt, LLC and Aequor Holdings, LLC ask the U.S. Bankruptcy Court for the Eastern District of Texas to extend their exclusive period to file a Chapter 11 plan and to solicit acceptance thereof to August 3 and October 2, 2023 respectively. Currently, the Debtors' exclusivity period to file a plan ends on May 5, 2023. With respect to Aequor Holdings, the Debtors explained that more time is required to analyze the Tacora assets and options for selling same to pay creditors. On the other hand, with respect to Aequor Mgt, the Debtors stated that the Committee was recently appointed and retained counsel yet more recently. Aequor Mgt, LLC and Aequor Holdings, LLC are represented by: Davor Rukavina, Esq. Thomas D. Berghman, Esq. MUNSCH HARDT KOPF & HARR, P.C. 3800 Ross Tower 500 N. Akard Street Dallas, TX 75201-6659 Tel: (214) 855-7500 Email: drukavina@munsch.com tberghman@munsch.com About Aequor Mgt Aequor Mgt, LLC -- https://BurroSand.com/ -- claims to be the lowest cost producer of 100 Mesh frac sand in the Permian Basin serving oil and gas producers. The company is based in Tyler, Texas. Aequor Mgt and Aequor Holdings, LLC filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Lead Case No. 23-60010) on Jan. 5, 2023. At the time of the filing, Aequor Mgt reported $1 million to $10 million in assets and $50 million to $100 million in liabilities while Aequor Holdings reported $10 million to $50 million in both assets and liabilities. Judge Joshua P. Searcy oversees the cases. The Debtors are represented by Davor Rukavina, Esq., at Munsch Hardt Kopf & Harr, P.C. AG BROTHERS': Gets OK to Hire Duran Business Group as Accountant ---------------------------------------------------------------- AG Brothers' Food Restaurants, LLC received approval from the U.S. Bankruptcy Court for the District of Arizona to employ Duran Accounting Solutions, LLC, doing business as Duran Business Group, as its accountant. The firm will assist the Debtor in the preparation of tax returns, financial statements, monthly operating reports, and any other accounting matters that may require assistance during the Debtor's Chapter 11 proceeding. Duran Business Group will be paid at the rate of $150 per hour. In addition, the firm will be paid a retainer of $1,500 for accounting services and $3,000 for payroll. Regina Duran, a principal at Duran Business Group, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Regina Duran Duran Accounting Solutions, LLC d/b/a/ Duran Business Group 2633 E Indian School Rd. Ste 230 Phoenix, AZ 85016 Tel: (480) 248-6755 About AG Brothers' Food Restaurants AG Brothers' Food Restaurants, LLC -- http://www.mariscoselnuevoaltata.com/-- owns and operates a restaurant specializing in Mexican cuisine. AG Brothers' Food Restaurants filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 22-06667) on Oct. 4, 2022, with $1 million and $10 million in both assets and liabilities. Dawn Maguire has been appointed as Subchapter V trustee. Judge Madeleine C. Wanslee oversees the case. The Debtor tapped Allan D. Newdelman, P.C. as bankruptcy counsel and Duran Accounting Solutions, LLC, doing business as Duran Business Group, as accountant. AQUAVISTA WATERSIDE: Barings Private Marks Loan at 21% Off ---------------------------------------------------------- Barings Private Credit Corporation has marked its $177,000 loan extended to Aquavista Watersides 2 LTD to market at $92,000 or 79% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan to Aquavista Watersides 2 LTD. The loan accrues interest at a rate of 8.9% (SONIA+6%) per annum. The loan matures in December 2024. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Aquavista Watersides 2 LTD is in the transportation services sector. ASURION LLC: $1.64B Bank Debt Trades at 16% Discount ---------------------------------------------------- Participations in a syndicated loan under which Asurion LLC is a borrower were trading in the secondary market around 83.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.64 billion facility is a Term loan that is scheduled to mature on February 3, 2028. The amount is fully drawn and outstanding. Asurion, LLC provides wireless handset insurance services. The Company offers replacement of lost, stolen, damaged, and malfunctioning devices, as well as roadside assistance programs, technical support, mobile security devices, and electronics protection. AT HOME GROUP: $600M Bank Debt Trades at 21% Discount ----------------------------------------------------- Participations in a syndicated loan under which At Home Group Inc is a borrower were trading in the secondary market around 78.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $600 million facility is a Term loan that is scheduled to mature on July 23, 2028. The amount is fully drawn and outstanding. At Home Group Inc. owns and operates home decor stores. The Company offers furniture, home furnishings, wall decor and decorative accents, rugs, and housewares. ATLAS HEAVY: Scott Chernich Appointed as Subchapter V Trustee ------------------------------------------------------------- Andrew Vara, U.S. Trustee for Regions 3 and 9, appointed Scott Chernich as Subchapter V trustee for Atlas Heavy Engine Co. Pending appointment, Mr. Chernich will be compensated at $325 per hour for his service as Subchapter V trustee, in addition to reimbursement for related expenses incurred. Mr. Chernich declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. Mr. Chernich holds office at: Scott A. Chernich 313 S. Washington Square Lansing, MI 48933 Telephone: (517) 371-8133 Email: schernich@fosterswift.com About Atlas Heavy Atlas Heavy Engine Co. provides diesel engines and diesel engine parts. The company is based in Niles, Mich. Atlas sought protection from Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Mich. Case No. 23-00530) on March 14, 2023, with $1,107,418 in assets and $4,253,558 in liabilities. Richard J. Campbell, president and member, signed the petition. Judge Scott W. Dales oversees the case. Steven M. Bylenga, Esq., at CBH Attorneys & Counselors, PLLC is the Debtor's counsel. ATLAS HEAVY: Seeks Cash Collateral Access ----------------------------------------- Atlas Heavy Engine Co., d.b.a. Worldwide Diesel, asks the U.S. Bankruptcy Court for the Western District of Michigan to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to sustain its operations and preserve its assets for the benefit of the estate and creditors. In October 2021, Richard J. Campbell and his wife Erin Campbell, through Atlas, purchased Quality Truck Parts' assets for $3.825 million plus additional funds for closing costs. The sale and initial operating costs were financed through: (i) a loan from Huntington National Bank, backed by the Small Business Administration, for $3.392 million; (ii) seller financing from Quality Truck Parts through two notes with aggregate initial balances of $390,000; and (iii) capital contributions from Rich and Erin of approximately $210,000. HNB's Loan was secured by (i) a mortgage on Atlas' headquarters, (ii) a mortgage on vacant land owned by Rich in Wellston, Michigan; and (iii) a first priority UCC security interest in all of Atlas' assets and personal property. Substantial unanticipated warranty claims and supply chain shortages resulted in increased expenses and reduced revenue. The reduction in new diesel engines and parts resulted in a corollary reduction in available used engines and parts as companies hoarded their used engines and parts for their own fleets. The reduction in available used diesel engines and parts substantially reduced Atlas' inventory and sales, which resulted in Atlas being unable to service its debt. In an effort to increase its inventory, Rich and Erin purchased 2nd Chance Diesel, a quality machine shop in Kearney, Missouri, specializing in rebuilding diesel engines, to rebuild engines and parts for Atlas to sell. Unfortunately, acquiring 2nd Chance Diesel to produce inventory for Atlas was insufficient to cover the inventory shortages, increased expenses, and reduced revenue that Atlas' operating model was premised upon. In fact, 2nd Chance Diesel ran into similar issues with its supply chain and increased expenses, which ultimately resulted in it ceasing operations. Without being able to obtain ample inventory to generate sufficient revenue to satisfy its operational expenses, Atlas defaulted under its monthly debt service obligation to HNB. Despite Atlas' inability to successfully service its debts to HNB in 2022, Atlas reasonably believes that easing supply chain shortages combined with reducing its debt service obligations through a "cramdown" of the loans to HNB and Quality Truck Parts will result in a sustainable and profitable business model. Atlas says the value of the "Cash Collateral" is approximately $164,743 which includes Cash, Bank Accounts, Accounts Receivable, and tax refunds. The Debtor believes these lenders are likely to assert an interest in one or more of the Debtor's assets: -- Huntington National Bank (Purchase Financing) i. First Priority - filed October 14, 2021 ii. Amount: $3,392,000 iii. Lien on: All assets -- Huntinpton National Bank (Operating Loan) i. Second Priority- filed October 14, 2021 ii. Amount $304,000 iii. Lien on: All assets -- Quality Truck Parts. Inc. (Seller Financing) i. Third Priority - filed on October 11,2021 ii. Estimated Balance on Petition Date: $422,572 iii. Lien on: All Assets As adequate protection, the Secured Creditors will be granted continuing and replacement security interest in liens on all of the Atlas' post-petition property, excluding Atlas' rights under 11 U.S.C. section 544. Atlas' use of cash collateral will cease upon the occurrence of one of the following: (i) Atlas fails to comply with its promises of adequate assurance in any fashion; (ii) The appointment of a Chapter 11 trustee; (iii) Conversion of the Chapter 11 proceeding to a Chapter 7; (iv) The Chapter 11 proceeding is dismissed without the consent of the Secured Creditors; or (v) A material diminution in the amount of the Atlas' cash collateral and, after notice and hearing, the Court determines that the cash collateral is in excess of any adequate protection provided therein. A copy of the motion is available at https://bit.ly/40axrmB from PacerMonitor.com. About Atlas Heavy Engine Co. Atlas Heavy Engine Co. provides diesel engines and diesel engine parts. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Mich. Case No. 23-00530) on March 14, 2023. In the petition signed by Richard J. Campbell, president/member, the Debtor disclosed $1,107,418 in assets and $4,253,558 in liabilities. Judge Scott W. Dales oversees the case. Steven M. Bylenga, Esq., at CBH Attorneys & Counselors, PLLC, represents the Debtor as legal counsel. AVAYA HOLDINGS: $350M Bank Debt Trades at 73% Discount ------------------------------------------------------ Participations in a syndicated loan under which Avaya Holdings Corp is a borrower were trading in the secondary market around 27.2 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $350 million facility is a Term loan that is scheduled to mature on December 15, 2027. The amount is fully drawn and outstanding. About Avaya Morristown, New Jersey-based Avaya offers digital communications products, solutions and services for businesses of all sizes. Avaya delivers its technology predominantly through software and services, both on-premise and through the cloud in a diverse range of industries, including financial services, manufacturing, retail, transportation, energy, media and communications, healthcare, education, and government. Avaya, Inc., and 20 affiliated entities, including Avaya Holdings Corp., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 23-90088) on February 14, 2023. The Hon. David R. Jones oversees the cases. Avaya Inc. and 17 affiliates first sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 17-10089) on Jan. 19, 2017. The 2017 debtors emerged from bankruptcy and their second amended joint Chapter 11 plan of reorganization was declared effective on Dec. 15, 2017. The 2017 Plan provides holders of first-lien debt with 90.5% of stock in the reorganized company and holders of second-lien notes with a pro rata share of 4% of stock and warrants for an additional 5.1% of the shares. Avaya projected to have $2.925 billion of funded debt and a $300 million senior secured asset-based lending facility available following emergence. The 2023 petitions were signed by Eric Koza as chief restructuring officer. The Debtors estimated $1 billion to $10 billion in both assets and liabilities on a consolidated basis. Avaya Holdings' most recent financial report filed with the Securities and Exchange Commission was for the three-month period end March 31, 2022. In its Form 10-Q report, Holdings disclosed $5.8 billion in total consolidated assets against $5.2 billion in total consolidated liabilities. In the 2023 bankruptcy filing, the Debtors have retained Kirkland & Ellis LLP and Jackson Walker LLP as bankruptcy co-counsel; Evercore Group LLC as investment banker; AlixPartners LLP as restructuring advisor; PricewaterhouseCooopers LLP as auditor; and Kurtzman Carson Consultants LLC as claims and noticing agent. Counsel to Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent under the DIP Term Loan is Ropes & Gray LLP. A group of lenders are represented by Akin Gump Strauss Hauer & Feld LLP, Centerview Partners LP and Alvarez & Marsal North America, LLC. Counsel to the Akin Ad Hoc Group. A group of lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP, Glenn Agre Bergman & Fuentes LLP, and FTI Consulting, Inc. Counsel to the PW Ad Hoc Group. Counsel to Goldman Sachs Bank USA, as administrative agent and collateral agent under the Prepetition Term Loan, is Davis Polk & Wardwell LLP. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on Jan. 31, 2017. Morrison & Foerster, LLP, Jefferies, LLC and Alvarez & Marsal North America, LLC serve as the committee's legal counsel, investment banker and financial advisor, respectively. AVEANNA HEALTHCARE: $415M Bank Debt Trades at 36% Discount ---------------------------------------------------------- Participations in a syndicated loan under which Aveanna Healthcare LLC is a borrower were trading in the secondary market around 63.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $415 million facility is a Term loan that is scheduled to mature on December 10, 2029. The amount is fully drawn and outstanding. Aveanna Healthcare LLC provides health care services. The Company offers pediatric skilled nursing, therapy, autism, enteral nutrition, and adult services. BAUSCH HEALTH: $2.50B Bank Debt Trades at 24% Discount ------------------------------------------------------ Participations in a syndicated loan under which Bausch Health Cos Inc is a borrower were trading in the secondary market around 76.3 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $2.50 billion facility is a Term loan that is scheduled to mature on February 1, 2027. About $2.44 billion of the loan is withdrawn and outstanding. Bausch Health Companies Inc. discovers and distributes pharmaceutical. The Company develops drugs for unmet medical needs in central nervous system disorders, eye health, and gastrointestinal diseases, as well as contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetic devices. Bausch Health Companies serves customers worldwide. BETTER NUTRITIONALS: Committee Seeks Chapter 11 Trustee Appointment ------------------------------------------------------------------- The official committee representing unsecured creditors of Better Nutritionals, LLC is seeking to give control of the company's estate to a bankruptcy trustee, citing "gross mismanagement" of the estate. In a motion filed with the U.S. Bankruptcy Court for the Central District of California, attorney for the unsecured creditors' committee said the immediate appointment of an independent trustee is the company's best option to avoid insolvency. "[Better Nutritionals'] management appears content to gamble with creditor recoveries in the pursuit of its personal aims and must be replaced in favor of a neutral operator," said Keith Owens, Esq., one of the attorneys at Fox Rothschild, LLP representing the committee. Mr. Owens criticized the company's decision to continue operations without its key customer Goli and without changing its business plan after filing bankruptcy and incurring losses. "Even as it incurred prepetition losses, [Better Nutritionals] lined the pockets of its insiders with millions in distributions, a practice it intends to continue post-petition without regard to continued losses," the attorney said. Better Nutritionals custom-built its business to manufacture heaps of gummy supplement products for a single customer, Goli. Its 422,000-square-foot facility in Norco, Calif., was designed, at the behest of Goli, to manufacture nine billion gummy supplements per year. The company lost $45 million from operations in the first year that demand from Goli dried up. Its efforts to find new customers for more than a year did not produce results. By the end of December 2023, the company held just $60,565 of cash on hand and operated at a $254,596 net loss for the month. Operational losses brought the company to just $53,416 cash on hand at the end of January 2023, according to court papers filed by the committee's attorney. "[Better Nutritionals] is unmoved by these losses and continues to jealously guard its most significant sources of overhead -- the Norco facility and associated labor costs -- that no longer generate sufficient revenue to offset their monthly cost," Mr. Owens said. Mr. Owens said the committee sees the takeover of the company's Chapter 11 case by an independent trustee as the best option to avoid administrative insolvency. "A neutral operator will be able to assess the value of continuing [Better Nutritionals'] operations at its modern and expansive Norco facility, reengage with Goli and set the animosities aside to address a potential resolution, and determine whether a reasonable business plan exists to stave off liquidation of [Better Nutritionals'] once significant operations," the attorney said in his motion. The motion is on the court's calendar for March 28. The committee can be reached through: Michael A. Sweet, Esq. Keith C. Owens, Esq. Nicholas A. Koffroth, Esq. Fox Rothschild, LLP 10250 Constellation Blvd., Suite 900 Los Angeles CA 90067 Telephone: (310) 598-4150 Facsimile: (310) 556-9828 Email: msweet@foxrothschild.com kowens@foxrothschild.com nkoffroth@foxrothschild.com About Better Nutritionals Better Nutritionals, LLC is a contract manufacturer and R&D leader in nutritional supplements. The company is based in Norco, Calif. Better Nutritionals sought protection from Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-14723) on Dec. 20, 2022. In the petition signed by Sharon Hoffman, manager, the Debtor disclosed $50 million to $100 million in assets and $100 million to $500 million in liabilities. Judge Mark D. Houle oversees the case. John N. Tedford, IV, Esq., at Danning Gill Israel & Krasnoff, LLP and Force 10 Partners, LLC serve as the Debtor's legal counsel and financial advisor, respectively. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by Fox Rothschild, LLP. BLOCKFI INC: Says It's 'Fine' Despite Its $227M SVB Exposure ------------------------------------------------------------ Jeremy Hill of Bloomberg News reports that BlockFi Inc. has ample access to cash and is in no immediate danger despite more than $200 million of exposure to failed Silicon Valley Bank, a lawyer for the bankrupt crypto lender said. "BlockFi is fine," Christine Okike of Kirkland & Ellis said on behalf of the company in a bankruptcy hearing Monday, March 13, 2023. "We have access to cash to operate in the normal course, including paying employees and vendors." The company expects to have access to a large chunk of cash held with SVB later today, she said. Most of its exposure is through third-party money-market mutual funds. About BlockFi Inc. BlockFi is building a bridge between digital assets and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. BlockFi made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. BlockFi grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina. BlockFi worked with FTX US after it took an $80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May 2022. BlockFi had significant exposure to the companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a $400 million credit line from FTX US in an agreement that also gave FTX the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried. BlockFi is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. Kirkland & Ellis is also advising Celsius and Voyager in their separate Chapter 11 cases. BlockFi Inc. and eight affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on Nov. 28, 2022. In the petitions signed by their chief executive officer, Zachary Prince, the Debtors reported $1 billion to $10 billion in both assets and liabilities. Judge Michael B. Kaplan oversees the cases. The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as general bankruptcy counsels; Walkers (Bermuda) Limited as special Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Street Advisory Group, LLC as strategic and communications advisor. Kroll Restructuring Administration, LLC is the notice and claims agent. BLOCKFI INC: Wants to Pause Securities Lawsuits Against Top Execs ----------------------------------------------------------------- James Nani of Bloomberg Law reports that BlockFi is seeking to extend its bankruptcy protection against litigation to its directors and officers who are facing lawsuits over the crypto lender's alleged sale of unregistered securities. BlockFi sued Trey Greene and Antonie Elas -- who held accounts at BlockFi -- to pause their proposed class actions in New Jersey and Massachusetts against several company officers, directors, and former employees. BlockFi said it has agreed to use its insurance policies to cover the defense costs of some of the executives named in the suits. Allowing the suits to continue could bear on BlockFi's estate, it said. About BlockFi Inc. BlockFi is building a bridge between digital assets and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. BlockFi made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. BlockFi grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina. BlockFi worked with FTX US after it took an $80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May 2022. BlockFi had significant exposure to the companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a $400 million credit line from FTX US in an agreement that also gave FTX the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried. BlockFi is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. Kirkland & Ellis is also advising Celsius and Voyager in their separate Chapter 11 cases. BlockFi Inc. and eight affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on Nov. 28, 2022. In the petitions signed by their chief executive officer, Zachary Prince, the Debtors reported $1 billion to $10 billion in both assets and liabilities. Judge Michael B. Kaplan oversees the cases. The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as general bankruptcy counsels; Walkers (Bermuda) Limited as special Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Street Advisory Group, LLC as strategic and communications advisor. Kroll Restructuring Administration, LLC is the notice and claims agent. BURRELL FARMS: Starts Subchapter V Bankruptcy Case -------------------------------------------------- Burrell Farms and Gardens LLC filed for chapter 11 protection in the Western District of Tennessee. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to court filings, Burrell Farms and Gardens LLC has total liabilities of $3,000,000 to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for March 30, 2023 at 1:00 p.m. at Room 400, Memphis, TN. About Burrell Farms and Gardens LLC Burrell Farms and Gardens LLC owns a property located at 6263 Highway 54 West, Brownsville, TN valued at $10 million. Burrell Farms and Gardens LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-21037) on March 1, 2023. In the petition filed by Thomas Burrell, as president, the Debtor reported total assets of $13,110,000 and total liabilities of $3,000,000. The case is overseen by Honorable Bankruptcy Judge M Ruthie Hagan. James E. Bailey, III, has been appointed as Subchapter V trustee. The Debtor is represented by: Toni Campbell Parker, Esq. Law Office of Toni Campbell Parker 287 Madison Ave. Memphis, TN 38103 BW NHHC HOLDCO: $195M Bank Debt Trades at 65% Discount ------------------------------------------------------ Participations in a syndicated loan under which BW NHHC Holdco Inc is a borrower were trading in the secondary market around 35.3 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $195 million facility is a Term loan that is scheduled to mature on May 15, 2026. About $10 million of the loan is withdrawn and outstanding. BW NHHC HoldCo Inc. is the primary borrower for the merger between Jordan Health Services and Great Lakes Caring Home Health and Hospice. Combined, the company provides skilled home health, personal care and hospice services, primarily to Medicare and Medicaid patients. CANO HEALTH: $644M Bank Debt Trades at 21% Discount --------------------------------------------------- Participations in a syndicated loan under which Cano Health LLC is a borrower were trading in the secondary market around 78.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $644.4 million facility is a Term loan that is scheduled to mature on November 23, 2027. About $638 million of the loan is withdrawn and outstanding. Cano Health, LLC operates primary care centers and supports affiliated medical practices. The Company specializes in primary care for seniors, as well as promotes activities and care to improve both physical health and well-being and offers population health management programs. Cano Health serves patients in the United States. CANWEST AEROSPACE: Gets CCAA Initial Stay Order ----------------------------------------------- CanWest Aerospace Inc. and Can West Global Airparts Inc. sought and obtained an initial order under the Companies' Creditors Arrangement Act, as amended ("CCAA"). FTI Consulting Canada Inc. was appointed as monitor ("Monitor") of the Companies. The Initial Order provides, among other things, a stay of proceedings until March 18, 2023 ("Stay Period") which may be extended by the Court from time to time. A copy of the Initial Order and copies of the materials filed in the CCAA proceedings may be obtained at http://cfcanada.fticonsulting.com/CWAor on request from the Monitor by calling 1-(877) 876-7756 or e-mailing CWA@fticonsulting.com. Monitor: FTI Consulting Canada Inc. Attn: Craig Munro Huw Parks 1502 - 701 West Georgia Street Vancouver, BC V7Y 1C6 Tel: 604-757-6108 Email: craig.munro@fticonsulting.com Huw.Parks@fticonsulting.com Counsel to the Monitor: DLA Piper (Canada) LLP Attn: Colin Brousson Dannis Yang (Assistant) Suite 2800, Park Place 666 Burrard St Vancouver, BC V6C 2Z7 Tel: 604-643-6400 Email: colin.brousson@dlapiper.com dannis.yang@dlapiper.com Counsel for the Companies: Clark Wilson LLP Attn: Christopher J. Ramsay Katie G. Mak Nick Carlson Jaime Landa (Assistant) 900 - 885 West Georgia Street Vancouver, BC V6C 3H1 Tel: 604-687-5700 Email: CRamsay@cwilson.com KMak@cwilson.com NCarlson@cwilson.com JLanda@cwilson.com CanWest Aerospace Inc. provides maintenance, repair and overhaul services to helicopter and fixed-wing aircraft customers throughout the world. CASTLE BLACK: Files Subchapter V Case ------------------------------------- Castle Black Inc. filed for chapter 11 protection in the Western District of Tennessee. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. Castle Black operates a construction business at 231 S. Parkway W., Memphis, Tenn. 38109. According to court filings, Castle Black has $5,314,032 in debt owed to 100 to 199 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for April 5, 2023 at 1:00 p.m. at Room 400, Memphis, TN. About Castle Black Castle Black Inc. owns in fee simple title seven properties located in Memphis, TN, valued at $1.48 million. Castle Black Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-21064) on March 2, 2023. In the petition filed by Jonathan Logan as president, the Debtor reported total assets of $2,150,234 and total liabilities of $5,314,032. The case is overseen by Honorable Bankruptcy Judge M. Ruthie Hagan. James E. Bailey, III, has been appointed as Subchapter V trustee. The Debtor is represented by: Toni Campbell Parker, Esq. Law Office of Toni Campbell Parker 231 S. Parkway W. Memphis, TN 38109-1646 Fax: 866-489-7938 Email: tparker002@att.net CONVERGEONE HOLDINGS: $1.11B Bank Debt Trades at 40% Discount ------------------------------------------------------------- Participations in a syndicated loan under which ConvergeOne Holdings Inc is a borrower were trading in the secondary market around 60.2 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.11 billion facility is a Term loan that is scheduled to mature on January 4, 2026. About $1.09 billion of the loan is withdrawn and outstanding. ConvergeOne Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides managed cloud, cyber security, enterprises networking, data center, application and software development, security infrastructure, and hosted collaboration solutions. CORE SCIENTIFIC: Barings Private Marks $16.7M Loan at 63% Off ------------------------------------------------------------- Barings Private Credit Corporation has marked its $16,798,000 loan extended to Core Scientific, Inc. to market at $6,299,000 or 37% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan to Core Scientific, Inc. The loan accrues interest at a rate of 13% per annum. The loan matures in March 2025. Barings Private classified the investment as non-accrual. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. About Core Scientific Core Scientific, Inc. (OTCMKTS: CORZQ) is the largest U.S. publicly-traded Bitcoin mining company in computing power. Core Scientific, which was formed following a business combination in July 2021 with blank check company XPDI, is a large-scale operator of dedicated, purpose-built facilities for digital asset mining colocation services and a provider of blockchain infrastructure, software solutions and services. Core mines Bitcoin, Ethereum and other digital assets for third-party hosting customers and for its own account at its six fully operational data centers in North Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core was formed following a business combination in July 2021 with XPDI, a blank check company. In July 2022, one of the Company's largest customers, Celsius Mining LLC, filed for Chapter 11 bankruptcy in New York. With low Bitcoin prices depressing mining revenue to a record low, Core Scientific first warned in October 2022 that it may have to file for bankruptcy if the company can't find more funding to repay its debt that amounts to over $1 billion. Core Scientific did not make payments that came due in late October and early November 2022 with respect to several of its equipment and other financings, including its two bridge promissory notes. Core Scientific and its affiliates filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-90341) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific had total assets of US$1.4 billion and total liabilities of US$1.3 billion. Judge David R. Jones oversees the cases. The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT Partners, LP as investment banker; and AlixPartners, LLP as financial advisor. Stretto is the claims agent. A group of Core Scientific convertible bondholders is working with restructuring lawyers at Paul Hastings. B. Riley Commercial Capital, LLC, as administrative agent under the Replacement DIP facility, is represented by Choate, Hall & Stewart, LLP. On Jan. 9, 2023, the U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Willkie Farr & Gallagher, LLP as legal counsel and Ducera Partners, LLC as investment banker. CROWN FINANCE: EUR607M Bank Debt Trades at 87% Discount ------------------------------------------------------- Participations in a syndicated loan under which Crown Finance US Inc is a borrower were trading in the secondary market around 13.1 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The EUR607.6 million facility is a Term loan that is scheduled to mature on February 28, 2025. About EUR176.9 million of the loan is withdrawn and outstanding. Crown Finance US, Inc. operates as a movie theater. CURITEC LLC: In Chapter 11 After CMS Suspension ----------------------------------------------- Curitec LLC filed for chapter 11 protection in the Southern District of Texas. Based out of its Texas headquarters, the Debtor provides wound management solutions to post-acute and long-term care patients, who are predominantly elderly, high risk, high acuity, and fragile. The Debtor does this by delivering wound care products as well as ostomy, urological, and tracheostomy supplies to facilities and by providing direct education to patients and/or their caregivers. For the Debtor's most recent fiscal year, which ended on Dec. 31, 2022, the Debtor's annual revenue was, on a cash basis $26,926,497 and on an accrual basis $36,768,351 with 90% from Medicare Part B and 10% from Managed Care Plans. The Debtor owns no real estate and only owns personal property in the form of equipment, supplies, and intangible assets, such as accounts receivable, digital electronic records, and deposit accounts. Until the days and weeks shortly before the Petition Date, the Debtor has been a profitable business, in addition to providing high-quality goods and services to patients. The Debtor’s financial distress is directly attributable to an unforeseen and unexplained decision by the Centers for Medicare & Medicaid Services ("CMS") to suspend Medicare payments to the Debtor pursuant to a letter dated February 8, 2023. As set forth in the Suspension Letter, CMS made the decision to suspend payments based on what it determined are credible allegations of fraud and identified $4,760.24 of claims over a multi-month period in 2020 for which CMS alleges "[t]he documentation did not support that the wounds met the criteria for a qualifying wound as per Local Coverage Article." The Debtor has since received notice of an audit from a recovery audit contract for Medicare to identify overpayments. The Debtor has requested additional information from CMS regarding the allegations but none has been provided. Thus, the Debtor's business has effectively been ground to a halt, delivery of health care to patients -- who are predominantly elderly, high acuity, or fragile -- threatened, and employment jeopardized based on allegations of a lack of proper documentation for payments representing less than 0.00013% of the Debtor's annualized revenue. In the meantime, based on the Debtor's books and records as of the date of February 28, 2023, (A) a total of about $2 million in claims submitted to Medicare are due and owing and have not been paid; (B) there are about $2 million in submitted claims that Medicare has not yet processed; and (C) the Debtor is in the process of submitting to Medicare at least 12,049 claims for services that total about $11.5 million. These claim amounts are expected to increase as the Debtor's business continues to generate sales and accounts receivable. Receipts from these claims are necessary for the Debtor’s business operations -- but the Debtor does not know when or if it will receive such receipts. Absent relief from the Bankruptcy Court, Curitec is expected to run out of money in less than a month. Should that occur, Curitec will be out of business, all of its employees will lose their jobs, and 12,099 patients will lose access to life-saving products and services, including the 50% of its patients located in rural areas who may not have other readily-available treatment options. As things currently stand, Curitec has already reduced its staff by 10% to manage cash. Prior to filing bankruptcy, the Debtor sought to address the Suspension Letter directly. On Feb. 10, 2023, the Debtor issued a Freedom of Information Act request for information related to the Suspension Notice. To date, the Debtor has not received any information in response to the FOIA Request. On Feb. 17, 2023, health care regulatory counsel for Curitec contacted legal counsel for Qlarant, a Unified Program Integrity Contractor ("UPIC") appointed by CMS to detect, prevent, and deter fraud and abuse in the Medicare program. Qlarant's legal counsel was unable to discuss the suspension. The Debtor has timely filed a rebuttal to the Suspension Letter on March 1, 2023. The Rebuttal addresses the allegations in the Suspension Letter and seeks to have the suspension reversed so that Medicare payments can resume. To date, no action has been taken on the Rebuttal, and Medicare payments have not been received since the issuance of the Suspension Letter. Without the ability to obtain immediate relief from CMS, the Debtor has filed a chapter 11 case in order to seek the protection of the automatic stay pending resolution of its disputes with CMS in addition to achieving other debt restructuring objectives. Consequently, the Debtor anticipates that it will file a chapter 11 plan providing repayment to creditors in an amount that will be dependent upon resolution of its disputes with CMS. According to court filings, Curitec estimates between $1 million and $10 million in debt owed to 200 to 999 creditors. The petition states that funds will not be available to unsecured creditors. About Curitec LLC Curitec LLC -- https://curitec.com/ -- is a Medicare accredited Part B provider of durable medical supplies (DMEPOS). Its services include the delivery of advanced wound care products as well as ostomy, urological, and tracheostomy supplies to long term care facilities and hospice. Curitec LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90108) on March 3, 2023. In the petition filed by Nicholas Percival as manager and chief operating officer, the Debtor reported assets and liabilities between $1 million and $10 million each. The case is overseen by Honorable Bankruptcy Judge Christopher M. Lopez. The Debtor is represented by: Casey William Doherty, Jr, Esq. Dentons US LLP 24 Waterway Ave. STE 755 The Woodlands, TX 77380 Tel: 1-713-658-4643 Email: Casey.Doherty@dentons.com DIRECT TRAVEL: Barings Private Marks $5.5M Loan at 21% Off ---------------------------------------------------------- Barings Private Credit Corporation has marked its $5,591,000 loan extended to Direct Travel, Inc to market at $4,417,000 or 79% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan to Direct Travel, Inc. The loan accrues interest at a rate of 2% (LIBOR + 1.0%, 7.5% Payment In Kind) per annum. The loan matures n October 2023. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Direct Travel, Inc. operates as a travel management company. The Company offers corporate travel, meetings and events, and leisure services. ELEVATE TEXTILES: $125M Bank Debt Trades at 88% Discount -------------------------------------------------------- Participations in a syndicated loan under which Elevate Textiles Inc is a borrower were trading in the secondary market around 12.4 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $125 million facility is a Term loan that is scheduled to mature on May 1, 2025. The amount is fully drawn and outstanding. Elevate Textiles, Inc. manufactures and supplies textile products worldwide. ENVISION HEALTHCARE: $1B Bank Debt Trades at 81% Discount --------------------------------------------------------- Participations in a syndicated loan under which Envision Healthcare Corp is a borrower were trading in the secondary market around 18.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $1 billion facility is a Term loan that is scheduled to mature on March 31, 2027. The amount is fully drawn and outstandig. Envision Healthcare Corporation provides health care services. The Hospital offers surgery, pharmacy, medical imaging, emergency care, and other related health care services. Envision Healthcare serves patients in the United States. ENVISION HEALTHCARE: $5.45B Bank Debt Trades at 79% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Envision Healthcare Corp is a borrower were trading in the secondary market around 21.2 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $5.45 billion facility is a Term loan that is scheduled to mature on October 10, 2025. About $3.73 billion of the loan is withdrawn and outstanding. Envision Healthcare Corporation provides health care services. The Hospital offers surgery, pharmacy, medical imaging, emergency care, and other related health care services. Envision Healthcare serves patients in the United States. EQUINOX HOLDINGS: $150M Bank Debt Trades at 16% Discount -------------------------------------------------------- Participations in a syndicated loan under which Equinox Holdings Inc is a borrower were trading in the secondary market around 84.1 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $150 million facility is a Term loan that is scheduled to mature on March 8, 2024. The amount is fully drawn and outstanding. Equinox Holdings Inc., through its subsidiaries, provides fitness services such as yoga classes and studio cycling. EYECARE PARTNERS: $750M Bank Debt Trades at 16% Discount -------------------------------------------------------- Participations in a syndicated loan under which Eyecare Partners LLC is a borrower were trading in the secondary market around 83.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $750 million facility is a Term loan that is scheduled to mature on February 20, 2027. The amount is fully drawn and outstanding. EyeCare Partners, LLC, headquartered in St. Louis, Missouri, is a medically-focused eye care services provider. EyeCare Partners is vertically integrated, providing optometry, ophthalmology and retail products. FAAVEE LLC: Taps Watters International as Realtor ------------------------------------------------- Faavee, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Watters International Realty. The Debtor requires a realtor to market and sell its real property located at 2302 Vanderbilt Circle, Austin, Texas. The firm will be paid a commission of 7 percent of the sales price. Jennifer Vanessa Rodarte, a partner at Watters International Realty, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jennifer Vanessa Rodarte Watters International Realty 8240 N. Mopac Austin, TX 78759 Tel: (512) 298-4010 About Faavee LLC Faavee, LLC is the owner in fee simple title of eight properties in Texas, with an aggregate current value of $2.84 million. The company is based in Buda, Texas. Faavee filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 22-10870) on Dec. 30, 2022, with $2,849,500 in assets and $1,939,105 in liabilities. Alfredo Garza, sole member of Faavee, LLC, signed the petition. Judge Tony M. Davis oversees the case. Stephen W. Sather, Esq., at Barron & Newburger, PC serves as the Debtor's legal counsel. FENIX GROUP: Gets OK to Hire Silver Law as Special Counsel ---------------------------------------------------------- Fenix Group, LLC received approval from the U.S. Bankruptcy Court for the District of Arizona to employ Silver Law, PLC as special counsel. The Debtor needs the firm's legal assistance in connection with an Internal Revenue Service collection matter. The firm will be paid at these rates: Stephen Silver $650 per hour Jason Silver $425 per hour Chris Sheldon $425 per hour Suzanne Warren $400 per hour Paralegal $75 to $200 per hour The firm received from the Debtors a fee deposit of $5,000. Jason Silver, Esq., a partner at Silver Law, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jason M. Silver, Esq. Silver Law PLC 7033 E Greenway Pkwy # 200 Scottsdale, AZ 85254 Tel: (480) 429-3360 About Fenix Group Fenix Group, LLC provides services to children and adults with developmental disabilities. These include a day program (two locations), group supported employment, transportation, after school and summer programs for children, and adult development homes programs. They are funded through the State of Arizona Division of Development Disabilities. Fenix Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-00155) on Jan. 11, 2023, with up to $50,000 in assets and up to $500,000 in liabilities. Ron Tilley, a Fenix Group member and manager, signed the petition. Judge Madeleine C. Wanslee oversees the case. The Debtor tapped D. Lamar Hawkins, Esq., at Guidant Law, PLC as bankruptcy counsel; Silver Law, PLC as special counsel; and Richard F. Avellone, LLC as accountant. FREE SPEECH: Sandy Hook Families Sue Jones Over Debt Discharge -------------------------------------------------------------- Leslie A. Pappas of Law360 reports that families suing bankrupt right-wing radio host Alex Jones have filed two adversary complaints in his Chapter 11 case, seeking a court declaration that $1.5 billion in defamation judgments against him and his media company cannot be discharged in bankruptcy because the debts were incurred willfully and maliciously. The cases are: * In re David Wheeler, Francine Wheeler, Jacqueline Barden, Mark Barden, Nicole Hockley, Ian Hockley, Jennifer Hensel, Donna Soto, Carlee Soto-Parisi, Carlos M. Soto, Jillian Soto Marino, William Aldenberg, William Sherlach, Robert Parker, Richard M. Coan vs. Alexander E. Jones, and Free Speech Systems, LLC, Adv. Pro. No. 23-03037. * In re Neil Heslin, Scarlett Lewis, Leonard Pozner, Veronique De La Rosa, Estate of Marcel Fontaine vs. Alexander E. Jones, and Free Speech Systems, LLC, Adv. Pro. No. 23-03035. About Free Speech Systems Free Speech Systems LLC is a broadcast media production and distribution company that provides broadcasting aural programs by radio to the public. Free Speech Systems is a family-run business founded by Alex Jones. FSS is presently engaged in the business of producing and syndicating Jones' radio and video talk shows and selling products targeted to Jones' loyal fan base via the Internet. Today, FSS produces Alex Jones' syndicated news/talk show (The Alex Jones Show) from Austin, Texas, which airs via the Genesis Communications Network on over 100 radio stations across the United States and via the internet through websites including Infowars.com. Due to the content of Alex Jones' shows, Jones and FSS have faced an all-out ban of Infowars from mainstream online spaces. Shunning from financial institutions and banning Jones and FSS from major tech companies began in 2018. Conspiracy theorist Alex Jones has been sued by victims' family members over Jones' lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet TV, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April 18, 2022. The Debtors agreed to the dismissal of the Chapter 11 cases in June 2022 after the Sandy Hook victim families dismissed the three bankrupt companies from their lawsuits. Free Speech Systems filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on July 29, 2022. In the petition filed by W. Marc Schwartz, as chief restructuring officer, the Debtor reported assets and liabilities between $50 million and $100 million. Melissa A Haselden has been appointed as Subchapter V trustee. Alexander E. Jones filed for personal bankruptcy under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on Dec. 2, 2022, listing $1 million to $10 million in assets against liabilities of $1 billion to $10 billion in liabilities. Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC, is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C., led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan, and Antonio Ortiz are representing Alex Jones. FTX GROUP: Judge Worried About SBF's 'Inventive' Bail Workarounds ----------------------------------------------------------------- Rachel Scharf of Law360 reports that a Manhattan federal judge appeared unsatisfied Friday, March 10, 2023, with a proposed solution to disgraced FTX founder Sam Bankman-Fried's conduct while out on bail, saying the "very inventive and technologically savvy" defendant could still find ways to communicate with potential witnesses. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. FTX TRADING: Asks for Six More Months to File Plan -------------------------------------------------- Evan Ochsner of Bloomberg Law reports that FTX Trading Ltd., the defunct crypto exchange founded by Sam Bankman-Fried, wants six more months to propose a Chapter 11 reorganization plan, saying it needs the additional time to continue sorting out its finances following its downfall last 2022. The company is asking to have until September 7, 2023 to propose how it will reorganize, after its initial exclusive period to file a plan was set to expire March 11, 2023, according to a motion filed Friday in the US Bankruptcy Court for the District of Delaware. If FTX loses exclusivity, other parties, like FTX account holders, could submit their own plan . About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10 showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. GEOSTELLAR INC: Trustee's Motion to Dismiss Appeal Denied in Part ----------------------------------------------------------------- David Andrew Levine, Appellant, v. Martin P. Sheehan, Trustee of the Bankruptcy Estate of Geostellar, Inc., Appellee, Civil Action No. 3:22-CV-60 (GROH), (N.D.W. Va.), District Judge Gina M. Groh for the Northern District of West Virginia denies in part the motion to dismiss appeal filed by the Martin P. Sheehan, Trustee of the Bankruptcy Estate of Geostellar, Inc. The Trustee initiated an adversary proceeding, ancillary to Geostellar's bankruptcy proceeding, against the David A. Levine and Indeco Union -- which underlies the instant appeal before this Court. In the adversary proceeding below, Levine filed a Motion to Dismiss and Motion to Compel Arbitration. The Bankruptcy Court entered a Memorandum Opinion and Order holding that the Trustee's amended complaint was not subject to either arbitration or dismissal. Levine timely filed his Notice of Appeal. In the Motion to Dismiss Appeal, the Trustee argues that this Court lacks jurisdiction over this matter on appeal. First, the Trustee asserts that the bankruptcy court's order is not final, so it is not appealable. Next, the Appellee explains that the bankruptcy court's order does not implicate 11 U.S.C. Section 1121(d), so the order is not appealable to this Court under subsection (2). The Court holds that the underlying denial of the Trustee's motion to dismiss constitutes an interlocutory order that is not immediately appealable. Accordingly, the Court is without jurisdiction to review the bankruptcy court's denial of dismissal. On the other hand, Levine avers that this appeal is properly before this Court pursuant to the Federal Arbitration Act, which provides that "an appeal may be taken from an order. . . denying an application under section 206 of this title to compel arbitration." The Court finds and concludes that it does have jurisdiction to hear the appeal raised herein by Levine, pursuant to the FAA. Because the parties have already briefed this appeal and included argument pertaining to the bankruptcy court's denial of dismissal for failure to state a claim, the Court will simply limit its forthcoming ruling on appeal to the issue of compulsory arbitration. A full-text copy of the Memorandum Opinion and Order dated March 15, 2023 is available at https://tinyurl.com/4j9ayzt9 from Leagle.com. About Geostellar Inc. Geostellar, Inc., provides big-data geomatics solutions to make solar energy accessible. The company was founded in 2010 and is headquartered in Martinsburg, West Virginia. Geostellar sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. W.Va. Case No. 18-00045) on Jan. 29, 2018. In the petition signed by Howard Teich, president, the Debtor estimated assets of less than $500,000 and liabilities of $1 million to $10 million. Bernstein-Burkley, P.C., is the Debtor's legal counsel. GIRARDI & KEESE: Probe Shows Corrupt California State Bar --------------------------------------------------------- Joyce E. Cutler of Bloomberg Law reports that California's mandatory-membership state bar faces increased criticism and scrutiny in the wake of a pair of independent reports detailing how the now-disbarred and indicted plaintiffs' attorney Thomas Girardi infiltrated and corrupted an agency that was supposed to be protecting the public from people like him. The redacted reports released Friday paint a picture of a state regulator compromised by workers, allegedly influenced by Girardi’s bestowal of gifts, who blocked and buried complaints against the famed attorney and his now-bankrupt Girardi Keese law firm. The white papers likely precede even more uncomfortable hours for bar executives before legislative leaders and jurists. What the reports show "is that the Bar was systematically bought off by a mafioso like lawyer," Carol Langford, a University of San Francisco adjunct law professor who defends attorneys before the bar, said in a Friday email. "What makes it sickening is the Bar itself—the ruling body -- was self serving and self dealing all while prosecuting solo practitioners." "Even worse, they allowed the bad players to jump out with golden parachutes and so far pay no price for their actions," Langford said. Leaders of the quarter-million member organization were slated to meet with reporters March 13, 2023, to discuss the reports, the results of separate probes conducted by the law firm of Halpern May Ybarra Gelberg LLP, and by attorney Alyse M. Lazar. At least nine former bar employees or board members had connections to Girardi or accepted items of value, travel, or meals from him while working for the bar or as board members, the Halpern May report said. Many of Girardi's relationships with bar insiders and gifts weren’t appropriately divulged as part of their conflicts-of-interest disclosures, the firm’s study said. 'Failures of this Magnitude' The reports are the latest to reveal the culture within the bar that allowed Girardi to rack up 205 disciplinary cases against him over four decades. The bar used nonpublic private reprovals, closed complaints at intake, after investigation, and before the complaints were filed to dispatch the grievances filed against the famed Southern California plaintiffs’ attorney. "Collectively, the reports provide a clear and comprehensive view of how Girardi's unethical and unacceptable behavior went unchecked for so long. What happened was wrong, and the Board of Trustees does not condone it," board Chairman Ruben Duran said in a letter to members sent after the reports were made public. Such a "failure of this magnitude" damages the public trust in the agency and the profession, Duran said. State Senate Judiciary Committee Chairman Thomas Umberg told Bloomberg Law on Friday, March 10, 2023, he found the reports "shocking in the lack of transparency and oversight and conflicts of interest that were not addressed" by the bar. Lawmakers will hold a bar oversight hearing in the coming months, which will "be an opportunity to demonstrate that they have taken the appropriate corrective action and that they've addressed the issues of accountability and transparency," Umberg said. Lazar was hired to review 115 of 130 complaints filed against Girardi from 1982 to January 2021. Forty-four raised possible client trust account issues, and 38 alleged failures to competently or diligently perform legal services, to communicate with the client, or to take appropriate actions when withdrawing from employment, according to her separate report. The remainder complained about other ethics violations including dishonesty, failing to comply with conflicts rules, violating reporting requirements of Business and Professions Code §6068(o), and interfering with other attorneys’ representation of their clients. "Girardi's fame and fortune may have impacted the decision to erroneously close" at least 19 cases when they warranted "at the very least a warning letter and in some cases pursuit of actual discipline in the State Bar Court," her report said. Nine other cases were insufficiently investigated. Girardi has been disbarred and declared incompetent. He is charged in two federal courts with wire fraud for allegedly stealing from clients, and has entered pleas of not guilty. Both Girardi Keese and Girardi individually were involuntarily forced into bankruptcy. Shared Oversight The California Supreme Court oversees licensing and discipline of lawyers while the California Legislature regulates attorneys under the Business & Professions Code. That legislative oversight includes setting licensing fees. Umberg in 2021 introduced an annual fee bill with zero licensing fees to push the agency to hire a permanent chief trial counsel. He again threatened a zero-fee bill this year. "The legislature does not have exclusive authority concerning bar oversight, but we do have the ability through a fee mechanism to provide some consumer protection," Umberg said. In a statement sent late Friday, March 10, 2023, the state's Supreme Court said separating the bar's regulatory and professional association functions and eliminating elected board members in 2018 "were important reforms designed to reduce undue influence and to better focus the agency's mission to protect the public and regulate the profession." The court said it will closely study the report and work with the bar "to consider whether the reform measures already taken by the agency are adequate to prevent similar failings in the future." Commissioning and releasing the reports "represent important steps in the State Bar's efforts to better fulfill its public protection mission by fostering a culture grounded in integrity, accountability, and transparency," Duran said in a statement. "While much has already been achieved, these investigations equip us to further strengthen governance, ethical culture, policies, and procedures." Jay Edelson, whose Chicago firm sued Girardi and Girardi Keese for fraud and racketeering, disputed the bar's claims that it's "learned its lessons and has embraced reform." The bar's spent the last three years "with a multi-pronged strategy: distract, delay, and bully," he said in an email. "This has been the totality of our experiences with them and, in our view, is the reason that attorneys who were crucial to the Girardi Keese criminal operation are still licensed attorneys who are facing no public disciplinary actions." About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com An involuntary Chapter 7 petition was also filed against Thomas Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7 trustee can be reached at: Jason M. Rund Email: trustee@srlawyers.com 840 Apollo Street, Suite 351 El Segundo, CA 90245 Telephone: (310) 640-1200 GLOBAL AVIATION: Court OKs Final Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas authorized Global Aviation Technologies LLC to use cash collateral on a final basis in accordance with the budget. The Debtor requires the use of cash collateral to fund continued operations. GAT began operating in 2002 and has operated through many ebbs and flows of the aircraft industry impacted by the U.S. economy. However, the changes to the U.S. economy from the COVID-19 pandemic, including how the Federal Aviation Authority administered its regulations, caused GAT's operations to suffer significant cash-flow issues. To address those cash-flow problems, GAT took full advantage of government-backed loan programs that were made available in connection with the Coronavirus Aid. Relief, and Economic Security Act, including the Payroll Protection Program Loan and the Economic Injury Disaster Loan. Despite obtaining the relief through the CARES Act, GAT continued to suffer cash-flow and other financial problems from a variety of factors, including changes made by the United States Department of Defense in the administration of certain programs for the maintenance of aircraft and the manufacturing of aircraft parts for the U.S. Government. To address those cash-flow issues, GAT obtained several merchant capital advance loans from various lenders, including Credibly of Arizona, LLC, Front Capital, WebBank, OKD Capital, LLC, Payroll Funding Company, LLC, and Wynwood Capital Group LLC. Conway Bank and the U.S. Small Business Administration claim lien in all assets owned by GAT. As of the Petition Date, Conway was owed approximately $3.2 million by GAT on the notes associated with Conway's lien, with approximately $2.7 million subject to a guaranty from the SBA. The SBA may claim a separate security interest in GAT's assets as a result of the EIDL that GAT obtained in November 2021. The balance due on the SBA's EIDL is approximately $2 million. Additionally, the MC Lenders claim liens on all GAT's assets and specifically GAT's account receivables. On the Petition Date, the MC Lenders are owed: Lender Amount Owed ------ ----------- Credibly $273,906 Front $176,800 WebBank (2 loans) $191,980 OnDeck $292,632 PFC $138,370 Wynwood $127,765 ----------- Total $1,201,000 To the best of GAT's knowledge, there are no other lien claimants who assert rights in cash collateral. As of the filing date, GAT claims the value of its assets totals $4.850 million, including: $2,258,000 value of inventory $570,000 value of accounts receivable $9,652 balance in its operating account with Conway $43,386 balance in its operating account with Fidelity Bank The total value of the Cash Collateral claimed by GAT is $2.9 million. Conway and the SBA are the only parties with an interest in cash collateral as the lien Conway and the SBA maintain on GAT's cash collateral and other assets is equal to or exceeds the value of GAT's assets. The MC Lenders' potential interest in cash collateral is wholly unsecured. These events constitute an "Event of Default": 1) The failure to make any adequate protection payments to Conway as set out on the Budget; 2) Expenditures in excess of the Budget with the variances as specified in the Motion; 3) Expenditures not included in the Budget and not otherwise approved by Conway and the SBA in writing; 4) Incurrence after the Petition Date of credit or indebtedness that is (i) secured by a security interest, mortgage, or other lien on all or any portion of Conway's and the SBA's Collateral which is equal or senior to any security interest or other lien of Conway or the SBA, or (ii) entitled to priority administrative status which is equal or senior to that granted to Conway, the SBA, or both; 5) Entry of a Court order, other than the Interim Cash Collateral Order, granting relief from or modifying the automatic stay 11 U.S.C. Section 362 (i) to allow any creditor to execute upon or enforce a lien on or security interest in any cash collateral, or (ii) with respect to any lien of or the granting of any lien on any cash collateral to any state or local environmental or regulatory agency or authority, which in either case would have a material adverse effect on the business, operations, property, assets, or condition, financial or otherwise, of GAT; 6) Dismissal of the case or conversion of the case to Chapter 7 case, or appointment of a Chapter 11 trustee or examiner with enlarged powers or other responsible person; 7) Upon written notice from Conway or the SBA of any material misrepresentation of a material fact made after the Petition Date by GAT about its financial condition, the nature, extent, location or quality of any Collateral, or the disposition or use of any Collateral, including cash collateral; 8) The sale after the Petition Date of any portion of any of GAT's assets outside the ordinary course of its business unless otherwise approved by GAT in writing or by the Bankruptcy Court; 9) The failure of GAT to keep Conway's and the SBA's Collateral insured against casualty loss, naming Conway or the SBA as loss payee: 10) The failure by GAT to perform, after notice from Conway, the SBA, or both, in any respect, any of the material terms, provisions, conditions, covenants, or obligations under the Interim Order; and 11) The failure by GAT to perform, after notice from Conway, the SBA, or both, in any respect, any of the terms, provisions, conditions, covenants, or obligations under Conway's and the SBA's loan documents, excluding the terms, provisions, conditions, covenants, or obligations under any personal guaranty by the owners of GAT maintained by Conway or the SBA. In addition to the adequate protection payments specified in the Budget of $15,500 a month, Conway and the SBA will receive an additional and replacement security interests interests and liens, in the same priority as existed pre-petition, in and upon all of the pre-petition collateral and all of the Debtor's now-owned and after-acquired assets and rights of any kind or nature. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3JN6tvu from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $193,481 for March 2023; $193,481 for April 2023; $193,481 for May 2023; $193,481 for June 2023; $193,481 for July 2023; and $193,481 for August 2023. About Global Aviation Technologies LLC Global Aviation Technologies LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 23-10111) on February 20, 2023. In the petition signed by Candace Cottner, managing member/director of finance, the Debtor disclosed up to $500,000 in assets and up to $50 million in liabilities. Judge Mitchell L. Herren oversees the case. Nicholas R. Grillot, Esq., at Hinkle Law Firm LLC, represents the Debtor as legal counsel. GOBO LTD: Files for Chapter 11 to Stop Foreclosure -------------------------------------------------- Gobo Ltd. filed for chapter 11 protection in the Southern District of Ohio. The Debtor, a single asset real estate as that term is defined in section 101(51B) of the Bankruptcy Code, is an Ohio limited liability company which owns and operates real estate generally known as 4000 Horizons Drive, Columbus, Ohio 43220. The Debtor is owned by Donald A. Lee and his wife Cheryl B. Lee. The Debtor experienced financial hardship due to multiple factors, primarily the COVID-19 pandemic which resulted the Debtor's primary tenant, Horizons Video & Film Inc., also owned by Mr. Lee, failing to pay rent. When the Debtor fell behind in its payments to secured creditor The Huntington National Bank, the Bank commenced a foreclosure action in Franklin County Common Pleas Court, Case No. 21 CV 6710. The Debtor filed a Chapter 11 case to stop the sale of the property in the Foreclosure Action. The Debtor has a new lease for the Property which will enable the Debtor to provide adequate protection to the Secured Creditor. The Debtor is seeking to restructure through the filing of this chapter 11 proceeding and intends to submit a plan of reorganization. According to court filings, Gobo Ltd. 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 Gobo Ltd. Gobo Ltd. is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Gobo Ltd. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Case No. 23-50619) on March 1, 2023. In the petition filed by Don A. Lee, president, the Debtor reported assets and liabilities between $1 million and $10 million. The case is overseen by Honorable Bankruptcy Judge Mina Nami Khorrami. The Debtor is represented by: Myron N Terlecky, Esq. 4000 Horizons Dr. Columbus, OH 43220 Tel: 614-228-6345 Fax: 614-228-6369 GOBO LTD: Seeks Cash Collateral Access -------------------------------------- Gobo, Ltd. asks the U.S. Bankruptcy Court for the Southern District of Ohio, Eastern Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to continue to operate its business. The Huntington National Bank asserts a security interest in the Debtor's cash collateral. The Debtor experienced financial hardship due to multiple factors, primarily the COVID-19 pandemic which resulted in the Debtor's primary tenant, Horizons Video & Film Inc., also owned by Donald Lee, failing to pay rent. When the Debtor fell behind in its payments to the bank, the Secured Creditor commenced a foreclosure action in Franklin County Common Pleas Court, Case No. 21 CV 6710 . The Debtor filed its bankruptcy petition to stop the sale of the property in the Foreclosure Action. The Debtor has a new lease for the Property that will enable the Debtor to provide adequate protection to the Secured Creditor. The Debtor executed a promissory note in 2011 in the original amount of $2.550 million and granted the Secured Creditor a mortgage in connection with that loan. The Debtor also executed a commercial guaranty and granted the Secured Creditor a second mortgage in the amount of $350,000 in connection with that obligation. The Debtor will provide adequate protection to the Secured Creditor with respect to its interests in the cash collateral, by (i) re-granting post-petition liens to the Secured Creditor to the same extent, amount, and priority as its respective pre-petition security interests, if any, in cash collateral in existence on the Petition Date, without the necessity of the re-filing of any UCC Financing Statement or other documents; (ii) using cash collateral only in accordance with the Budget; (iii) making monthly payments in an amount equal to the interest at the applicable nondefault contract rate of interest on the Secured Creditor's claim; and (iv) providing the other protections described in the Proposed Order. A copy of the motion is available at https://bit.ly/3ZTCveP from PacerMonitor.com. About Gobo, Ltd. Gobo, Ltd. is an Ohio limited liability company which owns and operates real estate generally known as 4000 Horizons Drive, Columbus, Ohio 43220 . It is owned by Donald A. Lee and his wife Cheryl B. Lee. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 23-50619) on March 1, 2023. In the petition signed by Donald A. Lee, as president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Mina Nami Khorrami oversees the case. Myron N. Terlecky, Esq., at Strip Hoppers Leithart McGrath and Terlecky Co., LPA, represents the Debtor as legal counsel. GOLDEN ENTERTAINMENT: S&P Places 'B+' ICR on CreditWatch Positive ----------------------------------------------------------------- S&P Global Ratings placed all its ratings on Nevada-based gaming operator Golden Entertainment Inc., including its 'B+' issuer credit rating on the company, on CreditWatch with positive implications. S&P said, "We will resolve the CreditWatch placement when the company successfully closes the Rocky Gap sale, estimated toward the end of the second quarter pending regulatory approvals, and completes its intended debt reduction. Before resolving the CreditWatch, we would also expect the company to address its 2024 debt maturities." The CreditWatch placement follows Golden's stated intent to use the majority of the $260 million Rocky Gap sale proceeds to further reduce debt, and the possibility of additional debt reduction from its distributed gaming sale later this year. Golden expects to receive approximately $620 million of gross proceeds from these two asset sales, which should allow for significant debt deleveraging if it uses the majority of the net proceeds to repay debt. Golden is selling these businesses at a roughly 9x multiple of 2022 EBITDA. The company's stated intent to use asset sale proceeds for debt repayment follows Golden's recent track record of reducing debt; since the second quarter of 2021, it has repaid $197 million of term loan debt and also repurchased $40 million of senior unsecured notes on the open market. The company's S&P Global Ratings-adjusted debt leverage was 3.4x at the end of 2022, relatively flat with credit measures at the end of 2021 despite a 7% adjusted EBITDA decline. S&P said, "We had previously forecast adjusted debt leverage of about 4x at the end of 2022 because we assumed a steeper 10%-15% decline in EBITDA. However, voluntary debt repayment coupled with a lower EBITDA decline led to better-than-expected credit measures at the end of 2022. Furthermore, the company has a publicly stated financial policy to maintain net debt leverages below 3x, which we believe could be aligned with a higher rating. We estimate our adjustments add roughly 0.5x to Golden's financial policy measure, primarily because we do not net cash." S&P said, "Lower leverage should offset reduced scale and diversity following the asset sales. Pro forma the divestures and our expectation for substantial debt reduction, we are forecasting adjusted debt leverage to be in the low-2x area in 2024, which we believe should provide sufficient cushion to absorb potential increased earnings volatility given Golden will have a smaller, more concentrated EBITDA base solely in Nevada." The Rocky Gap casino and the Distributed Gaming business generated about $66 million of EBITDA in 2022, representing about 25% of the company's total EBITDA. Golden's 2022 revenue grew about 2% compared with 2021, which was a remarkably strong year coming out of the pandemic across regional gaming. However, adjusted EBITDA margins declined about 300 basis points year over year to about 28% due to higher labor costs and cost of goods that were affected by inflation pressure. Still, adjusted EBITDA margins were about 600 basis points higher than 2019 pre-pandemic levels as the company maintained most operating efficiencies it put in place. Pro forma for the sale of Rocky Gap and the much lower margin distributed gaming business, S&P's expect 2024 EBITDA margins could increase to the mid-30% area. S&P said, "We will resolve the CreditWatch after the company closes the Rocky Gap transaction and completes its intended debt reduction. We would also expect the company to address its 2024 credit facility maturity before, or in conjunction with, resolving the CreditWatch. If an upgrade were the outcome of our review, it would likely be limited to one notch." ESG credit indicators: E-2, S-3, G-2 HEALTHCHANNELS INTERMEDIATE: Bank Debt Trades at 39% Discount ------------------------------------------------------------- Participations in a syndicated loan under which Healthchannels Intermediate Holdco LLC is a borrower were trading in the secondary market around 61.1 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $385 million facility is a Term loan that is scheduled to mature on April 3, 2025. The amount is fully drawn and outstanding. Headquartered in Fort Lauderdale, Fla., HealthChannels provides medical scribing services to hospitals and physician staffing companies. HealthChannels is majority-owned by private equity firm Vesey Street Capital Partners, LLC. HEXION INC: $425M Bank Debt Trades at 16% Discount -------------------------------------------------- Participations in a syndicated loan under which Hexion Inc is a borrower were trading in the secondary market around 83.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $425 million facility is a Term loan that is scheduled to mature on March 15, 2030. The amount is fully drawn and outstanding. Hexion Inc. or Hexion is a chemical company based in Columbus, Ohio. It produces thermoset resins and related technologies and specialty products. Hexion is organized into two divisions: the Epoxy, Phenolic and Coating Resins Division, and the Forest Products Division. HIE HOLDINGS: Trustee Taps Gigaisland as IT Consultant ------------------------------------------------------ Elizabeth Kane, the Chapter 11 trustee for HIE Holdings, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Hawaii to employ Gigaisland, LLC as information technology consultant. The trustee requires the services of the firm for the administration of the Debtor's assets, including the transfer, storage and use of the Debtor's electronic data. The firm will be paid at the rate of $160 per hour. As disclosed in court filings, Gigaisland is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Laine Kohama Gigaisland LLC 2300 Ana Niu PI Honolulu, HI 96821 Tel: (808) 673-4747 Email: info@gigaisland.com About Hie Holdings HIE Holdings, Inc. is the parent entity of Royal Hawaiian Water Co., Ltd., and Hawaiian Isles Kona Coffee Company, Ltd. HIE Holdings is, in turn, owned by Michael Boulware, Julie Boulware and the Glenn Boulware Trust. Royal Hawaiian, doing business as Hawaiian Isles Water Company, operates a water bottling facility in Halawa, Oahu, while Hawaiian Isles Kona Coffee, doing business as Hawaii Coffee Roasters, distributes coffee. Royal Hawaiian sought for Chapter 11 bankruptcy protection (Bankr. D. Hawaii Case No. 22-00524) on July 30, 2022; HIE Holdings (Bankr. D. Hawaii Case No. 22-00534) on Aug. 3, 2022; and Hawaiian Isles Kona Coffee (Case No. 22-00546) on Aug. 5, 2022. The cases are jointly administered under Case No. 22-00534. At the time of the filing, each of the Debtors reported assets between $1 million and $10 million and liabilities between $1 million and $10 million. Judge Robert J. Faris oversees the cases. Chuck C. Choi, Esq., at Choi & Ito and KDL CPAs, LLC serve as the Debtors' legal counsel and accountant, respectively. Elizabeth A. Kane, the Chapter 11 trustee appointed in the Debtor's case, is represented by Pettit Law Hawai'i, LLLC. HORNBLOWER SUB: $349M Bank Debt Trades at 40% Discount ------------------------------------------------------ Participations in a syndicated loan under which Hornblower Sub LLC is a borrower were trading in the secondary market around 60.4 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $349.4 million facility is a Payment in kind Term loan that is scheduled to mature on April 27, 2025. The amount is fully drawn and outstanding. Hornblower Sub, LLC is a charter yacht and public dining cruise operator. IEH AUTO PARTS: Seeks to Hire Jackson Walker as Legal Counsel ------------------------------------------------------------- IEH Auto Parts Holding LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Jackson Walker, LLP as their legal counsel. The Debtors require legal counsel to: a. give advice with respect to the powers and duties of the Debtors in the continued management and operation of their business and property; b. advise and consult on the conduct of the Debtors' Chapter 11 cases, including all of the legal and administrative requirement of operating in Chapter 11; c. attend meetings and negotiating with representatives of creditors and other parties in interest; d. take all necessary actions to protect and preserve the Debtors' estate, including prosecuting actions on the Debtors' behalf, defending actions commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which they are involved, including objections to claims filed against the estate; e. prepare pleadings; f. represent the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the bankruptcy court and any appellate courts; i. advise the Debtors regarding tax matters; j. take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan and all documents related thereto; and k. perform all other necessary legal services for the Debtors in connection with the prosecution of the cases, including (i) analyzing certain of the Debtors' leases and contracts and the assumption and assignment or rejection thereof; (ii) analyzing the validity of certain liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. The firm will be paid at these rates: Partners $750 to $1,045 per hour Associates $475 to $750 per hour Paraprofessionals $230 to $250 per hour The Debtors paid a retainer to the firm in the total amount of $2,774,332. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Jackson Walker disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Response: The rates of attorneys in the firm range from $475 to $1,045 an hour and the paraprofessional rates range from $230 to $250 per hour. The firm represented the Debtors during the weeks immediately before the petition date, using the foregoing hourly rates. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The firm has not prepared a budget and staffing plan. Matthew Cavenaugh, Esq., a partner at Jackson Walker, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Matthew D. Cavenaugh, Esq. Jackson Walker LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Tel: (713) 752-4200 Fax: (713) 752-4221 About IEH Auto Parts Holding IEH Auto Parts Holding LLC -- https://autoplusap.com/ -- distributes automotive products. It offers equipment, tools, accessories, paint, and related products in the automotive aftermarket. Auto Plus serves customers in the United States. IEH Auto Parts Holding and its affiliates filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90054) on Feb. 1, 2023. In the petition filed by John Michael Neyrey, as chief executive officer, the Debtors reported assets and liabilities between $100 million and $500 million. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Jackson Walker, LLP and The Law Office of Liz Freeman, PLLC as legal counsels; Lincoln International, LLC as investment banker; and Portage Point Partners, LLC as restructuring advisor. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Kane Russell Coleman Logan, PC is the committee's legal counsel. IEH AUTO PARTS: Taps Law Office of Liz Freeman as Co-Counsel ------------------------------------------------------------ IEH Auto Parts Holding, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ The Law Office of Liz Freeman, PLLC as conflicts counsel and co-counsel with Jackson Walker, LLP. The firm's services include: a. providing legal advice related to the Debtors' Chapter 11 cases as legal issues arise; b. advising the Debtors regarding insurance matters; c. advising the Debtors regarding utility issues; f. advising the Debtors in connection with any potential sale of assets; g. negotiating with representatives of creditors and other parties in interest; h. reviewing and commenting on proposed drafts of pleadings to be filed with the court; i. at the request of the Debtors, appearing in the bankruptcy court and at any meeting with the U.S. Trustee and creditors; j. providing legal advice on any matter in which Jackson Walker may have a conflict or as needed based on specialization. The firm will be paid at the rate of $750 per hour. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Elizabeth Freeman, Esq., a partner at The Law Office of Liz Freeman, disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Not applicable. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The firm has not prepared a budget and staffing plan. Ms. Freeman disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Elizabeth C. Freeman, Esq. Law Office of Liz Freeman, PLLC P.O. Box 61209 700 Smith St. Houston, TX 77208 Tel: (832) 779-3580 Email: liz@lizfreemanlaw.com About IEH Auto Parts Holding IEH Auto Parts Holding LLC -- https://autoplusap.com/ -- distributes automotive products. It offers equipment, tools, accessories, paint, and related products in the automotive aftermarket. Auto Plus serves customers in the United States. IEH Auto Parts Holding and its affiliates filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90054) on Feb. 1, 2023. In the petition filed by John Michael Neyrey, as chief executive officer, the Debtors reported assets and liabilities between $100 million and $500 million. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Jackson Walker, LLP and The Law Office of Liz Freeman, PLLC as legal counsels; Lincoln International, LLC as investment banker; and Portage Point Partners, LLC as restructuring advisor. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Kane Russell Coleman Logan, PC is the committee's legal counsel. IEH AUTO PARTS: Taps Portage Point as Restructuring Advisor ----------------------------------------------------------- IEH Auto Parts Holding, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Portage Point Partners, LLC as restructuring advisor. The firm's services include: (a) assisting in the evaluation or development of a short-term cash flow model and related liquidity management tools for the Debtors; (b) assisting in the evaluation or development of a business plan and related forecasts and analyses; (c) assisting in the evaluation or development of various operational performance improvement analyses and forecasts; (d) assisting in the evaluation and development of various strategic and financial alternatives and analyses; (e) assisting the Debtors in their engagement and negotiations with various constituents; (f) assisting in the development and distribution of other information that may be required by the Debtor or their constituents; (g) assisting in the evaluation and implementation of contingency planning related to Debtor's commencing or otherwise becoming the subject of a case under Chapter 11; (h) assisting in obtaining and presenting information required by parties in interest, including sitting for depositions and testifying as may be required; (i) assisting in the preparation of other business, financial and reporting items related to the Debtors' Chapter 11 cases, including, but not limited to, the development and execution of asset sales for some or all of the Debtors' assets, and a Chapter 11 plan of reorganization or liquidation for the Debtors; and (j) other necessary restructuring advisory services. The firm will be paid at these rates: Managing Partner $975 per hour Managing Director $800 to $875 per hour Director $650 to $725 per hour Vice President $525 to $625 per hour Associate $395 to 435 per hour The Debtors paid classic retainer payments to the firm totaling $1.715 million in the 90 days prior to the petition date. Mark Berger, a managing director at Portage Point Partners, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Mark Berger Portage Point Partners, LLC 300 North LaSalle, Suite 1420 Chicago, IL 60654 Tel: (312) 781-7520 Email: mberger@pppllc.com About IEH Auto Parts Holding IEH Auto Parts Holding LLC -- https://autoplusap.com/ -- distributes automotive products. It offers equipment, tools, accessories, paint, and related products in the automotive aftermarket. Auto Plus serves customers in the United States. IEH Auto Parts Holding and its affiliates filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90054) on Feb. 1, 2023. In the petition filed by John Michael Neyrey, as chief executive officer, the Debtors reported assets and liabilities between $100 million and $500 million. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Jackson Walker, LLP and The Law Office of Liz Freeman, PLLC as legal counsels; Lincoln International, LLC as investment banker; and Portage Point Partners, LLC as restructuring advisor. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Kane Russell Coleman Logan, PC is the committee's legal counsel. INDRA HOLDINGS: $50M Bank Debt Trades at 54% Discount ----------------------------------------------------- Participations in a syndicated loan under which Indra Holdings Corp is a borrower were trading in the secondary market around 45.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $50 million facility is a Term loan that is scheduled to mature on December 23, 2024. The amount is fully drawn and outstanding. Indra Holdings Corp was founded in 2014. The company's line of business includes holding or owning securities of companies other than banks. ISAGENIX INTERNATIONAL: $375M Bank Debt Trades at 62% Discount -------------------------------------------------------------- Participations in a syndicated loan under which Isagenix International LLC is a borrower were trading in the secondary market around 38.2 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $375 million facility is a Term loan that is scheduled to mature on June 14, 2025. About $295.3 million of the loan is withdrawn and outstanding. Isagenix International LLC is a privately held multi-level marketing company that sells dietary supplements and personal care products. The company, based in Gilbert, Arizona, was founded in 2002 by John Anderson, Jim Cover, and Kathy Cover. ITI INTERMODAL: Barings Private Marks $6,000 Loan at 17% Off ------------------------------------------------------------ Barings Private Credit Corporation has marked its $6,000 loan extended to ITI Intermodal, Inc to market at $5,000 or 83% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan- Revolver to ITI Intermodal, Inc. The loan accrues interest at a rate of 9.1% (LIBOR+4.75%) per annum. The loan matures in December 2027. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. ITI Intermodal is an intermodal storage, equipment maintenance, and repair service provider. IVANTI SOFTWARE: $1.75B Bank Debt Trades at 16% Discount -------------------------------------------------------- Participations in a syndicated loan under which Ivanti Software Inc is a borrower were trading in the secondary market around 83.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.75 billion facility is a Term loan that is scheduled to mature on December 1, 2027. About $1.73 billion of the loan is withdrawn and outstanding. Ivanti Software, Inc. provides information technology services. The Company offers IT asset management, security, endpoint, and supply chain solutions. JDI DATA: Court OKs Cash Collateral Access Thru April ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, authorized JDi Data Corporation to use cash collateral on an interim basis in accordance with the budget, however, the Debtor is not authorized to disburse the proposed payments to the U.S. Small Business Administration. As previously reported by the Troubled Company Reporter, the Debtor requires the use of cash collateral to: a. pay its secured creditor, the U.S. Small Business Administration, its monthly debt payment which payment amount is unknows as the first payment for the SBA loan is coming due. The SBA Loan was for $1.8 million. The SBA has a UCC-1 recorded in the Secured Transaction Registry in Florida, which is the State of Incorporation for the Debtor; b. pay all necessary utilities, including remote cloud services provided by AWS; c. pay all applicable taxes and insurances; and d. otherwise remain compliant with its current monthly operational expenses. The SBA appears to be the only secured creditor of the Debtor but the Debtor's management is verifying the execution of a Security Agreement to the UCC-1, which was recorded on September 5, 2020, being owed the principal sum of $1.8 million plus applicable interest. Although the SBA retains a blanket UCC-1 interest in the Debtor's personal property, the Debtor proposed to provide adequate protection to the SBA in the form of the regular monthly payments due under the note, or in a lesser amount as agreed upon. A continued hearing on the matter is set for April 5 at 1:30 p.m. A copy of the order is available at https://bit.ly/3JqaB2Z from PacerMonitor.com. About JDi Data Corporation JDi Data Corporation has developed innovative solutions for professionals within the insurance, risk, and legal communities. Its software solutions are designed to allow organizations to invest in tools that truly transform their day-to-day processes. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11322) on February 17, 2022. In the petition signed by John Heller as CRO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Scott M. Grossman oversees the case. Scott M. Grossman, Esq., at Moffa & Bierman, represents the Debtor as legal counsel. KABBAGE INC: Debtor's Liquidation Plan Approved by Court -------------------------------------------------------- Alex Wolf of Bloomberg Law reports that bankrupt loan servicer Kabbage Inc. won court approval of a Chapter 11 liquidation plan that will transfer the company's pandemic-assistance loan servicing obligations to a third party. Kabbage will work with its banking partners, the Small Business Administration, and the Federal Reserve Bank of San Francisco to transition its loan servicing portfolio to another entity pursuant to a Chapter 11 plan approved by Judge Craig Goldblatt at a hearing Monday, March 13, 2023, in the US Bankruptcy Court for the District of Delaware. About Kabbage Inc. d/b/a KServicing Founded in 2010 and headquartered in Atlanta, Ga., Legacy Kabbage, a predecessor of Kabbage Inc. (doing business as KServicing) -- http://www.kservicing.com/-- was one of the leading fintech providers of working capital to small businesses for over a decade. Legacy Kabbage began as a proprietary online lending platform for small businesses, providing loan services to over 250,000 American small businesses, many of which were businesses that struggled to receive adequate funding through traditional banking institutions. From 2020-2021, the company provided and facilitated necessary funding to small business owners through PPP loans during the COVID-19 pandemic. The company's existing technology infrastructure spearheaded its PPP work, which led to a total of $7 billion in loans being originated by the company. The origination and servicing of PPP Loans and small business loans to eligible borrowers was critical during a time of unprecedented health and economic uncertainty brought about by the COVID-19 pandemic. On Aug. 16, 2020, much of the company's business was sold to American Express Travel Related Services Company, Inc. As a result of the merger, KServicing now operates in a limited capacity as (i) a servicer and subservicer of PPP Loans, (ii) a software services provider for lenders of PPP Loans, and (iii) a servicer of a minor portfolio of non-PPP small business loans. To implement the wind down of their businesses, on Oct. 3, 2022, Kabbage, Inc. d/b/a KServicing and certain of its affiliates each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10951). Judge Craig T. Goldblatt oversees the cases. Kabbage Inc. estimated $500 million to $1 billion in assets and debt as of the bankruptcy filing. The Debtors tapped Weil, Gotshal & Manges, LLP as general counsel; Richards, Layton & Finger, PA as local counsel; AlixPartners, LLC as financial advisor; KPMG International Limited as fraud review services provider; Jones Day, LLP as government investigations counsel; and Marc Sullivan, managing director at Phoenix Executive Services, LLC, as chief financial officer. Omni Agent Solutions, Inc. is the Debtors' claims agent and administrative advisor. Greenberg Traurig, LLP serves as counsel to the Debtors' board of directors. LIFESCAN GLOBAL: $275M Bank Debt Trades at 36% Discount ------------------------------------------------------- Participations in a syndicated loan under which LifeScan Global Corp is a borrower were trading in the secondary market around 63.9 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $275 million facility is a Term loan that is scheduled to mature on October 1, 2025. The amount is fully drawn and outstanding. Lifescan Global Corporation is a provider of blood glucose monitoring systems for home and hospital us. LISTRAC BIDCO: Barings Private Marks $1.8M Loan at 25% Off ---------------------------------------------------------- Barings Private Credit Corporation has marked its $1,887,000 loan extended to Listrac Bidco Limited to market at $1,406,000 or 75% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan to Listrac Bidco Limited. The loan accrues interest at a rate of 9.6% (SONIA + 6.25%) per annum. The loan was scheduled to mature in February 2023. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Listrac Bidco Limited belongs to the Healthcare Industry. LISTRAC BIDCO: Barings Private Marks $61,000 Loan at 26% Off ------------------------------------------------------------ Barings Private Credit Corporation has marked its $61,000 loan extended to to Listrac Bidco Limited to market at $45,000 or 75% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan Revolver to Listrac Bidco Limited. The loan accrues interest at a rate of 9.6% (SONIA+6.25%) per annum. The loan was scheduled to mature in February 2023. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Listrac Bidco Limited belongs to the Healthcare Industry. LOYALTY VENTURES: $500M Bank Debt Trades at 84% Discount -------------------------------------------------------- Participations in a syndicated loan under which Loyalty Ventures Inc is a borrower were trading in the secondary market around 16.1 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $500 million facility is a Term loan that is scheduled to mature on November 3, 2027. About $462.5 million of the loan is withdrawn and outstanding. Loyalty Ventures Inc. provides tech-enabled, data-driven consumer loyalty solutions. LOYALTYONE CO: Seeks Restructuring Under CCAA --------------------------------------------- The Ontario Superior Court of Justice (Commercial List) ("Court") made an Order ("Initial Order") (Court File No. CV-23-00696017-00CL) granting the LoyaltyOne, Co. protection pursuant to the Companies' Creditors Arrangement Act ("CCAA"). Pursuant to the Initial Order, KSV Restructuring Inc. was appointed as monitor ("Monitor"). The Monitor can be contacted by email at L1@ksvadvisory.com or by telephone at 1-844-249-2665. A copy of the Initial Order is available on the Monitor's website at: https://www.ksvadvisory.com/experience/case/loyaltyone Counsel to the Company: Cassels Brock & Blackwell LLP Scotia Plaza 40 King Street West, Suite 2100 Toronto, Ontario M5H 3C2 Ryan C. Jacobs Tel: 416-860-6465 Email: rjacobs@cassels.com Jane O. Dietrich Tel: 416-860-5223 Email: jdietrich@cassels.com Natalie E. Levine Tel: 416-860-6568 Email: nlevine@cassels.com Michael Wunder Tel: 416-860-6484 Email: mwunder@cassels.com Jeremy Bornstein Tel: 416-869-5386 Email: jbornstein@cassels.com Timothy Pinos Tel: 416-869-5784 EmailL: tpinos@cassels.com Monitor: KSV Restructuring Inc. 220 Bay Street, 13th Floor PO Box 20 Toronto, Ontario M5J 2W4 Noah Goldstein Tel: 416-932-6207 Email: ngoldstein@ksvadvisory.com David Sieradzki Tel: 416-932-6030 Email: dsieradzki@ksvadvisory.com Murtaza Tallat Tel: 416-932-6031 Email: mtallat@ksvadvisory.com Meg Ostling Tel: 416-932-6022 Email: mostling@ksvadvisory.com Counsel for the Monitor: Goodmans LLP 333 Bay Street, Suite 3400 Toronto, Ontario M5H 2S7 Brendan O'Neill Tel: 416-849-6017 Email: boneill@goodmans.ca Chris Armstrong Tel: 416-869-6013 Email: carmstrong@goodmans.ca Andrew Harmes Tel: 416-849-6923 Email: aharmes@goodmans.ca Restructuring Advisor to the Company: Alvarez & Marsal Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2900 Toronto, Ontario M5J 2J1 600 Madison Avenue, New York, New York 10022 Al Hutchens Tel: 416-847-5159 Email: ahutchens@alvarezandmarsal.com Justin Karayannopoulos Tel: 416-847-5177 Email: jkarayannopoulos@alvarezandmarsal.com Brian J. Fox Tel: 212-328-8610 Email: bfox@alvarezandmarsal.com Richard Behrens Tel: 213-304-2062 Email: rbehrens@alvarezandmarsal.com LoyaltyOne Co. -- https://www.loyalty.com/ -- owns and operates the AIR MILES Reward Program, Canada's most recognized loyalty program. LTL MANAGEMENT: 3rd Circ. Grants Amicus Bids of Ex-Judge, Law Profs ------------------------------------------------------------------- P.J. D'Annunzio of Law360 reports that the Third Circuit on Monday, March 13, 2023, agreed to consider friend-of-court arguments by law professors and a former bankruptcy judge in support of the dismissal of Johnson & Johnson unit LTL Management LLC's Chapter 11 case, which they said was not made in good faith. The retired bankruptcy judge and two law professors had urged the Third Circuit not to revisit its January 2023 ruling dismissing a Johnson & Johnson unit's bankruptcy, arguing that the unit's Chapter 11 filing "evidences an abusive invocation of bankruptcy jurisdiction and impairs the integrity of the bankruptcy system." To recall, on Jan. 30, 2023, LTL Management's Chapter 11 filing was dismissed by the U.S. Court of Appeals for the Third Circuit in Philadelphia, which said LTL Management's ties to Johnson & Johnson meant it wasn't facing the kind of distress that a bankruptcy was meant to address. "Given Chapter 11's ability to redefine fundamental rights of third parties, only those facing financial distress can call on bankruptcy's tools to do so," Thomas Ambro, the circuit judge, wrote in the decision. More than 40,000 plaintiffs have sued Johnson & Johnson, with some claiming that the company had known for decades that its baby powder and other talc-based products could have contained traces of asbestos, a carcinogen. In 2021, Johnson & Johnson created a subsidiary, called LTL Management, to handle those claims, and then sent LTL to Chapter 11 bankruptcy, a move that immediately faced legal challenges from plaintiffs who saw it as a way for the company to limit what it would ultimately have to pay out in the talcum-powder cases. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and 0(ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. LUCKY BUCKS: $555M Bank Debt Trades at 68% Discount --------------------------------------------------- Participations in a syndicated loan under which Lucky Bucks LLC is a borrower were trading in the secondary market around 32.3 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $555 million facility is a Term loan that is scheduled to mature on July 30, 2027. About $520.3 million of the loan is withdrawn and outstanding. Lucky Bucks, LLC provides coin-operated amusement machines. LUMEN TECHNOLOGIES: $5B Bank Debt Trades at 30% Discount -------------------------------------------------------- Participations in a syndicated loan under which Lumen Technologies Inc is a borrower were trading in the secondary market around 70.1 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $5 billion facility is a Term loan that is scheduled to mature on March 15, 2027. About $3.94 billion of the loan is withdrawn and outstanding. Lumen Technologies, Inc., headquartered in Monroe, Louisiana, is an integrated communications company that provides an array of communications services to large enterprise, mid-market enterprise, government and wholesale customers in its larger Business segment. The company's smaller Mass Markets segment primarily provides broadband services to its residential and small business customer base. MAGENTA BUYER: $3.18B Bank Debt Trades at 15% Discount ------------------------------------------------------ Participations in a syndicated loan under which Magenta Buyer LLC is a borrower were trading in the secondary market around 84.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $3.18 billion facility is a Term loan that is scheduled to mature on July 27, 2028. The amount is fully drawn and outstanding. Magenta Buyer LLC is a provider of cybersecurity software that derives revenue from the sale of security products, subscriptions, SaaS, support and maintenance, and professional services. MARINE WHOLESALE: Court OKs Cash Collateral Access Thru July 31 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorized Marine Wholesale and Warehouse, Co. to use cash collateral on an interim basis during the period between entry of the order and July 31, 2023, in accordance with the budget. As adequate protection from and against any diminution in the value of their interests in cash collateral, all persons and entities that hold perfected security interests in the Debtor's cash collateral are granted replacement liens in all of the Debtor's post-petition assets, other than recoveries from avoiding power actions, which liens will have the same validity, priority and extent as their prepetition liens. As additional adequate protection for the liens asserted by the United States Small Business Administration, the Debtor will make the monthly payments due the SBA under the parties' prepetition agreements in cash in the amount of $731 per month, commencing on August 1, 2022, and continuing on the first business day of each calendar month thereafter. As additional adequate protection for the liens asserted by the Alcohol and Tobacco Tax and Trade Bureau, pending the conclusion of the Final Hearing, the TTB may continue to hold without penalty the funds (in the amount of approximately $213,699 that were levied by the TTB prior to the commencement of the bankruptcy case. A copy of the order is available at https://bit.ly/3Tkp4Cd from PacerMonitor.com. About Marine Wholesale and Warehouse Co. Marine Wholesale and Warehouse Co. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13785) on July 12, 2022. In the petition signed by Jennifer Hartry, vice president and secretary, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Sheri Bluebond oversees the case. David R. Haberbush, Esq., at Haberbush, LLP is the Debtor's counsel. MARSHALL MEDICAL CENTER: Fitch Affirms IDR at 'BB+', Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Marshall Medical Center's (MMC) Issuer Default Rating (IDR) at 'BB+'. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Marshall Medical Center (CA) LT IDR BB+ Affirmed BB+ Marshall Medical Center (CA) /Issuer Default Rating/1 LT LT BB+ Affirmed BB+ SECURITY Bond security is not applicable since MMC's only rating is the IDR. ANALYTICAL CONCLUSION The 'BB+' rating affirmation reflects MMC's leading market position as the sole health care provider in its service area, stable payor mix, and anticipated operational improvement in fiscal 2023. Despite the operating loss recorded in fiscal 2022 (October 31 year-end), which led to a low 3.2% operating EBITDA margin, Fitch views MMC's operating risk profile as midrange. Management has begun to execute upon its plan to return operational performance to a 6.9% operating EBITDA margin in fiscal 2023, which Fitch views as reasonable. Operations thus far through fiscal 2023 (January 31 unaudited) are trending in the right direction and are at near breakeven levels (4.7% operating EBITDA margin), as management has been able to successfully adjust to and bring down higher than normal agency staff related expenses. Although a combination of MMC's key rating drivers may suggest a higher rating, Fitch believes the hospital's credit profile is more susceptible to operating volatility given its exposure to CA's Hospital Quality Assurance Fee (HQAF) program, coupled with the organization's limited balance sheet flexibility to absorb more elevated capital investments to comply with CA's seismic requirements. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Leading Market Position and Stable Payor Mix MMC's midrange revenue defensibility reflects its leading market position as the sole health care provider in a rural, economically healthy community with limited competition for acute care services. The hospital's market share is stable and is nearly 3x higher than its closest competitor. Medicaid and self-pay exposure accounted for approximately 20.2% of gross revenues in fiscal 2022, while Medicare exposure remains high at approximately 58.8% at fiscal 2022 given the area's aging population. Overall, MMC's payor mix is stable, demonstrating little year-over-year change. Additionally, MMC benefits from California's (HQAF) program given its demographics and rural designation, which Fitch expects to continue. Operating Risk: 'bbb' Fiscal 2023 Operational Improvement; Long-term Capex Required In fiscal 2022, MMC recorded an operating loss of approximately $5.5 million, which translated into a low 3.2% operating EBITDA margin, down from the prior year's 6.9% margin. Management states the decline in operations stems from higher inflationary expense pressures primarily related to contract labor and staffing, which management expects to have resolved within fiscal 2023. As of January 31, 2023 (three-months through 2023 unaudited), operating performance has already exhibited signs of improvement, with MMC generating a 4.7% operating EBITDA margin. Management expects to end fiscal 2023 with an approximate 6.9% operating EBITDA margin, which Fitch views as attainable. Average age of plant is somewhat elevated at 14.8 years as of fiscal 2022. Short-term capital plans are considered manageable. However, given CA's seismic requirements for hospitals, MMC will need to make various upgrades in order to have its facilities seismically compliant beyond 2030. Management is in process of making seismic upgrades and anticipates to spend approximately 1.5x depreciation annually through 2030, which will come primarily from operational cash flow. Overall, Fitch views MMC's operating risk assessment as midrange with an adequate ability to control costs, which is appropriate for the rating level. Financial Profile: 'bbb' Satisfactory Capital-Related Ratios At fiscal year-end 2022, MMC had approximately 92 days cash on hand (DCOH) and cash to adjusted debt of approximately 69%, which is down from the prior year's 118 days and 86%, respectively, but still satisfactory for the midrange financial assessment. The decrease in unrestricted liquidity resources is primarily related to the decrease in operational cash flow in fiscal 2022 and investment market volatility. Fitch views the hospital's asset allocation as having moderate exposure to equity markets with approximately 37.4% of its investment directed to equities as of Oct. 31, 2022 with the remaining invested in cash and fixed income assets. Fitch's forward-looking stressed scenario analysis indicates leverage metrics will see modest improvements over the next several years with maintenance of key leverage metrics that continue to support the 'bbb' financial profile. Asymmetric Additional Risk Considerations No asymmetric risk considerations were used in this rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - If operating EBITDA margins trend below 6% for a sustained period of time; - Although unexpected, the incurrence of a significant amount of additional debt to fund seismic-related capex requirements that would result in the deterioration of capital-related ratios. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Maintenance of midrange operating risk and financial profile assessments with achieved improvements to operating EBITDA margins to historical levels; - Bolstering to unrestricted liquidity that supports cash to adjusted debt position sustained above 90%. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. MEDPLAST HOLDINGS: Barings Private Marks $9.3M Loan at 15% Off -------------------------------------------------------------- Barings Private Credit Corporation has marked its $9,325,000 loan extended to MedPlast Holdings, Inc. to market at $7,915,000 or 85% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a Second Lien Senior Secured Term Loan to MedPlast Holdings, Inc. The loan accrues interest at a rate of 12.1% (LIBOR+7.75%) per annum. The loan matures in July 2026. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. MedPlast is an outsourced manufacturer of medical devices serving a broad range of therapeutic areas including cardiovascular, orthopedics and advanced surgical. MedPlast is owned by affiliates of JLL Partners and Water Street Healthcare Partners. META SPECIAL: $310M Bank Debt Trades at 17% Discount ---------------------------------------------------- Participations in a syndicated loan under which Meta Special Aerospace LLC is a borrower were trading in the secondary market around 83.5 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $310 million facility is a Term loan that is scheduled to mature on February 14, 2028. The amount is fully drawn and outstanding. Meta Special Aerospace LLC provides transportation services for logistic purpose. Meta Special Aerospace serves clients in the United States. MOLD-RITE PLASTIC: Barings Private Marks $13.9M Loan at 25% Off --------------------------------------------------------------- Barings Private Credit Corporation has marked its $13,983,000 loan extended to Mold-Rite Plastics LLC to market at $10,487,000 or 75% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a Second Lien Senior Secured Term Loan to Mold-Rite Plastics LLC. The loan accrues interest at a rate of 11.2% (LIBOR+7%) per annum. The loan matures in September 2029. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Mold-Rite Plastics, LLC produces and distributes plastic products. The Company offers hinged single flap dispensing, strap caps, plugs, disc tops, open spouts, cover caps, and jars. Mold-Rite Plastics markets its products to pharmaceutical, food, chemical, personal care, and automotive sectors. MONITRONICS INTERNATIONAL: $822M Bank Debt Trades at 62% Discount ----------------------------------------------------------------- Participations in a syndicated loan under which Monitronics International Inc is a borrower were trading in the secondary market around 38.4 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $822.5 million facility is a Term loan that is scheduled to mature on March 29, 2024. About $795.8 million of the loan is withdrawn and outstanding. Monitronics International, Inc. (doing business as Brinks Home) is an American company that offers home security systems. NARDA ACQUISITIONCO: $106,000 Revolver Loan Has Steep Discount -------------------------------------------------------------- Barings Private Credit Corporation has marked its $106,000 loan extended to Narda Acquisitionco Inc. to market at $4,000 or 4% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a Revolver loan to Narda Acquisitionco Inc. The loan accrues interest at a rate of 10.2% (LIBOR +5.50%) per annum. The loan matures in December 2027. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Narda AcquisitionCo, Inc. is a portfolio company of investment affiliates of J.F. Lehman & Company. Narda-MITEQ designs and manufactures a complete line of high-performance RF components and subsystems for the microwave electronics community. NEW FORTRESS: Fitch Affirms LongTerm IDR at 'BB-', Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed at 'BB-' New Fortress Energy Inc. (NFE)'s 'BB-' Long-Term Issuer Default Rating (IDR) and the 'BB-'/'RR4' senior secured debt. The Rating Outlook is Stable. The rating affirmation considers NFE's new dividend policy implemented during a period of large capex spending as the company scales to enter liquified natural gas (LNG) production. While the dividend policy favors equity shareholders, Fitch does not view it as negative, if the plan is implemented in a credit supportive manner balancing capital funding and dividends. The construction projects, four Floating LNG units (FLNG), initially may sell LNG into the short-term spot market. The move into LNG production is an extension of NFE's LNG logistics business and Fitch believes increases the business risk, moving away from a model predominately based on long term contracts providing cash flow stability. NFE's ratings are supported by the long-term contract profile underpinned by take-or-pay and minimum volume commitment components, which provide some cashflow stability. The ratings incorporate NFE's aggressive growth strategy and execution risk. KEY RATING DRIVERS Capital Allocation Plan: The new dividend policy increases funding needs during a period of high capex spending. The annual capital spending rises to $2 billion while the company implements a dividend policy, returning 40% of EBITDA to shareholders. The capex program is largely funded through free cashflow, with smaller contributions from asset sale proceeds and project level debt. The $683 million dividend paid in January 2023 under the new policy benefited from the 2022 LNG spot market sales during a period of historically high commodity pricing. NFE's EBITDA doubled to about $860 million in 2022 from about $420 million in 2021 (Fitch's calculation, which differs from management). Given the diminished recent demand in Europe for LNG and a warm winter, LNG global prices have declined from highs. However, near term commodity prices remain supportive under Fitch's price deck. Fitch expects that management will manage capex spending and shareholder returns if there is a cash fall shortfall. Increased Business Risk: The expansion into LNG production increases the business risk profile. LNG production is one of the more complex businesses in the midstream segment and the units will be located offshore in the Gulf of Mexico. Natural gas for the first four FLNG units will come from onshore pipelines in Mexico and Louisiana. These businesses expose NFE to higher operational, execution and regulatory risk than its current line of business - the construction and operation of power plants and LNG infrastructure while supplying LNG under long term contracts with local utilities to power thermal plants. Less Cash Flow Stability: Other LNG producers, such as Cheniere Energy Inc. (BBB-/Stable), secure long-term, take or pay contracts to support large scale liquefaction units. NFE's strategy involves matching its LNG supply and demand, and optimizing open sales to the most economic market. NFE's uncommitted LNG supply grows as the FLNG units come online, beginning in mid-2023. Fitch estimates the portion of the operating margin exposed to short-term spot market sales with commodity price risk expands to 40%-50% in the Fitch forecast. The remaining margin comes from the terminals generated under 66 contracts with an average 14-year term and about half paid under a take-or-pay component. Complex Capital Projects: The capex program has four FLNG units, each a 1.4 mtpa natural gas liquefaction unit mounted on an offshore refurbished oil rig. Management projects the first unit will be online mid-2023 and is securing permits in Mexico and the U.S. for offshore production. The remaining program includes LNG terminal and power plant projects in Brazil, Nicaragua and Mexico. Fitch believes the company may incur increased construction costs from delays caused by a prolonged ramp-up period for the first FLNG unit or receipt of full permitting. Any delay pushes back the cash flow growth expected under management's forecast. Operational and Financial Plan: Since 2021, NFE scaled the business through acquisitions and organic growth and has simplified the capital structure. It eliminated vessel level debt by selling some of its LNG vessels to a joint venture, Energos Energy Transformation. NFE has 20% ownership and guarantees the vessel lease charters. Fitch considers the $2 billion sale leaseback transaction a long-term obligation and includes $1.4 billion as debt. Asset sale proceeds from thermal plants in Brazil and Mexico and the Hilli FSRU vessel fund a portion of the growth projects. Fitch calculated leverage in 2022 declined to 5.2x as the short-term LNG market sales buoyed cash flow. A sizable short-term contract and commodity tailwinds will drive leverage down over the next two years, under Fitch's base case, to below 4.0x. However, leverage rises after 2025 as commodity prices, or the spread between Henry Hub and TTF, a European natural gas trading hub, narrow. Fitch will look for successful deployment and operations of the FLNG units and sustained profitability from the short and long-term LNG contracts. Counterparty and Country Ceiling Exposure: Fitch estimates that through 2025, between 50%-60% of NFE's cash flow will originate from customers in investment-grade countries Mexico (BBB-/Stable) and the U.S. (AAA/Stable). An additional 10%-20% will originate from customers in Jamaica (B-/Stable), Nicaragua (B-/Stable) and Brazil (B-/Stable) and the balance from market sales. Although Fitch does not rate the off-takers, the agency estimates that its credit quality would either be linked to the sovereign, for government related entities, or limited by the operating environment in which they operate. Fitch measures the relationship between cash flow generation in a given country compared to hard-foreign gross interest expense in determining a multinational company's applicable Country Ceiling. During the next four years, NFE's applicable Country Ceiling is the United States at 'AAA', given the size of its U.S. operations relative to debt service obligations. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 -- ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ESG Considerations: NFE has an ESG relevance score of 4 for Exposure to Environmental Impacts due to potential operational challenges related to extreme weather events in its operating regions. This is generally viewed as having a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY NFE is similar to LNG producer Cheniere Energy Partners LP (BBB-/Stable) as both are operating in the LNG business. NFE's operational and geographic focus is similar to Cheniere Energy Partners LP (Cheniere Energy; BBB-/Stable), a global LNG provider. NFE has operations in Miami, Jamaica, Puerto Rico, Mexico and Nicaragua, and Brazil. About half of NFE's cash flow is supported by long-term take-or-pay contracts with utilities and power generators in its operating regions through the sale of LNG and Power. NFE's contract tenor compare favorably with Cheniere Energy, averaging about 15 years, but has a lower portion of fixed take-or-pay revenues, less geographic diversity and smaller scale than Cheniere Energy, factors which drive the difference in ratings. Cheniere Energy is a master limited partnership with an LNG import-export facility and a Federal Energy Regulatory Commission regulated interstate natural gas pipeline operating subsidiary, Creole Trail Pipeline LP. Cheniere's consolidated operations are supported by long-term, take-or-pay style contracts for import, export and pipeline capacity, and has a highly leveraged operating subsidiary, Sabine Pass Liquification, LLC (BBB/Stable). Fitch notes Sabine Pass' contracts are of much more substantial duration than any of its midstream peers, in addition to its primarily fee-based revenue. Sabine Pass' current contracts have between 17 years to 20 years remaining. The contract profile is with investment-grade counterparties, in contrast to NFE has a portion of its counterparties based in non-investment countries. Additionally, Cheniere Energy's contracts are supported by a pass-through of fixed and variable costs of LNG to contractually obligated off-takers unlike NFE, which is exposed to changes in commodity price and offtake volumes. The majority of NFE's subsidiaries do not have project level debt, while Cheniere's operating subsidiary, Sabine Pass is highly levered, and in a combined and severe downside case of payment default by a large customer and weak merchant price forecast realizations, cash could be trapped. Leverage for NFE under the Fitch rating case improves to below 4.0x from 2023-2024, rising to closer to 5.0x after 2025. CQP's leverage for Cheniere Partners is similar with leverage below 5.0 through Fitch's forecast. However, Fitch believes Cheniere has a demonstrated track record in management and completion of complex construction projects and has less construction risk in completing debottlenecking and the next planned expansion compared with NFE's pipeline of FLNG, power plants and terminal projects. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - The Fitch price deck of HH natural gas of $3.50/MMBtu and TTF of $20 in 2023 and 2024, and HH of $3.00 and TTF of $10 in 2025, informs the assumptions for natural gas and TTF; - Growth capital spending is funded with retained cash and debt. The forecast includes full funding for the first FLNG project; - Dividends and capex in line with public guidance; - Execution of committed growth projects and an additional growth project annually during the outer years of the forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Long-term fixed price contracts exceeding 60% on a sustained basis with credit worthy counterparties; - Leverage (total debt with equity credit to operating EBITDA) below 4.5x on a sustained basis; - Lack of access to liquidity to meet working capital needs. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Excessive cost overruns for current construction projects; - Leverage (total debt with equity credit to operating EBITDA) above 5.5x on a sustained basis; - Deterioration in counterparty credit quality; - Aggressive cash distribution inconsistent with the company's long-term financing needs; - Long-term fundamentals over depressed international gas prices putting additional pressure the company's cash flow generation. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of Dec. 31, 2022, NEF had approximately $675 million of unrestricted cash. The company has approximately $165 million of restricted cash on its balance sheet restricted to funding of a thermal plant project. NFE has additional liquidity available through a revolving credit facility. During 2022 and 2023, NFE increased its revolving credit facility to $472 million from $200 million in 2021. The maturity is April 2026. The uncommitted letter of credit was increased to $325 million from $75 million during 2022 and 2023 and matures in July 2023. There are no near-term maturities for parent level debt, as the $2.75 billion senior secured notes mature in 2025 and 2026. The company has asset level debt and the earliest maturity is February 2024. ISSUER PROFILE New Fortress Energy LLC is a gas-to-power energy infrastructure company. The company spans the entire production and delivery chain from natural gas procurement and LNG to logistics, shipping, terminals and conversion or development of natural gas-fired generation. It also operates electric generation plants. The portfolio includes operational plants and regasification terminals in three countries controlling 29 LNG cargo, storage and LNG regasification vessels. Its current operations are in Jamaica, Puerto Rico and a terminal in Mexico with additional assets in Mexico, Nicaragua and Brazil coming online in 2023. SUMMARY OF FINANCIAL ADJUSTMENTS Consolidated leverage for NFE includes asset level debt and the Energos Formation Transaction obligations. Under Fitch's Corporate Criteria, the Energos lease obligations are considered long term obligations and the reported lease liability is treated as debt. The preferred stock at GMLP is given a 50% equity credit due to its perpetuality and cumulative nature of the dividends and interest. Instrument and Recovery Ratings: The secured notes are secured by equity pledges in various subsidiaries. Per Fitch's Corporates Recovery Ratings and Instrument Ratings Criteria, category 2 secured debt can be notched up to 'RR1'/'+2' from the IDR; however, the instrument ratings have been capped at 'RR4' due to Fitch's Country Specific Treatment of Recovery Rating Criteria. Fitch believes on a normalized run-rate basis most of the revenues will come from outside the United States. ESG CONSIDERATIONS NFE has an ESG relevance score of '4' for Exposure to Environmental Impacts due to potential operational challenges related to extreme weather events in its operating regions. This is generally viewed as having a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- New Fortress Energy Inc. LT IDR BB- Affirmed BB- senior secured LT BB- Affirmed RR4 BB- NEWELL BRANDS: S&P Downgrades ICR to 'BB+', Outlook Negative ------------------------------------------------------------ S&P Global Ratings lowered its long-term issuer credit rating on U.S.-based Newell Brands Inc. to 'BB+' from 'BBB-' and its commercial paper rating to 'B' from 'A-3'. S&P said, "At the same time, we lowered our issue-level rating on the company's unsecured notes to 'BB+' from 'BBB-' and assigned a '3' recovery rating, which indicates our expectation that lenders would receive meaningful recovery (30%-50%; rounded estimate: 55%) of principal in the event of a default. "The negative outlook reflects the possibility that we will lower the ratings on Newell over the next 12 months if leverage does not decline well below 4.5x." The rating action reflects the deterioration in the company's credit metrics and uncertainty of when they will be restored towards its target levels. Newell has a publicly stated 2.5x net leverage financial policy target, but its capital allocation decisions, combined with weaker demand for its products from a challenging macroeconomic backdrop, have increased its debt over the last year. These dynamics raised leverage higher than our previous expectations and may potentially keep it elevated through 2024. S&P's project leverage of about 4.8x for fiscal year 2023, slightly higher than its leverage of about 4.6x in fiscal 2022. These levels are above the mid-3x actual results and expectations that led to its prior upgrade to investment grade in early 2022. Newell made a $325 million share repurchase in fiscal 2022 under its $375 million repurchase authorization, which reduced its cash balance ahead of weaker expected macroeconomic conditions and consumer spending patterns. The company has also continued to pay its sizeable dividend of $400 million annually despite generating negative cash flow from operations of $584 million in 2022, primarily due to abnormal inventory and payables levels. Therefore, S&P believes the company is not committed to a financial policy that supports an investment-grade rating because it prioritized shareholder returns over debt reduction. Newell needed to issue $620 million of short-term debt during 2022 due to its capital allocation decisions, higher inventory levels, and lower demand. S&P said, "Furthermore, we believe the company cannot materially reduce its current short-term debt balance in 2023 and 2024 because we project $200 million of discretionary cash flow generation (cash flow from operations less capital expenditure [capex] and dividends) in total over the two-year period. Newell also has about $200 million of 4% senior unsecured notes due in 2024 and $500 million of 4.875% senior unsecured notes due in 2025. We previously expected that the company could repay these smaller maturities and continue to permanently reduce its debt burden. However, given its limited discretionary cash flow generation, we now believe it will have to refinance these maturities or borrow to repay them, which will likely increase its debt levels and interest burden which could put pressure on its ability to meet its interest coverage covenant of 3.5x." Newell's discretionary product portfolio will continue to experience volatility over economic cycles. S&P said, "We believe Newell's recent volatile performance stems partly from the discretionary nature of its product portfolio. However, if weak demand for its brands persists outside of economic cycles and we expect its portfolio to be less resilient, we could reassess our view of the business. The company has a long history of restructuring charges. Nevertheless, prior to its recent earnings degradation, Newell streamlined its operations, renewed the market positioning of its core brands, improved its supplier and customer relationships, increased its operational efficiency, and expanded the synergies between its various divisions. We previously believed the cleaner portfolio would make it easier for management to better plan for demand, manage inventory, and reduce excess and obsolete inventory." However, in 2022, a combination of inflation, supply chain challenges, and inventory realignment at U.S. retailers kept management from making these improvements. Newell's products benefitted from solid demand trends during the pandemic, improving its revenue by 12.8% in 2021, because consumers had extra money from government stimulus and spent less on services and travel. S&P said, "We expected this demand to continue because underlying wellness trends would lead consumers to continue buying products for outdoor and recreational activities, but that did not happen in 2022 and Newell's revenue declined 11%. As inflation picked up in the U.S. in 2022, consumers spent less on discretionary products. In addition, since the pandemic pulled demand for Newell's products forward, consumers did not need to buy replacements shortly thereafter, which we expect will continue in 2023 and lead its revenue to decline 9%. Its home and commercial solutions segment represents 55% of its portfolio and houses its discretionary home appliances and solutions businesses, which show signs of volatility amid weak macroeconomic conditions. The revenue from its home appliances and home solutions segments declined 20% and 11% in 2022, respectively. While the outdoor and recreation segment (14% of sales) benefits from positive long-term trends, the dynamics discussed above caused its revenue from this business to decline 11% in 2022. We consider the products in its learning and development segment (31% of 2022 sales), which comprises writing tools and its baby business, to be less discretionary than the rest of its product portfolio. This segment has the highest margin profile of any of its businesses. Supply chain challenges and weaker demand pressured the company's portfolio, but it raised prices to help offset this, leading its revenue to decline 3%, mainly due to foreign exchange headwinds." Newell's new CEO and CFO will focus on continued streamlining efforts, with potentially more divestitures to come. Chris Peterson, the former CFO since 2018, is now the CEO, while new joiner Mark Erceg (former experience in global finance at P&G and held other public and private CFO positions) is now the CFO. S&P said, "We view Mr. Peterson's streamlining efforts such as added automation and reduced stock-keeping units (SKUs) to improve efficiency and increase profitability per SKU after Newell acquired Jarden in 2015 favorably. However, we believe the company is not finished reducing its complexity and leverage." Project Ovid transformed the company's supply chain, however, this was not fully implemented in 2022. In 2022, the company could not adjust its supply chain as quickly as it needed to when demand trends shifted and retailers stopped taking inventory, which led to its high inventory overhang and negative free operating cash flow (FOCF). Long lead times out of Asia also contributed to Newell's inability to adjust inventories. Because of this, we believe the company may incur costs to nearshore its manufacturing and to right size the business, although none have been announced. It announced Project Phoenix in January 2023, which is a restructuring and cost-savings program that led to the formation of three operating segments and reduced staff. The program calls for $120 million-$150 million in costs to achieve about $250 million in annual savings, a good portion of which it will realize in 2023 but will be impaired by its weaker operating performance. Mr. Peterson stated that he will look to evolve the company's strategy once he takes over and we believe this could lead to tuck-in acquisitions or divestments. However, S&P does not expect large-scale mergers and acquisitions (M&A) given the integration issues with the company's 2015 acquisition of Jarden, which resulted in five divestitures and decreased its sales base to about $9 billion from $16 billion. At this time, it is unclear whether asset sale proceeds would enable Newell to materially reduce its leverage. The negative outlook reflects the potential for a lower rating over the next 12 months. S&P could lower its rating on Newell if we view the business less favorably due to lower growth expectations, operational missteps, or smaller scale given fluctuating demand for its products. S&P could also lower the rating if capital allocation decisions lead to leverage sustained near 4.5x or above. This could occur if: -- Newell continues to prioritize shareholder returns over debt reduction; -- Newell's operating performance suffers further due to a pullback in orders from key retailers amid tough macroeconomic conditions; or -- An extended period of high inflation or sharper-than-expected drop in consumer spending hinders its ability to recover operationally and sustain current credit metrics. S&P could revise its outlook on Newell to stable if an improving operating performance and prudent financial policies enable it to sustain leverage well below 4.5x. This could occur if: -- Its sales and earnings prospects improve because consumer demand improves; and -- The company generates at least $500 million of FOCF and uses a portion of it to reduce debt. ESG credit indicators: E-2, S-2, G-2 PACIFIC BEND: Files for Chapter 11 Due to Dispute With Performance ------------------------------------------------------------------ Pacific Bend Inc. filed for chapter 11 protection in the Central District of California. The Debtor specializes in the manufacturing and installation of industrial racking, storage and mezzanine across the United States for several customers, including but not limited to TJ Maxx, Bed Bath & Beyond, and Ashley's Furniture. The Debtor has been operating for over seven years. The Debtor owns a piece of real property from which it operates its business -- a real property located at 5733 West Whittier Avenue, Hemet, CA 92545. The Debtor believes the value of the property is $12.5 million. The primary reason for filing a bankruptcy case was due to actions of Performance Steel Inc. in its assertion of liability against the Debtor, and its collection efforts to collect the Debtor's accounts receivable. The Debtor and Performance Steel Inc. had entered into a letter of intent for Performance Steel's purchase of 50% of the Company's stock. During the due diligence period, the Debtor made payments on the Performance Steel indebtedness per Performance Steel's requests. During that time, however, Jim Russell, the owner of Performance Steel, made demands and exerted managerial control over the Debtor before actually acquiring its stock. By the time LOI expired, the relationship soured, and the Debtor decided not to proceed with proposed sale to Performance Steel. In response, Performance Steel declared an "event of default" on the grounds that it deemed the Debtor was unable to pay its indebtedness and directed the Debtor's customers to pay Performance Steel directly as a secured creditor on the Debtor's accounts receivables. The Debtor filed for bankruptcy to obtain a breathing room from Performance Steel's collection efforts. 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 April 12, 2022 at 1:30 p.m. in Room Telephonically on telephone conference line: 1-866-822-7121 (participant passcode: 6203551). About Pacific Bend Inc. Pacific Bend Inc. -- https://www.pacificbendinc.com/ -- manufactures pallet racking. Pacific Bend Inc. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10761)on February 28, 2023. In the petition filed by Darlene Barios, as CEO, president, officer, director, and shareholder, the Debtor reported assets and liabilities between $10 million and $50 million. Honorable Bankruptcy Judge Wayne E Johnson handles the case. The Debtor is represented by: Vanessa M Haberbush, Esq. Haberbush, LLP 5733 WEST WHITTIER AVE Hemet, CA 92545 Tel: (562) 435-3456 PG&E CORP: Fitch Hikes IDR to 'BB+', Outlook Stable --------------------------------------------------- Fitch Ratings has upgraded PG&E Corporation's (PCG) and Pacific Gas and Electric Company's (PG&E) Issuer Default Ratings (IDR) to 'BB+' from 'BB'. The Rating Outlook is Stable. Fitch has also upgraded PCG's secured debt to 'BB+'/'RR4' from 'BB'/'RR4' and PG&E's first mortgage bonds to 'BBB'/'RR2' from 'BBB-'/'RR2'. Fitch has also upgraded PG&E's preferred securities to 'BB+'/'RR5' from 'BB'/'RR5'. The upgrade and Stable Rating Outlook primarily reflects significantly lower levels of wildfires involving PG&E equipment, and associated liabilities, during 2019-2022 compared with 2017-2018. The rating action also considers credit supportive elements of Assembly Bill (AB) 1054 and Senate Bill (S.B.) 901, management focus on improving safety and operating performance and expectations for improving credit metrics. Fitch projects FFO leverage for the utility will improve from 7.1x in 2022 to 5.1x in 2023 and 4.5x in 2024. For PCG, FFO leverage is estimated to improve from 7.8x in 2022 to 5.7x in 2023 and 5.0x in 2024. PG&E is a wholly owned subsidiary of PCG and its core operating utility subsidiary representing virtually all of PCG's earnings and cash flows. KEY RATING DRIVERS Credit-Supportive Developments: Fitch believes the significant reduction in wildfires linked to PG&E equipment, the number of structures destroyed by PG&E-linked wildfires and associated liabilities during 2019-2022 compared with 2017-2018 is a key positive development and the primary catalyst of the PG&E and PCG upgrades. The rating action also considers credit supportive elements of anti-wildfire legislation enacted in California, ongoing management efforts to reduce wildfire risk and improve overall safety performance and strengthening projected credit metrics. Fitch notes absent withdrawals from the wildfire insurance fund created by A.B. 1054 since its creation in July 2019 as a result of lower utility-linked post-2018 wildfire activity. Other recent, constructive developments from a credit perspective include resolution of PG&E's 2022 and 2023 cost of capital proceedings and a wildfire self-insurance agreement reached with intervenors in PG&E's pending 2023 general rate case (GRC) proceeding. In addition, PG&E's December 2022 exit from Step One of the CPUC's Enhanced Oversight and Enforcement Process (EOEP) is a positive development from a credit perspective. Wildfires Remain the Key Challenge: Fitch believes wildfire risk remains the chief hurdle to further credit improvement at PG&E, along with related safety culture and reputational issues. Progress by the utility to improve fire resilience is evident in materially reduced post-2018 utility-linked wildfire activity. Continued improvement in wildfire resilience and safety culture would likely result in future positive credit rating actions for PG&E and its corporate parent. While efforts underway in California to minimize utility-linked wildfire destruction appear to be taking root, sustained recurrence of similarly destructive firestorm activity as 2017-2018 cannot be ruled out and would likely result in adverse credit rating actions for PG&E and PCG. Wildfire Activity Lower: Initiatives set in place by PG&E in its wildfire mitigation plan along with state and local community efforts to battle catastrophic wildfires appear to be reducing utility-linked incidents. A review of wildfires determined by the California Department of Forestry and Fire Protection (Cal Fire) to have been ignited by PG&E equipment during 2019-2022 reveals a significantly lower trend in number of fires caused by PG&E equipment and structures destroyed by those fires compared with 2017-2018. The 2019 Kincade Fire destroyed 374 structures, the 2020 Zogg Fire 231, the 2021 Dixie Fire 1,329 and the 2022 Mosquito Fire 78. That compares with 18,804 structures destroyed by the Camp Fire in 2018 and more than 4,300 structures destroyed by 20 major fires in 2017 triggered by PG&E equipment. The 2017 wildfire tally excludes Tubbs, which occurred in PG&E's service territory but according to Cal Fire did not involve PG&E equipment. The Tubbs Fire destroyed 5,636 structures. Credit Supportive Legislation Enacted: A.B. 1054, S.B. 901 and a number of other laws have been enacted in California to protect the public against deadly wildfires. AB 1054 creates a $21 billion wildfire insurance fund for the three large electric IOUs in California, including PG&E, to defray prudently incurred wildfire-related liabilities under inverse condemnation (IC) in excess of $1 billion. California applies IC to IOUs when their equipment is deemed to have ignited a wildfire, holding them strictly liable even if they complied with all rules and regulations. Under IC, payments to wildfire victims are made relatively quickly and may not be recovered by IOUs until long after payments have been made, if at all. The A.B. 1054 insurance fund is designed to address this mismatch in cash recovery and liability payments, providing a robust source of funds to buffer PG&E and the other large IOUs from liquidity and funding challenges associated with large firestorm-related liabilities. The legislation also authorized a wildfire mitigation certification process to support IOU efforts to enhance resilience, a more balanced prudence standard and securitization of certain wildfire costs. Premature exhaustion of the fund due to excessive wildfire activity and related claims is a concern (the fund has not been drawn upon since its inception in 2019). Fire-Related Developments: PG&E and district attorneys from six California counties have finalized settlements resolving the 2019 Kincade Fire and 2021 Dixie Fire criminal investigations. As a result, charges related to the Kincade Fire were dismissed and no criminal charges will be filed in the Dixie Fire. Fitch believes the settlement is a positive credit development. The Dixie Fire, one of the largest fires on record in California, burned 963,000 acres and destroyed 1,329 structures. In February 2023, PG&E and the safety and enforcement division of the CPUC (SED) entered into a settlement in which the SED will refrain from further enforcement proceedings relating to the Zogg Fire against the utility. The utility under the terms of the settlement will incur certain costs totaling $140 million and pay $10 million to the general fund without any admission of wrongdoing, fault, omission, negligence, imprudence, or liability. The settlement has no impact on criminal proceedings in connection with the Zogg Fire that remain in process. Dixie Fire Liability Booked: PG&E has booked a $1.175 billion charge for claims in connection with the Dixie Fire and expects to fully recover such costs through private insurance, regulatory recoveries and eligible claims on the AB 1054 wildfire fund. Future increases to the reserve booked by PG&E for the Dixie Fire are possible and would likely increase the utility's drawdown of the A.B. 1054 wildfire fund. Based on PG&E's current estimate of Dixie-related third-party liabilities, Fitch believes eligible claims would approximate $175 million. In that scenario, Fitch believes timely access to the fund as authorized under AB 1054 would be facilitated by the fund administrator, reducing the cushion available to participating utilities. A key credit concern for PG&E is premature depletion of the AB 1054 fund should out-sized wildfire activity continue unabated. Fitch notes there have been no draws on the fund that Fitch is aware of since its creation in July 2019. Future withdrawals for the Kincade fire are also possible. California Regulatory Compact: In Fitch's opinion, regulatory practices in California are generally balanced and credit supportive. However, PG&E and other California investor-owned utilities are subject to an active legislature and prone to a relatively high degree of political risk dating back to the energy crisis of 2001-2002. In Fitch's view, legislative actions and rate regulation in recent years have generally been credit supportive. Durability of a balanced regulatory compact is a key credit factor, especially in light of PG&E's large projected capex program. Capex at PG&E is driven by wildfire mitigation and spending to support state greenhouse gas reduction targets and is expected by management to approximate $52 billion 2023-2027. Planned 2023-2027 investment is 33% higher than the $39 billion invested by PG&E during 2018-2022. Regulatory Update: In September 2022, PG&E submitted testimony updating its 2023 GRC revenue requirement to reflect updates for escalation rates and federal tax law. The update to PG&E's requested revenue requirement would, if ultimately approved by the CPUC, increase rates by $4.0 billion in test year 2023. Based on the utility's updated filing, attrition rate increases will range from $680 million to $1.1 billion in 2024-2026. In Fitch's view, final CPUC decisions in PG&E's 2023 GRC and pending wildfire mitigation and catastrophic events filings will be key determinants of PG&E's long-term credit trajectory. A final decision in PG&E's 2023 GRC is scheduled for the third quarter of 2023 but could slip to early 2024, in Fitch's view. Safety Issues and Oversight: The CPUC placed PG&E into the first step of an EOEP in April 2021. The commission took the action due to PG&E's failure to prioritize clearing vegetation on its highest-risk power lines as part of its 2020 wildfire mitigation work. PG&E has made significant progress improving its vegetation management program and, as discussed above, the CPUC has removed PG&E from Step One of the EOEP. In January 2022, the CPUC appointed an independent safety monitor as allowed under the agency's order approving PG&E's plan of reorganization for a five-year term and has initiated several safety related proceedings. Appointment of the safety monitor by the CPUC follows the end of PG&E's probation and oversight by a federally appointed monitor. PG&E's ability to significantly improve safety performance and culture will be a key to restoring its reputation and determinant of PG&E's and its corporate parent's creditworthiness. Securitization Update: PG&E issued approximately $8.5 billion of securitization bonds for recovery of certain wildfire-related cost as authorized by A.B. 1054 and S.B. 901 in 2022. The tally includes PG&E's $983 million of secured recovery bonds issued in November of last year to recover eligible wildfire mitigation investment as defined under AB 1054. Legislative action authorizing issuance of utility tariff bonds underscores, in Fitch's view, a more constructive post-2018/2018 legislative/regulatory environment and concrete support of IOU credit quality. Earlier in 2022, PG&E issued a total $7.5 billion of securitization bonds as permitted under S.B. 901 to recover eligible 2017 wildfire costs. Fitch adjusts its financial ratios removing securitization related revenue, amortization, interest expense and debt from PG&E's financials reflecting protections and commitments granted under state law creating a transferable, nonbypassable special tariff to a ring-fenced SPE with no recourse to the utility. Parent-Subsidiary Rating Linkage: Fitch analyzed the parent-subsidiary relationship for PG&E and parent PCG, and determined that their IDRs are the same, based on the companies' standalone credit profiles (SCP). Parent-only debt at PCG is relatively modest and, based on the agency's projections, Fitch expects PCG's and PG&E's SCPs to remain the same. PG&E accounts for virtually all of PCG's consolidated earnings and cash flow. Should PCG's and PG&E's SCPs diverge, Fitch would apply a stronger subsidiary, weaker parent approach under Fitch's parent-subsidiary linkage criteria, reflecting PCG's dependence on cash flows from PG&E to meet its obligations. In that scenario, legal ring fencing would be deemed by Fitch to be porous and access and control open, resulting in a maximum two-notch differential in parent-subsidiary IDRs. DERIVATION SUMMARY PG&E Corporation (PCG; BB+/Stable) and peer utility holding companies Edison International (EIX; BBB-/Positive) and DPL, Inc. (DPL; BB/Stable) are similarly positioned as single utility-holding companies operating in California (PCG & EIX) and Ohio (DPL). Like PCG, virtually all of DPL's and EIX's earnings and cash flows are attributable to their respective operating utilities, Dayton Power & Light Company (DP&L; BBB-/Stable) and Southern California Edison Company (SCE; BBB-/Positive). Conversely, FirstEnergy Corporation (FE; BBB-/Stable), is a multi-state utility holding company with utility operations across the Mid-Atlantic region of the U.S. with greater regulatory diversity than its single-utility holding company peers. Both PCG's and EIX's business risk profiles are challenged by outsized wildfire-related liabilities with a more pronounced impact on PCG. Parent-only debt at PCG and peer EIX is relatively modest, representing approximately 11% and 15% of the companies' total respective consolidated debt outstanding. That compares to the mid-20% level at FE and approximately 60% at DPL. Fitch estimates FFO leverage will improve to 5.7x in 2023 and 5.0x in 2024 and 4.1x in 2025 for PCG, which compares to more than 8.0x for DPL through 2024 for FE and 4.9x-5.9x during 2021-2024 for EIX. FE and PCG are similarly positioned inasmuch as both are challenged by reputational issues due to poor corporate governance for the former and significant safety and environmental issues for the latter. Pacific Gas and Electric Company (PG&E; BB+/Stable), is one of the nation's largest combination electric and gas utilities serving approximately 5.5 million electric and 4.5 million natural gas customers. Peer utility operating companies, Southern California Edison Co. (SCE; BBB-/Positive), Jersey Central Power & Light Company (JCP&L; BBB/Stable) and Dayton Power & Light Company (AES Ohio; BBB-/Stable), provide electric utility services to 5.2 million, 1.2 million and 0.5 million electric customers in parts of California, New Jersey and Ohio, respectively. Uncertainty regarding the magnitude, frequency and destructive force of future wildfires and uncertainty regarding the utility's efforts to enhance wildfire resilience are key risk factors for both PG&E and SCE, with notably larger exposure for PG&E compared with SCE. Fitch believes PG&E and SCE have made significant progress implementing wildfire resilience infrastructure and processes. Nonetheless, a recurrence of large destructive wildfires on the scale of those witnessed in 2017-2018 cannot be ruled out. AES Ohio's creditworthiness has been adversely affected by regulatory developments in Ohio, primarily due to a PUCO order blocking distribution modernization charges of $105 million per year, and reflect high parent-only debt. At JCP&L, regulatory lag has led to somewhat weaker credit metrics in recent years. However, Fitch expects credit metrics to improve due a balanced outcome in JCP&L's last general rate case. FFO leverage at PG&E is estimated by Fitch at 5.1x in 2023 and 4.5x in 2024 and 3.9x in 2025. For SCE, Fitch estimates FFO leverage will average 4.8x during 2022-2026. While PG&E's projected financials are generally in-line with SCE's post-2021 leverage metrics, operating risk is higher at PG&E compared to SCE, in Fitch's view, due to a history of larger wildfires and a poor, albeit improving, safety record. JCP&L FFO leverage is expected to average 4.5x during 2022-2024 and AES Ohio's 5.0x over the coming five-year period. JCP&L's and AES Ohio's ratings reflect affiliation with weaker ultimate corporate parent companies. KEY ASSUMPTIONS - Reflects PG&E's CPUC-approved 2020 GRC settlement and anticipated rate relief in its pending 2023 GRC; - Timely access to the AB 1054 wildfire fund to recover wildfire costs in excess of $1 billion; - Total 2023-2026 capex averages more than $10 billion per annum; - No equity return on approximately $3.2 billion of wildfire mitigation capex; - Incorporates CPUC authorized capital structure waiver and a hypothetical 52% equity ratio for regulatory purposes; - Assumes a 10% earned ROE consistent with the CPUC authorized level in PG&E's 2023 cost of capital decision; - FERC jurisdiction transmission wildfire costs are fully recovered; - Assumes a 10.45% FERC earned ROE; - Rate base CAGR of 9.5% from 2022-2027; - Full recovery of deferred wildfire-related restoration, prevention and insurance costs; - Projections include undergrounding of 2,455 miles of power lines in high fire threat districts during 2022-2026; - Issuance of approximately $1.4 billion of A.B. 1054 authorized securitization bonds in 2023; - Continued operation of Diablo Canyon nuclear plant. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade for PCG: - An upgrade of PG&E. - Continuing improvement in catastrophic wildfire risk, the company's safety culture and reputation along with consolidated PCG FFO-leverage of better than 5.0x on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade for PCG: - A downgrade of PG&E. - An unexpected, significant increase in parent-only debt. - PCG FFO-leverage of worse than 5.5x on a sustained basis. Factors that could, individually or collectively, lead to positive rating action/upgrade for PG&E: - Meaningful reduction in the size and scale of prospective wildfire activity in PG&E's service territory. - Consistent improvement in PG&E's safety culture leading to resolution of legal, regulatory and reputational challenges. - Robust A.B. 1054 wildfire fund levels relative to future utility claims. - Improvement in FFO-leverage to better than 5.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade for PG&E: - Continuation of catastrophic wildfire activity on par with the Northern California wildfires of 2017 and the Camp fire in 2018 and resulting large third-party liabilities under inverse condemnation. - More rapid than expected drawdown of the AB 1054 fund due to persistent wildfire activity and large third-party liabilities. - Inability to address equipment failures and deliver demonstrable improvement in safety culture. - Failure to ameliorate reputational challenges. - Deterioration in rate regulation generally or an unfavorable outcome in PG&E's 2023 GRC. - Unfavorable legislative developments. - These or other factors resulting in FFO-leverage of worse than 5.5x on a sustained basis. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of Dec. 31, 2022, PCG had access to revolving credit facilities (RCF) with total consolidated borrowing capacity of $4.9 billion composed of a $4.4 billion RCF at PG&E and $500 million at PCG. Additional liquidity is provided via the utility's receivables securitization program. Approximately $2.0 billion was available under PCG's and PG&E's credit facilities at YE 2022 net of $998 million of LOCs and $1.930 billion of utility borrowings outstanding. In addition, the utility had $1.2 billion of borrowings outstanding under its accounts receivable securitization program, with capacity to borrow and additional $205 million under the program. No borrowings were outstanding under the corporate parent's $500 million revolving credit facility as of YE 2022. Like most utilities, PG&E is expected to be FCF negative based on Fitch's assumptions and its large capex program. Negative FCF is a function of high capex driven by spending to mitigate catastrophic wildfire activity and meet California's greenhouse gas reduction goals, which are among the most aggressive in the nation. Fitch expects cash shortfalls to be funded with a balanced mix of debt and equity, with equity provided as appropriate by the utility's corporate parent. PCG and PG&E have direct access to debt capital markets and Fitch believes debt maturities are manageable. Cash and cash equivalents at the end of 2022 totaled $734 million at PCG and $609 million at the utility. ISSUER PROFILE PCG's wholly owned operating utility, PG&E, accounts for virtually all of PCG's earnings and cash flows. PG&E is one of the nation's largest combination electric and gas utilities, serving 16 million people across a 70,000 square mile service territory that spans central and northern California. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch adjusts PCG's and PG&E's financials to remove securitization-related revenue, interest and amortization expense and debt and applies 50% equity credit to PG&E's $258 million of outstanding preferred securities. ESG CONSIDERATIONS PCG and PG&E have ESG Relevance Scores of '4' for Customer Welfare - Fair Messaging, Privacy & Data Security due to customer and other constituent impacts associated with wildfire activity, which has had a negative impact on the credit profile is relevant to the rating in conjunction with other factors. The ESG RS reflects Fitch's assessment of wildfire risks to creditworthiness as being manageable within PG&E's current rating category. PCG and PG&E have ESG Relevance Scores of '4' for Exposure to Environmental Impacts due to the impact of rain-drought-rain, high winds and dry ambient conditions on its operations, which has had a negative impact on the credit profile is relevant to the rating in conjunction with other factors. The ESG RS reflects Fitch's assessment of wildfire risks to creditworthiness as being manageable within PG&E's current rating category. PCG and PG&E have ESG Relevance Scores of '4' for Exposure to Social Impacts due to customer and other constituent impacts associated with wildfire activity, which has had a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. The ESG RS reflects Fitch's assessment of wildfire risks to creditworthiness as being manageable within PG&E's current rating category. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- PG&E Corporation LT IDR BB+ Upgrade BB senior secured LT BB+ Upgrade RR4 BB Pacific Gas and Electric Company LT IDR BB+ Upgrade BB preferred LT BB+ Upgrade RR5 BB senior secured LT BBB Upgrade RR2 BBB- PLANDAI BIOTECHNOLOGY: Incurs $4.7 Million Net Loss in 2016 ----------------------------------------------------------- Plandai Biotechnology, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $4.74 million on $298,494 of total revenues for the year ended June 30, 2016, compared to a net loss of $10.07 million on $92,898 of total revenues for the year ended June 30, 2015. As of June 30, 2016, the Company had $6.45 million in total assets, $18.43 million in total liabilities, $9.80 million in total stockholders' deficit, and a non-controlling interest of ($2.18) million. "As at June 30, 2016, the Company had yet to establish a proven, reliable, recurring source of revenue to fund its ongoing operating costs and with insufficient funds to fully implement its proposed business plan. This raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations," Plandai said. "In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern," the Company said. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1317880/000182912623002070/plandai_10k.htm#b_002 About Plandai London, England-based Plandai Biotechnology, Inc., and its subsidiaries focus on the production of proprietary botanical extracts for the nutriceutical and pharmaceutical industries. The company grows the green tea used in its products on a 3,000-hectare estate in the Mpumalanga region of South Africa. PlandaI uses a proprietary extraction process that is designed to yield highly bioavailable products of pharmaceutical-grade purity. The first product brought to market is Phytofare Catechin Complex, a green-tea derived extract that has multiple potential wellness applications. POINDEXTER PROPERTIES: $16M Bank Debt Trades at 16% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Poindexter Properties LLC is a borrower were trading in the secondary market around 83.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $16 million facility is a Asset-Based Term loan that is scheduled to mature on March 25, 2030. The amount is fully drawn and outstanding. Poindexter Properties LLC is based in Houston, Texas. POWER STOP: $395M Bank Debt Trades at 31% Discount -------------------------------------------------- Participations in a syndicated loan under which Power Stop LLC is a borrower were trading in the secondary market around 68.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $395 million facility is a Term loan that is scheduled to mature on January 26, 2029. The amount is fully drawn and outstanding. Power Stop LLC manufactures and distributes auto parts. The Company offers brake pads and calipers, rotor kits, sensors wires, and other braking systems for cars, trucks, SUVs, duty trucks and tows, and utility vehicles. PURE BIOSCIENCE: Incurs $1.1 Million Net Loss in Second Quarter --------------------------------------------------------------- PURE Bioscience, Inc. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.06 million on $397,000 of total revenue for the three months ended Jan. 31, 2023, compared to a net loss of $702,000 on $416,000 of total revenue for the three months ended Jan. 31, 2022. For the six months ended Jan. 31, 2023, the Company reported a net loss of $2.05 million on $868,000 of total revenue compared to a net loss of $1.50 million on $917,000 of total revenue for the six months ended Jan. 31, 2022. As of Jan. 31, 2023, the Company had $2.53 million in total assets, $463,000 in total current liabilities, and $2.07 million in total stockholders' equity. Pure Bioscience stated, "Our history of recurring operating losses, and negative cash flows from operating activities give rise to substantial doubt regarding our ability to continue as a going concern." New Chief Executive Officer and President On March 15, 2023 (Effective Date), Tom Y. Lee, the president, chief Executive officer and member of the Board of Directors of Pure Bioscience, Inc., resigned as the Company's president and chief executive officer, effective as of the Effective Date. Mr. Lee will continue to serve as a member of the Board. The Board appointed Robert Bartlett, a member of the Board, as the Company's president and chief executive officer, effective as of the Effective Date. Mr. Lee said, "I'm happy to announce the appointment of Robert F. Bartlett as Chief Executive Officer of PURE Bioscience. Robert is a proven leader with decades of experience in both large and small corporations. Robert has the skill set required to help the company increase revenue in new and existing market segments. With Robert on board, Tom Myers will transition from the Chief Operating Officer role to Executive Vice President of Technology and Development. This will give Mr. Myers the ability to focus on technical sales, business relationships, and research and development." Mr. Bartlett, said, "PURE's sales over the last year have shown that our sales approach delivered lackluster results. My immediate focus will be to enhance our current customer base along with redirecting our sales efforts into new and existing channels that are showing growth. It's my belief that we must have the right people in place to manage and grow our sales. Focus and accountability will be paramount as the company builds a new sales strategy." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1006028/000149315223008080/form10-q.htm About PURE Bioscience Inc. PURE Bioscience, Inc. -- www.purebio.com -- is focused on developing and commercializing its proprietary antimicrobial products primarily in the food safety arena. The Company provides solutions to combat the health and environmental challenges of pathogen and hygienic control. Its technology platform is based on patented, stabilized ionic silver, and its initial products contain silver dihydrogen citrate, better known as SDC. PURE is headquartered in Rancho Cucamonga, California (San Bernardino metropolitan area). PURE Bioscience reported a net loss of $3.49 million for the year ended July 31, 2022, compared to a net loss of $2.32 million for the year ended July 31, 2021. As of Oct. 31, 2022, the Company had $3.70 million in total assets, $699,000 in total liabilities, and $3 million in total stockholders' equity. Los Angeles, California-based Weinberg and Company, P.A., the Company's auditor since 2019, issued a "going concern" qualification in its report dated Oct. 28, 2022, citing that the Company has suffered recurring losses from operations and negative cash flows from operating activities that raise substantial doubt about its ability to continue as a going concern. R1 HOLDINGS: Barings Private Marks $472,000 Loan at 15% Off ----------------------------------------------------------- Barings Private Credit Corporation has marked its $472,000 loan extended to R1 Holdings, LLC to market at $403,000 or 85% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a Revolver loan to R1 Holdings, LLC. The loan accrues interest at a rate of 10.8% (SOFR+6.25%) per annum. The loan matures in December 2028. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. R1 Holdings, LLC is in the Transportation Industry. RANDYS HOLDING: Barings Private Marks $367,000 Loan at 19% Off -------------------------------------------------------------- Barings Private Credit Corporation has marked its $367,000 loan extended to Randys Holdings Inc to market at $297,000 or 81% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a Revolver loan to Randys Holdings Inc. The loan accrues interest at a rate of 10.6% (SOFR+6.50%) per annum. The loan matures in October 2028. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Randys is a supplier of highly engineered drivetrain products to the automotive aftermarket. RITCHIE BROS: S&P Assigns 'BB+' Rating on Senior Secured Debt ------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' final issue-level rating and '3' recovery rating to Ritchie Bros. Auctioneers Inc.'s (RBA) senior secured debt composed of $750 million revolving credit facilities and a $1.91 billion term loan A. At the same time, S&P Global Ratings assigned its 'BB+' final issue-level rating and '3' recovery rating to $550 million of senior secured notes due in 2028 issued by RBA's subsidiary, Ritchie Bros. Holding Inc. S&P said, "The '3' recovery rating on the secured debt indicates our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for secured debtholders in the event of a default. Finally, S&P Global Ratings assigned its 'BB-' issue-level rating and '6' recovery rating to the $800 million senior unsecured notes due in 2031, issued by Ritchie Bros. Holdings Inc. The '6' recovery rating on the unsecured notes indicates our expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of default. We expect that all the secured debt we rate at RBA and Ritchie Bros. Holding Inc. rank pari passu." RECOVERY ANALYSIS Key analytical factors -- S&P has updated its recovery analysis to incorporate the company's capital structure post the IAA Inc. acquisition and corresponding increase in its estimated enterprise value (from the IAA acquisition) in its simulated default scenario. -- RBA's capital structure following the IAA acquisition will consist of $750 million revolving credit facilities, a $1.91 billion term loan A, $550 million senior secured notes due 2028, and $800 million senior unsecured notes due 2031. -- S&P values the company on a going-concern basis using a 6.0x multiple of its projected emergence EBITDA. -- S&P's emergence EBITDA projection represents a significant deterioration from the current state of the combined businesses and incorporates its estimate of the company's fixed charges in default. -- The '3' recovery rating on RBA's secured debt indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of default. -- The '6' recovery rating on the $800 million unsecured notes indicates S&P's expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of default. -- S&P also assumes that the company draws down 85% of the $750 million available under its revolving credit facilities. Simulated default assumptions -- Simulated year of default: 2028 -- Implied enterprise value multiple: 6.0x -- EBITDA at emergence: US$326 million Simplified waterfall -- Net enterprise value at default (after 5% administrative costs): $1.86 billion -- Valuation split % (obligors/non-obligors): 95%/5% -- Collateral value available to first-lien secured creditors: $1.83 billion -- First-lien secured debt: $2.85 billion --Recovery expectations: 50%-70% (rounded estimate: 60%) -- Total value available to unsecured claims: $33 million -- Senior unsecured debt/pari passu unrecovered secured claims: $1.86 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) *All debt amounts include six months of prepetition interest RIVERBED TECHNOLOGY: $900M Bank Debt Trades at 67% Discount ----------------------------------------------------------- Participations in a syndicated loan under which Riverbed Technology Inc is a borrower were trading in the secondary market around 32.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $900 million facility is a PIK Term loan that is scheduled to mature on December 7, 2026. The amount is fully drawn and outstanding. Riverbed Technology, Inc. provides application performance monitoring, cloud migration, network performance monitoring, and security solutions. Riverbed Technology serves customers globally. ROBERTSHAW US: $110M Bank Debt Trades at 72% Discount ----------------------------------------------------- Participations in a syndicated loan under which Robertshaw US Holding Corp is a borrower were trading in the secondary market around 27.5 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $110 million facility is a Term loan that is scheduled to mature on February 28, 2026. The amount is fully drawn and outstanding. Robertshaw US Holding Corp. designs and manufactures electro-mechanical solutions, mechanical combustion systems, and electrical controls primarily for use in residential and commercial appliances, HVAC and transportation applications. RYZE RENEWABLES: Wants to Sell Las Vegas Refinery in June Auction ----------------------------------------------------------------- Rick Archer of Law360 reports that Biofuel company Ryze Renewables II got permission from a Delaware bankruptcy judge Friday, March 10, 2023, to tap into $2 million in Chapter 11 financing after telling him it hopes to put its unfinished Las Vegas refinery on the auction block in June 2023. About Ryze Renewables II Ryze Renewables II, LLC and Ryze Renewables Las Vegas, LLC were formed in 2017 in connection with the planned repurposing of an existing biofuels refinery located in Las Vegas, Nevada that, once complete, will have the capacity to produce 7,500 barrels of renewable diesel per day by converting non-edible renewable and waste feedstocks to premium low-carbon fuels. Ryze Renewables II defaulted on taxpayer-backed debt after a technology it adopted to repurpose an existing biofuels refinery proved to be defective. Ryze Renewables II and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10289) on March 9, 2023. In the petition signed by Klaus Gerber as chief restructuring officer, the Debtor disclosed up to $100 million to $500 million in both assets and liabilities. Judge Mary F. Walrath oversees the case. The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal counsel; Paul, Weiss, Rifkind, Wharton, & Garrison LLP as restructuring counsel, Stinson LLP as special construction counsel, Alvarez & Marsal North America, LLC as CRO provider, Guggenheim Partners, LLC as investment banker, and Stretto as notice, claims & balloting agent and administrative advisor. Ryze Renewables II is a Las Vegas-based biodiesel refinery project founded in 2017. Ryze Renewables sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10289 on March 9, 2023. In the petition filed by Klaus Gerber, as chief restructuring officer, the Debtor listed estimated assets and liabilities between $100 million and $500 million each. The Debtor is represented by: Elizabeth Soper Justison, Esq. Young Conaway 5233 E. El Campo Grande Ave Las Vegas, NV 89115 S-TEK 1 LLC: Confirmation Procedures Denied, Converted Under Ch. 7 ------------------------------------------------------------------ Bankruptcy Judge Robert H. Jacobvitz for the District of New Mexico denies the Debtor S-Tek 1, LLC's request to establish confirmation procedures and its alternative request for structured dismissal, and instead converts the Debtor's chapter 11 case to a case under chapter 7. Following a two-day joint hearing on confirmation of the Debtor's third plan of reorganization, the Court denied the confirmation of the Third Plan. After denying confirmation of the Third Plan, rather than immediately ruling on the Motion to Convert or Dismiss filed by Surv-Tek, Inc. and STIF, LLC, the Court set a status conference to discuss with the parties whether conversion or dismissal was more appropriate. Two days before the status conference, the Debtor filed the Fourth Plan. On the day before the status conference, the Debtor asked the Court to (i) set voting deadlines and confirmation procedures for the Fourth Plan and (ii) in the alternative, to establish a procedure for a structured dismissal that would include a sale of assets free and clear of liens. Although Debtor describes the Fourth Plan as substantively different from the Third Plan because it provides different funding sources for replacement of Debtor's vehicles, the Court finds and concludes that the Fourth Plan is essentially the same as the Third Plan -- it attempts to fill the evidentiary gaps regarding feasibility that the Debtor failed to sufficiently demonstrate at the final hearing on confirmation of the Third Plan. As such, the Court declines the Debtor's request "to move the Fourth Plan to a confirmation hearing." Likewise, the Court declines to grant "the Debtor additional time to file another plan." The Court reasons that: "This case largely has been a two-party dispute. . . the Debtor was given the opportunity to fully litigate its more than a dozen claims against the Surv-Tek Parties in a 9-day trial. . . a full and fair opportunity to modify its plan twice and take the modified plan to a multi-day contested evidentiary confirmation hearing, which was also a hearing on the Surv-Tek Parties' Motion to Convert or Dismiss. . . Both the Debtor and Surv-Tek have incurred enormous attorneys' fees while this case has been pending for over two years, during which time Debtor has made little or no payment to Surv-Tek on its secured claim. . . While the delay and added expense created by litigation of the Surv-Tek AP was a reasonable and necessary predicate to analyzing plan confirmation, the additional delay and expense of another hearing on confirmation of the Fourth Plan -- which essentially would be a do-over of the hearing on confirmation of the Third Plan -- is not reasonable. . . Therefore, the Fourth Plan is time-barred." The Court further finds that "the Debtor's inability to propose a confirmable plan is stark. . . the Debtor also has no ability to file another plan that it can take to a confirmation hearing. . . Thus, dismissing or converting this case are the only options left. . . Further, there are no unusual circumstances establishing that converting or dismissing the case is not in the best interest of creditors and the estate. Even if there were, the Debtor certainly could not demonstrate that there is a reasonable likelihood of plan confirmation within a reasonable time since it has no ability to file another plan at all." Given the circumstances of this case and the substance of the requested structured dismissal, the Court denies the Request for Structured Dismissal. The Court determines that the proposed structured dismissal is designed to achieve much of the same result after the bankruptcy case is dismissed as the Debtor proposed in the Third Plan and Fourth Plan: namely, "to enable Debtor to continue its business operations by giving Debtor time to recapitalize its business and replace the Collateral pledged to Surv-Tek before such Collateral is sold and delivered to a third party or surrendered. . . Under the proposed structured dismissal, the Debtor's ultimate goal would be for Surv-Tek to realize as much or more from the sale of its Collateral as it would receive from a sale in a converted chapter 7 case while at the same time enabling the Debtor to remain in business and not lay off its employees." The Court finds and concludes that the Debtor's continued business operations as contemplated by the structured dismissal is not feasible. A full-text copy of the Memorandum Opinion dated March 15, 2023 is available at https://tinyurl.com/3x22nerb from Leagle.com. About S-Tek 1 LLC S-Tek 1 LLC, also known as SurvTek -- https://www.survtek.com/ -- is a land surveying and consulting firm providing services to both the private and public sectors throughout New Mexico. It is based in based in Albuquerque, N.M. S-Tek 1, filed a Chapter 11 petition (Bankr. D.N.M. Case No. 20-12241) on Dec. 2, 2020. In its petition, the Debtor disclosed $355,177 in assets and $2,251,153 in liabilities. Randy Asselin, managing member, signed the petition. Judge Robert H. Jacobvitz presides over the case. The Debtor tapped Nephi D. Hardman Attorney at Law, LLC as its bankruptcy counsel and FPM & Associates, LLC as its accountant. SAFETY PRODUCTS: Barings Private Marks $159,000 Loan at 24% Off --------------------------------------------------------------- Barings Private Credit Corporation has marked its $159,000 loan extended to Safety Products Holdings, LLC to market at $121,000 or 76% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a First Lien Senior Secured Term Loan to Safety Products Holdings, LLC. The loan accrues interest at a rate of 11.2% (LIBOR+6%) per annum. The loan matures in September 2023. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Safety Products Holdings, LLC provides engineered and consumable safety cutting tools. SCREENVISION LLC: $175M Bank Debt Trades at 38% Discount -------------------------------------------------------- Participations in a syndicated loan under which Screenvision LLC is a borrower were trading in the secondary market around 62.5 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $175 million facility is a Term loan that is scheduled to mature on July 3, 2025. About $143.7 million of the loan is withdrawn and outstanding. Screenvision, LLC provides publishing and broadcasting services. SIGNAL PARENT: $550M Bank Debt Trades at 33% Discount ----------------------------------------------------- Participations in a syndicated loan under which Signal Parent Inc is a borrower were trading in the secondary market around 66.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $550 million facility is a Term loan that is scheduled to mature on April 1, 2028. About $541.8 million of the loan is withdrawn and outstanding. Signal Parent, Inc. provides interior design services. SILICON VALLEY BANK: Federal Reserve Starts Probe After Collapse ---------------------------------------------------------------- Saleha Mohsin and Kate Davidson of Bloomberg News report that the Federal Reserve is launching an internal probe of its supervision of Silicon Valley Bank after its collapse sparked sharp criticism of the central bank's oversight. Vice Chair for Supervision Michael Barr will lead the review, due for public release by May 1,2023 the Fed said Monday, March 13, 2023. The collapse of the lender, which was overseen by the Federal Reserve Bank of San Francisco, was the biggest bank failure in more than a decade. About Silicon Valley Bank Silicon Valley Bank is a U.S.-based high-tech commercial bank. Based in Santa Clara, California, SVB became the go-to bank for nearly half of all venture-backed tech startups. At its peak in 2021, SVB was worth US$44 billion and managed over $200 billion in assets. On March 8, 2023, Silicon Valley Bank Chief Executive Officer Greg Becker told shareholders that the bank launched a $1.75 billion share sale to shore up its balance sheet. It said in an investor prospectus it needed the proceeds to plug a $1.8 billion hole caused by the sale of a $21 billion loss-making bond portfolio consisting mostly of U.S. Treasuries. Following the announcement, SVB's clients pulled their money from the bank en masse. Investors and depositors tried to pull $42 billion from Silicon Valley Bank, and at the close of business on March 9, the bank had a negative cash balance of $958 million. On the morning of March 10, 2023, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation (FDIC). About 89 percent of the bank's $172 billion in deposit liabilities exceeded the maximum insured by the FDIC. SVB was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. Only the collapse of Washington Mutual during the 2008 global financial crisis was larger. Silicon Valley Bank is the first FDIC-insured institution to fail this 2023. The previous FDIC-insured institution to close was Almena State Bank, Almena, Kansas, in October 2020. SPEEDBOAT JV: Returns to Chapter 11 to Stop Foreclosure ------------------------------------------------------- Speedboat JV Partners LLC filed for chapter 11 protection in the Northern District of California to stop foreclosure. The Debtor owns the property at 77 Speed Boat Avenue, Kings Beach, California 96143. Speedboat first filed a single-asset Chapter 11 bankruptcy petition regarding this Property on September 17, 2020. That petition was converted to chapter 7 and then dismissed on Speedboat's motion when Speedboat obtained financing. Speedboat entered into a loan agreement under which it borrowed $11.5 million from certain lenders and under which REEF-PCG LLC is the administrative and collateral agent. Speedboat has now defaulted on its loan – in fact, Speedboat did not even begin to perform on its agreement – and REEF has, pursuant to its rights under its agreement, attempted to foreclose on the Property. Conveniently, Speedboat filed the new Chapter 11 petition on Feb. 28, 2023, one day before the scheduled foreclosure sale, invoking the automatic stay. REEF-PCG LLC immediately filed a motion for relief from the automatic stay. REEF asserts that under these circumstances, relief is appropriate if Speedboat has engaged in a scheme to hinder or delay REEF. Speedboat's acquisition of financing from REEF was based on Speedboat's representations that it, now in hindsight, obviously had no intention of performing and its filing of a Petition is clear evidence of a scheme to hinder and delay REEF. REEF asserts that alternatively, the Court should dismiss this case for cause under 11 U.S.C. Sec. 1112(b)(1). The Petition has been filed for one reason only: to delay the foreclosure proceedings with no true intention or ability to reorganize under Chapter 11. According to court filings, Speedboat JV Partners has $13,560,585 in debt owed to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for March 28, 2023. About Speedboat JV Partners LLC Speedboat JV Partners LLC is a limited liability company in California. Speedboat JV Partners LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-30111) on Feb. 28, 2023. In the petition filed by Marc Shishido, as managing member, the Debtor reported total assets of $21,500,000 and total liabilities of $13,560,585. The case is overseen by Honorable Bankruptcy Judge Dennis Montali. T.G. HOLDINGS: Wins Cash Collateral Access Thru June 14 ------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania authorized T.G. Holdings, LLC, dba Cannon's Chophouse, to use cash collateral on an interim basis in accordance with the budget, through June 14, 2023. The Court said the pre-petition liens of the U.S. Internal Revenue Service and the Pennsylvania Department of Revenue will be continued post-petition as to both pre-petition and post-petition assets, but the value of the Respondents' lien shall not be greater than the value thereof at the time the Debtor filed the bankruptcy petition, plus accruals and advances thereafter, and minus payments to the Respondents thereafter. No additional financing statements or mortgages need be filed to perfect such post-petition liens and security interests. The Debtor will provide the IRS and the DoR access to its records and financial information as they may request, in addition to the monthly financial reports required by the U.S. Trustee. A copy of the Court's order and the Debtor's budget is available at https://bit.ly/3JMIgoT from PacerMonitor.com. The Debtor projects total cost, on a weekly basis, as follows: $15,937 for the week ending March 21, 2023; $15,937 for the week ending March 28, 2023; $15,937 for the week ending April 4, 2023; $15,937 for the week ending April 11, 2023; $15,937 for the week ending April 18, 2023; and $15,937 for the week ending April 25, 2023. About T.G. Holdings, LLC T.G. Holdings, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-10061) on February 8, 2023. In the petition signed by Charles A. Bish, Jr., managing member, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Carlota Bohm oversees the case. Michael P. Kruszewski, Esq., at Quinn, Buseck, Leemhuis, Toohey, & Kroto, Inc, represents the Debtor as legal counsel. TELESAT LLC: $1.91B Bank Debt Trades at 49% Discount ---------------------------------------------------- Participations in a syndicated loan under which Telesat LLC is a borrower were trading in the secondary market around 50.8 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.91 billion facility is a Term loan that is scheduled to mature on December 6, 2026. About $1.55 billion of the loan is withdrawn and outstanding. Telesat LLC operates as a satellite operator. The Company offers satellite delivered communications solutions to broadcast, telecom, corporate, and government customers, as well as provides technical consultancy services. Telesat serves clients worldwide. TEXAS COASTAL: Files for Chapter 11 to Stop Foreclosure ------------------------------------------------------- Texas Coastal Group LLC filed for chapter 11 protection in the Southern District of Florida. The Debtor is the owner of 110.99 acres of land located on the West side of State Highway 361 North of Hawksbill Cay Drive at Mustang Boulevard in Port Aransas, Nueces County, Texas. The Real Property is currently being developed for residential homes. Future development of condominiums and restaurants is also being contemplated. Phase 1 of the development has been completed and consists of 43 lots that came online in early 2022. To date there has been 12 lot sales in Phase 1. The Debtor's managers conduct the Debtor’s business operations from 340 Royal Poinciana Way, Suite 319-397, Palm Beach, Florida 33480. On Jan. 24, 2023, the Debtor received a demand letter from counsel for its secured lender, Caz Creek Lending, LLC, declaring the maturity of the subject promissory note and demanding payment in full. On Feb. 13, 2023, Caz Creek noticed the Real Property for a non-judicial foreclosure sale for March 7, 2023. The Debtor filed this bankruptcy proceeding to preserve the equity in this estate either through takeout financing, sale of a portion of the membership interests to fund a paydown of the secured debt, 11 U.S.C. Sec. 363 sale or restructuring of the secured debt. According to court filings, Texas Coastal Group 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 Texas Coastal Group Texas Coastal Group LLC is a Single Asset Real Estate as defined in 11 U.S.C. Section 101(51B). The Debtor is the fee simple owner of a property located at St. Hwy. 361 & Mustang Blvd. valued at $51.1 million. Texas Coastal Group LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11704) on March 2, 2023. In the petition filed by Craig J. Millard, Sr. as member, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for November 2, 2022 at 10:00 a.m. at by U.S. Trustee Teleconference on telephone conference line: 866-915-4419 (participant passcode: 6071331). The case is overseen by Honorable Bankruptcy Judge Erik P. Kimball. The Debtor is represented by: John E Page, Esq. Shraiberg Page, P.A. 340 Royal Poinciana Way Suite 317-397 Palm Beach, FL 33480 Tel: 561-443-0800 Email: jpage@slp.law TIMBERSTONE 4038T: SARE Starts Subchapter V Bankruptcy Case ----------------------------------------------------------- Timberstone 4038T LLC filed for chapter 11 protection in the Northern District of California. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. According to its schedules, the Debtor owns 100 acres of vacant land at Marinda Drive and Ridgeway Avenue, Fairfax, CA 94930, appraised at $5 million. According to court filings, Timberstone 4038T estimates between $1 million and $10 million in debt owed to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. A tele/videoconference meeting of creditors under 11 U.S.C. Section 341(a) is slated for June 26, 2023 at 10:30 a.m. About Timberstone 4038T Timberstone 4038T LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Timberstone 4038T LLC filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-30109) on February 28, 2023. In the petition filed by Marshall Rothman, as managing member, the Debtor reported assets and liabilities between $1 million and $10 million each. The case is overseen by Honorable Bankruptcy Judge Hannah L Blumenstiel. The Debtor is represented by: Sarah M. Stuppi, Esq. Law Offices of Stuppi and Stuppi 2 Davis Drive Belevedere Tiburon, CA 94920 (415) 272-5999 TUESDAY MORNING: Drops Invictus, Gets New DIP Financing ------------------------------------------------------- Jeff Montgomery of Law360 reports that bankrupt discount goods chain Tuesday Morning Corp. reported that it had moved ahead Friday with a new, contested $12.5 million debtor in possession loan in Texas, despite objections from a first lender that provided a $15 million interim DIP loan but balked at completing a stalking horse sale offer. The Debtors previously obtained court approval to access $15 million of DIP financing from Invictus Global Management, LLC, and Cantor Fitzgerald Securities, as administrative agent. Invictus says the money received from Invictus allowed the Debtors to continue operating -- and to generate more than $30 million within two weeks. On March 2, Debtors filed the New DIP Motion seeking to take out new DIP financing from 1903P Loan Agent, LLC. At the March 3 hearing, the Court orally ruled that it would vacate in part and suspend in part the Invictus DIP Order. Although the Court granted the New DIP Motion on an "interim" basis, it approved the full financing package that the Debtors had requested. According to the Debtors, Invictus failed to deliver the stalking horse bid it guaranteed the Court and all parties on the record at the first-day hearing that it would make. That promise of a stalking horse bid was fundamental to the Debtors' favoring of the Invictus DIP Facility over the interim, fee-free use of cash collateral offered by the ABL Lenders at the hearing. Invictus threatened to withdraw its interest in making a stalking horse bid if the Debtors accepted the ABL Lenders' proposed use of cash collateral. After it failed to make a stalking horse offer, and in the face of settlement discussions with the ABL Lenders on a consensual resolution, it insisted on pursuing a strategy that, through costly, cumbersome litigation, would paralyze and stagnate the Chapter 11 cases and severely threaten the value of the estates and the Debtors' critical prospects to expeditiously emerge from bankruptcy. As a result, the Debtors have negotiated a replacement DIP facility (the "New DIP Facility") with 1903P Loan Agent, LLC or one of its affiliates ("New DIP Lender"). The New DIP Lender is also the FILO B Documentation Agent and one of the Prepetition ABL Lenders. The Debtors will use the proceeds of the New DIP Facility to: (i) repay certain obligations under the Prepetition ABL Credit Facility (with certain Prepetition ABL Disputed Amounts being compromised); (ii) fund cash collateralization of the Prepetition LC Obligations owed to Wells Fargo Bank, N.A., (iii) fund general working capital; and (iv) fund operational expenses and restructuring expenses. The Debtors, still lacking a stalking horse bid at this point, remain at a critical juncture, and the New DIP Facility provides the necessary financing to allow the Debtors to pursue transactions and otherwise preserve value for the benefit the Debtors’ estates, their creditors and stakeholders. About Tuesday Morning Dallas, Texas-based Tuesday Morning Corporation is an off-price retailer specializing in products for the home, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal decor, at prices generally below those found in boutique, specialty and department stores, catalogs and on-line retailers. Tuesday Morning and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Texas Lead Case No. 23-90001) on Feb. 14, 2023. The Debtors said both assets and liabilities, on a consolidated basis, are between $100 million and $500 million. The Hon. Edward L. Morris presides over the case. Lawyers at Munsch Hardt Kopf & Harr, P.C., serve as counsel to the Debtors. The Debtors tapped Piper Sandler as investment banker; and Stretto, Inc., as claims and noticing agent. TV AZTECA S.A.B.: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Each of the petitioning creditors Plenisfer Investments SICAV – Destination Value Total Return, Cyrus Opportunities Master Fund II, Ltd., and Sandpiper Limited filed involuntary Chapter 11 petitions against each of the following entities: Alleged Debtor Case No. -------------- -------- 1. TV Azteca, S.A.B. de C.V. 23-10385 Periferico Sur 4121 colonia Fuentes del Pedregal alcaldia Tlalpan, C.P Ciudad de Mexico C.P. 14140 2. Alta Empresa, S.A. de C.V. 23-10386 3. Asesoria Especializada En Aviacion, S.A. de C.V. 23-10387 4. Equipo de Futbol Mazatlan, S.A. de C.V. 23-10388 5. Producciones Dopamina, S.A. de C.V. 23-10389 6. Azteca Records, S.A. de C.V. 23-10390 7. Ganador Azteca, S.A.P.I. de C.V. 23-10391 8. Operadora Mexicana De Television, S.A. de C.V. 23-10393 9. Azteca Sports Rights LLC 23-10395 10. Producciones Azteca Digital, S.A. de C.V. 23-10397 11. Producciones Especializadas, S.A. de C.V. 23-10399 12. Productora De Television Regional De Tv Azteca, S.A. de C.V. 13. Promotora de Futbol Rojinegros, S.A. de C.V. 14. Mazatlan Promotora de Futbol, S.A. de C.V. 15. Publicidad Especializada en Medios de Comunicacion de TV Azteca, S.A. de C.V. 16. S.C.I. de Mexico, S.A. de C.V. 17. Servicios Aereos Noticiosos, S.A. de C.V. 18. Servicios Especializados Taz, S.A. de C.V. 19. Servicios y Mantenimiento del Futuro en Television, S.A. de C.V. 20. Corporacion de Asesoria Tecnica y de Produccion, S.A. de C.V. 23-10394 21. Editorial Mandarina, S.A. de C.V. 23-10396 22. Multimedia, Espectaculos y Atracciones, S.A. de C.V. 23-10398 23. Servicios Foraneos de Administracion, S.A. de C.V. 24. Servicios Locales de Produccion, S.A. de C.V. 25. Azteca International Corporation 23-10392 26. Stations Group, LLC 27. TV Azteca Honduras, S.A. de C.V. 28. Comercializadora de Television de Honduras, S.A. de C.V. 29. Incotel S.A. 30. TVA Guatemala S.A. 31. Lasimex, S.A. de C.V. 32. TV Azteca Global, S.L.U. 33. Azteca Comunicaciones Peru, S.A.C. 34. Redes Opticas, S.A.C. 35. Televisora del Valle de Mexico, S.A. de C.V. The Petitioning Creditors will move for joint administration of these cases under the case number assigned to the Chapter 11 case of TV Azteca, S.A.B. de C.V. Business Description: TV Azteca is a Mexican multimedia conglomerate. Involuntary Chapter 11 Petition Date: March 20, 2023 Court: United States Bankruptcy Court Southern District of New York Petitioners' Counsel: Abid Qureshi, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York NY 10036 Tel: 212-872-1000 Email: aqureshi@akingump.com Full-text copies of two of the Involuntary Petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/V3RCLNY/TV_Azteca_SAB_de_CV__nysbke-23-10385__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/2F5SSZY/Alta_Empresa_SA_de_CV__nysbke-23-10386__0001.0.pdf?mcid=tGE4TAMA Alleged creditors who signed the petition: Petitioner Nature of Claim Claim Amount 1. Plenisfer Investments SICAV - Unsecured Bond $11,600,000 Destination Value Total Return Debt 49 Avenue J.F. Kennedy Luxembourg, Grand Duchy of Luxembourg L-1855 2. Cyrus Opportunities Master Unsecured Bond $27,477,000 Fund II, Ltd Debt 65 East 55th Street, 35th Floor New York, NY 10022 3. Sandpiper Limited Unsecured Bond $24,238,000 89 Nexus Way Debt 2nd Floor Camana Bay P.O. Box 31105 Grand Cayman, KY1-1205 Cayman Islands UNITED FURNITURE: Trustee Taps B. Riley as Real Estate Advisor -------------------------------------------------------------- Derek Henderson, the Chapter 11 trustee for United Furniture Industries, Inc. and its affiliates, seeks approval from the U.S. Bankruptcy Court for the Northern District of Mississippi to employ B. Riley Real Estate, LLC. The trustee requires a real estate advisor to market and sell the Debtors' real properties in Nettleton, Vardaman, Armory, Oklahoma and Tupelo in Mississippi; MS; Victorville in California; and Winston Salem, Lexington, High Point and Trinity in North Carolina. For each sale of a property, the firm will be paid a fee equal to 2.50 percent of the gross proceeds. The firm will earn the fee upon consummation of the sale. Michael Jerbich, a partner at B. Riley, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael Jerbich B. Riley Real Estate, LLC 875 N. Michigan Avenue, Suite 3900 Chicago, IL 60611 Tel: (312) 894-7621 Email: mjerbich@brileyfin.com About United Furniture Industries United Furniture Industries, Inc. manufactures and sells upholstery. It offers bonded leather and upholstery fabric recliners, reclining sofas and loveseats, sectionals, and sofa sleepers, as well as stationary sofas, loveseats, chairs, and ottomans. United Furniture Industries was subject to an involuntary Chapter 7 bankruptcy petition (Bankr. N.D. Miss. Case No. 22-13422) filed on Dec. 30, 2022. The petition was signed by alleged creditors Wells Fargo Bank, National Association, Security Associates of Mississippi Alabama LLC, and V & B International, Inc. On Jan. 18, 2023, the court entered the order for relief, thereby, converting the case to one under Chapter 11. On Jan. 31, 2023, eight affiliates of United Furniture Industries filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Mississippi. The affiliates are LS Logistics, LLC, Furniture Wood, Inc., UFI Transportation, LLC, United Wood Products, Inc., Associated Bunk Bed Company, FW Acquisition, LLC, UFI Royal Development, LLC, and UFI Exporter, Inc. Their Chapter 11 cases are jointly administered under Case No. 22-13422. Judge Selene D. Maddox oversees the cases. Wells Fargo is represented by R. Spencer Clift, III, Esq., while Security Associates is represented by Andrew C. Allen, Esq., at The Law Offices of Andrew C. Allen. Derek Henderson is the trustee appointed in the Debtors' Chapter 11 cases. The trustee hired McCraney, Montagnet, Quin, Noble, PLLC as bankruptcy counsel; King & Spencer, PLLC as special counsel; Harper Rains Knight & Company as financial advisor; and B. Riley Real Estate, LLC as real estate advisor. UNITED FURNITURE: Trustee Taps Harper as Financial Advisor ---------------------------------------------------------- Derek Henderson, the Chapter 11 trustee for United Furniture Industries, Inc. and its affiliates, seeks approval from the U.S. Bankruptcy Court for the Northern District of Mississippi to employ Harper Rains Knight & Company as his financial advisor. The trustee requires a financial advisor to: a. prepare a liquidation analysis and a monthly analysis of the Debtors' financial information, including analysis of significant changes financially, operationally or otherwise; b. monitor and assist with the proposed marketing and sale process; c. analyze the Debtors' general financial and business condition, including an analysis of current assets and liabilities, PP&E and other "soft" assets; d. review and analyze reports regarding cash collateral and any debtor-in-possession financing arrangements and budgets; e. review financial projections and assumptions; f. provide financial accounting advice to assist with reconciliation of account ledgers and accuracy of company books and records, preparation of financial statements, and related financial oversight; g. review filings required by the bankruptcy court or the Office of the U.S. Trustee, including, but not limited to, schedules of assets and liabilities, statements of financial affairs and monthly operating reports; h. review the Debtors' financial information, including, but not limited to, analyses of cash receipts and disbursements, financial statement items and proposed transactions for which bankruptcy court approval is sought; i. analyze assumption and rejection issues regarding executory contracts and leases; j. assist in evaluating strategies and alternatives available to creditors; k. assist in preparing or reviewing documents necessary for confirmation of a Chapter 11 plan; l. assist the trustee in negotiations and meetings with lenders and creditors; m. advise the trustee regarding tax consequences of proposed actions; n. assist with the claims resolution process, including, but not limited to, analyses of creditor's claims by type and entity; o. provide expert witness report and testimony regarding the financial affairs of the Debtors, confirmation issues, or other matters; p. provide litigation consulting services and expert witness testimony regarding confirmation issues, avoidance actions or other matters; q. advise the trustee regarding the termination and liquidation of any retirement or pension plans; r. prepare federal and state corporate income tax returns; s. provide assistance requested by the trustee regarding accounting for the inventory held for sale and for any other tangible personal property; and t. other such functions as requested by the trustee. Harper will be paid at these rates: Accountants $250 to $400 per hour Staffs $190 per hour Stephen Smith, a shareholder of Harper, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Stephen Smith Harper Rains Knight & Company 1052 Highland Colony Parkway, Suite 100 Ridgeland, MS 39157 Tel: (601) 605-0722 Email: ssmith@hrkcpa.com About United Furniture Industries United Furniture Industries, Inc. manufactures and sells upholstery. It offers bonded leather and upholstery fabric recliners, reclining sofas and loveseats, sectionals, and sofa sleepers, as well as stationary sofas, loveseats, chairs, and ottomans. United Furniture Industries was subject to an involuntary Chapter 7 bankruptcy petition (Bankr. N.D. Miss. Case No. 22-13422) filed on Dec. 30, 2022. The petition was signed by alleged creditors Wells Fargo Bank, National Association, Security Associates of Mississippi Alabama LLC, and V & B International, Inc. On Jan. 18, 2023, the court entered the order for relief, thereby, converting the case to one under Chapter 11. On Jan. 31, 2023, eight affiliates of United Furniture Industries filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Mississippi. The affiliates are LS Logistics, LLC, Furniture Wood, Inc., UFI Transportation, LLC, United Wood Products, Inc., Associated Bunk Bed Company, FW Acquisition, LLC, UFI Royal Development, LLC, and UFI Exporter, Inc. Their Chapter 11 cases are jointly administered under Case No. 22-13422. Judge Selene D. Maddox oversees the cases. Wells Fargo is represented by R. Spencer Clift, III, Esq., while Security Associates is represented by Andrew C. Allen, Esq., at The Law Offices of Andrew C. Allen. Derek Henderson is the trustee appointed in the Debtors' Chapter 11 cases. The trustee hired McCraney, Montagnet, Quin, Noble, PLLC as bankruptcy counsel; King & Spencer, PLLC as special counsel; Harper Rains Knight & Company as financial advisor; and B. Riley Real Estate, LLC as real estate advisor. UNITED ROAD: $331M Bank Debt Trades at 66% Discount --------------------------------------------------- Participations in a syndicated loan under which United Road Services Inc is a borrower were trading in the secondary market around 33.6 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $331.3 million facility is a Term loan that is scheduled to mature on October 19, 2024. About $299 million of the loan is withdrawn and outstanding. United Road Services, Inc. provides vehicle transportation logistics solutions. VERITAS US: EUR748M Bank Debt Trades at 24% Discount ---------------------------------------------------- Participations in a syndicated loan under which Veritas US Inc is a borrower were trading in the secondary market around 76.4 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The EUR748.6 million facility is a Term loan that is scheduled to mature on September 1, 2025. The amount is fully drawn and outstanding. Veritas US Inc. designs and develops enterprise software solutions. VOYAGER DIGITAL: Government's Bid to Stay Confirmation Order Denied ------------------------------------------------------------------- Bankruptcy Judge Michael E. Wiles for the Southern District of New York denies the motion for a stay of the Confirmation Order pending appeal filed by the United States Government, through the Office of the United States Trustee and the Office of the United States Attorney for the Southern District of New York. The Court has entered an order confirming the Debtor's plan of reorganization in these cases on March 8, 2023, and the corrected and operative version of the order was entered on March 10, 2023. The Government has moved for a stay of the Confirmation Order pending an appeal, or in the alternative for a stay of the "exculpation" provisions that are included in the Confirmation Order and in the underlying plan of reorganization. Bankruptcy Procedure provides that the decision to deny a stay is within the discretion of the bankruptcy court. As a general matter, the court must consider: (1) whether the movant has made a "strong showing" that it is likely to succeed on appeal, (2) whether the movant will suffer irreparable injury absent a stay, (3) whether another party will suffer substantial injury if a stay is issued, and (4) how public interests may be affected. Judge Wiles concludes that "based on these factors. . . the Government is not entitled to a stay." He explains that the "effect of my order. . . is that certain parties will be obligated to do what the plan calls for regarding the rebalancing of the cryptocurrency portfolios and the distribution of cryptocurrencies to customers. I have left open the right of the Government to seek to stop the activities at any time if the Government believes that they should be stopped. All I have done. . . is to confirm that, in the meantime, the people who are required to do things pursuant to my confirmation order will not be held liable for having done what I have required. So long as I have jurisdiction to issue the confirmation order (which I plainly do), and so long has my order requires that certain actions be taken (as it plainly does), then that ruling is proper under the authorities that I have cited." Judge Wiles notes that the Government has not contended that it faces an "irreparable injury" in the absence of a stay except for the risk that an appeal might be rendered equitably moot if a stay were not granted. He explains that the "real point of my order. . . is to protect parties who must buy, sell and distribute cryptocurrencies from being subjected to liability based on belated contentions that those very actions might be contrary to the securities laws, commodities laws or other laws. I certainly could understand and agree that an appeal on that particular ground would be considered equitably moot to transactions that had already been completed in reliance on the authority of my order. . . the Government's entire argument about the "equitable mootness" risk is merely hypothetical, because the Government cannot identify anything that it actually would want to do, or should be allowed to do, that would be rendered equitably moot in the absence of a stay." The Government also argues that a stay will not harm the Debtors because the proposed transaction with Binance.US may not close until later this month. To the extent that what the Government wants is a reasonable time to seek a stay from the District Court, the parties have agreed to provide that by extending the stay through March 20, 2023 at 5:00 p.m. Judge Wiles finds and concludes that the stay that the Government is actually seeking "would extend long past the time when the Binance.US deal is scheduled to close. . . could threaten the availability of that transaction, and the uncontroverted evidence before me at the confirmation hearing is that a loss of the Binance.US transaction would lead to a reduction of approximately $100 million in the assets available for distribution to creditors. . . would also postpone the Debtors' ability to implement their "toggle" plan, and would further delay distributions to customers. . . the harm that the Debtors and their constituents would suffer if a stay were to be granted exceeds any harm that the Government might incur due to the absence of a stay. . . public interest favors the timely resolution of bankruptcy cases." A full-text copy of the Decision and Order dated March 15, 2023 is available at https://tinyurl.com/mr2acb68 from Leagle.com. About Voyager Digital Holdings Based in Toronto, Canada, Voyager Digital Holdings Inc. -- https://www.investvoyager.com/ -- runs a cryptocurrency platform. Voyager claims to offer a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. Voyager Digital Holdings Inc. and two affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10943) on July 5, 2022. In the petition filed by Stephen Ehrlich, chief executive officer, the Debtors estimated assets and liabilities between $1 billion and $10 billion. Judge Michael E. Wiles oversees the cases. The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; Consello Group as strategic financial advisor; Deloitte Tax, LLP as tax services provider; and Deloitte & Touche, LLP as accounting advisor. Stretto, Inc. is the claims agent. On July 19, 2022, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped McDermott Will & Emery, LLP as bankruptcy counsel; FTI Consulting, Inc. as financial advisor; Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq Corporate Restructuring, LLC as noticing and information agent. The committee also tapped the services of Harney Westwood & Riegels, LP in connection with Three Arrows Capital Ltd.'s liquidation proceedings in British Virgin Islands. On July 6, 2022, the Debtors filed a joint Chapter 11 plan of reorganization. * * * Following an auction process, the Debtors in September 2022 selected the bid submitted by FTX US' West Realm Shires Inc. as the winning bid for the assets. But after a series of events, FTX collapsed in November 2022, before the sale could be completed. After reopening bidding, Voyager Digital selected the offer from U.S. exchange BAM Trading Services Inc. (doing business as "Binance.US") as the highest and best bid for its assets. Binance's bid is valued at $1.022 billion. WOODLAND FOOD: Barings Private Marks $125,000 Loan at 26% Off ------------------------------------------------------------- Barings Private Credit Corporation has marked its $125,000 loan extended to Woodland Foods, LLC to market at $92,000 or 74% of the outstanding amount, as of December 31, 2022, according to a disclosure contained in Barings Private's Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 23, 2023. Barings Private is a participant in a Revolver loan to Woodland Foods, LLC. The loan accrues interest at a rate of 6.5% (LIBOR+5.50%) per annum. The loan matures in December 2027. Barings Private Credit was formed on April 2, 2021, as a Maryland Limited Liability Company named Barings Private Credit LLC and commenced operations on May 10, 2021. Barings Private converted to a Maryland corporation, effective on May 13, 2021. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. In addition, Barings Private has elected to be treated and intends to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Woodland Foods is an importer and manufacturer of specialty culinary ingredients and products from countries around the world. Woodland Foods sells under the brand DG (D'allesandro Gourmet) in the food service channel, under Curious Spoon and Epicurean Specialty in the retail channel, and under Woodland Ingredients in the industrial manufacturing channel. Woodland Foods specializes in providing a one-stop-shop resource for globally sourced specialty culinary ingredients and products, a robust product innovation platform as well as custom blending, processing, and packing. ZAYO GROUP: $4.96B Bank Debt Trades at 18% Discount --------------------------------------------------- Participations in a syndicated loan under which Zayo Group Holdings Inc is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Friday, March 17, 2023, according to Bloomberg's Evaluated Pricing service data. The $4.96 billion facility is a Term loan that is scheduled to mature on March 9, 2027. The amount is fully drawn and outstanding. Zayo Group Holdings, Inc., or Zayo Group, is a privately held company headquartered in Boulder, Colorado, with European headquarters in London, England. The company provides communications infrastructure services. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***